Return to Transcripts main page

CNN Wolf Blitzer Reports

Republican National Convention to Begin Next Week; Michael Moore Blasts Bush

Aired August 27, 2004 - 17:00   ET

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

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


WOLF BLITZER, HOST: Happening now: spotlight on New York City. We're close to the start of the Republican National Convention. And CNN has a brand new Electoral College analysis. Who's ahead in the race for the White House right now?
And right before the Republicans get their turn, Michael Moore is blasting President Bush again. Standby for hard news on a special edition of WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Battleground states. Is Bush moving ahead of Kerry ahead of the GOP convention?

Terror in the sky. New information. Were twin plane crashes the work of suicide bombers?

And a new warning in this country.

Showdown over. When will the violence start up again in Najaf? Why the Pentagon is worried.

Boomer burden. A warning from the Fed chairman. Is your retirement at risk?

(END VIDEOTAPE)

ANNOUNCER: This is a special edition of WOLF BLITZER REPORTS live from the Republican National Convention in New York.

BLITZER: Hello from Manhattan's Madison Square Garden where you might normally expect to see the New York Knicks. Monday it becomes home court for the Republican National Convention.

As Republicans scramble to get ready here, we have a new CNN Electoral College analysis just in. If the election were held today, George W. Bush would win 274 Electoral College votes. John Kerry would take 264. The difference, huge. It would be enough, just enough, to give Bush another term since the magic number, remember, is 270.

But look at this. If just one small state such as Nevada were to go the other way, the electoral vote would be tied, throwing the election into the House of Representatives. The CNN map is very similar to the extraordinarily close election of 2000. But remember, it's only a snapshot of where things may stand as of today. Our information is based on analysis of state polling, advertising buys, and interviews with strategists from both campaigns, along with neutral analysts.

Meantime, new numbers show the president leading in some key battleground states and the candidates are hitting the campaign trail hard. Let's go live to CNN's Kathleen Koch, she's with the president in Miami -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Wolf, it goes without saying just how important this battleground state of Florida is in a presidential election. So President Bush in just a few minutes will be coming into this auditorium, making his 26th visit to the state as president. He's firing up the faithful at this rally in Miami, which is home to one-fifth of the voters in the state.

Now the latest polls do show the president enjoying the slimmest of leads when it comes to likely voters in November, leading his opponent, John Kerry by just 1 percentage point.

Now before the president came here to this rally, he made a stop at a local firehouse to get a briefing from state official, including his brother Jeb, on the damage that was wrought just two weeks ago by Hurricane Charley.

The president saying that his brother Jeb had done a great job. He also praised the local power company workers who had come here from around the country to help restore power.

And the president is going to be announcing at today's rally that he is going to ask Congress for an extra $2 (ph) billion in federal aid to help out with hurricane recovery in this state. That is aid that is very much needed here. The state -- that deadly hurricane, causing some $7.4 billion in damages, leaving some 27 people dead.

You see the president is coming in now. He is going to be introduced by first lady Laura and also on hand here is former Democratic senator and now Republican (sic), Zell Miller. Of course, you know, Wolf, he will be the keynote speaker there in New York at the Republican Convention next week.

Back to you.

BLITZER: All right. There he is, the president going to this rally down in Florida, a key battleground state. Kathleen Koch, thanks very much. We'll get back to you if there's news from this rally where the president is addressing his supporters.

The Democratic presidential candidate, John Kerry, meanwhile, is in California where he has been focusing in on the U.S. economy. CNN's Joe Johns is on the campaign trail with Kerry in San Francisco.

(BEGIN VIDEOTAPE) JOE JOHNS, CNN CORRESPONDENT: John Kerry went back to the economy today with the latest report showing economic growth was slower than expected for the second quarter. The campaign said that was an indication the economy has not turned the corner. Kerry talked about that at a high school this morning.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: In the last four years under this administration the tax burden of the middle class in America has gone up and the tax burden of the wealthiest people in the country has gone down. John Edwards and I believe it should be the other way around, and when we're in there, it will be.

JOHNS: Kerry also unveiled some proposals, including one to crack down on predatory lending. The Bush campaign, of course, weighed in on all of this. A spokesman releasing a statement saying the economy has gained 1.5 million jobs in the last year. He accused Kerry of conducting a campaign of pessimism, said he is intent on talking down the economy and ignoring progress.

Speaking of money, John Kerry has raised quite a lot of it on this Western swing. He has three fund-raisers, including one at this hotel right behind me.

Wolf, back to you.

BLITZER: Thanks very much, Joe Johns.

"The Los Angeles Times" reports President Bush appears to be leading John Kerry in three key states. The newspaper's polling numbers show Bush with a 5-point lead in Ohio, the numbers give Bush a 4-point lead in Wisconsin. Bush is shown to have a 2-point lead in Missouri. All the polls have a sampling error of 4 percentage points.

The man who enraged Republicans with "Fahrenheit 9/11" is back at it once again. CNN's Brian Todd picks up the story in Washington -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, some may consider "Fahrenheit 9/11" mild compared to this: an open letter to President Bush dated yesterday, sent out today from filmmaker Michael Moore, at the very least, keeps the swift boat controversy going as we head into the GOP convention.

You can pick out anything from this letter to fuel the fire, but one excerpt sums it up, quote: "What would we do without you, Mr. Bush? Criticize you as we might, when it comes to pointing out other men's military records, there is no one who can touch your prowess. In 2000, you let out the rumor that your opponent, John McCain, might be nuts from the five years he spent in a POW camp.

Then in the 2002 elections, your team compared triple amputee Senator Max Cleland to Osama bin Laden. And that cost him the election. And now you're having the same impact on war hero John Kerry.

Since you -- oops, I mean the Swift Boat Veterans for Truth, started running those ads, Kerry's poll numbers have dropped."

Now CNN has been trying to get response this afternoon from the White House. So far, nothing yet. President Bush and the re-election campaign have repeatedly denounced those ads put out by so-called 527 groups like the Swift Boat Veterans for Truth.

One last note, Michael Moore signs off the letter by saying he will be a guest at the convention for "USA Today," a guest columnist, that is. And he offers to drop by and read the president some of his work -- Wolf.

BLITZER: Brian Todd reporting from Washington, thanks very much.

Let's get reaction to all of these developments. Joining us here at Madison Square Garden, the Bush-Cheney campaign manager, Ken Mehlman.

KEN MEHLMAN, BUSH-CHENEY CAMPAIGN MANAGER: How are you, Wolf?

BLITZER: Thanks very much, it looks like you've got some work cut out for you. Still, before it starts I'm sure everything will be ready by Monday morning.

MEHLMAN: Hope so.

BLITZER: Any quick reaction to Michael Moore?

MEHLMAN: Michael Moore is one of John Kerry's surrogates. He has been out there. He sat with Mrs. Kerry in John Kerry's box during their convention.

BLITZER: Did he sit with Mrs. Kerry, I don't think he sat with Mrs. Kerry.

MEHLMAN: Well, I know he sat in the box. And he has made a number of outrageous statements during the course of this campaign. And I...

BLITZER: He sat with Mrs. Carter, Jimmy Carter -- and former President Jimmy Carter, just to be precise. I was there.

MEHLMAN: I apologize for that. But he is somebody who from the beginning the Kerry campaign has relied upon to deliver their message. He has made a lot of outrageous statements about this country, about our response to the war on terrorism. And we are happy to have Michael Moore out there speaking for the Kerry campaign as he has been for the past several months.

BLITZER: I don't think he's speaking for Kerry campaign, but let's ask a specific question. The whole notion of indirectly going after John Kerry's war record, as Republicans did to try to defeat Max Cleland in Georgia and John McCain during the 2000 primary.

MEHLMAN: Well, Wolf, from the beginning of this campaign, the Bush campaign has been clear about two things, and President Bush has been clear about two thinks. We think this election is about the future. This election is not about what happened 35 years ago. It is about whether we will raise taxes, as John Kerry, would do, or cut them as the president will do.

It is about whether we take the battle of the terrorists, as the president is doing, or take the Kerry approach which is to return to the pre-9/11 model of how to take on the war on terrorism.

It is the Kerry campaign, not the Bush campaign, who has been going out and raising questions about what people did 35 years ago during the Vietnam War era. Secondly, the president...

BLITZER: But you want the Swift Boat Veterans for Truth to drop their ads?

MEHLMAN: We believe that anybody who is operating under different rules that apply to the Kerry campaign and the Bush campaign, trying to elect or defeat a federal candidate, ought to apply by the same rules. Our approach is simple. We think -- it is based on principle. And that says that if you are trying to elect or defeat George Bush or John Kerry, you are to operate under the law. And whoever is using these soft money -- these billion dollar contributions in the case of a George Soros...

BLITZER: It's legal, they're operating under the law -- according to the law, the courts have ruled that this is legal.

