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The Situation Room
GOP Prospects in Congress; Palins Testify in Trooper Probe; Rollins Gives McCain Advice; Voter Suppression Feared
Aired October 24, 2008 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now, growing fear among Republicans, not only of losing the White House, but also of a Democratic landslide in Congress, putting the power of the filibuster at risk.
Fueling the fear, one of the Democrats' biggest guns taking direct aim at the Senate's top Republican, who's struggling to hold his seat. We're going to tell you what Bill Clinton is doing. Stand by for that.
Plus, Sarah Palin and her husband giving their side of the story in a controversy that's dogging her campaign. The Republican vice presidential candidate being deposed right now about the firing of an Alaska official.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
Republicans are very worried, not just about the White House, but also about both houses of Congress. The GOP right now is at risk of slipping even further into the minority.
Let's bring back John King.
He's got some new information on this story that's raising lots of concern among Republicans out there.
What are you hearing -- John?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, rightly so. We've been focusing much of our attention -- most of our attention on the presidential race. But there are 435 House races and a third of the Senate is up for grabs.
I talked to a half dozen of the Republican Party's top strategists today and they are looking for something bleak on the horizon. They say they expect to lose at least two dozen House seats, maybe more than that, maybe over 30, and at least six Senate seats.
Let's look at the House first. If you look behind me on the map here, you see the current lineup -- 235 Democrats, one vacate seat, which was a Democratic seat, 199 Republicans. Imagine if the Republicans lost as many as 25 to 30 seats, the margin that would give Nancy Pelosi and the Democrats in the House of Representatives. And many Republicans believe, Wolf, at least two dozen, perhaps 30, or more.
Now, let's shift over to the Senate. That, of course, has been a battleground because of the rules in the Senate. Sixty votes gets you a filibuster-proof majority. Look at what we have right now. It's essentially 49-49. There are two Independents, Joe Lieberman and Bernie Sanders of Vermont, who vote with the Democrats. The Democrats have a 51-49 advantage. Again, imagine how these numbers might change.
Republicans think, at a minimum, they're going to lose five seats. And they think it could go as high as nine seats. And there are a number of very competitive places in play.
Alaska Ted Stevens is currently on trial. How the verdict goes could affect that race.
Even the minority leader, the Republican leader in the Senate, Mitch McConnell, is someone considered vulnerable. Most Democrats think he will hold on, but they think they can get that seat. Pickup in Virginia. A possible pickup defeating Elizabeth Dole in North Carolina. Seats in Georgia in play. Seats in New Mexico and Colorado the Democrats expect to pick up.
So it's a sweeping across the country. And they believe, in part, they will benefit more in the final days, because the Obama campaign can help them, because he has so much money left to spend.
BLITZER: If -- you were just in North Carolina.
Do people think Elizabeth Dole really is going to lose in North Carolina?
KING: I could not find one Republican who told me they were confident she would win. I am told she just put some of her money into the campaign. The gap has narrowed somewhat. It is a Republican state, so everyone says do not count her out. But, again, that is a state where you're going to have big increase in African-American turnout, helping the Democrats.
The Democrats picked a very good candidate to run against her, with a profile. Senator Dole's campaign is widely criticized throughout the state for lacking energy and a consistent focus. Elizabeth Dole could very well be -- essentially, remember, on the East Coast, the Republicans have all but conceded Virginia already.
Then North Carolina comes in. If North Carolina goes Democratic, as well, the Democrats will believe, from the early results in the East, that they are in for a big night.
BLITZER: And even in a state like Georgia, the incumbent, Saxby Chambliss, he seems to be in trouble himself.
KING: And it is another state where you will have a higher African-American turnout in the Atlanta area, in other areas, because of the Obama candidacy. Obama running way behind in Georgia. But Saxby Chambliss -- that is one the Republicans believe they will pull out in the end, because of the conservative DNA of that state. But make no mistake about it, Saxby Chambliss is running a ton of television ads trying to save that seat. It is in play.
BLITZER: Election night, we'll be at the CNN Election Center. We'll be looking at all these races.
KING: Yes, it will be nice.
BLITZER: For all the political news junkies out there, this will be great.
KING: It sure will.
BLITZER: We'll watch it, because we love politics.
And as John just mentioned, the Senate minority leader, Mitch McConnell, is among those Republicans fighting to hold onto their seats. The former president, Bill Clinton, was in McConnell's home state of Kentucky today campaigning for his Democratic challenger and for Barack Obama.
Listen to this.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And I want you to understand, you really have not only the fate of the people in your neighborhood and your state, but the direction of this country in your hands. We're going to have an earthquake here on election day, I don't care what anybody says. This thing is going to...
(APPLAUSE)
B. CLINTON: And in the country, Senator Obama is going to win a great victory because the American people are going to turn away...
(APPLAUSE)
B. CLINTON: ...from what we've done. And Hillary has -- was as good as her word and after the convention, she has done over 50 events for him now...
(APPLAUSE)
B. CLINTON: ...because we made a campaign to change America and we've got to do it. We don't have any choice.
(END VIDEO CLIP)
BLITZER: The former president predicting an earthquake on November 4th -- a political earthquake, that is.
