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The Situation Room
Obama V.P. Searcher Steps Down; McCain's Battleground Message; Interview With Mitt Romney; McCain Faces New Criticism From Democrats About Iraq; Congressman Ron Paul of Texas is Still a Presidential Candidate; Cindy McCain and Michelle Obama in the Spotlight
Aired June 11, 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, a member of Barack Obama's vice presidential search team steps down. We'll get Obama's reaction, take a fresh look at the controversy that drove Jim Johnson out.
Also this hour, John McCain gets new flak over Iraq. Democrats are pouncing on his latest remark about troop withdrawals. I'll ask a top McCain ally, Republican Mitt Romney, to weigh in on this and more.
And the president opens up about his regrets. On his farewell tour of Europe, Mr. Bush acknowledges something he could have done better in the leadup to the war.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
But up first this hour, a member of Barack Obama's vice presidential search committee calls it quits. One of Jim Johnson's jobs was to prevent Obama from linking himself to someone with embarrassing baggage. Today Johnson himself is leaving to spare Obama even the perception of a problem.
Let's bring in Suzanne Malveaux. She's watching the story for us.
All right. What's going on, Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, it's a very fast-moving story. Essentially, Jim Johnson was the man tapped with helping Senator Barack Obama choose his vice presidential nominee. He is stepping down today following criticism from the McCain camp that Obama was being a hypocrite for seeking him as an adviser.
Johnson, who was once chairman of the mortgage lender Fannie Mae, received loans with the help of the CEO of Countrywide Financial Corporation. Now, that company is under federal investigation for its alleged role in the sub prime mortgage crisis.
Now, there is no evidence of anything illegal in these transactions. Obama issued the following statement just this last hour explaining his decision. He said, "Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee, so he has made a decision to step aside that I accept. We have a very good selection process under way, and I'm confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead. I remain grateful to Jim for his service and his efforts in this process."
BLITZER: So if there was no evidence of any wrongdoing, and no wrongdoing, for that matter, as far as the Obama campaign is concerned, why take this kind of -- it's a pretty humiliating step for Jim Johnson, who's a longtime, well known person here in Washington.
MALVEAUX: And it could be seen as a flip-flop on the Obama side. So obviously this underscores just how politically damaging this could have been.
It really is a perception problem. Both of these candidates are running as reformists, and this could undermine that message for Obama. It was just yesterday when Obama was asked about how he could avoid a situation like this. He said he would "have to hire the vetter to vet the vetters."
So this is not a controversy the Obama camp had expected. You may recall, actually, that Johnson played the same role in the Kerry campaign in 2004, and Walter Mondale's campaign in 1984.
And by the way, Wolf, the campaign tells me today that they're not going to name his successor, his replacement, today.
BLITZER: All right. We'll see what happens on that front. Thanks.
We're just getting in response from the McCain campaign right now. Let me quote from the McCain campaign's response.
"Jim Johnson's resignation raises serious questions about Barack Obama's judgment. Selecting the vice presidential nominee is the most important decision a presidential candidate can make and one even Barack Obama has said will 'signal how I want to operate my presidency.'"
The McCain campaign statement goes on to say, "By entrusting this process to a man who has now been forced to step down because of questionable loans, the American people have reason to question the judgment of a candidate who has shown he will only make the right call when under pressure from the news media. America can't afford a president who flip-flops on key questions in the course of 24 hours. That's not change we can believe in."
That statement coming in from Tucker Bounds, a spokesman for the McCain campaign.
Jim Johnson's exit somewhat overshadowing Obama's message of the day. He spoke in Chicago about new restrictions on credit card companies to help Americans saddled with debt. The Democrat had planned to give the speech in Cedar Rapids, Iowa, but he had to cancel the trip because he didn't want to take attention or resources away from the flooding that's under way in Iowa right now.
Here's what Senator Obama won't be seeing firsthand, by the way, in Iowa today -- a frantic sandbagging effort is keeping floodwaters out of downtown Cedar Falls. But officials fear more rain forecast for today and tomorrow could bust a critical levee wide open.
Evacuations are under way in downtown Cedar Falls, neighboring Waterloo and other drenched areas. Several of Iowa's rivers are on the rise right now. Authorities say they're assessing the flood threat almost constantly.
Let's continue our political coverage right now. More on John McCain.
He's on familiar battlegrounds right now. The Republican nominee-in-waiting is on the offensive for votes in the swing state of Pennsylvania. And he's fighting over new controversy about his stance on the war in Iraq and the importance of bringing U.S. troops home. About 150,000 U.S. troops are still in Iraq.
Let's go to Dana Bash. She's in Pennsylvania watching this story for us.
All right. There was a dustup today over comments that the senator made in the morning.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. And you know, it's interesting, Wolf. The goal of the day for John McCain was to get him back into his comfort zone, a much-needed chance to get him back into his comfort zone. That, of course, for him is a town hall meeting. It was not to get into a debate over whether or not he wants to bring troops home from Iraq.