MEHLMAN: Actually, the Federal Election Commission ruled that it is not legal. But they said that the rules won't apply until after this election. We think that's wrong. We think there ought to be a level playing field for this election not just after this election but for this election, too.

BLITZER: What about these latest poll numbers? You're feeling pretty good going into this convention?

MEHLMAN: We think it's going to be a close election. We've always said it will be a close election but what's extraordinary is that John Kerry from a political perspective has had the least successful convention -- period after a convention of any nominee since George McGovern. Ronald Reagan was 16 points ahead after his convention, Jimmy Carter was 31 points...

BLITZER: Incumbent presidents are usually ten points ahead if they are going to get reelected, you know that.

MEHLMAN: We've always said the election will be close. The country is closely divided. But fundamentally, what we saw happen over the course of the last month is the more the American people paid attention to John Kerry and his plan for higher taxes and his statement that going after the terrorists actually creates more terrorists and is out of the mainstream views on important issues, the more they paid attention, the less comfortable they felt with him and the more comfortable they felt with the president.

BLITZER: Ken Mehlman, good luck with your convention here in New York. Is this enemy territory?

MEHLMAN: It's friendly territory. Republican mayor, Republican governor.

BLITZER: Thanks very much.

This note to our viewers. Our special coverage from the Republican National Convention will continue later this hour. We'll take you on a live tour of the convention where the delegates and dignitaries soon will be gathering. We'll also speak with Kerry strategist Tad Devine. That's coming up later this hour.

And again to our viewers, you have a chance to weigh in on this story. Our web question of the day is this. Do political conventions influence your vote for president? You can vote right now. Go to CNN.com/wolf. We'll have the results for you later this hour.

Reforming the nation's intelligence community. President Bush acts on recommendations by the 9/11 commission.

Plus, calm restored in Najaf after weeks of deadly violence. Can Iraqi police keep the peace around the mosque?

Terror evidence? Traces of explosives found in the wreckage of a Russian plane crash.

And a serious warning to baby boomers from the nation's top economist. He says the government may not necessarily be able to deliver all it promises.

(COMMERCIAL BREAK)

BLITZER: This is something you didn't see at the Democratic National Convention at the FleetCenter in Boston. Al Jazeera which has a sky box here like other news organizations. They are allowed to have their banner just below their sky box, something the Democrats did not allow Al Jazeera to do in Boston. Much more coverage coming up from the campaign trail, much more coverage coming up from the Republican convention here at Madison Square Garden.

But first let's move on to some other important news we're following today.

President Bush today took some action, some serious action as aides say on some recommendations of the 9/11 commission. Let's go live to our national security correspondent David Ensor in Washington -- David.

DAVID ENSOR, CNN NATL. SECURITY CORRESPONDENT: Wolf, with a few strokes of a pen, President Bush increased the powers of the nation's top intelligence officer while falling well short of the changes proposed by the 9/11 commission. Acting Director John McLaughlin who was at the White House today now has more power to determine the budgets of the big intelligence agencies besides the CIA, the National Security Agency and others that are currently under the Pentagon's budgetary control.

The presidential executive orders also give the intelligence chief a role in determining joint military intelligence operations budgets for the first time. And they set up a new national counterterrorism center.

Some officials are complaining that the measures do not go far enough. One said they're designed to create the appearance of doing something to respond to the 9/11 commission without really doing anything meaningful. White House officials say the steps, while limited, do indeed strengthen the nation's top intelligence officers, though more will be needed. A senior official calling it a signal and a whole set of enhanced authorities that didn't exist before. Much more as I mentioned is expected though from the White House in the form of legislation that will be proposed next month -- Wolf.

BLITZER: David Ensor reporting for us. Thanks very much.

Could VA hospitals become terror targets? That concern is being voiced today. Our justice correspondent Kelli Arena joins us from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the FBI and Department of Homeland Security sent out an advisory to state and local partners that said that there is the potential for terrorist attacks against military targets in the United States and, in particular, soft targets such as VA hospitals.

Now, the bulletin says there are reports of suspicious activity, including reports this year of possible reconnaissance activities at facilities in Bethesda, Maryland and Aurora, Colorado. It goes on to say that investigations of those incidents have revealed no links to terrorist activity and that both the FBI and DHS are unaware of any credible information indicating a specific terrorist threat to VA hospitals.

It is important to note, Wolf, that bulletins go out like this all the time. They are not meant as warnings to the public but instead are meant only for law enforcement and relevant parties, in this case, officials at the Department of Veterans Affairs. The bulletin also provides some guidance in trying to differentiate surveillance from harmless recreational activity. For example, someone who is observing security reaction drills or procedures may need to be checked out -- Wolf.

Kelli Arena. Very disturbing story. Thanks, Kelli, very much.

Our live coverage for the Republican National Convention continues straight ahead.

Plus, explosive discovery in the wreckage of a Russian passenger jet. New evidence of a possible terror link.

Fraternity house fire. A deadly blaze on the campus of Ole Miss.

No win situation. An international gymnastics group asks the American Paul Hamm to give back his gold medal.

(COMMERCIAL BREAK)

BLITZER: Welcome back to Madison Square Garden. Much more political coverage coming up.

Let's move on to Iraq, though, right now. Residents return to the battle-scarred city of Najaf. And the cleanup began after a peace deal brought an end to 3 weeks of fighting. Militants left the sacred Imam Ali Mosque. And pilgrims arrived under the watchful eyes of Iraqi forces. U.S. troops are holding their positions in a defensive posture.

In Washington, some officials are taking the truce in Najaf with a serious grain of salt as the military tries to learn some lessons from the recent showdown. Let's go live to our Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well Wolf, indeed, the military is watching to see if the insurgency in Najaf really has ended. And they are, indeed, already looking at the lessons learned.

(BEGIN VIDEOTAPE)

STARR (voice-over): As the dead are removed from the Imam Ali Mosque, the citizens of Najaf rejoice at the peace deal, at least for now.

The Grand Ayatollah Ali al-Sistani's intervention led Muqtada al- Sadr and his followers to stop fighting. A victory for the interim government. But a senior U.S. defense official calls the peace plan a face-saving gesture for everybody, further bloodshed avoided but no guarantee of lasting peace.

Did heavily armed U.S. troops and Iraqis at the last minute walk away from a military victory against a lightly armed insurgency?

MICHAEL O'HANLON, BROOKINGS INSTITUTION: I think it was correct to avoid that final showdown, sort of an Alamo style showdown, that might have brought down the building with the last elements of the resistance. But frankly, I think we were very close to a complete annihilation of what part of the Mehdi Army was in Najaf.

STARR: The concern, not sparking a wider Shia resistance. But overwhelming defeat of al-Sadr and his fighters was the strategy back in April.

LT. GEN. RICARDO SANCHEZ, U.S. ARMY: The commission of the U.S. forces is to kill or capture Muqtada al-Sadr. That's our mission.

STARR: U.S. troops set up a cordon outside the holy shrine as fighting raged. Guerrillas, using light weapons, and hit and run sniper attacks, proven insurgency tactics. In an effort to support the new government, the U.S. military is now focused not just on defeating the insurgents, but on achieving broader objectives. O'HANLON: You have for avoid confusing tactical success with strategic success. They're two different things when you're fighting a counterinsurgency.

STARR: Al-Sadr, still a power the U.S. and Iraqis will have to watch.

AKBAR AHMED, AMERICAN UNIVERSITY: Muqtada Sadr has emerged from nowhere, but he is a very ambitious man. He obviously has now a taste of power, of street power.

(END VIDEOTAPE)

STARR: Now Wolf, in the end, Najaf may be an exercise in the limits, the political limits, if you will, of U.S. military power. Keeping U.S. troops out of that final showdown may have worked, but only if this peace agreement holds -- Wolf.

BLITZER: Barbara Starr at the Pentagon. Thanks.

More live coverage from the Republican National Convention, that's coming up ahead. We're here at Madison Square Garden, and will take you on an inside tour of the garden and show you why there's something unusual about the confetti that will fall after the president speaks next Thursday night.

The Vietnam debate: a new ad targets President Bush's lack of service in Vietnam. But is it fair? Insight into the options young men had during that wartime era.

and a community in fear after a serial rapist who targets students strikes again.

(COMMERCIAL BREAK)

BLITZER: They're loading up the balloons here at Madison Square Garden. Those balloons will drop Thursday night. Welcome back to our special coverage from New York.

We're live from the home of the Republican National Convention where delegates from around the country will soon gather. We'll take you on an inside tour of this garden.

First, though, let's have a quick check of some other stories now in the news.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): In Russia, intelligence officials now say they believe terrorists caused the crash of at least one of the 2 Russian jetliners that went down within minutes of each other. The crashes killed a total of 89 people.

