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The Situation Room

Interview With Donald Trump; McCain, Obama Prepare For Final Debate

Aired October 15, 2008 - 18:00   ET


ABBI TATTON, CNN INTERNET REPORTER: Well, just unleashed today from the Republican National Committee, squirrels, unleashed in an effort to highlight Obama's ties to ACORN.
They have got a new blog following around their antics. It follows a Web site that was launched last week from the Republican on the same theme. Obama campaign spokesman said on this show earlier that ACORN is not involved in their voter registration efforts.

And advisers have questioned why this GOP focus on this issue, on ACORN. An Obama spokesman, Tommy Vietor, said, if they really think this is an important issue, why make a joke of it by dressing up like Alvin and the Chipmunks and harassing Richard Simmons?

Well, you can bet that those squirrels will be around later at the debate.

WOLF BLITZER, CNN ANCHOR: Thanks, Abbi, very much.

And, to our viewers, You're in THE SITUATION ROOM.

Happening now: another dive on the wild financial ride, the Dow plunging, closing with the second largest daily point loss ever.

And you're going to be hearing from Donald Trump this hour. He is a McCain supporter, but he is grading President Bush on the economy. Donald Trump here in THE SITUATION ROOM.

A stunner in Virginia -- we are unveiling a major shift on CNN's electoral map, showing who is now in striking distance of winning Virginia.

And the last showdown -- Barack Obama and John McCain, they are now all set for their last debate. It will center on domestic policy, but things could get very personal.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer at the CNN ELECTION CENTER. You are in THE SITUATION ROOM.

We begin with the breaking news, the second worst point day ever,, for the Dow Jones industrial average, plunging today more than 733 points, a dismal day across the board, with the Dow off more than 7 percent, the Nasdaq even worse, down more than 8 percent, and the S&P losing 9 percent of its value today alone, in all, $1.1 trillion of market value gone. Let's go to our senior business correspondent, Ali Velshi. He's working this story for us.

Ali, who would have thought. What happened?


Well, a couple of things to remember. First of all, we are still trading above 8500. That is one of the bands that people have said that we are expected to trade within if this market is near a bottom. And often it can be very rocky and very volatile near the bottom.

But two specific things happened. The first one -- first of all, let me just take you for a ride for the last five days. And it really is a ride. On Friday, the Dow was down just 128 points. That was a relief after the week we had seen. Then, on Monday, up 936, something we had never, ever seen before, and, by the way, the only day in October that the market has been positive.

Then yesterday, just a little bit of a drop, 76 points, seemed OK. And then today, look at this, and much of this coming at the end of the day, which is where we have seen the action in this market, a drop of 733 points.

A couple of reasons why, number one, retail sales. This country depends on the consumer more than any other in the Western world, and the consumer is weakening. We saw a drop in the percentage number for retail sales. It was the biggest drop that we have seen in three years in just one month. We have seen that. So, that worries people invested in the markets. They are fearful that the companies that comprise the stock market won't make money, particularly as we enter into this crucial holiday shopping season.

The second thing is, there were two Fed officials today who used the word recession. The administration, Ben Bernanke, neither of them have used that word. And that has got people worried, that if we are continuing to be in a recession, even after this financial crisis is over, that's just going to affect the way we do business. It's going to put more people out of work and home prices are going to go lower.

BLITZER: At least they're just using the word recession, as opposed to the D-word, depression. We haven't heard that.

VELSHI: Absolutely. And that's the good part. But there are concerns that our unemployment rate will drop precipitously. And that is where our concern lies right now.

BLITZER: Ali is working the story for us. Ali, thank you very much.

We are also following presidential politics right now, including the debate. This is going to be the third and final presidential debate. Something that is going on, though, outside of the debate is something we have not seen in this entire general election season.

On our brand-new CNN electoral map, incorporating several factors -- get this -- we are moving the state of Virginia from a tossup, from a tossup, to a state leaning toward Barack Obama, 13 electoral votes in Virginia. That is stunning, because Virginia has not voted for a Democratic presidential candidate in more than 40 years.

Our map also shows other encouraging news for Senator Obama. We are moving New Jersey from leaning toward Obama to safe for Obama. Perhaps rather discouraging for John McCain, North Dakota, North Dakota of all states, moving from a safe state for McCain to simply leaning toward McCain.

Part of the switch for Virginia, by the way, is our new CNN/"TIME" magazine/Opinion Research Corporation poll. Look a this. It shows Obama leading in Virginia by 10 points, 53 percent to 43 percent. Our polls also show Obama leading McCain in other key tossups. Obama is ahead in Florida right now 51 to 46 percent in Florida.

Let's take a look in Colorado, 51 percent to 47 percent for Obama. Again, he is ahead. In Missouri, right now, it's very, very tight, virtually tied, 49 percent for McCain, 48 percent for Obama. In McCain, McCain has -- in Georgia, that is, McCain has 53 percent, 45 percent for Obama.

Let's walk over to our chief national correspondent, John King. He is looking at all of this for us.

John, specifically Virginia, a state 44 years has not gone for the GOP in a presidential contest, but that could be changing.


A note of caution, still a long way to go, almost three weeks in this campaign, including, as you noted, the big debate tonight. But let's look at impact of what we're doing in Virginia.

Here is where we started the day, CNN's projection, Obama with 264 electoral votes. You need 270 to win. Well, here's what happens. We're now going to put Virginia not red, but leaning blue. We lean it blue for Barack Obama. And look up here what that does. That puts Barack Obama over the top, again, today.

