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McCain Camp Sharpens Attack on Obama; Levees on Verge of Breaking; Interview With Governor Ed Rendell

Aired June 17, 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, the McCain camp accusing Barack Obama of misunderstanding the terror threat. Are new remarks by Obama "stunning and alarming," as Republicans now claim? We'll cut to the heart of an intense new round of presidential campaign sparring over an important issue, the war on terror.
Also this hour, Democrats' divisions exposed once again. Obama forced to defend Hillary Clinton after booing by his own supporters. Is party unity right now a pipe dream?

And the desperate race against floodwaters. Levees breached or on the verge of busting. We're tracking the danger and the drama along the Mississippi River right now. There's a race against the clock.

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

But up first this hour, John McCain's camp gets more aggressive in arguing that Barack Obama would be a naive and potentially dangerous commander in chief. At issue, new comments by Obama about the legal rights of terror suspects. The McCain camp pounced and now the Obama camp is responding in outrage.

Let's go to Brian Todd. He's watching this developing story for us.

The back-and-forth on this issue, Brian, right now getting intense.

BRIAN TODD, CNN CORRESPONDENT: It is, Wolf, shaping up as one of the sharpest debates between the two candidates -- how to handle terror suspects. It was rekindled last week with the Supreme Court's ruling giving Guantanamo detainees the right to habeas corpus -- that's the right to challenge their detention in court -- but now it escalates.

John McCain's team saying Barack Obama is delusional and as you said, Wolf, naive for his views on how to track terror suspects and how to handle them, if they're caught. In a network interview Obama said, "It is my firm belief that we can track terrorists. We can crack down on threats against the United States, but we can do so within the constraints of our Constitution."

"In previous terrorists attacks," he goes on to say, "for example, the first attack against the World Trade Center, we were able to arrest those responsible, put them on trial. They are currently in U.S. prisons, incapacitated." He said that under the Bush administration's policies, the fact that several terror suspects have not been put on trial has destroyed America's credibility around the world when it comes to the rule of law.

Now, in a conference call today, McCain's top foreign policy adviser responded this way...

(BEGIN AUDIO CLIP)

RANDY SCHEUNEMANN, FOREIGN POLICY ADVISER, MCCAIN CAMPAIGN: Senator Obama is a perfect manifestation of a September 10th mindset. He brings the attitude, the failures of judgment, the weakness and the misunderstanding of the nature of our adversary and the dangers posed by them to a series of policy positions.

(END AUDIO CLIP)

TODD: McCain's team has a couple of essential arguments there. They say the policies of the Clinton administration in the 1990s to in many cases track terrorists through the law enforcement system failed. They argue that people like Osama bin Laden and Khalid Sheikh Mohammed were indicted in the U.S. in the '90s and then went on to plot the Africa bombings, the USS Cole attack and September 11th.

Now, later, Democratic Senator John Kerry joined a call organized by the Obama campaign. He was asked if under an Obama administration they would favor granting Osama bin Laden habeas corpus if he were captured. And here's the response from Kerry.

"Let me answer that on several levels. First of all, the Supreme Court has ruled that they have those rights. This is not Obama, this is the Supreme Court. If John McCain were president, he would have to give them those rights. This is a phony argument and it is typical of what the Republican playbook is, which is say anything no matter what the other side has said, just say it."

These exchanges getting sharper with each round, and it strikes at the heart of maybe the most critical debate in this campaign, Wolf -- who has got the better security credentials in post-9/11 America. You can bet they'll keep this up.

BLITZER: All right. We're going to be getting a lot more on this story, Brian. Stand by. Thank you very much.

But let's get right now to another huge story we're following -- the misery, the emergency unfolding in what's surely the worst natural disaster in this country since Hurricane Katrina. In Iowa, Illinois and Missouri right now, along the Mississippi River, water could top about two dozen levees, unleashing even more catastrophe on areas already devastated.

Right now, officials and everyday people are using equipment and their bare hands in a race against time to shore up those levees with sandbags. Some have already overflowed or have broken. Floodwaters killed five people, displaced some 38,000 others, damaged $1 billion worth of Iowa crops already. Let's go out to the scene. Our senior correspondent, Allan Chernoff, is in Lone Tree, Iowa, watching all of this.

This disaster, it's a crop disaster to be sure. It's going to have a huge ripple effect on prices of food all over the country, Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: No doubt about that, Wolf. And this is the reason why. It looks like a beautiful lake, right? It's a cornfield. All of it. Rivers throughout Iowa have overflowed for miles and miles, turning corn and soybean into seaweed.

(BEGIN VIDEOTAPE)

CHERNOFF (voice over): Joe Mooney is boating where he usually plants, motoring seven feet above his corn and soybean fields.

(on camera): Right now we're on top of a cornfield.

