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The Situation Room

President Bush Backs Push for Economic Stimulus Package; Casino Caucus Ruling; Las Vegas and Beyond; Interview with Bob Johnson

Aired January 17, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Bush buys into a plan to try to jump-start the economy. Are Republican presidential candidates following his lead?
This hour, recession fears at the White House and on the campaign trail.

Plus, a judge decides a high-stakes legal and political battle in Las Vegas. We're going to tell you what it means for Hillary Clinton and Barack Obama and why the whole matter got Bill Clinton riled up.

And a leading Clinton supporter tells Obama he's sorry. I'll ask the Black Entertainment TV founder, Bob Johnson, about his role in the Democrats' spat over race and the truce that has followed.

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

Up first, new evidence that Washington is getting the powerful message that voters are sending this election year, that they are in economic pain. For the first time, the White House now saying President Bush is on board with new efforts to try to jump-start the U.S. economy.

Brianna Keilar is over at the White House watching this story for us.

There's a growing sense of urgency right now among the Republicans, the Democrats, at the White House, on Capitol Hill. What's going on?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, there is enough urgency here, Wolf, that President Bush will speak about this tomorrow, something we've just learned. He's going to talk about what he wants in an economic stimulus package and what he doesn't want.


KEILAR (voice over): With fears of a recession growing, Fed chairman Ben Bernanke was on Capitol Hill Thursday urging Congress to act quickly on an economic stimulus package.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Stimulus that comes to late will not support economic activity in the near term, and it could be actively destabilizing if it comes at a time when growth is already improving. KEILAR: This afternoon, the president had a conference call with Senate and House leaders from both parties. The White House characterizing it as a consultation rather than a negotiation. All sides are indicating partisan bickering will take a back seat to finding a solution.

Today marks the first time the White House has said President Bush is backing a stimulus plan, but spokesman Tony Fratto shied away from discussing specifics.

TONY FRATTO, WHITE HOUSE DEPUTY PRESS SECRETARY: The headwinds that we're dealing with right now are things that we see over the next coming quarters. So we do want to try to pass something quickly.

KEILAR: House Speaker Nancy Pelosi and House Minority Leader John Boehner met yesterday to discuss the stimulus package and are expected to meet again this afternoon. Proposals are still vague.

One option Democrats and Republicans seem to agree on, tax rebates, checks sent to taxpayers in an attempt to quickly pump money into the economy. Democrats say they will scuttle any Republican attempts to extend the president's tax cuts as part of the stimulus package.

Privately, congressional Republicans acknowledge it's a fight they can't win. What's more, Bernanke told Congress Thursday making the tax cuts permanent won't help in the short term.

BERNANKE: I think that the evidence suggests that measures that involve putting money in the hands of households and firms that will spend it in the near term will be more effective.


KEILAR: A Democratic leadership aide on the Hill says the understanding is that President Bush will be talking principles tomorrow because there was a Democrat on that conference call who was asking him not to get too specific, so that instead, Democrats and Republicans and the White House can come up with a unified plan. Meanwhile, House Speaker Nancy Pelosi is hoping to have an agreement before the State of the Union on the 28th -- Wolf.

BLITZER: Well, the fact that the president is going to go out and speak tomorrow underscores the urgency of this economic crisis right now, because originally, I'm told, the White House was thinking he would simply unveil some ideas in his State of the Union Address a week from Monday. The fact that he's going tomorrow I think shows how critical the situation is, this fear of a real recession.

Brianna Keilar over at the White House.

Thank you.

We're going to have a lot more on this story coming up throughout these hours of THE SITUATION ROOM, but let's get to a late-breaking development right now out on the campaign trail. It involves decisions of Las Vegas casino workers.

A judge in Las Vegas threw out a legal challenge to rules for Saturday's Democratic caucuses in Nevada. It's widely viewed as a boost for Barack Obama, potentially a serious blow to Hillary Clinton.

CNN's Jessica Yellin is in Las Vegas. She's watching this story for us.

Tell us about the ruling and the ramifications from it, Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, the judge decided that nine caucuses that are set to take place inside casinos on Saturday can go forward as planned. These were designed by the party to help increase turnout and allow all those shift workers who staff the casinos to show up and caucus during their work hours on Saturday.

The reason it's considered a boon to Barack Obama is because the union that represents many of those shift workers has endorsed Obama, and it's expected he will get high support at those casino site caucuses. Now, one of the people who brought the case to challenge those sites wouldn't point blank say this hurts Senator Clinton, but she did have this to say...


LYNN WARNE, PRESIDENT, NEVADA STATE EDUCATION ASSN.: It certainly is advantageous for one particular group of employees. Those are the Strip workers that are going to be at work. You know, I guess we'll just have to see how the caucuses come out on Saturday. I think...

