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The Situation Room
Selling the Bailout To Congress; Biden Criticizes Own Ad; Who's Voting Early and Why; Latinos May Hold Key To Colorado
Aired September 23, 2008 - 17:00 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, he just blasted the United States for the U.N. General Assembly. Now reporters getting ready to question the Iranian president, Mahmoud Ahmadinejad. We're going to go their live ounce the questioning starts.
Also, the government's massive plan to bail out Wall Street -- it's meeting with skepticism, even outrage, on Capitol Hill. Now Senator Hillary Clinton is weighing in, as well, and she's laying blame.
And Joe Biden's verbal gaffes -- are the vice presidential candidate's off-the-cuff comments dragging down the Democratic campaign?
I'm Wolf Blitzer in New York.
And you're in THE SITUATION ROOM.
We just heard the Iranian president, Mahmoud Ahmadinejad, blast the United States and Israel. Now he's about to face the news media here in New York. He'll be answering reporters' questions.
We're going to go there live once the questioning starts.
Remember, last year, during a Q&A with American reporters, he insisted there we were no gays in Iran at all, that there was no gay problem in Iran. He said there simply weren't any homosexuals. We'll see what he says. That's coming up shortly. Stand by. Christiane Amanpour will be among those reporters inside that room.
First, though, we want to get to the unprecedented scene on Capitol Hill today. The Treasury secretary and the Federal Reserve chairman desperately trying to convince lawmakers to quickly approve a massive Wall Street bailout or possibly risk economic disaster. But it's a tough sell, with many legislators expressing skepticism, others expressing even outrage.
CNN's Mary Snow is following this story for us -- all right, Mary, update our viewers on what happened today.
MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the debate over the bailout measure got fired up at a Senate Banking hearing. It lasted nearly five hours. Some lawmakers expressed anger. The Federal Reserve chairman and Treasury secretary expressed urgency.
(BEGIN VIDEOTAPE) SNOW (voice-over): It was the first public grilling since proposing what may be the largest government bailout ever.
HENRY PAULSON, TREASURY SECRETARY: Now, I share the outrage that people have. It's -- it's embarrassing to look at this. And I think it's embarrassing for the United States of America.
SNOW: Treasury Secretary Henry Paulson, the Wall Street veteran, and Ben Bernanke, the academic turned Federal Reserve chairman, urged Congress to act quickly on the $700 billion rescue plan. In explaining why, the Fed chairman summed it up this way.
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: And I do believe we need to act to stabilize the situation, which is continuing to be very unpredictable and very worrisome.
ALAN BLINDER, FORMER FEDERAL RESERVE CHAIRMAN: I think if you translate that from Fed speak to English, you're hearing deep concerns. I mean Federal Reserve chairs are supposed to be islands of tranquility, exude confidence.
SNOW: Both men stress the need to keep credit markets functioning, to keep banks working and businesses flowing. And if not...
BERNANKE: Jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract.
SNOW: Banks need to keep lending to keep businesses running and keep people in their homes. One economist illustrates a worst case scenario for consumers, if, say, credit markets deteriorated.
BLINDER: If those markets we were in the kind of shape that the mortgage market is in now -- and they're not, for sure they're not -- people would be getting notices from their banks, I'm sorry you can't use your credit card anymore.
SNOW: With the sense of urgency came questions over the anger that taxpayers are getting socked with footing the bill.
PAULSON: It may make you angry. It makes me angry. When you ask about the taxpayers being on the hook, guess what -- they're already on the hook.
SNOW: We asked some economists how much taxpayers will be on the hook.
MICHAEL MUSSA, PETERSON INSTITUTE: It's impossible to say and give a precise figure. But if we had a severe recession, we're talking about losses in the economy in the hundreds of billions, if not trillions of dollars.
(END VIDEO TAPE)
SNOW: And after a day of the Senate hearing on the plan, the markets reacted, extending losses, with the Dow losing 161 points today. One analyst explains that the longer it takes to get the rescue plan passed, the more nervous the markets get -- Wolf.
BLITZER: And they're very nervous right now.
Mary is watching all of this for us.
Thanks.
The former Democratic presidential candidate, Hillary Clinton -- she's still a United States senator -- she says Congress should not just rubber stamp the Bush administration's bailout plan.
Listen to what she told CNN's John Roberts on "AMERICAN MORNING".
(BEGIN VIDEO CLIP FROM "AMERICAN MORNING")
SEN. HILLARY RODHAM CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: We could have done better had we started acting nearly two years ago, when I and others said that this crisis was looming on the horizon and we had to do something to help people stay in their homes and begin to deal with these mortgages that unfortunately were, you know, not in the best interests of either homeowners or our economy.
Well, we are where we are now. And we do have to take action. But I think it's important that Congress is driving a hard bargain with the administration and not just, saying OK, we'll do whatever you want.
(END VIDEO CLIP)
BLITZER: Senator Clinton also didn't hesitate to lay blame for the financial crisis.
