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The Situation Room

Eighth Losing Session for the Dow; Candidates Target Economy; Swaying Undecided Voters

Aired October 10, 2008 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, breaking news -- pleas for calm from President Bush go largely ignored on Wall Street, where the hemorrhaging continues for yet another day. No end in sight to this global financial meltdown.
Also, is the McCain campaign stoking hostility toward Barack Obama?

I'll ask a rising star in the Democratic Party, the Montana governor, Brian Schweitzer. He's standing by live.

And disturbing new allegations in the candidates' dueling ads.

But are they true ?

We're checking the facts for you.

I'm Wolf Blitzer.


And we're following the breaking news this hour -- a dismal end to a disastrous week on Wall Street. Stocks diving once again today. The Dow shedding more than 120 points.

But that's almost palatable compared to what happened when the markets opened this morning.

Take a look at this. Within the first 15 minutes, the Dow plunged almost 700 points, raising fears of another massive sell-off. But within the hour, the Dow recovered and even ventured into some positive territory for a time, before losing ground in the final hour. It was going up and down like crazy.

Wall Street's record slump comes despite repeated efforts by President Bush to calm panicked investors.

Our White House correspondent, Elaine Quijano, is standing by over at the White House.

The president spoke out this morning and he tried to reassure not only Americans, but, indeed, the entire world -- Elaine?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. President Bush said this morning that the government's massive financial rescue plan is aggressive and big enough to work. But he said it will take time. (BEGIN VIDEOTAPE)

QUIJANO (voice-over): President Bush is trying to stop the bleeding by reassuring Americans nervous about the faltering economy.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Fellow citizens, we can solve this crisis and we will.

QUIJANO: Yet he was also realistic, urging people not to panic about their plummeting investments.

BUSH: Anxiety can feed anxiety. And that can make it hard to see all that is being done to solve the problem.

QUIJANO: So this time, the president's reassurances included an explanation of the Treasury Department's new powers under the financial rescue plan to become part owner in troubled banks.

BUSH: Including buying or insuring troubled assets and purchasing equity of financial institutions.

QUIJANO: The president has tried calming the markets 27 times in recent weeks through written statements, radio addresses and on-camera comments.

BUSH: We've overcome tough challenges before and we will overcome this one.

QUIJANO: And against the backdrop of gloomy economic news, the president has also tried projecting an image of normality -- signing landmark legislation like the U.S.-India Civilian Nuclear Agreement and continuing with his weekend exercise regime -- bike riding in the suburbs of Washington.

But the markets have continued their stomach-churning ride.

Analyst Anne Mathias, with the Stanford Group, says now anxious investors are watching and waiting for the government's financial rescue plan to actually begin the process of buying bad debt.

ANNE MATHIAS, STANFORD GROUP: The promise of it is there, but reality of it isn't yet. So I think perhaps once this actually starts working, once the patient starts taking the medicine, people will start to feel better.


QUIJANO: Now, so concerned about public anxiety, President Bush will host a rare Saturday meeting at the White House of the Group of Seven industrialized nations' finance ministers. And he'll deliver remarks in the Rose Garden, Wolf, afterward -- Wolf.

BLITZER: Thanks very much, Elaine, for that, watching the White House.

Both candidates unveiled new plans today for the economy. John McCain's plan is about retirement. Barack Obama's idea is aimed at taxes and small businesses.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Current rules mandate that investors must begin to sell-off their IRAs and 401(k)s when they reach age 70-and-a-half. To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended.



SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: Just as we make more lending available, we need to relieve the tax burden on small businesses to help create jobs. That's why I proposed eliminating all capital gains taxes on investments in small businesses and startups. And today I'm going to propose an additional temporary business tax incentive through next year to encourage new investing, because it's time to protect the jobs that we have and to create the jobs of tomorrow by unlocking the drive and ingenuity and innovation of the American people. And that's what I will do as president of the United States of America.


BLITZER: Let's go to our senior political correspondent, Candy Crowley.

She's working this story for us -- how unusual is it, Candy, for these presidential candidates, so close to an election, to be coming up with such specific economic proposals?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Wolf, this period in the campaign is usually dedicated to two things -- rallying the troops in huge, big forums, exciting people and exciting volunteers about getting out to help. And, also, about the door-to-door operations -- the ground troops, so to speak.

But it's just another for instance of this economy really changing everything. It's not just about how people are living, but also about how this campaign is being run. So much bad news every day really requires both of these candidates to say something.

And what we've seen here are two proposals aimed at very specific subsets. For John McCain, it's older Americans. He has real strength there in that voting bloc.

