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Obama and Romney Battle Over Energy; Canadian Shoppers; Americans Watched Around the Clock?; Debating The Tax Plans; GOP Convention Lineup; Romney Hits Obama On Small Business; Furor Over Biden's "Back In Chains" Remark; Border Battle Over Low Prices

Aired August 14, 2012 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: Brooke, thanks very much.

Happening now: a battle over who has the best plan to make America energy-independent. We're standing by to hear live from both Mitt Romney and President Obama.

Also, the vice president, Joe Biden, he does it again. You're going to hear what he said today that has conservatives complaining of a racial hit, and the Obama campaign's trying to clarify.

And milk piranhas, that's what people in one U.S. town are calling Canadian shoppers. We're going to hear and take a closer look at what is behind the very unneighborly feelings.

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

Energy is front and center in the presidential race today. We have been watching as Mitt Romney and President Obama trade long- distance jabs and accuse their opponent of keeping the country from developing all of its potential energy resources.

Romney drove home his point during a stop in Ohio's coal country today.

Our national political correspondent, Jim Acosta, is following Romney's bus tour. He's joining us now live.

So, what happened today, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, move over Medicare. There are other wars of words breaking out right and left over energy and something Joe Biden said earlier today.

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I see how he's been waging war on coal.

ACOSTA (voice-over): Mining for votes in eastern Ohio, Mitt Romney accused President Obama of leaving coal in the dust in favor of green energy. When Romney took his hammer to Vice President Biden, he had the coal miners standing behind him fuming.

ROMNEY: His vice president said coal is more dangerous than terrorists. Can you imagine that? Yes.

ACOSTA: Romney was referring to Biden's comments in a 2007 interview when he was asked whether air pollution and corn sweeteners had killed more people than terrorists.

SEN. JOSEPH BIDEN (D), DELAWARE: Air that has too much coal in it, corn syrup next, then a terrorist attack.

ACOSTA: The Obama campaign quickly fired back, tweeting out this video of Romney blasting a coal-fired power plant when he was governor.

ROMNEY: I will not create jobs or hold jobs that kill people. And that plant, that plant kills people.

ACOSTA: Over in Iowa, the president defended his support for greener alternatives by mocking comments Romney once made about wind energy.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Governor Romney even explained his energy policy this way. I'm quoting here: "You can't drive a car with a windmill on it."

I don't know if he's actually tried that. I know he's had other things on his car.

(LAUGHTER)

ACOSTA: The jab was a not-so-veiled reference to Seamus, the dog Romney once strapped to the roof of the family car when he was a young father. Back in Ohio, coal miner Richard Bee says it's Romney who is right on the issue.

(on camera): Do you really think there's a war on coal?

RICHARD BEE, COAL MINER: I absolutely believe there's a war on coal. If we don't stop them right now, we will never keep our coal industry alive.

ACOSTA (voice-over): The new war of words quickly overshadowed the debate over Medicare prompted by Romney's selection of Paul Ryan as his running mate. A well-placed Republican source told CNN a growing number of Republicans are beginning to view Romney's choice as a risky move.

(on camera): Are you disappointed you weren't selected as his running mate?

SEN. MARCO RUBIO (R), FLORIDA: Oh, no. He made the right choice. Paul Ryan is incredible.

ACOSTA (voice-over): In an interview with CNN, one of Romney's runners-up, Marco Rubio, said the Ryan pick won't damage the ticket in Florida, where the senior vehicle code will be crucial.

(on camera): Can the Romney/Ryan ticket win Florida? RUBIO: Absolutely. It will win Florida.

ACOSTA: You're predicting?

RUBIO: I am predicting.

ACOSTA (voice-over): The Romney campaign is more concerned with the president's number two man after what he said in Virginia.

BIDEN: He's going to let the big banks once again write their own rules, unchain Wall Street. Going to put you all back in chains.

(END VIDEOTAPE)

BLITZER: Wow. Jim, stand by for a moment, because that Biden comment is causing quite an uproar out there on the campaign trail.

I want to bring in our White House correspondent, Dan Lothian.

Dan, what did the vice president say he really meant by that comment that Romney was going to "keep them in chains"?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, what the vice president was trying to make here was that he was trying to show that Mitt Romney's plans on Wall Street reform would be bad for Americans.

