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The Situation Room

President Obama Attacked by Former Navy SEALs in Ad; Negative Campaigning Normal in Every Election; Mitt Romney Confirms He Paid Taxes

Aired August 18, 2012 - 18:00   ET

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

JOHN KING, CNN HOST: You're in the SITUATION ROOM.

Mitt Romney's beginning his final sprint to the Republican convention, but President Obama isn't about to let him have this week's spotlight all to himself.

Also, Paul Ryan's presence on the Republican ticket, just one factor putting his home state back into play. See why we now call Wisconsin a toss-up.

And smile for the camera. Stores now installing new technology that not only knows who you are, it will serve up tempting deals based on what you buy.

Welcome to our viewers in the United States and around the world. Wolf Blitzer is off today. I'm John King. You're in the SITUATION ROOM.

We're heading into a monster week for Mitt Romney and Paul Ryan, as they gear up for the Republican convention, now just a week away. To start building excitement, the running mates reunite Monday in one of this year's all-important swing states.

CNN's Joe Johns is here to look ahead at what else we can expect in a big, big week ahead.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: That's right, John. It certainly looks like the Ryan/Romney campaign could be changing its strategy already.

Last week, Paul Ryan himself said, and campaign aides confirmed, that the initial plan was for the two men to split up, more often than not, in the few weeks leading up to the Republican national convention in Tampa. But now, Mitt Romney and Paul Ryan are already scheduled to reunite for a campaign stop in the Manchester area of New Hampshire and the campaign has left open the possibility of more stops together, later in the week. Early reports are those stops could be in the Midwest.

New Hampshire was the place where Romney originally was supposed to make the announcement of the pick for vice president. They'd planned to do it last Friday, but that got postponed until Saturday, because of a memorial service for the victims of the Sikh temple shooting in Ryan's home district. So why the change? Ryan and Romney certainly work well together. I saw them campaign as a team in the primaries, just a bit, and Romney clearly appears to get some pep in his step when he's with Ryan. So there's some elevated energy there, for one thing.

And the tandem of Romney and Ryan has also been drawing large crowds, conservatives certainly like Ryan a lot, and the Romney campaign is going to the try to capitalize on that.

But, John, as you know, it's a gamble for the Romney campaign, because, obviously, the two of them can cover more ground in those all-important battleground states, if they're campaigning separately, rather than together.

KING: And so you see this whenever this pick is made. You want them to campaign together, you want people to get the optics, they're a good time, looks like they work well together. You're dead right about Ryan energizes crowds in Wisconsin and in Iowa watching him this week.

However, how do they deal with that delicate balance? Because in the end, Americans pick presidents. It's governor Romney that has to step back front and center and say, thank you, Paul, appreciate the energy, but if he's going to win, it has to be him.

JOHNS: Absolutely. It's very clear they are walking a very delicate balance there, and I think you'll see it in the coming weeks, that Romney is going to establish himself has the man who's running for president, vote for me. Ryan is my sidekick. And that's generally the way it works. Though so many conservatives out there see Ryan as so important now to energize them and get them to the polls in November.

KING: And when you talk to folks, there's no question this pick was largely designed to give Mitt Romney someone he likes and can work with and to energize the conservative base. How did the Romney campaign deal with the questions of, well, might it hurt you in the middle, though?

JOHNS: That's certainly a possibility, but Romney is hoping that he, himself, can make the case to those voters in the middle and let Ryan worry about the conservatives as well. Romney thinks he can handle that, and he's certainly proven that, being a Massachusetts governor coming from a state where he had to appeal to both sides.

KING: Don't get any bluer than Massachusetts.

Joe Johns, thanks so much.

It may be the Republicans' turn in the spotlight, but don't expect President Obama to lay low during the week ahead. He's also visiting swing states and raising campaign cash with the help of some NBA stars.

Here's CNN White House correspondent, Dan Lothian.

Dan, take us into the week ahead.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, that's right. You know, the president will be heading out to Nevada. That's an important state for the president. He has been going there quite a bit, talking about what he has done to help those homeowners who have their, those mortgages that are underwater, those upside down mortgages. That is a state that has been impacted by the downturn in the real estate market. So the president visiting that key state.

Also going to the state of Ohio. That's a place where recently he had that bus tour. He has been spending a lot of time in that state. He's ahead in the polls there, but both of these states, critical to deciding who wins the White House. And of course, the president also going to New York. New York City, as you know, a lot of money there. So he'll be going to collect some campaign cash to fuel this very competitive race, John.

KING: New York, more of an ATM than a swing state, at the moment for the campaign.