Officials say they detected traces of a high explosive in the wreckage of one of the two jet liners. They also say a Chechen woman was on board one of the flights and that no friends or relatives have come to claim her remains.

After a long dramatic year, just for the pretrial, jury selection begins in the Kobe Bryant sexual assault case today. 500 potential jurors showed up at a Colorado courthouse.

In Virginia, a serial rapist strikes again. Politics say a woman was sexually assaulted in her home by a man who has been eluding them for seven years. The man apparently broke in through a back door. Authorities say his DNA showed up in six other crime scenes since 1997.

Students at the University of Mississippi are mourning the deaths of three fraternity members. They were killed in a massive fire that swept through their fraternity house just before dawn; 20 other students and the house mother escaped.

Keeping you informed, CNN, the most trusted name in news.

As Gotham City gears up for the Republican National Convention, our national correspondent, Bob Franken, is poking around Madison Square Garden and the convention hall here, where all the action will be taking place. Bob is going to take us on a special guided tour right now.

Bob, go ahead.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Gotham? Perhaps you're thinking here that we've come to the well once too often. But, no, this is not a hole in the floor. In fact, this isn't even a floor we're standing on. That's the floor down there. They did this to create some extra space.

What you see here is a stage for the entertainers that will literally rise up on hydraulics when they perform. Now, the stage for the speakers will be up there. You see some of the workmen up there dealing with it. Actually, that's all the speakers, save one. Those middle seats over there will become a stage on Thursday night, in effect, a theater in the round for President Bush. He's going to do the very difficult job of making his speech a la Oprah Winfrey, I suppose.

So he is going to be walking around quite a bit. And, of course, all of us are going to be watching this from the various sky boxes here at Madison Square Garden. If you look up there, can you see an awful lot of CNN logos, because, as well all know, there are an awful lot of CNN networks. There's news source, which serves our affiliates. There's radio. There's worldwide CNN International, CNN en Espanol.

And you can see balloons just about everywhere you look. There's the ritual dropping of the balloons on Thursday night. But there's also the confetti. And this is very special confetti. This is confetti, not just pieces of paper, but pieces of paper that are personalized, pictures of the president, the vice president, President and Mrs. Bush, all of them, the confetti that's going to be dropped, like that, only in masses. And you mentioned just a moment ago that we have the sky boxes up there but, also, there's the other broadcast location. Wolf, we're looking at you right now and we're going to send it back to you.

BLITZER: All right, we're virtually ringside here at the Republican National Convention. We're not up in those hermetically sealed sky boxes. We're down near the ground, not exactly on the floor, but not very far away.

Thanks, Bob, very much.

One issue that continues to dominate this campaign, at least in recent weeks, the independent attack ads that are running against both President Bush and Senator Kerry over their military service during the Vietnam War. The allegation against the president is one of the many legacies of that very divisive war.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It is an issue that has dogged the president almost since the day he first entered the political arena.

(BEGIN VIDEO CLIP, MOVEON.ORG AD)

NARRATOR: George Bush used his father to get into the National Guard, was grounded and then went missing.

(END VIDEO CLIP)

BLITZER: The recent MoveOn.org ad was created to counter attacking John Kerry's Vietnam War service put out by the group calling itself the Swift Boat Veterans For Truth.

Bush's Guard record was an issue when he ran for president four years ago and it erupted again earlier this year when filmmaker Michael Moore denounced the president as a deserter in "Fahrenheit 9/11." Then there were these remarks from Democratic National Committee Chairman Terry McAuliffe.

TERRY MCAULIFFE, DNC CHAIRMAN: So he went to Alabama for a year while he was in the National Guard and he never showed up. I would call it AWOL.

BLITZER: The White House was quick to dismiss the charges as outrageous and baseless. But despite their efforts, Bush campaign officials have been unable to clear up the apparent gaps in the president's military records.

There's no conclusive evidence that Bush's father, who was a congressman at the time, used his influence to get his son a highly sought-after place in the Texas Air National Guard. But according to "The Boston Globe" and other reports, Bush jumped to the top of the waiting list of 500. "The Globe" also says he was assigned to flight school despite scoring 25 percent on a pilot aptitude test, the lowest acceptable grade. Bush joined the Guard after he graduated from Yale and 12 days before his student deferment was to expire in 1968. It was the height of the Vietnam War, when more than 300 American troops were being killed every week. Bush did what a lot of American men of draft age did during the war, joined the National Guard or the Reserve.

Many others who didn't regard the military as an option burned their draft cards, sought medical or marriage deferments, went to prison or fled to Canada. Tens of thousands were drafted. And there were those, like John Kerry, who enlisted and volunteered for combat in Vietnam. Bush was honorably discharged from the Guard in 1973, eight months before his six-year commitment was scheduled to end.

Still unresolved even today are the attendance gaps in his Guard service. Bush flew for 22 months and never flew again after being suspended from flight status in 1972 for not taking a required annual physical exam. Adding to the controversy, the question over whether he did part of his Guard service in Alabama. "The Boston Globe," "The Washington Post" and others that examined Bush's military records say they do not support Bush's claims he did in fact do Guard duty in Alabama.

To substantiate Bush's version, the White House in February released what it said were all of the president's military records.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: If you look at these records, these records document that the president fulfilled his duties.

(END VIDEOTAPE)

BLITZER: And as we mentioned, a new CNN analysis shows that if the election were held today, George W. Bush would win 274 Electoral College votes. John Kerry would take 264. That would be just enough to give President Bush another term. The magic number, remember, is 270.

But if just one small state such as Nevada were to go the other way, the electoral vote actually would be tied, 269 each, throwing the election into the House of Representatives. But this, remember, is only a small snapshot of where things may stand as of today.

Joining us now to talk about this, the Kerry campaign senior strategist Tad Devine.

Lots to talk about, Tad.

What do you make of this Electoral College analysis we have, especially given the fact that during the Democratic Convention Kerry, our analysis showed that Kerry would have 300 Electoral College votes, a snapshot then.

TAD DEVINE, SENIOR JOHN KERRY CAMPAIGN ADVISER: Well, Wolf, I think we're still ahead. I think this is going to be a close race. We've all said that. We had one of the closest elections in our nation's history last time. The nation has been deeply divided I think by the policies of the president. So I think it is going to remain close.

I think we're ahead in a number of states where your analysis may have us behind right now. I think in places in Florida, for example, we're very, very strong, and a number of other states in the Midwest. So I think John Kerry is going to win not just the popular vote this time, but the electoral vote as well.

BLITZER: And those new numbers of the battleground states "The L.A. Times" put out in Missouri, Ohio and Wisconsin, all of which show Bush ahead?

DEVINE: Well, look, I saw that poll. There's a lot of others polls out today. I think most of the polling says the race is close nationally. I think we have a real advantage. You see these snapshots of individual states. I was in Ohio last week, as a matter of fact, for a CNN town hall meeting. And you had a poll saying we're 10 points ahead.

So I think we're in strong shape in Ohio. I got to talk to a lot of people when I was out there. I think the reason John Kerry is in strong shape in Ohio today is simple. More than 200,000 people in that state have lost their jobs. Health care costs have increased almost 50 percent. There's a huge squeeze of the middle class going on in Ohio and all across this country. And I think those voters are really going to decide this election.

BLITZER: We heard earlier Ken Mehlman, the campaign manager for the Bush-Cheney campaign, say that Michael Moore, who has got a new letter to the president that is out today, Michael Moore is a surrogate for your campaign. Is he?

DEVINE: No. I heard him talking about Michael Moore sitting in somebody's box. Well, I remember when Ahmad Chalabi was sitting in the president's box at the State of the Union.

There's a guy who really because of the association with President Bush has cost our country a lot. We have spent over -- almost $200 billion in Iraq now and nearly 1,000 Americans have died. And the association with the president with somebody in his box has really cost somebody something, the lives of Americans and incredible amounts of taxpayers' money.

BLITZER: Does Senator Kerry stand by Michael Moore on those charges he makes against the president, though?

DEVINE: Wolf, Michael Moore has a right to speak for himself. And he and I think a lot of people in this country have very strong feelings about the president of the United States. That's because this president has been a disaster in office.

He has been pursued disastrous policies in respect to our economy. Four million Americans have lost their health insurance since he's been president. The price of gasoline is skyrocketing because he has no energy policy. So I think people do feel very strongly about the president. Many of them have expressed their opinions, as is their right to do so. But John Kerry and John Edwards speak for themselves.

BLITZER: Tad Devine, we'll be hearing from you a lot during the next several days and weeks. Thanks very much for joining us.

DEVINE: Thank you, Wolf.

BLITZER: And our special live coverage from the Republican National Convention here at Madison Square Garden in New York will continue. The president gets a pre-convention boost in several of those battleground states. We've been reporting those numbers. Our Carlos Watson, he is standing by with "The Inside Edge."