Mitt Romney in the past has expressed opposition to the so-called Dodd-Frank bill. He has since clarified that. But that's the point that the vice president was trying to make. That in and of itself would not have been bad, but critics are jumping on the words he used, those racially-charged words, as some Republicans are saying, making that connection between this, the comments, the chains, and slavery.

And on the Internet and, otherwise, the Republicans are really asking the Obama campaign to really back away from these comments again, saying that they're simply over the line.

BLITZER: So far, as you know, Dan, the White House is not backing away from that comment. They released a statement.

LOTHIAN: That's right.

It was from deputy campaign manager Stephanie Cutter, who said in a statement -- quote -- "For months, Speaker Boehner, Congressman Ryan and other Republicans have called for the unshackling of the private sector from regulations that protect Americans from risky financial deals."

She says that the vice president has in the past used this unshackling term, and this was just another derivative of that, a metaphor the vice president was using to make a point here, Wolf.

BLITZER: Let me bring Jim into the conversation.

What's the Romney campaign now saying about this clarification, this explanation from the Obama campaign? ACOSTA: Well, Wolf, I had a chance to talk to a senior strategist for the campaign, Eric Fehrnstrom, who said this was an outrageous attack coming from Vice President Biden and a sign in his view the Obama campaign is getting desperate.

He pointed to a new Gallup daily tracking poll that came out today showing Romney and Ryan with slight edge in this race of 2 percent. And Eric Fehrnstrom, Wolf, said this could be a sign of a Paul Ryan bounce. But the official word from the Romney campaign, they put out a statement earlier today, they are describing what Joe Biden had to say earlier today as a new low for the campaign -- Wolf.

BLITZER: All right, guys, stand by. We're going to have a lot more on what Vice President Biden said, the war of words emerging right now in the Obama and Romney campaigns. Later this hour, the Democratic strategist, the former White House press secretary, deputy communications director Jen Psaki, she is going to be joining us. She's now the press secretary for the Obama campaign.

President Obama's riding his campaign bus through Iowa once again today. We will be hearing from him live later this hour. The president's top political strategist, David Axelrod, also in Iowa right now.

He stopped to talk to our chief national correspondent, John King, who is joining us live right now.

How did that conversation go, John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Interesting conversation, Wolf, because this is such an interesting state.

President Obama won Iowa by 10 points last year. But both campaigns say it's very close now. It's definitely a battleground state. The president as you noted here, not for one, not for two, but for a three-day bus tour. When I sat down with David Axelrod this morning, we talked about why is Iowa a battleground and how does he think Paul Ryan will factor here.

(BEGIN VIDEO CLIP)

DAVID AXELROD, SENIOR OBAMA CAMPAIGN STRATEGIST: I think what Paul Ryan does is further clarifies the choice. There's absolutely no doubt that there are two distinct views about how we should move forward as a country.

I would argue that his takes us back. So I don't think it's a good vision for the country. But it is a distinct vision. And it's more distinct today than it was a few days ago.

KING: In Wisconsin, in Ohio, here in Iowa, the Republican Party's base is increasingly white blue-collar voters. Does he help there?

AXELROD: I don't think so because while Congressman Ryan is a genial person, I like him as a person and he does come from this region, his views don't reflect the interests of this region.

This is a region of working-class people. And they don't see the merit of trillions of dollars of new tax cuts skewed to the wealthy that would raise their burdens when they're trying to get along and get ahead in this economy.

He may hail from Wisconsin, but he is very much a product of the right-wing Washington think tanks. And that vision is not a good vision for this country.

KING: This state was defining to then Senator, now President Obama's stepping on to the national political stage. Why is it so close this time?

AXELROD: This has always been a competitive state.

And I actually think it's moving in the right direction for us. I like where we are. But, obviously, we're contesting for every vote here, which is why we're here for three days. But I must say that a ticket that -- I mean, Paul Ryan is part of the group in Congress that is blocking a long-term farm bill that is so important to Iowa.

He's part of the group in Congress and along with Governor Romney who oppose, you know, tax credits for the wind industry, which is one of the burgeoning industries here in Iowa. Counts for 7,000 new jobs in the last few years. And, of course, this is an older state. So their plans relative to Medicare and Medicaid are not ones that older Americans would embrace.

KING: Have you been outhustled here over the last few years? Governor Branstad has led a pretty aggressive voter registration and the Republicans now have parity.

