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Congressman Charlie Rangel Under Fire Over Rent Deal; McCain Relaunch Misfire?; Another Near-Miss At JFK; Major Financial Firm Collapses

Aired July 11, 2008 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now, Barack Obama vs. Osama bin Laden. The Democrat warns what might happen if the al Qaeda leader is caught alive. It's a CNN exclusive interview with Senator Obama.

Plus, a powerful U.S. congressman and the apartments he's been renting for bargain prices. The Ways and Means Committee chairman, Charlie Rangel, insisting he's done nothing wrong.

And the trouble brewing in Saint Louis if America's biggest beer maker is actually bought by foreigners. Locals now fearing for their jobs. All that and the best political team on television.

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

Barack Obama is preparing for his closeup on the world stage, eager to prove he has the judgment, the experience to be the commander in chief. We want to welcome our viewers in the United States and around the world.

Tough questions today for Barack Obama about international hot spots and his foreign policy vision. The Democrat took a break from campaigning in Ohio for an exclusive interview with CNN's Fareed Zakaria.

Up for discussion, the hunt for Osama bin Laden.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If he was captured alive then we would make a decision to bring the full weight of not only U.S. justice, but world justice down on him. And I think that -- and I have said this before -- that I am not a cheerleader for the death penalty. I think it has to be reserved for only the most heinous crimes. But I certainly think plotting and engineering the death of 3,000 Americans justifies such an approach.

Now, the -- I think this is a big hypothetical, though. Let's catch him first. And the fact that we have failed to seriously go after al Qaeda over the last five years because of the distraction of Iraq, I think we are now seeing the consequences of that in Afghanistan.

(END VIDEO CLIP)

BLITZER: And let's listen to Senator Obama now on Afghanistan and the president, Hamid Karzai's, struggles.

(BEGIN VIDEO CLIP)

OBAMA: I think the Karzai government has not gotten out of the bunker and helped to organize Afghanistan and government, the judiciary, police forces, in ways that would give people confidence. So there are a lot of problems there.

But a big chunk of the issue is that we allowed the Taliban and al Qaeda to regenerate itself when we had them on the ropes. That was a big mistake and it's one I'm going to correct when I'm president.

(END VIDEO CLIP)

BLITZER: And Fareed Zakaria also asked Senator Obama about John McCain's suggestion that Russia be thrown out of the G-8.

(BEGIN VIDEO CLIP)

OBAMA: It would be a mistake.

Look, if we're going to do something about nuclear proliferation, just to take one issue that I think is as important as any on the list, we have got to have Russia involved.

The amount of loose nuclear material that's floating around in the former Soviet Union, the amount of technical know-how that is in countries that used to be behind the Iron Curtain, without Russia's cooperation, our efforts on that front will be greatly weakened.

(END VIDEO CLIP)

BLITZER: And joining us now, the host of "FAREED ZAKARIA GPS," Fareed Zakaria, who has just conducted this interview with Barack Obama.

Fareed, thanks very much for joining us.

FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: My pleasure, Wolf.

BLITZER: Let's get your analysis right now, what we just heard. Because as far as John McCain is concerned, we're hearing a very different stance from Barack Obama as far as Russia and its involvement in the G-8 alignment.

ZAKARIA: I think they're two very different visions of how to deal with the world, Wolf. I think on the one hand, you have McCain, who is suggesting, in a sense, a new division, a new Cold War, if you will, between the democracies and the autocracies.

What Obama said to me was, look, you can't solve the world's problems that way, we have got to deal with the issues of global warming, issues of nuclear proliferation. On nuclear proliferation, on loose nukes, you need the Russians. On any economic issue, you need the Chinese. So it's a vision of drawing in the world's major powers, whether or not they're democracies, which is a kind of more ideological view, you know, which is sort of democracy versus the rest.

BLITZER: So basically the major difference between Barack Obama and John McCain is, McCain wants to expel Russia from the G-8 and Barack Obama says keep them in, keep them in this tent, because the U.S. needs them.

ZAKARIA: Exactly. Draw these guys into the tent so we can solve some of the world's common problems together.

BLITZER: Now, let's talk a little bit about Afghanistan, because there's been a dramatic increase in violence there. Some U.S. officials are blaming the Pakistanis for allowing Taliban and al Qaeda fighters to go in from the tribal areas of Pakistan into Afghanistan. But you and the Democratic presidential candidate focused in on Hamid Karzai, the leader of Afghanistan.

What's his bottom line?

ZAKARIA: I think Senator Obama was repeating a stand he's taken for a long time, which is that things in Afghanistan are not going well. That they are deteriorating, and that's where U.S. forces and diplomatic and all kinds of energy needs to be placed.