JOE MOONEY, FARMER: Yes. Right now, right on top of a cornfield.

CHERNOFF: That's amazing.

MOONEY: Yes. It don't look much like a cornfield. I'd say it's more of a bass field now.

CHERNOFF: Take out your fishing rod, huh?

MOONEY: You bet. This would normally be all planted here, and that would be planted over there. That's all cornfield over on this side.

CHERNOFF (voice over): Joe's 43 acres along the Iowa River are now part of the waterway, and his home is an island.

MOONEY: We've pulled everything out of our basement. My motorcycle's sitting in my front living room.

CHERNOFF: It's been such a wet spring here, that Joe never even got a chance to plant his crops. Some neighbors did and are facing a total loss.

UNIDENTIFIED MALE: It does keep you in touch with Mother Nature. You know what the wrath of her can be.

CHERNOFF: Weeks of rain have transformed Iowa's landscape. About 15 percent of the state's corn and soybean fields are underwater, according to the Iowa Farm Bureau, more than three million acres. And as much as 20 percent of the state's crops this year may be lost.

As a result, corn and soybean prices are soaring, which eventually will hit supermarket prices. Not only for cereal and salad dressing, which is made from soybeans, but for milk and beef as well, since about half of Iowa's corn is fed to livestock. MOONEY: It's going up. It's going up. It ain't going to be good for anybody. I think it will affect everybody in the United States.

CHERNOFF: Joe is thankful he has a second job working as a mechanic. But for neighbors who rely solely on farming for their income, the summer of 2008 looks bleak.

(END VIDEOTAPE)

CHERNOFF: If farmers can get another week of beautiful sunshine, then some of them will try to replant short season corn and soybeans. But for farmers like Joe who are facing this kind of flooding, the fields are lost for the summer -- Wolf.

BLITZER: How soon before we feel the effects of these floods at the supermarket, Allan?

CHERNOFF: Wolf, it will take some time, because the products we're eating right now are all based on last year's harvest. And also, in terms of beef, prices actually could decline a little bit before they rise. That's because the high price of feed is going to leave lots of farmers to slaughter many of their livestock. So, the prices could come down a bit before they go up.

BLITZER: Allan Chernoff on the scene for us. What a scene it is.

Thank you.

Many of you are sending us pictures of exactly what you're seeing through our iReports. Our Internet reporter, Abbi Tatton, is watching this.

These pictures are amazing, Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, and for days now we've been getting pictures in from Iowa, like this one here of Davenport sent in just last night. But what we're going to do now is take a look down river at the pictures coming in from the communities that are really bracing for the rising waters here.

First of all, Canton, Missouri, the city appealing for volunteers to help with their sandbagging efforts over the last few days. This picture sent in here from Johnnie Walker, who tells us that part of the city is already under a voluntary evacuation order.

And a little bit further south here, to La Grange, Missouri, now we're going to a town of a population of just 1,000 people. I just got off the phone with the city administrator there who said folks are just exhausted with the efforts going on right now. And he said they are expecting rising waters of two feet in the next couple of days.

Further south now to Quincy, Illinois, this is an area that the National Weather Service says is at high risk for major flooding. As you can see here from the picture, the Riverside parks are already gradually disappearing with the rising waters.

And if we advance that picture here, this is a shot from Pam Thurman. All of these sent in to CNN's iReport.

This is workers trying to shore up the levees there, hauling sand over the sandbags already there in an effort to stop these rising waters. And there's more of these pictures coming in from the communities all along the Mississippi River at ireport.com.

BLITZER: And you'll be bringing us more of those pictures later.

TATTON: Absolutely.

BLITZER: Thank you, Abbi, very much.

Federal agencies are in the disaster zone. On Thursday, President Bush will be there as well. He'll travel there for a firsthand look at the devastation. Today, the president talked about the priorities.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The first task at hand is to deal with the floodwaters, to anticipate where the flooding may next occur, and to work with the state and local authorities to deal with the response.

(END VIDEO CLIP)

BLITZER: Impacting the response, one large relief group says it needs relief itself. The American Red Cross is in the red, saying its relief fund is simply wiped out and that it's taking out loans to pay for shelter, food and other services. The Red Cross says its response to the Midwest could cost $40 million and is urging Americans to help other Americans by donating.

The group says it will do whatever it can to continue to help those in need.

What a story. We're going to stay on top of it and get more for you as THE SITUATION ROOM continues.

But let's check in with Jack Cafferty right now for "The Cafferty File."

Jack, it is a sad, sad story to see what nature can do.

JACK CAFFERTY, CNN ANCHOR: Well, and when nature decides to kick up her heels, man is just powerless against her. That's a horrible tragedy visited upon those people out there, and we can only help that they will get a little change in the weather pattern and a chance for some of those floodwaters to recede. But the harvest is pretty much shot in a lot of those areas, farmers will be down at the bank trying to borrow money so they can get ready to try and plant next year.