YELLIN: And they've endorsed Obama?

WARNE: They have. I think that what it does is it advantages one work, one group of workers.


YELLIN: And, again, many of those workers are believed to be Obama supporters. They wanted to have more influence at the -- the Clinton supporters who were there wanted to have more influence at the off-site caucuses around the state, but they did not win today -- Wolf.

BLITZER: All right, Jessica. Before this ruling today on this decision by the courts, a TV reporter asked the former president, Bill Clinton, about the whole thing. He defended the education, the teachers union. He denied, though, that the Clinton campaign had anything to do with their effort to stop this from going on.

Now listen to this little exchange that the former president had with this TV reporter.

(BEGIN VIDEO CLIP) WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: You think that one person's vote should count five times as much as another?

UNIDENTIFIED MALE: I think it looks as though -- to a lot of people -- as though the Clinton campaign, or Clinton supporters -- the Clinton supporters. Not the campaign, but their supporters.

CLINTON: Wait. We had nothing to do with that lawsuit.


CLINTON: I read about it in the newspaper.


BLITZER: All right. Now, what about his claim that we just heard there that the casino workers would have five times more -- their votes would be five times more significant than other votes out in Nevada? What is the president referring to?

YELLIN: Well, that claim only works if every single registered Democrat actually turns out to caucus in Nevada. And you know the chances of that are highly unlikely.

What he's bothered by is the fact that if you caucus at one of the casino sites, then you get -- the more people that turn out there, the more delegates they get. That's not true of other sites.

At other sites, there's a fixed number of delegates. So, if 50 people turn out offsite, they get a flat number. But if 50 people turn out at a caucus site on the casinos, proportionately they could get more, depending on what their turnout is.

It's all about, you know, numbers and -- you know, it's confusing, potentially, but the bottom line is higher turnout at the caucus casino sites means more delegates. And President Clinton and others think that's unfair.

BLITZER: And that's what he was referring to.

YELLIN: Make any sense?

BLITZER: It makes sense. It's complicated. All of these caucuses are complicated, whether in Iowa or Nevada or anyplace else.

We'll begin to understand the process as it goes forward on Saturday. We'll continue to watch the legal and political fallout.

Candy Crowley is going to have a full report on the former president, Bill Clinton, and whether or not he's taking on the role of bad cop. That's coming up later here in THE SITUATION ROOM.

Let's move on to some other important stories.

Heading into Saturday's contest in Nevada -- this is the image, by the way, that many Americans have of the state, the Las Vegas Strip -- a glitsy playground for people with money to burn, among other things. But back in the 1900s it was a very, very sleepy little western town.

The population has grown steadily. It grew first rather modestly, fueled by mining and later by legalized gambling. But over the past two decades, Nevada's population has exploded to almost two million people in the year 2,000. A lot more since then. That's a large part because of the surge of Latino residents and other minorities.

Nevada, especially Las Vegas, growing leaps and bounds.

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

You remember that state. I think you had a little upbringing there, didn't you?

JACK CAFFERTY, CNN ANCHOR: Well, Reno is my hometown. But when we were kids in school, my Uncle Jack was the manager of the Golden Nugget Casino in Las Vegas. And downtown Las Vegas was literally all there was, down on Freemont Street.

There was the Pioneer Club and the Horseshoe and the Golden Nugget, a few joints like that. The Strip didn't exist back then. And, you know, it's grown remarkably since then. And over two million people now. I mean, it seems an impossibility based on the childhood memories I have of the place.

Mike Huckabee is vowing to enforce this nation's immigration laws and send all illegal aliens home. The Republican candidate was the first one to sign the pledge of an immigration reduction group called Numbers USA. This so-called no amnesty pledge means that Huckabee is committed to opposing any special path to citizenship for the estimated 12 million illegal aliens in this country.

He's also vowing to cut the numbers of illegal aliens already here by using law enforcement. Hey, there's a concept. Huckabee signed the pledge in South Carolina, the site of the Republican primary next Saturday, where it's looking like he's in a very tight race for the top spot.

Throughout the campaign, Huckabee's opponents have called him weak on immigration, pointing to things like his support when he was governor of Arkansas for college scholarships for children of illegal aliens. However, Huckabee's talk on immigration got a lot tougher last month when he came out with a nine-point immigration plan. Among other things, the plan calls for sealing the border with Mexico; hiring more border patrol agents; enforcing the law on employers who hire illegals; and making illegal aliens go on before they can apply to return to the United States.

Here's the question. How realistic is Mike Huckabee's pledge to send all illegal aliens home?

Go to, where you can post a comment on my blog -- Wolf.