(BEGIN VIDEOTAPE)
BASH (voice-over): John McCain came to Pennsylvania looking for votes his advisers call crucial to fall victory -- Democrats who voted for Hillary Clinton here.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I don't agree with Senator Obama that they cling to their religion and the Constitution because they're bitter.
BASH: He spoke off the cuff, surrounded by supporters at a town hall instead of a planned speech on climate change. An attempt to recover from what advisers admit has been a presentation problem. Last week's green backdrop and teleprompter stumbles a day earlier...
MCCAIN: I will veto every single beer -- bill with earmarks.
BASH: But finding his general election mojo hit a bump earlier in the morning when McCain was asked if he knows when troops can come home from Iraq.
MCCAIN: No, but that's not too important. What's important is the casualties in Iraq. Americans are in South Korea. Americans are in Japan.
BASH: Not a new theme for McCain, who consistently argues the emphasis should be on stability in Iraq before troop withdrawal. But Democrats heard the phrase "not too important" and pounced with a deluge of statements. Senate Majority Leader Harry Reid saying, "... he just doesn't get the grave national security consequences of staying the course."
It was reminiscent of another McCain line Democrats made infamous when he was trying to make the same point.
UNIDENTIFIED MALE: ... are staying in Iraq for 50 years.
MCCAIN: Maybe 100.
UNIDENTIFIED MALE: Is that...
MCCAIN: We've been in South Korea -- we've been in Japan for 60 years.
BASH: The McCain campaign scrambled a conference call with allies to fight back.
SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I view the attacks on Senator McCain this morning as another partisan attempt to distort John McCain's words.
BASH: McCain chose his words on Iraq more carefully at the town hall.
MCCAIN: Is it long and hard and difficult, and are the casualties painful to us, even one? Of course.
(END VIDEOTAPE)
BASH: On the economy, McCain made clear to voters that he understands their pain at the pump. But for the second day in a row, McCain's main campaign event included no mention of a gas tax holiday. It's perplexing, Wolf, since his aides told us that they think that is his best winning argument on that very important issue to voters, and he didn't mention it at all, at least in his main event, all week so far -- Wolf.
BLITZER: Dana's keeping tabs on what's going on in the McCain campaign.
Dana, thanks very much.
Pennsylvania is one of 12 battleground states identified here on CNN and in our CNN electoral map in yellow. Check those 12 states out.
Pennsylvania has 21 electoral votes. Democrats carried the state in the last four presidential elections by slim margins in the past two contests, larger margins in 2000 and 2004. Pennsylvania has the second oldest population in the United States.
The economy is a big issue in this state, with a large blue collar work force. In April, the state's unemployment rate was the same as the national rate, 5 percent. The state's Democratic base is located in the urban areas of Philadelphia and Pittsburgh, while the GOP's base is in the more rural, central part of the state.
One of McCain's national campaign co-chairman is well known in Pennsylvania. That's former governor Tom Ridge.
Let's go to Jack Cafferty right now. He's got "The Cafferty File" on another day -- Jack.
JACK CAFFERTY, CNN ANCHOR: Tom Ridge, wasn't he the guy who headed up homeland security way back when...
BLITZER: He was the first secretary.
CAFFERTY: Yes. He was the one who advised us we should get clear plastic sheeting and Duct tape and wrap our houses in it, right?
BLITZER: He did the color codes too.
CAFFERTY: But didn't he do clear plastic sheeting and Duct tape?
BLITZER: Yes, he did. Yes, he did.
CAFFERTY: Democrats and Republicans might be settled on their nominees now, but that doesn't mean that Barack Obama and John McCain are the only ones in the spotlight. Maureen Dowd writes in her "New York Times" column -- it's a great column, by the way -- it's called "Mincing Up Michelle" -- that now that Hillary Clinton's out of the race, the Republican machine can turn its full attention to demonizing Michelle Obama.
Quoting here, "She's the new unwilling contestant in round two of the sulfurous national game of kill the witch."
There are Web sites dedicated to portraying Michelle Obama as a female version of the Reverend Jeremiah Wright. A recent cover of "The National Review" called her "Mrs. Grievance." And one popular conservative blogger described her as "Obama's bitter half."
Michelle Obama stirred controversy last February when she said, "For the first time in my adult lifetime, I'm really proud of my country." The campaign clarified she meant she was proud of the participation of the thousands of Americans turning out to vote, but it still led to accusations that she was being unpatriotic.
Cindy McCain has also drawn criticism when she first refused to release her tax returns. Some said that wasn't consistent with her husband's message of openness. Mrs. McCain also talked about her addiction to painkillers in the early '90s and how she initially kept it secret from both her husband and her family.