A note of caution, today is not Election Day, but if nothing else changed between now and Election Day, and we have these projections right, Barack Obama would have enough electoral wins to win the White House.

Another key point, you look at these six states left that are gold on our map, those are the tossup states, every one of them states carried by the Republicans last time, George W. Bush in 2004. So, it is John McCain on defense, defending traditional Republican territory.

So, what is the challenge for John McCain? It obviously is to change the map. And let's just focus for a second on this state of Virginia. As you noted, Wolf, has not voted for a Democrat since 1964. It is a state that has been trending Democratic, two Democratic governors in a row. Why is Barack Obama winning?

First and foremost, let me stretch this out up here. The population growth in Virginia is up here in the Washington suburbs. You see in close John Kerry carried the closest-in suburbs four years ago. Out here, Republican territory. Barack Obama is now leading in Northern Virginia, Wolf, by a 57 to 38 percent margin over John McCain. This is where the people are. Barack Obama is winning a lot of votes there.

One other quick point here. Down here in southeast Virginia, Christian conservatives, but also a lot of African-Americans in the Norfolk, Hampton Roads area, southeast Virginia, Barack Obama winning as well. If John McCain is to change the map, he obviously needs a strong debate performance. He has to do better in those two areas I just pointed out, in that one state. If we saw movement there, we would expect movement elsewhere. But, Wolf, the map not in John McCain's favor at the moment.

BLITZER: John, stand by.

We are less than three hours away from the third and final presidential debate. Two rivals will enter an arena, an arena of a political battle with very different missions. Barack Obama will likely try to remain steady. John McCain will likely try for a dramatic shakeup.

We are covering both sides as we count down to this final presidential debate between Barack Obama and John McCain. Jessica Yellin has more on the Democrats. But let's go the Ed Henry first. He is looking at the strategy, what we can expect from John McCain tonight. He has got some major challenges, Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That is right, Wolf. Time is running out for John McCain, and he is getting conflicting advice about just how negative to go tonight.


HENRY (voice-over): As he faces enormous pressure from his own supporters to get more aggressive, John McCain has been trying to talk tough.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: After I whip his you know what in this debate, we're going to be going out 24/7.


HENRY: But in the next breath, McCain pulled back, a sign of the tightrope he walks when attacking Barack Obama.

MCCAIN: I want to emphasize again, I respect Senator Obama, we will conduct a respectful race. And we will make sure that everybody else does too.

HENRY: McCain is sensitive to going too negative and turning off undecided voters. The latest Pew poll found 44 percent of swing voters think McCain has been too personally critical of Obama. Only 23 percent of swing voters think Obama has been too personally critical of McCain.

Nevertheless, some McCain allies are pressing him to hit Obama over his ties to former 1960s radical William Ayers and the Reverend Jeremiah Wright.

UNIDENTIFIED MALE: We have all of these shady characters that have surrounded him. I am begging you, sir -- I am begging you, take it to him.

HENRY: McCain continues to resist calls to harp on Reverend Wright, but made clear he does plan to mention Ayers after Obama's claim that he didn't have the guts to bring the issue up to his face.

MCCAIN: I think he's probably ensured that it will come up this time.


HENRY: Now you are looking at a live picture behind me inside that the debate hall.

The rules are a little different for the moderator this time, CBS news' Bob Schieffer. He can follow up more with these candidates, more time to probe them after their individual answers of different issues.

That could play more well into John McCain's hand. The previous debate, there was not a lot of time for follow-up. The moderator could not jump in there and press people. This may give John McCain a chance to go on the attack a bit. And the way the McCain campaign puts it is, it is not just going negative. It's about trying to show sharp differences with Barack Obama, especially on the economy -- Wolf.

BLITZER: Ed Henry is there. Jessica Yellin is over there as well. What is the strategy you are hearing that Obama will have, Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Obama's aides say that his tactic tonight will be very similar to what we have seen in past debates. He wants an even-keeled performance. And the first rule is do no harm.


YELLIN (voice-over): Barack Obama wrapped up his debate prep in Ohio sounding calm.

(on camera): Senator, how are you feeling about tonight?


YELLIN (voice-over): And calm is the impression he'll try to convey tonight. That would reinforce his campaign spin that Obama is steady while McCain is erratic.

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: I think what the debate has shown in the last two debates is a guy who is confident and steady and a guy who's not quite sure where he wants to take the country.

YELLIN: Aides expect that tonight Obama will have to defend himself against charges that he'll raise taxes...

OBAMA: You've heard a lot about taxes in this campaign. Here's the truth. My opponent and I are both offering tax cuts.

YELLIN: ... and explain his association with former 1960s radical Bill Ayers, as he did in this interview with ABC's Charlie Gibson.

OBAMA: The notion that somehow he has been involved in my campaign, that he is an adviser of mine, that he -- that I have palled around with a terrorist, all these statements are made simply to try to score cheap political points.

YELLIN: And as much as possible, expect Barack Obama to describe any attacks as a distraction from the issue Americans care about the most, the economy.


YELLIN: And, Wolf, Obama senior adviser David Axelrod says, since Obama is so comfortable with the material, what they have focused on in debate prep is logistics, is what it will feel like for Obama to sit on this stage behind me just a few hours from now in such a closed setting, so -- in such a close context with his opponent, a very different setup -- Wolf.