It's a hardscrabble life in some of those parts of the Midwest. Barack Obama has already made history in this campaign, but what if he does it again? What if he picked a Republican as his V.P.?

Salon.com, the Web site, reports about the buzz that's currently surrounding Republican Senator Chuck Hagel of Nebraska as a potential choice for Obama. Hagel admittedly is a long shot for the job. Just imagine the symbolism -- Obama could truly hit home on that message that he's serious about changing the way Washington works by running with a Republican.

It's happened before. Lincoln did it.

There's no better Republican, in my humble opinion, to run with Obama than Chuck Hagel. He's absolutely one of the best of the crop in Washington, D.C.

He says he's going to retire at the end of his term in the Senate. He's been very tough on President Bush -- another reason I like him -- when it comes to the war in Iraq.

Last year, Hagel said President Bush was not accountable anymore and that, "Before this is over, you might see calls for his impeachment." Well, we did. A couple of weeks ago, Kucinich introduced articles of impeachment. It went nowhere.

Hagel was also recently critical of his longtime friend John McCain, particularly some of McCain's comments about Iran as he attacks Barack Obama on his foreign policy. Chuck Hagel said he thinks McCain is "... smarter than some of the things he's saying."

The article points out although many tout Hagel as a moderate Republican who is willing to reach across the aisle, he is still a conservative. And there's the rub.

Former Senator Bob Kerrey, a Democrat and a friend of Hagel's, says it would be hard to imagine his party backing someone who is anti-choice, anti-civil rights for gays, and anti-gun control, but he added, "It's not impossible, but it is bumping right up on the edge." That's a quote.

For his part, Hagel has yet to endorse John McCain. It's been reported that Hagel's wife gave Barack Obama $500 in February.

And in a CNN interview last month, Hagel himself laughed at a question about being Obama's running mate. But he didn't rule it out, saying that he's "... going to try and find some honest work."

So, here's our question: What message would it send if Barack Obama picked Republican Chuck Hagel as his running mate?

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

It would certainly give us something different to talk about, wouldn't it?

BLITZER: It certainly would. Good question, Jack. Thanks very much.

John McCain is going after Barack Obama on several new fronts and with new intensity. I'll speak about it with Pennsylvania's Democratic governor, Ed Rendell. I'll ask if Obama is stuck playing a damaging game of defense.

Also ahead, McCain is about to give a major speech, at least that's what his aides say, on oil independence. Will his plan to lift the ban on offshore drilling fly in the politically crucial state of Florida?

And just a mention of Hillary Clinton's name prompted some Obama supporters in Michigan to start booing. Are new moves by Obama's campaign making matters worse?

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

(COMMERCIAL BREAK)

BLITZER: On, the war on terror and gas prices, a lot of other subjects as well, John McCain has been turning up the heat on Barack Obama.

Let's discuss this and more with Ed Rendell. He's the governor of Pennsylvania. A Democrat. Pennsylvania, a crucial battleground, as every one of our viewers fully appreciates.

Governor, thanks for coming in.

GOV. ED RENDELL (D), PENNSYLVANIA: My pleasure.

BLITZER: Let me get your response first to Jack Cafferty's question. What do you think about that notion of Chuck Hagel, a Republican, being the vice presidential running mate?

RENDELL: Well, Chuck Hagel is one of my favorite senators. I think he's a great guy. He tells the truth. Tells it like it is. And isn't bound by party ideology.

I would love it. But I'm not sure our rank and file would react well. Senator Obama would have a selling job, but I think it's a powerful message for the general election, apparently.

BLITZER: Why wouldn't the rank and file love it?

RENDELL: Well, because on some of the seminal issues that are really important to us, Chuck Hagel is a true conservative, and I think that would be a difficult thing for the rank and file.

BLITZER: You mean on guns and abortions and those kinds of issues?

RENDELL: Absolutely.

BLITZER: All right, let's talk a little bit about McCain. He's really pounding away at Obama, most recently on his dealings with suspected terrorists, on oil, on energy, and lots of other matters. Is he succeeding, though, in putting Obama on the defensive by going on the offensive, as McCain is?

RENDELL: Well, I think to some degree. But I think one of the problems is that eventually, John McCain's going to have to tell us what he would do as opposed to what's wrong with Barack Obama. And his plans are pitiful in terms of trying to revive the economy, or what's going to affect the average working person in Pennsylvania or any other state.

Even on the subject of taxes. always a sort of a strong point for Republicans, Barack Obama will give 80 percent of Americans a bigger tax cut than John McCain would. That's pretty devastating. Pretty devastating.