AXELROD: I think we still have an organizational edge in the state and we have done a good job of registering new voters. I think we're building that back up. But I don't think we're going to be outhustled on Election Day. And I don't think we're going to be outhustled in the next 85 days.

(END VIDEOTAPE)

KING: And, Wolf, part of that organizing going on right here at the Iowa State Fair. A million people will pass through here this year. Both campaigns are working hard to sign up new voters and to sign up new volunteers.

A few feet behind me there's what is called the Cast Your Kernel poll. A local TV station has people come in. You take a corn kernel, you drop it in a jar. One for Romney, one for Obama. Not exactly scientific, Wolf. At the moment Governor Romney's winning.

BLITZER: I noticed Paul Ryan was at that state fair where you are. I take it the president is not going to be there? Or has he changed his mind?

KING: The president did come through last night. He was here for about an hour. His bus pulled in after an event up in Boone. He was seen drinking a beer in what's the Bud Tent. It's a famous institution here.

A little flyover overhead.

The president was here for about an hour. He met with Democratic supporters, had a little something to eat and we did see him enjoying a cold beer. Part of the fair tradition. I might have one myself a little later.

BLITZER: I'm sure you will. All right. Enjoy. We will have you back here a little bit later as well. So hold off on the beer for the time being.

KING: Yes.

BLITZER: Medicare, energy and now Vice President Biden's warning about Wall Street putting people "back in chains." We're going to have lots to talk about. The former White House deputy communications director, now press secretary for the Obama campaign, Jen Psaki, she will join us live.

Later, a look at how Big Brother will be watching some city dwellers like never before.

Plus, why people in Washington state in one town, they're talking about telling their Canadian neighbors to simply stay home.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Sixty-four percent of Americans say they have given quite a lot of thought to the upcoming presidential election. How can you not think about it? You can't get away from it.

According to a "USA Today"/Gallup poll, the 64 percent is down actually from the previous two presidential races, but higher than American's engagement in the 2000 election. The numbers suggest that voter turnout could be lower this year than in 2008 or 2004. Republicans are more revved up than the Democrats, 74 percent of Republicans say they think about the election quite a lot compared to just 61 percent of Democrats. This 13-point GOP advantage is the highest this poll has measured in recent presidential elections.

Now, it's possible the Democrats just haven't tuned in yet and that the Republicans are more engaged because of the primaries. Typically, Americans start thinking more about the election the closer it gets once the conventions, debates, et cetera start happening. And tradition really starts to rev up after Labor Day. If the higher GOP interest keeps up, it could mean higher turnout for the Republicans come November.

It's clear Mitt Romney selection of Paul Ryan over the weekend has jump started the party's base, the crowds at Romney's events have grown larger -- perhaps as high as 15,000 at one North Carolina rally. And they've grown more energetic as well. Reminds you a little of President Obama's crowds back in 2008. But the president is not drawing those kinds of crowds this time around.

Here's the question, how often do you think about the presidential election? Go to CNN.com/CaffertyFile. Post a comment on my blog. Or go to our post on THE SITUATION ROOM's Facebook page.

It seems embedded in the public consciousness and it's only going to get worse, Wolf.

BLITZER: I think about it at least three or four times an hour, Jack.

CAFFERTY: Yes, but you're supposed to. That's your job.

BLITZER: Maybe more. Maybe I don't think about anything else just the presidential election.

CAFFERTY: You don't wake up in the middle of the night screaming thinking about it.

BLITZER: Sometimes in the middle night do wake up and start worrying about something in the election. All right, Jack, thanks very much.

Other subjects we're following right now. You may not have ever heard of computer software called TrapWire, but WikiLeaks says the program is enabling the government to spy on everyone. WikiLeaks' latest release of stolen email is sparking global concern about the anti-terrorism software.

CNN's intelligence correspondent Suzanne Kelly is here in THE SITUATION ROOM working the story for us. Susan, how valid are these concerns?

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: Well, Wolf, according to the WikiLeaks e-mails TrapWire is a program that was originally intended to provide law enforcement with detailed images captured in U.S. cities and then sharing that information with authorities as those activities were occurring.

Now, it turns out while this system may not be all that widely used, the notion of being watched around the clock is not such a stretch.

(BEGIN VIDEOTAPE)

KELLY (voice-over): Surveillance cameras are everywhere. Just who's watching and what they're watching has flamed new concerns after WikiLeaks published stolen e-mails regarding a government surveillance program called TrapWire. It's a program meant to identify potential terrorist activity using cameras now omnipresent.