BLITZER: And it all starts two hours and 47 minutes from now. Jessica will be there. Thanks, Jessica.

He is certainly no fan of President Bush, but Donald Trump is now weighing in on the Bush administration's handling of the economic crisis.


DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Look, I mean, these people inherited a mess. And they weren't necessarily to blame for it. And they are trying to fix it.


BLITZER: All right, my interview with Donald Trump, that is coming up next.

Also, the final debate, as we have been saying, only two hours and, what, 47 minutes away. John McCain may be tempted to lash out at Barack Obama, but would he only hurt himself by going negative? And they are still sitting on the fence, 20 days to go. When will undecided voters finally make up their minds? The best political team on television is standing by.

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


BLITZER: President Bush and his economic team have certainly come in for some heavy criticism for the country's economic crisis. So, how does one of the country's best known businessmen feel about the job that they are actually doing?

Today, I had a chance to sit down over at Trump Towers with the real estate mogul Donald Trump. We had this discussion.


BLITZER: Let's talk about the economy right now. And I want you to do, in your Donald Trump-style, some quick analysis, but give me some grades for these people, how they have done in dealing with the economic crisis that we are all going through right now. OK, grades. A is the best. F is failing -- President Bush?

TRUMP: Well, I would certainly not give him an F. And I guess you can't give him an A, because, unfortunately, look at the mess we are in.

But I think that he has been dealing with the crisis pretty well. And he has some very smart people -- and I am sure Paulson is going to be on your list -- in Paulson and Ben B., as the expression goes. They are pretty smart people. They are very smart people. So, I would give him a B.

BLITZER: Really?

TRUMP: Aren't you shocked to hear me say that?

BLITZER: Yes. I am pretty surprised.


TRUMP: You're talking about dealing with the crisis. You are not talking about getting us into the crisis. You're talking about dealing with the crisis. So, I would give him a B.


BLITZER: How they have dealt with this financial crisis.

TRUMP: I would give him a B.

BLITZER: All right, Henry Paulson?

TRUMP: I would give him an A.

BLITZER: Really?

TRUMP: I would give him an A. And I know a lot of people are saying, oh, this and that.

But the fact is, he came into a mess. He didn't create the mess. And he is helping us get out of the mess.

BLITZER: So, if Obama were elected, you would advise him to keep Paulson on the job?

TRUMP: I wouldn't necessarily. He has got his own people. And he has got his -- some very, very smart people with him.

But I think Paulson, I would give an A, because he really took something very strong. Now, you could say the U.K. came up with the first land, but Paulson is the one that got us there in the first place, in terms of the concept.

BLITZER: The Federal Reserve chairman, Ben Bernanke, Ben B., as you call him.

TRUMP: I think that he has -- was a little bit late on the draw, but he has come around strongly. And I would give him a B-plus, a good strong B-plus.

Look, I mean, these people inherited a mess. And they weren't necessarily to blame for it. And they are trying to fix it. I would say that Ben was a little bit late. And, based on the lateness, but I am not sure there's -- if he was earlier, I am not sure that we would be in any different -- so, I would give him a B-plus.

BLITZER: John McCain?

TRUMP: Well, John is one of 100 senators. And you could put Obama in the same category. And they have to vote yea or nay and they sort of voted...


TRUMP: ... the same way.


TRUMP: So, I would certainly -- I probably wouldn't put them anywhere, because I don't think they had that much influence on what has happened.

BLITZER: And Barack Obama same?

TRUMP: Same thing. I don't think that Barack Obama or John McCain had that much influence as to what happened with what is going on with the economy.

BLITZER: Nancy Pelosi, the speaker?

TRUMP: Well, you know, when she first got in and was named speaker, I met her. And I'm very impressed by her. I think she's a very impressive person. I like her a lot.

But I was surprised that she didn't do more in terms of Bush and going after Bush. It was almost -- it just seemed like she was going to really look to impeach Bush and get him out of office, which, personally, I think would have been a wonderful thing.

BLITZER: Impeaching him?

TRUMP: Absolutely, for the war, for the war.

BLITZER: Because of the conduct of the war.

TRUMP: Well, he lied. He got us into the war with lies.

And, I mean, look at the trouble Bill Clinton got into with something that was totally unimportant. And they tried to impeach him, which was nonsense. And, yet, Bush got us into this horrible war with lies, by lying, by saying they had weapons of mass destruction, by saying all sorts of things that turned out not to be true.


BLITZER: Their argument is, they weren't lying, that that was the intelligence that he was presented, and it was not as if he was just lying about it.

TRUMP: I don't believe that.

BLITZER: You believe that it was a deliberate lie?

TRUMP: I don't believe it. And I don't think you believe it either, Wolf. You are a very, very intelligent young man. I don't think you believe it either.

BLITZER: By the way, thank you for calling me a young man.

TRUMP: Young.



TRUMP: Young is more important than intelligent is.

The fact is that he lied. And he got us into a war that was a horrendous mistake. And, any way you take it, that war was a mistake.

BLITZER: So, you think he should have been impeached because of it?

TRUMP: Look, it was not Saddam Hussein that attacked the World Trade Center, OK? In fact, those people, when they sent their families back, most of them went back to Saudi Arabia. It was not Saddam Hussein that took down the World Trade Center.

And, in fact, Saddam Hussein killed terrorists. They had very few terrorists, because he didn't terrorists in Iraq, and he killed terrorists. So, we go and attack Saddam Hussein.