So in that sense, I think he was being quite consistent. I thought he went a little bit further in directly criticizing Karzai for not really trying to reestablish control of the country. But I think that overall, it was a fairly consistent message that we're spending too much time on Iraq, not enough on Afghanistan, and the real problem is Afghanistan, which is deteriorating.

BLITZER: Fareed Zakaria.

The full interview will air Sunday, 1:00 p.m., on "FAREED ZAKARIA GPS."

Fareed, thanks very much for joining us.

ZAKARIA: My pleasure, Wolf.

BLITZER: Also today, Senator Obama tried to clarify some comments he made the other day about America's lack of foreign language skills. Some conservative critics claimed Obama stepped on a political land mine by suggesting that U.S. citizens should be forced to speak Spanish. But Obama told voters that's not what he said.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I want to mention, by the way, foreign languages. I said something the other day down in Georgia. And the Republicans jumped on this.

I said, you know, absolutely, immigrants need to learn English, but we also need to learn foreign languages.

(CHEERING AND APPLAUSE)

OBAMA: You know, but this is an example of some of the problems we get into when somebody attacks you for saying the truth, which is, we should want our children with more knowledge. We should want our children to have more skills. There's nothing wrong with that. That's a good thing.

I know, because I don't speak a foreign language.

(LAUGHTER)

OBAMA: It's embarrassing.

(END VIDEO CLIP)

BLITZER: Senator Obama speaking earlier on a sensitive subject.

Let's check in with Jack Cafferty. He's got "The Cafferty File" -- Jack.

(LAUGHTER)

JACK CAFFERTY, CNN ANCHOR: I'm right here.

BLITZER: Yes.

CAFFERTY: John McCain didn't need this. Former Senator Phil Gramm, McCain's campaign co-chairman and one of his economic advisers, said the U.S. is only going through a mental recession. Mental, no problem. Gramm also called the United States a nation of whiners.

McCain is actually quite capable of saying dumb things on his own. He doesn't need Phil Gramm to help him do this. Gramm later said he was referring to U.S. leaders as whiners, not ordinary Americans, but that's not what he said.

Gramm also stood by his comments on that mental recession thing, saying we haven't measured negative growth. It is simply all in our minds.

McCain, he couldn't distance himself from the comments fast enough, saying that he strongly disagrees, Gramm doesn't speak for him. But Phil Gramm is advising him on the economy. And Phil Gramm is co-chairing his run for the White House. Phil Gramm has now made it much more difficult for McCain to prove to the average citizen that he feels their pain.

And reinforces that nasty perception that wealthy Republicans are out of touch with what most Americans are dealing with. Gramm's remarks came after McCain himself said earlier this year the economy is not his strong suit, and after he insisted the fundamentals of our economy remain strong.

Tell that to the millions of Americans who are grappling with record energy costs and gas prices, the housing, credit crises, loss of jobs, increase in unemployment, crashing stock market, inflation, falling dollar, the drain from two wars, on and on. It's a mental thing.

It's Friday afternoon is what it is. So, we need your help here. Here's the question: What's the difference between a mental recession and a real one?

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

BLITZER: Maybe he meant, Jack, we like to drink wine. That's why we're a nation of whiners. Is that possible?

CAFFERTY: He must have been sucking on a big bottle of grape juice to let those words come out of his mouth. I couldn't believe it. Who says stuff like that?

BLITZER: I know. It was pretty shocking.

All right, Jack, see you in a few moments.

One of the most powerful members of Congress says he won't be embarrassed, but a rent deal he enjoys has been exposed. Now New York's Charlie Rangel is facing some outrage. He's angry.

And Barack Obama will soon be heading to Germany. Its chancellor is opposed to something he might do there. And there are questions over whether or not that's because the Bush administration is pressuring her.

And John McCain's staff shakeup was supposed to help him, but campaign problems seemingly haven't gone away.

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

(COMMERCIAL BREAK)

BLITZER: He's the powerful chairman of the House Ways and Means Committee, a major figure in national Democratic and New York City politics.

But a newspaper report is exposing a rent deal Congressman Charlie Rangel enjoys, a deal that is raising some questions, causing some outrage out there.

Let's go to Mary Snow. She's in New York working the story for us.

Congressman Rangel, who is not a shy guy at all, he's angry about this report.

MARY SNOW, CNN CORRESPONDENT: Yes, and, Wolf, he had a rather unusual news conference today here in Harlem. We're outside of his apartment. He is defending the fact that he has four apartments in this Harlem building. But some people here in Harlem save it is unfair that he has several apartments when they're struggling to find affordable housing.

(BEGIN VIDEOTAPE)

SNOW (voice-over): New York Democratic Congressman Charles Rangel facing reporters outside his Harlem home after a front-page story in "The New York Times" raised questions about the fact he has four rent-stabilized apartments in the building.

REP. CHARLES RANGEL (D-NY), HOUSE WAYS AND MEANS COMMITTEE CHAIRMAN: And I'm not apologizing to anyone for that.