(BEGIN VIDEO CLIP FROM "AMERICAN MORNING")
CLINTON: Everybody has to take responsibility. But the great bulk of the responsibility rests with this administration and with the ideology that the Republicans have been promoting since they took over the Congress in 1995. You know, they never met a regulation that they thought was worth implementing. They really believed, in an almost faith-based way, in the power of the marketplace. And we have learned our lesson repeatedly in our country. It's human nature.
If you take the rules away or if you have weak rules, then people are going to take advantage. And that's what happens in markets.
(END VIDEO CLIP)
BLITZER: Senator Clinton weighed in on Barack Obama's vice presidential pick. She called Joe Biden, "a good choice, a champion of working people and a great strategist."
Senator Biden is well-known, as most of you know, for making some off-the-cuff comments. Sometimes they seem to bite the Obama campaign.
Let's go to Brian Todd.
He's working this story for us -- Brian, how big of a problem is this right now at this sensitive moment in the race?
BRIAN TODD, CNN CORRESPONDENT: Well, outwardly, Wolf, the Obama campaign is portraying it as no problem at all. Today, the word we heard them use several times to describe Joe Biden -- authentic. They are pointedly trying to turn his unguarded remarks to their advantage.
(BEGIN VIDEOTAPE)
SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL NOMINEE: But unfortunately...
TODD (voice-over): Joe Biden on message -- broadsiding his opponents on the economy, health care and, for good measure...
BIDEN: We will end this war.
TODD: Just the response the campaign hopes for, because this can be Joe Biden unscripted.
(BEGIN VIDEO CLIP FROM THE "CBS EVENING NEWS," COURTESY CBS)
BIDEN: I thought that was terrible, by the way.
(END VIDEO CLIP)
TODD: Criticizing an ad from his own campaign about John McCain's computer illiteracy in an interview with CBS News. Biden then issued a statement saying: "I was acting about an ad I'd never seen, reacting merely to press reports."
Earlier, Biden said the government shouldn't bailout financial giant AIG. Later, on NBC's "Today Show," his running mate implied Biden had spoken too soon.
SEN. BARACK OBAMA (D), PRESIDENTIAL NOMINEE: I think that in that situation, I think Joe should have waited, as well.
TODD: Campaign aides say Biden later got on the same page with Obama, saying he wants more facts before taking a position on AIG. But these episodes shows that the folksy, plain-spoken Joe Biden, seen as refreshing on the stump, has a flip side -- the propensity to blurt out comments that get him into trouble and have prompted the Republicans to create a Biden gaffe clock.
Will the campaign make the esteemed senator stick to script?
Biden didn't speak to us at this event. But aides say he's done more than 80 interviews since being selected as Obama's running mate and they're not about to repackage Joe Biden.
STEPHANIE CUTTER, OBAMA CAMPAIGN SENIOR ADVISER: This is a guy who stands by who he is and will say what's on his mind. He is authentic and he is real and he is honest.
TODD: And they say he's connecting with the audience they need to reach -- working class voters who had supported Hillary Clinton. But given his gaffes and the rock star perception of Sarah Palin, is Joe Biden bringing down the Democratic ticket?
WALTER SHAPIRO, SALON.COM: I don't think he is becoming a drag. To a large extent, vice presidential candidates only matter at the margins. Even Sarah Palin, when the dust settles, will probably be most important about bringing home the Republican base to John McCain, not changing the allegiance of persuadable voters in the center.
(END VIDEO TAPE)
TODD: Focusing on the base, not worrying so much about the press traveling with them -- that seems to be a tactic used by both vice presidential teams now, apparently.
Sarah Palin has never given a news conference since she was selected. Biden hasn't given one in two weeks.
In Biden's case, we're told that's because he's preparing for his debate with Palin -- Wolf.
BLITZER: And we just heard from Senator McCain, his first news conference in some six weeks.
TODD: Right.
BLITZER: It wasn't very long, but he at least is answering some reporters' questions.
You're getting hints they might unleash Joe Biden a little bit more in the weeks ahead.
What are you hearing?
TODD: Well, a campaign aide told me today that they want to have Biden be the one to attack John McCain's record in the Senate, since he has served with McCain for decades now. An aide told us Biden's going to be McCain's what they call real life fact checker on the trail.
Let's watch for that. It's going to be very interesting to see if these two men, who've called each other friends for a long time, go at it now, especially Joe Biden in the role of attack dog.
BLITZER: We'll watch with you, Brian.
Thank you.
Let's check in with Jack.
He's got The Cafferty File -- Jack.
CAFFERTY: Vice presidential hopeful, Alaska Governor Sarah Palin, had a full schedule today hear in New York City, including meetings with Afghan President Hamid Karzai, Iraqi President Jalal Talabani and Colombian President Alvaro Uribe. Also on her dance card, former Secretary of State Henry Kissinger, rock star turned humanitarian Bono.
A big list.
These folks all in town, of course, for the fall session of the U.N. General Assembly.
