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Clock Ticking on Veepstakes; Tropical Storm Fay Soaks Florida

Aired August 21, 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 says he's made his big decision. But when will he reveal the name of his running mate? The clock is ticking, suspense building. We have new details on the timing.

Plus, an Obama attack on John McCain that hits home. Does the Republican know how many houses he and his wife, Cindy, own? The best political team on television on the new charges that McCain is simply out of touch.

And disaster in Florida. Tropical Storm Fay storms ashore again. The torrential rains up to two feet and more. The downpours continue.

We want to welcome our viewers in the United States and around the world.

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

Barack Obama says he has selected his running mate, but he's not going to reveal his choice, at least not let. We're waiting. Obama is milking the anticipation for his big announcement. It could come any time now. But right now, Senator Barack Obama is in Virginia, where he's been campaigning with one of those vice presidential short- listers, the governor, Tim Kaine.

He's also been seizing on a new gaffe by John McCain. He didn't seem to know exactly how many homes he and his wife owned.

Jessica Yellin is standing by with Obama in Virginia.

But let's go to Ed Henry first.

Ed, McCain gave Obama an opening to label him as rich and out of touch.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, what's so ironic here is that John McCain has been picking up steam in recent weeks by staying on message. Yesterday, he veered off message and is paying the price.

(BEGIN VIDEOTAPE)

HENRY (voice-over): It was an attack John McCain served up to Barack Obama on a silver platter. SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Somebody asked John McCain, How many houses do you have? And he said, I'm not sure. I will have to check with my staff. True quote.

HENRY: In an interview Wednesday with Politico. com, McCain got that question and seemed to stumble.

UNIDENTIFIED MALE: How many houses do you and Mrs. McCain have?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I think -- I will have my staff get to you. I can't tell you. Condominiums... I will have them get to you.

HENRY: The McCain camp insists the senator knows the answer. The couple has four homes, their ranch near Sedona, as well as condos in Arizona, California and Virginia. But the Obama camp insists the total is higher if you include their investment properties, citing a study by PolitiFact.com.

OBAMA: And by the way, the answer is John McCain has seven homes. So there's just -- there's just a fundamental gap of understanding between John McCain's world and what people are going through every single day here in America.

HENRY: McCain took the day off in Arizona, but his campaign fired back at Obama by invoking his ties to Tony Rezko, who was convicted on federal bribery and fraud charges. McCain spokesman Brian Rodgers said of Obama, "Does a guy who made more than $4 million last year, just got back from vacation on a private beach in Hawaii, and bought his own million-dollar mansion with the help of the convicted felon really want to get into a debate about houses?"

(END VIDEOTAPE)

HENRY: (AUDIO GAP) camp there pushing back hard by essentially invoking the name of Tony Rezko, the convicted friend of Barack Obama, involved in a real estate deal with Barack Obama. So, the McCain camp wants to push back hard. They realize this could be a problem. It might be just sort of a campaign blip. Both sides going back and forth. But given the shaky economy, given the foreclosure crisis, this also could be politically explosive -- Wolf.

BLITZER: Could be, indeed. All right, thanks, Ed.

Let's get some more now on how Senator Obama is seizing on this flap over McCain's homes, even as he keeps everyone guessing about his running mate.

CNN's Jessica Yellin is with the Obama campaign in Virginia -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Obama is having a field day with some of McCain's recent comments, not just that house gaffe you heard Ed report on, but also a comment McCain made over the weekend. When asked, how much money makes a person rich, McCain said, $5 million. (BEGIN VIDEOTAPE)

YELLIN (voice-over): For Barack Obama, it's a gift from John McCain.

OBAMA: I guess if you think that being rich means you've got to make $5 million, and if you don't know how many houses you have, then it's not surprising that you might think the economy was fundamentally strong.

YELLIN: The Obama campaign is convinced this message is on the money, and they're taking it all the way to the bank. they have already released this ad...

NARRATOR: When asked how many houses he owns? McCain lost track. He couldn't remember.

Well, it's seven. Seven houses. And here's one house America can't afford to let John McCain move into.

YELLIN: And top surrogates are hitting 16 states to mock John McCain for, in the campaign's words, losing track of his houses. Obama supporter and V.P. short-lister, Virginia Governor Tim Kaine, made the case on CNN.

GOV. TIM KAINE (D), VIRGINIA: He couldn't count high enough, apparently, to even know how many houses he owned.

YELLIN: The Obama campaign believes this line of attack will persuade voters that McCain is out of touch with regular folks and can't fix what he doesn't know is broken. It could also defuse charges that Obama is elitist. It's as if they're saying, who is the snob now?

OBAMA: And if you're like me and you got one house, or you were like the millions of people who are struggling right now to keep up with their mortgage so they don't lose their home, you might have a different perspective.

