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The Situation Room

Interview with Barack Obama; Robert Gates Addresses Air Force Nuclear Weapons Mishap

Aired June 05, 2008 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama says settle down. He'll make a decision about his running mate in good time. This hour, we have a brand new interview with the Democratic presidential nominee-in-waiting.
Is Hillary Clinton on the short list of what he -- about what he calls his final counselor?

And Obama takes new swipes at John McCain and at President Bush. We'll get instant reaction to our interview from a top McCain ally, Carly Fiorina. She's here in THE SITUATION ROOM.

And the Democratic Party transformed by its new leader. We'll look at the new standard Obama is setting for accepting political cash for the entire party.

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

Barack Obama says the last 48 hours have been exciting, but he has a lot of work to do. On his to do list today, courting voters in Virginia -- a once solidly red state he hopes to turn blue in November. Many Democrats now are rallying behind their nominee-in- waiting, including, apparently, Hillary Clinton, who's signaling she'll endorse Barack Obama on Saturday.

Let's bring in our senior political correspondent, Candy Crowley. She's in Bristol, Virginia, all the way in the southern part of Virginia today, where Barack Obama was campaigning.

They're pretty serious about taking Virginia seriously this time, Candy. You sat down with the senator. You had a chance to go through many of the substantive issues.

First, on foreign policy, he was open to discussing several important questions.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: He really was. This was kind of a broad range. We kind of tried to pick some hot spots around the world, things that are happening now -- Gitmo, things that have been happening for ages -- Jerusalem and what you do with that city -- and Iraq. And I had thought his position on Iraq, when I said, you mean you would go over there and you would see whatever you saw and General Petraeus would say things and it would not change your mind, no matter what, about what you would do with the troops. And he seemed to kind of open that door a little crack. So we did talk about foreign policy, a little bit about domestic policy. And I can tell you a little later about what he said about a basketball game that's coming up.

BLITZER: I know. That's going to be interesting.

All right, let me go to the interview right now.

Here's an important piece of Candy's interview on foreign policy with the Democratic presidential presumptive nominee.

(BEGIN VIDEOTAPE)

CROWLEY: I want to ask you about something you said in AIPAC yesterday. You said that Jerusalem must remain undivided.

Do Palestinians have no claim to Jerusalem in the future?

SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: Well, obviously, it's going to be up to the parties to negotiate a range of these issues. And Jerusalem will be part of the negotiations. But...

CROWLEY: But you would be against any kind of division of Jerusalem?

OBAMA: Yes. My belief is that as a practical matter, it would be very difficult to execute. And I think that it is smart for us to work through a system in which everybody has access to the extraordinary religious sites in old Jerusalem, but that Israel has a legitimate claim on that city.

CROWLEY: You've upset the Palestinians with this, who have said -- some of the leaders have said it shows he is not for peace, if he believes Jerusalem should remain undivided.

It causes a problem, doesn't it, as the U.S. being an honest broker?

OBAMA: Well, keep in mind, though, that I've said some things -- and I said even some things yesterday -- that probably some Israelis aren't happy with, which is that we have to look at the settlement policy of the Israeli government. And that has not been helpful to peace, as well; that we have to be a contiguous and cohesive Palestinian state that functions effectively.

You know, there are a whole host of areas where I think there's going to have to be compromise on both sides.

And what I said yesterday is that we're going to have to start earlier than we have historically on this process.

I recognize that a president comes in with a lot of stuff coming at him. But the Middle East peace process is so important, that we can't reserve it to the end of a presidency. We've got to start soon. And I'm going to be absolutely committed to making that happen.

CROWLEY: You've said you want to go back to Iraq...

OBAMA: Yes.

CROWLEY: ...and see what the situation is on the ground.

Is there nothing that they could show you or that General Petraeus could tell you that would move you from wanting to immediately begin removing U.S. troops?

OBAMA: Well, you know, I would never say there's nothing or never or no way in which I'd change my mind. You know, obviously, I'm open to the facts and to reason. And there's no doubt that we've seen significant improvements in security on the ground in Iraq. And our troops and General Petraeus deserve enormous credit for that.

I have to look at this issue from a broader strategic perspective, though. And in terms of long-term strategy, I am absolutely convinced that the best thing we can do is to set a clear timetable, tell the Iraqis we are going to start pulling out, do it in a careful fashion, make sure...

CROWLEY: Now, when you say careful...

OBAMA: Yes?

CROWLEY: What are we going to be careful about?