Now, Iraq now is the number-one breeding ground for terrorists. All the terrorists go to Iraq to learn the trade. You know, we all have trades, right? And they go to Iraq. But you didn't have that when Saddam Hussein was running Iraq with an iron fist. Now you do.

Now, we took out Saddam Hussein. What have we created? A mess. And the day we leave Iraq, it is going to be -- forget it.


BLITZER: All right. We are going to have more of the interview with Donald Trump. He is discussing at length what is going on. Stay with us -- more from Donald Trump, my interview with the billionaire. That's coming up, continuing, right after the break.

Also, John McCain's balancing act -- can he be calm and experienced, an angry fighter, and a maverick all at the same time? The best political team on television is standing by to weigh in. We will have a complete debate preview.

There, you're looking at live pictures from Hofstra University, Hempstead, New York, out on Long Island. Two hours, 38 minutes from now, the debate, the final debate, of this campaign begins.


BLITZER: So, how does one of America's most famous businessmen really feel about the government's committing $700 billion to bail out banks and other Wall Street firms?

Here is the rest of my interview today with Donald Trump.


BLITZER: Let's talk a little bit about the billions that are being pumped into the banks.

TRUMP: Well, let's talk a little bit about -- one other thing about Iraq. They have hundreds of millions of dollars was just recently found in the banks of New York.

BLITZER: Eighty-seven billion surplus.

TRUMP: Hundreds of billions of dollars.

BLITZER: You think it is much more than the 87?

TRUMP: I think it's much more.


TRUMP: And it's building up every day.

BLITZER: Because of the oil...


TRUMP: Are we not entitled to anything? They have so much money, they don't know what to do with it. Are we entitled to anything?

BLITZER: Because the United States is still spending about $10 billion a month in Iraq, and you want the Iraqis to start spending that?

TRUMP: The United States has been stupidly managed for the last eight years.

BLITZER: So, on this issue, you give Bush a...

TRUMP: On that issue, a F-minus.

BLITZER: All right.

TRUMP: On the issue of the war, an F-minus, and I don't think there is such a thing.

BLITZER: Let's talk about, quickly, because we are almost out of time, the billions that are being spent to pump up and to reassure investors out there, the credit lines and everything else.

Some say this is private nationalization of the banking system. Others go further and say this is socialism in the works. You are a capitalist. How concerned are you about this?

TRUMP: Well, it is probably is a little bit of a combination of both, but I think it was necessary. The banks were in a seizure. The banks were unable to move. They were unable to do anything. And at least now they have some liquidity.

You save companies like Morgan Stanley. You save some banks, very good companies like Morgan Stanley.


BLITZER: That's because the Japanese came in, Mitsubishi, right?

TRUMP: Well, they came in, but they also had some government help. And the Japanese got some government assurances or whatever.

BLITZER: Can you believe that Lehman Brothers is out of business?

TRUMP: Well, Lehman Brothers missed it by about a week-and-a- half.


TRUMP: Had Lehman Brothers been able to survive another week- and-a-half. But the fact is, you can't lose all of your institutions. And I know it for a fact. I have friends, they have buildings. They have wonderful buildings, fully occupied buildings. They have tiny mortgages. When the mortgages come due, they can't even renew them. It's ridiculous. The banks are essentially out of business.

Now, the real question is, is that going to be enough? You don't want to make it anymore, but is it going to be enough? And will you start to see some money flowing? So far, the answer is no. So far, the banks still don't have the money to put out.

BLITZER: Is it a good idea for these big financial institutions that are being saved in effect by U.S. taxpayers for the restrictions on the CEO compensation to go forward, the golden parachutes and all that kind of stuff, ended because U.S. taxpayers are now directly pumping up these companies?

TRUMP: Well, I think it is a great idea that that has ended, yes. You can't have the golden parachutes and they're not allowed to have the golden parachutes. So, if you go into that pool, you can't have golden parachutes and some other things.

And I think, politically, that is important. And I think it is important anyway. If you have to go into that pool, you don't get those big benefits. And I think that is a good thing.

BLITZER: Bottom line, are you upbeat in the short term about what is going to happen in the U.S. economy?

TRUMP: No, I'm not. I am upbeat for the long term. We have a great country. It is the greatest country in the world. And I'm very upbeat in the long term, but, short term, probably not.

BLITZER: Donald Trump, thanks.

TRUMP: Thank you very much.


BLITZER: Political attacks could hurt, but not necessarily the target of those attacks. We are looking at the impact of John McCain's negative tone against Barack Obama.

And what will it take to push the undecideds off of the fence, a knockout debate performance or something else? The best political team on television getting ready to weigh in.


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

Happening now: The final presidential debate now only two-and-a- half-hours or so away, how will John McCain play it? Will he be the fighter, the maverick or the experienced politician? We are watching this.

Also, Michelle Obama says her husband is the underdog in the race for the White House, despite his impressive lead in the polls. All that coming up, plus the best political team on television. I'm

Wolf Blitzer. You are in THE SITUATION ROOM. The final presidential debate. But, sagging in the polls right now, John McCain needs a big win tonight. He needs it desperately. But his bare-knuckles campaign against Barack Obama doesn't seem to be doing much damage. And McCain -- yes, McCain -- may only be hurting himself, at least if you believe in some of these poll numbers that are coming out right now.