So what's fair game when it comes to the nominees' spouses? After Tennessee Republicans recently went after Michelle Obama, Barack said they should "lay off" his wife." But it's not the first time critics have picked on potential first ladies. Remember Judy Giuliani, the subject of several nasty profiles showing her as a social climber, husband stealer? And, of course, Hillary Clinton was slammed way back in 1992 when she made that famous comment about staying home and baking cookies.
So here's the question. Should Michelle Obama and Cindy McCain be off limits during the upcoming campaign?
Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.
BLITZER: Thanks, Jack. See you in a few moments.
Republican Mitt Romney is going after Barack Obama on John McCain's behalf. And there's one word he's using over and over again on issues from Iraq to the economy. My interview with Mitt Romney, that's just ahead.
There's also a new push in Congress right now to give millions of Americans extra unemployment benefits. And it's throwing a wrench between the White House and many Republicans, including McCain. We'll update you on what's going on.
Also, McCain and Obama are fighting right now over the same women who were dedicated to Hillary Clinton. There's new evidence one of them is making some headway.
We'll tell you what's going on right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: John McCain's allies are circling the wagons as the Republican nominee-in-waiting faces new criticism from Democrats over Iraq.
(BEGIN VIDEOTAPE)
BLITZER: And joining us now from Boston, the former governor of Massachusetts, the former Republican presidential candidate, Mitt Romney.
Governor, thanks very much for coming in.
MITT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: Thanks, Wolf.
BLITZER: A little commotion over Iraq today. Senator McCain was on "The Today Show" earlier this morning, and he had this exchange with Matt Lauer. I'm going to play the whole thing and then we'll talk about it. Listen to this.
(BEGIN VIDEO CLIP)
MATT LAUER, "THE TODAY SHOW": Do you now have a better estimate of when American forces can come home from Iraq?
MCCAIN: No, but that's not too important. What's important is the casualties in Iraq. Americans are in South Korea, Americans are in Japan, American troops are in Germany. That's all fine. American casualties and the ability to withdraw.
(END VIDEO CLIP)
BLITZER: All right, Governor. The Democrats, including Senator Obama's campaign and a lot of the Democratic leadership in Congress, they're really irate. They're saying -- they're saying that McCain is simply out of touch when he says "that's not too important" when U.S. troops, 150,000 or so, still in Iraq, would be coming home.
I wonder if you'd want to go to bat for Senator McCain right now.
ROMNEY: Well, pretty straightforward. He's pointing out the exact date that all of our troops come home is a lot less critical than whether we can stop casualties and whether we can stabilize the government in Iraq and make sure that al Qaeda doesn't have a safe haven from which they can launch attacks.
He's already indicated that he'd like to have most of our troops home by the end of his first term. That's the goal that he has in mind. It's a goal that he's pursuing.
And clearly, the key here is that John McCain predicted that the surge would work. And Barack Obama said, no, it wouldn't. And the surge is working. And that's the benefit of experience. Barack Obama's lack of experience is, I'm afraid, showing here.
And by the way, any time we're talking about Iraq and the fact that John McCain was right and Barack Obama was wrong, that's helping the McCain story.
BLITZER: They're also pointing out, Senator Obama and other Democrats, critics of the war, that the Iranians seem to be the big winner in all this. They look at these most recent pictures of the Iraqi prime minister, Nuri al-Maliki, going once again to Tehran, kissing the Iranian president, Mahmoud Ahmadinejad, as he's done before. And they say, what's going on? The Democrats accusing Bush and McCain, for that matter, for allowing Iran to be the big strategic winner in that region as a result of the U.S. invasion.
You want to respond to that charge?
ROMNEY: Well, once again you point out the peril of Barack Obama's inexperience. If we were to withdraw our troops in a precipitous manner, we would leave the Iraqis no choice but to cozy up to Iran, because Iran would become the superpower in the region.
In is instead, by stabilizing Iraq, making sure it's government and now it's 500,000-strong military, is independent and capable of protecting their own borders, that Iraq is able to follow its own course. Of course they'll talk to their neighbors, as they're doing now, and have diplomatic out reach and see if they can't keep Iran from interfering with what's going on in Iraq. But there's nothing more dangerous in the region than our withdrawing and having Iraq have nowhere to turn but to Ahmadinejad. BLITZER: You know the U.S. is negotiating with the Iraqi government right now, the Bush administration, before the end of the this year, what's called a status of forces agreement for a permanent or a long-term -- let me say just a long-term, not necessarily a permanent, a long-term U.S. military presence in Iraq. And apparently the Iraqi government of Nuri al-Maliki not very happy with what the U.S. is seeking.
A close aide, if you will, to the prime minister saying this in "The Washington Post" today: "The Americans are making demands that would lead to the colonization of Iraq. If we can't reach a fair agreement, many people think we should say, 'Goodbye, U.S. troops. We don't need you here anymore.'"