Dan, how do they view this, the Obama campaign? They understand the event flow of campaigns. If Mitt Romney is going to dominate, he'll get most of the spotlight, the lead up to his convention and then the convention week. How do they decide in the Obama campaign when to engage and when to step back and let the Republicans have their day?

LOTHIAN: Well, right now it doesn't appear they really want to step back. They're engaging very much either with the candidate himself or on the air with these very tough campaign ads. They've really been pushing this issue of Medicare. You know, that's something that has been part of this campaign cycle, but not the key focus.

And when Paul Ryan was brought on as the vice presidential pick for Mitt Romney that became a central focus. We saw that from the president when he was doing that bus tour in Iowa, and the campaign plans to keep pushing that. Saying that under the policy of what Mitt Romney has, and Paul Ryan, they're painting them with one brush, that Medicare will be changed, as we know it, will be changed. It will be turned into a voucher program. The Romney campaign saying that the president has taken money from Medicare in order to fund, quote, "Obama care."

So Medicare, a big issue that we'll keep hearing the White House and the president push in the coming days, John.

KING: And Dan, they also for weeks have been pushing Mitt Romney to release more of his tax returns. He put one year out, says a second will be coming. And now the Obama campaign having what I'll call a not-so-friendly exchange of notes?

LOTHIAN: That's right. I guess we could call this, let's make a deal. What you have is the Obama campaign really trying to push the Romney campaign into the corner. They have been asking for more taxes to be -- tax reports to be released, because they believe that the American people deserve to find out more about the financial background of a presidential candidate. And even some Republicans have been pressuring Romney to do the same, because they believe if Romney releases these tax returns, then this issue will just go away. So now you have Jim Messina, who's the president's campaign manager, firing off a letter to the Romney campaign, saying in part quote, "governor Romney apparently fears that the more he offers, the more our campaign will demand that he provides. So I am prepared to provide assurances on just that point. If the governor will release five years of returns, I commit in turn that we will not criticize him for not releasing more." They say he won't criticize him in ads, they won't criticize him in any commentary.

But for the Romney campaign, Matt Rhodes, Romney's campaign manager essentially dismissing this letter, writing his own letter that said in part quote, "it is clear that President Obama wants nothing more than to talk about governor Romney's tax returns instead of the issues that matter to voters, like putting Americans back to work, fixing the economy, and reining in spending."

The Romney campaign, they have said time and time again, that this is not an issue. That what Mitt Romney wants to focus on is how he can go out there and create jobs for the millions of Americans who are still out of work, John.

KING: That's at least good to know, despite all the nastiness, they can have a nice exchange of notes.

LOTHIAN: That's right.

KING: Dan Lothian at the White House for us.

Dan. Thanks so much.

A group of veterans, including former Navy SEALs, now accusing President Obama for taking too much credit for the killing over Osama bin Laden. The group says it's nonpartisan, but a CNN investigation finds close links to the Republican parties.

Let's bring in our Brian Todd who led this investigation.

Brian, what'd you find?

BRIAN TODD, CNN CORRESPONDENT: John, we have just discovered tom links that this group has to the GOP links that the group has not freely acknowledged. Its new web video just rakes the president for his campaign references to the bin Laden raid.

(BEGIN VIDEOTAPE)

TODD (voice-over): In a campaign ad, Bill Clinton praises President Obama's courage for ordering the Navy SEALs to launch against Osama bin Laden.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Suppose they'd been captured or killed? The downside would have been horrible for him. TODD: On the campaign trail, the president emphasizes it himself.

OBAMA: I promised to go after al-Qaeda and go after bin Laden and we did it.

TODD: Now, there's a counterattack.

BEN SMITH, FORMER NAVE SEAL: Mr. President, you did not kill Osama bin Laden. America did. The work that the American military has done killed Osama bin Laden. You did not.

TODD: That's former Navy SEAL, Ben smith, in a new video, slamming President Obama. The 22-minute film, titled "Dishonorable Disclosures" features former SEALs, Special Forces members, intelligence officers, skewering the president for taking credit for the bin Laden raid.

The Obama campaign pushes back, saying that the president has repeatedly credited the SEALs for the bin Laden operation. The Obama team also point to this interview that Wolf Blitzer did recently with commander of the raid admiral William McRaven.

ADMIRAL WILLIAM MCRAVEN, COMMANDER, U.S. SPECIAL OPERATION: At the end of the day, make no mistake about it, it was the president of the United States that shouldered the burden for this operation, that made the hard decisions.

TODD: I pressed Ben Smith on that. Does the president get no credit here? Should he get no credit here?

SMITH: He gets the credit for having Osama bin Laden killed under his watch. And if he's -- if he gave the order, wonderful. But taking all the credit with the I, I, I, me, I, I about it and using us as a political ad is wrong.