OBAMA: Well, we're going to be careful about two things. One is we've got to be careful about the safety of our troops. It's not an easy exercise to bring out the thousands of troops that we have there, the tons of equipment that we have there. So we've got to execute that effectively. But we also have to do it and pace it in a way that works in concert with the diplomacy that's happening inside Iraq and in the region. And it's got to be coupled with increased humanitarian aid -- something that we have not done a good job of. It's going to have to be combined with getting the United Nations and other international agencies to put in place monitors so that we can assure that we don't see genocide, we don't see ethnic cleansing taking place.

There's a lot of work that's going to have to be done. It's a very complicated operation. And I've got no interest in doing it carelessly or precipitously.

CROWLEY: But a timetable could slide then, I mean if you took all those things into consideration?

OBAMA: Well, but I think it's important for us to say to the Iraqis we're not here for the long haul. It's time for you guys to achieve agreement on critical issues like how you're dividing up oil revenues, how the provincial government is relating to the national government. Those are issues you've got to resolve. We are not going to be here forever. And we will continue to work with you to make Iraq a cohesive, coherent state. But we have a lot of other interests.

We've got to make sure that Afghanistan is not sliding into chaos. We've got to go after Al Qaeda much more aggressively. Pakistan -- the peace agreements that they've been making with tribal leaders in those areas do not appear to be resulting in a better safety situation for our troops or for the Afghan government. We've got to deal with Iran. We -- and we have to tamp down the anti-American sentiment that has become so pervasive in the Middle East.

Those are all things that I've got to take into account. And that's why I believe that my Iraq approach is much better to an approach that is essentially open-ended, when it comes to John McCain.

(END VIDEOTAPE)

BLITZER: Let's go back to Candy Crowley.

We're going to have more of your interview coming up, Candy.

But you also raised the issue of Guantanamo Bay and these tribunals for these suspected terrorists, including Khalid Sheikh Mohammed, among others.

And what did he say?

CROWLEY: Well, I asked him. He has said all along we need to close down GITMO. It's against American principles. And I said, well, so what are you going to do with all the people that are in Gitmo?

What happens?

And he said, well, you put them in military prisons. You try them. If they are found not guilty, you try them in tribunals. If they're found not guilty, you let them go. And he said they did this after the first bombing in the World Trade Center and we can certainly do it again.

So that was his take on -- as you know, he has said several times we need to close the place down.

BLITZER: All right, Candy, stand by.

I want to run more of your interview in a moment, including what he has to say about Hillary Clinton on this day.

But let's check in with Jack Cafferty right now. He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN ANCHOR: Speaking of Hillary Clinton, she's offering Barack Obama a half a loaf on her way out the door. No joint appearance with the presumptive nominee and their families in prime time, which would be carried live on television. No appearances by folks like Harold Ickes or Terry McAuliffe, who ran her campaign, telling her supporters to unite behind Barack Obama. No appearance by Bill Clinton saying let bygones be bygones, I'm going to offer to work hard to get Barack Obama elected.

Instead, Senator Clinton is planning a public appearance on Saturday to talk about how "we can rally the party behind Senator Obama. The stakes are too high and the task before us too important to do otherwise."

Meanwhile, it turns out Clinton had to be pushed to get out of the race by several of her Democratic Congressional colleagues. And reportedly, she didn't even bother to call Barack Obama to tell him of her decision.

One more thing. This is important. Clinton is expected to suspend her campaign instead of dropping out altogether. And that means she will remain a candidate, technically. And she intends to hold onto her delegates.

Some Obama supporters worry that questions about what Clinton does next will turn into a second campaign that won't end until Obama chooses a running mate -- a job that Clinton is apparently interested in even though nobody's asked her.

Mike Lupica, an old buddy of mine, writes in the "New York "Daily News" that even at the end of this, Clinton is trying to rewrite the party rules that her people helped to write in the first place. And he adds this -- quoting now -- "She acts as if she is the shadow president of a constituency that includes the 18 million people she says voted for her, as if those votes belong to her; as if all 18 million people are waiting for her to give them their marching orders. She leaves the race with the same air of entitlement with which she entered."

So here's the question: How would you describe the way Hillary Clinton's handling her exit from the race?

Go to CNN.com/caffertyfile. You can post a comment on my blog.

I'm not out of breath today, Wolf. It feels much better.

BLITZER: Yes, you sound really good, too. You sound very strong.

(LAUGHTER)

BLITZER: Jack, Stand by. Thank you.