And Barack Obama has a great economic recovery plan for this country. He focuses on two things that I'm trying to do here in Pennsylvania. In fact, I'm in budget discussions with our caucus leaders right now.

One, infrastructure. Infrastructure, Wolf, as you know, is the best form of economic stimulus, because it puts people to work in jobs that can't be outsourced, and billions of dollars of money for U.S. businesses.

(CROSSTALK)

BLITZER: But let me interrupt for a second, Governor. McCain makes the point and a lot of economists agree, that at the time of economic distress, that's about the worse time to go ahead and start raising taxes, which is what Barack Obama's strategy is.

RENDELL: But he cuts taxes on 80 percent of Americans and raises taxes on 1 percent of Americans who can afford to have those taxes raised.

Look, John McCain's plan would increase the federal deficit by almost $500 billion over the next 10 years. That's the worst thing we can do economically.

You saw what happened when Bill Clinton eliminated the federal deficit. Twenty-three million new jobs. We can't afford that type of deficit expander, and that's what John McCain -- and it's an amazing turnaround, because John McCain was the guy who was against the Bush tax cuts.

Remember, he told us at a time of war, there's no way we should be cutting taxes. We shouldn't be increasing the deficit. And now all of a sudden he's for giving bigger tax cuts than George Bush ever gave. I mean, we've got to realize that the deficit is crushing this country.

BLITZER: It's hard to believe to a lot of people out there, but when it comes to Independent voters -- and there certainly are a lot of them in Pennsylvania, which is a key battleground state -- these two guys roughly doing about the same right now.

How do you explain that?

RENDELL: Well, I think Senator Obama's come through a bruising primary, and there was a lot of contention during the primary. I think what Senator Obama has to do is get out and tell working Pennsylvanians exactly what his plans are for their budget.

And when he tells them what his plans are for their budget, I think he's going to get the vast majority of those votes. And you're going to see a swing on Independents and a swing on Reagan Democrats, or working-class Democrats, whatever you want to call them. I think he's going to do real well when people start comparing side by side the plans for these candidates. I mean, remember...

BLITZER: You helped Hillary Clinton carry Pennsylvania...

RENDELL: I helped Hillary.

BLITZER: ... as all of us remember. You supported Hillary Clinton in her battle against Barack Obama.

What do you think about this latest development? He's already suggesting that Patti Solis Doyle is going to be the chief of staff to the incoming vice presidential candidate on the Democratic side, even though she and Hillary Clinton right now have not necessarily a very good relationship. She used to work for Hillary Clinton, at least until February. They're apparently not talking right now.

RENDELL: Sure. She was the campaign manager.

BLITZER: What kind of signal does that send to you and other Hillary Clinton supporters?

RENDELL: Well, I think we all have a tendency, Wolf, to make too much of those type of things. I think Senator Obama has not made up his mind here by a long shot.

On the other hand, I can tell you, he always talks about team of rivals and how much he admired Abraham Lincoln for doing that. Well, who was his biggest rival? Hillary Clinton. So that might be a message the other way.

I don't think we should try to define messages. I think Senator Obama can consider this. I think he's going to continue his talks, his personal talks with Senator Clinton. And we'll see what happens. But I think to try to read the tea leaves makes no sense.

BLITZER: That's our job, though. We try to do that.

Hey, Governor, thanks very much.

RENDELL: My pleasure.

BLITZER: Democrats come together to put the division behind them, but something unexpected happens showing there's still a division out there. At an Obama event, the mere mention of Hillary Clinton's name brought out some boos. How long will it take for the wounds from the primary to heal?

And in the health scare regarding raw tomatoes, there's a new development we're just getting in. You're going to want to hear about this before you run out for your next meal.

Stick around. You're in THE SITUATION ROOM.

(NEWSBREAK)

(COMMERCIAL BREAK)

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

Happening now, some senators want to know how it happened. In the post-9/11 atmosphere, how did the U.S. adopt interrogation tactics for terror suspects that sometimes were simply too harsh and that some say were simply too abusive?

A Senate panel is investigating trying to get to the bottom of this. We'll have a full report coming up.

Troops versus the Taliban. NATO and Afghan forces ready for a showdown with militant fighters who have taken over areas in Afghanistan. Fighting could start soon. Lots of Americans are involved. Residents right now are being warned to take cover.

We'll have a full report on that coming up as well.

And who knows what will happen in two days, but Hamas now says a cease-fire will start with Israel on Thursday. How is Israel responding to that? We'll go to Jerusalem.

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

John McCain is in Texas oil country right now, only minutes away from giving what his aides describe as a major speech on America's dependence on foreign oil. This, as the all-but-certain Republican nominee is trying to show he's different than President Bush when it comes to energy policy.

Listen to this clip from a new McCain ad out today on global warming.

