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THE SITUATION ROOM

Fed Cuts Interest Rates; O.J. Charged With 10 Felony Counts

Aired September 18, 2007 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks, Kitty.
Happening now, interest rates go down, stock markets go up big time, but will the Fed's action today also help millions of Americans with serious mortgage worries?

Prosecutors now throwing the book at O.J. Simpson, including 10, count them, 10 felony counts for an alleged armed robbery. Could he spend the rest of his life in prison?

And pledges to end the war in Iraq helped Democrats gain control of Congress, have they though dropped the ball? I'll ask the host of HBO's "Real Time with Bill Maher", the comedian, Bill Maher.

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

Tonight experts are calling it a big discount for America, one that will mean money in your pocket if you have debt. It's a move that could help save millions of Americans who are now struggling financially. Today the U.S. economy got a shot in the arm after the Federal Reserve cut a key interest rate for the first time in four years. Wall Street immediately saw a huge rally on the news, the Dow seeing its first 300-point gain in almost five years. We want to explain precisely what this action could mean for you. Our Ali Velshi has details.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Everybody thought the Fed was going to cut today. They thought they were going to cut a quarter of a percent. They cut by half a percent. That means that the prime rate has gone down by half a percent, and then here where Treasury bonds are traded, that means that they came down. And that's where your mortgages are often financed, so everybody got a discount today.

And if you're any sort of investor, what a day you had, that Dow, the biggest point gain since 2002, gold at a 27-year high. You saw General Electric have its biggest gain in five years. You saw Procter & Gamble hit an all-time high. Why? Because the Fed made interest rates lower. Here's what happened.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): The immediate effect of this cut is that certain types of credit card debt, personal loans, business loans, and home equity loans all got cheaper. While the Fed cut doesn't bail out the sinking housing market or those people caught up in the sub-prime mortgage debacle, it is good news for millions of Americans with adjustable rate mortgages, arms as they are called, aren't tied to the Fed rate.

They're actually tied to one-year Treasuries which are traded at the Chicago Board of Trade, but Treasury rates tend to follow the Fed rate, in this case down, so homeowners with adjustable rates that were about to adjust to a higher rate just caught a bit of a break. When interest rates come down, people and businesses spend more money. Businesses borrow money to expand and maybe hire more workers who in turn borrow more money to spend, supply and demand increase, which keeps the economy going and growing.

(END VIDEOTAPE)

VELSHI: Now, Wolf, if you look at the Dow, it is now up 10 percent for the year. It you look at the top 10 mutual funds owned by Americans, they are all up more than 10 percent over the last 52 weeks, so the markets are strong, interest rates are coming down. It doesn't solve the housing problem, but it seems to be investors feel like this is a good step in the right direction, Wolf.

BLITZER: All right, Ali. Thanks very much -- Ali Velshi on the scene for us, 335 points on the Dow today.

We have some new images just being released by Las Vegas police tonight in the case against O.J. Simpson. The former football star is now charged with conspiracy to kidnap in connection with an alleged armed robbery in Las Vegas. Let's go straight to CNN's Ed Lavandera. He's on the scene for us in Las Vegas. First of all, Ed, tell us about these new images, these photos that are just coming in.

ED LAVANDERA, CNN CORRESPONDENT: Absolutely. We'll get to that very quickly here. Las Vegas police as you mentioned releasing two video images, two snap shops of video images they say were taken at the Palace Station Casino last Thursday the night of this incident where O.J. Simpson and an entourage went back, as O.J. Simpson has said, to recover some of his stuff, sports memorabilia.

All along, authorities here in Las Vegas have been saying that O.J. was with five other men. So far four of these men have been charged. Two of them they are still working on figuring out who exactly they are. They don't know their names or where they might be from at this point, so this afternoon authorities here in Las Vegas have released these images taken from the casino last Thursday and they're asking for the public's help in identifying who these men might be and where they might be at this point.

And as you mentioned, the other big news here this afternoon, O.J. Simpson and three other men now facing additional charges and much more serious charges as well, including elements of kidnapping, first-degree kidnapping with a deadly weapon, conspiracy to commit kidnapping, these are charges that now carry a possible life sentence if O.J. Simpson and these other men were to be convicted on these charges. And of course, O.J. Simpson expected in court tomorrow morning to hear these charges formally and also his attorney says they'll continue to work on trying to get him released on bail. Wolf? BLITZER: Ed, one of the men making these accusations against O.J. Simpson now in a hospital in critical condition. Tell our viewers what's going on, on that front.

LAVANDERA: Another bizarre twist here this afternoon as well, Wolf. A gentleman by the name of Bruce Fromong, who was one of the two men that authorities say were confronted by O.J. Simpson and his entourage last Thursday, Fromong is now in a Los Angeles hospital in critical condition after suffering a heart attack.

BLITZER: What a bizarre twist that is. Just walk us through the process. Now tomorrow O.J. Simpson appears before a judge. The judge will then determine whether or not he can go out on bail as the other suspects are presumably out on bail right now. Is that right?