BLITZER: All right, Jack. Thanks very much.

Brian Todd is working on a story, by the way, that's coming up later here in THE SITUATION ROOM, more on Mike Huckabee, some controversial comments he's making now about gay marriage, about the confederate flag in South Carolina. Lots of stuff brewing out on the campaign trail. We'll update our viewers with that.

Thanks very much, Jack.

John McCain is unveiling his plan to put some new kick into the economy. We're going to tell you what he wants to do and how it compares with his Republican rivals, what it means for the showdown Saturday in South Carolina.

Also coming up, Hillary Clinton once famously stood by her man. Now he's fighting for her. Does he go too far, though? We're going to take a closer look at some angry words from the former president.

And why is Clinton supporter Bob Johnson now apologizing to Barack Obama? I'll ask Bob Johnson about that and what he was thinking when he seemed to allude to past drug use by Obama.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Barack Obama is often beating back criticisms not just from one Clinton, but two. It's rare in presidential politics that a candidate has to fight so hard against a rival and that candidate's spouse as well. But, of course, it never happened that a candidate is married to a former president.

Our senior political correspondent, Candy Crowley, is joining us now from Las Vegas.

You've been looking at a lot of what's going on with the Clintons, Candy, husband and wife, and the role, specifically, that Bill Clinton has carved out for himself on the campaign trail.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. You know, Wolf, we were at an event the other day with Hillary Clinton, and she was introduced as the most famous woman in the world. And as you know, her husband is a noted headliner as well, and they've really been working it.


CROWLEY (voice over): One of the problems with running against Hillary Clinton is that she has a pit bull.

W. CLINTON: If she wanted 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. CROWLEY: That's the latest Clinton brawl over whether his wife's campaign pushed a failed lawsuit to block nine Nevada caucuses where Barack Obama is expected to have considerable support.

UNIDENTIFIED MALE: Do the caucuses in the casino help Senator Obama? Or do you think...

CROWLEY: Not much need for an answer, anyway. It's a pretty good bet that if Bill Clinton feels that way -- and he does -- then she does, too.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Obviously, we want as many people as possible to be able to participate.

CROWLEY: It's been like that a lot lately, a rendition of good cop/bad cop, ganging up mostly on Barack Obama.

She applies the velvet shiv.

H. CLINTON: I'm running for president because I believe that there is not a contradiction between experience and change.

CROWLEY: He favors heavy artillery.

W. CLINTON: Give me a break. This whole thing is the biggest fairy tale I've ever seen.

CROWLEY: Earlier on they traveled together. It's more like tag team now. She debates in Nevada, he revs up voters in California. Today, s he's in California, he picks up the slack in Nevada.

How much does he help? For Democrats, Bill Clinton is the good old days, the high times. Eighty-nine percent of them view him favorably. It makes running against her difficult -- getting people to vote for you who once voted for him.

Obama and Edwards tread lightly on the Bill Clinton era, but they tread, arguing mostly that the country needs a sea change.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: 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.

CROWLEY: Still, it's tricky business. In New Hampshire exit polls, 49 percent of Democrats had a strongly favorable opinion of Bill Clinton. A majority of them voted for Hillary Clinton.

The only thing better than having a pit bull on your side is having a pit bull with high favorables.


CROWLEY: It's always been an assumption that if and when Hillary Clinton got to the general campaign, that Bill Clinton might have to take a back seat because of the so-called Clinton baggage, but one more figure for you, Wolf. Sixty percent of Americans, Republicans, Democrats, Independents, have a favorable opinion of Bill Clinton. Expect to see him out on that general campaign trail, if indeed they get there -- Wolf.

BLITZER: He had similar high favorability numbers even during the worst days of the whole Monica Lewinsky scandal some 10 years ago.

All right. Thanks very much for that.

Candy watching this story.

Hillary and Bill Clinton are trying to put a major blowup with the Obama campaign behind them. That would be the recent dustup over race, politics, code words, campaign tactics. Today, a prominent Clinton supporter is doing his part to support a truce between the Clinton and Obama camps.

The Black Entertainment Television founder Bob Johnson apologized to Senator Obama for a remark that was widely seen as an allusion to Obama's acknowledged drug use as a teenager. The Obama camp says it accepts the apology.

This is what Johnson originally said last Sunday.


ROBERT Johnson, FOUNDER, BLACK ENTERTAINMENT TELEVISION: ... Hillary and Bill Clinton, who have been deeply and emotionally involved in black issues, when Barack Obama was doing something in the neighborhood that I won't say what he was doing. But he said it in his book.


BLITZER: And joining us now on the phone is Bob Johnson.

All right, Bob. Explain to our viewers what you were thinking when you made that very controversial comment.