(END VIDEOTAPE)

YELLIN: The Obama campaign continues to say that everyone will find out who Obama has chosen to be his V.P. at the same time. They will send it out, they say, by text message.

Meantime, the top contenders are staying mum. Not only have many of Obama's supporters signed up for that text, but also all the reporters covering Obama. And you can be sure it will be a long sleepless night of watching a BlackBerry -- Wolf.

BLITZER: All right, I get the feeling. Thanks, Jessica, for that.

In the heat of this presidential contest, John McCain and Barack Obama are planning to come together, albeit briefly, to mark 9/11. They have now agreed to take part in a prime-time forum on public service in New York City on 9/11, this September 11. It will be their first joint appearance after their respective conventions, just a couple of weeks before their first debate.

President Bush is declaring a federal state of emergency in Florida in the wake of Tropical Storm Fay's massive, massive flooding. A second death is now blamed on Fay. A woman drowned while swimming in storm-swollen ocean waters.

CNN's Sean Callebs is joining us now from St. Augustine, where this storm is still battering the area not far away from Jacksonville.

What's the latest, Sean?

SEAN CALLEBS, CNN CORRESPONDENT: Well, if you could see where we are now, the surf is really churning up a great deal out there. We're getting buffeting by some pretty strong winds, about the strongest that we have felt out here throughout the day.

However, not very much rain right now. The reason the folks in CNN Weather Center tell us, that what is left of that eye is shredding somewhat. And right now we are in a lull, but the rain is coming. And we have seen that here throughout the day. This is a storm that is going to be remembered for just amount of punishment it's done to this state, and a storm that never reached hurricane status.

And now, of course, the heartbreak. You talked about the second death. That happened up in Neptune, just outside of Jacksonville, tragic story. Somebody went in this water when it was about this rough. And the authorities say certainly the conditions out there contributed to that.

But just look down here. You can kind of see this expanse out on the beach and what this wind is doing, blowing sea oats out this area, just whipping everywhere.

And, remember, this is sand that has been rained on throughout the day. So, it's really patted down pretty well. But you talk about the rain, Wolf, that really bears talking about a little bit more. The amount that we have seen in 24 hours, Cape Canaveral to the south of us, 20 inches of rain, Melbourne, 26 inches of rain.

This is being gauged in feet now, not inches. So, people are worried here. They know it's going to hammer this area, Wolf, then move further inland to Tallahassee, Gainesville. Much of this area has suffered from a drought now for a better part of a year, but the last thing they need, 30 inches of rain in a 24-hour period -- Wolf, back to you.

BLITZER: Be careful over there, Sean. We will check back.

Jack Cafferty has the day out. Our CNN contributor James Carville is here. And he has some advice for Senator Barack Obama. Carville says the Democrat has to get mad to win. He's going to tell us what he means. He's standing by live.

Plus, the Democrats hog the spotlight next week. Is there a way, though, for John McCain to stay out of the shadows during the Democrats' convention?

And it turns out there were voting machine problems, serious ones, during Ohio's March primary, after all. Some votes simply weren't counted. What does that mean for November?

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

(COMMERCIAL BREAK)

BLITZER: Authorities are investigating a threatening letter and some white powder at John McCain's campaign office outside Denver.

Let's go right to the scene. Joe Johns is in Denver watching this story for us.

All right, Joe, what do we know about this?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, it's clearly the kind of thing you don't want to overplay right now. We do know here in Denver that they're preparing for a convention. And now we know that over at the McCain headquarters, an office here in the Centennial Park area of Denver, a letter was received.

It's been described by authorities as a threatening letter, along with a quantity of white powder. Authorities do not know what the quantity of white powder is. Of course, they will be field testing it to find out whether it is anything dangerous or whether it is all a hoax.

We are told that the campaign has taken the necessary precautions, locating and talking to the authorities, both local and federal. And they have got the situation, they say, under control. Waiting, of course, for the authorities to tell us exactly what that white powder is.

It's the kind of thing of course that comes up during conventions and big events around the country. And we're certainly not going to play it up too high, at least at this point -- back to you.

BLITZER: Right, because you don't want to give a lot of crazy people ideas out there.

All right, thanks, Joe, very much for that. We will check back with you when we get some definitive word on what it is.

Meanwhile, Senator Obama has watched Senator McCain narrow the gap in the polls, turning this into what some suggest will be a very, very close race. Could a show of anger, though, help the Democratic candidate turn things around?

Let's bring in our Democratic strategist and CNN political contributor James Carville, who knows a thing or two about winning presidential campaigns.

All right, James, you have written a provocative piece on CNN.com and you have some strong advice for Senator Obama. Give us the upshot.