TODD: The film also blasts the Obama administration for allowing classified information on the raid and other security operations to become public.

UNIDENTIFIED MALE: We had tactics, techniques, and procedures that were compromised. We even knew the name of the dog that was on the operation.

TODD: The Obama team denies taking part in any leaks and says the Republicans are resorting to swift boat tactics, a reference to the blistering 2004 attacks on John Kerry's Vietnam war record.

UNIDENTIFIED MALE: John Kerry cannot be trusted.

TODD: This new ad was made bay group called OPSEC, for operational security. A spokeswoman for the group says, it is completely non- partisan. But CNN found many links between the group and the GOP.

The president of OPSEC, a former Navy SEAL named Scott Taylor who appears in the video, once ran for Congress as a Republican. A spokesman for the group has done similar work for the Bush administration and Republicans in Congress. Ben Smith, that former SEAL, told me he's an independent voter, but says on his facebook page that he was once a spokesman for the tea party.

And OPSEC lists its headquarters as being in this building in a certain suite, we found out that also in that suite are two Republican strategy groups and no other groups. We were not allowed to film inside, but we are told by someone in the suite that OPSEC doesn't have much more than a desk there and that no one from OPSEC was there to talk to us.

An OPSEC spokeswoman told us where they're located has nothing to do with the message they're trying to get out.

Could that message hurt President Obama like swift boat damaged John Kerry?

DARRELL WEST, BROOKINGS INSTITUTE: It could hurt Obama in the sense that it's a very competitive election, it's going to come down to 20,000 or 25,000 votes in handful of states, so we don't know how what's going to move those voters, but national security is a very sensitive issue for many people.

(END VIDEOTAPE)

TODD: And OPSEC is now one of three groups of former special operations members coming out with campaigns against the president over the security leaks. Neither the Pentagon nor the CIA would comment on this latest video or confirm the military experience of those in the film -John.

KING: So Brian, this is one of those stories where the old Watergate rule applies. Follow the money.

TODD: That's right.

KING: Can you follow the money? Where are they getting it?

TODD: If you could follow it, that would be great, apparently you can't right now. The group is not disclosing its donors. It's set up as a special kind of nonprofit under the tax code where you don't have to disclose their donors. They did tell us they have about $1 million at their disposal and they plan to run ads in swing states in the coming weeks. We'll see if they do it. We will see what kind of resources they have.

KING: Excellent report, Brian Todd. Brian, thank you.

Stay with us for a death-defying drive. CNN's Ben Wedeman and his crew drive to the city at the heart of Syria's civil war and run out of gas. You will see what people go through there every day.

Also, candidates going negative. Well, it's been happening for centuries. We'll take a look at 200 years, that's right, 200 years of campaign mudslinging.

And the battle for the state where Barack Obama scored his first big victory in 2008 could put the Romney/Ryan team in the White House in time.

(COMMERCIAL BREAK)

KING: Syria seems to be sinking deeper into civil war by the minute. With United Nations now reporting the humanitarian crisis affects an estimated two million people at the heart of the fighting, the country's largest city, Aleppo.

This past week, CNN's senior international correspondent, Ben Wedeman, took a death-defying drive inside.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We made it. We left our safe house at 11:00 in the morning. It's ten minutes past 10:00 at night, and we finally made it to Aleppo.

All right. We're now going in the direction of Salaheddine where of course all the fighting is taking place. We're going to go to a Mashad neighborhood which is adjacent to Salaheddine. There we'll get out and make our way slowly and cautiously towards Salaheddine, which the rebels say they've largely retaken. But if you have to take everything they say -- everyone says, with a great big sack of salt.

(SPEAKING FOREIGN LANGUAGE)

WEDEMAN: He's saying at the intersection, go faster. OK, we're going through an intersection where he says to drive fast, so, time to get on the gear.

(SPEAKING FOREIGN LANGUAGE)

UNIDENTIFIED MALE: Just put your foot down, mate.

WEDEMAN: So we're just going through this intersection.

UNIDENTIFIED MALE: Keep going!

WEDEMAN: OK. Now we're good. We're good. It was just that road here.

(SPEAKING FOREIGN LANGUAGE)

WEDEMAN: OK, he's saying, here's there a sniper that's shooting.

(SPEAKING FOREIGN LANGUAGE)

WEDEMAN: OK, he's saying you want to go back and drive fast through the intersection, because there's a sniper. He says get down.

UNIDENTIFIED MALE: Get down, mate.

UNIDENTIFIED MALE: There's a sniper.

WEDEMAN: Get down. Get down. Get down.