The idea of being watched is new reality in a post-9/11 world. Though some worry that those measures come at a high price.

JAY STANLEY, ACLU SENIOR POLICY ANALYST: The whole approach stopping terrorism is based on mass surveillance is not an effective way to stop terrorism. And it's very dangerous for our liberties. We don't want to live in a society where the government is watching all of us all the time, just in case we might be a terrorist.

KELLY: But TrapWire doesn't appear to have gotten very far off the ground with government supporters. The Department of Homeland Security helped fund the initial development of the project.

An official telling us that DHS funded an operational pilot in Washington, D.C. and Seattle in 2010 to determine if the system could be applicable in infrastructure protection applications. That pilot aimed at keeping buildings safe included cameras being placed in some 15 locations. But DHS says it discontinued funding the program in January 2011.

That doesn't mean, however, that similar programs haven't taken off.

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: We're announcing the full launch of Domain Awareness System.

KELLY: Last week, the City of New York announced that it had partnered with Microsoft in the development of a real time surveillance network blanketing parts of the city with cameras and offering real time pictures of what's happening, then feeding those images back to law enforcement personnel.

BLOOMBERG: This new system capitalizes a new powerful policing software that allows police officers and other personnel to more quickly access relevant information gathered from existing technology and help them respond even more effectively.

(END VIDEOTAPE)

KELLY: Now, the idea that we move around anymore without being watched is just not realistic. The idea though that this concept is new is also not realistic.

Wolf, the government continues to fund projects like this as it looks for new ways to detect and disrupt terror plots.

BLITZER: Interesting stuff. It's amazing that -- you know, I think in European cities they're watching everything already. That's slowly but surely beginning to happen here.

KELLY: It is a little creepy.

BLITZER: Thanks very much.

KELLY: Pleasure.

BLITZER: The Republican presidential candidate just got to his location in Zanesville, Ohio. He's getting ready to speak to a crowd there. There you see his bus. We're going to have some live coverage coming up.

We're also standing by to hear from the president of the United States. He's also out there on the campaign trail. He's getting ready to speak. We'll have live coverage of that as well.

And much more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We've got some live pictures coming in from Zanesville, Ohio.

Romney actually already has spoken. He spoke briefly, only for about eight minutes in Zanesville. We're going to take a closer look at the tape, see what he had to say. We'll give you some highlights. That's coming up. He's getting ready to move out on the bus from Zanesville to his next stop.

We'll continue monitoring what's going on there. There you see the Romney bus.

We are standing by to hear from President Obama. He's getting ready to speak in Iowa this hour or early next hour. We'll have live coverage of that as well.

Standby. Much more political news coming up right here in THE SITUATION ROOM.

Meanwhile, an encouraging sign the U.S. economy gained some strength last month. Kate Bolduan is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What do you have, Kate?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Hi there, Wolf.

U.S. retail sales rose in July for the first time in four months. The Commerce Department reports overall retail sales went u up eight-tenths of a percent, which was well above economist expectations. But experts warn the numbers can be volatile before July. Retail sales dropped for three straight months.

And a tough new crash test by the Insurance Institute for Highway Safety is sending a number of luxury cars to the bottom of the class. Mercedes, Lexus and Audi all have cars in the worst, quote- unquote, "poor" rating. The test has the vehicle striking another car or object with just a quarter of the driver side bumper. The institute says these so-called small overlap crashes cause about a quarter of the serious fatal and automobile injuries each year.

For more on these cars, you can check out IIHS.org.

And finally this hour, high school students in Detroit will get a free pair of Nikes if they show up for the all-important count day. That's the day attendance is used to determine the school's funding through state and federal funding for the year to come. Bob's Classic Kicks is donating up to 17,000 pairs of sneakers. The store is seeking sponsorship to help offset the cost.

According to "Detroit News:, the owners both attended Detroit schools and wanted a way to give back and this is how they're doing it.

BLITZER: Very nice. Very nice gesture indeed. The Detroit schools could use all the help.

BOLDUAN: Use all the funding they can get, yes.

BLITZER: Of course. Kate, thank you.

Medicare takes a bit of a backseat today as energy and what some Republicans see as Vice President Biden's racially charged words come from and center in the presidential campaign. We're going to hear from a top Obama campaign official.