JAMES CARVILLE, CNN POLITICAL ANALYST: Well, I think the upshot is, I think he has to keep portraying himself as change and that the attacks on him are sort of attempts by the status quo to remain in power.

I think he's doing a much better job this week of sharpening his focus on the economy and talking about accomplishments of past Democratic administrations and how much better Democrats are than Republicans on economic issues.

And, third, I think there's a lot of things that have happened in this country, from the deficit, to our reputation overseas, to energy, to a lot of different things. And I think at some point, he's got to show some sort of -- now, I don't know if anger is the right word, but that he's doggone upset about what has happened to his country and he has a real sense of urgency about going and fixing it.

And to his credit, I think he's been a lot sharper here the last couple, three days.

BLITZER: And, so, you just want him to hone in directly. But isn't that what God created surrogates for and vice presidential running mates? Shouldn't he sort of stay above the fray?

CARVILLE: No, I don't think so.

I think that people are looking for a president -- he doesn't need to get -- I'm not suggesting that you have -- certainly surrogates and the vice presidential candidate can do most of the direct attacking, if you will. But I think that people look at this country -- it's a 80 percent wrong-track country -- I think there's people upset about what has happened to their country. And I think they want a president that shares their sort of dismay at what's happened.

And I think he's much more focused on the economy in the past couple or three days than he's been before. And he's getting a little sharper here. I think that these polling numbers might be a blessing, if you will, a little warning shot that people are looking for some intensity here. And I think he's responded rather nicely.

BLITZER: They want to see some passion.

CARVILLE: Yes, sir.

BLITZER: That's what you write in the column.

He now says publicly what we have suspected for days. He's made up his mind. He knows who his vice presidential running mate is going to be. Listen to this exchange he had just a little while ago with a reporter from "USA Today."

(BEGIN VIDEO CLIP)

OBAMA: I did say that I have made the selection. And that's all you're going to get. All right?

(END VIDEO CLIP)

BLITZER: All right, that was actually -- he was telling reporters out there. He's made up his mind. He's not going to tell us, at least not yet.

Your colleague and good friend Paul Begala said earlier here in THE SITUATION ROOM he believes it's going to be Senator Joe Biden. What do you think?

CARVILLE: You know, I guess so many people have said it's going to be Joe Biden, it's kind of hard to sort of go against it. I don't know that anybody really knows.

I think they have held this thing pretty tightly. I still would have preferred that he pick Senator Clinton, and not because I'm just a fan of hers. I think it would have shown that he was really going to be have some big, challenging people around him. But Senator Biden would be -- I think people would be very, very pleased with that pick.

It does seem to be that the tea leaves say that he wants somebody in the foreign policy arena. I always thought he might pick Senator Sam Nunn. But from what I understand, his people are shooting that down. So, I'm looking forward to hearing as much as anybody else. If he picks Senator Biden, then conventional wisdom will have scored a big point.

BLITZER: We're hearing from Senator Sam Nunn, former Senator Sam Nunn's people, he's out of the country until Monday.

CARVILLE: Right.

BLITZER: So, that would seem to suggest he's not the guy.

(CROSSTALK)

BLITZER: Look at some of these polls. In our latest CNN poll of polls, the average of the national polls, 44 percent for Obama, 42 percent for McCain, 14 percent unsure.

CARVILLE: Right.

BLITZER: But look at this. In some of the battleground states, like Florida, for example, 47 for McCain, 46 for Obama, 7 percent unsure, in New Hampshire, 46 for Obama, 45 for McCain, 9 percent unsure.

Shouldn't -- given the mood of the country, the economy, the anger at President Bush, shouldn't Senator Obama be doing a whole lot better than that?

CARVILLE: Well, he's doing better than we were in '92 at a comparable time. We didn't really vault ahead in the polls until the convention. And I think if you go back even and if you look at '80, he's probably performing a little under maybe where President Reagan was performing in that year. Look, we have got to be honest about this. If he comes out of Denver and doesn't increase his position by somewhat, I think Democrats will start to get really nervous.

But I do see encouraging signs this week that the campaign understands that they had a problem, that they're starting to focus in on some of these things. So, we have got to wait and see.

Also, what is interesting about these polls, Wolf, is that Senator McCain's position has not improved -- 14 percent I think is a pretty large undecided at this point in the election. I suspect that number to go down pretty quickly here after the conventions.

BLITZER: We will see if he takes your advice on Hillary Clinton. You never know.

CARVILLE: I just noticed that you were talking about people with crazy ideas, and you had me on the air. So, I don't know if there was hidden meaning there or not, Wolf.

(LAUGHTER)

BLITZER: A lot of people will agree with you. But we will see if Barack Obama does.

CARVILLE: Thank you, man.

BLITZER: All right, thank you, James.

CARVILLE: You bet.