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

NARRATOR: John McCain stood up to the president and sounded the alarm on global warming five years ago.

(END VIDEO CLIP)

BLITZER: Let's bring in Dana Bash. She's covering the McCain camp for us.

Dana, this -- McCain's speech that he's about to deliver in Texas right now, he's specifically going after Obama when it comes to the issue of energy.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. He's going after Barack Obama, specifically for supporting windfall profits tax on oil companies.

And, according to speech excerpts released by his campaign. McCain will say -- quote -- "If the plan sounds familiar, it's because that was Jimmy Carter's big idea, too. And a lot of good it did us. He will go on to say, "I'm all for recycling, but it's better applied to paper and plastic than to the failed policies of the 1970s."

Now, that sounds like a lot like a classic Republican line, the idea that he's opposed to a windfall profits tax. But, just last month, Wolf, he said he was open to such a tax.

Listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I would be glad to look, not just at the windfall profits tax -- that's not what bothers me -- but we should look at any incentives that we are giving to people that -- or industries or corporations that are distorting the market.

(END VIDEO CLIP)

BASH: So, Wolf, that change really is proof of just how tricky gas tax politics is, especially for John McCain.

BLITZER: He's also going to be talking about his new position -- he began discussing it yesterday -- on lifting some of those restrictions on offshore oil drilling. This is a really sensitive issue in the battleground state of Florida, as you well know, Dana.

BASH: It certainly is.

You know, the last time McCain ran for president, in 2000, and really over the last several years in the Senate, he's been opposed to lifting the federal moratorium on offshore drilling. It's what helped define him as an environmentally conscious Republican.

Now McCain is arguing, as you said, it's time to lift that ban, because, he says, it stands in the way of oil exploration. It's also a way, he said, it can be done in an environmentally OK way now.

But it is a risky reversal, as you said, especially in the battleground states, just like Florida. But even many Republicans have opposed offshore drilling there in the past. You know, two of them today, Governor Charlie Crist, and Mel Martinez -- both are McCain supporters -- both of them also shifted their positions.

Listen to Governor Crist on this issue.

(BEGIN VIDEO CLIP) GOV. CHARLIE CRIST (R), FLORIDA: Floridians are suffering. And, you know, when you're paying over $4 a gallon for gas, you have to wonder if there might be additional resources that we would be able to utilize to bring that price down -- simple supply and demand. So, I applaud him for his idea. And I think that it's something that should be studied.

(END VIDEO CLIP)

BASH: Now, Senator Martinez said virtually the same thing to me in an interview just a short time ago, Wolf.

But left-leaning environmentalists call this change pandering. And it's unclear if it's really going to hurt McCain in Florida. But I spoke to several California Republicans today. And they said, you know, it was always a long shot for McCain there in California, but no longer. They say this move, this idea of lifting the federal moratorium for offshore drilling, makes it pretty much impossible for McCain in California, where they are very, very environmentally conscious.

BLITZER: And Senator Bill Nelson of Florida just issued a statement, Dana, saying this would be a disaster for Florida's tourism industry. And he's fiercely opposed to this. He's a Democrat, as you know.

All right, Dana, thanks very much.

BLITZER: There's a fierce debate over whether to lift the ban on offshore oil drilling. The McCain camp argues for it, as we just heard from Dana, saying the U.S. could gain at least 21 billion barrels of untapped oil.

Environmentalists, though, argue against it, citing the risk of oil spills that can spoil beaches. Back in 1969, oil drilling off California caused a crack in the seafloor that led to a massive oil spill. A lot of people remember that.

Coming up here in THE SITUATION ROOM, we're going to have an exclusive interview with the chairman and CEO of Chevron. Dave O'Reilly. He is -- he's here in THE SITUATION ROOM. We're going to be asking him some of the tough questions submitted by the viewers as well about the sky-high price of gas, what we can expect to pay in the future.

The chairman and CEO of Chevron will be here in THE SITUATION ROOM.

Barack Obama's making another appeal today to voters in Michigan. Only hours earlier, an effort to bring Democrats in that state together took a sort of embarrassing turn.

And now there are fresh concerns within the party about whether Obama can bring Hillary Clinton supporters into the fold.

Let's go out to our senior political correspondent, Candy Crowley. She's watching this story for us.

Some setbacks, Candy, for party unity?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, as you know, Wolf, looking at the polls, Barack Obama's doing a pretty good job of bringing in those Clinton supporters.

Nonetheless, a recent poll in "The Washington Post" showed, about a quarter of the people who say they were Clinton supporters now believe they will vote for John McCain. So, the Obama campaign has tried to use this time along the road to the convention to sort of pave over that party split. But, as you mentioned, it ran into a few speed bumps yesterday.

(BEGIN VIDEOTAPE)

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: Yes, we can.