We're also standing by to hear from President Obama at his next stop in Iowa. You're looking at live pictures. That's where the president will speak. We'll hear what he has to say right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All right, let's get right to our "Strategy Session." Joining us our two strategists, CNN contributors both, on the Democratic side, Donna Brazile, for the Republicans, Mary Matalin. Mary is joining us on the phone today.

But let me go through an important issue that's coming up involving taxes, very serious differences between these candidates when it comes to taxes, for example, and I'll put it up on the screen.

We'll go through some of them. Highest income tax rate, the president would increase it from 35 percent to 39.6 percent. Romney has 28 percent at his highest. Ryan supported 25 percent.

You know, this is seen, Mary, potentially as a bonanza for rich people if the Republicans are elected. What do you say about that?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR (via telephone): I say that that's a false description in that what Obama is saying why he would tax the so-called upper bracket is to reduce the deficit or to pay for programs. We don't need to expand the government anymore.

That's part of the problem. All that would raise what Obama's tax plan is $30 billion over 11 years, which is $3 billion a year. We spend $10 billion a day.

So Romney and Ryan have a real plan. It will really reduce the deficit, restructure the debt. It's tax and regulatory reform and it will get the economy going.

BLITZER: But it's true, rich people at the highest brackets, Mary -- then I'm going to bring Donna in, they would go from what is now 35 percent, the president wants to raise it to 39.6 percent. But under Romney's plan, let's forget about Ryan for a moment, it goes down to 28 percent, meaning as far as income tax rates, there's going to be a bonanza for rich people.

MATALIN: And as a percentage of the GDP, they pay twice what the other income brackets pay. They earn half of what they pay. They pay the highest percentage of their income of any group. And that's been increasingly so.

They pay twice what they did in earlier decades. Every time there's tax reform, the wealthier brackets end up having to pay a greater percentage of their income. When it's in raw dollars, it's different, but that's what grows the economy. That's the money used for saving and investment.

BLITZER: We'll let Donna respond to that. Because it is true that the top 2 percent and 3 percent of income earners, they pay a huge chunk of all income tax, not all the other taxes necessarily, but income tax in the United States.

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: They also have a huge chunk of exemptions and loopholes they use to lower their taxes, Wolf. Look, I know I think I've experienced at least two or three of those income tax brackets over the course of my work life starting at the age of 12.

But it is true that according to the Tax Policy Center, Chairman Ryan's budget gives those making over $1 million an average of $394,000 in tax cuts. The Joint Economic Committee, Wolf, even said that the Ryan plan gives the largest tax cuts to, of course, the wealthiest and will pay for those tax cuts by raising taxes on the middle class.

President Obama has offered a very balanced approach, as you know, allowing the Bush tax cuts for the wealthiest Americans to go back to the pre-Bush rates, the Clinton rates. And he believes that that money will be useful to pay off some of the government debt as well as to pay for our expenses.

Mitt Romney has, of course, a tax plan that will also increase the deficit. If you take a look at his plan, at least the details we know because as you know like his own tax returns, we don't know that many details.

But, again, he doubles down on the Bush tax cuts and says it won't even cause us to raise the deficit. I think we should take a serious look at all of these tax plans.

BLITZER: Let's move on and talk about the Republican convention coming up at the end of this month in Tampa. Mary, I'll bring you into this conversation right now.

We know that Chris Christie is going to be the keynote speaker. Marco Rubio, the senator from Florida, is going to introduce Mitt Romney. Both very dynamic speakers, very popular with the Republicans and conservatives.

How far will this go in energizing that base, which presumably even though that Paul Ryan was named to the ticket, there are still elements of that base, Mary, as you well know aren't really in love with Mitt Romney.

MATALIN: Well, what the base is concerned about, what America's concerned about, what independents who don't identify with either party is concerned about is the level of debt and the growth of government that we've experienced under this president.

And what Marco Rubio and Chris Christie and others, Scott Walker, the 17 Republican governors that were in the last mid-terms and the Romney/Ryan ticket represent is structural reform and reigning in this growing burgeoning government.

So Christie and Rubio are powerful voices for that and a good magnifying voice for the Romney/Ryan message.

BLITZER: All right, go ahead, Donna, react.

BRAZILE: Well, first of all, I hope the background music is better than the song because if you're going to go to the Republican convention as I plan to do, Wolf, you will really need some extraordinary music to keep you from falling asleep at night.