BLITZER: We will see you in Denver.

Barack Obama's campaign says he will disclose his vice presidential pick through a text message. And that has some pranksters running wild right now with fake running mate messages. We're taking a closer look at what's showing up in the e-mail on the Internet. Be careful what you read out there.

And the comedian Jerry Seinfeld has a new job. He's signed on as a pitch man for a high-tech giant for a cool -- get this -- $10 million.

And the maker of voting machines used in Ohio's march primaries now says some votes never got counted. Can they have fix this glitch before November?

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

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Barack Obama's campaign says he will reveal his running mate through a text message. But, as we wait for the announcement -- and a lot of us are waiting very anxiously right now -- some pranksters are having a field day with hoax messages.

Let's go back to Abbi Tatton.

Abbi, what do we know? What's going on?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, CNN has got about a half-dozen reports today from viewers who have said, I got the text message from Obama. I know who the V.P. is going to be, for them then to discover that it was actually a hoax.

It reads: "From Barack Obama, dear friend, I wanted to let you be the first to know that I have selected Virginia Governor Tim Kaine as my V.P." That one is a fake, just like the ones going around about Kathleen Sebelius, or Al Gore.

It's actually pretty easy to fake one of these text messages, make it look like it's coming from someone else. And blogs over the last couple of days have been posting how-to instructions, how to prank your friends. An Obama spokesperson says that she actually got one of these hoax messages saying that the V.P. pick is going to Suri Cruise. Certainly, that one is not going to happen. She wouldn't comment beyond that.

As for the real text message, like you said, Wolf, we are all just waiting.

BLITZER: Thanks very much, Abbi, for that -- Abbi.

We will be very careful when we report that news because of the fears of a hoax.

New evidence that Barack Obama still hasn't won over so many of Hillary Clinton's supporters. There may be one way to bring Senator Clinton's supporters into the Obama fold.

And John McCain is looking for ways to stay in the spotlight while the Democrats party in Denver next week. The best political team on television has some tips.

And can't late-night comics find anything funny about Senator Obama?

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

(COMMERCIAL BREAK)

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

Happening now: Barack Obama struggling to rebuild his lead in the polls -- why he might want to take a cue from the Clintons. We will talk about that and more with the best political team on television.

Also, an apparent double standard on late-night TV, where John McCain is fair game, but not necessarily Obama. Plus, almost a million Afghan refugees in Pakistan, now fears they may be forced out in a humanitarian nightmare.

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

Could be a bad sign for Barack Obama. With the Democratic Convention in Denver now only four days away, almost half -- yes, almost half -- of Hillary Clinton's supporters say they still aren't ready to back her former rival. And Obama's lead over John McCain has been shrinking.

Let's go straight to our senior political analyst, Bill Schneider. He's already in Denver watching this story for us.

All right, here's the question, Bill. And I know you know a lot about these polls. What can Senator Obama do right now to reverse his slide in the polls?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Take a cue from the Clintons, and maybe even take a Clinton.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): Hillary Clinton's on board.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: To anyone who voted for me and is now considering...

(CHEERING AND APPLAUSE)

CLINTON: ... not voting or voting for Senator McCain, I urge you to reconsider.

SCHNEIDER: Are they listening?

"The Wall Street Journal"/NBC News poll reports that a bare majority of Clinton supporters say they will vote for Obama. Twenty- one percent favor McCain, while 27 percent are still undecided or say they will vote for somebody else.

Another poll shows John McCain has been making gains among white men and working class whites -- the same voters who delivered for Clinton in the primaries.

How does Obama reach those voters?

The same way Bill Clinton did in 1992 and Hillary Clinton did in the primaries -- economic populism.

CLINTON: If I tell you I will fight for you, that is exactly what I intend to do.

SCHNEIDER: Look who's a born-again populist now.

OBAMA: But what I can do is I can say I'm going to wake up every day thinking about you and thinking about how to make your life a little bit better.

SCHNEIDER: Obama even used his new populist edge to slice up McCain.

OBAMA: Because I don't think that the 463,000 Americans who've lost their job this year are seeing the great progress that John McCain has seen.

SCHNEIDER: Here's another idea -- put Hillary Clinton on the ticket. It would turn the Democratic convention into a love-in -- 4,400 delegates singing "Kumbaya."

Would Clinton add to the ticket? Apparently.

If Clinton were the Democratic nominee for president, the "Journal"/NBC poll shows she'd leading McCain by six points.

Obama's lead in the poll? Three.

(END VIDEOTAPE)

SCHNEIDER: Iraq was the issue that got Obama the nomination. The economy was Clinton's issue. But if Obama is going to win this election, he has to do it on the economy. And that means finding the populist voice, because face it -- populism is popular. You might want to write that down.