If that's the position of the Iraqi government, why should the U.S. force itself on them if they say better -- you know, we're better off, get out of here?
ROMNEY: Well, there's no question we won't be forcing ourselves on them. And the individual quoted does not speak for the prime minister or for the government.
We will obviously work out an agreement as to what role we'll have on an ongoing basis. And this is a -- if you will, a post- conflict basis in that country to help secure their stability long term and to make clear to their neighbors that you don't come into Iraq and try and destabilize matters. But what the requirements are and what the final agreement will be is something that'll be worked out between both parties. And I wouldn't add a lot of energy at this stage to what some people who are part of the negotiation are trying to leak for their benefit.
BLITZER: Let's make the turn to the economy, which is issue #1 right now for American voters. Obama makes the point that under the new tax cuts that Senator McCain is proposing, cut corporate tax rates out there, ExxonMobil and some of the other big oil companies, they'd reap a bonanza of additional tax breaks right now.
Explain why it's appropriate at this time of rising gas prices for ExxonMobil, for example, to get additional tax cuts.
ROMNEY: Well, no one is interested in giving additional tax cuts to ExxonMobil, but everybody's interested in giving additional tax cuts to people who are beginning businesses, particularly small business. And one thing we've learned by watching a nation like Ireland that was an economic basket case, is that when they lowered corporate tax rates, it meant more corporations moved to their country, more corporations grew and added jobs in their country. And they're now the shining star of the European Union.
Lowering tax rates helps create jobs. I know the Democrats fundamentally don't believe that, but I think almost every economist will tell you that taxes slow down an economy and kill jobs. Lowering taxes adds jobs, it adds businesses, it adds employment.
Right now, again, Barack Obama's inexperience is showing when he says let's raise taxes right now. That's the last thing you do in an economic slowdown. Even he said, well, maybe we ought to wait a while until the economy is stronger to raise taxes. I think he's pointing out, he knows raising taxes hurts growth, hurts jobs, and that's the wrong way to go.
BLITZER: He says there should be a windfall profits tax on ExxonMobil and some of these other big oil companies. But would it be appropriate -- do you think Senator McCain should have an exemption for ExxonMobil and other oil companies so they won't benefit from a reduction in overall corporate tax rates?
ROMNEY: You know, I guess there is a politics of blackballing and scapegoating and trying to go after one company. Look, in the oil world, the people that are making the big money are not the oil companies. There's some of them out there, I'm sure, making a lot of money. But the people making the big money are Russia and Iran and Venezuela, the people that have the oil. That's where the big money is.
(CROSSTALK)
BLITZER: But ExxonMobil had huge record profits...
ROMNEY: That's right. And it's...
BLITZER: ... every quarter in recent years.
ROMNEY: Right, and I'm not going to defend their profit, other than it's the same as their profit in the past. It's a percentage of their sales. They're a bigger and bigger company. They have more profit.
But look, if we're going to -- if we're going to build our whole tax policy for the hundreds of thousands of corporations in America based on one company's tax posture, that's a little silly. We want to create jobs in this country.
And by the way, in the energy sector I want to see those guys investing in new refineries, in new drilling. I'd like to see Barack Obama, by the way, say, you know what? We need more drilling in this country. We need more natural gas.
You know, he said yesterday he wants to tax natural gas and coal in this country. Those are our sources of energy, other than the oil that we have to buy from other people. Let's have economic policies here that help America, as opposed to try to scapegoat one or two companies.
BLITZER: Governor Romney, always good to have you here in THE SITUATION ROOM.
Thanks for coming in.
ROMNEY: Thanks, Wolf. Good to be with you.
(END VIDEOTAPE) BLITZER: And I just want to correct one thing I said earlier. I misspoke when I pointed out that the Democrats carried Pennsylvania by slim margins in the last two elections. They carried Pennsylvania by wider margins in the president contests back in '92 and '96. That's what I meant to say but didn't say it appropriately.
Coming up, many people wonder if their country is ready for its first African-American president. But might Barack Obama face an even bigger problem, one concerning his wife? There's something about Michelle Obama that could be hard for people to accept according to one well-known columnist.
We're looking into the story.
And does the president have any doubts about invading Iraq? With rare candor, he says what he could have done better.
Stay with us. You're in THE SITUATION ROOM.
(NEWSBREAK)
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, Pakistan is outraged at something the U.S. military did, even going as far as calling it -- and I'm quoting now -- "a completely unprovoked and cowardly act" that left some of its troops dead.
You're going to hear Pakistan's account of what happened and the U.S. military's version as well -- Barbara Starr working this story.
In Iraq, meanwhile, a critical issue that pits sovereignty vs. security and may change a key debate between Barack Obama and John McCain: what happens if more and more Iraqis insist that the U.S. military simply leave the country, and leave soon?