JOHNSON: Well, Wolf, and you know, I'm a strong supporter of Hillary Clinton for president, as you know, and sometimes in campaigns you get carried away in your zeal to support your candidate. And you say things that are inappropriate and not proper for a campaign that should be based on the issues.

And that is why I issued this personal apology to Senator Obama, I know Senator Obama. I have a great deal of respect for him. And I'm glad that his campaign has responded and accepted the apology.

And I think that as we saw in the last debate, that matter is settled, both by the Clinton campaign and the Obama campaign, and certainly by myself.

BLITZER: Give us your mind -- the process that you went through. I know you struggled whether to support Hillary Clinton or Barack Obama. Tell us why in the end you decided to support Hillary Clinton. JOHNSON: Well, it wasn't a struggle. As you know, I have been friends with the Clintons for almost 20 years -- President Clinton and Hillary. And I have a great, as I said, respect for Senator Obama. But Hillary Clinton, in my opinion, has far more experience and is ready on day one to be president of the United States.

She has been in the Senate longer than Senator Obama. She has been engaged in international affairs issues as it relates to involvement with -- as a first lady and the traveling she has done. She has been on the Armed Services Committee ever since she has been in the Senate.

She has been actively involved in public policy issues, health care, economic, education, all of those matters that I think are critical to a -- what I would call a CEO of the nation, or a leader of the nation, taking control of this country on day one and being able to deal with everything from the economic recession we are facing to terrorism to moving this country forward with a positive change in leadership to get things done, sometimes in a very tough environment in Washington, D.C.

BLITZER: But what do you say to your fellow African-Americans, Bob, who say, you know what, given the history of racism in our country, and all that we have gone through, this is a moment, this is an opportunity right now potentially for a black man to be elected president of the United States and the country should really grab it, especially, especially African-Americans?

You have heard that argument, I'm sure, from a lot of people. What do you say to them?

JOHNSON: Well, Wolf, I think -- yes, I have heard that argument. That argument just resounds to the bottom of the heart of African- Americans. And I myself look at pride and what I have been able to accomplish with African-Americans who work with me in the business arena. It is certainly something that we should be proud of when we overcome all of the challenges that we face. And all of us can be really proud of Senator Obama.

But when it comes down to -- I tell my African-American friends, you have got to look at this issue, not only with your heart, but with your head. And when I look at it with my head, my head tells me that the best person to lead this country, the person who I think can deal with the issues that are certainly important to African-Americans, education, access to housing, health care, job creation, criminal justice, someone who has a long, long term of involvement with us in those issues, that is Senator Hillary Rodham Clinton.

And so I look at it, I say, my heart goes out to those people who want to see a people of color, who looks like us, in the White House, great achievement, historic beyond words, but at the end of the day, this nation has to be run by a leader. And I think Hillary Clinton is the better candidate to lead this nation for the next eight years.

BLITZER: Bob Johnson, thanks very much for joining us.

JOHNSON: Wolf, thank you very much. Appreciate it.


BLITZER: Fans of a politically-charged documentary are going to new lengths to promote the film. We're going to tell you where the fight over the anti-Hillary Clinton movie goes from here.

Also, Republican Fred Thompson is promising to shock the world in South Carolina. Will it be the kind of shock he needs to keep his campaign going?

John King on the campaign trail watching the story.

Stay with us. You're in THE SITUATION ROOM.



BLITZER: John McCain has a message to millions of Americans -- he feels your pain. Amid high misery and low confidence in the economy, McCain now unveiling his plan to improve the situation.

And with so many presidential candidates running as agents of change, why are so many of them looking for help from veteran politicians and Washington insiders?

Stick around. Bill Schneider has that story.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: The defense secretary reveals his thoughts on bringing more U.S. troops home from Iraq, but there's said to be tension between officials over at the Pentagon and commanders on the ground over this issue. We're standing by for new information.

There was an enormous bang. That's how one passenger describes a crash landing at one of the world's busiest airports. We're going to tell you what happened in that emergency and the desperate escape. Stand by for that.

And it contains Gestapo orders, slave labor booklets and death books. A vast Nazi archive is now open for Holocaust survivors and their families.

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

Americans face record home foreclosures, high gas prices and fears of losing their jobs. John McCain wants everyone to know -- and I'm quoting now -- "We will get through this."

Today, the Republican presidential candidate is unveiling a plan to try to help the economy. And he used a contested primary battleground to do it. Let's go to CNN's Dana Bash. She's in Columbia, South Carolina, watching this story.

Clearly, it's part of a strategy to win votes Saturday in the primary. I assume that's part of his rationale for unveiling that plan today.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: There's no question about it, Wolf.