UNIDENTIFIED MALE: Just plug it, mate.

UNIDENTIFIED MALE: I can't go any farther.

WEDEMAN: That's already, you're fine.

WEDEMAN: Come down. Just get down. Even if it's uncomfortable, just get down.

UNIDENTIFIED MALE: It's not because it's uncomfortable.

WEDEMAN: OK. We made it past that one. OK. Maybe now's a good time to get out, get our bearings. Wait, what are you doing? OK, he's going to take us between the buildings. Probably will park the car there and --

(END VIDEOTAPE)

KING: Ben Wedeman and his team doing some heroic reporting inside Syria. So you have a better sense of just what's happening in the middle of that crisis. Ben will be with us throughout these terrifying days ahead.

Thanks to Ben Wedeman there.

A lesson in political mudslinging for the 2012 candidates from our founding fathers. Just ahead, why negative campaigning is a big part of political history.

And companies may be able to recognize you from facebook and track you with the blink of a camera's eye.

(COMMERCIAL BREAK)

KING: Oh, we hear plenty of complaints about how negative this presidential campaign is, but really, it's nothing new. What we're seeing this time around, actually, pretty mild.

CNN's early start co-anchor John Berman has dug up some of the ghosts of campaigns past.

(BEGIN VIDEOTAPE)

JOHN BERMAN, CNN ANCHOR, EARLY START (voice-over): Mitt Romney. The ad implies he was more or less responsible for a woman dying.

UNIDENTIFIED MALE: And she passed away in 22 days.

BERMAN: A stretch, to say the least. Barack Obama. The ad says he wants to end welfare reform.

UNIDENTIFIED MALE: You wouldn't have to work.

BERMAN: Not really true either. No, Mitt Romney and Barack Obama do not agree on a lot. But they do agree this campaign has become positively negative.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There's so much negativity and so much cynicism.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: What's different this year is that the president is taking things to a new low.

BERMAN: Different? Different than, say, Mitt Romney's campaigns against Rick Perry, Rick Santorum, and Newt Gingrich?

UNIDENTIFIED FEMALE ANCHOR: Are you calling Mitt Romney a liar?

NEWT GINGRICH (R), FORMER PRESIDENTIAL CANDIDATE: Yes.

BERMAN: Or for that matter, Barack Obama's campaign against Hillary Clinton.

HILLARY CLINTON, SECRETARY OF STATE: Shame on you, Barack Obama!

BERMAN: If history has taught us anything, it's that every campaign in history seems like the most negative in history.

UNIDENTIFIED MALE ANCHOR: 2010, likely to have the most negative campaign ads ever.

UNIDENTIFIED MALE: The most negative campaign in memory.

UNIDENTIFIED FEMALE: The most negative campaign any of us can remember.

BERMAN: Yes, negative campaigns existed even before super PACs. Lyndon Johnson implied Barry Goldwater would start a nuclear war. Grover Cleveland accused of having a child out of wedlock. Mama, where's my pa?

Andrew Jackson, accused of killing a man and having a wife who was a bigamist. John Quincy Adams, it was said he procured prostitutes for the Russian czar. Thomas Jefferson. John Adams supporters once said his election would result in murder, robbery, rape, adultery, and incest.

So until we get charges of robbery, nuclear war starting, or prostitute procuring, maybe this will have to wait.

ROMNEY: The president is taking things to a new low.

BERMAN: They might be mean, cruel, and cynical, but negative campaigns are not blights on history, they are our history.

If there is one thing that does seem different this year, it's not that the negative campaigning has started earlier, it's that the complaining about negative campaigning has started earlier.

John Berman, CNN, New York.

(END VIDEOTAPE)

KING: And if you're wondering, perhaps the last presidential election that didn't go negative, well, 1820. President James Monroe ran unopposed. What a difference four years make?

The president shake hands and vice versa with the Iowa state fair where an easy win in '08 has become a big campaign battleground.

And also, look who's watching your every move. Is new facebook technology pushing the bounds of privacy?

(COMMERCIAL BREAK)

KING: Less than three months now to the presidential election, and some new states, smaller states, are becoming prime battlegrounds. In the race to get to 270 electoral votes, tiny places like New Hampshire, four electoral votes, Wisconsin, ten electoral votes, and Iowa with six are becoming big battlegrounds. This past week, I spent some time out in Iowa.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We go through probably about 3,000 an hour.

KING (voice-over): Choices, choices, choices. The Iowa state fair is a test of diet discipline.

UNIDENTIFIED MALE: Take a kernel of corn, stick it in a jar!

KING: And all in the spirit of farm state fun, proof this time around Iowa is a competitive presidential battleground.