BLITZER: Yes, I'm going to write that down. Populist is popular. Got it. Thanks, Bill. See you in Denver.

Let's talk a little bit more about this and other critical issues. Joining us, our senior political analyst, Gloria Borger. She's already in Denver at the Democratic Convention site. In Phoenix, Ramesh Ponnuru, the senior editor of the "National Review". And in New York, our senior analyst, Jeff Toobin.

Guys, thanks very much -- Jeff, why isn't -- why isn't Barack Obama doing better right now, given the bad economy, the unpopularity of a Republican administration, unpopularity of a war in Iraq?

Why isn't he doing better?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST, "NEW YORKER" MAGAZINE COLUMNIST: Because he's a Democrat and it's hard for Democrats to win elections. He's still leading. He's had a small lead since May. It's fluctuated between 6 percent, between 2 percent, between 3 percent. It's not that big a change.

Yes, he's got to focus on economic issues. But this was never going to be a landslide. And he's doing about as well as can be expected. I don't think there's any reason for him or his supporters to panic here.

BLITZER: What about that, Ramesh? Should they be panicking?

RAMESH PONNORU, SENIOR EDITOR, "NATIONAL REVIEW": Well, one thing people ought to remember about Barack Obama is that he has never faced serious Republican opposition in any of his races before. He won in his only statewide race against Alan Keyes, who had to be imported from out of state to Illinois.

So I don't think it's a real shock that he has not been weathering the Republican attacks very well. What's interesting in these polls is that his numbers are dropping more than McCain's are rising.

BLITZER: Gloria, the -- some are arguing, even at this late date, you know, he needs Hillary Clinton. You've heard that and I know there's a lot of buzz that it's going to be Joe Biden. I'm not necessarily -- you know, I have no idea. I've heard all the rumors that everybody else has heard. But does he really need, at this point, to, you know, sort of suck it up and bring in Hillary Clinton?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I don't think he does need to do that. I think what he needs to do, Wolf,

is get those lower income women who seem to have some doubts about him on board. And one way he could do that is talk about substance.

And that's what he's got to be doing at this convention. He's got to be talking about tax cuts for the middle class, how he cares about people like them. That's the one issue he doesn't really do well on.

When you ask the question, does Barack Obama share your values, a lot of people say no. So he's got to take to talk to those voters at this convention and reassure them that he's not a risk.

BLITZER: Does Joe Biden, Jeffrey, does he do it for Barack Obama?

TOOBIN: Well, I don't think vice presidents matter all that much. I mean I'm as excited about this as anything. But think about over the last five or so elections, How much difference did any of the vice presidential candidates make? Probably close to nothing, I think. And that's probably likely to be truly here. I think Joe Biden is a good, safe choice for Barack Obama. He's going to win Delaware anyway. So I think it's probably a good choice, but it's not a game-changing choice.

BLITZER: What do you think, Ramesh?

PONNURU: Well, I think a vice presidential choice matters for more Obama because he's a little bit more of a question mark in voters. And it's not so much that people will want this person as a vice president or not want him as a vice president, it's what does the pick say about Obama -- what is he trying to highlight or accentuate. And I think he needs to prove himself on values and on foreign policy.

BLITZER: Well, does Joe Biden do it, Ramesh?

PONNURU: I think that it's going to be tough to have two senators, two people who are best known for talk rather than for accomplishment. I am not sure that Biden gets him where he needs to be.

BLITZER: What do you think, Gloria?

BORGER: Well, I was talking to somebody who is close to Barack Obama today. And he said to me that Obama's been having this debate, which is do you reinforce your message by nominating somebody who's like you, which is anti-Washington, or do you reassure voters with a Joe Biden, for example, that, yes, you will have somebody on the ticket who shores up your national security credentials.

I think there's a fear inside the Obama camp that if you were to go for somebody with a tremendous amount of experience, that you're stepping on your own message of change. And so that's really the big decision, I think, that he has been grappling with.

BLITZER: It's a dilemma, because you want somebody who can reassure the country on the whole issue of national security. But Joe Biden certainly has all of those credentials, the chairman of the Foreign Relations Committee, Jeff. He knows a great deal and he's a good talker, as all of us know. He did very well in the debates. But he's a Washington presence.

TOOBIN: He's been a senator since he was 29 years old. He is as experienced as they come. But, you know, I think he would be -- I think it is good to accentuate someone who's got good qualifications. I mean the problem with a Tim Kaine is that what are his qualifications to be president? The governor of Virginia. He's barely accomplished anything, just a little traffic in Northern Virginia.

I mean Joe Biden can point to legislation that he's passed and the fact that he knows a lot about foreign policy as the chairman of the Foreign Relations Committee.

BLITZER: Yes. There's a lot of traffic in Northern Virginia, not just a little bit of traffic...