SNOW: The powerful New York Democrat who chairs the House, Ways and Means Committee lashed out at "The New York Times" story, poking holes in one inconsistency, that he lived in a penthouse, when there is none.

But it didn't quell questions about having four units at a time when the number of rent-stabilized apartments in New York are dwindling, as landlords push to charge higher rates. Rangel says he uses one of those units as an office and not a residence. He says he will need to check whether there's an issue with that unit, but says...

RANGEL: And I have done nothing illegal, and I have not negotiated a separate contract with the landlord.

SNOW: The topic is so heated that Harlem resident Lance Smith disrupted Rangel's press conference at one point.

LANCE SMITH, RESIDENT OF HARLEM: Does it constitute you receiving a gift, a special privilege from the landlord that the landlord has not afforded to any other tenant?

SNOW: Rangel says he's not accepted any gifts, adding he wouldn't recognize the landlord if he saw him.

The company that owns the building, Olnick Organization, declined comment, beyond a spokeswoman saying, "This is a private matter for the Olnick Organization and Mr. Rangel to evaluate."

We asked Rangel about the fact that an owner of that real estate company contributed $2,000 to Rangel's campaign in 2004.

RANGEL: This year, I have raised $5 million. So, I would not be able to find that $2,000 check.

SNOW: One watchdog group says, while Rangel may not have done anything illegal, it could pose problems for him.

UNIDENTIFIED FEMALE: There's both an appearance problem, but there's a bottom-line problem here that he may have gotten a sweetheart deal.

(END VIDEOTAPE)

SNOW: And, Wolf, Congressman Rangel does say, though, that one of the units that he's using for a campaign office, he was asked, what happens if there is an issue with this particular apartment? He said he will find another office if that is the case and says he is looking into that right now -- Wolf.

BLITZER: Could he be facing, Mary, a legal problem?

SNOW: I talked to real estate attorneys, who say it's really not illegal to have more than one rent-stabilized apartment. But they say it is very unusual. And, as we have heard, there is many people here in Harlem -- there are many people here in Harlem who are saying it really is a matter of whether or not it's fair.

BLITZER: Mary Snow is in Harlem working the story for us. Mary, good work, as usual.

John McCain is out on the campaign trail today in Wisconsin. He's wrapping up a week that was supposed to represent a new beginning for his campaign under brand-new management.

Let's bring in Dana Bash. She's covering the McCain campaign for us.

This relaunch this week has not gone as hoped for.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, it's interesting, Wolf. When we talked to McCain strategists and McCain advisers at the beginning of the week, there was really a palpable sense that they were trying so, so hard to focus on what they will really wanted to get out there this week, which is that his economic plan will create new jobs.

But in the words of one Republican strategist I talked to this week, he said that they instead were scarred with some self-inflicted wounds.

(BEGIN VIDEOTAPE)

BASH (voice-over): In many ways, this town hall with Wisconsin women was the kind of makeover John McCain's aides retooling his campaign were going for.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I have a proven record. I have a proven record of reaching across the aisle. Now, sometimes...

(APPLAUSE)

BASH: McCain was connecting with swing voters. He was loose, but maybe a bit too loose.

MCCAIN: I will do anything in my power to get those offshore exploited -- explored, discovered, and...

(LAUGHTER)

MCCAIN: Explored and exploited.. BASH: A Freudian slip of sorts from the self-described environmentalist now calling for drilling offshore, evidence that McCain's week of events to relaunch his campaign had some misfires.

Case in point...

PHIL GRAMM, MCCAIN CHIEF ECONOMIC ADVISER: We have sort of become a nation of whiners.

BASH: Having to rebuke his good friend and economic adviser for declaring the country is in a mental recession.

MCCAIN: Phil Gramm does not speak for me. I believe that the person here in Michigan that just lost his job isn't suffering from a mental recession.

BASH: Some awkward moments got less national attention, but may be just as politically perilous, like going to the battleground of Michigan, where many voters believe free trade sent their jobs overseas, and saying this.

MCCAIN: I believe that free trade is important.

BASH: Too much straight talk for these voters, who told him so.

UNIDENTIFIED MALE: So, what we need to do is control some of these trade issues that we have got going on. And we want fair trade.

BASH: Some Republicans tell CNN, they worry McCain's free trade message is alienating blue-collar voters he's trying to pull from Barack Obama.

Experts agree.

BERNIE PORN, MICHIGAN POLLSTER: He may think that he's telling the truth about the issue, but this is one of those issues where I can assure him that the voters can't handle that truth.

(END VIDEOTAPE)

BASH: Now, McCain did talk hour after hour, day after day this week about his prescriptions for the ailing economy and how he believes Barack Obama will raise your taxes. But, Wolf, what's really unknown right now is whether anybody really heard him.