And some supporters of Bill and Hillary Clinton are said to keep a very special list. Apparently, you don't want to be on this list. Might those listed who supported Barack Obama suffer political revenge for crossing the Clintons? Mary Snow working this story for us.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Take a look at Hillary Clinton's Web site these days, and you will see a picture of a seemingly grateful Clinton and a message for her supporters to support Barack Obama. It's an especially explicit overture to one key constituency, many women who staunchly supported Hillary Clinton.
Whether or not those women need that urging remains to be seen. But there is at least some evidence of where it may be moving.
Let's turn to CNN's Jessica Yellin. She's watching this story for us. Jessica, what's going on here?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, after Senator Clinton's departure, the McCain camp might be wishing that the women's vote is up for grabs. But a new poll shows some of those female Clinton supporters are already moving to Obama's camp.
(BEGIN VIDEOTAPE)
YELLIN (voice-over): Barack Obama surrounded by women supporters.
UNIDENTIFIED FEMALE: God bless you.
YELLIN: Visiting with a working woman.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: So, you have five patients today?
UNIDENTIFIED FEMALE: I have five of them.
YELLIN: Empathizing with one women's struggles.
OBAMA: I listened to a woman from Iowa who I met who works the night shift after a full day of class and still can't pay the medical bills for a sister who is ill.
YELLIN: Could it be part of an effort to counter this?
UNIDENTIFIED FEMALE: I will not vote for any Democrat that idly sat by on their hands and did nothing to support her while she was vilified in the court of public opinion.
YELLIN: Some Clinton supporters so angry, they threatened to abandon the party in November. They're not the only ones frustrated by perceived sexism in the primary.
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: But I have never seen a candidate treated so disrespectfully just for running.
HOWARD DEAN, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: Emotions have run high. Heated discussions have led at times to sexist comments, particularly by some members of the media.
YELLIN: It should come as no surprise that John McCain is making a play for Clinton's female base.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Senator Clinton has earned great respect for her tenacity and courage. And she deserves a lot more appreciation than she sometimes received.
YELLIN: But a new Gallup poll shows Obama has already gained eight points among women since Clinton dropped out of the race. He now leads McCain among women by 13 points.
And there's this. George Bush won 48 percent of the women's vote in 2004. McCain is polling 10 points behind that. The Obama campaign says they will make grassroots outreach to women voters throughout the election. And a number of women's groups are gearing up to help.
ELLEN MORAN, EXECUTIVE DIRECTOR, EMILY'S LIST: Democrats don't win general elections without a majority of women voters.
(END VIDEOTAPE)
YELLIN: And to make sure they get them, the Obama campaign and the McCain campaign will be going after two key swing blocs of women voters, Wolf. They are white women with no college education and older women. Both of those groups tend to be the swing vote that goes between the Republicans and the Democrats, and is not loyal to either side -- Wolf.
BLITZER: Jessica, thanks very much -- Jessica Yellin reports.
And Barack Obama is also well known for using the Internet to his advantage. Now John McCain's campaign is stepping up its efforts as well.
Let's go to our Internet reporter, Abbi Tatton.
Abbi, what is the McCain campaign doing?
ABBI TATTON, CNN INTERNET REPORTER: Wolf, for a start, there's a new blog on JohnMcCain.com where you will find, strangely, ABBA -- ABBA singing "Take a Chance on Me."
This is a message to disaffected Hillary supporters, this, the McCain report, one of a series of new features, action items, and tools on JohnMcCain.com registering people to vote, recruiting friends.
E-campaign director Michael Palmer says he hopes this will push supporters to do activities online on behalf of the campaign. Online, in this race -- we have all seen it -- it is advantage Barack Obama right now, whether it's online fund-raising or on YouTube, where his videos have been seen by millions more people than John McCain's, or on Facebook, where he's got hundreds of thousands of more supporters.
E-campaign director Palmer of the McCain campaign says, that work online for Barack Obama has been remarkable, but he adds, at the end of the day, it's about getting ballots on the box, and you can't just do that through Facebook.
However, look around on the social networks run by Barack Obama, and you will find hundreds and thousands of supporters working to prove him wrong -- Wolf.
BLITZER: Abbi, thank you.
And the Obama campaign, by the way, has just released a scathing, rebuttal to the McCain campaign over the whole issue of our top story this hour, Jim Johnson's decision to leave that vice presidential search committee. We're going to bring you that statement shortly. Stand by for that.
Also happening right now: the House of Representatives voting on a bill to extend unemployment benefits for almost four million people. President Bush is threatening a veto, putting him at odds with a number of Republicans who say they support the measure, including Senator John McCain himself.
Let's go to CNN's Kate Bolduan. She's on Capitol Hill, watching this story for us.
Where does the bill stand, Kate, right now?
KATE BOLDUAN, CNN CORRESPONDENT: Well, Wolf, the bill is being voted on as we speak. This is a debate over whether to help people whose unemployment benefits are running out. But, as with so much this election year, Wolf, it's also all about politics.