And it appeared to be thrown together rather quickly. Senator McCain spoke about the economy here in Columbia, talked about the issue. But it wasn't until we saw on our BlackBerrys after the speech that he meant to really unveil a new specific plan.

And it's an indicator not just of how tight this Republican race is, but how none of these candidates -- all of the candidates, I should say, want to get in front of the issue that is dominating.



BASH (voice-over): Just before this South Carolina primary he needs to win, it's clear what John McCain learned from the Michigan primary he lost: Focus on the economy.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Obviously, we're seeing the news. We're seeing the concerns that people have out there.

BASH: Unveiling a new economic stimulus plan.

MCCAIN: I will cut your taxes. I will encourage the growth. I will eliminate the wasteful and unnecessary spending.

BASH: Specifically, McCain says he would lower the corporate tax rate, allow a tax write-off for equipment and technology investments, establish a new tax credit for research and development.

McCain has stopped warning voters that lost jobs aren't coming back. That didn't work in Michigan. Now it's optimism.

MCCAIN: This is still the most powerful and greatest nation on Earth. We are the greatest innovator, the greatest exporter, the greatest importer, the strongest economy.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I will be releasing soon my economic stimulus plan to give the economy a short-term boost.


BASH: In a hurried appearance before he left South Carolina for Nevada, Mitt Romney promised he will soon announce an economic plan of his own. ROMNEY: I do believe it makes sense for Congress to take immediate action. The consequence of the economy falling into a recession is one which can be calculated in large numbers for the government, but in very important, heartfelt changes for the families of America.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: I want to say to you, I was probably the one candidate, particularly in my party, who started seeing that we had some economic challenges.

BASH: As for Mike Huckabee, no talk of stimulus, just, I told you so.

HUCKABEE: Now, a few months later, all of them are saying, boy, we have got some economic challenges. Well, they would have known that a little bit ago if they had gotten out of Washington and out of the ivory towers.


BASH: Now, as for Senator McCain, his campaign tells us that his plan would ultimately -- ultimately cost about $50 billion. When asked how he would pay for it, Senator McCain said he would do it by cutting pork-barrel spending. No surprise there, of course, Wolf, since McCain is trying to woo conservatives here in South Carolina and elsewhere by preaching fiscal restraint -- Wolf.

BLITZER: He hates those earmarks, and has for a long time.

All right, thanks very much, Dana, for that.

Republican Fred Thompson is saying once again today he's not ready to support an economic stimulus package. Thompson sounds -- sounded that much more cautious note in South Carolina, where he's putting his struggling campaign on the line right now.

Let's head out to our chief national correspondent, John King. He's watching this story for us.

Is he sounding, though, more upbeat, more optimistic about his chances Saturday, John, in the process?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, he's clearly comfortable here. The former Tennessee senator said it's nice to be around Southern cooking; it's nice to be around people who don't think he talks funny.

But he doesn't just need Southern hospitality. Fred Thompson needs a win.


KING (voice-over): Rolling through small-town South Carolina, hoping the jumbled Republican race is about to take another turn.

FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: And we're going to shock the world on Saturday here with your help.

KING: This is the first state where Fred Thompson is a factor. Just how much is the question.

THOMPSON: Good to be back among folks who don't think I talk funny. I will tell you that. But...


KING: He talks experience and judgment, like John McCain...

THOMPSON: I served on the Intelligence Committee. I have been in those countries and talked to CIA officers in closed rooms. And it's no time to have a president who needs training wheels.

KING: ... and urges social consumers enamored with Mike Huckabee to look again.

THOMPSON: It's the reason I received the endorsement of the National Right to Life folks.

KING: Social conservative support is critical to Thompson. But, while Thompson was mulling the race last year, Huckabee was making dramatic inroads.

UNIDENTIFIED MALE: He may have missed his opening. I mean, politics is a process very much tied to timing. And that window seemed to open this summer. He may have waited a little bit late.

KING: Now Huckabee is his urgent target. Thompson criticizes governors who support giving tuition breaks to children of illegal immigrants.

THOMPSON: And some of them are running for president this year.

KING: And he says fiscal conservatives should beware of Huckabee's economic pitch.

THOMPSON: Usually, that kind of language and that kind of rhetoric, especially the populist kind of rhetoric, winds up in bigger government.

KING: He also questions his rival's nice-guy image. This show of hands is people who say they have received calls supporting Huckabee that distort Thompson's record on abortion.

THOMPSON: Half the people in here have...

KING: Huckabee says the calls are from an independent group with no ties to his campaign. Thompson says, that is not good enough.

THOMPSON: You can't just wash your hands of this, when you have made a special effort in his case of saying he's above all this, this is a new day, he's a new kind of guy, he's a values guy, and then walk away from something like this.