In Washington, meantime, former presidential hopeful Senator Hillary Clinton was having some high-powered meetings of her own. She's hosting the 7th Annual New York Farm Day. The guest list there, according to her office, includes producers of New York's award- winning wines, farm fresh products and fresh seafood.
Who would have thought a couple of months ago that Clinton would be showcasing her state's agriculture industry while a first time governor and hockey mom, who got her very first passport ever just last year, would be meeting with heads of state at the U.N.?
Would have thunk?
Here's the question -- what does it say that Sarah Palin is meeting with heads of state at the U.N. while Hillary Clinton is hosting Farm Day?
Go to CNN.com/caffertyfile. You can post a comment on my blog.
BLITZER: I'm anxious to hear what our viewers think, Jack.
That's a good question.
Thank you.
Some of the stories we're working on this hour, the Iranian president delivers a scathing indictment of the United States and Israel at the United Nations. Now he's about to be grilled by reporters here in New York.
We're going to have live coverage of his news conference. That's coming up.
Also, for millions of Americans, election day is already here -- who's voting early and what impact will the ballots cast today and tomorrow and all these early ballots have on the outcome on November 4th?
And a worker's rebellion turns deadly -- you're going to find out what caused dozens of employees to turn on their boss.
Stay with us.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: It's exactly six days -- six weeks, that is -- until election day, but thousands of Americans are already casting their ballots. Our senior political analyst, Bill Schneider, shows us who's voting early and how it's impacting these final weeks of the campaign -- Bill.
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, vote early and often -- that used to be a joke. Now it's half serious.
(BEGIN VIDEOTAPE)
SCHNEIDER (voice-over): Thirty-one states allow voters to cast their ballots in person before election day. They don't require a reason. Twenty-eight states allow early voting by mail. This year, as many as a third of voters around the country are expected to cast their ballots before election day, up from 20 percent in 2004.
JULIA OLIVIER, EARLY VOTER: I'm a first time voter, so I really wanted to make sure I was on top of everything. That's why I voted so early.
SCHNEIDER: Voting is already underway in Georgia and parts of Kentucky and Virginia. Iowa starts before the first debate. Six more states will allow people to vote next week, including the mother of all battleground states, Ohio.
The idea is to make voting more convenient and increase turnout without overwhelming polling places on election day.
CATHY COX, GEORGIA STATE SECRETARY OF STATE: I think early voting is here to stay. It's just a recognition of the busy lives we all lead.
SCHNEIDER: Many early voters are strong partisans who are committed to a candidate. People who can't make up their minds tend to put off a decision. They might actually pay attention to the campaign.
But what happens to the campaigns?
LELAND BEATTY, DEMOCRATIC POLLSTER: That'll take your breath away, if you're a campaign trying to make sure that you're reaching or covering all of the people who are voting.
SCHNEIDER: Early voting means the candidates have to jump directly to their closing arguments.
(END VIDEO TAPE)
SCHNEIDER: You've probably heard about an October surprise -- some unexpected development that throws the campaign into an uproar. Well, suppose we have an October surprise this year -- after hundreds of thousands of people have already voted early.
Can they change their minds and ask for their ballots back?
Sorry, early voters. You're out of luck -- Wolf.
BLITZER: Thanks very much. That's what you have to pay. That's some of the price you pay for voting early. We'll watch what's going on.
Bill Schneider reporting.
It's among the most crucial toss-up states right now and the presidential candidates, they know it. It could be the key to unlocking Colorado's nine electoral votes and that key could be with Latinos.
Our chief national correspondent, John King, is in Aurora, Colorado right now, outside of Denver -- all right, John, explain why Latinos.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, the math is both simple and stunning. Twenty years ago, 3.7 million Hispanics cast votes for president. By 2004, that number more than doubled, to 7.5 million. And as it grows again this year, Barack Obama, at the moment, has a more than two to one advantage over John McCain among Latino voters. If that edge holds, Colorado is one of several states that could turn from red to blue.
(BEGIN VIDEOTAPE)
KING (voice-over): Roasting chilies roadside -- a small business navigating a troubled economy and part of a demographic shift that is changing the face of America and its elections.
RAMONA MARTINEZ, COLORADO DEMOCRATIC ACTIVIST: The sleeping giant has finally woken up. You know, they keep saying oh, it's the year of the Latinos. Well, I think it is this time.
KING: Ramona Martinez is a former Denver city councilwoman and long-term Democratic organizer. She sees an unprecedented Obama campaign Latino outreach program as a potential tipping point in Colorado and a few other key battleground states.
MARTINEZ: They just hired another 20 or 30 organizers to do voter registration in key areas. They just had training. They're hiring more organizers than I've seen in my lifetime, in this state, for the Latino vote.
KING: Latinos are the fastest growing segment of the population here in Colorado and nationally. Democrats believe Latinos could be decisive in the key western battlegrounds of Nevada, New Mexico and here in Colorado.