CNN's Dana Bash is working the story for us -- all right, Dana, the strategy for Senator McCain tonight is complex. What are you hearing?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, specifically, you know, McCain has said, Wolf, that he expects to be asked tonight about hitting Obama for his connections to William Ayers. But an adviser told me that they're not sending out with a "Ayers bat" to club Obama with.

But McCain aides have learned it's a tough line to walk between raising the questions they complain reporters don't ask about Obama and being perceived as overly negative.


BASH (voice-over): John McCain on the stump, sharpening his attacks big time last week.

MCCAIN: Who is the real Barack Obama? I guess he believes if a lie is big enough and repeated often enough, it will be believed.

BASH: Sarah Palin even sharper.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: He didn't know that he had launched his career in the living room of a domestic terrorist?

BASH: Frustrated supporters urged McCain to hit even harder.

UNIDENTIFIED MALE: It is absolutely vital that you take it to Obama, that you hit him where it hits, that's his soft spot.

BASH: McCain advisers called the attacks crucial to sowing voters' doubts about Obama. But it seems to have backfired. A "New York Times" poll shows after stepping up his anti-Obama rhetoric, McCain's favorability ratings dropped 4 points and Obama's rose 4 points.

In fact, when voters were asked what they think McCain spends more time doing, only 31 percent said explaining what he'd do as president. Sixty-one percent said he's spent more time attacking Obama. McCain's own brother reportedly sent a worried e-mail to GOP officials saying: "Make ads that show John not as a crank or a curmudgeon, but as a great leader for his time."

But McCain's supporters say their data shows it's not so much that his attacks aren't working, it's that Obama's are. He's spending an unprecedented amount of campaign cash blanketing battleground states with anti-McCain messages.


NARRATOR: John McCain admits he doesn't understand the economy. So who advises him?


TERRY NELSON, REPUBLICAN STRATEGIST: They have the ability to run a very significant positive message about their vision while also running a -- you know, having enough money to get through a very significant negative image about John McCain. And you can't say that that's -- that wouldn't have an impact on the race.


BASH: But whatever the reason, McCain's negatives are going up and aides are trying to correct that. Now, McCain has introduced a new economic plan, returned to his convention speech mantra that he'll fight for you. And he's also added a lot more about what he'd do as president to his stump speech. And, Wolf, I'm told that's precisely what he's going to try to do tonight -- at least that's what he prepped for with aides -- Wolf.

BLITZER: All right, Dana. Thank you.

So what can we expect from John McCain in tonight's debate? Joining us, our senior correspondent, Candy Crowley; our senior analyst, Jeff Toobin; and our senior analyst, Gloria Borger. Gloria, which John McCain shows up tonight?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: That's the big question, because as Dana can tell you better than anybody else, you kind of never know with John McCain. They can prep him all they want and tell him these are the lines we want you to deliver and then he'll go to do something else.

And for those of us who have dealt with John McCain over the years and interviewed him, you really never know.

I think what you have to see though, Wolf, is somebody who's more comfortable in his own skin than he's been in these past two debates.

BLITZER: Because, you know, the older -- let's say the old John McCain, the straight talker, the maverick, that's one thing -- some people say he's not all that comfortable being the attack dog, if you will.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: He doesn't look all that comfortable. But, look, he has to find a magic mix here. He needs to be aggressive, but he can't be too aggressive. He needs to be the John McCain that everybody thought he was when he started this -- the maverick and that kind of thing.

I just think that he's got -- you know, the problem is he's got a very tough role to play because there's so many places he has to reach out -- conservatives, swing people. It's just -- it will be interesting to...


BLITZER: But right now, he's got to reach out to those undecided moderate middle, if you will. And that's a different -- a different approach than reaching out to the base.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST, "NEW YORKER" MAGAZINE COLUMNIST: And there's not that many, given how close we are to the election. I think the operative word that Candy used is magic. I don't know if there is magic out there.

The problem that John McCain faces is that his party is very unpopular, his president is unpopular, the economy is in terrible shape. You can't spin that in a debate. That's just a fact in the world.

BORGER: Well...

BLITZER: All right, listen to Sarah Palin today. She gave an interview to our affiliate in New Hampshire, WMUR. I want to play this little clip.


PALIN: I do not think it's negative or mean-spirited at all, not whatsoever, when you call someone out on their record. And, of course, when we talk about Barack Obama's associations that he's had in the past and maybe has today, when we talk about ACORN, when we talk about Bill Ayers, those things are -- they're a fair game. In fact, Barack Obama even has kind of called John McCain out on this recently, saying, hey, you know, if you've got something to say, say it to my face in the debate. So we'll see tonight if John McCain does that.


TOOBIN: Who cares about ACORN? Who cares about Bill Ayers? I mean I just don't get this. What is the point...

BORGER: Their point is trying...

TOOBIN: ...of raising that?

BORGER: Well, their point is trying to show that Barack Obama is not truthful and that he's given lots of different stories on Ayers and that his affiliation with ACORN is a group that they think now has been discredited. And that's what they're trying to do. That's how...

TOOBIN: But he doesn't have an affiliation with ACORN

BORGER: But -- well, he does. I mean, he does. I mean it's...

TOOBIN: Well, they are...


TOOBIN: They are supporting him.

BORGER: Yes. Exactly.

TOOBIN: But he doesn't authorize their work.

BORGER: He's not directing them. Exactly.

TOOBIN: He's not in charge of them.

BLITZER: Well...

BORGER: Guilt by affiliation.