BLITZER: Good point. Dana, I know you are going to continue to watch this campaign for us.

Some Democrats' so-called dream ticket may turn out to be only a dream. You may be wondering in Barack Obama is actually vetting Hillary Clinton for the vice presidency. Someone very close to her reveals a new detail.

And Barack Obama's campaign gets creative in his criticism of John McCain, using McCain's own name against him. And the medical examiner releasing new details on a story that's left many people speechless. It involves the woman left to die on a hospital room floor. We're just getting brand-new details.

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

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: All right, a plan to make a big speech at a historic spot has run into a snag for Senator Barack Obama. Is the White House partly to blame? The battle over the Brandenburg Gate in Berlin, that's coming up.

And a new study shows Barack Obama could actually win the election by a landslide. What are they basing that prediction on?

And America's biggest beer maker may not be American for much longer. What Missouri's lawmakers have to stay about it.

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

(COMMERCIAL BREAK)

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

Happening now, some say there are echoes of Camelot in Obama's 2008 campaign. But did the Bush administration help turn an upcoming speech into an international incident?

The war of ads -- Barack Obama's tactic using John McCain's name against him.

And McCain is getting aggressive in some of the biggest swing states. He's going after a major bloc of voters in Florida. You are going to see how.

All of this, plus the best political team on television.

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

The German government said today it expects to find a -- quote -- "good solution" to a flap that could be called Obama-gate. At issue, Barack Obama's request to speak at Berlin's historic Brandenburg Gate during an upcoming trip to Germany.

Our White House correspondent, Ed Henry, is working the story for us.

Lots of sensitivities here, a lot of symbolism, not only for Germans, Ed, but for American politicians as well.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. You know that both John Kennedy and Ronald Reagan gave major historic speeches in Berlin. But Angela Merkel, the German chancellor, is now saying she doesn't want Senator Obama to use the Brandenburg Gate as a specific backdrop. There are now charges in fact that the U.S. may have pressured Angela Merkel to get her to say that.

But I can tell you, the White House today is trying to shoot down that allegation.

(BEGIN VIDEOTAPE)

HENRY (voice-over): Barack Obama will soon embark on a global tour to beef up his foreign policy credentials, with stops in big European capitals, like Berlin, London and Paris, where people are giddy about his presidential campaign.

DOMINIQUE STRUYE DE SWIELANDE, BELGIAN AMBASSADOR TO U.S.: I think Obama is seen a bit in the line of the continuation of Kennedy, you know -- a very dynamic, charismatic person.

HENRY: During his own trip to Germany in 1963, John F. Kennedy famously said, "Ich bin ein Berliner" at a town hall near the Brandenburg Gate.

Obama is now considering a speech at the Gate itself. But German Chancellor Angela Merkel, a key ally of President Bush, is trying to squash it. A Merkel spokesman said it's inappropriate to use the Gate as a campaign backdrop.

RONALD REAGAN (R), FORMER PRESIDENT OF THE UNITED STATES: If you seek liberalization, come here to this gate.

HENRY: It was the site of Ronald Reagan's most famous anti- communism speech in 1987, when he prodded Soviet leader Mikhail Gorbachev to open up the Gate and...

REAGAN: Mr. Gorbachev, tear down this wall.

HENRY: On Thursday, a German newspaper reported a U.S. official approached Merkel's staff at the G-8 summit in Japan to express concerns about Obama's planned speech. But a White House official told CNN, "The U.S. delegation did not raise this issue" with Merkel. And a Merkel aide suggested it was pure fiction to suggest the chancellor was pressured by the president.

The Obama campaign is trying to be diplomatic, a spokesman saying the candidate.".. Has considered several sites for a possible speech, and he will choose one that makes most sense for him and his German hosts."

As for the message Obama will bring to Europe and then the Middle East?

OBAMA: After the end of the Cold War, we found ourselves as this mighty superpower and yet, although our military power is unmatched, world security today can't be solved just by one country, because they span the globe. (END VIDEOTAPE)

HENRY: And this just in, Wolf.

I've confirmed with two sources that around the time of this European trip later this month, Barack Obama will also be going to Iraq on an official Congressional delegation. There's been -- specific dates, obviously, are not out yet because of security reasons.

But what's interesting is who's going with him. Democrat Jack Reed from the Senate, but also Republican Chuck Hagel. Now, Hagel's office won't comment. Jack Reed's office won't comment about all of this; obviously, security reasons, again.

But the bottom line is this is going to help fuel even more speculation that a Republican like Chuck Hagel could be on Barack Obama's short list for vice president. It's also, obviously, all about Barack Obama trying to show that he's ready to be commander-in-chief, going into the war zone like that -- Wolf.

BLITZER: And both Senators Reed and Hagel military veterans with distinction.