Barack Obama says Hillary Clinton would be on anyone's vice presidential short list. Up next, more of our interview with Barack Obama. He gives his best pitch to women voters who were fierce supporters of Hillary Clinton. You're going to want to hear what he's to say.

Plus, the McCain camp's reaction to Barack Obama. I'll speak live with a top adviser to John McCain, Carly Fiorina. She's standing by right here in THE SITUATION ROOM. Immediate reaction.

And a new snapshot of the fall match-up between McCain and Obama -- the prospects for a squeaker vote. That's coming up in our Strategy Session.

Lots of news happening today right here in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Let's get back to our interview now with Barack Obama.

CNN's Candy Crowley pressed him just a little while ago about the question a lot of people are asking -- who will he choose as his running mate?

(BEGIN VIDEOTAPE)

CROWLEY: You know and I know that if Senator Clinton wanted to tamp down this vice presidential conversation by her surrogates that she would. She has, as she will tell you, more than 17 million voters. She has come -- she has more delegates than any runner-up in history.

Do you have to put her on the ticket?

OBAMA: Well, let me begin by saying -- repeating what I said on Tuesday night. She has been an extraordinary candidate. She's been an extraordinary public servant for years now. She ran as tough a race as could be imagined. And I have nothing but respect for Senator Clinton and what she's going to contribute to the party. And I'm also confident we're going to be unified in November.

What I've also said is the vice presidency is the most important decision that I'll make before I'm president. And it's something that I take very seriously. I know Bill Clinton took it very seriously when he had to go through this process. Senator Clinton, I'm sure, would take it very seriously if she were going through this process.

So we've got a committee that's made up of some wonderful people. They are going to go through the procedure and vet and talk to people and get recommendations. I will meet with a range of people and I'll ultimately make a decision. Senator Clinton would be on anybody's short list. By all...

CROWLEY: But you don't feel this -- there's an enormous amount of pressure out there for you to put her on the ticket.

Do you feel that pressure?

OBAMA: You know, I am a big believer in making decisions well, not making them fast and not responding to pressure. And I think Senator Clinton right now is in the same position I am, which is we just completed 54 contests. We want to catch our breath. We need to take stock of where we are. I'm sure she has to do the same thing.

And, you know, she and I will have a conversation -- we won't be doing it through surrogates or the press -- to talk about how we move forward and join forces to make sure we are successful in November. And so there's going to be a lot of time for that.

CROWLEY: Is it the best way to win over her supporters, though, to put her on the ticket?

You've seen, I'm, sure, the polling showing that you're dropping women, sort of downscale voters, those kind of voters.

Isn't that the best way to win them over, is to put her on that ticket?

OBAMA: As I said, I think everybody just needs to settle down. We've just completed this arduous process. It's only been two days. And, you know, I think it's both not just in my interests and Senator Clinton's interests, but in the Democratic Party's interests and the country's interests to make sure that I make this decision well. And I will be deliberate and systematic about it because this will be my final counselor when I'm making decisions in the White House. And I want to make sure that I get it right.

CROWLEY: So you don't feel at this moment you have to put her on the ticket is the bottom line?

OBAMA: Well, the bottom line is, is that we're going to go through a process. And I'll make my decision sometime in the weeks to come.

CROWLEY: Give me your best 30 second pitch for a 45-year-old female Hillary Clinton supporter who is saying I'm not going to vote for him, I am going to vote for John McCain or I'm going to stay home.

Why does she come vote for you?

OBAMA: We've got, I think, as important an election as we've seen in years, maybe in a generation. And there's going to be a clear choice. And for that 45-year-old woman who is trying to figure out how am I going to send my kids to college, I've got a plan to make college more affordable. John McCain doesn't.

For that 45-year-old woman he's trying to figure out, how do I manage my health care bills, I've got a plan to provide her health insurance if he doesn't have it and to lower her premiums if she does. John McCain essentially is going to provide tax cuts but it may lead to her employer dropping her coverage altogether.

If she's got a son who is in Iraq right now, maybe on the third or fourth rotation, I'm telling her that I'm going to bring her son home and start ending our commitment there. John McCain would continue it.

And when that son comes home, I would make sure that that son or daughter is getting a G.I. Bill that allows him or her to go to college. John McCain rejects it.

I would tell that 45-year-old woman that we're going to have Supreme Court appointments. And John McCain and I have very different philosophies when it comes to who should be on the bench. And critical issues like a woman's right to choose is going to be at stake.