BLITZER: During the primary season, they did subcontract some voter registration work with a subsidiary of...


TOOBIN: With a subsidiary of ACORN.


TOOBIN: Yes...

BLITZER: I mean David Axelrod was just on the show in the last hour and he told us.

TOOBIN: That's right. No. And I stand corrected on that. But I just don't see why that is going to move voters.

BORGER: Well, it...

CROWLEY: Well, I think it does move some voters. I mean if you are really sitting there in the middle and haven't decided, it says one of two things -- you don't know Barack Obama that well or you're a little turned off by John McCain.

I mean what he has to do is to go back to what used to be the problem with Barack Obama, which is you don't really understand who this guy is. And he has to do that on policy and he has to do that on association.

BORGER: Right.

BLITZER: She's raising...

CROWLEY: And, by the way...

BLITZER: She's raising, Sarah Palin, serious questions about Barack Obama...


BLITZER: ...about his past associations and maybe his associations that he has today. She said that. So that's...


TOOBIN: Clearly she's...

BORGER: Yes...

TOOBIN: She's right. I mean she's right, those are legitimate questions. I don't think that's negative campaigning at all, to raise those questions. But the problem is, how do you do it in such a way that resonates with voters to make you want to support your candidate?

BORGER: Well, first of all, the moderator has to ask the question, because I don't think, as Dana is reporting, that he's going to raise it first. If he's asked...

BLITZER: That would be Bob Schieffer...

BORGER: If he's asked by Bob Schieffer tonight about Bill Ayers, he's going to jump to the bait and I guarantee you Barack Obama has his answer. We've already...

TOOBIN: He's been waiting.

BORGER: We've...

TOOBIN: He's been waiting for three days.

BORGER: Well, we've already heard it, essentially, from all of his spinners. But he's got to talk about policy and be clear and direct. This is McCain. This is where I disagree with you, we have fundamental differences, and lay it out.

CROWLEY: Well, and those who say, also...

BORGER: Lay it out.

CROWLEY: ...also lay out Obama's record...

BORGER: Right.

CROWLEY: ...which he's been trying to do on the stump, which is well, he tells you he's going to cut taxes, but let's take a look at this.

BORGER: Exactly. Exactly.

BLITZER: Guys, hold on for a moment, because we have to take a quick break.

When we come back, we'll continue our conversation, including fighting to be the underdog -- why the candidates see an advantage in coming from behind. We're back with the best political team on television.

Plus, high tech political hijinks on the Internet -- CNN's Jeanne Moos is getting ready to take a "Moost Unusual" look.



MICHELLE OBAMA, BARACK OBAMA'S WIFE: We want you to continue to work from now until election day, because this isn't going to be easy. We are taking nothing for granted. Barack Obama will be the underdog until he is sitting in the White House.


BLITZER: All right. It doesn't sound like they're doing the drapes yet in the Oval Office, Candy. They're nervous. Even though the polls are impressive, they're nervous.

CROWLEY: I don't know how nervous they are, actually. I mean they do have a transition team now. That doesn't mean, you know...


BLITZER: McCain has a transition team, too.

TOOBIN: Right.

CROWLEY: Well, they're not working quite as hard as they are in the Obama camp.


CROWLEY: But, listen, I mean, I think that they feel pretty darned good. I mean, obviously, you never take anything for granted. But I'll tell you one thing, you never tell a crowd it's done, because you need them to come out. And so that's what that's about.

BORGER: Well...

BLITZER: Who are these undecided voters who are still out there?

You've got eight, nine, 10 percent saying, you know, I'm still undecided.

BORGER: Right. I talked to some pollsters about that today. And they say largely non-college educated women, blue collar men. And so those are the folks that -- that McCain is really going to be looking at in this debate tonight, because they're still persuadable. They still have questions about Barack Obama. And -- but they're also quite affected by the economic downturn. And that's McCain's real problem, which is why he's got to tell them what he's going to do for them, not for the investor class...

BLITZER: I assume that a lot of those undecideds will make up their mind after tonight's debate.

TOOBIN: Well, you know...

(CROSSTALK) TOOBIN: ...the curious thing about the debates has been that the polls have not really moved after each one. It's really been the economy, the financial crisis, that has moved the voters. And, you know, we -- many of us think that, you know, it is true that the debates made people more comfortable with Obama. But he has not really, you know, had crushing victories in these debates, because he hasn't moved (INAUDIBLE) people.

BLITZER: But he did reassure a lot of folks that he could stand, you know, toe-to-toe...

TOOBIN: Apparently.


TOOBIN: Apparently.

BLITZER: ...with John McCain. And he did -- I think it's fair to say, Candy, and correct me if I'm wrong, if you disagree -- but he did in these debates what Ronald Reagan did back in 1980 in the debates against an incumbent president, Jimmy Carter.

CROWLEY: Right. I can stand here on the same stage. I can look presidential. You need to -- I think he hardened his soft support during these...


CROWLEY: know, people who were already for him, but maybe thought they would be changeable and that kind of thing. And so, yes, they think -- at least in the Obama campaign, the strategists think we passed that bar. People began to look at him saying oh, I can imagine him as president, because that has lot to do with the vote.

BLITZER: You know, one thing that's going to be interesting, as we look ahead to the debate tonight, Gloria Bob, the moderator, Bob Schieffer, of CBS News, he's going to be able to do what the other moderators presumably...

BORGER: Hopefully.