Mitch McConnell, by the way, calls himself a big target for Democrats because of his position as the Senate minority leader. He's the top Republican in the Senate. CNN's Kate Bolduan has more now on his fight to hold onto his seat -- Kate?
KATE BOLDUAN, CNN CORRESPONDENT: Republicans themselves acknowledge this is a tough election to be a Republican. A sign of that here in Kentucky -- even the Senate minority leader isn't a safe bet.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: We're going to shake your hand (INAUDIBLE).
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Well...
UNIDENTIFIED MALE: And I feel for you.
BOLDUAN: Senator Mitch McConnell on the campaign trail with his wife, Labor Secretary Elaine Chao -- crisscrossing the state and fighting to save his political career.
MCCONNELL: Look, this is a lot tougher race than it was six years ago. I'm a lot bigger target because I'm the Republican leader of the Senate -- the symbol of the other side, if you will.
BOLDUAN: Kentucky is traditionally a Republican stronghold. McConnell was re-elected four times.
UNIDENTIFIED FEMALE: I think he's done an excellent job.
MCCONNELL: Democratic challenger and millionaire businessman, Bruce Lunsford, is trying to tie McConnell to an unpopular President Bush and blame the senator for the financial crisis.
He says the state is ready for change.
BRUCE LUNSFORD (D), KENTUCKY SENATE CANDIDATE: This has really been an administration that has -- has worked in partnership with Mitch McConnell in the Senate to create a lot of burden on people. And I think people deserve better than this.
LARRY HARNEY, LUNSFORD SUPPORTER: Well, I think Kentucky needs a change. And I think the United States needs a change.
BOLDUAN: Senate Democrats, with an eye toward a 60 seat filibuster-proof majority, see momentum in Kentucky. In just 12 days, the Democratic Senatorial Campaign Committee spent almost half a million dollars on TV ads here.
(BEGIN VIDEO CLIP FROM DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE CAMPAIGN AD)
UNIDENTIFIED MALE: McConnell opened the gate and Wall Street went wild.
(END VIDEO CLIP)
BOLDUAN: McConnell's campaign is fighting back with its own ads.
(BEGIN VIDEO CLIP FROM MCCONNELL CAMPAIGN AD)
UNIDENTIFIED FEMALE: CEO Bruce Lunsford makes his millions the Wall Street way -- hedge funds, oil money.
BOLDUAN: McConnell has questioned Lunsford's business practices, accusing Lunsford's former health care clinics of mistreating veterans -- a charge that Lunsford denies. At the same time, McConnell is reminding voters of his decades in the Senate.
MCCONNELL: To trade me in for a rookie a few years younger than I am will mean, for the Commonwealth of Kentucky, a dramatic and substantial loss of clout and influence.
BOLDUAN: While the outcome of this race remains uncertain, political observers say the fact Kentucky is in play is symbolic of the political environment across the country.
(END VIDEO TAPE)
BOLDUAN: As Democrats push for a 60 seat majority, a McConnell defeat here could also be seen as payback for the 2004 loss of then Senate minority leader, Democrat Tom Daschle -- Wolf.
BLITZER: Kate Bolduan in Louisville for us.
Kate, thanks for that report.
Let's go to Jack Cafferty.
He's got The Cafferty File --pretty stunning numbers you heard from John King at the top of the hour. The potential, what, Republicans are worried about losing maybe 20 or 30 seats in the House and maybe five or eight or nine in the Senate. That would what President Clinton just said, pretty much of a political earthquake.
CAFFERTY: Yes, I was going to say, he characterized it as an earthquake. Certainly, that's -- that's a word that fits.
Have you looked at your 401(k) lately?
It's getting ugly out there.
U.S. stock markets following overseas markets, as the global equities meltdown continues. The Dow Industrial Average today fell another 312 points. That's 3.6 percent.
Overnight last night, it was worse overseas. Tokyo stocks down 10 percent. An 8 percent sell-off in Hong Kong. European markets didn't fare much better, either.
Investors all around the world now are becoming more and more convinced that a long, deep recession is beginning.
And they're probably right. The U.S. economy has lost jobs for nine straight months and there's no end in sight -- 760,000 jobs cut from payrolls across the country so far this year. There is another devastating jobs report due on November the 7th -- three days after we elect our next president.
The housing crisis shows no signs of abating -- 81,000 homes lost to foreclosure in September alone. And there are no signs anywhere that things are about to get any better anytime soon, regardless of what happens on election night.
So the question is this -- how much will troubling economic news influence what actually happens on election day?
Go to CNN.com/caffertyfile, where you can post a comment on my blog.
Former President Clinton coined that phrase, "It's the economy, stupid". If he's right, the Republicans have a lot to worry about -- Wolf.
BLITZER: Yes, I think you're probably right about that.
All right, we'll see what happens. Eleven days to go.
Jack, thank you.
And 11 days left for the McCain campaign to try to turn around the race. The man who engineered Ronald Reagan's landslide re-election standing by to join us live with some advice for the Republican presidential candidate.
And a major new development in the controversy over the firing of an Alaska state official -- Sarah Palin giving a deposition right now on the campaign trail.