KING: And on that question so many of the other candidates are dealing with, what to do about the economy, Senator Thompson did say today he was open to some small, targeted steps from the federal government to provide economic stimulus.

But, Wolf, he said what he is worried most of all is that, if any stimulus package is put on the floor of Congress, it will become loaded with pork. He said, what we can't have is a -- quote -- "Christmas tree" -- Wolf.

BLITZER: John King is in Prosperity, South Carolina. I love the name of that town.

Does it look prosperous...

KING: It's a great town.


BLITZER: ... where you are, John? What's the story in Prosperity?

KING: The great joke here, Wolf, is that prosperity is to the left of Clinton, South Carolina. They have T-shirts and everything. So, they prefer this town. And it's a great little town, small town. And we're right across from the Stable Steak House, where Senator Thompson was today, good small-town flavor here in South Carolina.

KING: Lovely name, though.

All right, thanks very much, John King, reporting from Prosperity in South Carolina.

And, as John just reported, the pro-Huckabee phone calls attacking other Republican candidates, commonly referred to as push polls, were denounced by the Huckabee campaign once again. Several South Carolina residents are complaining online about these calls.

Let's go to our Internet reporter, Abbi Tatton.

Abbi, what are they saying about all of this?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, dirty tricks in South Carolina. And this is what it sounds like.


UNIDENTIFIED MALE: Does the fact that former Senator Fred Thompson refuses to sign the no-new-tax pledge that is a written promise not to raise taxes as president and that Governor Huckabee has signed the no-new-taxes pledge not to raises taxes as president, supported the Bush tax cuts, and is proposing a FairTax reform that eliminates the IRS altogether, make you more likely to trust Governor Huckabee on the issue of tax relief?



TATTON: That's the voice of Matt Collins (ph) of Charleston, a Fred Thompson supporter who received that call. And this was his reaction.


UNIDENTIFIED MALE: I just got push-polled by somebody supporting Mike Huckabee against Fred Thompson. Interesting.


TATTON: A million of these calls going out. And it's not just against Fred Thompson.

Look at what people are saying online about these calls, that they have got them slamming John McCain, Mitt Romney, and not just in South Carolina, people reporting that they're getting them in Nevada, in Michigan, in other states as well.

The calls are coming from an organization called Common Sense Issues. The Huckabee campaign has disavowed these tactics. The executive director of Common Sense Issues, Patrick Davis, says that they're independent of the Huckabee campaign. He says the calls are educational.

And, look out, Florida. They may go there next -- Wolf.

BLITZER: As Jack Cafferty would say, it's getting ugly out there, Abbi. Thanks very much.

This important programming note to our viewers about the South Carolina primary: CNN and the Congressional Black Caucus Institute are sponsoring are a Democratic presidential debate in Myrtle Beach on Monday. That's Martin Luther King Jr. Day. Please join me and Suzanne Malveaux, Joe Johns, for the showdown Monday night, 8:00 p.m. Eastern right here on CNN.

Stay with us all day Saturday for complete coverage of the South Carolina primary and the Nevada caucuses.

Change matters. Virtually all the presidential candidates say they want to shake up Washington. So, why are they looking for support from veteran politicians and Washington insiders?

Also, Mike Huckabee raising eyebrows when talking about gay marriage and making a comment about men and -- marrying men and perhaps other things as well. That's coming up in our "Strategy Session."

And new developments regarding hostages taken by Colombian rebels -- it involves whether or not some captives held for years are still alive.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Another Democratic senator is choosing sides today between colleagues Hillary Clinton and Barack Obama and former colleague John Edwards, the Judiciary Committee chairman, Patrick Leahy of Vermont, choosing Obama. Leahy is now the seventh Democratic senator to endorse Obama. The senators have endorsed -- 10 senators, that is, have endorsed Clinton.

There are no Senate endorsements for John Edwards that we know of among sitting senators right now.

Let's go to our senior political correspondent, Bill Schneider. He's watching these stories -- the story for us.

Are these endorsements actually good for these candidates, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, they could be good or they could be bad. Obama is taking a calculated risk, but, you know, it just might pay off.


SCHNEIDER (voice-over): Even though he's a United States senator, Barack Obama says he's running against Washington.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I am running because I believe the real gamble in this election is playing the same Washington game with the same Washington players and expecting a different result.

SCHNEIDER: So, how is the Washington establishment responding? Are they afraid? Are they a'trembling? No.

SEN. JOHN KERRY (D), MASSACHUSETTS: Sometimes, the hardest thing is for the establishment, the established political world to make a clean break from the past, to really embrace new thinking and a new beginning.