FERNANDO TORRES, FIRST TIME VOTER: I don't make any money so.
KING: New citizen and small businessman Fernando Torres says his first vote will go to Obama, because he doesn't believe John McCain understands his struggles.
TORRES: I think he came from rich people.
KING: Insurance saleswoman Ana Calderon is a registered Democrat, likely to vote Obama, but not quite certain.
ANA CALDERON, REGISTERED DEMOCRAT: He's still very inexperienced. And then there's McCain, who's been with the government for years -- a veteran, a real smart man who would do a good job.
KING: The McCain campaign targets Latinos in the Denver area...
UNIDENTIFIED FEMALE: Mr. Valdez, I am -- my name is (INAUDIBLE).
KING: ...but much more aggressively in more conservative Pueblo County, where it has help from a recent convert with a famous name in Colorado politics.
SILVER SALAZAR, DEMOCRAT FOR MCCAIN: My name is Silver Salazar and I'm a volunteer calling on behalf of the Colorado Republican Party.
KING: Silver Salazar was a Hillary Clinton supporter and a Democratic activist for more than two decades.
SALAZAR: Senator Obama is totally out of touch with the Hispanics, immigration reform, abortion, the war in Iraq. So that made my decision a lot easier.
(END VIDEO TAPE)
KING: And if the Salazar name sounds familiar or perhaps if Silver Salazar looks familiar, he has two cousins the Colorado Congressional delegation -- Senator Ken Salazar, Congressman John Salazar. Both are Democrats, Wolf. Both are big Obama supporters. Silver Salazar joking with us that they normally have Thanksgiving dinner together. He said not this year, because they're on competing sides in the intense competition here for Colorado and the Latino vote -- Wolf.
BLITZER: It's really close in Colorado right now.
KING: It sure is.
BLITZER: That's one of those final critical battleground states.
John, thank you.
Some of the key battleground states have seen a big boost in voter registration. Take a look at this. Since the start of this year, Colorado has registered close to 119,000 new voters. Michigan has added more than 101,000 new voters to its rolls. Virginia has registered -- get this -- almost 284,000 new voters. And in Florida, there are 310,000 new voters who are registered. And that is encouraging to the Obama campaign.
The Iranian president, Mahmoud Ahmadinejad, he's getting ready to answer reporters' questions here in New York following a scathing attack on the U.S. at the United Nations. You saw it live in THE SITUATION ROOM. We're standing by to go live to that news conference shortly. And a CEO murdered by a group of fired workers -- a labor dispute turns deadly.
Plus, Google takes direct aim at Apple -- unveiling its answer to the iPhone -- the G1, or GPhone -- whatever it's called. We'll tell you.
(COMMERCIAL BREAK)
BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.
What's going on -- Carol?
COSTELLO: A couple of things, Wolf.
More than 60 former factory workers in India have been charged with the murder of their CEO. The local head of an Italian auto parts manufacturer bled to death when a mob attacked him with iron rods inside the plant. Authorities say the man was attempting to calm a crowd of more than 100 workers who had been laid off in recent months in an ongoing labor dispute.
Georgian forces shoot down what they say is a Russian drone. Police officers took pictures of the downed aircraft in a village in South Ossetia. Russian officials have not commented. The incident follows Sunday's shooting at a checkpoint in Western Georgia, where separatist fighters shot and killed a police officer.
Scientists who want to know more about the Big Bang Theory will have to wait even longer. Repairs to the world's largest particle collider used for the experiment are expected to run into the last winter break. Scientists hope the machine will explain more about antimatter, including the so-called God particle believed to give mass to all others.
Move over Apple, here comes Google. The Web search giant has entered the mobile phone market. The first cell phone running Google's new software looks something like the popular iPhone, but has a slide out keyboard to access e-mail and, of course, the Internet. T-Mobile says it plans to sell the G1 phone next month for 179 bucks with a two year contract.
So there you have it -- Wolf.
BLITZER: The G1. All right. We'll watch that one, as well.
Who knew?
All right, stand by, Carol.
We're going to get back to you.
The Iranian president, Mahmoud Ahmadinejad, live. He's about to answer reporters' questions here in New York following his anti-U.S. speech at the United Nations. It underscores a problem facing the next president. And Donna Brazile and Alex Castellanos, they're standing by to offer their advice on what's going on?
Plus, serious allegations against Barack Obama in a new ad from the National Rifle Association. We put it to the truth squad on that, our CNN truth squad. You're going to see for yourself what's true and what's not true.
That and a lot more coming up right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Both presidential candidates are now laying out conditions for voting yea on behalf of that $700 billion layout plan.
What are the conditions?
That discussion and more coming up.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, Mahmoud Ahmadinejad's threat to the West -- one of the most pressing foreign policy issues for the next president -- Iran. I'll be talking to Alex Castellanos and Donna Brazile. They're standing by live. We'll talk about how the presidential candidates plan to deal with the fiery Iranian leader.
The NRA's new anti-Obama ad -- true or not true?