And so on every issue there are going to be major differences. And, you know, I think that once people -- once Democrats or Independents -- or some thoughtful Republicans -- take a look and say do we want to continue, effectively, the same policy approaches that we've seen over the last eight years or do we want to move this country in a better direction, because if we continue on this current path, we're going to see a decline in opportunity for the American people?

I think that's a choice that -- that I feel confident will tip our way.

(END VIDEOTAPE)

BLITZER: Senator Obama speaking with Candy Crowley.

Let's go back to Candy. Candy, I want to read to you a statement that we just got from the Clinton campaign on this whole notion of her running right now to be the running mate, if you will.

Let me read it to you and our viewers: "While Senator Clinton has made clear throughout this process that she will do whatever she can to elect a Democrat to the White House, she is not seeking the vice presidency and no one speaks for her but her. The choice here is Senator Obama's and his alone."

That's a pretty strong statement from the Clinton campaign.

CROWLEY: It is. And they've been taking a lot of heat -- shall I say she has been taking a lot of heat for what one lawmaker said to me what they saw was an unseemly courtship for the vice presidency.

Now, Hillary Clinton has not been doing it, but she does have some people who have supported her -- Lanny Davis and Bob Johnson have been out there pushing this idea. So they're taking heat in the Clinton campaign.

But I would point out to you that advisers have always said look, she is open to it. But that is very different, Wolf, from demanding it. And I think the Clinton campaign began to feel that that was the impression getting out there and they needed to quickly draw that back and say, look, she's not demanding anything. She's always said she'd do whatever she could to get him elected.

BLITZER: We're going to have more of your interview coming up later. But you do ask him about his top domestic priority.

What did he say that would be?

CROWLEY: Health care, actually. He said universal health care and energy policy. And, you know, obviously, he laid out all the reasons why those are important. But he said those two things, in addition to some foreign policy issues -- Afghanistan and Iraq -- really would consume the first part of his presidency.

BLITZER: And you had a little fun with him, also -- Lakers, Celtics. What -- he's a great basketball fan.

What did he predict?

CROWLEY: He's a huge basketball fan. And I asked him on behalf of my son, who said find out. So here's what I find found out, that he really likes a player, Kevin Garnett, who plays for the Celtics. But he believes it's the Lakers in six because they're a better team. I am told Garnett hails from Chicago or went to school there, so there's a hometown connection.

BLITZER: All right. Conventional wisdom on his part.

We'll see what happens in this rivalry.

CROWLEY: I wouldn't know.

BLITZER: All right, thanks very much, Candy.

Good work.

CROWLEY: Thanks.

We'll get back to you. We're going to have more of your interview coming up in THE SITUATION ROOM.

The McCain campaign was listening very closely, of course, to what Barack Obama just said.

How are they reacting?

I'm going to be speaking live with a top McCain adviser, Carly Fiorina. She's standing by right here in THE SITUATION ROOM. We'll here what she has to say.

Also, Barack Obama hopes to prove he means he means change. Wait until you hear what he's just started doing to try to transform the entire Democratic Party. He's the new leader of that party and he's taking charge right now.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, on the heels of Scott McClellan's critical book about the runup to the Iraq War, a Senate report says the Bush administration misused intelligence to build its case in 2003 and misled Americans about links between Iraq and al Qaeda. Senate Intelligence Committee Chairman John Rockefeller says the administration repeatedly presented intelligence as fact when it was "unsubstantiated, contradicted or even nonexistent." Republicans dismiss the report as partisan gamesmanship.

It's outrageous, unacceptable and will not be forgotten -- that's how the U.S. describes Zimbabwe's detention of U.S. and British diplomats. They're free now, but only after being held for hours. Police detained them at a roadblock north of the capital for what Zimbabwe suggests was suspicious activity. The State Department says that was unjust and that the U.S. will raise it with the U.N. Security Council. Moments ago, Defense Secretary Robert Gates revealed findings from a damning report about the Air Force that shows how angry Pentagon officials are at the safeguarding of nuclear weapons and criticizes last August's mishap involving nuclear weapons being flown from North Dakota to Louisiana. Gates announced that Air Force Secretary Michael Wynne and Chief of Staff General T. Michael Moseley have effectively been fired over that incident and that critical report.

Back to you -- Wolf.

BLITZER: Thanks, Carol, very much.

John McCain earned some bragging rights. It involves something that will make him more competitive against Barack Obama. You're going to find out what has happened. I'll speak about that and get reaction to the latest interview with Barack Obama we just had here in THE SITUATION ROOM from a top McCain adviser, Carly Fiorina. She's standing by live.