There's no question that we have to deal with our long- term structural deficits, but taxes at their lowest in 60 years, discretionary spending the lowest since President Eisenhower, we face this huge deficit because we're still paying for a war in Afghanistan.

And we still have less revenues coming in as a result of the recession. So I think we need to have an honest discussion about what it will take to fix our economy. But I don't think you'll get that honesty from listening to those speakers during the Republican convention.

BLITZER: It will be a lively convention. One final question, Mary, to you, Sarah Palin a no-show. She's either not invited or not coming. Is that a big loss for the Republicans?

MATALIN: Sarah is and remains a positive and pivotal voice for constitutional conservatives. I think Rubio and a number of the primetime speakers wouldn't be in a primetime speaking situation were it not for Sarah Palin's intervention and their primary from their election.

So the spirit of Sarah Palin lives. I'm pretty sure she did not want to be a giant distraction that the press would make if she appeared.

BRAZILE: I'm going to miss her, Wolf. I'm going to miss her.

BLITZER: Yes.

BRAZILE: I want her there.

BLITZER: All right, guys, thanks very, very much.

It's day two of President Obama's swing through Iowa. We're going to talk live with his traveling press secretary about what's topping the agenda.

And bargain hunters from across the border aren't necessarily getting all that warm welcome from fellow shoppers. We're going to explain what's happening at one Washington State Costco.

(COMMERCIAL BREAK)

BLITZER: Mitt Romney was talking energy. He was talking coal earlier today. His latest campaign stop in Ohio, he brought up the issue of small business. Listen to this.

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: It's also because small businesses create about 65 percent, about two-thirds, of all the jobs in America. I want small business to do well so people do well across this country.

That means I want to keep taxes down on small business. I want regulators to see their job as encouraging business not just crushing it. I want to make sure that that big cloud hanging over small business is taken away. I want to replace and repeal Obama care.

Now and then the president says something even I can't believe. I mean, there's some things he's done too I can't believe. Going out saying he's going to take the work requirement out of welfare. How in the world can he not understand the power of work, the dignity of work?

And taking work out of welfare is something I'll change. I'll tell you that, day one. He made a commitment when he was running for office. He said he was going to protect Medicare. You know that every time you get a paycheck out of that money comes money going into the welfare trust fund to pay for your health care when you're older.

And this president has decided, I can't believe it, he's taken $716 billion out of the Medicare trust fund to pay for Obamacare. I'll put it back. And then just the other day in Virginia he said, you know, if you have a business, you didn't build that.

Someone else said that and then he says, then he says he was taken out of context, you know. So take a look at the context. It's worse than the quote, all right, because he says, look, if you think you're successful because you worked hard, a lot of people worked hard.

If you think you're successful because you're smart, a lot of people are smart. I couldn't figure out where he was going with this. My own view is we celebrate people who work hard and try and do their best in school and get promotions.

(END VIDEOTAPE)

BLITZER: All right, guys. Just saw Mitt Romney is going hard against the president in Ohio. Now you're looking at live pictures coming in from Marshaltown, Iowa, where the president of the United States will respond.

He's getting ready to speak to that group over there. So we'll have live coverage of that as well once the president goes up to the stage. We'll hear from him. Lots of back and forth going on.

Jack Cafferty's back right now with "The Cafferty File," -- Jack.

JACK CAFFERTY, CNN ANCHOR: Obama seems to have a little spring in his step. Excuse me, Romney. I think he's been more energized.

BLITZER: He's been energized by Paul Ryan's inclusion on the ticket. I think that's fair.

CAFFERTY: It's more energy than we've seen out of him recently. The question this hour is, how often do you think about the presidential election like we give you any chance to think about anything else?

Ethan in North Carolina, "I give the presidential election constant thought because this election's either going to make or break America if you can break it anymore."

Rilely, "Very little, after the election not much will change. Most of the same representatives and senators will be back doing nothing. So why think about it?"

Ed in Harrisburg, "This year, America's at a cross roads of deciding what sort of country we're going to be down the road. And the choices are now very clear. I'm thinking about this constantly, continually.

We've kicked the can down the road long enough. We now can no longer pay the piper. We need bold, radical changes, shared sacrifice and revised expectations. Lots to think about this election year, hard choices to make."