Plus, why you might have a problem if you wear an Obama t-shirt or a McCain cap to the polls on election day. There are new rules in some states. We'll explain, right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: New developments right now in a controversy dogging the vice presidential nominee, Sarah Palin. Right now, she and her husband are testifying for an inquiry into the dismissal of Alaska's public safety commissioner, allegedly linked to the Palins' efforts to get their former brother-in-law, a state trooper, fired.
Let's go to our justice correspondent, Kelli Arena.
She's working the story for us -- Kelli, what are you finding out?
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, that deposition started just a short time ago in St. Louis. Governor Palin is answering questions about the firing of Alaska's public safety commissioner, a man by the name of Walt Monegan, and whether it was appropriate.
Monegan claims that he was removed from his position because he wouldn't fire Palin's ex-brother-in-law, who is a state trooper.
Palin says that Monegan was removed because of professional differences.
Now, this will be the first sworn statement involving that controversy. Just two weeks ago, an investigation sanctioned by Alaska's legislature found that Palin did have the right to dismiss Monegan because she appointed him, but said that she acted unethically.
Now, what we're talking about today, Wolf, is a separate investigation by Alaska's personnel board. Palin had asked the agency, whose members are appointed by the governor, to conduct its own probe right after she joined the Republican ticket.
The governor maintains that she did nothing wrong.
In a statement today, the campaign says that: "Palin's concerns about her ex-brother-in-law were unrelated to Walt Monegan's reassignment, that the governor is hoping that today's interviews will bring this matter to a close."
And Wolf, as you mentioned, Todd Palin is also being disposed -- deposed. His role has also been the subject of some controversy.
BLITZER: The election only, what, 11 days away, Kelli.
Are we expecting any breakthrough -- any dramatic announcements between now and then involving this case?
ARENA: There could be. You know, the personnel board does have a meeting scheduled for the day before the election. And it is possible that a report could come out then. We simply do not know.
As for what was said today, the meeting was closed. Transcripts are not expected to be released until we do see a report.
So, as they say, stay tuned.
BLITZER: We will, together with you. We're counting on you, Kelli.
Thanks very much for that.
Let's get some more now on what's going on in the campaign.
For that, we're joined by Republican strategist and CNN contributor, Ed Rollins.
First of all, on the story that Kelli was just reporting on, the trooper and the firing and all of that, is it really much of an issue in these final 11 days, because we've been hearing a lot about it almost from the moment she got tapped? ED ROLLINS, CNN CONTRIBUTOR, REPUBLICAN STRATEGIST: I think people that -- that are going to vote against the team because of that have already made up their mind. I don't think anything new is going to come out. I think she's got her side. And, obviously, at the end of the day, the full story will be told.
But I think, really, the critical thing here is John McCain and how he wants to end this campaign and what he wants to talk about to the American public in (INAUDIBLE) days.
BLITZER: Some have suggested, Ed, that he's being outspent, out hustled, out organized. Give him some advice right now, in these last 11 days.
If he's going to pull it out, what does he need to do?
ROLLINS: Well, he has to be him. I think the bottom line is you're starting to see a campaign with all the wheels coming off -- a lot of internal fighting and infighting, which tells me more than the polls tell me. That -- obviously, they have internal polls that show that they're close. They wouldn't be fighting, they'd be moving forward if they had polls, as they all do, that sort of say that they're matching the public polls and they know they're in a real fight.
I think for John McCain, who's always been a man of great credibility, this is a campaign he's not comfortable with. And I think in the closing days, he has to get comfortable. He has to look the public in the eye and say, I've given my life to this country, I basically think I can lead this country and effectively why I think I can and here's what I want to do on the economic front, because that's all anybody cares about.
You know, the rest of it is all peripheral -- all the attacks on Obama and all the things that he may have done or not done years ago are totally irrelevant. It's really about John -- John McCain at this point in time.
BLITZER: Yes. Give us some historic perspective, because in the 1980 campaign, when your former boss, Ronald Reagan, beat an incumbent president, Jimmy Carter, it was relatively close until virtually the end, wasn't it?
ROLLINS: Yes. There was -- the public had made up their mind, very similar to where they've made up their mind on George Bush. Carter was at about 28 percent approval rating, very similar to the president's today. And the country was desperately looking for an alternative.
Once Reagan got the nomination and once the Carter people went on the attack, people had serious doubts about Ronald Reagan.
They had a debate -- only one debate between the president and Reagan. It was eight days before the election. There were a whole lot of voters that sort of were in a holding pattern. And once Reagan got on the stage, once Reagan wasn't viewed as this irresponsible, crazy Hollywood movie actor who had been governor of California and really had some substance, all those voters came down. And Reagan, obviously, won by a landslide. He won by nearly 10 points. He won all but five states.
And equally as important, in an election very similar to this one, he bought in -- 35 Democrats were defeated in the House, 12 Senate Democrats were defeated. And it really became a realignment election (INAUDIBLE) roaring...
BLITZER: So if Obama is elected in 11 days, will it be the debates -- his performance in those three presidential debates or will it be the horrible economic crisis the country is going through right now?
Because you remember, in 1980, there was not only a horrible economic crisis in the United States, there were 444 days of Americans being held in captivity in Iran, that -- all of which undermined Jimmy Carter.