And is it safe where you are?

There's potentially deadly weather snaking across the Midwest and Great Plains, even packing tornadoes. We're going to tell you if you could be affected.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, many of you are grappling with an age-old question -- how much will age matter when it comes to your presidential vote?

Which voters value John McCain's higher age and which value Barack Obama's younger age?

Carol Costello is working this story.

The nation's fourth largest airline says it's facing the worst industry crisis since 9/11 and needs to cut about 3,000 jobs and ground 67 planes. Continental hopes that will cut costs and cut some record oil and fuel prices, as well.

And it's a staggering measure of misery -- over one million people could soon lose their homes. That according to a report from the Mortgage Bankers Association. This is the sixth straight quarter where a record number of loans went into foreclosure.

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

What a difference a month makes. In May John McCain broke his own record for fundraising. He pulled in $21.5 million, his best total so far. McCain's previous one month best was $18 million in April. That money will help McCain better compete against Barack Obama. You just heard Candy Crowley's interview today with Obama. Let's get some immediate reaction from a top McCain adviser, Carly Fiorina. She's the chairwoman for the Republican National Committee's victory 2008 campaign. Carly thanks very much for coming in. He says that among his top priorities, energy but health care. He wants universal health care. He thinks all American citizens should be entitled to that. McCain has a different position. He doesn't necessarily agree.

CARLY FIORINA, RNC VICTORY CHAIRMAN: Actually, McCain does believe that all Americans ought to be able to afford quality health care.

BLITZER: That's different than the government guaranteeing universal health care.

FIORINA: The goal is for everyone to have health care. There are radically different views about how to achieve that goal. Barack Obama wants to put in place a large government program. Large government programs gave us long security lines at the airport. That isn't exactly what we want to do with health care. John McCain is focused on how do we take the cost out of health care so that it's more affordable. How do we make health care accessible to everyone? One of the best ways to do both of those things is to give people lots of choice, to allow them to shop for health insurance all over this country. And another way to do that is to allow an employer -- an employee to own their health care plan and have it be portable. An issue important to women, by the way.

BLITZER: Of course, but you know what the democrats who support universal health care say there are large government programs and there are large government programs. Social security, Medicare, those are very large government programs but they're both very popular.

FIORINA: They're very large. They're very popular. Medicare is, I think everyone would agree, not terribly efficient. And there are lots of ways to make Medicare more efficient. One of those, John McCain proposed several months ago, which is why is it that taxpayers should be paying for prescription drugs for people like Warren Buffet and Bill Gates? It makes no sense. Why don't we instead focus Medicare on those who truly need help with prescription drugs? Just one example of the inefficiency in that program and John McCain is a reformer who will reform inefficient government programs.

BLITZER: The other major difference on foreign policy that he just outlined in the interview with Candy is Iraq. He says McCain wants to keep it open ended, keep those troops there as long as necessary. He says have a timeline, a timetable for withdrawal. That will put pressure on the Iraqis themselves to get the job done.

FIORINA: Well, in this regard, I think experience and understanding of the situation on the ground matters tremendously. John McCain has traveled more often to Iraq than virtually any other candidate, for certain more than Barack Obama who's only been there once. I think what John McCain has said is it's important to American interests that when we leave, and we will leave, but when we leave that we do so with honor and with victory. It's important to our interests in the Middle East. What he has always said is that he will make the decision as to when and how we leave based upon the conditions on the ground and he's also said that the strategy that he pressured the Bush administration into accepting, the surge, is now clearly working. And the government in Iraq is making progress in terms of defending itself. But they're also making political progress, undeniably.

BLITZER: You know the argument that he's going to make, Barack Obama, if they do these town hall meetings or these debates, wherever he goes, he's going to say you may have a lot of experience, but back in 2002 and early 2003 you supported this notion of going to war in Iraq which was a bad mistake.

FIORINA: Well and you know what? A lot of people supported the decision to go to war.

BLITZER: He didn't though, Barack Obama didn't.

FIORINA: Democrats and republicans. That is correct. And I think it would be interesting to go back and see why he didn't. The facts are lots of people all over the world supported that decision because the information at the time indicated that Saddam Hussein was a real threat. Nevertheless, we are where we are. And the issue now is what do we do going forward in the future? I think what John McCain believes is that the strategy that we now have in place and the general that we have on the ground, those new plans are working and we need to let them work.