(BEGIN VIDEOTAPE)
BOLDUAN (voice-over): Democrats say extending unemployment benefits is not only key to saving the economy, but also the right thing to do.
REP. SHEILA JACKSON LEE (D), TEXAS: Helping the bus driver, the nurse, helping those who are working with their hands, who have families to support, who can barely get gasoline.
REP. CAROLYN MALONEY (D), NEW YORK: Unemployment benefits are also important to economic recovery, with absolutely every dollar of the benefit checks going right back into the economy.
BOLDUAN: The measure would extend unemployment benefits by 13 weeks in every state, up to 26 weeks in states with high unemployment, reaching as many as four million people in the coming months.
For Democrats, this is a policy priority, but they also see it as a political opportunity, because, on this issue, Republicans are divided. The White House has threatened to veto the bill, saying it's flawed and not fiscally responsible, because it extends benefits even to states with low unemployment. House Republican leaders also oppose the bill.
REP. ROY BLUNT (R-MO), HOUSE MINORITY WHIP: I think that the extreme view of this that our friends on the other side are now pushing doesn't really solve any problem, in fact, may discourage people from actively looking for work.
BOLDUAN: But not all Republicans agree. In fact, the presumptive Republican presidential nominee, John McCain, supports additional benefits.
MCCAIN: We have to extend the unemployment benefits. We have to -- there's a lot of things we're going to have to do to think outside the box.
BOLDUAN: And dozens of rank-and-file Republicans are breaking from their party to support the bill. Michigan Republican Mike Rogers is one of them.
REP. MIKE ROGERS (R-MI), HOUSE PERMANENT SELECT COMMITTEE ON INTELLIGENCE MEMBER: And it can't be about a party issue in this case. When someone loses their job, that's not a party label. That's a family issue.
(END VIDEOTAPE)
BOLDUAN: Now, if this measure passes, a Senate Democratic leadership aide says the Senate could possibly take this measure up to vote on it by the end of the week. And, for the first time today, Wolf, the White House is signaling that it could support extending benefits, but only to states with high unemployment rates.
BLITZER: Kate Bolduan on the Hill for us -- thanks, Kate.
President Bush is getting sort of reflective right now. He's speaking openly about what he regrets when it comes to the war in Iraq. You're going to hear what he said during his farewell trip to Europe. That's coming up next.
Also, the battle for Congress: Do the Republicans fear major losses? And what can they do to try to prevent that? Our "Strategy Session," we will discuss later.
We have exclusive information, video never before seen. Our own Michael Ware is in Baghdad. He got ahold of some secret al Qaeda documents and videotapes. What they say about the organization in Iraq, you're going to want to see this.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: President Bush is pressing on with his European tour. He's in Germany today. And he's facing a familiar question, one that resonates over there, as well as back here at home. Does he have any regrets at all about the war in Iraq?
Let's go back to Brian Todd. He's watching this story.
Sort of a mixed answer from the president.
BRIAN TODD, CNN CORRESPONDENT: It was, Wolf, and a little bit surprising, considering this is a president not prone to a lot of retrospection.
The president says he has no doubts about invading Iraq, but he does think he could have done better in justifying his decision.
(BEGIN VIDEOTAPE)
TODD (voice-over): A president who doesn't usually do self- analysis opens up a bit on whether he has any regrets on the Iraq invasion. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: First of all, you don't get to do things over in my line of work. But I could have used better rhetoric to indicate that, one, we tried exhaustive diplomacy in Iraq, two, that I don't like war.
TODD: Before the invasion of Iraq, President Bush argued that diplomacy had failed, and it was time to act.
REGGIE DALE, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: The European population as a whole did think that he hadn't exhausted diplomacy. And they also did not like this whole idea of preemptive action.
TODD: The president also came under some criticism at the time for talking tough about finding Osama bin Laden and fighting insurgents in Iraq.
(BEGIN VIDEO CLIP)
BUSH: Wanted dead or alive.
The answer is, bring 'em on.
(END VIDEO CLIP)
TODD: Mr. Bush has previously expressed regret for that kind of talk. But, during his trip to Europe, he was asked about it in a newspaper interview.
"Phrases such as 'Bring them on' or 'dead or alive,'" Bush said, "indicated to people that I was, you know, not a man of peace. What most people don't know, he added, is that it is very painful to him to put youngsters in harm's way.
The president's former press secretary recently told CNN that he regretted how the White House made the case for the Iraq war, and not just because of the president's choice of words.
SCOTT MCCLELLAN, FORMER WHITE HOUSE PRESS SECRETARY: What happened was the case was packaged together, overstated, and oversold to the American people.
TODD: But the White House dismissed that charge, and the president has no doubts about his decision to invade Iraq then or now.
BUSH: I don't regret it at all. Removing Saddam Hussein made the world a safer place.