Our truth squad investigates.
And how did Hillary Clinton react when she found out that Barack Obama asked Joe Biden to be his running mate?
We're going to tell you exactly what she's saying, according to her husband.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
ANNOUNCER: This is CNN breaking news.
BLITZER: But first I want to go to Carol Costello.
She's following a breaking news story.
We're just getting word from the courts.
What happened -- Carol?
COSTELLO: Yes, we just got this in from the U.S. Supreme Court, Wolf.
The U.S. Supreme Court has stayed -- granted a stay of execution for a man on Georgia's death row. His name is Troy Davis. He's been on death row since 1991, accused of killing a Savannah, Georgia police officer. Now, seven of the nine witnesses in his case recanted their testimony, and there is no physical evidence tying Davis to the crime. For these reasons, we suspect, the Supreme Court decided to issue that stay of execution for Troy Davis. So he will not be going -- he will not be executed, at least tonight. Where this case goes from here, it's unclear right now. But, of course, we'll keep you posted.
Back to you, Wolf.
BLITZER: Carol, thank you for that.
Let's get back to a hot button issue right now. That would be Iran. It's one of the first and certainly one of the most crucial foreign policy issues that will confront the next president of the United States. It certainly will be among the top issues debated Friday night at the first presidential debate.
Let's discuss what's going on with republican consultant Alex Castellanos and democratic strategist, CNN political contributor Donna Brazile. Thanks very much for coming in.
How do they handle, what's the best way to handle Ahmadinejad and Iran, Donna, when the subject comes up?
DONNA BRAZILE, DEMOCRATIC STRATEGIST: I think Senator Obama should stick with his original principles on this issue because clearly the Bush administration has come around. President Bush said all options should be on the table. But the first option, of course, is to try to solve it diplomatically. Over the past few months we've seen a high level of administration officials, the secretary of state for political affairs began to have a dialogue with Iran. We need to have a dialogue. Again, all the options should be on the table.
BLITZER: When you say all the options on the table that obviously includes the military option if it comes down to that as well. Alex, what do you think?
ALEX CASTELLANOS, REPUBLICAN CONSULTANT: Well, I think Senator Obama has a little weakness on this issue. And it's something that I would expect the McCain folks to press during the debate. Obama said that Iran was a teeny country that posed no serious foreign policy threat to the United States. But, of course, we all know it could be a teeny country with a big nuclear bomb sooner rather than later. I think that's one of the areas that the McCain people expect to exploit in the debate. He has certainly changed his position since then and adopted frankly a position much closer to George Bush, which is that he'll do anything, anything, anything to keep nuclear weapons out of the hands of Ahmadinejad. Does that mean that he now supports the Bush policy of preemption? I think the McCain people will press that during the debate as well.
BRAZILE: Senator McCain has never trivialized the issue. He understands he's a threat to not justice real and the Middle East but if we've got to stabilize Iraq we've got to make sure we have some registrations with Iran. After all, we need to focus on Afghanistan. This is a very important issue. He didn't just come around. He had this policy position last spring in the debates. And George Bush clearly has adopted Senator Obama's position.
BLITZER: There's a sense, Alex, that McCain might have an advantage going into this first debate on foreign policy since he's been involved in dealing with national security and foreign policy for some of his 26 years in Washington. Do you believe that advantage for this first debate is with Senator McCain?
CASTELLANOS: I think, first of all, considering the economic climate that we have now, the meltdown that we're dealing with on Wall Street, you know, any day we're talking about foreign policy as opposed to the economy, that's probably a better day for the republican candidate. Also, it does give Senator McCain a chance to -- to focus on his experience on the issue. That's also a plus. I think the Obama campaign made a mistake when they went after Sarah Palin's experience, because it highlighted Obama's own lack of experience. He has about as little foreign policy experience as the republican vice presidential candidate does. So on foreign policy is a good thing for republicans to talk about right now.
BLITZER: Go ahead, Donna.
BRAZILE: With all of the international crisis, this is going to be a very important moment to discuss some of the major issues. But I think Senator Obama is prepared. He's been involved in over 22 debates. He's been in the senate now for four years serving on a key subcommittee on foreign affairs and a member of the veterans committee. So he's prepared to have this conversation to see if McCain's judgment on the Iraq war, his wisdom on sending our troops to war without a battle plan for victory, I think there's ample room to have a debate.
BLITZER: Donna, do you think if the congress goes ahead and approving this $700 billion bailout on the top of a few hundred billion dollars in other bailouts that have come up in the last few days it's going to cause Senator Obama to rethink his -- his health care initiatives, his other domestic programs that are going to cost a lot of money? Does he have to tell the American people in the next six weeks, you know what, the deficit and the national debt are skyrocketing, I'm going to be honest with you and we're not going to be able to afford some of these initiatives that I earlier supported?