Ben in Boston, "Whenever I read the paper or listen to the news my mind focuses on the election. I'm tired of the nitpicking, bickering and negativity though. I wish Hillary was running."

Mark in Washington, "Every moment I'm out looking for a job." Pat in Michigan, "Every day when I wake up and realize that either way I vote, I'm going to lose."

And Martha writes, "Personally, I would like to forget about it. But you guys won't let me." If you want to read more on the subject, go to the blog cnn.com/caffertyfile or through our post on "THE SITUATION ROOM's" Facebook page -- Wolf.

BLITZER: Thanks, Jack. Thanks very much. Up next, we're going to ask the Obama campaign's press secretary about Vice President Joe Biden's warning today that Mitt Romney's economic policies would put people, quote, "back in chains." What did he mean?

Also, we're keeping our eyes on at least 60 dangerous wildfires in the western U.S. We'll have an update that's coming up in our 6:00 p.m. Eastern hour.

(COMMERCIAL BREAK)

BLITZER: The president of the United States getting ready to speak to his supporters in Iowa. But in advance let's bring in Jen Psaki, she's the traveling press secretary for the Obama 2012 campaign, former White House official for the president as well. Jen, thanks very much for coming in.

JEN PSAKI, TRAVELING PRESS SECRETARY FOR OBAMA 2012 CAMPAIGN: Hi, Wolf.

BLITZER: Thank you.

PSAKI: My pleasure.

BLITZER: I want to get your immediate reaction, explanation of what Vice President Joe Biden really meant when he said this that's causing a big uproar out there. The Republicans are really going after him. Listen to the vice president earlier today.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: Look at what they value and look at their budget and what they're proposing. Romney said in the first hundred days he's going to let the big banks once again write their own rules. Unchain Wall Street. Going to put you all back in chains.

(END VIDEO CLIP)

BLITZER: All right, those are pretty strong words. He's going to put you all back in chains. What did he mean?

PSAKI: Well, Wolf, it's very clear what the vice president was saying. Republicans often use the phrase unshackle. They want to be unshackled from the Wall Street reforms the president and his team put in place that have really helped address the challenges that we've been having to deal with over the last couple of years.

The vice president was using a metaphor in saying, listen, we can't go back to the stage where we didn't have reforms in place on Wall Street, we didn't have new rules of the road that would protect middle class families.

That's exactly what he's talking about. And I think, you know, we need to be spared a little bit of this feigned outrage by Republicans because they're out there putting out false ads on the air, about welfare and the president's record.

They're out there questioning the president and whether he understands freedom and understands America. It's clear what the vice president was saying.

And we agree, we can't go back to the stage where we had old rules of the road in place for Wall Street reform and middle class families weren't protected.

BLITZER: Andrea Sal from the Romney campaign, she issued a statement, a tough one. I'll put it up on the screen. She said after weeks of slanderous and baseless accusation levelled against Governor Romney, the Obama campaign has reach a new low.

The comments made by the vice president of the United States are not acceptable in our political discourse and demonstrate yet again that the Obama campaign will say and do anything to win this election. You want to respond to Andrea Sal?

PSAKI: Well, Wolf, we know that they want to defund Wall Street reform. We know they want to go back to an era where we didn't have those rules of the road in place. That's an area where we disagree.

You know, I do have to say it's a little absurd coming from a campaign that has not run one, but two ads distorting and mischaracterizing the president's record on welfare. This is clear.

This is their one issue or one of their only issues they're running on. And it's a false boldface lie. Maybe they need to go back to the drawing board, take a look at what they're actually running on, what their differences are so they can lay out an honest choice for the American people.

BLITZER: You understand, Jen, the words and the vice president uttered these words, he says he's going to put you all back in chains, in chains. Those are very, very powerful strong words. I don't know if he's ever said anything along those lines before. Do you think he wishes he had a do-over?

PSAKI: Well, the Republicans in Congress and Mitt Romney himself often use the phrase unshackling. Unshackling from Wall Street reforms because they think it's not the right approach. We think it's the right approach.

The vice president often talks about unshackling the middle class and everything we need to do for the middle class. So, again, this is a metaphor. People know what he's talking about.

Let's talk about the real issues like their opposition to the wind tax credit we've been talking about in Iowa today. Their opposition to extending tax cuts for middle class families. That's a conversation people want to be having right now. Not this silly side show.

BLITZER: Yes. It's a strong words though, put you all back in chains. As I said, I never heard the vice president say that before. I'm sure the president would never use those words.