A warning to retires. The government may have promised more than it can deliver. Will baby boomers have to deal with fewer benefits?

And medal mess, another twist for the American gymnast Paul Hamm. All that coming up.

First, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The International Red Cross is stepping up flights of humanitarian supplies into Sudan. Tens of thousands are reported to have died in ethnic strikes in the Darfur region. And hundreds of thousands have been forced to leave their homes.

Against the barrier. Palestinians staged a rally to protest Israel's West Bank barrier. Israeli leaders say the barrier will protect Israelis from terror attacks. But a speaker at today's rally, the grandson of Mahatma Gandhi, said it reminded him of South Africa's apartheid era.

Philippine floods. At least eight people are dead after heavy rains in the Philippines. Some people had to be plucked by helicopters from the roofs of submerged houses.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Welcome back to Madison Square Garden.

There's an ominous warning for 77 million baby boomers today from the Federal Reserve chairman, Alan Greenspan. He says when it comes to retirement benefits, the federal government is promising more than it can deliver.

CNNfn personal finance editor Gerri Willis is joining us now.

The words were pretty scary, what he had to say, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: You bet, Wolf. Listen to this. He says: "As a nation, we owe it to our retirees to deliver only the benefits that can be delivered. If we delay, adjustments could be abrupt and painful," dramatic words here on the eve of the convention, also Greenspan offering some solutions to the problem which we were interested in as well. He says, work longer, retire later.

And, of course, nobody but Federal Reserve Alan Greenspan knows this so well. He's 78 years old, still working. He says, raise minimum age for retirement benefits. That's already happened once, could happen again. and, finally, slow the growth of Medicare spending, which is the program he's most worried about here, Social Security not as much as Medicare, which he says is really behind the times.

BLITZER: That's a political hot potato, going from 65 to 67. It's been discussed, maybe even 68. But that's in the political environment right now unlikely to happen.

WILLIS: Well, you bet. That's always a political hot potato.

But, remember that Greenspan here is serving out the final years in his role as the head of the Federal Reserve. He's free to sort of say whatever he wants to. Interesting time that he picks now to start talking about this issue. He's talked about Medicare, Social Security three times now this year, talking about the importance of fixing this problem. And, of course, he's talking so much about boomers here and the problems they're going to face as they hit retirement.

BLITZER: There's basically three solutions to this. You either reduce the benefits. You increase taxes to pay for the benefits. Or the economy is simply going to boom, so that the federal government will be generating a whole more revenue, that last option politically the nicest.

WILLIS: Yes, that would be great, wouldn't it? In fact, Greenspan says raising taxes will not happen either. That's a bad choice.

He says raising payroll taxes will discourage people from getting into the work force, staying in the work force just at the time that you have all these people leaving the work force. He sees that as a bad option. He wants boomers to save more, put away more money.

BLITZER: That's pretty good advice anyhow.

WILLIS: Yes, definitely.

(CROSSTALK)

BLITZER: ... boomers. Thanks very much, Gerri.

WILLIS: You're welcome.

BLITZER: Our live coverage from the Republican National Convention here in New York City at Madison Square Garden will continue.

The president sees a pre-convention surge in some key battleground states. Our political analyst Carlos Watson standing by with "The Inside Edge."

Match for the medal. Iraq's soccer team tries to make Olympic history. An update on all of today's action in Athens, that's coming up.

(COMMERCIAL BREAK)

BLITZER: As Republicans converge on New York City for their national convention, let's get "The Inside Edge" now from our CNN political analyst Carlos Watson. He's joining us right now from Mountain View, California, but he will be in New York very, very soon.

Carlos, what do you make of these new battleground poll numbers, which show a slight edge for the president?

CARLOS WATSON, CNN POLITICAL ANALYST: Good news for the president. Ohio, Wisconsin, Missouri, three states, three very important states, and two of these three states are places where the swift boat veterans ads were running. So they have seemed to have made a difference.

One interesting thing to note, Wolf, big issue for John Kerry in all three of these places, it's somewhere between one out of five and one out of four voters who say they want real change in the country, needs to go in a different direction, aren't voting for John Kerry. That's a problem., He's not yet seen as an agent of change that they can count on.

BLITZER: Is there going to be a likely, likely, a big bounce coming out of this convention, given the polarization in the country right now?

WATSON: All the indications are no, that you are unlikely to see a big national bump.

But I'll tell you what I'm looking for, Wolf. I'm looking for bumps in key swing states, particularly in the South and particularly in some of these border states. By that, I mean Virginia, North Carolina and Tennessee, all places that should be red states the president should hold on to, but that the most recent polls all shown are within less than 10 points, usually with the president ahead. So even if they don't see a big national bump, looking for some key state-specific bumps in those places.

BLITZER: What are we going to hear? What's going to be the main message coming out of this convention Monday through Thursday?

WATSON: Three things, Wolf, should stand out. First and foremost, the president wants to say that no issue is as important as protecting the country against terrorism, and you can't trust John Kerry. No. 2, I expect to hear the president try and reframe his record on the economy and on the war on Iraq and say that while things haven't been perfect, I want you to consider these other factors. And last but not least, it is going to be important for independents to hear that the president has a real compelling agenda for another four years, that he's not a guy who did everything he wanted to do in four years, but indeed on health care, on education and in other areas, there's more yet to come.

BLITZER: Is it your sense that this message that they're trying to reach out to this moderate middle of the swing voters could conflict with getting that base, the conservative base up all ginned up and make sure that they're on board, to get their friends to vote? Sometimes there is a built-in conflict there, isn't there, Carlos?

WATSON: Sometimes there is. But I don't expect that to be the case here.

Both on the left and on the right, you're seeing unusual unanimity, because both sides remember how close 2000 was, know that every vote counts and know that there is a big divide in terms of policy. So while, in 1992, we did the Republican Party split, I don't expect to see that in 2004. And, again, one of the central reasons is something that most people don't see. It's the grassroots campaign, the phone calls, the e-mails, even some of the radio ads that are going on.

Things other than television and other than the big conventions I think are making a real difference in holding the Republicans together.

BLITZER: CNN's Carlos Watson with "The Inside Edge" -- he will be on his way to New York, a key player throughout our extensive coverage coming up over the next several days.

Carlos, thanks very much.

WATSON: Look forward to joining you.

BLITZER: Have a safe flight to New York.

And our coverage of the Republican Convention will kick off this weekend with an in-depth look at the president. You can catch "The Mission of George W. Bush" Sunday, 8:00 p.m. Eastern, followed by a special live edition of "LARRY KING LIVE." And please join Judy Woodruff and me for "America Votes 2004" special, a preview of the Republican National Convention, all Sunday night.

A top American gymnast is asked to give up his gold medal. More on this medal mess in Athens. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing in on our Web question of the day. Take a look at these numbers. We'll put them on the screen. Well, they're not up on the screen, but we'll tell you what the numbers are. There they are, 9 percent vs. 91 percent. Remember, though, this is not a scientific poll.

Up now, our Olympic update. For those who don't want to know what happened today and want to watch it on television tonight, this is a good time to mute your TV. This year's most favorite underdogs lost a game today, but still kept the hearts of fans worldwide. Iraq men's soccer team lost 1-0 to Italy in the bronze medal game. That puts the Iraqi team in fourth place, which is still the best finish ever for any Iraqi soccer team in a major international tournament.

The streak is over for the U.S. men's basketball team, the so- called dream team not much of a dream. The U.S. men lost their semifinal match to Argentina today 89-81. That means that after winning gold medals in '92, '96 and 2000, they won't be able to win anything better than bronze this year.

Finally, there's an angry dispute over one of America's gold medals. Paul Hamm won the gymnastics all-around gold after Olympic judges mistakenly docked a South Korean rival. Now world gymnastics officials have written a letter to Hamm asking him to give up his gold medal as a show of sportsmanship. U.S. officials have refused even to deliver that letter to him. They say Hamm should not be punished for a mistake by officials.

(BEGIN VIDEO CLIP)

JIM SCHERR, USOC CHIEF EXECUTIVE: That Paul Hamm can solve their problems and the technical issues they have with the judging rules and how they have administered the sport for this competition is absolutely improper and should never have been suggested by the FIG. Therefore, as I have stated, we have rejected their proposal and we will not deliver this letter, nor suggestion, to Paul.

(END VIDEO CLIP)

BLITZER: Through his agent today, Paul Hamm declined to comment formally on the letter.

A reminder, WOLF BLITZER REPORTS, we air weekdays at this time, 5:00 p.m. Eastern. We're also on weekdays at noon Eastern. And please tune into a special edition of "LATE EDITION," the last word in Sunday talk. We're live from the Republican National Convention here at Madison Square Garden. Among my special guests this Sunday, the chairman of the Bush-Cheney campaign, Governor Marc Racicot, and the Democratic Senator Hillary Rodham Clinton from New York.