President Obama stopped by the fair during his three-day spring and the Romney campaign chose it for Paul Ryan solo debut. It was a very different feel from four years ago when the president won Iowa by ten points.

TERRY BRANSTAD (R), IOWA GOVERNOR: We have a real battle going on here for the heart and soul of the people of this state.

KING: Republican governor Terry Branstad says the GOP base is fired up and he predicts the president will lose a good chunk of his 2008 o coalition.

BRANSTAD: Obama had a real following here four years ago, but people feel betrayed. They feel like he ran and something is going to bring people together and he is going reach for us, Iowans. He hasn't done that.

KING: Four years ago, Democrats had a significant voter registration advantage, but now Republicans have erased that edge. Visit an Obama campaign office like this one in Davenport, and you see the competition up close.

UNIDENTIFIED MALE: Can I count on you to vote by mail?

KING: Have you been out-hustled here?

DAVID AXELROD, OBAMA CHIEF CAMPAIGN STRATEGIST: I think we still have an organizational edge in the state and we've done a good job of registering new voters. So, I think we're building that back up. But I don't think we're going to be out-hustled on Election Day. I don't think we're going to be out-hustled in the next 85 days.

UNIDENTIFIED MALE: Mitt Romney's middle class tax increase. He pays less, you pay more.

KING: The TV ad war is bruising, $6 million in just the past month. The Obama campaign outspent the Romney campaign almost two to one in that period, but add in party and super PAC spending, and the pro- Romney forces had the edge.

UNIDENTIFIED FEMALE: Forty one straight months of unemployment over eight percent. Almost four million fewer jobs than President Obama predicted.

KING: Iowa is a great test of the Ryan factor. The president's team says his policy views will trump his Midwest roots.

AXELROD: 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: But governor Branstad says Ryan helps with critical catholic voters and is in tune with Iowans' biggest worry.

BRANSTAD: The number one concern here is the budget deficit.

KING: A million people attend the fair, so both campaigns are working hard, signing up new voters, new volunteers, and leaving the fun to others.

(END VIDEOTAPE)

KING: Joining uh now at the magic wall, "New York Times" national political Jeff Zeleny.

Jeff, when you look at this map, this is where we have it now, 237, strong or leaning for President Obama, 206, strong or leaning for governor Romney. Let's focus on Iowa for a minute. The president won in a blowout last time, but it is truly a toss-up state.

JEFF ZELENY, NATIONAL POLITICAL CORRESPONDENT, NEW YORK TIMES: Without a doubt. I mean, look at 2000 and 2004, Al Gore won in 2000, George W. Bush won in 2004. The result in 2008 is a bit of an anomaly, not much of a benchmark. So, what both sides are really focusing in, digging in on this, and this Ryan pick, without a doubt, I was on Iowa as well, has energized these conservatives, who were a little unsure about Mitt Romney.

KING: And so, then you look at Wisconsin, we moved it to toss up. "New York Times" just has toss up for some time. Ten electoral votes. If governor Romney can put that in place, puts Iowa in play, you have a very different Midwest than you had four years ago.

ZELENY: Without a doubt. And that is one of the places that governor Romney probably thought was out of his reach before this. It at least now makes it competitive. And it sends a signal to all these outside super PACs to start spending money there, right now. It's going to ensure that the Obama campaign and Democrats are going to have to spend their limited resources there as well.

KING: So let's take a hypothetical here. Let's move Iowa to the Republicans. Let's move Wisconsin to the Republicans. Again, it's a hypothetical. If you do that, 237 to 222, but what the Democrats would tell you is, Ryan puts Medicare front and center.

What happens down here? Can governor Romney win 29 electoral votes in the state of Florida? If that goes blue again, can governor Romney win? If President Obama kept what I had before and gets Florida, he's knocking on the door.

ZELENY: He can win, but he would have to put one of the Democratic states in play. He would have to win a Michigan, he would have to win a Wisconsin. And what the Romney campaign is going to have to do, probably after labor day, is make a choice between trying to make a vanity run in Michigan, which is, you know, sort of in governor Romney's blood, or go for a Michigan.

But if Florida is -- becomes out of reach for Republicans, we don't know, but if it does, they have to run the table, absolutely everywhere.

KING: That gets interesting. If that one goes blue, governor Romney's essentially got to win all these. Let's switch maps just for one final play, if you look at this because this is what strikes me.

This is 2008. And you see this right here. I mean, President Obama just owns it. He just owns the industrial Midwest, the heartland of the country. But if you look at 2010, these are your Senate races. And these are your governor races. And I talked to governor Branstad when he was here this week, and he made this joke, Indiana was already Republican.