For Barack Obama, who has taken some criticism for a tax plan which would raise taxes for those earning $250,000 and over, has been criticized that that actually would hurt some small businesses.

Today, Barack Obama reached out to small businesses, saying here's how we can keep them going. So there's politics, but overriding all of this is an economy that neither one of these candidates can afford to ignore without putting out new proposals -- not every day, Wolf, but every once in a while.

BLITZER: Thanks very much, Candy.

We'll get back with you.

Candy Crowley is working the story.

Obama was in Ohio today. That's a battleground state that could be critical to the outcome of the presidential election. It's also a state where the unemployment rate right now is nearly 7.5 percent.

Mary Snow talked to Ohio voters about their fears and whether they think the government can make a difference -- Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, with financial markets roiling, the anxiety level is high.

When you talk to people on Chillicothe's Main Street, how are they reacting to the markets?

We went and found out.


SNOW: Tell me about your fear factor.

SEAN COY, MAINTENANCE WORKER: Oh, fear factor. Well, I've got two kids in college and I'm working at a small, family-owned utility that we're fighting to stay ahead and keeping my job.

SNOW: Scared?

COY: Sure. Yes, I'm very scared.

SNOW: What do you expect?

EVELYN WASHINGTON, RETIRED POSTAL WORKER: Well, we took our money and we got CDs and turned it in -- and put them in our trust.

SNOW: In terms of your investments, have you done anything differently, taken your money out of stock investments, put them in cash?

SHIRLEY CARPENTER, CASE WORKER: Well, we're working on that now. We haven't decided which way we're going to go, but we're worked on it.

PHIL FISHER, CITY WORKER: I haven't really changed anything, but I'll have to admit, I am a bit nervous.

MARIA JOHNSON, STUDENT: Everybody is afraid. Your money is going down. But I think I'm going to follow Warren Buffett, who is a good role model to me when it comes to saving money and how to make money. And he said leave your long-term investments alone. And even though it's a fearful time, I'm going to try to just stay where I am and ride it out.


SNOW: And while investors ride it out, the confidence level is mixed on whether the government's rescue plan can stop the bleeding any time soon -- Wolf.

BLITZER: Mary. Mary is in Chillicothe, Ohio.

He's certainly a rising star in the Democratic Party. And he certainly fired up the convention.


GOV. BRIAN SCHWEITZER (D), MONTANA: Stand up, Colorado. Stand up.

Florida, stand up.

Michigan, stand up. Pennsylvania, stand up.


BLITZER: The Montana governor, Brian Schweitzer, he's standing by to join us live. We'll talk about the race for the White House, the financial meltdown and more.

Also, new battles in the ad wars -- the campaigns trading some serious new charges. Our CNN truth squad is checking their facts

Plus, John McCain holding a rally this hour in Minnesota amid charges some of those events are actually firing up hostility toward Barack Obama.

We're going to go there live.

Stick around.



BLITZER: Just a few weeks before election day and anything and everything that happens out on the campaign trail has potential to shift voters who are still undecided.

Let's go to our senior political analyst, Bill Schneider.

What's the biggest shift we've seen in this election -- Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: In the suburban vote. The suburbs are swinging.


SCHNEIDER (voice-over): The final battleground in this election is not a state, it's an area you can find in almost every state -- suburbs, where most voters now live. Suburban voters -- mostly white, mostly higher income -- used to be reliably Republican. When Ronald Reagan ran in 1980 and 1984, Democrats got less than 40 percent of the vote in the nation's suburbs.


One word -- taxes.

It's an issue Republicans are still hoping will work for them.

MCCAIN: Senator Obama, I've got a news flash. The economy is bad. Abandon...


MCCAIN: ...abandon your plan to raise taxes.

SCHNEIDER: In recent years, suburban support for Democrats has been creeping up. Bill Clinton actually carried suburban voters when he ran for re-election in 1996. The suburbs have been changing. More and more urban voters, including minorities, are moving to the close-in suburbs. This year could see a breakthrough. For the first time, a majority of suburban voters say they will vote for the Democrat.

What's swinging the suburbs to Obama?

OBAMA: We are facing the worst economic crisis since the Great Depression.

SCHNEIDER: The National Center for Suburban Studies at Hofstra University recently did a national poll of suburban voters. A lot of suburbanites' wealth is in their homes. Fifty-seven percent of suburban residents said home prices have declined in the past year. Twenty-eight percent said they've gone down a lot.

Suburbanites depend on their cars. Six in 10 report cutting back significantly on how much they drive and their household spending. The signs are clear -- the economic crisis may be turning the suburbs blue.