BRAZILE: Wolf, it would be very refreshing to have politicians be honest with us. But Senator Obama has been honest. He's already said that his plan will be paid for. He's not going to put any additional items on the table until we know what the revenue looks like, until we know if the economy will rebound or if we will go deeper and deeper into a recession. I think his plan is responsible. It addresses the needs of the American people. He should keep those plans on the table. Look, I remember back in the gore campaign when we saw a $5.6 trillion worth of surplus and we all sat there and figured out how to spend the surplus. Now we have about $10 trillion in debt. Senator Obama will have a responsible plan to get us out of this mess as well as keep the priorities on health care, education and building our infrastructure.
BLITZER: Do you think Senator McCain who prides himself in being a straight shooter, Alex, will tell the American people, you know what, we can't afford all these tax cuts, the new tax cuts that I'm proposing including tax cuts for the wealthiest of Americans, tax cuts for corporations? We're looking at this live picture of Ahmadinejad getting ready for the news conference. Go ahead and answer the question.
CASTELLANOS: I think absolutely. When your house is on fire, you put out the fire. You don't talk about how you're going to redecorate it. I think both Senator McCain and Obama are going to have to adjust to the new economic realities. But now I think candidates are going to have to talk about growth. How do we grow this economy? That's going to be the only way we pull out of this thing. Yes we have to deal with the crisis now. In the long run we have to have an agenda for growth and Barack Obama is talking about tax increases, still, I think on business that he's going to have to frankly say is he going to take those off the table or not, Senator McCain I think is going to have a tough challenge to sell tax cuts as the seeds of growth. But I think that's what a lot of republicans think he should do.
BLITZER: I just want to alert our viewers what we're seeing. There's Mahmoud Ahmadinejad on your screen. He's getting ready to begin a news conference here in New York over at the United Nations. I don't know if he's going to open with an opening statement. If he is we don't necessarily have to hear that since we just heard his 30- minute address before the United States general assembly. But once he gets to the questions, it could be interesting to see how he responds to the international reporters who have gathered there at the United Nations to ask him some questions.
What do you think the -- on the eve, Donna, of this -- this first presidential debate, which will focus in on national security and foreign policy, the presence of Ahmadinejad here in New York this week, how does that impact this entire presidential campaign at this very critical stage?
BRAZILE: You know, Wolf, we just had Obama in Pakistan. There are so many other events taking place as we speak. I think the American people will tune in to look at these two candidates to see who has the plan for the future, not just an economic plan that will, as Alex says, correctly grow us out of this mess but also who has a plan to restore America's prestige around the world. I want to correct one thing Alex said about Senator Obama's tax plan. He will not raise taxes on the middle class. And he's not trying to tax people even further. What he did say and what he has pledged to do is to provide tax relief to 95 percent of Americans who are now struggling to make ends meet.
BLITZER: He will raise taxes, Alex, as you know, and he's said it many times, on those households earning more than $250,000 a year. He'll cut taxes for the middle class. He says 90 percent to 95 percent of the Americans will pay less taxes in an Obama administration. Although even that could be in jeopardy given the enormous cost of this bailout right now.
CASTELLANOS: And he has said he will, however, though, raise taxes on businesses. As a matter of fact, he's been very critical of Senator McCain for cutting taxes on businesses. Just the people we buy things from, like groceries and gasoline and things like that, and the people that give us paychecks, we're trying to grow business and job making in America. Not cut it back. Especially if we're trying to climb out of a recession. I think also, Wolf, in this debate the big test is not going to be just policy and vision. It's going to be the character of men. We've seen the world as an uncertain place right now and a crisis, a new one, can be on us at any moment. I think which of these leaders has been tested and proven, that's what I would expect McCain to focus on. Barack Obama who's voted present in the state senate, Barack Obama who said important issues are above his pay grade, the one who's frankly not put forward a real plan on the economic meltdown saying he's going to wait and see, I think that's what I would expect the McCain campaign to really try and point out in the debate.
BLITZER: Go ahead, Donna. We've got to move on.
BRAZILE: I also believe temperament matters just as much as experience. Senator Obama has made it very clear that until Secretary Paulson outlined his plan, which he did on Sunday, and of course he even added more over the last couple days, he would not comment on the specifics. Look, he's a member of the United States senate. I expect these lawmakers to read the legislation before they rubber stamp the administration's proposal.
BLITZER: Guys, we're going to leave it right there. Alex and Donna, good discussion.
You're looking at live pictures of Mahmoud Ahmadinejad. He's speaking over at the United Nations. He's going to get ready to tart answering some reporters' questions. Zain Verjee is here watching this story with us. Zain's our State Department correspondent.
He was fiery this morning, although Christiane suggested, accident scene, not necessarily fierily as he was in years past. Do you agree with that assessment?