BLITZER: The good news is that there are serious substantive policy differences between McCain and Obama, and we're all going to get a lot smarter in the process.

FIORINA: That's right.

BLITZER: As we better appreciate where these two guys are coming from.

FIORINA: And that's why John McCain proposed a series of town hall meetings so that we don't have big staged events. We don't have speeches on Teleprompters. We just have a give and take between the American people and two candidates running for president. That is what democracy should be about. A real give and take on real important issues.

BLITZER: I'm looking forward to it.

FIORINA: Well, John McCain is as well. We hope Senator Obama will accept the challenge.

BLITZER: Carly, thanks very much.

FIORINA: Thank you.

BLITZER: Carly Fiorina, a top adviser to Senator McCain.

Barack Obama is trying to reshape the Democratic Party in his own campaign's image. Just ahead, there's a new ban he's imposing on some political cash. He's now the effective leader of the party and he's taking charge on this day.

Also, aides say Hillary Clinton is not seeking the vice presidency. Supporters are backing off a push to get her on the ticket with Obama. What's really going on? Our strategy session is just ahead.

A leading conservative pundit thinks Obama is getting under McCain's skin. My interview with George Will. That's coming up right here in THE SITUATION ROOM. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: The democrats' new presidential nominee in waiting is setting a new standard for donations to the national party. As of right now, Barack Obama says no contributions by Washington lobbyists or some political action committees are allowed. Let's go to our senior political analyst Bill Schneider. Bill, what's the significance of this announcement today?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Tuesday night Senator Obama conquered the Democratic Party. And now he intends to transform it.

(BEGIN VIDEOTAPE)

SCHNEIDER: Barack Obama wants to change how politics is done in this country. He doesn't take money from registered federal lobbyists or special interest political action committees. Now he's insisting the Democratic Party do the same.

SEN. BARACK OBAMA, (D) PRESUMPTIVE PRES. NOMINEE: The Democratic National Committee will uphold the same standard. We will not take a dime from Washington lobbyists or special interest PACs.

SCHNEIDER: Will the change have a major financial impact on the party?

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: Lobbyists and particularly registered lobbyists don't make up so much of their overall take. PACs made up less than 10 percent in 2004.

SCHNEIDER: But Obama's move is politically significant. He's trying to institutionalize a new model of political fundraising. The old mottle was fat cat fundraising, a small number of large contributions from rich people and special interests. The alternative, public financing has never been popular. Only about 10 percent of taxpayers check off the box designating $3.00 of their tax money for the presidential campaign. How about a large number of small contributions from ordinary Americans? Ironically, it was John McCain who helped move the system in that direction.

SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRES. NOMINEE: I have a long record of fighting against the special interests. I'm proud of that record. SCHNEIDER: McCain sponsored a key reform.

KRUMHOLZ: The Democratic Party and the Republican Party both have been moving more towards small donors ever since the ban on soft money in 2002. There has been a bit more of that but the Obama campaign has just taken it to an entirely new level.

SCHNEIDER: Why? Passion. Obama is leading something more than a campaign. He's leading a movement. A movement is a cause. If you want ordinary Americans to give money, they have to believe in the cause.

(END OF VIDEOTAPE)

SCHNEIDER: The conservative movement is also a cause. That's why for decades the Republican Party has out raised the democrats in small contributions. And why this year, the Republican Party is out raising John McCain, who's not a favorite of movement conservatives. But to democrats the situation is reversed. Obama is the movement politician who has out raised the party. Now he wants to make the Democratic Party part of his movement. Wolf?

BLITZER: Thanks very much Bill Schneider. Given the DNC's new ban on donations from lobbyists and PACs, we wondered what this might mean for the Democratic National Convention over at the Pepsi Center in Denver at the end of the summer. Dozens of corporations are sponsoring the convention. Many of them have lobbying interests right here in Washington. We asked the Obama campaign if the ban on lobbyist donations and pact money would also apply to those corporate sponsors. We're waiting for an answer right now. We should note that the Republican National Convention in St. Paul also has lots of corporate sponsors with major lobbying interests as well.

In our strategy session, the house speaker Nancy Pelosi says the democrats have the main attraction.

(BEGIN VIDEO CLIP)

NANCY PELOSI: We're in the attraction business. Sometimes you might never know it. But that's what we're in. And he has proven to be an attraction in politics.

(END OF VIDEO CLIP)

BLITZER: But what do the national numbers say right now? Our first poll of polls since Obama went over the top. We're going to show you what the numbers are. You might be interested.