SCHNEIDER: It may be fitting that next week, the third and final debate will take place at Hofstra University on Long Island -- in the suburbs -- ground zero in this presidential campaign -- Wolf.

BLITZER: Good point.

Thanks very much, Bill, for that.

John McCain leading Barack Obama by 5 points in Montana in a new American Research Group poll. It shows 50 percent of likely voters reporting McCain, 45 percent backing Obama. But with 5 percent still undecided and a 4 point sampling error, that puts the race in that state too close to call.

Let's discuss this and more with Montana's Democratic governor, Brian Schweitzer.

He's joining us live.

Governor, thanks very much for coming in.

SCHWEITZER: Actually, that poll is incorrect. In Montana, one of the only states in the country Ron Paul will be on the ballot as the Constitutional candidate -- Ron Paul has an A rating with the NRA and John McCain and, of course, Barack Obama do not.

Ron Paul, actually, in the Republican Caucus, got second place behind Mitt Romney. And John McCain was third place.

If you travel across Western Montana, you'll actually see more Ron Paul signs than you do John McCain. And he would...

BLITZER: So what does that mean, practically speaking?

SCHWEITZER: If you include Paul in the polling, he gets somewhere between 5 and 8 percent. And then Obama and McCain are tied around 5. So it's tied in Montana.

BLITZER: So are the candidates showing up there?

Are they -- do they have ads running there?

Because I haven't seen either one, or their vice presidential running mates, at least recently, show up in Montana?

SCHWEITZER: Of course, Obama has been to Montana five times. Joe Biden has been here one time...

BLITZER: Recently, though?

SCHWEITZER: ...McCain and Palin. Yes, Biden was here just a couple weeks ago. McCain and Palin have not come to Montana. Obama has been running ads now for several months. And the only ads that we see for McCain are on cable TV, CNN.

BLITZER: So are you flatly predicting that Senator Obama will carry your state?

SCHWEITZER: Oh, no. I'm not saying that. I'm, saying it's tied. I'm saying it's tied. I'm saying that Ron Paul is going to be decider here.

You know, Bill Clinton won Montana with only 38.5 percent because Perot received a higher percentage in Montana than any other state. So Montana is a ticket-splitting state. And we're also a state that likes independence.

BLITZER: How is the financial crisis affecting folks in Montana?

SCHWEITZER: Well, I've got to tell you, just yesterday, the legislative fiscal analysts -- the accountants for the State of Montana announced that we have a surplus that's just short of $1 billion. We have a very strong economy in Montana. Wages have been up. Unemployment is down. Of course, we're a natural resource state and people from all over the world are moving to Montana because it's a great place to raise a family, to build a community.

BLITZER: So you're lucky. You don't really need a whole lot of federal assistance right now, given what's going on in Montana?

SCHWEITZER: Well, listen, our banks are strong, too. I spent a great deal of time on phone with Montana banks. And they are a barometer of Montana Main Street. And they say to us that their deposits have never been better, their liquidity has never been better.

But, of course, when you've got a hurricane that is engulfing the entire world, Montana is a pretty high elevation. But it's starting to crowd its way toward Montana.

We're just hoping that Wall Street and Fleet Street and Germany gets their mess straightened out before it ends up high in the Rocky Mountains in Montana.

BLITZER: A lot of people are hoping that.

How worried are you, if you are at all, Governor, about some of the nasty things that are being said in these final days of this presidential campaign?

SCHWEITZER: People are pretty smart. They watch TV. And the closer you get to an election, the less they believe the lies. And, of course, people do not like name calling anymore. This yani, yani, yani, you are a or you are a, no I'm not, you went first, no I didn't. People are disgusted with that. It's time for ideas. This is a marketplace of ideas. And we're looking for a leader who will carry America back to its greatest years, not backwards to some of our worst years.

BLITZER: How worried are you about some, perhaps, racial undertone there, people saying they're going to vote for Barack Obama, but the so-called Bradley Effect -- they go into the polling booth and they don't because he's African-American?

SCHWEITZER: Well, Montana is about 93 percent white and about 7 percent Native American. We are less than 1 percent black and Hispanic and Asian all combined. I think that this issue is maybe probably stronger in the border states. Maybe if you're talking about Tennessee and Kentucky and West Virginia.

But in Montana, we weren't part of that civil rights debate of 30 and 40 years ago. So we don't see it. Obama won the Democratic primary going away in Montana. And, of course, he already polls higher than Gore or Kerry or even Bill Clinton did both times. So Obama, right now, already polls higher than the last four candidates that ran for president of the United States for Democrats.