Until then, thanks for joining us.

"LOU DOBBS TONIGHT" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired August 27, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now: spotlight on New York City. We're close to the start of the Republican National Convention. And CNN has a brand new Electoral College analysis. Who's ahead in the race for the White House right now?
And right before the Republicans get their turn, Michael Moore is blasting President Bush again. Standby for hard news on a special edition of WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Battleground states. Is Bush moving ahead of Kerry ahead of the GOP convention?

Terror in the sky. New information. Were twin plane crashes the work of suicide bombers?

And a new warning in this country.

Showdown over. When will the violence start up again in Najaf? Why the Pentagon is worried.

Boomer burden. A warning from the Fed chairman. Is your retirement at risk?

(END VIDEOTAPE)

ANNOUNCER: This is a special edition of WOLF BLITZER REPORTS live from the Republican National Convention in New York.

BLITZER: Hello from Manhattan's Madison Square Garden where you might normally expect to see the New York Knicks. Monday it becomes home court for the Republican National Convention.

As Republicans scramble to get ready here, we have a new CNN Electoral College analysis just in. If the election were held today, George W. Bush would win 274 Electoral College votes. John Kerry would take 264. The difference, huge. It would be enough, just enough, to give Bush another term since the magic number, remember, is 270.

But look at this. If just one small state such as Nevada were to go the other way, the electoral vote would be tied, throwing the election into the House of Representatives. The CNN map is very similar to the extraordinarily close election of 2000. But remember, it's only a snapshot of where things may stand as of today. Our information is based on analysis of state polling, advertising buys, and interviews with strategists from both campaigns, along with neutral analysts.

Meantime, new numbers show the president leading in some key battleground states and the candidates are hitting the campaign trail hard. Let's go live to CNN's Kathleen Koch, she's with the president in Miami -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Wolf, it goes without saying just how important this battleground state of Florida is in a presidential election. So President Bush in just a few minutes will be coming into this auditorium, making his 26th visit to the state as president. He's firing up the faithful at this rally in Miami, which is home to one-fifth of the voters in the state.

Now the latest polls do show the president enjoying the slimmest of leads when it comes to likely voters in November, leading his opponent, John Kerry by just 1 percentage point.

Now before the president came here to this rally, he made a stop at a local firehouse to get a briefing from state official, including his brother Jeb, on the damage that was wrought just two weeks ago by Hurricane Charley.

The president saying that his brother Jeb had done a great job. He also praised the local power company workers who had come here from around the country to help restore power.

And the president is going to be announcing at today's rally that he is going to ask Congress for an extra $2 (ph) billion in federal aid to help out with hurricane recovery in this state. That is aid that is very much needed here. The state -- that deadly hurricane, causing some $7.4 billion in damages, leaving some 27 people dead.

You see the president is coming in now. He is going to be introduced by first lady Laura and also on hand here is former Democratic senator and now Republican (sic), Zell Miller. Of course, you know, Wolf, he will be the keynote speaker there in New York at the Republican Convention next week.

Back to you.

BLITZER: All right. There he is, the president going to this rally down in Florida, a key battleground state. Kathleen Koch, thanks very much. We'll get back to you if there's news from this rally where the president is addressing his supporters.

The Democratic presidential candidate, John Kerry, meanwhile, is in California where he has been focusing in on the U.S. economy. CNN's Joe Johns is on the campaign trail with Kerry in San Francisco.

(BEGIN VIDEOTAPE) JOE JOHNS, CNN CORRESPONDENT: John Kerry went back to the economy today with the latest report showing economic growth was slower than expected for the second quarter. The campaign said that was an indication the economy has not turned the corner. Kerry talked about that at a high school this morning.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: In the last four years under this administration the tax burden of the middle class in America has gone up and the tax burden of the wealthiest people in the country has gone down. John Edwards and I believe it should be the other way around, and when we're in there, it will be.

JOHNS: Kerry also unveiled some proposals, including one to crack down on predatory lending. The Bush campaign, of course, weighed in on all of this. A spokesman releasing a statement saying the economy has gained 1.5 million jobs in the last year. He accused Kerry of conducting a campaign of pessimism, said he is intent on talking down the economy and ignoring progress.

Speaking of money, John Kerry has raised quite a lot of it on this Western swing. He has three fund-raisers, including one at this hotel right behind me.

Wolf, back to you.

BLITZER: Thanks very much, Joe Johns.

"The Los Angeles Times" reports President Bush appears to be leading John Kerry in three key states. The newspaper's polling numbers show Bush with a 5-point lead in Ohio, the numbers give Bush a 4-point lead in Wisconsin. Bush is shown to have a 2-point lead in Missouri. All the polls have a sampling error of 4 percentage points.

The man who enraged Republicans with "Fahrenheit 9/11" is back at it once again. CNN's Brian Todd picks up the story in Washington -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, some may consider "Fahrenheit 9/11" mild compared to this: an open letter to President Bush dated yesterday, sent out today from filmmaker Michael Moore, at the very least, keeps the swift boat controversy going as we head into the GOP convention.

You can pick out anything from this letter to fuel the fire, but one excerpt sums it up, quote: "What would we do without you, Mr. Bush? Criticize you as we might, when it comes to pointing out other men's military records, there is no one who can touch your prowess. In 2000, you let out the rumor that your opponent, John McCain, might be nuts from the five years he spent in a POW camp.

Then in the 2002 elections, your team compared triple amputee Senator Max Cleland to Osama bin Laden. And that cost him the election. And now you're having the same impact on war hero John Kerry.

Since you -- oops, I mean the Swift Boat Veterans for Truth, started running those ads, Kerry's poll numbers have dropped."

Now CNN has been trying to get response this afternoon from the White House. So far, nothing yet. President Bush and the re-election campaign have repeatedly denounced those ads put out by so-called 527 groups like the Swift Boat Veterans for Truth.

One last note, Michael Moore signs off the letter by saying he will be a guest at the convention for "USA Today," a guest columnist, that is. And he offers to drop by and read the president some of his work -- Wolf.

BLITZER: Brian Todd reporting from Washington, thanks very much.

Let's get reaction to all of these developments. Joining us here at Madison Square Garden, the Bush-Cheney campaign manager, Ken Mehlman.

KEN MEHLMAN, BUSH-CHENEY CAMPAIGN MANAGER: How are you, Wolf?

BLITZER: Thanks very much, it looks like you've got some work cut out for you. Still, before it starts I'm sure everything will be ready by Monday morning.

MEHLMAN: Hope so.

BLITZER: Any quick reaction to Michael Moore?

MEHLMAN: Michael Moore is one of John Kerry's surrogates. He has been out there. He sat with Mrs. Kerry in John Kerry's box during their convention.

BLITZER: Did he sit with Mrs. Kerry, I don't think he sat with Mrs. Kerry.

MEHLMAN: Well, I know he sat in the box. And he has made a number of outrageous statements during the course of this campaign. And I...

BLITZER: He sat with Mrs. Carter, Jimmy Carter -- and former President Jimmy Carter, just to be precise. I was there.

MEHLMAN: I apologize for that. But he is somebody who from the beginning the Kerry campaign has relied upon to deliver their message. He has made a lot of outrageous statements about this country, about our response to the war on terrorism. And we are happy to have Michael Moore out there speaking for the Kerry campaign as he has been for the past several months.

BLITZER: I don't think he's speaking for Kerry campaign, but let's ask a specific question. The whole notion of indirectly going after John Kerry's war record, as Republicans did to try to defeat Max Cleland in Georgia and John McCain during the 2000 primary.

MEHLMAN: Well, Wolf, from the beginning of this campaign, the Bush campaign has been clear about two things, and President Bush has been clear about two thinks. We think this election is about the future. This election is not about what happened 35 years ago. It is about whether we will raise taxes, as John Kerry, would do, or cut them as the president will do.

It is about whether we take the battle of the terrorists, as the president is doing, or take the Kerry approach which is to return to the pre-9/11 model of how to take on the war on terrorism.

It is the Kerry campaign, not the Bush campaign, who has been going out and raising questions about what people did 35 years ago during the Vietnam War era. Secondly, the president...

BLITZER: But you want the Swift Boat Veterans for Truth to drop their ads?

MEHLMAN: We believe that anybody who is operating under different rules that apply to the Kerry campaign and the Bush campaign, trying to elect or defeat a federal candidate, ought to apply by the same rules. Our approach is simple. We think -- it is based on principle. And that says that if you are trying to elect or defeat George Bush or John Kerry, you are to operate under the law. And whoever is using these soft money -- these billion dollar contributions in the case of a George Soros...

BLITZER: It's legal, they're operating under the law -- according to the law, the courts have ruled that this is legal.