All right, thanks very much.

Good information.

Ed Henry is at the White House.

Let's discuss this and more with our senior political analyst, Gloria Borger; our own Jack Cafferty; and David Brody. He's the senior national correspondent for the Christian Broadcasting Network.

First of all, Jack, what do you think about the whole Brandenburg Gate, because he's clearly going to JFK's playbook for some of this stuff?

CAFFERTY: Well, you know, he's viewed as something of a Renaissance guy in Europe. The stuff I've been reading about it, though, it has nothing to do with Merkel or the Bush White House. And, of course, if the Bush White House said they didn't have anything to do with it, we all believe them, right, because they never lie.

It's up to the mayor of Berlin to decide whether or not someone gives a speech at the Brandenburg Gate. And the mayor of Berlin has said, on the record, he would be delighted to have Barack Obama speak at the Brandenburg Gate.

So we -- you know, I don't -- I think at the end of the day, it's up to the mayor to decide who gives a speech there. And we'll see what happens.

But I think it's terrific. There hasn't been this much interest in an American politician over there in years.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, except there is a danger in it. And the danger is that we know Barack Obama gives a great speech, we know he's very popular over there. But whatever speech he gives in front of the Brandenburg Gate, he's going to be compared to Ronald Reagan. He's going to be compared to JFK.

And what if he doesn't measure up?

And what if some people think it's a little...

CAFFERTY: Have you heard him speak?

BORGER: Well, I have...

(LAUGHTER)

BORGER: I have heard him -- I have heard him speak.

CAFFERTY: OK.

BORGER: But there is a sense, also, that what if he just looks a little arrogant, because he's still running for president, he's not president.

BLITZER: It's not just...

DAVID BRODY, CHRISTIAN BROADCASTING NETWORK: You know...

BLITZER: It's not just that, David. It's the fact that he's going to do the acceptance for his nomination not inside a 20,000 seat stadium.

BORGER: Right.

BLITZER: He's going to go out in a football field for 75,000, which recalls JFK's decision back in 1960 to speak and accept that nomination at the Los Angeles Coliseum.

BRODY: Wolf, that's a great point and something I was going to bring up, because if you throw in INVESCO Field, former Mile High Stadium, where he's going to give that speech, and then now possibly the Brandenburg Gate, I mean Obama and the campaign need to watch out here a little bit here because he does have that "elitist" tag that's been out there. Fair or unfair, it's out there. Some have called it -- and these are his critics -- calling it a messiah complex, so to speak.

And so, if you're going to get out there and do all of these speeches, how is that going to play in Peoria?

BLITZER: But I...

BRODY: You've got to be careful on that.

BLITZER: But I think it's fair and I agree totally with Jack on this, David. As far as a politician being able to deliver a speech, reading a teleprompter...

BORGER: Yes. (INAUDIBLE).

BLITZER: In my years, I have not seen anyone who does it better than Senator Obama.

CAFFERTY: No. Let me just raise this point, too.

BRODY: No doubt. No doubt.

CAFFERTY: If the Los Angeles Coliseum was good enough for Jack Kennedy and the Brandenburg Gate was good enough for Ron Reagan -- and Bill Clinton spoke there, too. I happened to be in Berlin when President Clinton spoke back there in the early '90s.

If these things were good enough for Jack Kennedy, how is it we can suggest that, you know, he should be criticized for wanting to give his acceptance speech in front of 76,000 people instead of 20,000 people...

BORGER: Well...

CAFFERTY: ...if 76,000 people would like to see the speech?

I don't get this.

BORGER: Well, you know, though -- although I remember during the campaign, during the primaries, when Obama was not doing so well there for a while. They stopped all of these large venues.

BRODY: That's right.

BORGER: And they went back to sort of Obama doing the small town halls one-on-one because -- because they felt that he needed to do that to kind of start relating to people again and not become this huge cultish figure.

And I think there's a little danger here. He's going to Europe. He wants to have small meetings that are with high-ranking officials to discuss important business.

BRODY: Also, let's just remember, the more -- you're talking about the Brandenburg Gate, well, what we're seeing on the CNN screen here, Obama-Gate, so to speak. I mean, you know, the last thing the Obama campaign wants is a positive P.R. to turn into a negative P.R. story.

BORGER: Right.

BRODY: And the more this gets pumped up, they've got to weigh that and understand...

CAFFERTY: Pumped up by whom?

BRODY: Well, it depends who's going to sit -- who's going to say what on that...

CAFFERTY: I mean what are we sitting here doing? BLITZER: We're talking -- we're talking about a Gate.

BRODY: Right.

BLITZER: That's what we're talking about.

CAFFERTY: Yes, right.

BLITZER: All right, guys, stand by. Stand by, because we've got to talk about some other subjects, as well, including unemployment, oil prices and more. Experts who track presidential trends have a new prediction about how these and other factors could decide the November election.