He said if you look at what happened in the governor's races, Illinois, that's Obama's guys there, but he made the point that we've got them surrounded. Does it matter? Do the Republican governors matter when it comes to this presidential election?

ZELENY: I think it matters in terms of the infrastructure. I think if there would be a recount in one of these places, as we saw in Florida in 2000, who controls the levers of government absolutely matters. But I don't think it matters as much in 2012, because 2012 is not the same electorate as the midterms in 2010.

And there is some, sort of a backlash to some of these Republican governors' policies, like in Ohio, for example. John Kasich, not as popular as he would like to be at this point, as Mitt Romney would like to have him be at the head of the Republican party.

KING: So it's a better question after we get through both conventions. But as we prepare to go to the Republican convention, and you look at this map, I'm going to turn Florida back. I'll turn these states back to where we have them in our math right now, in our real math.

When you look at this map, do you think, OK, if there's one state where Jeff Zeleny is going to spend a lot of time in the final days, is there one?

ZELENY: I don't think there is one. There are several states. I mean, I think you have to put Virginia up there in the mix. If President Obama can keep Virginia in the winning column that makes it difficult for Republicans to win here. But, you know, Ohio is always a good place to keep your eye on, because if governor Romney cannot win Ohio, it's tough for him also to reach the White House. No Republican has done it.

KING: Right. Math almost impossible for governor Romney without Ohio and the state of Florida.

Jeff Zeleny, appreciate your time. We'll be going through the map a lot in the weeks to come.

And the Obama campaign now says it wants to make a deal with Romney if it releases more of its tax returns. Just ahead, how team Romney responds to that.

And a camera that knows your face and tracks your shopping habits thanks to facebook. Is it a deal or a danger?

(COMMERCIAL BREAK)

KING: Mitt Romney stirred the debate over his taxes again this week, revealing new information about how much he says he's paid.

(BEGIN VIDEO CLIP)

ROMNEY: I did go back and look at my taxes, and over the past ten years, I never paid less than 13 percent. I think the most recent year is 13.6 or something like that. I've paid taxes every single year.

(END VIDEO CLIP)

KING: The Obama campaign's response -- prove it.

Joining us to talk more about all of this and where we're going from here, "Washington Post" national political reporter, Nia-Malika Henderson and "the Times" deputy bureau chief, Michael Crowley.

How much does this matter? Governor Romney trying to say, of course I paid some, Harry Reid saying he had paid none. He's trying to give information, but you have the letter already from Jim Messina, the Obama campaign manager, "you release five years of returns, I commit in turn that we will not criticize him for not releasing more."

NIA-MALIKA HENDERSON, POLITICAL REPORTER, THE WASHINGTON POST: That's right. And that's a very narrow promise that he is making. I mean, he is not say that he won't - they won't criticize whatever in those taxes. We know at some point he's going to release, I guess it's 2010, the full tax returns. He's obviously hoping to put this to rest. I don't think he will. I don't think most voters care about this single issue.

I think what Democrats have been pretty expert at doing is trying to paint Mitt Romney as somebody who doesn't have to play by the same rules as everyone else. And that's what they're -- that's the case they're making in the adds that you see about Mitt Romney.

KING: So Democrats say, rich guy who's hiding something, and the Romney campaign in turn says, it's clear that President Obama wants to talk nothing more than governor Romney's tax returns, instead of the issues that matter to voters like putting Americans to work, fixing the economy.

Did the Romney campaign become its own worst enemy though, by having him talk again, or did he need to say something?

MICHAEL CROWLEY, DEPUTY WASHINGTON BUREAU CHIEF, TIME: Well, I think he was going to have to suffer follow up questions like that. Kind particularly after he told ABC that we would go back and look and see what his rates have been in past years.

So, he kind of invited that follow-up. They had to know it was coming. Evidently they weren't -- they did not think he was going to be talking about at taxes at that particular event, when they were wanting to focus on the whiteboard.

It does -- the one that's interesting here, is to see the Romney campaign trying to claim the high ground. One thing they can do with the Ryan pick, Paul Ryan is obviously divisive and controversial in many ways. But they can say, it's a campaign about substance and ideas. And Paul Ryan is looking at the budget, 10, 20, 30 plus years out, and this is where we want to have this campaign and the Obama campaign is coming at us with negative attacks about our tax returns and things we've litigated.

So it's interesting to see them try to take the high road, but the high road often does not succeed in American politics. I actually think the Obama campaign is on to a winning issue, but we'll have to wait to see how it plays out.

KING: You mentioned Ryan. This is that odd period in every presidential race where we meet the new running mate. And he gets a week, maybe two of attention, who knows if it matters come Election Day. It usually does.