MEHLMAN: Actually, the Federal Election Commission ruled that it is not legal. But they said that the rules won't apply until after this election. We think that's wrong. We think there ought to be a level playing field for this election not just after this election but for this election, too.

BLITZER: What about these latest poll numbers? You're feeling pretty good going into this convention?

MEHLMAN: We think it's going to be a close election. We've always said it will be a close election but what's extraordinary is that John Kerry from a political perspective has had the least successful convention -- period after a convention of any nominee since George McGovern. Ronald Reagan was 16 points ahead after his convention, Jimmy Carter was 31 points...

BLITZER: Incumbent presidents are usually ten points ahead if they are going to get reelected, you know that.

MEHLMAN: We've always said the election will be close. The country is closely divided. But fundamentally, what we saw happen over the course of the last month is the more the American people paid attention to John Kerry and his plan for higher taxes and his statement that going after the terrorists actually creates more terrorists and is out of the mainstream views on important issues, the more they paid attention, the less comfortable they felt with him and the more comfortable they felt with the president.

BLITZER: Ken Mehlman, good luck with your convention here in New York. Is this enemy territory?

MEHLMAN: It's friendly territory. Republican mayor, Republican governor.

BLITZER: Thanks very much.

This note to our viewers. Our special coverage from the Republican National Convention will continue later this hour. We'll take you on a live tour of the convention where the delegates and dignitaries soon will be gathering. We'll also speak with Kerry strategist Tad Devine. That's coming up later this hour.

And again to our viewers, you have a chance to weigh in on this story. Our web question of the day is this. Do political conventions influence your vote for president? You can vote right now. Go to CNN.com/wolf. We'll have the results for you later this hour.

Reforming the nation's intelligence community. President Bush acts on recommendations by the 9/11 commission.

Plus, calm restored in Najaf after weeks of deadly violence. Can Iraqi police keep the peace around the mosque?

Terror evidence? Traces of explosives found in the wreckage of a Russian plane crash.

And a serious warning to baby boomers from the nation's top economist. He says the government may not necessarily be able to deliver all it promises.

(COMMERCIAL BREAK)

BLITZER: This is something you didn't see at the Democratic National Convention at the FleetCenter in Boston. Al Jazeera which has a sky box here like other news organizations. They are allowed to have their banner just below their sky box, something the Democrats did not allow Al Jazeera to do in Boston. Much more coverage coming up from the campaign trail, much more coverage coming up from the Republican convention here at Madison Square Garden.

But first let's move on to some other important news we're following today.

President Bush today took some action, some serious action as aides say on some recommendations of the 9/11 commission. Let's go live to our national security correspondent David Ensor in Washington -- David.

DAVID ENSOR, CNN NATL. SECURITY CORRESPONDENT: Wolf, with a few strokes of a pen, President Bush increased the powers of the nation's top intelligence officer while falling well short of the changes proposed by the 9/11 commission. Acting Director John McLaughlin who was at the White House today now has more power to determine the budgets of the big intelligence agencies besides the CIA, the National Security Agency and others that are currently under the Pentagon's budgetary control.

The presidential executive orders also give the intelligence chief a role in determining joint military intelligence operations budgets for the first time. And they set up a new national counterterrorism center.

Some officials are complaining that the measures do not go far enough. One said they're designed to create the appearance of doing something to respond to the 9/11 commission without really doing anything meaningful. White House officials say the steps, while limited, do indeed strengthen the nation's top intelligence officers, though more will be needed. A senior official calling it a signal and a whole set of enhanced authorities that didn't exist before. Much more as I mentioned is expected though from the White House in the form of legislation that will be proposed next month -- Wolf.

BLITZER: David Ensor reporting for us. Thanks very much.

Could VA hospitals become terror targets? That concern is being voiced today. Our justice correspondent Kelli Arena joins us from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the FBI and Department of Homeland Security sent out an advisory to state and local partners that said that there is the potential for terrorist attacks against military targets in the United States and, in particular, soft targets such as VA hospitals.

Now, the bulletin says there are reports of suspicious activity, including reports this year of possible reconnaissance activities at facilities in Bethesda, Maryland and Aurora, Colorado. It goes on to say that investigations of those incidents have revealed no links to terrorist activity and that both the FBI and DHS are unaware of any credible information indicating a specific terrorist threat to VA hospitals.

It is important to note, Wolf, that bulletins go out like this all the time. They are not meant as warnings to the public but instead are meant only for law enforcement and relevant parties, in this case, officials at the Department of Veterans Affairs. The bulletin also provides some guidance in trying to differentiate surveillance from harmless recreational activity. For example, someone who is observing security reaction drills or procedures may need to be checked out -- Wolf.

Kelli Arena. Very disturbing story. Thanks, Kelli, very much.

Our live coverage for the Republican National Convention continues straight ahead.

Plus, explosive discovery in the wreckage of a Russian passenger jet. New evidence of a possible terror link.

Fraternity house fire. A deadly blaze on the campus of Ole Miss.

No win situation. An international gymnastics group asks the American Paul Hamm to give back his gold medal.

(COMMERCIAL BREAK)

BLITZER: Welcome back to Madison Square Garden. Much more political coverage coming up.

Let's move on to Iraq, though, right now. Residents return to the battle-scarred city of Najaf. And the cleanup began after a peace deal brought an end to 3 weeks of fighting. Militants left the sacred Imam Ali Mosque. And pilgrims arrived under the watchful eyes of Iraqi forces. U.S. troops are holding their positions in a defensive posture.

In Washington, some officials are taking the truce in Najaf with a serious grain of salt as the military tries to learn some lessons from the recent showdown. Let's go live to our Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well Wolf, indeed, the military is watching to see if the insurgency in Najaf really has ended. And they are, indeed, already looking at the lessons learned.

(BEGIN VIDEOTAPE)

STARR (voice-over): As the dead are removed from the Imam Ali Mosque, the citizens of Najaf rejoice at the peace deal, at least for now.

The Grand Ayatollah Ali al-Sistani's intervention led Muqtada al- Sadr and his followers to stop fighting. A victory for the interim government. But a senior U.S. defense official calls the peace plan a face-saving gesture for everybody, further bloodshed avoided but no guarantee of lasting peace.

Did heavily armed U.S. troops and Iraqis at the last minute walk away from a military victory against a lightly armed insurgency?

MICHAEL O'HANLON, BROOKINGS INSTITUTION: I think it was correct to avoid that final showdown, sort of an Alamo style showdown, that might have brought down the building with the last elements of the resistance. But frankly, I think we were very close to a complete annihilation of what part of the Mehdi Army was in Najaf.

STARR: The concern, not sparking a wider Shia resistance. But overwhelming defeat of al-Sadr and his fighters was the strategy back in April.

LT. GEN. RICARDO SANCHEZ, U.S. ARMY: The commission of the U.S. forces is to kill or capture Muqtada al-Sadr. That's our mission.

STARR: U.S. troops set up a cordon outside the holy shrine as fighting raged. Guerrillas, using light weapons, and hit and run sniper attacks, proven insurgency tactics. In an effort to support the new government, the U.S. military is now focused not just on defeating the insurgents, but on achieving broader objectives. O'HANLON: You have for avoid confusing tactical success with strategic success. They're two different things when you're fighting a counterinsurgency.

STARR: Al-Sadr, still a power the U.S. and Iraqis will have to watch.

AKBAR AHMED, AMERICAN UNIVERSITY: Muqtada Sadr has emerged from nowhere, but he is a very ambitious man. He obviously has now a taste of power, of street power.

(END VIDEOTAPE)

STARR: Now Wolf, in the end, Najaf may be an exercise in the limits, the political limits, if you will, of U.S. military power. Keeping U.S. troops out of that final showdown may have worked, but only if this peace agreement holds -- Wolf.

BLITZER: Barbara Starr at the Pentagon. Thanks.

More live coverage from the Republican National Convention, that's coming up ahead. We're here at Madison Square Garden, and will take you on an inside tour of the garden and show you why there's something unusual about the confetti that will fall after the president speaks next Thursday night.

The Vietnam debate: a new ad targets President Bush's lack of service in Vietnam. But is it fair? Insight into the options young men had during that wartime era.

and a community in fear after a serial rapist who targets students strikes again.

(COMMERCIAL BREAK)

BLITZER: They're loading up the balloons here at Madison Square Garden. Those balloons will drop Thursday night. Welcome back to our special coverage from New York.

We're live from the home of the Republican National Convention where delegates from around the country will soon gather. We'll take you on an inside tour of this garden.

First, though, let's have a quick check of some other stories now in the news.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): In Russia, intelligence officials now say they believe terrorists caused the crash of at least one of the 2 Russian jetliners that went down within minutes of each other. The crashes killed a total of 89 people.

Officials say they detected traces of a high explosive in the wreckage of one of the two jet liners. They also say a Chechen woman was on board one of the flights and that no friends or relatives have come to claim her remains.