(END VIDEOTAPE)
TODD: President Bush in Europe this week discussing, among other things, how to handle concerns about Iran's nuclear program now.
What was his rhetoric like today? Well, all options are on the table, he said, but his first choice is to address the situation diplomatically -- Wolf. BLITZER: Brian, thanks very much.
Coming up in our "Strategy Session": more back and forth between the Obama and McCain campaigns over the resignation of Obama's vice presidential vetter.
And "The New York Times" columnist Maureen Dowd suggesting many Americans are more ready for a black president than they are for a black first lady. Donna Brazile and John Feehery, they are standing by -- right here in THE SITUATION ROOM. We will discuss.
(COMMERCIAL BREAK)
BLITZER: In today's "Strategy Session": Many people say Barack Obama's wife is the picture of style and substance, but might she also pose the picture of a unique political problem for the Democratic presidential candidate?
Let's discuss this with our CNN political contributor, the Democratic strategist Donna Brazile, and Republican strategist John Feehery.
Maureen Dowd, you probably saw the column she wrote in "The New York Times" in the. She's an excellent columnist, as all of us know, always something provocative to say.
She writes this in today's "Times": "There are some who think it will be harder for America to accept a black first lady -- the national hostess who serenely presides over the White House Christmas festivities and the Easter egg roll -- than a black president."
What do you think?
DONNA BRAZILE, CNN POLITICAL ANALYST: Well, first of all, you're absolutely right. Maureen Dowd is one of the best journalists out there today and columnists. And I wanted to give her some praise.
But, look, Wolf, we have seen black women serve as secretary of state, black women energy secretary. We have seen a black woman go up in space, Mae Jemison. I mean, I don't know how far this conversation will go.
But Michelle Obama can expect to be vilified. Cindy McCain was vilified in 2000. But I think that, like Cindy McCain, Michelle Obama is a woman of grace and a woman who understands her role in the campaign and her role as Barack Obama's spouse.
So, I think she will be prepared for the toughness that is required to serve as first lady. But, even more importantly, she will serve with distinction.
BLITZER: Is it a good strategy for Republicans to go after Michelle Obama?
JOHN FEEHERY, REPUBLICAN STRATEGIST: Not really. I agree with -- I don't think it's a good strategy. I think Donna's right. The fact of the matter is that, you know, that they're a complete package. And if you're going to go after Michelle Obama, at the exclusive, and not go after Barack Obama, I think it's a big mistake. The fact of the matter is, she's got grace. She's a woman of great -- she's so smart.
The fact of the matter is that it doesn't make any sense to go after her in that way. Let other people who have concerns about her raise those concerns. As Donna says, everyone's fair game. But Republicans have to be worried about women voters. They have be worried about independent voters. And attacking her might be a losing strategy.
BLITZER: And, like Barack Obama, she's got an amazing personal story, how she's managed to come up from very, very humble origins, and go to Harvard, and Princeton, wherever she went, some major Ivy League schools. It's an amazing story. But we will leave that for another day right now.
Let's talk about this back and forth we're seeing involving Jim Johnson, someone we know -- he's been around in Washington since the days of Walter Mondale when he was vice president. He was a chief of staff for then Vice President Walter Mondale.
He was tapped by Barack Obama to help him do what he's done before, vet some of these potential vice presidential running mates. And now he's today announced he's dropping out because of some of the controversy, some of the criticism that the McCain campaign, Republicans launched against him.
Earlier this hour, we had some of the back and forth. Now, within the past few moments, the Obama campaign issued another statement, saying this: "It's too bad their campaign," referring to the McCain campaign, "is still rife with lobbyist influence and doesn't see a similar 'perception problem' with the man currently running their own vice presidential selection process, a prominent D.C. lobbyist whose firm has represented Exxon and a top Enron executive."
This is not a big issue in terms of a big schemes, the economy, the war in Iraq. But it has, John, the potential to say something, if anything. What do you think?
FEEHERY: The problem here is, Barack Obama has said he's not the conventional politician. He's unconventional. He's a breath of fresh air. He's a new -- exciting, new person.
The fact of the matter is that, when you have someone like Jim Johnson or Tony Rezko, he seems like a conventional politician. And it kind of just punches through that mystique of Barack Obama as something new. He actually is a conventional politician in all his policies. And that actually will work to McCain's advantage.
Now, is it going to be a big factor? No. But the more the McCain campaign can say he's a conventional politician, with conventional liberal policies, the better off for the McCain campaign. BLITZER: But does it diminish Barack Obama?
BRAZILE: Absolutely not.
Look, Senator McCain has purged so many people from his staff, lobbyists, consultants, that I don't know who's running the campaign right now. I don't think anyone knows if anybody will survive, given the fact that McCain is running as a reformer.