BLITZER: ...didn't do or couldn't do, given the ground rules -- follow-up and...

BORGER: I know Bob. He'll do it.

BLITZER: worked with him at CBS for a long time.

BORGER: He'll do it. He will.

BLITZER: ...and press them if they don't answer the questions and say you're not answering the questions.

TOOBIN: Thank goodness for that.

BORGER: Right. And, also, let me say something. They're going to be sitting across from each other. It's not going to be this exact kind of table...

BLITZER: Sort of like the way we are.

TOOBIN: The way we are, yes.

BORGER: Right. And the thing is, it's a little counter- intuitive, because you would normally think it would be harder to attack someone if you're right next to them.

TOOBIN: You never -- you never have a problem with that.

BORGER: Yes, I never do.


BORGER: And I don't think they will, either. Because if you go back to 2004, remember John Kerry and John Edwards in one of the late debates in New York in the primary process?

I thought they were going to kill each other.

TOOBIN: See, but I...

BORGER: And they were around the table.


CROWLEY: ...saying that John McCain...

BORGER: They were around the table.

CROWLEY: 2000...

BLITZER: You meant Cheney.

CROWLEY: ...confronted George Bush head-on...

BORGER: Right.

CROWLEY: ...sitting right next to him.

BLITZER: You mean Dick Cheney.

TOOBIN: No, he means...

BORGER: No, no, I...

TOOBIN: She means in the primaries.

BORGER: I mean in the primaries, in the New York primaries.

BLITZER: Oh, in the primaries. Oh, OK.

BORGER: In the New York primaries. In the primaries. And so I think sitting around a table is actually -- they're more likely to clash than not. TOOBIN: But I...


TOOBIN: I actually disagree.

I think when you're talking about a presidential debate between the two major party candidates where the risk of seeming angry is so big, I think it's going to be harder to attack...

BLITZER: All right, guys...


BORGER: We'll see.

BLITZER: We'll watch. We've got...

BORGER: OK. It will be interesting.

BLITZER: We've got a little time left.

TOOBIN: It will be interesting, that's for sure.

BLITZER: These guys are going to be with us.

With the candidates squaring off on the economy tonight -- that's the subject -- the Obama campaign is unveiling an online tax calculator, letting voters figure out how much they would save if Obama is elected.

Let's go to our Internet reporter, Abbi Tatton. She is looking at this calculator. How does it work -- Abbi?

TATTON: Wolf, the Obama campaign saying to voters go right here and figure out for yourself how much you could save under Obama's plan.

A couple filing jointly, earning $60,000 a year, say, with two dependents, and it will spit out that you will save $1,000 under Obama's tax plan versus $645 under Senator McCain's.

Take away those two dependents and that number for McCain goes down to zero, according to this tax calculator.

It's designed to display the tax breaks that Obama is promising for the middle class.

Go to the highest wage earners and you might get some different messages, though. If we plug in more than $250,000 a year, you just get this message -- "you will probably not get a tax cut under the Obama-Biden plan" -- something that the group -- the conservative group Americans For Tax Reform call misleading.

Go to the Republican Party Web site and you'll find that they've been doing some calculations of a different kind. The RNC Spend-O- Meter has been trying to work out how much all Barack Obama's proposals might cost -- Wolf.

BLITZER: All right. Thanks, Abbi, for that.

Lou is getting ready for his show that begins right at the top of the hour. You're here. Tell us what you have in store.

LOU DOBBS, CNN ANCHOR: Well, Wolf, coming up at the top of the hour, we'll have much more, of course, on the final presidential debate -- what could be the candidates' last chance to strike a decisive blow before election day. We'll have live coverage.

We'll also have the very best political analysis from the very best political team on television.

And we'll be talking about explosive comments about race and politics by top Democratic Congressman Jack Murtha.

We'll also assess the political impact of the increasingly grim news about our markets.

And the Dow Jones Industrials today down more than 700 points -- new pessimism today about a worsening economy and the risk of severe recession. Rising anger tonight over charges that the left-wing activist group ACORN is engaged in outright election fraud by forging voter signatures and other acts. ACORN is an organization, of course, with ties to Senator Obama. We'll have that special report.

Join us for all that at the top of the hour here on CNN. And, of course, we'll have all of the day's news and much more, from an Independent perspective -- Wolf, back to you.

BLITZER: We'll be watching, Lou. Thank you.

Joe Biden makes an admission -- what happened when he followed a group of women into a female dormitory back in his college days, 40 years ago?

And their hands will be on the dials during tonight's debate -- a group of battleground state voters getting ready to watch the face-off with CNN's Soledad O'Brien. We're going to Ohio, right after this.


BLITZER: On our "Political Ticker," Barack Obama's running mate playfully admitted he was arrested more than 40 years ago. Biden joked about it in Ohio. He said he was attending a football game between his university and Ohio University, and he mistakenly followed what he called -- and I'm quoting now -- "a lovely group of women" into an all female dormitory. Biden says an officer quickly stopped him, noting that men were not allowed inside. Biden joked it was only a temporary detention.

Tonight's presidential debate will be the last between Barack Obama and John McCain -- but it won't be the last. Third party presidential candidates will reportedly face-off Sunday. Reports say it will happen at Columbia University here in New York. Independent Ralph Nader, Green Party candidate Cynthia McKinney, Constitution Party candidate Chuck Baldwin all supposed to attend. Libertarian Party nominee Bob Barr is said to have a scheduling conflict.