Ladies and gentlemen, the next president of the United States of America, Barack Obama.

(CHEERING AND APPLAUSE)

CROWLEY: Twenty thousand people showed up for another step in the healing of the party, the picture of unity, Democratic golden boy Al Gore, presumptive nominee Barack Obama, and Michigan Governor Jennifer Granholm, a former supporter of Hillary Clinton. It's going to take more than a picture.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: For all of those who, like me, supported Senator Clinton, we recognize that Senator Clinton -- Senator Clinton...

(BOOING)

GRANHOLM: Come on, now. She's a great American.

(BOOING)

GRANHOLM: She's a great senator.

CROWLEY: There are bad feelings on both sides of the Clinton/Obama fault line, the aftershocks of a fierce, sometimes bitter, primary season.

And he, of course, has the most to lose as he courts the Clinton vote. A "Washington Post"/ABC poll found, a quarter of Clinton supporters say they will vote for John McCain. A prime-time appearance in an arena full of supporters jeering Hillary Clinton's name does not help the cause.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: She has, in her own words, shattered a glass ceiling into 18 million pieces.

(CHEERING AND APPLAUSE) OBAMA: She has lifted up the sights of young women all across America, including my two daughters. She is worthy of our respect.

CROWLEY: Also unhelpful, at least among insiders who pay attention to these things, the recent Obama hire of Clinton's former campaign manager, Patti Solis Doyle. She was one of those blamed for early Clinton mistakes and bounced from the Clinton campaign. Hard feelings still exist.

Solis Doyle will be the chief of staff for whomever Obama taps as his vice presidential nominee. At least two high-profile Clinton supporters see the hire as a slap in the face and a sign Clinton will not be Obama's pick. Camp Obama insists, there was no such message and no offense intended, but, certainly, some was taken. Party unity is harder than it sounds.

(END VIDEOTAPE)

CROWLEY: Aboard his plane heading to Washington, Barack Obama today held a news conference, and said that these were scattered boos, that the Patti Solis Doyle hire was because he worked with family members of hers when he was a community organizer in Chicago, and, again, that no offense was intended -- Wolf.

BLITZER: Thanks very much for that, Candy Crowley.

One group of voters could decide the presidential race this fall. We're going to be taking a closer look at the fight for those independent voters and whether Barack Obama or John McCain right now has an advantage.

Democratic-leaning groups are launching a costly new ad campaign against McCain. Should they be reined in? Can they be reined in? Stand by for our "Strategy Session."

And, later, we will go live to the flood zone in the Midwest -- the breaking news on rising waters, levees threatening to burst right now. This is a race against time, and lots at stake.

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

(COMMERCIAL BREAK)

BLITZER: In the presidential fight between Barack Obama and John McCain, every single vote is crucial. But some groups have the potential to tilt the final outcome one way or another.

Let's go to our senior political analyst, Bill Schneider. He's watching this story.

Bill, what do we know right now? Who's winning this battle for those independent voters?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, right now, nobody.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Independents hold the key to victory. Both contenders know it.

MCCAIN: I don't know if you would call it a maverick, but I certainly have issues that I think can attract independents.

OBAMA: As important as it is for Democrats to be unified, it's also important that we reach out to independents.

SCHNEIDER: Who's got the edge with independents? Two new polls give the same answer: neither candidate. The "Washington Post"/ABC News poll finds independents split. So does the CNN poll by the Opinion Research Corporation, 45 percent for Barack Obama, 45 percent for John McCain.

Independents, remember, have no brand-name loyalties. Bizarre as it may sound, they actually look at the candidates and the issues, and then make up their minds. So, what do they think of the candidates? Do they hate them both?

Actually, they like them both, McCain somewhat more than Obama. On the issues, however, independents are not happy at all. Seventy- eight percent think the economy is lousy. Seventy-two percent oppose the war in Iraq, which explains why independents are so down on the Republican Party.

Only 33 percent have a favorable opinion of Republicans. Fifty- three percent like the Democrats -- big difference. Obama's trying to sell change, which independents clearly want.

OBAMA: You're Democrats who are tired of being divided, but you are also Republicans who no longer recognize the party that runs Washington, and independents who are hungry for change.

(CHEERING AND APPLAUSE)

SCHNEIDER: If independents are so down on Republicans, why do so many of them support McCain? Because most independents think McCain will be different from Bush. Otherwise, McCain wouldn't have a chance.

(END VIDEOTAPE)

SCHNEIDER: Independents don't like the Republican brand, but they do like McCain. For independents, the brand comes second. For partisans, the brand comes first.

You know, a reporter once asked Harry Truman, "Do you vote for the man or for the party?" Truman answered: "I always vote for the best man. He is the Democrat" -- Wolf.

BLITZER: Bill Schneider, good report. Thanks very much for that.