SCHNEIDER: Some big-time Washington players have endorsed Obama, like 2004 Democratic nominee John Kerry and Senate Judiciary Committee Chairman Patrick Leahy.

Does Obama really want their endorsements? There is the risk that it will make his outsider stance look phony. But Obama's big problem is not convincing voters he's fresh and new; it's convincing voters he has the experience and still to do the job.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: 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.

SCHNEIDER: Endorsements from his Senate colleagues will reassure voters that they feel comfortable with Obama, that they can work with him, that he can do the job, as long it doesn't look like Obama is going after them for endorsements. Instead, they're coming to him, confessing their sins.

KERRY: One thing is clear. Washington, D.C., isn't the only teacher. And, in recent years, Washington, D.C., hasn't been the best teacher.


SCHNEIDER: The insiders hope some of Obama's luster may rub off on them. And Obama hopes the endorsements will reassure voters that he's not a risky bet -- Wolf.

BLITZER: Thanks very much, Bill Schneider, with that story for us.

Coming up in our "Strategy Session": Hillary Clinton focusing in on the economy. But could her prescription to this issue cause her a political headache down the road?

And Mike Huckabee seems to be hardening his message on some of the social issues that he's campaigning so hard on in South Carolina right now.

That's what Donna Brazile and Cheri Jacobus, they're standing to talk about -- right here in THE SITUATION ROOM.


BLITZER: Hillary Clinton wants you to know what she would do to help in these tough economic times. She's out there talking about her plans to try to help troubled homeowners if elected president.

Let's go to our "Strategy Session" right now, joining us, our political analyst Donna Brazile -- she's a Democratic strategist -- and Republican strategist Cheri Jacobus.

Guys, thanks very much for coming in.

Here's a little clip of what Hillary Clinton is talking about to try to help homeowners who may be in trouble.


CLINTON: I want to have a moratorium for 90 days on foreclosures, so we can begin figuring out how to help people work out the challenges they face in staying in their homes. I want to freeze interest rates.


BLITZER: And, the other night, she said she wants to freeze interest rates. I assume she's referring to the mortgage rates for five years.

Is that a responsible comment, though, from somebody who wants to be president, to sort of dictate to the free market what the interest rates should be?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, I'm not an economist, but even the chairman of the Federal Reserve is concerned about the economy. He's concerned about the housing starts. It's down about 14 percent.

Look, someone needs to tell the American people the truth. Are we in a recession or not? And I think what Senator Clinton has said, along with others, is that we need an economic stimulus package that will help keep families in their homes.

BLITZER: What do you think?

CHERI JACOBUS, REPUBLICAN STRATEGIST: Well, I think this is basically pandering for the Nevada primary.

Nevada is the state that has been hit, I think, hardest, or just about hardest, by the mortgage crisis. And, so, she's using her position as a presidential candidate to basically this giveaway. But that type of a freeze is irresponsible. And it really should not be dictated by a president.

The problem for Hillary Clinton right now is that she's going to have to take that to the Senate and fight for it, so it doesn't look just like a proposal she's coming up for campaign purpose. Whether or not she does that, I think, will be the real test for the voters, if she's just pandering and saying what she needs to, or not.


JACOBUS: So, it would be an interesting question to come up in a debate.


BLITZER: She is a sitting senator.

BRAZILE: Well, look, she's not pandering. People really out there telling these candidates that they're scared.

We have Citibank and Merrill Lynch and others going overseas to borrow money. We have homeowners afraid that they're not going to make ends meet. She's not pandering. It's not pandering when candidates come up with specific proposals, as Senator Clinton did on January 11, outlining what she would do to help stimulate this economy.


JACOBUS: What's important to look at is what's not in her package. And she does not talk about a middle-class tax cut in this package.

BRAZILE: Oh, yes.

JACOBUS: So, if you don't think this isn't pandering because of the Nevada primary, you know, come on.


BRAZILE: Read her plan,, Cheri.

JACOBUS: The proof is in the pudding. If she takes it to the Senate floor and if she gets involved in a fight...

BLITZER: Well, that's the point she's trying to make, that it's one thing to just say this out of the campaign trail. It's another thing, as a sitting legislator, to go and introduce legislation or to pass some bill that would actually implement her recommendations.

BRAZILE: Well, I haven't -- I haven't looked at her Web site or Obama or Edwards lately to what their economic stimulus -- I think they're waiting on Ms. Pelosi and Mr. Reid and others to come up with a package that they could all embrace.

But she's been very honest and forthright in coming up with a plan. So have all of the Democrats. The Republicans are just finding their voice no the economy.


JACOBUS: Talking about it doesn't do it.


JACOBUS: ... got to do something.