ROLLINS: The two things came together at the same time. The day the economy started falling apart, a few days before that -- obviously, the first debates came about. And I think the threshold was met. I think that the public, at least in the exit polls of the debates, all think that Obama basically was credible and that he actually won those debates. I may differ, but it's not -- it doesn't matter what I think. It's what the public thinks.
So I think -- I think at that point in time, Obama all of a sudden met the presidential standard. And I think, to a certain extent, the economy is blamed on this administration, rightly or wrongly. But it's certainly the way it works. John McCain being not a representative of this administration, but certainly tied to this administration, his fortunes have sunk ever since.
BLITZER: Well, give us your assessment right now, with 11 days to go. And, obviously, 11 days in politics, a lot can happen.
What do you think?
What's going to happen in 11 days?
ROLLINS: I don't think we win it. I think at the end of the day -- and I've felt this way for a period of time, having done a lot of the campaigns -- they everything going. They have the momentum. They have the bad political environment and the economy is not going to get better in 11 days. There's an inconsistent message on our part.
They have had a strategy from the very beginning to tie McCain to Bush. They've done a very effective job of that. And I think the Bush campaign has bounced all over the place.
And I think the last 10 days here, once again, if John McCain goes out and can do a sales pitch -- here's the real John McCain, here's what I want to do, here's my economic team -- maybe the country will take another look and some of these things will close back up.
If he doesn't do that and they keep different ads, different days, different themes, then I think Obama wins.
He's got the money, he's got the energy, he's got the young people, he's got a tremendous support by the Democrats, which is a unified party again. And our party is not exactly happy.
So my sense is everything that I know about politics, after 40 years and nine presidential campaigns, tells me we're going to end up with the short end of this one.
BLITZER: Ed Rollins knows a lot.
Ed, thanks for coming in.
ROLLINS: My pleasure.
Thanks.
BLITZER: An outspoken liberal giving credit to the GOP.
Listen to this.
(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")
MICHAEL MOORE, FILMMAKER: Let me give this to the Republicans, they're a lot smarter than we are.
(END VIDEO CLIP)
BLITZER: But can Republicans outsmart Democrats in this tough election?
Alex Castellanos and Hilary Rosen -- they're standing by live. They'll weigh in, as well.
Plus, Joe Biden speaking out about the new president being tested -- and he's not mincing words. We'll have the latest on this controversy right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Alina Cho is monitoring some other important stories incoming into THE SITUATION ROOM right now.
What's going on -- Alina.
CHO: Hey there, Wolf.
Another bad day for the Dow. Wall Street ends the week with another sharp loss -- 312 points, 3.5 percent, as markets worldwide fall on growing fears that a recession is at hand. The roller coaster day saw the Dow down more than 500 points at the open, recovering briefly, only to drop sharply again. Today's sell-off comes from grim forecasts from huge companies like Sony and Daimler, and hedge funds, which had to unwind positions to pay back debt.
A massive outcry in Eastern Afghanistan, as more than a thousand people protest a bloody Taliban attack. Twenty-six young men were killed on Sunday when Taliban militants stopped a bus in southern Kandahar Province. At least six of them were beheaded. Apparently, they were targeted for being Afghan security forces. The demonstration was one of the largest anti-Taliban gatherings since the fall of the hard-line regime in 2001.
And while looking after his own health, Senator Ted Kennedy also plans to do some work on universal health care reform. Kennedy's cancer is keeping him homebound. But according to his aides, he is holding video conferences with lawmakers and is also reaching out to some special interest groups that will help influence the debate. Kennedy plans to take the legislation to Congress at the beginning of the year -- Wolf, back to you.
BLITZER: We wish him only the best, as well.
Thanks very much, Alina, for that.
She was registered to vote, then got a letter telling her she's not eligible to vote -- get this -- because she's not a United States citizen.
(BEGIN VIDEO CLIP)
ABBIE BOUDREAU, INVESTIGATIVE CORRESPONDENT: Are you a citizen?
KYLA BERRY, STUDENT: I am.
UNIDENTIFIED FEMALE: And where are you from?
BERRY: I'm from Boston, Massachusetts.
(END VIDEO CLIP)
BLITZER: And she's not alone. Thousands of people in just one state were told the same thing.
Our Special Investigations Unit is looking into this story. I think you're going to want to see what's going on.
Also, Democratic vice presidential candidate Joe Biden saying he doesn't regret a remark that's come back to haunt him.
Plus, just as CNN equals politics, "Saturday Night Live" equals political satire -- at least this season. And ratings are through the roof.
Stay with us.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, some voters get letters saying they're ineligible to vote in this election. Others have to make sure they dress appropriately for the polls.
What's going on?
Joe Biden has no regrets about saying Barack Obama would be tested by an international crisis within six months if he wins the election.
Is the Democratic vice presidential candidate hurting his own party?
And it's a small state that plays a big role in the strategies of both parties -- we're going to go to Nevada, the epicenter of the foreclosure crisis.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
Only 11 days until the election and there are more fears of voter suppression. Now in numerous states throughout the country, there are concerns that some eligible voters may not be allowed to vote.
What's going on?
Let's go to CNN's Abbie Boudreau from our Special Investigations Unit.