After a long dramatic year, just for the pretrial, jury selection begins in the Kobe Bryant sexual assault case today. 500 potential jurors showed up at a Colorado courthouse.

In Virginia, a serial rapist strikes again. Politics say a woman was sexually assaulted in her home by a man who has been eluding them for seven years. The man apparently broke in through a back door. Authorities say his DNA showed up in six other crime scenes since 1997.

Students at the University of Mississippi are mourning the deaths of three fraternity members. They were killed in a massive fire that swept through their fraternity house just before dawn; 20 other students and the house mother escaped.

Keeping you informed, CNN, the most trusted name in news.

As Gotham City gears up for the Republican National Convention, our national correspondent, Bob Franken, is poking around Madison Square Garden and the convention hall here, where all the action will be taking place. Bob is going to take us on a special guided tour right now.

Bob, go ahead.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Gotham? Perhaps you're thinking here that we've come to the well once too often. But, no, this is not a hole in the floor. In fact, this isn't even a floor we're standing on. That's the floor down there. They did this to create some extra space.

What you see here is a stage for the entertainers that will literally rise up on hydraulics when they perform. Now, the stage for the speakers will be up there. You see some of the workmen up there dealing with it. Actually, that's all the speakers, save one. Those middle seats over there will become a stage on Thursday night, in effect, a theater in the round for President Bush. He's going to do the very difficult job of making his speech a la Oprah Winfrey, I suppose.

So he is going to be walking around quite a bit. And, of course, all of us are going to be watching this from the various sky boxes here at Madison Square Garden. If you look up there, can you see an awful lot of CNN logos, because, as well all know, there are an awful lot of CNN networks. There's news source, which serves our affiliates. There's radio. There's worldwide CNN International, CNN en Espanol.

And you can see balloons just about everywhere you look. There's the ritual dropping of the balloons on Thursday night. But there's also the confetti. And this is very special confetti. This is confetti, not just pieces of paper, but pieces of paper that are personalized, pictures of the president, the vice president, President and Mrs. Bush, all of them, the confetti that's going to be dropped, like that, only in masses. And you mentioned just a moment ago that we have the sky boxes up there but, also, there's the other broadcast location. Wolf, we're looking at you right now and we're going to send it back to you.

BLITZER: All right, we're virtually ringside here at the Republican National Convention. We're not up in those hermetically sealed sky boxes. We're down near the ground, not exactly on the floor, but not very far away.

Thanks, Bob, very much.

One issue that continues to dominate this campaign, at least in recent weeks, the independent attack ads that are running against both President Bush and Senator Kerry over their military service during the Vietnam War. The allegation against the president is one of the many legacies of that very divisive war.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It is an issue that has dogged the president almost since the day he first entered the political arena.

(BEGIN VIDEO CLIP, MOVEON.ORG AD)

NARRATOR: George Bush used his father to get into the National Guard, was grounded and then went missing.

(END VIDEO CLIP)

BLITZER: The recent MoveOn.org ad was created to counter attacking John Kerry's Vietnam War service put out by the group calling itself the Swift Boat Veterans For Truth.

Bush's Guard record was an issue when he ran for president four years ago and it erupted again earlier this year when filmmaker Michael Moore denounced the president as a deserter in "Fahrenheit 9/11." Then there were these remarks from Democratic National Committee Chairman Terry McAuliffe.

TERRY MCAULIFFE, DNC CHAIRMAN: So he went to Alabama for a year while he was in the National Guard and he never showed up. I would call it AWOL.

BLITZER: The White House was quick to dismiss the charges as outrageous and baseless. But despite their efforts, Bush campaign officials have been unable to clear up the apparent gaps in the president's military records.

There's no conclusive evidence that Bush's father, who was a congressman at the time, used his influence to get his son a highly sought-after place in the Texas Air National Guard. But according to "The Boston Globe" and other reports, Bush jumped to the top of the waiting list of 500. "The Globe" also says he was assigned to flight school despite scoring 25 percent on a pilot aptitude test, the lowest acceptable grade. Bush joined the Guard after he graduated from Yale and 12 days before his student deferment was to expire in 1968. It was the height of the Vietnam War, when more than 300 American troops were being killed every week. Bush did what a lot of American men of draft age did during the war, joined the National Guard or the Reserve.

Many others who didn't regard the military as an option burned their draft cards, sought medical or marriage deferments, went to prison or fled to Canada. Tens of thousands were drafted. And there were those, like John Kerry, who enlisted and volunteered for combat in Vietnam. Bush was honorably discharged from the Guard in 1973, eight months before his six-year commitment was scheduled to end.

Still unresolved even today are the attendance gaps in his Guard service. Bush flew for 22 months and never flew again after being suspended from flight status in 1972 for not taking a required annual physical exam. Adding to the controversy, the question over whether he did part of his Guard service in Alabama. "The Boston Globe," "The Washington Post" and others that examined Bush's military records say they do not support Bush's claims he did in fact do Guard duty in Alabama.

To substantiate Bush's version, the White House in February released what it said were all of the president's military records.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: If you look at these records, these records document that the president fulfilled his duties.

(END VIDEOTAPE)

BLITZER: And as we mentioned, a new CNN analysis shows that if the election were held today, George W. Bush would win 274 Electoral College votes. John Kerry would take 264. That would be just enough to give President Bush another term. The magic number, remember, is 270.

But if just one small state such as Nevada were to go the other way, the electoral vote actually would be tied, 269 each, throwing the election into the House of Representatives. But this, remember, is only a small snapshot of where things may stand as of today.

Joining us now to talk about this, the Kerry campaign senior strategist Tad Devine.

Lots to talk about, Tad.

What do you make of this Electoral College analysis we have, especially given the fact that during the Democratic Convention Kerry, our analysis showed that Kerry would have 300 Electoral College votes, a snapshot then.

TAD DEVINE, SENIOR JOHN KERRY CAMPAIGN ADVISER: Well, Wolf, I think we're still ahead. I think this is going to be a close race. We've all said that. We had one of the closest elections in our nation's history last time. The nation has been deeply divided I think by the policies of the president. So I think it is going to remain close.

I think we're ahead in a number of states where your analysis may have us behind right now. I think in places in Florida, for example, we're very, very strong, and a number of other states in the Midwest. So I think John Kerry is going to win not just the popular vote this time, but the electoral vote as well.

BLITZER: And those new numbers of the battleground states "The L.A. Times" put out in Missouri, Ohio and Wisconsin, all of which show Bush ahead?

DEVINE: Well, look, I saw that poll. There's a lot of others polls out today. I think most of the polling says the race is close nationally. I think we have a real advantage. You see these snapshots of individual states. I was in Ohio last week, as a matter of fact, for a CNN town hall meeting. And you had a poll saying we're 10 points ahead.

So I think we're in strong shape in Ohio. I got to talk to a lot of people when I was out there. I think the reason John Kerry is in strong shape in Ohio today is simple. More than 200,000 people in that state have lost their jobs. Health care costs have increased almost 50 percent. There's a huge squeeze of the middle class going on in Ohio and all across this country. And I think those voters are really going to decide this election.

BLITZER: We heard earlier Ken Mehlman, the campaign manager for the Bush-Cheney campaign, say that Michael Moore, who has got a new letter to the president that is out today, Michael Moore is a surrogate for your campaign. Is he?

DEVINE: No. I heard him talking about Michael Moore sitting in somebody's box. Well, I remember when Ahmad Chalabi was sitting in the president's box at the State of the Union.

There's a guy who really because of the association with President Bush has cost our country a lot. We have spent over -- almost $200 billion in Iraq now and nearly 1,000 Americans have died. And the association with the president with somebody in his box has really cost somebody something, the lives of Americans and incredible amounts of taxpayers' money.

BLITZER: Does Senator Kerry stand by Michael Moore on those charges he makes against the president, though?

DEVINE: Wolf, Michael Moore has a right to speak for himself. And he and I think a lot of people in this country have very strong feelings about the president of the United States. That's because this president has been a disaster in office.

He has been pursued disastrous policies in respect to our economy. Four million Americans have lost their health insurance since he's been president. The price of gasoline is skyrocketing because he has no energy policy. So I think people do feel very strongly about the president. Many of them have expressed their opinions, as is their right to do so. But John Kerry and John Edwards speak for themselves.

BLITZER: Tad Devine, we'll be hearing from you a lot during the next several days and weeks. Thanks very much for joining us.

DEVINE: Thank you, Wolf.

BLITZER: And our special live coverage from the Republican National Convention here at Madison Square Garden in New York will continue. The president gets a pre-convention boost in several of those battleground states. We've been reporting those numbers. Our Carlos Watson, he is standing by with "The Inside Edge."

A warning to retires. The government may have promised more than it can deliver. Will baby boomers have to deal with fewer benefits?