And, like Senator Obama, when you run as a reformer, you're trying to change the way Washington works. And some of the people have worked too long in Washington, D.C. So, by this standard, we're going to take a look at the McCain campaign and see if there are additional lobbyists...
(CROSSTALK)
BLITZER: But is that what the American public wants right now, this kind of back and forth over personalities? Don't they want to really get in on the substantive major differences between the Obama position and the McCain position?
BRAZILE: That is a debate I think the majority of Americans want.
But, look, when the McCain campaign and others are sending out talking points every day, saying, let's go after this one, and let's pick a fight with this one, it's a distraction. And Senator Obama did the right thing...
(CROSSTALK)
BLITZER: It has a potential of backfiring, doesn't it?
FEEHERY: Well, it's a little bit of a tit for tat spin, which -- the fact is, MoveOn.org has done things with Charlie Black, the same kinds of things. It gets back....
BLITZER: Charlie Black is one of the top advisers to John McCain.
FEEHERY: The fact of the matter is that, when you say that you're holier than thou, that you're this brand-new fresh -- breath of fresh air, and then you have these people who are conventional politicians, it really punctures that mystique, because people really don't know Barack Obama that well.
And if we can show him as a conventional politician, that's actually good for Republicans.
BRAZILE: But when you're running against the Washington establishment, as John McCain and -- and the Washington establishment is actually running, then that's...
(CROSSTALK)
FEEHERY: John McCain is very well known. People know who John McCain is.
(CROSSTALK)
BLITZER: Guys, stand by...
(CROSSTALK)
BLITZER: ... because we're going to continue this conversation.
(LAUGHTER)
BLITZER: We have got a lot of time in the days, weeks and months ahead.
Straight ahead: a story you're going to see only here on CNN. Stand by for this.
We have the secret videotapes and documents that illustrate al Qaeda's thirst for blood. Our own Michael Ware is in Baghdad. He's going to show us stuff we have never seen before.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: On our Political Ticker right now: Congressman Ron Paul of Texas is still a presidential candidate. Yes, he has not dropped out. But he's planning to steal some of McCain's thunder during the Republican Convention in early September in Saint Paul. Paul will hold a nearby rally on the second day of the convention. A spokesman says it will be a celebration of GOP values and what the party has traditionally stood for, while sending a message that -- quote -- "We need to return to our roots."
Ron Paul, by the way, will be among our guests here in THE SITUATION ROOM on Friday.
Remember, for the latest political news any time, check out CNNPolitics.com. That's also where you can download our new political screen-saver and where you can check out my latest blog post. Wrote one just before the start of the show.
Let's go back to Jack. He's got "The Cafferty File" -- Jack.
CAFFERTY: What did you write about? It looks like Johnson's picture. Is that...
BLITZER: I wrote about Iraq and...
CAFFERTY: Oh.
BLITZER: ... awkward images for the Bush administration, the McCain campaign right now, the kissing and hugging between our ally there, Nouri al-Maliki, Mahmoud Ahmadinejad. It's hard for people to understand what's going on when you see that kind of embrace. CAFFERTY: Well, yes, except when you know that they're both members of the same tribe, then it's a little easier. I don't know what's worse, watching al-Maliki kiss Ahma-dinner-jacket, or seeing George Bush holding hands with the Saudi royal family. Both troubling images, wouldn't you agree?
The question this hour is: Should Michelle Obama and Cindy McCain be off-limits during the political campaign?
Linda writes: "They ought to be looked at very closely. After all, they will hear sensitive information. Their views will be heard around the world. Do you want someone to go to another country on behalf of the U.S. without knowing what type person they are? The country will be judged by their presentation."
Mary writes: "I am a Barack supporter, but I think Michelle Obama can handle a little scrutiny. She does tend to be too strong and overly confident, not a good quality for a first lady. A little scrutiny will serve to smooth her rough edges."
John writes: "This is exactly why we have the leaders we have. No one with any brains would want to leave a secure position with a good company to join the gang of lizards that we call our leaders. Elect a president by encouraging the best minds to run. They will not win with the way -- they won't, rather, with the way their lives are turned upside down today. Therefore, we wind up with exactly what we get: third-rate lawyers and other has-beens and do-nothings."
Patrick in Virginia: "Frankly, I hope that the American people are seeing that a new breed of politics is emerging in this election cycle, one in which the voting public is better than buying into the smearing of a nominee's wife."
Steve in Idaho: "It depends, Jack. If it's something they said regarding the candidate and his policies, it's fair game. But if it is something about their personal character or something they said or did in their past, it's not relevant, because they are not running for president."
Someone who bills himself as "The Best Political Viewer of Television in Texas" says, "Not as long as they get in front of the cameras and reporters."
And Tim in Toledo writes: "Off limits? Not a chance. There's always a chance that one of them may run for president some day."
If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile, and look for yours there among hundreds of others -- Wolf.
BLITZER: Thanks, Jack.