LAVANDERA: Right, two of these suspects -- there are four in all that have been formally charged today, O.J. Simpson, two men who have already been booked into the jail and released on their own recognizance. We're still trying to figure out exactly where this fourth person who has been charged, if he's about to turn himself in or where he might be, but then O.J. Simpson will be in court tomorrow morning, these charges will be formally presented to him.

Remember he was arrested on just six counts. There have been five additional counts that have been added since he's been sitting here in jail in Las Vegas. Those charges will be formally presented to him and also the second matter will be this bail issue and O.J. Simpson's attorney has been saying if this man had any other name other than O.J. Simpson, he would have been released already.

BLITZER: We'll watch it tomorrow with you, Ed. Ed Lavandera is on the scene in Las Vegas for us.

Let's go to Jack Cafferty. He's on the scene for us in New York. What a bizarre story, this O.J. Simpson story is all about. Can you believe this, Jack?

JACK CAFFERTY, CNN ANCHOR: Well yeah, I can believe it. He's proven himself to be less than an honorable human being several times over the last several years. And if he did this stuff and he's convicted, I can't think of a better place for him than rotting in a prison for the rest of his life. That's exactly where he belongs.

Some schoolteachers could soon be eligible for bonuses of more than $12,000 a year. Lawmakers are considering authorizing federal grants as a revision to the "No Child Left Behind" law. This bonus money would be meant for outstanding teachers who work in schools in poor areas. "The Washington Post" reports Democratic Congressman George Miller says the teaching work force is leaking talent and his proposal for bonuses would help to rejuvenate it.

The bonuses would be worth up to $10,000 in most cases, up to $12,500 for specialists in subjects like math and science -- efforts to link teacher's performance to pay already underway in school systems in both Denver and in the state of Minnesota, but predictably, not everybody thinks this is such a great idea. Teachers' unions are against the bonuses, saying it would undermine their ability to negotiate contracts and would be partly based on student test scores which they think are an unreliable measure.

So the question is this -- should outstanding teachers in schools in poor areas be eligible for bonuses of up to $12,500 a year? Give us your thoughts, send them to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile. There's been a debate in this country for years about merit pay for teachers, and I think it's probably not a bad idea.

BLITZER: I think public school teachers are woefully underpaid.

CAFFERTY: Absolutely.

BLITZER: I think everybody agrees that they do incredibly important work and they should be paid adequately for that.

CAFFERTY: I agree.

BLITZER: Jack, thanks very much.

It was the Taser shot seen and heard around the world.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I didn't do anything. Don't Tase me, bro. Don't Tase me. I didn't do anything. Ow! Ow! Ow! Ow!

(END VIDEO CLIP)

BLITZER: His shouting didn't work. Tonight there's fallout, huge fallout after police Taser a student at a speech by Senator John Kerry. We're going to have details coming up.

Also, a major move by the U.S. embassy in Baghdad, it is affecting thousands of American civilians and diplomats after Iraqi civilians were killed in a shootout. This new development is happening right now. We're going to share it with you, what's going on.

And it's the Cold War all over again. The country's spy chief saying America is still being watched. You're going to find out who he says is aggressively spying on the United States and what he wants to do about it.

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

(COMMERCIAL BREAK)

BLITZER: Tonight a major announcement by the United States embassy in Iraq, with potentially enormous ramifications for thousands of American diplomats and civilians living in the so-called Green Zone. Within the last hour, the embassy announced diplomats will no longer be allowed to leave that Green Zone.

That's after a shootout involving a private American security force in which a number of Iraqi civilians died. Let's go to CNN's Brian Todd. He is watching this story for us. It involves a story we reported and you reported yesterday with this Blackwater security firm, a private American defense contractor.

BRIAN TODD, CNN CORRESPONDENT: Directly to that we just got this notice moments ago from the State Department. They are suspending travel for diplomats outside the Green Zone and throughout Iraq. And it is connected to that incident. In this notice it says, in light of the incident involving U.S. security -- U.S. embassy protective details in the Mansour District of Baghdad, the embassy has suspended official U.S. government civilian ground movements outside the international zone and throughout Iraq.

It says this suspension is in effect in order to assess mission security and procedures as well as a possible increased threat to personnel traveling with security details outside the international zone. It is a move with a lot of ramifications, U.S. diplomats now at least for the moment not able to move outside the Green Zone. This notice does not make clear when that suspension might be lifted, and there is -- there was a little confusion earlier today as to whether Blackwater was still operating in Iraq, but the State Department earlier today did say that the security firm is still operating in Iraq while this investigation continues.

There are still very much differing accounts over what happened on Sunday in that incident. Iraqi officials say that the U.S. security detail when it came under small-arms fire fired back and hit Iraqi civilians, killing just about -- they killed eight people and the Iraqis say that seven of those eight were civilians and the eighth one was a policeman, but the security firm and other security sources in the industry say that the people who fired on that convoy were actually militants and that the only people killed were in fact Iraqi militants, so that investigation is ongoing, Wolf, but for the moment, diplomatic personnel, U.S. diplomatic personnel cannot travel outside the Green Zone. That has a lot of ramifications, as you know.