BLITZER: What do you think he needs to do in these final days of this campaign, Senator Obama? SCHWEITZER: I think just stay on message. He is the change candidate. He's the one who has ideas about American energy designed by American engineers, that's clean and green and puts us in a position of no longer being dependent on these petro-dictators.

John McCain has some more of the ideas of George Bush. I think he needs to talk about bread and butter issues -- the price of gasoline, the price of energy, jobs and, of course, the whole mortgage crisis.

Obama has a plan and McCain has more of the same.

BLITZER: Governor Schweitzer, thanks for coming in.

I hope you'll be a frequent visitor.

SCHWEITZER: Thank you very much.

BLITZER: John McCain is holding a rally this hour. We're going to take you there live. You'll have to decide for yourself whether he's rallying his backers or stoking hostility, as some of his Democratic critics are suggesting.

Plus, our CNN truth squad checking out the latest McCain and Obama ads. We're looking for the facts, right here in THE SITUATION ROOM.


BLITZER: Susan Roesgen is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Susie, what's going on?

ROESGEN: Well, Connecticut, Wolf, becomes the third state to allow gay marriage. The Connecticut Supreme Court ruled in a lawsuit that same same-sex couples have a constitutional right to marry. The court was sharply divided, though, with three justices issuing separate dissenting opinions. Gay marriage is also legal now in Massachusetts and California.

In news from around the world, health officials say hundreds of birds had to be killed at a poultry farm in Eastern Germany. That was after a duck tested positive for a dangerous strain of the bird flu virus. That strain has killed more than 200 people worldwide.

And Venezuela is taking on McDonald's. The anti-U.S. government there has ordered more than 100 McDonald's restaurants to close for two days. Venezuela claims there are inconsistencies in McDonald's' financial books.

And the mission to Mars is on. Despite soaring cost overruns, NASA has decided to go ahead with plans to launch a larger robotic rover to Mars next year. This new rover is so big that it is the size of an SUV. It's powered by a nuclear battery. It carries powerful new instruments to look for life on Mars -- a huge new price tag, too. $1.5 billion has already been spent on it -- Wolf.

BLITZER: It's not cheap to go to Mars.

All right, thanks, Susie, for that.

She's standing by.

She's got more news coming up.

When it comes to the financial crisis, the candidates are playing the blame game.


UNIDENTIFIED FEMALE: Congressional liberals fought against more regulation.



UNIDENTIFIED MALE: McCain would shift the burn from lenders to taxpayers, guaranteeing a loss of taxpayer money.


BLITZER: Lots of charges and counter-charges.

Who do you believe?

Our CNN truth squad checking the facts.

Also, you won't believe some of the names turning up on the Obama campaign list -- bogus donors slipping through the cracks.

And while stocks are down, enlistment is up right now -- why the U.S. military is benefiting from the financial meltdown.

Stay with us.



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

Happening now, harsh accusations fired off in the political ad wars. We're checking what's fact, what's fiction. Howard Kurtz has that.

Also, it's hard to find a job, but the U.S. military is handing out bonuses. We're going to show you the recruitment bonanza.

And flying to Florida to convince your Jewish grandmother to vote Democratic -- we're going to show you how one comedian is helping Democrats do just that.

I'm Wolf Blitzer.


The candidates are trading serious accusations in a new round of campaign ads.

But is there any truth to all these charges?

We've got the CNN truth squad on it.

Howard Kurtz, the host of CNN's "RELIABLE SOURCES," is checking the facts -- Howie.

HOWARD KURTZ, CNN'S "RELIABLE SOURCES": Wolf, as the banking crisis spreads and the stock market keeps sinking, the candidates ads' are trying to pin the problem on each other. But John McCain also wants to talk about another subject -- Barack Obama's friends.



UNIDENTIFIED FEMALE: Obama's blind ambition -- when convenient, he worked with terrorist Bill Ayers. When discovered, he lied. Obama -- blind ambition, bad judgment.


KURTZ: There is no evidence -- none -- that Obama lied about his contacts with Ayers, whose Weatherman group carried out a series of bombings when the Illinois senator was eight years old. What is true is that Obama initially minimized his relationship with Ayers.

OBAMA: This is a guy who lives in my neighborhood who is a professor of English in Chicago, who I know and who I have not received some official endorsement from.

KURTZ: Ayers hosted a reception at his home for Obama during his first state senate campaign in 1995. And the two served together on a pair of charitable boards. They've never been close.

McCain's ad also tries to pin the mortgage mess on Obama friends on Capitol Hill.


UNIDENTIFIED FEMALE: Congressional liberals fought for risky subprime loans. Congressional liberals fought against more regulation.