She's been looking into this story.
It's raising lots of concern -- Abbie, what are you finding out?
BOUDREAU: Well, Wolf, the idea of voter suppression is a real concern to a lot of people. We've talked to some eligible voters who fear their right to vote is now being challenged.
(BEGIN VIDEOTAPE)
BOUDREAU (voice-over): Just two weeks ago, 21-year-old Kyla Berry received a disturbing letter in the mail from local election officials, stating she is not a U.S. citizen. That was news to her.
(on camera): Are you a citizen?
BERRY: I am.
BOUDREAU: And where are you from?
BERRY: I'm from Boston, Massachusetts.
BOUDREAU (voice-over): Kyla is one of more than 50,000 registered Georgia voter who's have been flagged because of a computer mismatch in their personal identification information.
BERRY: I can't believe it's happening to me.
BOUDREAU: Some 4,500 of those are having their citizenship questioned.
WENDY WEISER, NYU-BRENNAN CENTER FOR JUSTICE: Every year, election officials strike millions of names from the voter rolls using processes that are secret, prone to error and vulnerable to manipulation.
BOUDREAU: Experts fear this could lead to suppression of votes. And many critics allege minorities are more often on these lists.
WEISER: There are last minute efforts to try to knock off new voters using a process that we call no match, no vote or disenfranchisement by typo.
ABBIE BOUDREAU, CNN CORRESPONDENT: Georgia is also under fire for requesting social security records on about 2 million voters, more requests than any other state. These types of allegations have flared up across the U.S. most notably in Ohio where there are concerns that hundreds of thousands of voters could be purged from the voter rolls. Laughlin McDonald of the ACLU is suing the state of Georgia over letters like Kyla's. He also argues the letters were sent out too close to the election date.
Is it possible that eligible voters' votes may not count in Georgia?
LAUGHLIN MCDONALD, ACLU VOTING RIGHTS PROJECT: If people who are properly eligible get improperly challenged and purged the answer would be yes.
BOUDREAU: But Georgia Secretary of State Karen Kandel says she's not worried.
KAREN KANDEL, GEORGIA SECRETARY OF STATE: This is about ensuring the integrity of our elections. It is imperative to have checks and balances on the front end during the processes and on the back end and that's what the verification process is about.
(END VIDEOTAPE)
BOUDREAU: Someone like Kyla would still allowed to cast a provisional ballot when she votes but it's up to county officials whether those ballots would actually count and there are a lot of people who fear that process just won't work and eligible voters will be left out.
WOLF BLITZER, CNN ANCHOR: What has this is young woman done, Abbie, to try to resolve this problem?
BOUDREAU: She has called the number that was on the letter several times but there's never an answer. She does have -- she's waiting for her mom to send her birth certificate so she can try to prove she is indeed a citizen of the United States.
BLITZER: Wow. What a story. Stay on top of it for us. Thanks very much. Joe Biden meanwhile has been asked if he regrets saying that Barack Obama will be tested by an international crisis within six months if he's elected president. Joining us now Republican consultant Alex Castellanos and CNN political contributor Hilary Rosen. Both of them are CNN political contributors and Hilary Rosen is the editor at large at huffingtonpost.com. Is that right, Hilary?
HILARY ROSEN, HUFFINGTONPOST.COM: Yes, sir.
BLITZER: All right. I just want to make sure I got titles right. Here's how Senator Biden explained that controversial comment. He was asked if he regrets saying that Barack Obama would almost certainly, let me repeat it, would certainly be tested in the first six months. Listen to this.
(BEGIN VIDEO CLIP)
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: No, I don't regret the comment. Every new president is tested. Democrat or Republican. I don't know where John's been the last 20 years, number one.
Number two, I've watched Barack Obama. I've tested his mettle. He's ready to handle any crisis. Based upon the major crises we've had, he's been right and John's been wrong.
(END VIDEO CLIP)
BLITZER: Factually he might be right Biden but I guess the criticism he's getting from Democrats is why is he raising this issue right now? This is not exactly the issue Barack Obama wants to put in the spotlight right now when the economy is issue number one.
ROSEN: Well, you know, Secretary of Homeland Security Michael Chertoff said just the other day that in times of presidential transition, that you are vulnerable to acts of terrorism.
BLITZER: I know that's all true Hilary but why did he bring it up? Because that's the criticism he's getting. This is not something that you know, Obama needed right now.
ROSEN: He said it once on stump in context essentially to validate that he knows that Barack Obama's capable of being a great commander in chief. I think this is desperation on the McCain campaign's part to somehow turn this into an issue when Republicans and Democrats alike know that this is a fact.
BLITZER: Go ahead, Alex.
ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Oh, I think thank heavens the old Joe Biden is back. I think the McCain campaign, Wolf you're right, the Obama campaign is going to send him to the secure secret location with Dick Cheney to finish out the rest of the campaign.
This is not the kind of thing, of course, that the Obama campaign wants. What it does is remind voters that the most important job of a president is to keep the country safe. And they'd rather be talking about the economy, not national security. And just Joe Biden's present as the point on the campaign trail drags the agenda back to foreign policy. That's not what they prefer. They've been gaining ground on the economy. Not on foreign affairs.