Also, Hillary Clinton supporters back off their push to get her on the ticket, at least for now. Did they overplay their hand in the first place? All of that coming up. Hillary Rosen and Tony Blankly, they're here in THE SITUATION ROOM.

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BLITZER: In our strategy session today, more reaction to Candy Crowley's interview with Barack Obama. You just saw parts of it here in THE SITUATION ROOM. One key item has many people wondering whether or not he'll pick Hillary Clinton as his running mate. Let's discuss this and more with democratic strategist Hillary Rosen. She's the political director of Huffington Post.com. And Tony Blankly, he's a former spokesman for Newt Gingrich. He's with the firm Needleman PR right now and both of them are smart people. Thanks, guys, very much for coming in. He's really effusive in his praise for Hillary Clinton right now and her campaign has just put out a statement saying she's not running for the vice president. What's going on here behind the scenes, Hillary, because you're about as well plugged in as anyone?

HILLARY ROSEN, DEMOCRATIC STRATEGIST: I think behind the scenes is very much what both of them have said over the last 24 hours. Which is everybody breathe, relax. You know, she didn't start publicly campaigning for this. She had told members of the congressional delegation on a phone call that she'd do whatever it took to get a democrat elected. That started everybody saying --

BLITZER: Then you got guys like Bob Johnson and Lanny Davis circulating petitions and saying that the campaign knows what they're doing.

ROSEN: There's really not a lot of evidence suggesting that she was encouraging them to do that. But regardless, I think right now she very much needs the breather. He gets the breather. And she's going to make an extraordinary gracious speech on Saturday. She started it yesterday at AIPAC when she told a very important constituency group that they can count on Barack Obama. I think this is going well.

BLITZER: Tony, what do you think?

TONY BLANKLY: I think it's worth remembering historically the people we talk about for vice president are rarely the ones chosen. You think back (INAUDIBLE), who thought of Quayle? Who thought of most of them? For that matter, who thought of Lyndon Johnson back in 1960?

BLITZER: Who thought of Dick Cheney? He was running the (INAUDIBLE) committee.

BLANKLY: The fact is that for a long time we all chat about who we think and it turns out not to be. I don't think it's going to be Hillary. I think it would be a mistake for Obama to pick her and he's too smart a guy. I don't think he's going to pick her.

BLITZER: I write about this on my blog post today at cnnpolitics.com. It's amazing how competitive this race between McCain and Obama is right now given this right track, wrong track, job approval numbers for President Bush. Right now in our poll of polls, our average of the major national polls, Obama is at 47 percent. McCain is at 45 percent. 8 percent are unsure. I suspect in the coming days he'll go up a little bit given all the unity the democrats are trying to profess right now. But it's still pretty competitive.

ROSEN: It's very competitive. Some people are surprised because obviously George Bush has a very low approval rating and McCain is polling higher than George Bush. But it's important to remember that on all of the issues that Barack Obama and John McCain differ on an overwhelming majority of the public are on Barack Obama's side. Over these next few weeks this campaign is really going to be about issues. Frankly as a democrat I think that's one of the nice things about running against John McCain is that he is a decent man. And this campaign I do believe is going to be mostly about issues.

BLITZER: The republicans --

ROSEN: And that's the discussion.

BLITZER: A lot of people say republicans really lucked out in getting a candidate who is seen on many of these issues as a maverick, supposedly and he seems to be pretty competitive if you believe these major national polls of registered voters.

BLANKLY: I don't think these polls mean much right now. I suspect that eventually this will not be a 51, 49 race, it will be 55, 45, 54, 46. I don't know which way. It depends whether the public comes to a negative or positive judgment regarding Obama and whether McCain maintains being in sort of a good vehicle for those who decide they don't like Obama. We won't know that probably till Septemberish. But as far as the issues I think this is a fascinating point. Because yes it's true, that right now the issues as being framed favor Obama. I think a lot of republicans think, I think, depending on how the issues get presented Obama may be seen as too far to the left for a general electorate. And so when he talks about wanting to talk about the issues, he thinks it's going to work to his advantage. I'm not convinced of that.

BLITZER: But he'll be running to the center right now as they always do, right?

ROSEN: Well he'll be running to the center. We have long evidence of John McCain's taking specific positions on issues that are right at the forefront of where the people are. It's going to be hard for him to flip-flop. Remember, that's -- you know, every vote, every decision you've ever made is on trial now. That helps probably Barack Obama that he hasn't been in the senate that long. John McCain voted against alternative energy policies.