And medal mess, another twist for the American gymnast Paul Hamm. All that coming up.

First, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The International Red Cross is stepping up flights of humanitarian supplies into Sudan. Tens of thousands are reported to have died in ethnic strikes in the Darfur region. And hundreds of thousands have been forced to leave their homes.

Against the barrier. Palestinians staged a rally to protest Israel's West Bank barrier. Israeli leaders say the barrier will protect Israelis from terror attacks. But a speaker at today's rally, the grandson of Mahatma Gandhi, said it reminded him of South Africa's apartheid era.

Philippine floods. At least eight people are dead after heavy rains in the Philippines. Some people had to be plucked by helicopters from the roofs of submerged houses.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Welcome back to Madison Square Garden.

There's an ominous warning for 77 million baby boomers today from the Federal Reserve chairman, Alan Greenspan. He says when it comes to retirement benefits, the federal government is promising more than it can deliver.

CNNfn personal finance editor Gerri Willis is joining us now.

The words were pretty scary, what he had to say, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: You bet, Wolf. Listen to this. He says: "As a nation, we owe it to our retirees to deliver only the benefits that can be delivered. If we delay, adjustments could be abrupt and painful," dramatic words here on the eve of the convention, also Greenspan offering some solutions to the problem which we were interested in as well. He says, work longer, retire later.

And, of course, nobody but Federal Reserve Alan Greenspan knows this so well. He's 78 years old, still working. He says, raise minimum age for retirement benefits. That's already happened once, could happen again. and, finally, slow the growth of Medicare spending, which is the program he's most worried about here, Social Security not as much as Medicare, which he says is really behind the times.

BLITZER: That's a political hot potato, going from 65 to 67. It's been discussed, maybe even 68. But that's in the political environment right now unlikely to happen.

WILLIS: Well, you bet. That's always a political hot potato.

But, remember that Greenspan here is serving out the final years in his role as the head of the Federal Reserve. He's free to sort of say whatever he wants to. Interesting time that he picks now to start talking about this issue. He's talked about Medicare, Social Security three times now this year, talking about the importance of fixing this problem. And, of course, he's talking so much about boomers here and the problems they're going to face as they hit retirement.

BLITZER: There's basically three solutions to this. You either reduce the benefits. You increase taxes to pay for the benefits. Or the economy is simply going to boom, so that the federal government will be generating a whole more revenue, that last option politically the nicest.

WILLIS: Yes, that would be great, wouldn't it? In fact, Greenspan says raising taxes will not happen either. That's a bad choice.

He says raising payroll taxes will discourage people from getting into the work force, staying in the work force just at the time that you have all these people leaving the work force. He sees that as a bad option. He wants boomers to save more, put away more money.

BLITZER: That's pretty good advice anyhow.

WILLIS: Yes, definitely.

(CROSSTALK)

BLITZER: ... boomers. Thanks very much, Gerri.

WILLIS: You're welcome.

BLITZER: Our live coverage from the Republican National Convention here in New York City at Madison Square Garden will continue.

The president sees a pre-convention surge in some key battleground states. Our political analyst Carlos Watson standing by with "The Inside Edge."

Match for the medal. Iraq's soccer team tries to make Olympic history. An update on all of today's action in Athens, that's coming up.

(COMMERCIAL BREAK)

BLITZER: As Republicans converge on New York City for their national convention, let's get "The Inside Edge" now from our CNN political analyst Carlos Watson. He's joining us right now from Mountain View, California, but he will be in New York very, very soon.

Carlos, what do you make of these new battleground poll numbers, which show a slight edge for the president?

CARLOS WATSON, CNN POLITICAL ANALYST: Good news for the president. Ohio, Wisconsin, Missouri, three states, three very important states, and two of these three states are places where the swift boat veterans ads were running. So they have seemed to have made a difference.

One interesting thing to note, Wolf, big issue for John Kerry in all three of these places, it's somewhere between one out of five and one out of four voters who say they want real change in the country, needs to go in a different direction, aren't voting for John Kerry. That's a problem., He's not yet seen as an agent of change that they can count on.

BLITZER: Is there going to be a likely, likely, a big bounce coming out of this convention, given the polarization in the country right now?

WATSON: All the indications are no, that you are unlikely to see a big national bump.

But I'll tell you what I'm looking for, Wolf. I'm looking for bumps in key swing states, particularly in the South and particularly in some of these border states. By that, I mean Virginia, North Carolina and Tennessee, all places that should be red states the president should hold on to, but that the most recent polls all shown are within less than 10 points, usually with the president ahead. So even if they don't see a big national bump, looking for some key state-specific bumps in those places.

BLITZER: What are we going to hear? What's going to be the main message coming out of this convention Monday through Thursday?

WATSON: Three things, Wolf, should stand out. First and foremost, the president wants to say that no issue is as important as protecting the country against terrorism, and you can't trust John Kerry. No. 2, I expect to hear the president try and reframe his record on the economy and on the war on Iraq and say that while things haven't been perfect, I want you to consider these other factors. And last but not least, it is going to be important for independents to hear that the president has a real compelling agenda for another four years, that he's not a guy who did everything he wanted to do in four years, but indeed on health care, on education and in other areas, there's more yet to come.

BLITZER: Is it your sense that this message that they're trying to reach out to this moderate middle of the swing voters could conflict with getting that base, the conservative base up all ginned up and make sure that they're on board, to get their friends to vote? Sometimes there is a built-in conflict there, isn't there, Carlos?

WATSON: Sometimes there is. But I don't expect that to be the case here.

Both on the left and on the right, you're seeing unusual unanimity, because both sides remember how close 2000 was, know that every vote counts and know that there is a big divide in terms of policy. So while, in 1992, we did the Republican Party split, I don't expect to see that in 2004. And, again, one of the central reasons is something that most people don't see. It's the grassroots campaign, the phone calls, the e-mails, even some of the radio ads that are going on.

Things other than television and other than the big conventions I think are making a real difference in holding the Republicans together.

BLITZER: CNN's Carlos Watson with "The Inside Edge" -- he will be on his way to New York, a key player throughout our extensive coverage coming up over the next several days.

Carlos, thanks very much.

WATSON: Look forward to joining you.

BLITZER: Have a safe flight to New York.

And our coverage of the Republican Convention will kick off this weekend with an in-depth look at the president. You can catch "The Mission of George W. Bush" Sunday, 8:00 p.m. Eastern, followed by a special live edition of "LARRY KING LIVE." And please join Judy Woodruff and me for "America Votes 2004" special, a preview of the Republican National Convention, all Sunday night.

A top American gymnast is asked to give up his gold medal. More on this medal mess in Athens. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing in on our Web question of the day. Take a look at these numbers. We'll put them on the screen. Well, they're not up on the screen, but we'll tell you what the numbers are. There they are, 9 percent vs. 91 percent. Remember, though, this is not a scientific poll.

Up now, our Olympic update. For those who don't want to know what happened today and want to watch it on television tonight, this is a good time to mute your TV. This year's most favorite underdogs lost a game today, but still kept the hearts of fans worldwide. Iraq men's soccer team lost 1-0 to Italy in the bronze medal game. That puts the Iraqi team in fourth place, which is still the best finish ever for any Iraqi soccer team in a major international tournament.

The streak is over for the U.S. men's basketball team, the so- called dream team not much of a dream. The U.S. men lost their semifinal match to Argentina today 89-81. That means that after winning gold medals in '92, '96 and 2000, they won't be able to win anything better than bronze this year.

Finally, there's an angry dispute over one of America's gold medals. Paul Hamm won the gymnastics all-around gold after Olympic judges mistakenly docked a South Korean rival. Now world gymnastics officials have written a letter to Hamm asking him to give up his gold medal as a show of sportsmanship. U.S. officials have refused even to deliver that letter to him. They say Hamm should not be punished for a mistake by officials.

(BEGIN VIDEO CLIP)

JIM SCHERR, USOC CHIEF EXECUTIVE: That Paul Hamm can solve their problems and the technical issues they have with the judging rules and how they have administered the sport for this competition is absolutely improper and should never have been suggested by the FIG. Therefore, as I have stated, we have rejected their proposal and we will not deliver this letter, nor suggestion, to Paul.

(END VIDEO CLIP)

BLITZER: Through his agent today, Paul Hamm declined to comment formally on the letter.

A reminder, WOLF BLITZER REPORTS, we air weekdays at this time, 5:00 p.m. Eastern. We're also on weekdays at noon Eastern. And please tune into a special edition of "LATE EDITION," the last word in Sunday talk. We're live from the Republican National Convention here at Madison Square Garden. Among my special guests this Sunday, the chairman of the Bush-Cheney campaign, Governor Marc Racicot, and the Democratic Senator Hillary Rodham Clinton from New York.

Until then, thanks for joining us.

"LOU DOBBS TONIGHT" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com