BLITZER: Hilary, Michael Moore who's obviously a well-known liberal, he was on "LARRY KING LIVE" last night, and he said this. I'm going to play the clip because there's a lot of concern that some Democrats have out there that the Democrats are still fully capable of losing this election, given the history over recent presidential contests. Listen to Michael Moore.
(BEGIN VIDEO CLIP)
MICHAEL MOORE, FILMMAKER: Let me give this to the Republicans. They're a lot smarter than we are. I mean seriously. They've been in power for 20 of the last 28 years. They didn't do that by being stupid. They've done that because they know how to win elections. And they are not going to give up and until the very last minute that the polls close to try and take this election.
(END VIDEO CLIP)
BLITZER: Because some Democrats are already as John McCain says measuring the drapes in the Oval Office.
ROSEN: I don't think too many people are taking it for granted. There are a couple things going on. First of all, democrats are so hungry this year. Second of all, independents and many Republicans are so desperate for change that you know, the big picture factors still work in Barack Obama's favor.
But you know, he's right in a way. Democrats know how to lose and Republicans know how to work the system. They've done it historically. Look at that young Kyla Berry from Georgia with that Republican administration in the state of Georgia. There is absolutely a ground game Republicans have run in many states that you know, a lot can happen between now and election day.
BLITZER: Alex?
CASTELLANOS: Poor Democrats. You know, right now, Michael Moore's out there. Republicans must be geniuses even though he spent the last eight years telling everyone how dumb Republicans really are.
Liberals come up with this great concept that you know, Republicans must it be really smart and evil to win elections when they're so remarkably and amazingly wrong and out of sync with the American people when it's actually just the other way around. We live in a right of center country and it's the National Democratic Party that's been out of touch for so long.
Nobody's trying to disenfranchise voters. I credit Moore with trying to gin up turnout and say the election is not over. I think both sides are plenty motivated. The new Gallup data says that this early voting is as Republican as it is Democrat which is the first time I've seen that and it's a ray of hope for Republicans.
BLITZER: Go ahead Hilary.
ROSEN: That's not necessarily true in Florida and North Carolina where we're seeing a little bit more Democratic advantage there.
But you know, it's free Kyla Berry, Alex. We are seeing this everywhere. You know, let's hope we don't see it on Election Day. But that sort of voter suppression thing I think is the thing that most scares Democrats right now.
CASTELLANOS: There's a great Democratic tradition in for example places like Chicago and old Democratic machine of voting people that have been dead, voting them early and often. The point is to assure the integrity of the process. There are lots of people out there who vote who shouldn't. Let's make sure they know and make sure everyone who should does.
BLITZER: Alex, having said all that, do you agree with Ed Rollins? He was just here in THE SITUATION ROOM, that he doesn't see how McCain can pull this one off at this late stage?
CASTELLANOS: Well, right now, I think for Senator McCain, it's very tough. He is threading the eye of a needle and the needle is getting increasingly small. The options left, when you look at the electoral map, if you're battling for Virginia, North Carolina, if you're behind in Florida, and if those surveys are right it's a double digit lead for Obama in Pennsylvania, then you know, you don't need to just not win a state or two. You need to change the entire national picture and you've only got a week and a half to do that. That doesn't often happen. I think with this economic meltdown, we have a sense of voters said enough two weeks ago and this race settled into its final form.
BLITZER: We've got to leave it on that note. Guys, thanks very much. 11 days to go.
Look at this. You have to know the dress code if you're voting in Virginia. Certain clothing has now been banned from inside Virginia polling places. We're going to show you what the election board doesn't want to see.
And happy days are here again. The campaign certainly has been full of lots of surprises. But who would have thought it would lead Henry Winkler, it would resurrect the Fonz?
HENRY WINKLER, ACTOR: Eight years ago, I thought to myself, okay, we've got these presidents of the United States, Cheney Bush, give them a shot. Was I -- I was so wr -- wr can be.
UNIDENTIFIED MALE: You were wrong, Fonz.
WINKLER: Okay, that's the word.
(COMMERCIAL BREAK) BLITZER: 11 days until the election. Virginia voters watch what you wear when you go vote. You could be asked to change. CNN's Dan Lothian explains.
Dan?
DAN LOTHIAN, CNN CORRESPONDENT: Wolf, waving a sign or doing any kind of electioneering within 40 feet of a polling place has always been illegal but now when you show up to vote here or at any other site, your wardrobe will be closely scrutinized.
(BEGIN VIDEOTAPE)
LOTHIAN: It's a way to root for your team without saying a word. Wardrobe billboards are part of every campaign rally. Team Obama and Team McCain plastered on hats, glasses, buttons. But what's okay out here is no longer allowed in here. Virginia has joined a few other states in banning politically themed clothing and other paraphernalia from inside all polling places on Election Day. It's something in the past had only been done sporadically.
UNIDENTIFIED MALE: We want to take the important step to make sure the rules are applied uniformly throughout Virginia.
LOTHIAN: In a two to one vote, the board said it was seeking to strike a balance between free speech and zones free of distractions and harassment. 78-year-old Mary Lawrence Aitken who sports a campaign button at the retirement community is livid.