Barack Obama and John McCain were both invited. They won't be there.

Remember, for the latest political news anytime, you can always check out The Ticker is now the number one political news blog out there on the Web.

In the battlefield state of Ohio, a group of undecided voters getting ready right now to watch tonight's debate. With them live from Columbus, our special correspondent, Soledad O'Brien.

We loved these segments over these three earlier debates -- two presidential, one vice presidential. Set the scene for our viewers once again -- Soledad. What's in store for all of us tonight?

SOLEDAD O'BRIEN, CNN CORRESPONDENT: Yes, we are the ones responsible for the squiggles that you will see on your television screens as you watch the debate tonight. That's the folks who will be filing in in just about five minutes behind me.

Here in Ohio, they have lost lots of manufacturing jobs. They have high unemployment. So it really makes this an important state, obviously, for the candidates, who've been here. So we'll have 30 people once again, evenly divided, roughly, between men and women; also, between registered Independents, registered Democrats, registered Republicans.

And, again, we're going to hand them these perception analyzers -- people meters. To the left means that you're not really happy with what you're hearing -- low numbers there. Around 50 is where they're supposed to keep it when the moderator is asking the question -- middle ground. And then high -- up to 100 if you like what you're hearing from the candidates.

Wolf, on your screen, that means the squiggles, the highs and the lows, really matching second to second with the issues that the candidates are talking about, things that make the listeners respond positively or, in some cases, negatively.

And as we've seen over the last three debates, often going for the jugular, being mean, being nasty, brings those meters down. So it will be interesting to see exactly what the strategy is tonight and how people respond.

They will be coming in just a few minutes and get prepped. We'll be watching them as they watch the debate and feed all this information not just back to the computers -- which is being run by our professors from SMU -- but also back to CNN so you guys can see it right on your screens, how our focus group of about 30 people are reacting tonight's debate -- Wolf.

BLITZER: And we'll be checking in with all of you, both before and certainly after the debate. Soledad, thanks for that. You may have already seen the funny spoofs of the candidates on YouTube and JibJab. But just wait until you see what Jeanne Moos found out there on the Web -- some smooth moves from the presidential nominees.

And a look at the best "Hot Shots" from tomorrow's newspapers.

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


BLITZER: Tonight's presidential debate may feature a candidate dancing around a question, but chances are you won't see either of them bust a move -- although you can certainly find that out there on the Web.

CNN's Jeanne Moos brings us these high tech funnies in her "Moost Unusual" way.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): You can watch the real thing...


UNIDENTIFIED MALE: Live from Hollywood.


MOOS: ...or you can watch "Dancing with the Political Stars" on the Web.


UNIDENTIFIED MALE: The maverick who's a maniac on the dance floor, John McCain.


MOOS: Or you can interact with Palin as president. There she is in the Oval Office. You click around looking for things.


UNIDENTIFIED FEMALE: Darn you, Katie Couric.


MOOS: Like Katie Couric getting waterboarded or the Dow going down and teen pregnancies going up, science in the wastebasket, a dinosaur strolling past the Oval Office. From paleontology to dancing Obama...


UNIDENTIFIED MALE: And who's heavy on rhetoric, but light on his feet.


MOOS:'re looking at the latest in political entertainment.

(on camera): This seems to me as if it's sort of high tech low brow.


MOOS (voice-over): David Morgansen director "Dancing with the Political Stars".


UNIDENTIFIED MALE: Witness the shock and awe of George W. Bush.


MOOS: Yes, it required directing and actors.


UNIDENTIFIED MALE: Wait until you see what he does to the samba.

UNIDENTIFIED MALE: Yes, oh my god.


MOOS (on camera): You had some guy flailing around and they put George Bush's head on him?

MORGASEN: Exactly. There's a very talented dancer we had and he was dancing around goofily.

MOOS (voice-over): The high tech part involves the head.

MORGASEN: That was done in Moscow.

MOOS (on camera): The heads were attached in Moscow?

(voice-over): A media company based in Russia is showcasing the technology at its Web site,

Contrast that with Palin as president. It took five days for Sean Ohlenkamp, an ad agency art director, to build the Web site with two friends.

SEAN OHLENKAMP, CO-CREATOR, PALINASPRESIDENT.COM: We started out with a lot of really big gags and now we're really getting into the little intricate things that, you know, people will really have to search for.

MOOS: Like notching the number of Sarah Palin's wolf kills on the Oval Office desk.

Sean is trying to add new gags every day.

OHLENKAMP: We threw in the "Bridge To Nowhere."

MOOS: The favorite seems to be sorry, shooting Bambi. It takes two to tango with this interactive stuff.

Did we say tango? It's Al Gore.


UNIDENTIFIED MALE: With dancing so hot, they can melt the polar ice caps.


MOOS: Among the dance contestants, it seemed John McCain's head was the worst fit.

MORGASEN: The guy playing McCain -- who is McCain's body -- was probably like 21 years old.

MOOS: And if you're playing Palin as president, stay away from the red phone.

Jeanne Moos, CNN...




MOOS: ...New York.


BLITZER: Jeanne Moos, thanks very much.

We wanted you to check our political pod cast. To get the best political team to go, you can subscribe at It's a good idea to do so.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

I'll be back in one hour -- exactly one hour from now, with the best political team on television, to set the stage for this, the third and final presidential debate.

But right now, let's go to "LOU DOBBS TONIGHT".

Lou is standing by -- Lou.