KURTZ: That's accurate, but Obama actually spoke out against subprime lenders lowering their standards in a speech at the NASDAQ a year ago. And both parties are complicit in failing to reign in the risky conduct at failed mortgage giants Fannie Mae and Freddie Mac.

Obama, meanwhile, marries images of foreclosed homes and market chaos to McCain's $300 billion proposal at this week's presidential debate.


MCCAIN: I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America.

UNIDENTIFIED MALE: McCain would shift the burden from lenders to taxpayers, guaranteeing a loss of taxpayer money.

Who wins?

The same lenders that caused the crisis in the first place.

That's true. The ad cites an article from which says taxpayers would bear the burden as the government pays lenders full price for home loans that have gone sour. What Obama doesn't mention is that he voted for the $700 billion federal bailout that will also bail out banks holding bad mortgage but on less generous terms.


KURTZ: The finger pointing was inevitable given magnitude of the financial crisis. The question is in this kind of environment, will voters care about Bill Ayers? Wolf.

WOLF BLITZER, CNN HOST: Howard Kurtz, thanks very much. Both Obama and McCain are certainly raking in millions of dollars in campaign contributions. But who is keeping track of where the money is coming from? Let's go back to Suzie Roesgen. She is working this story for us. What are you finding. Suzie?

SUSAN ROESGEN, CNN CORRESPONDENT: You know, Wolf, several different news media have been looking at what seems to be bogus donor names. Apparently, the donations don't really amount to that much money but judging by some of these donor names, someone is not paying too much attention.


ROESGEN (voice-over): Doodad Pro. Qwerty. Jfgggjjfg jgjg. Sound like anybody you know? Those are three apparently bogus names listed on campaign donations to Senator Obama. The names were dug out of millions of donations by news organizations and online blogs. And this week the Republican National Committee filed a complaint with the Federal Election Committee demanding a review of all of Senator Obama's donations.

ROESGEN (on-camera): This is how easy it is to make a campaign donation to either candidate without the campaigns knowing who you are. Go online, use a credit card and make up whatever name and address you want. It's illegal to use a bogus name for a contribution, so don't really do it, but if you did, you will make a donation and odds are only the dollar amount would get noticed.

ROESGEN (voice-over): The amount given to the Obama campaign by those three bogus donors added up to less than $15,000, but it brings a political cost.

UNIDENTIFIED MALE: Clearly, it's a violation because the law was broken. But really, more than anything, it's a political mistake. ROESGEN: Still, the Center for Responsive Politics, a D.C. watch dog group says there are bogus names among Senator McCain's donors as well. And with hundreds of millions of dollars donated to both candidates, the campaigns ought to do a much better job of knowing where the money comes from.

MASSIR RITSCH, CENTER FOR RESPONSIVE POLITICS: This is a system that relies on transparency. We have the most expensive election system in the world. We should have the most transparent.


ROESGEN: Well, an Obama campaign spokesman tells us that the moneys from the Doodad Pro and the other two strange name donors has been returned by refunding the credit cards that were used and that the campaign has been in their words aggressive about taking every available step to make sure contributions are appropriate. Wolf?

BLITZER: And when you speak to the experts, why would individuals give these bogus names? What's the rationale potentially?

ROESGEN: Well, you know, there could be three different reasons. One is they don't want the government to know what they are doing. They don't think it is the government's business. Second, they don't want their friends or neighbors or employers to know. Or third, Wolf, it could be actually fraud by not putting the correct name down. They might be able to use several different bogus names and donate more than the law allows for individuals.

BLITZER: Susan Roesgen working the story for us. Thanks, Susan very much.

Republicans and Democrats as you know are trading charges of voter registration fraud and voter suppression as well. Let's talk about this and more with our political contributors, Tara Wall, the deputy editorial page editor of the "Washington Times" and democratic strategy Donna Brazile. What do you make of the bogus names, Donna, we just heard? Why would or how big of a deal in other words is this for the Obama campaign?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, Wolf, as you heard, it happens in both campaigns and I'm sure the RNC and DNC also dealing with bogus names. It's unfortunate that certain Americans, certain people try to game the system by going online and creating this false impression that they are contributing to the candidate when in fact they are not. I think the Obama campaign, they have done a great job in vetting all of this. Remember, they have over $3 million and they are vetting this 24 hours a day. And I know how difficult this process is, especially in the heat of an election like this. They are doing a good job.

BLITZER: All right. Tara, what do you think?