Plus, a sign that Hillary Clinton may not -- repeat -- not be on Barack Obama's vice presidential short list.

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

(COMMERCIAL BREAK)

BLITZER: Let's get right back to the best political team on television.

Gloria, "The Washington Post" -- reported today that Macroeconomic Advisers, a forecasting firm out in St. Louis, has a new projection. We checked with them and they confirmed that they do. And they've look at various factors, including the unemployment rate, the real oil price increases, the power of the incumbent party, the impact of party fatigue. And the president of the forecasting firm is suggesting landslide for Barack Obama come November.

Based on their track record -- and they've got a track record -- what do you think?

BORGER: Well, I think we were all saying that Hillary Clinton was going to be the shoe-in for the nomination and that she was essentially the incumbent president, you know. So I take a look at this and I say, yes, looking at all of those factors, sure, you have to give Obama the edge, particularly, given the state of the economy.

But there are things that happen overnight in politics and that can change an election. And I think that at this point, it's very hard to say that anyone would have a landslide.

And, by the way, John McCain is running closer to Barack Obama than a lot of people would have thought, given the fact that 80 percent of the country think it's headed in the wrong direction.

BRODY: Hey, Wolf, you know, the underdog status -- and John McCain has said he's the underdog. And if you look at the metrics on paper, I mean, you know, would the Colts -- or would the Jets have beaten the Colts back in '69?

Would Villanova have beaten Georgetown in NCAA basketball? You know, those big upsets. I mean the point is, is that Gloria is right. I mean there are intangibles ahead -- the conventions, the debates. And you know, there's a lot of other things.

I also like to call it the politics -- or I should say the nuance of Barack Obama. You know, Barack Obama is a very smart guy. And when you're smart and you're a constitutional law professor, you tend to argue both sides. And we've seen some of that.

You know, the McCain camp will call it a flip-flop. I don't know if it's necessarily flip-flopping, but when you see everything from different points of view, that can get you in trouble. And the spontaneous moments in this campaign will be something to watch.

BLITZER: Jack?

CAFFERTY: The outfit in St. Louis is right.

(LAUGHTER)

BLITZER: Just a note, our latest CNN poll of polls, our average of the polls as of today, nationwide among registered voters, 49 percent for Obama, 41 percent for McCain, 10 percent unsure, at least at this point.

Gloria, he's got a new ad that's out.

Let me play you a little clip.

I'm referring to Senator McCain.

(BEGIN VIDEO CLIP, OBAMA CAMPAIGN AD)

UNIDENTIFIED MALE: And Obama's plan cuts taxes on the middle class and won't raise taxes on anybody making less than $250,000 a year. But McCain wants billions in new corporate tax breaks and no way to pay for it.

UNIDENTIFIED FEMALE: Hmmm, it sounds like George Bush all over again.

UNIDENTIFIED MALE: I guess that's why they say John McCain, McSame as Bush.

UNIDENTIFIED FEMALE: Uh-huh.

(END VIDEO CLIP)

BLITZER: Actually, that was an Obama ad, not a McCain ad. I misspoke.

But do you think that's going to get some traction out there?

BORGER: Well, you know, I think it's sort of the top campaign theme from the Obama campaign, which is if you liked George Bush, you're going to love John McCain, and he's more of the same. And the tax issue is very, very important because people vote their pocketbooks. And if John McCain can convince people that Barack Obama is going to raise your taxes, it's clearly going to help him. And he's been talking about that a lot on the campaign trail.

BLITZER: Jack?

CAFFERTY: Well, he's been talking about it. But the fact of the matter is Barack Obama has never said he's going to raise anybody's taxes except -- except on people who make over $250,000 a year.

BORGER: Two hundred fifty, right.

CAFFERTY: And he has also said that middle class taxpayers will get a tax cut. And he's not talking about giving tax breaks to the corporations.

The problem with John McCain's campaign, besides Phil Gramm being a part of it...

(LAUGHTER)

CAFFERTY: ...is that the headwinds are just too strong. I mean look at the polls that Gloria was talking about. Eighty percent of the people think the country is going in the wrong direction.

He'd better get used to hearing commercials saying he's just like George Bush, because he's going to hear a lot of it between now and November.

BLITZER: All right, Jack, stand by. We've got "The Cafferty File" coming up.

Gloria, David have a great weekend.

Thanks very much.

Let's check in with Lou and see what's coming up right at the top of the hour.

Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, coming up, we'll be reporting on the turmoil in our housing market -- a crisis that seems to be worsening each and every day. But you wouldn't know that by listening to the powerful chairman of the Senate Banking Committee, Senator Christopher Dodd, who said today people are panicking, in effect telling hard-pressed Americans don't worry, be happy.