BLITZER: Quickly.

BLANKLY: McCain is not where I would like him to be but he's where the center of the country is right now. He doesn't have to worry about flip-flopping. He's been there for a long time. Obama more of a question mark.

BLITZER: All right guys, thanks for coming in. Good discussion.

Is it safer where you are right now? There's potentially deadly weather snaking across parts of the country, even tornadoes. We're going to update you on what's going on.

Plus, how much will age play a role in this presidential contest? How might Barack Obama's and John McCain's age help or hurt them? And we'll have more on that pentagon report highly critical of the civilian leadership of the U.S. air force. Some people are being fired for mishaps in the air force. Stay with us. You're in THE SITUATION ROOM.

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BLITZER: On our political ticker, Senator Robert Byrd is back home today after being treated for an infection at a Washington area hospital. The 90-year-old West Virginia democrat was admitted Monday suffering from sluggishness and a fever. His office says the nation's longest serving senator will stay on antibiotics while recovering at home. He's expected to return to work when the doctors give the ok.

On this day 40 years ago a tragic moment in American politics and in the history of this nation. Senator Robert F. Kennedy was assassinated on June 5th, 1968 in California while celebrating a victory in the state's democratic presidential primary. Today "The New York Times" is remembering RFK by inviting his children to share their memories of him. Kathleen Kennedy Townsend, cites her father's work to feed the hungry, writing and I'm quoting now, "He wanted his children to feel the desperation of those children the way he had and to see the need to do something positive about it." Joe Kennedy writes that his father lived by a moral compass that others less certain of their direction looked to for guidance. And Kerry Kennedy writes, there was no quality my father admired more than courage, save perhaps love.

Remember, for the latest political news any time you can check out cnnpolitics.com. That's where you can also download our new political screen saver and where you can check out my daily blog post. Wrote one just before the show. Cnnpolitics.com.

Warning. Forecasters say there could be an outbreak of tornadoes that could rival one of the deadliest weather events in history. A day back in 1974 when 22 people were killed. Our severe weather expert Chad Myers is joining us now from the CNN weather center. This is pretty unusual what's going on. What is going on Chad?

CHAD MYERS, CNN METEOROLOGIST: We definitely have April and May stuff happening in June. The heat of June going on with the April and May, what they call, dynamics. Already seven tornadoes on the ground already today. Two currently on the ground. One in Geoff County, Kansas and one in Pratt County, Kansas. Those are still on the ground reported by spotters. Tonight Wolf we could see 20 to 40 tornadoes. These will be large tornadoes on the ground tonight. All the way from Minneapolis right on down into Oklahoma into Texas as well. This is going to be one dangerous night. Never a better night than to buy this $40 weather radio. It might save your life tonight. Wolf?

BLITZER: Good advice Chad. We're going to stay in close touch with you. Let's go to Jack right now for the Cafferty file. Jack?

JACK CAFFERTY: The question this hour is how would you describe the way Hillary Clinton is handling her exit from the race. Emma writes from San Jose, California, "I'm sorry to see her traumatized by her loss. It seems she's inviting democrats who supported her to remain bitter. No wonder the polls show McCain and Obama in a dead heat. When she does support Obama the polls may change. Unfortunately we'll be left with the memory of how she dealt with the loss in the early days after the primary election."

Chuck in Minneapolis says, "Jack, please go to Hillary Clinton's website. What you will see is an embarrassing testament to Hillary's egomania. The first two popup responses and the only ones that you can send to her easily are, one, a stock support me message. And two a contribute money message. Nothing there about unifying the party. To the contrary, it's quote, continue to support me, unquote not Obama in big bold type. There's nothing there about congratulating Obama either."

C.J. in Atlanta, "She's handling her exit like a lady. She has $17 million reasons to hold her head up high." Karen in Washington, Hillary and her $110 million are going to be just fine. It's the rest of us I'm worried about. All of her supporters who claim they'll vote for McCain, exactly who does that help? You're so worried about protecting her, she'll be living in her mansion, McCain will be in the White House and the rest of us will be out on the street."

Susan who calls herself an older woman in Pennsylvania writes this. "And she speaks for us women? I think not. Not for this woman. She had a chance Tuesday night to show her strength, to be gracious and classy and she showed her selfish side instead. Most are willing the next day or evening to cut her some slack. But now she's just the same old selfish self centered woman she has and always will be. She gives us women a bad name."