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Yes, I do. I mean that was one of the most striking aspects of the speech. He didn't come out of the gates slamming the United States as he normally does. But he did do his due diligence and he did keep to his previous scripts. He criticized the U.S. for being in Iraq. He didn't openly use the words the United States. He called it an immoral power, selfish, bullying power, dominating power. It was clear who he was talking about. He did criticize the U.S. for pushing its agenda for world domination in places like Iraq and Afghanistan. He slammed the united states in saying it's pretty ineffective. The key thing he said in the speech was defending Iran's nuclear program, that they have a right to do it and they're doing nothing wrong. He said the nuclear watchdog is okay with it. There are lots of questions about some of the things he said in that speech. He insisted that Iran was resist any kind of bullying and would continue to do what they're doing.
BLITZER: But the International Atomic Energy Agency is not OK with Iran's nuclear program. They want greater transparency. They're deeply concerned. Let's listen in briefly to hear what he's saying right now. This is Mahmoud Ahmadinejad, the president of Iran.
PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): -- human cultures. And human criteria. That will become the primary elements in the establishment of peace and friendship and security that is viable for all. We have seen that in the past 60 years the material thought and value system has created nothing but discrimination and tensions, and the escalation of tension and insecurity. And, in fact, constant instability as well as a larger gap in wealth among nations. And consequently fear for the world, of its future. Nations have all arrived at the conclusion that for their own prosperity, they must find a new path, new thought system and criteria to gauge their developments by. And this is what we --
BLITZER: All right. Mahmoud Ahmadinejad. He's opening up with some remarks similar to what he said just a little while ago before the general assembly. We'll take a quick break. We'll wait for the questioning to start. We'll go back there live once he starts answering reporters' questions.
Also, we're following the presidential race. The National Rifle Association taking a stand on Barack Obama with an ad saying they'll tax ammunition and ban shotguns and rifles. Our CNN truth squad is standing by to check the facts.
How did the Clintons feel about Barack Obama choosing Joe Biden as his running mate? We'll hear from the former president. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: All right. He started answer questions. He was just asked by a reporter about the sanctions imposed against Iran for its nuclear program. He's answering that question right now. Let's listen in.
AHMADINEJAD (through translator): But prior to the opportunity for that declaration on the part of the agency, the United States administration collected a series of papers and claims that it raised and placed enormous pressure on the agency to accept investigating into those papers.
Now, according to the rules of the IAEA, no state party to the agency has the right to raise a claim against another state party. And should a state party raise any claim or an allegation, it is not incumbent upon the agency to consider it at all. In fact, it should not. And having said that and known that, nonetheless, under extreme political pressure, the agency placed on its agenda the need to investigate those allegations as well.
Although those allegations, I must say, were so superficial and funny that, in fact, it pointed to the fact that those papers presented by the U.S. administration were a forged paper. And the forgery was so poorly done that any elementary school kid would even be able to figure that out. Now, up to this day we have extended the greatest amount of cooperation any state country has to the agency thus far. Actually, several thousand hours of investigations and inspections have been carried out, and Iran has offered the agency thousands of documents, pages of documents. So throughout the history of the agency, Iran has actually given the most amount of cooperation to the agency compared to any other state.
However, we're yet told that we do still not have necessarily possess the right to pursue our legal and rightful interest for peaceful nuclear development unless the United States is convinced. That's what we've been told.
Now, I'd like to say clear and loud, we neither want nor are interested nor can we please the U.S. administration that can never be satisfied.
We are a state member of the agency. And it is our duty to enjoy our rightful legal rights, in fact.
Now, if we are told that unknown or undeclared efforts must be clarified to the agency, we've said there are none whatsoever. And if so, please do tell us which ones. And they say, well, no, we don't have any evidence or any indication or no document; we are just telling you to tell us. Now, they are in fact asking us to prove something that does not exist, to prove a nonexistence, and that is impossible.
We have suggested to the agency not to place itself under political pressures, and when it faces allegations of such nature by different governments, we have actually told the governments to stop using the language of force.
Using language of force has no effect on the Iranian people. I mean, after all, there has been so much propaganda, these sanctions that they have embarked on, as you said you have imposed the embargo. What result has it exactly had? None. In fact, you are placing sanctions on yourself. Iran is a vast country.
Since we are honest and tell the truth and all our nuclear activities are placed transparently before the agency for its inspections and since we have worked within the legal framework, we can definitely uphold our measures and rights to those measures, and we will not allow any political actors to deny our people of their right in this respect.
Now, doesn't it seem really funny here that governments who have a wealth of nuclear arsenals, and have in fact used nuclear weapons too, and are developing new generations of nuclear weapons, and threatening other nations with the use of nuclear weapons, should in fact not consider as posing a threat to humanity on the one hand. But then on the other end, Iran's peaceful activities should be considered a threat simply on the premise that in the future it might deviate.
That is the language, the lexicon that I was referring to in my earlier remarks that have come to an end. That era is past, and has no effect from the hence onward.
So I would just simply recommend that they change their outlook, their behavior towards other nations, because this belongs to an old time and age, and using it will create this and enliven this concern among other nations, that those who use and have used these nuclear weapons are in fact still in the backward pages of history rather than the forward ones. This is non-effective.