MARY LAWRENCE AITKEN, VIRGINIA VOTER: I think they're being very frivolous in the big scheme of things.
LOTHIAN: The ruling also prompted calls to CNN's voter hotline.
UNIDENTIFIED FEMALE: I want to know why. So please give me a call.
UNIDENTIFIED MALE: If that's not a violation of first amendment rights, I don't know what is.
LOTHIAN: Voter rights groups protested, too. Jennifer Schiffer with Lawyers Committee for Civil Rights says volunteers will now be at the polls with extra shirts to help people cover-up if needed.
JENNIFER SCHIFFER, LAWYERS COMMITTEE FOR CIVIL RIGHTS: We just decided we're going to do whatever we can to make sure everybody can vote and isn't hampered by this law.
LOTHIAN: The ACLU which argued against the ban says it has not decided whether to challenge it or not but leaving all options on the table. Election officials says rule breakers will be confronted but not turned away.
JEAN CUNNINGHAM, VIRGINIA STATE BOARD OF ELECTIONS: That a person decides they want to wear a t-shirt to the polls, we'll still make sure that they get to vote. (END VIDEOTAPE)
LOTHIAN: How will that work? Officials say anyone who shows up to vote wearing these will be asked to go outside and change, turn them inside out, or cover up.
Wolf?
BLITZER: Dan Lothian in Alexandria, Virginia, right outside the nation's capital.
An e-mail warning voters about wearing campaign clothing at the polls is circulating online confusing voters across the country. Let's go to our Internet reporter Abbi Tatton.
Abbi, what does the e-mail say?
ABBI TATTON, CNN INTERNET REPORTER: Wolf, it's got no name on it, no state attached, just an urgent warning telling people please advise everyone you know they cannot go to the polls wearing any Obama shirts, pins or hats. It's saying that officials can turn you away will turn you away. Well, election officials and the Barack Obama campaign is saying that's not the case. The Barack Obama campaign actually has a part of their website dedicated to this e-mail saying that yes, there are some states like Virginia, Nebraska is another one where campaign gear is prohibited in the polls. But you will still be allowed to vote. As we just heard at the very worst case scenario, you're going to be asked to turn that t-shirt inside out, cover up that campaign button. As ever Wolf, go to your local election officials to ask about these things rather than trusting anonymous e- mails in your inbox.
BLITZER: Or just wear a Jacket covering up those t-shirts.
TATTON: Take a sweater.
BLITZER: That's a good idea. All right. Thanks Abbi for that.
It's certainly the lighter side of a very serious election.
UNIDENTIFIED MALE: Where's McRage?
TINA FEY, ACTRESS: Well, you know, John McCain and have I been so busy traveling around this great country of ours, talking about change and energy and the pennant and William Ayers and doing a little shopping.
BLITZER: "Saturday Night Live" now twice a week. They're getting huge ratings. We're going to show you what they did last night. If you missed it, you're going to want to see this even if you saw it, you're going to want to see it again. Will it have an impact on November 4th? It's a serious question.
And then the critical tossup state of Nevada. A wave of foreclosures could have a big political impact, as well. We're going live to Reno right after this. (COMMERCIAL BREAK)
BLITZER: Our commitment to covering the battleground states, Nevada is reeling from the financial crisis. Dan Simon is in Reno right now looking at the throw for us. What are we seeing out there? It's been among the states hit hardest by all these home foreclosures.
DAN SIMON, CNN CORRESPONDENT: Right, Wolf. It's the number one state in the country in terms of foreclosures and also in terms of how it might be affecting the election. We can tell you that here in Reno, they are seeing a record number of people go to the polls early. Perhaps they might be a bit more engaged in the process than they otherwise would have been. We are in one of the hardest hit neighborhoods here and pretty much everywhere you look, you see one of those foreclosure signs.
(BEGIN VIDEOTAPE)
SIMON: The houses in Reno Sky Vista neighborhood went up five years ago. Times were good then and the real estate market on fire. Today, the streets are dotted with foreclosures and for sale signs.
ALICIA KING, RENO RESIDENT: It is scary to see the things happen to people around you and you always think, it could happen to you.
SIMON: Alicia King and her husband bought their house for $140,000 and within a few years it doubled in value and now it is worth less than what they paid for it.
KING: You have to be in it for the long haul and trust that the market is going to change.
SIMON: Her neighbor Mia Fleck may be worse off, because she bought her home in a peak when the houses were going well over $200,000. Now she and her husband are upside down on the mortgage. The house is worth less than what is owed.
MIA FLECK, RENO RESIDENT: We have no means if we needed to it to help ourselves out by pulling money out of the house. We can't do anything. We are pretty much stuck here waiting it out.
SIMON: Nevada is the epicenter for the nation's housing mess. 1 in every 43 homes in the state is in foreclosure. Clark County which includes Las Vegas accounts for about 90 percent of them. One gated community now has 75 percent of its homes vacant.
SEN. HARRY REID (D), MAJORITY LEADER: We don't have at this stage programs to help people who are going into foreclosure.
SIMON: This week Senate Majority Leader and Nevada Senator Harry Reid toured a hard hit area and hopes that federal funds will ease the pain foreclosures are inflicting on Nevada neighborhoods. The state is in line to receive $72 million targeted at foreclosed and abandoned properties.