TARA WALL, "THE WASHINGTON TIMES": Well, Donna and I have a lot of agreement on this. We actually had these discussions in past elections. On a personal level, obviously, it happens. It's unfortunate. I think election workers are obviously doing their jobs as this is being brought to light particularly as it relates to voter fraud and intimidation. I have seen first time, you know, as a one- time poll worker, also on the campaigns, even as a former reporter covered some of these extensively in other states and it continues to happen unfortunately. I think when you have this organization for example like A.C.O.R.N. and any of them like them that are pressuring voters or potential voters consistently in getting multiple, you know, signatures with fake names, it really devalues the system. And you know, as you've seen, you see these recent calls by people like John Boehner to now defund A.C.O.R.N., at least the agencies that are getting public money like (Hudd), like Barack Obama, you know, like Fannie Mae.



BLITZER: Hold on, hold on ladies.

BRAZILE: I have had a lot of experience working with A.C.O.R.N., they are not a fraudulent organization. They're a great organization.

WALL: I'm not making that suggestion. I'm not making that suggestion, Donna. I said when organizations are doing this if they do it this like whether it's A.C.O.R.N. or any other organization when its found by election workers taking place as it should be track down.

BRAZILE: Tara, in 2004, Republicans were taking the test in Nevada for collecting bogus signatures. This is not a Republican or Democratic problem.

WALL: No, this is not.

BRAZILE: It is a problem with our system of how we go about voter registration. If we had universal voting rights, everybody in the country, once they turn 18, we wouldn't have this problem.

BLITZER: The argument democrats, a lot of democrats Tara make is that Republicans are suppressing the vote out there. They are trying to stand in the way of individuals and often African-Americans from registering and voting. How serious of a charge do you believe this is?

WALL: I've been accused of intimidating black voters from not voting as well. So you know look, I think it is hard to pin down when people talk about suppression. I don't deny it. I'm sure it exists on both sides and again and again I did not put a title or party on what was taking place, I said organizations. Whether they or whoever they are, if they do it, it's wrong and they should be cracked down on. I think election workers owe us, owe the public, the voters, owe the process an obligation to ensure that none of this is taking place. So when these instances happen we ought to put our food foot down and right now we are talked about this most recent cases that are happening in many cities, Ohio and others, with this one particular organization. But there are others. And I think we ought to root them out and you know these election workers ought to take a stand and do something about it. Absolutely, whether it's suppression or intimidation.

BRAZILE: You know, I've said for years - I've said for years that we, that both parties need to take the partisanship out of voter registration in election day practices. Wolf, there are still laws on the book that prohibit parties, state election officials from illegally purging people from voting from blocking access to polling sites. There is this case law and case history about voter suppression and voter intimidation. But we need to have an error free election in this country. I'm sick and tired of hearing people who go to the polling police and found out that the machines are not working or their names have been systematically purged from the voter registration rolls. It's time that we clean up our democracy.

BLITZER: I think everybody agrees on that. Let's talk about a second economic stimulus package. Tara, Nancy Pelosi wants it. Obama wants it. You heard Robert Rubin, the former Clinton Treasury Secretary here in the "Situation Room" in the last hour, say that's what's needed to help Americans, help them keep their jobs, get new jobs going. Do a lot of infrastructure work for roads and bridges. What do you think?

BRAZILE: I think that was supposed to happen with the first economic stimulus package if I'm not mistaken, that we just passed a couple of months ago but I could be wrong. I think that many conservative economists will tell you that this is just another example of government solving more government problems with more government solutions that lead to then more government problems and it's a never ending cycle and a never ending cut off. And when do we draw the line? It doesn't surprise me quite frankly, but, I think that certainly I don't know that voters, the American public, really have an appetite right now for a continued government bailout, whatever form it may come in.

BLITZER: It would cost tens of billions of dollars, Donna at a time when we already have these record budget deficits.

BRAZILE: But it will be directed to taxpayers in the form of stimulus check perhaps to help with their home heating bills. It will be directed to state governments to help them with their Medicare bills. It will be directed to small businesses. So this would be a stimulus that will help ordinary people, not just bail out Wall Street, but bail out people who are hurting on Main Street. So I think the country should take a look at it and maybe when Congress comes back after the election, they will hear from their constituency and call for a second stimulus as well.

BLIZER: Let's see what happens. Ladies, thanks very much.

WALL: You bet, Wolf.

BLITZER: Donna and Tara, good discussion.

It's a highly sensitive investigation at the height of this political season. There's a report out today about whether Alaska's public safety director lost his job because Governor Sarah Palin had a personal vendetta. We are standing by for news. And with $750 million to hand out in bonuses, the U.S. military is signing up new recruits in droves. We'll tell you what's going on right here in the "Situation Room."