And violent Mexican cartels literally invading the United States. Some law enforcement officers now comparing violence along our border with Mexico to the war in Iraq.

And a new opinion poll says fully a third of all voters are either undecided or could change their minds quickly. Compelling new evidence that Independent voters may well determine the outcome of this presidential election. I'll be talking about what that means for Senators Obama and McCain and the country with three of the best political analysts anywhere.

Join us for all of that at the top of the hour right here on CNN. We'll have that with an Independent perspective on all of the day's news.

Please join us -- Wolf, back to you.

BLITZER: Lou always very independent.

Lou, we'll see you in 15 minutes. Thank you.

DOBBS: You've got it.

BLITZER: An all-American beer now falling under foreign control. Opponents are vowing a fight, but it could already be a done deal.

And Barack Obama reaching out to red state voters by way of NASCAR.

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

(COMMERCIAL BREAK)

BLITZER: There's another story just coming into THE SITUATION ROOM right now.

Carol Costello is monitoring what's going on -- would you have, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: It's pretty scary. It's happened again. For the second time this week, Wolf, the federal Aviation Administration is reporting two airborne planes came within 600 feet of each other at JFK Airport. As I said, the second time this week this has happened.

What happened was is Delta Flight 123 -- a Boeing 757 was landing on one runway when the pilot decided to abort his landing and he came back up. At the same time, a Comair Flight 1520, a regional jet, was taking off on another runway. So when the Delta jet decided to take off again, the Comair flight took off, too. And they missed each other by 600 feet.

Nobody was hurt, but as you can expect, Wolf, an investigation is underway.

Also in the news tonight, Russia and China have vetoed proposed sanctions on Zimbabwe. They rejected U.S. efforts to step up punitive measures against the regime of President Robert Mugabe after a campaign of violence against the opposition. Britain and France supported the United States. Russia said sanctions would have taken the U.N. beyond its mandate to deal with threats to international peace and security -- back to you, Wolf.

BLITZER: There's a lot of anger, especially at the Russians, for this veto at the U.N. Security Council.

Carol, thanks very much.

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

CAFFERTY: The question this hour, this Friday is: What's the difference between a "mental recession," which is what McCain adviser Phil Gramm says we're having, and a real recession?

Thomas in Ohio: "A 'mental recession' is having someone tell you the economy is really hell out here in the heartland while your wife rakes in millions from her beer distributorship and you make your money off the taxpayer -- the guy who's having a real recession and drinking his troubles away."

Derrick writes: "A 'mental recession' is something the rich experience when they're out of Grey Poupon. The other is for every Americans."

Don in California: "A 'mental recession' is when you see your neighbors struggling financially. Real recession is when you're struggling financially."

Dean writes: "It's a 'mental recession' to the 1 percent of the U.S. population that has 95 percent of the money here in the United States."

Allison says: "I guess a 'mental recession' is when you have a nightmare that your 401(k) is disappearing right before your eyes. A real recession is when you wake up and you realize you weren't dreaming at all, that your 401(k) rate of return since January, minus 7 percent."

Bill writes: "A 'mental recession' is worrying about your stock in General Motors going down. A real recession is worrying about how you're going to come up with the money to buy gas for your old G.M. car."

Dick writes: "Apparently I only think I'm hungry."

Merinda says: "Easy. In an economic recession, you lose your shirt, your house, job, savings. In a 'mental recession', you lose your mind. Sanity, peace of mind, feelings of well-being. Phil Gramm is already there."

James writes: "A 'mental recession' is what the Republicans are feeling. A real recession is what the rest of us are feeling."

And John writes: "The difference? A couple of hundred thousand dollars a year."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile. Some very clever answers that we didn't have time for that you might enjoy reading there -- Wolf.

BLITZER: I don't know what Phil Gramm was thinking, do you?

CAFFERTY: Out of his rabid loving mind.

BLITZER: Mental recession.

CAFFERTY: I changed one word there.

BLITZER: All right.

(LAUGHTER)

BLITZER: Have a great weekend.

CAFFERTY: See you later.

BLITZER: We'll see you back here Monday.

CAFFERTY: Yes.

BLITZER: On our Political Ticker today, a former top adviser to Hillary Clinton says he does not think she's not being formally considered as Barack Obama's running mate. Howard Wolfson said as far as he knows, Clinton has not been asked to participate in the formal vetting process. But senator and former presidential candidate, Chris Dodd, apparently has been approached by the Obama camp. The Associated Press reporting that Dodd has been asked to provide information to the Obama search team. Dodd among my guests Sunday on "LATE EDITION".

Obama may go after the NASCAR vote by sponsoring a car. His campaign is talking to one team about a deal for the Sprint Cup series this year.

If it comes through, it's believed it would be the first time a presidential candidate has actually sponsored a car.