(CROSSTALK)

BLITZER: ...as a lot of us know.

All right, guys, stand by. We're going to continue this, including a new charge of elitism. The charges are flying back and forth right now between Barack Obama and John McCain.

Is it the strategy itself that's out of touch?

Plus, a growing crisis threatening to simply explode -- the lives of one million refugees right now hang in the balance.

(COMMERCIAL BREAK)

BLITZER: Barack Obama and John McCain are each trying to paint the other guy as simply elitist and out of touch. We're back with our panel.

Ramesh, the issue came up because in an interview with the Politico Web site, Senator McCain was asked, how many homes do you and your wife Cindy own and he didn't know the answer to that. And the Obama camp quickly pounced.

Listen to this little clip of a Web ad they just released.

(BEGIN VIDEO CLIP)

OBAMA: I'm Barack Obama and I approved this message.

NARRATOR: Maybe you're struggling just to pay the mortgage on your home. But recently, John McCain said the fundamentals of our economy are strong. Hmm. Then again that same day, when asked how many houses he owns, McCain lost track. He couldn't remember. Well, it's seven. Seven houses.

(END VIDEO CLIP)

BLITZER: All right. You get the point. Is this going to be a big deal, a little deal? What does it say?

PONNURU: Well, I think it's going to be one of the big attacks that the Obama campaign is pushing over the next 24 hours. But of course, it's -- it's a twofer for them. They get to do an economic elitist thing and I think they're subtly trying to do something with McCain's age by saying that he lost track. In fact, if you look at the quote, he never says he doesn't know. He just refers it to the staff because he's got investments.

BLITZER: You know, Gloria...

TOOBIN: How...

BLITZER: ...the McCain campaign did not wait very long to pounce back against Obama with this ad.

And I'll play a little clip for you. It just came out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Barack Obama knows a lot about housing problems. One of his biggest fundraisers helped him buy his million dollar mansion, purchasing part of the property he couldn't afford. From Obama, Rezko got political favors, including $14 million from taxpayers. Now...

(END VIDEO CLIP)

BLITZER: All right, it looks like this campaign is beginning to take an interesting twist.

What do you think?

BORGER: Well, I think what's really interesting, Wolf, is how quickly these ads went up. I mean one ad goes up from the Obama campaign and then within nanoseconds you've got another ad coming back from the McCain campaign. I think they've learned a lesson here from John Kerry in 2004, which is never let any charge go unanswered.

And I think it's a sideshow, honestly, as they try to appeal to those Independent voters, those middle class voters.

I think the larger issue here is going to be taxes. It's going to be a question of who's going to raise your taxes, who's going to give you a tax break, which people are going to benefit and which aren't? I think that's the real issue that Americans care about.

TOOBIN: No, wait a second. We're being entirely too grown up here. How many people in America can't answer the question how many houses do you own? I mean even Gloria Borger, who is enormously wealthy, could probably answer that question.

BLITZER: Yes.

TOOBIN: I mean it's ridiculous.

That's -- what kind of answer was that?

BORGER: I can because I write the check. Yes.

(LAUGHTER)

BORGER: But what it does show is somebody a little out of touch who's not writing those checks every month and not writing those checks...

TOOBIN: Yes. It shows...

BORGER: ...to pay his mortgage every month.

TOOBIN: It shows that he's old and it shows that he's rich. And it's very easy -- you know what the old advice that journalists always get -- show, don't tell. That's showing something, that question.

BLITZER: And that's going to...

BORGER: I don't think Americans...

BLITZER: Let me let Ramesh weigh in...

BORGER: I don't think Americans think there's anything wrong with being rich, really.

BLITZER: All right. Ramesh, go ahead.

BORGER: (INAUDIBLE).

PONNURU: Yes. And I don't think it shows that he's old, either. Look, I mean, there's been a controversy about this in the press already. And McCain didn't want to give an answer that was going to be fly specked (ph) to death, so he referred it to staff. It's exactly the sort of thing that you would refer to staff. It's a question, essentially, about his investment building. And I don't think there's any serious question that he knows how many houses he owns in the sense of living in. And, you know, look, the richer vain here is not McCain's wealth, which, as Gloria said, isn't that much of a vulnerability. It's Obama's ties to Rezko, which is getting more attention as a result of these attacks.

TOOBIN: Could be.

BORGER: But, you know, this is a payback for celebrity -- for celebrity. You know, the Obama people...

PONNURU: It got under their skin.

BORGER: ...were angry about the celebrity ad.

TOOBIN: That's what...

BORGER: So they're saying well, guess what?

Guess who's the guy who's seven or eight houses. (INAUDIBLE).