Barack Obama supports -- supporters unveiling a dramatic new ad. In it, a woman holds a baby and says, "John McCain can't have the child to serve in Iraq." Does that cross the line? And should Obama and McCain try to keep ads like these out of the race?

And a highway full of cars sees an unlikely traveler. That would be an airplane. It makes an emergency landing. You're going to want to see this and find out what happens next.

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

(COMMERCIAL BREAK)

BLITZER: Barack Obama is filling some job positions right now, but at least one new hire is raising eyebrows. As we just reported, Patti Solis Doyle will be the chief of staff for -- for whoever becomes Obama's vice presidential running mate. But she was fired from Hillary Clinton's campaign only a few months ago. So, what's the strategy behind the move? What signal is it sending, if any?

Let's discuss in our "Strategy Session."

Joining us, the Democratic strategist Hilary Rosen -- she's the political director of HuffingtonPost.com -- and the Republican strategist John Feehery.

Guys, thanks very much for coming in.

You know Patti about as well as anyone. What's going on here?

HILARY ROSEN, DEMOCRATIC STRATEGIST: Well, we are good friends.

And -- but I think that they -- and she's been a close ally of the Chicago Democratic machine for -- for many years. She knows David Axelrod and some others for a long time.

BLITZER: She's from Chicago.

ROSEN: I think they were looking for a senior role for her. And they found one. This particular role that they found for her, though, I think is -- is -- you know, poured the cement in the -- in any hopes of...

BLITZER: Is it a slap at Hillary Clinton? Because I take it the two of them are barely speaking right now, since February, when she was let go from the Clinton campaign.

ROSEN: They don't speak. I don't think that the campaign meant it as a slap at Senator Clinton, but it clearly pours the cement in any potential for her being vice presidential nominee, because there's just no way that she would have done that job or they would have given it to her if they thought that Hillary was on the...

(CROSSTALK)

BLITZER: I don't know anything, but I find it hard to believe that all those smart strategists working for Barack Obama didn't foresee there could be a problem in -- in naming a vice presidential chief of staff long before you have a vice presidential candidate.

JOHN FEEHERY, REPUBLICAN STRATEGIST: A little jab, there's no doubt about it. Hillary kind of begging to be vice president now, not -- she is a Chicago insider. And this kind of raises the question about Chicago. Chicago is not exactly a paragon of virtue when it comes to ethics.

So, the Chicago insider, does this help Obama? Has he become too much of a Chicago-centric campaigner? And will this hurt him in the general election? We don't know that. But I don't think that they -- I think they thought about this, and I think they did want to jab Hillary Clinton just a little bit.

ROSEN: Yes, well, I think the particular job of being the chief of staff for a vice presidential nominee, it's pretty much of an inside job. You have to know, you know, the kinds of -- the -- the schedule. You have to know activities. You have to know how to manage donors, those sorts of things.

Patti is superb at those sorts of things. So, she would succeed at that job. I just think it was, you know, crazy to announce it at this point.

But, you know, look, I -- maybe this is just all an insider's game at this point. And, hopefully, this campaign is spending a lot more time on other things than this.

BLITZER: Maybe -- maybe there's a bigger picture that none of us can see right now.

(LAUGHTER)

BLITZER: And that's always possible.

MoveOn.org has a new ad coming out. It's a left -- left-leaning organization, obviously supports Barack Obama.

FEEHERY: Sure.

BLITZER: Going after John McCain.

I'm going to play a little snippet.

FEEHERY: Sure.

(BEGIN VIDEO CLIP, MOVEON.ORG AD)

UNIDENTIFIED FEMALE: John McCain, when you say you would stay in Iraq for 100 years, were you counting on Alex? Because, if you were, you can't have him.

(END VIDEO CLIP)

BLITZER: All right, John, what do you think?

FEEHERY: I think the ad is a little bit -- it's outrageous. It's over the top. MoveOn has done this time and time again with "General Betray Us." And I think, at the end of the day, these kind of ads are going to rebound against -- against the Democrats.

MoveOn.org was founded by George Soros, who actually participated in raising money for the groups that wanted campaign finance reform. And now he got campaign finance reform, really energizing MoveOn.org. Now MoveOn.org is running these commercials. It's over the top. Will Barack Obama be able to control these guys?

That's not the question. The question is, will these guys be able to control Barack Obama?

BLITZER: They're not affiliated with the Obama campaign.

FEEHERY: They're not.

BLITZER: They're independent.

FEEHERY: They're not.

BLITZER: But go ahead.

ROSEN: There are so many mis -- untrue facts in what John said, I don't know where to start.

As a practical matter, MoveOn.org is an independent organization, funded by small donors, not by big donors. And this ad is such -- look, I think that both Barack Obama and John McCain are going to have a significant dependency on outside groups to help sell the message.