BLITZER: The economic crisis certainly taking a toll on families and businesses across the country but the U.S. military right now, thriving. Let's go to our senior pentagon correspondent Jamie McIntyre. He's looking at the new recruits. What's going on Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, I have in my hand the official report card from the Pentagon. You remember these blue tops from your Pentagon days and our viewers with high definition television can see all of the services got a perfect grade. And that's even before the bad economy has made military service more attractive.


UNIDENTIFIED MALE: Raise your right hands and repeat after me.

MCINTYRE (voice-over): At the Baltimore processing station, a new crop of recruits takes the oath before shipping off to boot camp. Most made their decision to sign up well before the current financial meltdown. But the bad times were a factor for David Whall, a former truck driver who's small business went under when the economy tanked.

DAVID WHALL, U.S. ARMY: I couldn't get any offers. And job experience in what I want to do and it's a stable income. Here I am.

MCINTYRE: Whall is 48. He can still join up because to help meet its goal the Army recently raised the maximum enlistment age to 42. And he gets credit for prior service in the Navy.

But to attract many of the 300,000 fresh recruits signed up this year, the Pentagon paid out hard cash. More than $750 million in bonuses. However, if two trends continue, violence drops in Iraq and the economy slides into depression, the military may not need as many incentives next year.

DAVID CHU, UNDERSECRETARY OF DEFENSE: What more difficult economic times give us is an opening to make our case to people who might not otherwise have. And to make our case fairly -


MCINTYRE: Now, the Pentagon says some trends that affect the quality of new recruits like high school graduation rates and teen drug use are not directly affected by the economy. Nevertheless, if more young people consider enlisting, well then the U.S. military can afford to be more picky. Wolf.

BLITZER: All right, Jamie, good work. Thank you.

John McCain on the stump, saying there needs to be respect in the presidential race. Is this a new tactic? Stand by. Also, every day seems to bring more bad economic news. Things we are still not being told. Frank Sesno standing by to join us with the answer to that question.

And she makes her living making people laugh. Now she wants to help Barack Obama win the state of Florida. She is doing it with humor and a big schlep. We'll explain right here on the "Situation Room."


BLITZER: All right. Senator John McCain, he is in Minnesota right now. He just had this exchange at a town hall meeting outside of Minneapolis. Listen to the question and the answer.


UNIDENTIFIED MALE: I consider you to be a true American hero. We would like you to remain a true American hero. We want you to fight at your next, at your next. Wait, wait, wait. Wait. Wait. Wait, wait.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I think I got my marching orders, yes. Go ahead.

UNIDENTIFIED MALE: The people here in Minnesota want to see a real fight this next time in your debate. And we want a strong president to lead us for the next four years.


MCCAIN: Well, thank you. Let me, I, I will, sir and I thank you and I thank you for your service. I would just like to mention on that subject, look, I, I'm very enthusiastic and encouraged by the incredible enthusiasm that's here this afternoon. And the support and the real incredible volunteers and people that have been doing so much for us. And I think it is really good. And I have to tell you that I think a big part of the reason frankly is because the governor of Alaska has ignited a lot of people as well in this campaign but, so, and we want to fight, and I will fight, but we will be respectful. I admire Senator Obama and his accomplishments and I will respect him, and I want - no, no, I want everyone to be respectful and let's make sure we are, because that is the way that politic should be conducted in America.


BLITZER: Senator Obama hit the campaign trail in the critical state of Ohio today. He also criticized his rival John McCain. Here is Senator Obama's own words raw and unfiltered.


SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Now is not the time for fear. Now is not the time for panic. Now is not the time to turn Americans against each other, and now is the time for resolve and steady leadership. We can meet this moment, and we can come together to restore confidence in the American economy and we can renew that fundamental belief that in America, our destiny is not written for us, it is written by us. That is who we are, and that is the country that we need to be right now.

We know what is coming. We know what they are going to do, but here's the thing, Ohio, they can try to turn the page on the economy. They can try to deny the record of the last eight years. They can run misleading ads. They can pursue the politics of anything goes, it will not work. Not this time. I think that folks are looking for something different this time. It is easy to rile up a crowd. Nothing is easier than riling up a crowd by stoking anger and division. But that is not what we need right now in the United States.

The times are too serious. The challenges are too great. The American people aren't looking for someone who can divide this country, they are looking for somebody who will lead this country.


BLITZER: And you just heard Senator McCain saying that I think for the first time that he wants everyone to respect Senator Obama and calm down and run a very, very respectful campaign in the face of what some see as incitement going on in some of his rallies. He is trying to calm everyone down right now which a lot of people have been calling on him and Governor Palin to do. We are going to continue to watch this developing story. Stand by for more on this latest development.