Iran is the most peaceful and peace demanding state in the Middle East. We have a history that goes as far back as 7,000 years ago, throughout which the Iranian nation has never in fact aggressed upon another nation.
However, in the past 30 years, heavy eight-year war was imposed on Iran, instigated by Saddam Hussein with the direct support of the United States of America and its allies, during which chemical weapons were used on our people, while the American government continued its support of Saddam.
Now, we'd like to recommend that we all must give more attention to justice, to truth and legality and the law, and they, too, should, because this will help everyone.
Iran's path is clear. We are in favor of dialogue and talks and in favor of reason. However, we will not accept the language of force.
UNIDENTIFIED MALE: Thank you very much.
(CROSSTALK)
UNIDENTIFIED MALE: Thank you. My name is Massoud Hadar (ph). I represent (inaudible) of Pakistan. Recently, Israel has threatened to attack Iran's nuclear plant, suspecting that it is producing nuclear weapons. How does Iran propose to meet the Israeli threat? Do you have any thoughts on that?
AHMADINEJAD (through translator): Of course, the Zionist regime has been created just for this purpose. The philosophy behind this regime is nothing but threats, aggression and occupation. This regime has been created to terrorize, to place pressure on people, to kill women and children, to deny people medicine and food, and to besiege them.
The threats created by this regime are not new. Both Zionists, as well as their supporters, are aware that they are far smaller and far weaker than to be able to harm Iran. The Iranian nation is a peace-loving nation that favors talks and dialogue. However, if there is a hand that is raised against our nation, well prior to the opportunity of an attack, be cut completely from -- indefinitely.
I think that this language is really to cover up the failures and the crimes that -- and the sorrowful events that have happened in the occupied territories and are still ongoing.
Today, the Zionist regime has a right at the end of the line. It was created for occupation and aggression. And today, its pawns are much weaker and cannot continue its aggression and oppression. Now, to cover up its own weakness, its own -- they say these things, but they know quite well themselves that they are far smaller than to be able to think about infringing on Iran's borders.
BLITZER: All right. So there he is answering some questions. Mahmoud Ahmadinejad, the president of Iran, making it clear that he is not backing down at all when it comes to Iran's nuclear program. He says it has been thoroughly investigated by the International Atomic Energy Agency. The IAEA doesn't necessarily agree. They want further answers and questions and he say has the IAEA is acting simply from pressure from the United States, also, continuing to blast Israel which he always does at every opportunity. We continue to watch what he is saying at the news conference and if he has more news, we'll share that with you as well.
Let's bring in bring in Jack Cafferty. He's got the Cafferty File.
You remember last year at that conference he said that there were no homosexuals in Iran, because there are no homosexuals in Iran.
JACK CAFFERTY, CNN CORRESPONDENT: Maybe they have seen to it that there are not. Who knows?
The question this hour is what does it say that Sarah Palin's meeting with heads of state at the U.N. while Hillary Clinton is hosting farm day?
L.J. in San Diego writes, "It is means Senator Clinton is doing what senators do in their states, communicating with and supporting constituents while Sarah is out of class for a day having a closely chaperoned field trip to the U.N. like so many students have done. No questions, no press, but only yearbook picture day for Sarah."
John writes from New Jersey, "Hillary is doing what Hillary does to earn the credibility that she has and the votes that she gets. What the Palin and Clinton comparison speaks to is the incredibly poor judgment Obama used in picks a running mate."
Jerome writes, "Hillary is connecting with people. Palin is avoiding any read debate and meeting with hand picked heads of very Bush states. The press should stop covering her until the press is granted complete access to her and she answers in a truthful manner."
Raquel writes, "It means Palin's facade is working and still working just barely but it's still working. Clinton is back to business. I am totally embarrassed of Sarah Palin, but as a woman I remain proud of Hillary Clinton and she continues to work hard for the people. I admire her tenaciousness."
S.C. in New York, "I don't see Senator Clinton hosting farm day as demeaning." We never intended to suggest that it was. "The farmers are what sustain us. They are vital to everything in America. From my personal view, they have more wisdom than some world leaders have shown us." I am inclined to agree. Butch writes, "It means the U.N. has turned into another meaningless campaign stop."
And Dave in Toronto says, "Whenever Palin is near mammals she shoots them and makes stew. Fortunately guns are not permitted in the U.N. A photo shoot is harmless. The world is better off with the women's schedules just as they are."
If you don't see your e-mail here, you can go to my blog at CNN.com/CaffertyFile and look for yours among hundreds of others.
BLITZER: It is pretty amazing the basis of your question what Hillary Clinton was doing today and what Sarah Palin was doing today and where they respectively were a few weeks ago.
CAFFERTY: Well, that is the thing that get my attention and a little note in the e-mail yesterday saying that Hillary is hosting farm day and what an interesting counterpoint what the two ladies wound up doing. Six months ago, nobody in New York City knew who Sarah Palin was.
BLITZER: And very few people outside of Alaska knew who she was. Thank you, Jack.