But we did meet Paul Ryan. I tried to ask him this question in this great bus tour, I would call it, at the Iowa state fair. Part of the question is how as successful would he be? How different from Governor Romney. Well, let's watch this brief encounter.

(BEGIN VIDEO CLIP)

KING: They're already calling voters here in your state and here in Iowa, saying, ah, this is proof they're going to take away your Medicare. What do you say to that?

REP. PAUL RYAN (R), VICE PRESIDENTIAL CANDIDATE: We'll play all these issues later. We'll play stump the running mate later. But our job is to strengthen and protect Medicare. That's what we do. President Obama, they're raiding and ultimately rationing Medicare. We'll deal with these issues later, though, OK, John?

(END VIDEO CLIP)

KING: The Ryan pick is without a doubt, has without a doubt put Medicare front and center. But what's fascinating about this, the Romney campaign says, we're thrilled. We've raised more than $10 million. This is great, it energizes the base. The Obama campaign says, we're thrilled, it energizes the base and we're going to raise money and put Medicare front and center. Are they both right?

HENDERSON: They're right. We've seen this play out this week since he was announced, we have seen the face very excited. Very similar to the Palin pick last time when you saw so many people energized, people going and flooding those phone banks and making calls.

But I think it is -- I don't think we expected that we would be talking about Medicare so much. This was a campaign, the Romney campaign, very much focused on where are the jobs, that John Boehner slogan was very much the centerpiece of their argument for gaining the White House.

And so now we're talking about Medicare, but I think the Republicans have very much been on the offensive on this. They had a campaign ad out. Now, you obviously see Obama on the defensive, an odd place, I think, for the Democrats to be.

KING: It's an incredibly odd place, Michael. And if you look though, if you look at Karl Rove, look at the editorial page of the "Wall Street Journal." They think maybe there's a tipping point. They're trying to make the case, and maybe it's all they can say, but they're trying to make the case, if they actually have a policy debate about Medicare. After a few years in which every American has made tough choices, that maybe the Republicans can actually turn this issue in their favor for once.

CROWLEY: Yes. I mean, the Karl Rove position is that, in the past, you have not had Democratic legislation that took any money away from Medicare, and the Obama health care bill did take some money away. Now it's mostly to providers and not beneficiaries.

But Republicans feel like for the first time, they have sort of an in, that they never had before. I still think, John, that most likely, you know, they might be able to fight the Democrats to a draw on this. But I'm not sure it's really where they want to be fighting.

I mean, as you just said, what they're not talking about, when this Medicaid argument is -- Medicare argument is happening is, job creation, people who are unemployed, whose cousin or spouse might be unemployed, they're not saying, we're going to get you back to work in a few months. They're talking about the next generation, solvency of the program. They are hitting Democrats on cuts for seniors, which they allege are coming in the shorter term.

But I think the winning argument for the Romney campaign is near-term job creation, and this is taking them away from that issue.

KING: And so, how important is this next week? The Republican convention is a week away. There's been a lot on Paul Ryan last week, that's how it works. But governor Romney in the end will have to be front and center. There is only governor Romney can beat President Obama. Paul Ryan may help, may hurt, but it's Romney.

How do they do it next week? They will be together in New Hampshire. This is the big lead up in the convention. What's the challenge for governor Romney?

HENDERSON: Well, I think the challenge is he's got to reintroduce himself to the American public. You've seen all summer where the Democrats again have been pretty expert at focusing on Bain, focusing on the layoffs, they're taking away his main argument, which is that he's a job creator. So, I think that's a challenge there.

You obviously see Ann Romney there. They'll try to humanize him with that lavish video about his bio. So, think that's a challenge. Really having a message that people can -- that resonates with people.

CROWLEY: I think humanizing is so important. My sense is that a lot of American people just don't feel like they know Mitt Romney that well. He's a little bit of a cipher. He doesn't want to talk about his time as governor, he doesn't want to talk about Bain, even his religion is a little sensitive. They really these to introduce him and personalize him and humanize him. That's the thing that's really hindering him right now.

KING: Michael Crowley and Nia-Malika Henderson. Thanks so much for coming in. Big couple of weeks ahead.

CROWLEY: Yes.

KING: Here we go into the stretch.

A surveillance camera that knows your face and tracks your shopping habits. Is it a big deal, a big deal, or a sign of dangerous times to come? We investigate next.

And the late chef Julia Childs like you've never heard her before. Jeanne Moos is ahead.

(COMMERCIAL BREAK)

KING: Another new kind of computer technology now raising questions about your privacy. The camera that recognizes your face and can track your shopping habits through facebook.

Our Brian Todd is looking into that for us.