TOOBIN: It's not a question of angry. It's a question of the substance. I mean is Barack Obama the product of a single family -- you know, a single mother in Hawaii? Is he an elitist? Or is a guy who married into a $100 million fortune elitist? I mean those are legitimate subjects to debate.

BLITZER: And we're going to...

PONNURU: Well, sure. Absolutely. But it's not going to work.

BLITZER: We're going to see this debate -- guys, we're going to see if it works or it doesn't work, because there's still, what, some 70 plus days until the election. Thanks very much to all three of you.

Letterman, Leno and company are having a field day with John McCain, but what about his rival?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They really are still searching for that thing about Obama that is instantly funny.

(END VIDEO CLIP)

BLITZER: So here's the question -- could race behind the late night disparity?

Also, starting tomorrow, a controversial procedure that might make your food safer.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs is getting ready for his show that begins right at the top of the hour.

He's standing by with a little preview.

What's going on -- Lou?

LOU DOBBS, CNN ANCHOR: Hey, Wolf.

Tonight, we're reporting on the Catholic Church's outrageous efforts to meddle in this nation's immigration policy. The church, at least in Rhode Island, aggressively pushing its amnesty agenda, trying to stop federal agents from doing their job and upholding U.S. law.

Also tonight, the federal government doesn't seem to know how to protect American consumers from dangerous food, so it's come up with a new idea. The FDA wants to blast some of our vegetables with radiation. That's a good idea.

And Senator Obama's presidential campaign seems to have stalled four days before the Democratic National Convention. We'll be talking about the unfortunate timing with three of my favorite political analysts and we'll be examining a very important issue the presidential candidates will not talk about -- our population explosion. Three of the world's leading authorities on population growth join me here tonight. You don't want to miss it.

Join us at the top of the hour here on CNN for all of that, all the day's news from an Independent perspective -- Wolf, back to you.

BLITZER: See you then, Lou. Thank you.

DOBBS: You got it.

BLITZER: Let's check in with Carol once again. She's monitoring some other important stories incoming to THE SITUATION ROOM. What do you have -- Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, most states still don't recognize same-sex marriage, but now Hallmark does. The country's largest greeting card company is introducing same-sex wedding cards. Hallmark says the move is in response to consumer demand and it's not a political statement.

California and Massachusetts are the only states to recognize gay marriage, while a handful of other states recognize same-sex civil unions.

Flags are at half staff at the White House and elsewhere around Washington and in Ohio today in memory of Stephanie -- Congresswoman Stephanie Tubbs Jones. Tubbs Jones passed away last night due to a brain hemorrhage caused by an aneurysm. Her Ohio colleague, Dennis Kucinich, called it a "incalculable loss." Tubbs Jones, a Democrat, was serving her fifth term in Congress, representing parts of Cleveland and its suburbs. She was just 58 years old.

And across Madrid today, five minutes of silence to honor the victims of the worst air disaster in decades. One hundred fifty-three people were killed when a Spanair jet crashed just after take-off yesterday. Investigators are reviewing flight data recorders in an attempt to determine what went wrong. Witnesses report seeing an explosion just before the plane banked violently and slammed into the ground. Nineteen people managed to survive the crash.

That's a look at the headlines right now -- Wolf.

BLITZER: A horrible disaster.

Thanks, Carol, very much.

The Taliban now claiming responsibility for twin suicide bombings that killed at least 59 people in Pakistan today. The explosions seem to have been timed to inflict maximum casualties. Last week, the Taliban declared so called open war on Pakistan's military.

Officials are afraid there may be a new threat from insurgents in Afghanistan because of the huge number of refugees returning there.

Our Pentagon correspondent, Barbara Starr, has been looking into this -- Barbara.

BARBARA STARR, PENTAGON CORRESPONDENT: Wolf, a new crisis in Afghanistan, but is it also becoming a security crisis?

(BEGIN VIDEOTAPE)

STARR (voice-over): In Afghanistan, a new, little noticed crisis -- tens of thousands of Afghan refugees leaving Pakistan, coming back to a country wracked by violence and poverty.

KRISTELE YOUNES, REFUGEES INTERNATIONAL: They live in dreadful conditions. They live in makeshift shacks and they don't have access to regular water. They don't have access to latrines.

STARR: Kristele Younes of Refugees International recently toured refugee centers, taking these photos, where people, she says, have been dumped.

YOUNES: They don't have access to local markets. They cannot work. They receive very little assistance.

STARR: Pakistan, she says, is forcing people out -- part of its effort to show it can control its border region, long said to be a Taliban stronghold. But when they get to Afghanistan, there's little help. The government has little money, U.S. troops are tied up fighting the insurgents, the U.N. Office of the High Commissioner for Refugees is doing what it can.

UNIDENTIFIED MALE: We have built over 170,000 homes since 2002. That's helping over one million people.