John McCain is reaching out to Latino voters with a new ad called "God's Children". He pays special tribute to Hispanic soldiers killed in Iraq and honors those fighting today in Iraq and Afghanistan, as well. The ad that will air in Colorado, Nevada and New Mexico -- all states with large Hispanic populations.

In fact, listen to this.

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: From time to time, remember that these are God's children. They must come into our country legally, but they have enriched our culture and our nation, as every generation of immigrants before them.

Thank you.

UNIDENTIFIED MALE: Thank you.

MCCAIN: I'm John McCain.

(END VIDEO CLIP)

BLITZER: There has been a major financial failure that we're just learning about.

Ali Velshi is joining us on the phone.

What do we know -- Ali?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Wolf, this is IndyMac Bank. It is one of the largest banks in the country, that deals with A-1 loans, which are loans to people who do not have to provide documentation. So it's a very risky loan business.

This company has been failing for some time. The shares dropped to under $1 today. Federal regulators have moved in and seized control of the bank. They are going to be closing some branches, but as of Monday the Federal Deposit Insurance Corporation will take control of IndyMac Bank. Many of the branches will be open. We're unsure as to what is going to happen next for this bank.

It has more than $30 billion in assets and is a very large mortgage holder. It is at the risky end of the business, Wolf, so it is not necessarily an indication that bigger and more secure banks will fail, but it is an indication that the government, when all else fails and the market is not prepared to keep a company afloat because it's got bad mortgages, is going to step in.

There are some insured deposits here. As you know, the FDIC does insure certain deposits. Not all of IndyMac's deposits were insured. But we are still to get more information on this.

At the moment, the federal government has stepped in and seized IndyMac Bank, in one of the largest bank failures in U.S. history.

BLITZER: Wow! What a story.

We'll stay on top of it. Ali, thank you.

Trouble is brewing in St. Louis. The impending sale of Anheuser- Busch is about a lot more than just beer.

Stay with us.

(COMMERCIAL)

BLITZER: Trouble brewing in St. Louis right now. America's biggest beer maker could soon be taken over by the world's biggest beer seller. Six thousand jobs at stake already and political leaders have said they'll fight the takeover, but it soon may be a done deal.

Susan Roesgen is monitoring developments out in our Midwest bureau.

What's the latest -- Susan?

SUSAN ROESGEN, CNN CORRESPONDENT: Well, Wolf, it could happen as early as this weekend. That's what folks in St. Louis are buzzing about. They are very worried, both political leaders and voters are worried that if the king of beers is controlled by an overseas company, it might mean that St. Louis is outsourcing the city's soul.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): In St. Louis, it sounds unthinkable -- could the king of beers be knocked off the throne by a company headquartered in Belgium?

No comment today from Anheuser-Busch. But global giant InBev is ready to take over.

On the company Web site, the CEO has been promising that while the brand may change hands, the beer will stay the same.

CARLOS BRITO, INBEV CEO: I think what's important here is that Budweiser, the beer, will continue to be brewed in the same breweries -- we don't have plans to close any breweries -- by the same people, according to the same recipe, according to the same traditions and heritage. I think that's what matters at the end of the day. And that's what we're committed to, because we understand that's so key to the business, to the brands and to consumers and, therefore, to us.

ROESGEN: Will things stay the same if a global company takes over?

Many Bud drinkers don't buy it.

UNIDENTIFIED MALE: No. I think it's just -- any time that they get their claws in it and then everything changes.

UNIDENTIFIED FEMALE: I'd be very skeptical that that would really be the case.

ROESGEN: Also skeptical are Missouri Senators Claire McCaskill and Kit Bond. They're against a takeover, worried that St. Louis could lose jobs and a community icon. Anheuser-Busch has been making beer for 150 years and the board of directors filed suit earlier this week to stop the takeover.

But InBev is offering shareholders 30 percent more for the company's stock and industry analysts say that may be enough to seal the deal.

(END VIDEOTAPE)

ROESGEN: And, Wolf, Senator Barack Obama actually talked about this potential takeover on Monday in St. Louis. He said, in his words, it would be a shame if Anheuser-Busch is taken over by a foreign company. He said an American company should step up if Anheuser-Busch really plans to sell.

We haven't heard any comments yet from John McCain, but you have to remember that Cindy McCain, in the last financial disclosure statement, owns one million shares -- $1 million worth of shares in Anheuser-Busch stock. So she stands -- and he by her -- stands to gain a lot of money if this deal goes through.

BLITZER: Lots of sensitivity out there on this important sale, potentially.

Susan, thanks very much.

Among my guests this is Sunday on "LATE EDITION," Senators Jon Kyle and Chris Dodd. We'll talk about Iran, a timetable for troop withdrawals in Iraq, the presidential race. "LATE EDITION" airs 11:00 a.m. Eastern on Sunday.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.