BLITZER: These 527s...

(CROSSTALK)

ROSEN: Look, as a practical matter, these are two pretty nice guys.

FEEHERY: Right.

ROSEN: And it's...

BLITZER: Obama and McCain.

ROSEN: Obama and McCain.

It's going to be hard for them to campaign with the kind of intensity and dirt that are often required in presidential campaigns. We saw in 2004 what the Swift-Boaters to John Kerry. Democrats are not going to let that happen again to Barack Obama.

And if that means staying away from the campaign, having independent actions and independent, hard-hitting ads at John McCain, that's going to happen, because there's no question the Republicans are going to do that to Barack Obama.

BLITZER: And I think everybody agrees that this is going to get worse before it gets better, if it gets better.

(CROSSTALK)

BLITZER: But hold your thought...

FEEHERY: OK.

BLITZER: ... because we're out of time, unfortunately.

(LAUGHTER)

BLITZER: Hilary and John, thanks very much.

A developing story just coming in to THE SITUATION ROOM. Carol's got some details.

What do we know, carol?

CAROL COSTELLO, CNN CORRESPONDENT: Yes, it's coming in from Richmond, Virginia.

A Richmond judge has just approved a state settlement, an $11 million settlement with most of the families who lost loved ones to a gunman at Virginia Tech. The money will be split between 24 of 32 families. I'm sure you remember that, last year, a gunman, a student gunman, went on a rampage at Virginia Tech, killing 27 people, including himself. And, eventually, soon, the state of Virginia will have to pay those families $11 million -- back to you, Wolf.

BLITZER: All right, Carol, thanks very much.

Democrats say, if you vote for John McCain, you will really be voting for a third Bush term. So, how true is that? Mary Snow is looking at the similarities between the candidate and the president.

And a plane lands on a highway. It's an emergency you're going to want to see. Find out exactly what happened.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker today: Our new CNN poll of polls shows Barack Obama now leading John McCain by five points among registered voters nationwide. We averaged three new surveys and found Obama with 46 percent support, McCain with 41 percent support.

This is our first poll of polls in which all the surveys were conducted after Hillary Clinton dropped out of the Democratic race and endorsed Barack Obama.

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 check out my blog posts as well.

Let's go to Jack. He's got "The Cafferty File" -- Jack. CAFFERTY: What did you write about?

BLITZER: I wrote about taxes, the difference between Barack Obama and McCain when it comes to their tax policies.

CAFFERTY: Are they both going to cost us money? They probably will, right?

BLITZER: They're very, very different, totally different on a whole range of tax issues. And we go through some of them.

CAFFERTY: All right. Well, that sounds pretty good. I'm going to go check that out.

BLITZER: Good.

CAFFERTY: The question this hour is: What message would it send if Barack Obama picked a Republican senator, Chuck Hagel, from Nebraska, as his V.P.?

Keith writes: "I think it would be a great decision. We need a statesman in the White House, not a party leader. Barack has to demonstrate that he can govern across party lines. We are tired of the red-state/blue-state divide. This would demonstrate that he is committed to ending that division."

Stacy in Fairfax, Virginia, says: "It would be a big mistake for the Democratic Party and for the Obama campaign. First, it would do nothing to bring the party together. It would also signal that there isn't a qualified moderate Democrat available or willing to run as vice president."

Jay in Mississippi writes: "It spells change. Hagel would certainly solve foreign policy issues. It would say that Obama will govern from the center, not from the left. It would ensure policies that benefit both sides, not just one side. It actually spells how America ought to be: an executive branch committed to representing all of the people."

Greg in New York writes: "Hagel is a good man, I give him credit for standing up to his fellow Republicans on their war policy. I give him even more credit for defending Obama against his friend John McCain. The only thing is, he's still a Republican. And, if he were to take over the presidency, he'd still appoint conservative judges and such. Just because the two men have similar stances on the war doesn't mean they agree on every other policy there is."

Robert in Atlanta writes: "Sure, why not? Let's make more of Hillary Clinton's people angry and give the election to McBush."

Dayton in Columbia, Maryland, writes: "It would mean that change is more important than any specific policy. I agree."

And Gina in Long Beach, California, writes, "Have you run out of things to talk about?"

(LAUGHTER)

CAFFERTY: No, but we probably will if I keep trying to do three of these related to politics for the next five months. So, stay tuned.

If you didn't see your e-mail here, you can go to my blog. That's at CNN.com/caffertyfile, where people have not run out of answers to these silly little questions. There are hundreds of responses there -- Wolf.

BLITZER: I have total confidence in you, Jack. Thanks very much.

(LAUGHTER)

CAFFERTY: All right.

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

Happening now: the worst natural disaster to hit the United States since Hurricane Katrina.