(BEGIN VIDEOTAPE)

TODD (voice-over): And you thought ads targeting you were pure fantasy. Well, shoppers, meet minority report.

UNIDENTIFIED FEMALE: Welcome back to the game.

TODD: A new service called face deals uses cameras set up in stores, restaurants, bars. Facial recognition matches up your image with your profile and pictures on facebook. Then it can send your a customized offer from that store. But only if you give permission before hand.

Face deals uses Facebook's open platform but is not otherwise connected to facebook. The service was developed by the marketing firm Red Pepper, which uses this promotional video to take you through it. Log into facebook, grant permission to image you. Verify your likeness.

UNIDENTIFIED MALE: When the face recognized, the deal is sent transaction.

TODD: The deal was then, as the company said, dynamically optimized. That means your face is read, it is matched up with your facebook like history. The face deal system then it delivers your coupon, your customized discount right to your mobile. Its wiz-bang has laser-like efficiency and concerns the heck out of privacy advocates.

Marc Rotenberg is with the Electronic Privacy Information Center. There's a surveillance camera in this store. We are also being filmed. What's wrong with using a camera do a little marketing?

MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: Well, I think the problem Brian, is that people will find that their personal information will become quickly available to the stores they're visiting.

TODD: What's wrong with it if they sign up for it?

ROTENBERG: Well, people would need to know how much of their personal information is actually being made available. It is not simply their identity. On facebook, for example, it would be their network of friends, their likes and interests. A lot of that information would become available and I don't think people would agree to that.

TODD: I ran that by red pepper's CEO.

TIM MCMULLEN, CEO, REDPEPPER AGENCY: We're not actually going to be pulling all the data. Not to mention applications that we do for retail companies around the country, all that kind of stuff. People allow apps, applications all the time. It's allow this app. And that is essentially saying that we can have access to your network. And I think that's sort of a line and a comfort line people are moving towards, as long as that information is not misused.

TODD: What does facebook think of this? It's a big part of the process and that face deals logo looks a lot like Facebook's. A spokesman told us the company is not commenting on face deals. It just wants to make sure people make informed decisions about the apps they used. The Red Pepper CEO says his agency has been in contact with facebook and when this camera is actually set up in stores, the name and logo will be different.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

KING: Fascinating stuff. The officials of the company developing the face deals camera say it's being beta tested in only three different stores in Nashville but they hope to roll it out nationwide.

The late chef, Julia Childs, like you've never heard her before. Jeanne Moos just ahead.

(COMMERCIAL BREAK)

KING: The late Julia Childs would have turned 100 this week. So, in her honor, lots of people are cooking up tributes, including CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Eight years after her death, Julia Child is back and she sounds hungry. The woman whose "New York Times" obit called her the French chef for a jell-o nation has been audited for a you tube nation.

PBS commissioned John Boswell to honor the icon to celebrate what would have been her 100 birthday.

JASON SEIKEN, SENIOR VICE PRESIDENT, PBS INTERACTIVE: Actually ever sing, use the magic voto tune to bring her to life in song.

MOOS: Julia Child didn't mince words, she minced ingredients. If you went searching on Google, maybe you stumbled on the Google doodle cooked up in her honor. These days everybody is a foodie, but not everybody gets portrayed by Meryl Streep.

UNIDENTIFIED FEMALE: Bon appetit.

MOOS: And Diane Ackroyd (ph) on "snl," nothing finger licking good about his chicken.

UNIDENTIFIED FEMALE: Must stop the leading.

MOOS: The real Julia may have liked things rare, but not that bloody. She used a blow torch to melt cheese over a beef tartar burger for David Letterman.

DAVID LETTERMAN, COMEDIAN: Ever cooked something that turned out awful?

UNIDENTIFIED FEMALE: Yes.

LETTERMAN: What do you do then? UNIDENTIFIED FEMALE: I give it to my husband.

MOOS: No wonder he died first. Julia's auto-tune resurrection is the later installment of PBS icons remixed icons like Mr. Rogers.

UNIDENTIFIED MALE: Did you ever grow anything in the garden of your mind

MOOS: Fond memories of both by new technology, certain lines are favorites.

MOOS: The video even made some people cry. It's not because Julia's cropping onions. One commentator wrote, every time she mentions the smell of something cooking, reminding her of home --

MOOS: I tear up a little. Oh, hell, I cried full out when I first listened.

The woman who once said how can a nation be called great when its bread tastes like Kleenex has us reaching for our hankies?

Jeanne moos, CNN, New York.

(END VIDEOTAPE)

KING: Bon appetit.

That does it for me. I'm John King in the SITUATION ROOM. The news continues next on CNN.