But let's move onto Paul Ryan, the new vice presidential running mate of Mitt Romney. He was out there earlier today. I'll play a little clip of what he said and I'll get your reaction. Listen to this.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), VICE PRESIDENTIAL CANDIDATE: President Obama cannot run on his record. Just think about it. This is the worst economic recovery, if you call it that, in 70 years. He promised he'd keep unemployment from going up above 8 percent.

It's always been above 8 percent under his tenure. He promised to create jobs, 23 million Americans are struggling to find work. Families are hurting. He promised to cut the deficit in half in four years. I rest my case on that one.

(END VIDEO CLIP)

BLITZER: All right, so did the president overpromise?

PSAKI: Look, the president came in at an extremely difficult time in the economy. As we know, we were losing almost 700,000 jobs a month. The economy was shrinking at a rate of 9 percent. We've had 28 straight months of private sector job growth.

He's out here talking about fighting for middle class tax cuts. He's put in place access to affordable health care for all American. We're happy to put our record up against the Romney/Ryan record every day.

What the clear difference is the two we're fighting for. We're fighting for the middle class. We're fighting for families in Iowa who are trying to get their lives back together, trying to get jobs -- wind turbines around the state.

And we know that the Romney and Ryan record is totally different. It's not the right ones for Iowans. It's not the right one for middle class families across the country.

BLITZER: Jen Psaki is the traveling press secretary for the president of the United States. He's getting ready to speak to that crowd behind her. We'll have live coverage coming in from Iowa. Jen, thanks very much for coming in.

PSAKI: Thank you, Wolf.

BLITZER: We're going to go back to Iowa once the president starts speaking. I want to hear what he has to say. He's presumably going to be responding to those very tough words from Mitt Romney today, Paul Ryan today.

Lots coming up right here in THE SITUATION ROOM. Also, the search for low prices is creating a cross border feud between the U.S. and Canada. (COMMERCIAL BREAK)

BLITZER: There's a cross border conflict playing up north and the battleground is a Costco in Washington State. Chris Brown at the CDC reports the hunt for bargains as shoppers drawing lines in the warehouse sand.

(BEGIN VIDEOTAPE)

CHRIS BROWN, CDC (voice-over): In Bellingham, Washington, they're equating Canadian shopper to voracious predators. Milk Piranhas is their nickname. Shoppers from the Vancouver area whose appetite for bargains can devour a palette full of Costco milk jugs in just seconds.

JEN LEVIERE: It's completely insane. I dread going especially on the weekends when there's more Canadians. I'm like look, Canadian, Canadian, Canadian plates. Costco is a nightmare. Even on like a Tuesday afternoon. Don't these people work?

BROWN: In this U.S. border town, there's suddenly a fierce debate about whether Canadian shopping is out of control.

LEVIERE: Just the lines are halfway down the length of the store.

BROWN: This Facebook page suggests maybe there should be American-only shopping at certain times of the day to give locals a break. Points out bad parking jobs and some of the anti-Canadian comments are brutal.

Canadians are obnoxious. I've never dealt with people who are so rude. And there's absolutely nothing that we can say or do that will make you stop coming. I'm just going to move.

With Vancouver suburbs just 25 minutes away, it's a quick, easy way for some to save a lot of money.

UNIDENTIFIED MALE: It's almost two for the price of one.

BROWN: The anti-Canadian campaign has a few thousand likes on it, but aside from blowing off a bit of steam, it's not expected to go very far.

KEN OPLINGER, BELLINGHAM CHAMBER OF COMMERCE: The last two years our sales tax generation has doubled or tripled the pace of the rest of the state and it's almost entirely because of the Canadians coming south.

BROWN: So, indeed, Costco's response is, time to build a bigger store. And just to prove we're not all that bad, we even helped one woman return an unwanted wedding gift.

UNIDENTIFIED FEMALE: Here we go.

Thank you. BROWN (on camera): See, Canadians are nice.

UNIDENTIFIED FEMALE: It is very nice to shop with you.

BROWN (voice-over): A small victory for parking lot diplomacy.

Chris Brown, CBC News, Bellingham, Washington.

(END VIDEO TAPE)

BLITZER: Canadian border services tell us, by the way, visitors are only allowed to bring $20 worth of milk back over the border unless they stay in the United States for more than 24 hours.