REID: A foreclosure is not good for anyone, the lender or the neighborhood.
SIMON: Nowhere more evidence than in the Reno neighborhood where the residents complain about neglected yards and an increase in crime.
KING: You just try to have to have faith that things are going to change and get better, because they will. You know.
(END VIDEOTAPE)
SIMON: One statistic that really made an impression on us is in 2006 in Washaw County where we are, there were 18 foreclosures. This year there are more than 1,300 and it is considered a swing county and many believe it will decide who carries the state of Nevada.
BLITZER: All right. Dan, thanks very much.
Let's go right to Jack. He's got the Cafferty File.
JACK CAFFERTY, CNN CORRESPONDENT: That is sad. That is my hometown you are talking about.
BLITZER: Yeah, you are from Reno.
CAFFERTY: Very sad.
The question this hour is sort of related. How long will the ongoing economic troubling developments influence what happens a week from next Tuesday, Election Day.
Bob in Morristown, New Jersey, "The economy is once more demonstrating that the unregulated, unbridled greed of Reagan, Bush and Cheney does not work. It does not lift all ships, but sinks the critical ones. It doesn't trickle down but drowns those in the middle and the bottom. As George Herbert Walker Bush rightly said, it is voodoo economics."
James in North Carolina, "The last time I looked at the 401(k) it was painful. When I vote on November 4th, I intend to make sure that all the Republicans in North Carolina feel my pain."
David writes, "The economy has turned the election upside down but the real story is total incompetence of George W. Bush. McCain can huff and puff but he cannot blow away the 90 percent of Bush policies including Bush's economic policies."
Bob writes, "I think that the financial challenges will help to change the political tide in our country. Our global economy is experiencing unprecedented times and to be blunt, perhaps the metrics need to be recalibrated to measure the economy we are seeing and experiencing. I have seen my family's savings and 401(k)'s and traditional retirement accounts dissipate. We are talking about savings of ten or 15 years. The economic hemorrhaging must stop."
Jim in Desoto, Texas, writes, "The households and economies for John McCain is fine and dandy. McCain is voting for McCain, and the rest of us not so much." And Rod writes, "Can you say landslide?"
If you didn't see your e-mail, you can go to my website at CNN.com/Caffertyfile and look for yours there among hundreds of others.
BLITZER: Jack, thank you very much.
Noticeably absent from campaign trail, President Bush. Is he playing a role though behind the scenes?
And why this election may be the best thing to happen to "Saturday Night Live" in years. Alina is working the story right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: There's no doubt that this presidential election campaign has been a golden season for political satire and nobody does it quite like "Saturday Night Live." Let's go back to Alina. She's working this story.
Alina?
ALINA CHO, CNN CORRESPONDENT: Hey there Wolf. One thing is for there's been no shortage of material this election year.
(BEGIN VIDEOTAPE)
CHO: Former SNL cast member Will Ferrell is back to play one of his best known roles, George W. Bush.
WILL FARRELL, ACTOR: I come to you tonight in the midst of a very important election between two very qualified candidates the hot lady and the Tiger Woods guy.
CHO: Farrell as Bush clueless about his sinking approval rating brags about endorsement of McCain and Palin.
FEY: Well, upon hearing that you want to give McCain a super public endorsement, he cannot be found.
CHO: He goes on to endorse the VP candidate.
FARRELL: The president can do nothing without checking with the vice president, and that is why Sarah Palin --
FEY: Well, actually, Mr. President, I don't want to go all Katie Couric on you, but I think it is the other way around. I think they the vice president reports to the president.
FARRELL: Really?
CHO: And Darrell Hammond as John McCain finally gets the endorsement. FARRELL: A vote for John McCain is a vote for George W. Bush. You're welcome. I want to be there for you, John, for the next eight years.
FEY: The next 16 years.
FARRELL: Live from New York, it is Saturday night!
CHO: Ratings for "Saturday Night Live" are up 50 percent this season thanks to the election and a fake VP candidate who is a dead ringer for the real thing.
LORNE MICHAELS, EXEC. PRODUCER SATURDAY NIGHT LIVE: She looks so much like Tina Fey.
CHO: On Thursday, the joke is on us, too, CNN.
UNIDENTIFIED MALE: Okay. Right to the mega map.
CHO: Well, we call it the magic wall.
UNIDENTIFIED MALE: Now the country can be moved up and down like so. Also, don't forget, we can shrink it to put it in your pocket if you need to.
CHO: Fred Armesson tells me that he based the fake reports on John King's real ones.
JOHN KING, CNN CORRESPONDENT: I worry about the job security, and do I have bar tending skills so if Fred takes my job after the election, I will have a job.
CHO: There is plenty of material for King and for SNL.
(END VIDEOTAPE)
CHO: I could watch that a million times. In case you are wondering how Fred Armesson got so good at navigating the magic wall, our own CNN producer who works with John King went to SNL himself yesterday, Wolf to, help them out. The show is live again Saturday and TMZ is reporting that former cast player Maya Rudolph will be back to play -- who else? -- Michelle Obama.
BLITZER: Thank you, Alina, for that report.