Meanwhile, some staggering financial losses with no end in sight. What if it is even worse than it seems? Can you imagine. Our special correspondent Frank Sesno is here with his weekly segment, "What if". Are we not being told certain things right now? I know you're digging, Frank, what are you picking up.

FRANK SESNO, CNN SPECIAL CORRESPONDENT: Here's the problem. The problem is what do they say and how much do they say it. And what you've been talking about that disconnect we've been hearing out on the campaign trail that shows just how far the financial is from the political.


SESNO (voice-over): What if they told us what we were really in for, markets panic, savings disappearing. GM selling for less than $5 a share, the lowest since 1950. Is this what they saw when they had all those meetings, looked into the abyss and then wouldn't tell us what they really heard?

UNIDENTIFIED MALE: I'm not going to repeat the language of last evening.

SESNO: Because they wanted to preserve a shred of confidence. The president called for it again today.

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: We can solve this crisis, and we will.


SESNO: But they have been saying that all along and it keeps getting worse. Governments have been a step behind since the dams burst. What if they hadn't used words like bailout and rescue and words that suggest a problem that can be fixed, said that some of these lost savings and jobs won't ever come back. Those are not popular things to say in Washington, and on the campaign trail where you are supposed to be optimistic and always have a plan, the candidates have had to throw out their playbooks, because now it is about survival. And the agony has led to irony.

OBAMA: With the current crisis, demands a global response.

MCCAIN: My friends, we have to stop spending.

SESNO: The candidates who said they would tell it to us straight won't say they don't know where this is going or whether what has been done will really work or what they will be do next if it doesn't. It would be too uncertain, too negative and a bad sound bite.

UNIDENTIFIED FEMALE: At the lows today, we were down better than 700 points.

SESNO: And the media which often think in sound bites are not believed either and blamed alternatively for feeding the panic or missing another one. So with less than a month to go until the election, there are no prescriptions for this. These markets have to play themselves out.


SESNO: And while these markets play themselves out, the rest of us are hanging on for dear life and it is white knuckle time right, Wolf. And what we are seeing is you're seeing portfolios down and housing values down, stock prices down, companies on the ropes, and banks going under. What the politicians can't say is that a lot of these stuff is not going to be recovered and what they are very reluctant to say as I mentioned a moment ago is we just don't know. They are doing what they can, but the markets are so much bigger. So there are real limits here and they are caught in the middle and the consumers are caught at the end.

BLITZER: All right. Frank, thanks very much. We will have more on this coming up at the top of the hour.

But, let's make a turn right now to what is being called the great schlep. A group of Democrats are teaming up with Sarah Silverman, the comedienne with a message for Jewish voters and grandparents down in Florida. Let's go to our internet reporter, Abbi Tatton. Abbi, what are they telling the grand kids to do?

ABBI TATTON, CNN INTERNET CORRESPONDENT: Well, they are saying to head for the bingo halls of Florida this weekend to persuade your Jewish grandparents to vote Obama and Sarah Silverman gives the instructions.


SARAH SILVERMAN, COMEDIAN: Explain to them that we're all the same inside., You know, you could compare an elderly Jewish woman like Nana to a young black man and they may seem totally different, but on paper, they are the same. I mean think about it. Track suits, let's start there. They both love track suits -


TATTON: I am going to leave it abruptly, but it is one of the only parts of the video that we can actually show on television. It' from the website the from the democratic group Jews Vote that has a serious goal to get young Obama supporters to swing states to persuade undecided voters in the Jewish community to vote for Obama and the schlep, Wolf, starts today.

BLITZER: Jewish grandparents living down in (Brower) county, Palm Beach county, Miami Dade county, I understand why they are doing that. Thanks very much for that, Abbi.

A global financial crisis, markets around the world caught in a downward spiral. So where will it end, the former Clinton Treasury Secretary Robert Rubin has some answers right here in the "Situation Room."


BLITZER: Let's go to Lou Dobbs to see what is coming up in the top of the next hour, an hour from now. Lou, I know you're working on this voter registration and some bogus names and fraud, what are you picking up on?

LOU DOBBS, CNN HOST: I mean, from Houston, Wolf, to Ohio to Pennsylvania to Nevada. We are right now watching just a real collapse in the integrity of our registration and voting system in this country. And A.C.O.R.N., well, it is a group that is obviously in the news much these days, associated at least through the primaries with the Obama campaign, this left wing radical activist group has really carried out, well, some peculiar, peculiar registration techniques and now we are seeing some federal and state investigation of those techniques.