STARR: But Refugees International says there are still 900,000 Afghan refugees that may be forced back from Pakistan. These children are part of family of seven. YOUNES: I spoke to their mother, who explained to me that they left Pakistan before being forced to by the government. They were very worried because they were living in a camp and they saw a neighboring camp being completely destroyed.

STARR: And there are worries that the humanitarian crisis is also a security crisis if the Taliban expand their recruiting to these desperate people. Already, Southern Afghanistan is largely cut off from aid because of the insurgency.

YOUNES: In the past two years, humanitarians have lost a lot of ground in Afghanistan. They used to be able to address the needs in about 70 to 80 percent of the country. And now we're talking of about half of the country.

(END VIDEOTAPE)

STARR: One of the biggest worries -- that safe zone for humanitarian work might shrink even further unless NATO and the U.S. can get more troops into Afghanistan and begin to restore security -- Wolf.

BLITZER: All right, Barbara, thanks. Let's hope that can happen.

Is it hard to poke fun at Barack Obama? Why late night comics seem to be getting more mileage out of John McCain these days.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker" today, politics may be serious business, but not necessarily to late night TV comics. They poke fun at John McCain, but not Barack Obama -- at least not so much.

Our entertainment correspondent, Kareen Wynter, has the story -- Kareen.

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: Hi, Wolf.

Late night TV has always considered it open season on candidates. But this time around, one presidential hopeful is proving a tougher target.

(BEGIN VIDEOTAPE)

WYNTER (voice-over): Leno...

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": All these young people. This is like the opposite of a John McCain rally. I can't believe it.

(LAUGHTER)

(END VIDEO CLIP)

WYNTER: Letterman.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": But if you want some of the John McCain stuff, you can go to -- it's being sold at the -- oh, at the Very Old Navy.

(END VIDEO CLIP)

WYNTER: The late night kings have seemingly endless punch lines about Republican presidential candidate John McCain. But the laugh lines haven't rolled so easily about his Democratic challenger, Barack Obama.

BILL CARTER, "THE NEW YORK TIMES": They really are still searching for that thing about Obama that is instantly funny.

WYNTER: And identifiable to the public, says Bill Carter of "The New York Times," who interviewed the late night comics and their writers for a recent article.

Carter says comics like David Letterman are struggling to poke fun at Obama.

(BEGIN VIDEO CLIP)

LETTERMAN: Italy is designing clothing based on how Barack Obama dresses. And I said, well, yes, that will connect him with the angry working-class voters.

(LAUGHTER)

(END VIDEO CLIP)

CARTER: They've tried a few things like that, like that he's -- that he's got sort of high-brow tastes or that he doesn't eat fried food and things like that. That isn't really a good line, because it doesn't really have a lot of angles.

WYNTER: Comedian Jimmy Kimmel recently told "The New York Times" Obama isn't the ideal target for late-night humor because he's "so polished, he doesn't seem to have any flaws."

But don't expect Kimmel to spare Obama in his monologue.

(BEGIN VIDEO CLIP)

JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": Presidential candidate Barack Obama was in Germany today. A huge crowd turned out to hear him speak -- more than 200,000 people cheering him enthusiastically.

Yes, I guess it's the first time they've seen a black person since Milli Vanilli left the country.

(LAUGHTER)

(END VIDEO CLIP)

WYNTER: Carter thinks comics are also walking a fine line because of Obama's race.

CARTER: If you're a white host with white writers, you don't make race jokes, because it's going to look -- it probably is going to look bad.

UNIDENTIFIED MALE: Ain't no more on my credit report.

WYNTER: But black comedians like D.L. Hughley aren't afraid to let the jokes fly.

D.L. HUGHLEY, COMEDIAN: He look like Urkel and the dude from "Mad Magazine" had a baby.

The reason we don't hear a lot of Obama jokes is primarily there are a lot of -- I think it's white liberal guilt. I do.

(LAUGHTER)

HUGHLEY: I think that people feel in some part guilty and some part that they want Obama to win so bad, that they just refuse to do anything that might put him in a light.

WYNTER: Hughley says comedians should have a laugh -- or two -- at Obama's expense.

HUGHLEY: As much as they may embarrass, they also humanize you.

(END VIDEOTAPE)

WYNTER: And if Obama makes it to the White House, it will be interesting to see how long this hands-off approach actually lasts -- Wolf.

BLITZER: Kareen in L.A. , thank you.

Remember to check out our SITUATION ROOM screen saver and stay up to date on all the latest news. You can download it at CNN.com/situationroom.

I'm Wolf Blitzer in THE SITUATION ROOM.

I'll see you back here tomorrow and then it's off to Denver and the convention. Up next, "LOU DOBBS TONIGHT" -- Lou.