BLITZER: Let's talk about what other people on the Republican side consider to be pandering.

Mike Huckabee, he is making some controversial comments out there on the Confederate flag, a hot-button issue in South Carolina with a lot of history there, especially involving John McCain.

This is what he says. He says: "You don't like people from outside the state coming in and telling you what to do with your flag. In fact, if somebody came to Arkansas and told us what to do with our flag, we would tell them what to do with the pole. That's what we would do."

You know, this is Mike Huckabee obviously speaking to an element in South Carolina...


BLITZER: ... that believes that Confederate flag should be flying.

JACOBUS: You know, I think it's a little bit of a short-term -- has short-term value for him.

I think John McCain had it right when, after the 2000 campaign was over, he said, you know, what I really felt was that the flag shouldn't be flown.

So, it could appeal to some people. I find it hard to believe that even people in South Carolina who like their flag are going to vote on that sure. So, I think it's somewhat shortsighted on the park of Mike Huckabee to say that.

BLITZER: What do you think, Donna?

BRAZILE: Well, that is pandering.

This is a former Baptist -- or perhaps a Baptist preacher, who should understand that it's time to bring us all together. Look, there's a rich legacy of racism in this country. And we just left a conversation in the Democratic Party where we have a truce. I think the Republicans need to have a truce on this and really bring themselves into the 21st century.

BLITZER: Donna Brazile and Cheri Jacobus, guys, thanks for coming in.

On the presidential campaign trail right now: Do you know where your candidates are? We're going to tell you where they are and why.

And, in South Carolina, some older African-Americans say, they're backing Hillary Clinton, while some younger blacks say they're backing Barack Obama. What might that mean come primary day for the Democrats down there?

We will be right back.


BLITZER: We hit the campaign trail on our Political Ticker this Thursday.

All three leading Democratic presidential candidates spent time today out in California. That's the big prize on Super Tuesday, February 5. Barack Obama has a stop in San Francisco. John Edwards swings through Los Angeles, before heading back to Nevada for Saturday's caucuses. Hillary Clinton spends a good part of the day in the state.

The Democrats will be back for CNN's big debate in Los Angeles on January 31 at the Kodak Theatre. I will be moderating that debate. We will also have a Republican presidential debate the night before in Los Angeles on January 30 as well at the Reagan Library. Anderson Cooper will be moderating that debate.

And, remember, for all the latest political news any time, check out

Right now, you can check out Jack Cafferty. He's got "The Cafferty File" -- Jack.

CAFFERTY: Do any of these senators who are out running for president spend any time being senators anymore? BLITZER: Well, you know, the Senate has been in recess a lot. I don't know if you have noticed, Jack, that they're not doing a whole lot of work the last few weeks here.

CAFFERTY: But they're not in recess now. And Bernanke is up on the Hill talking about how urgent it is to do something about the economic problems. And these are senators.


BLITZER: The short answer is, they don't spend a lot of time there.

CAFFERTY: Thank you.

The defense rests, Your Honor.


CAFFERTY: The question this hour is: How realistic is Mike Huckabee's pledge to send all illegal aliens home?

Beth writes: "In reality, Mr. Huckabee may not be able to send them all home. But think how much better off we would be if he only accomplishes half that goal. I have not heard any other candidate with enough guts to make such a pledge."

Mike writes: "Completely unrealistic unless you get the full support of state and local law enforcement. It will be up to local law enforcement agencies to apprehend illegal aliens, which they should be doing already anyway, and then turn them over to the INS. There are already laws on the books that are not being enforced, so what does it matter if one person is saying he's going to send them all home?"

Kathryn writes: "I hope, if he's elected, he can do it. What's wrong with saying, "You are here illegally; go home"? If I ran a red light illegally, I would have to pay the consequences. I'm all for making the illegal aliens obey the laws of the United States."

Tom writes: "A pledge on illegal aliens? Give me a break. It is the economy, stupid. He is just pandering. He knows that won't work."

William in North Carolina: "I will vote for Mike Huckabee on this pledge alone. Why even have borders or laws if anybody can come or go and do as they please without consequence? Deporting every illegal immigrant is not only realistic and uncomplicated with today's technology; it is imperative, if the country is to survive as a sovereign and honorable nation."

Troy writes: "Elian Gonzalez times 12 million equals yeah, right."

And Brady says: "How exactly does Huckabee plan on rounding up 12 million illegal aliens? And where will the millions of dollars in law enforcement resources come from? Maybe he could play his guitar around the country with Chuck Norris to raise the required cash" -- Wolf.

BLITZER: Jack, thanks very much.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: Mike Huckabee in the heart of the South speaking out about the Confederate flag and gay marriage. Is he speaking from the heart?