BLITZER: Enormous ramifications because if the American diplomats and there are well over 1,000 of them can only talk to themselves and their colleagues inside the Green Zone, they can't go out, speak to Iraqis, do any independent reporting, report back to the State Department, the National Security Council on what's going on, because they don't have protection, they don't have security, it is going to cause enormous ramifications.

What an embarrassment right now for the U.S. diplomatic mission in Iraq. Brian thanks very much. We'll watch this story and see what happens -- an enormously significant story happening in Baghdad right now.

Meanwhile, America's intelligence chief says Russia and China are aggressively spying on the United States and he's defending a new law that lets the government eavesdrop and collect information. Let's go live to our justice correspondent Kelli Arena. It sounds, Kelli, like the bad old days of the Cold War.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Oh it sure does, Wolf. You know the nation's top intelligence official warned Congress not to look at the threat to the U.S. too narrowly. He says that there's a lot more threatening our country than just terrorism.

(BEGIN VIDEOTAPE)

ARENA (voice-over): As if al Qaeda and Iraq weren't enough...

(MUSIC)

ARENA: ... let's add our Cold War adversaries back into the mix. Director of National Intelligence Mike McConnell says Russia and China are aggressively spying on the United States, threatening national security. In his words, their efforts are approaching Cold War levels.

PETER ZEIHAN, STRATFOR.COM: Both in the case of Russia and China, you've got increasing capability married to an increasing desire for their own political purposes to get information from the United States.

ARENA: So what's China after? Well experts say technology for its businesses and military. Dozens of Chinese nationals have been charged with passing secrets while living in the United States, most recently former defense engineer Chi Mak. The FBI even went so far as to place ads in Chinese language newspapers asking for tips on so- called subversive elements.

RUDY GUERIN, FORMER FBI COUNTERINTELLIGENCE: It's not just Washington and New York and Los Angeles. It's everywhere. It's in all 50 states. And wherever the research and development is, that's where you'll find the threat.

ARENA: As for Russia, experts say it wants to regain super-power status. To do that, they say its president, a former KGB operative, is focusing mightily on rebuilding the country's intelligence arm.

UNIDENTIFIED MALE: They believe that they're dealing with state survival.

ARENA: Experts say the war on terror has shifted resources away from counterintelligence and we're paying the price. The most recent espionage report to Congress states that spying has eroded the U.S. military's advantage and undercut the U.S. economy.

(END VIDEOTAPE)

ARENA: Now Wolf, we did reach out to the Russian embassy for comment, but calls there were not returned. A Chinese embassy spokesman says very predictably that allegations of spying are totally groundless.

BLITZER: Kelli thanks very much, Kelli Arena reporting.

The comedian Bill Maher comparing the recent war report to one of the worst financial collapses in American history.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I call it the Enron Surge Report because they manipulated the statistics the same way Enron did. It didn't count.

(END VIDEO CLIP)

BLITZER: Real talk from the real-time HBO host Bill Maher. He goes after Republicans and Democrats on Iraq, Senator Larry Craig, O.J. Simpson and a lot more. That's coming up.

And a plan to tax the rich to help millions of poor people, it is from Senator Barack Obama. Might you save money if he becomes president? Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Quite a surprise on Capitol Hill today when Republican Senator Larry Craig showed up to go back to work. Senator Craig, of course, was arrested in a sex sting in a Minneapolis airport men's room. He pleaded guilty later. Our congressional correspondent Jessica Yellin is following the story from Capitol Hill for us. A lot of people caught off-guard by his mere decision to show up for work.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Most people were, Wolf, except for Senate Minority Leader Mitch McConnell who got a heads-up call from Larry Craig warning him that he was going to come today. Larry Craig showed up and spoke actually at the Republicans weekly lunch here in the Capitol. We understand from one senator who was present that Craig apologized if his actions caused any embarrassment and reminded senators that his case is on appeal, but he did not address what his future plans are.

And one congressional aide who was in the room said that it left a big question in many people's minds and certainly some uncertainty as to whether Craig does intend to resign on the 30th as he had said. Now CNN caught up with Larry Craig when he arrived this morning and we asked why he decided to return to Washington.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: What brings you back to the Capitol today?

SEN. LARRY CRAIG (R), IDAHO: To go to work.

UNIDENTIFIED REPORTER: Are you intending to vote today, sir?

CRAIG: That's my plan.

UNIDENTIFIED REPORTER: Why did you decide to come back today?

CRAIG: Because I'm a serving United States senator from Idaho.

(END VIDEO CLIP)

YELLIN: Now we asked Craig ourselves, why he -- whether he in fact does decide to retire on the 30th, and he said quote, "we're working on that now." Well the answer didn't seem very clear, so we followed up and saying does that mean it is an open question whether you will resign or not? He said, I said I intend to resign on the 30th. That's what we are working on. So it seems like that's an open question, Wolf.

BLITZER: Has the mood among his Republican colleagues changed any over these past couple of weeks?

YELLIN: That also varies. We spoke to Orrin Hatch. Senator Orrin Hatch said that this morning he read Larry Craig's appeal papers and he thinks that there is no underlying crime there, and it is still up to Larry Craig to decide whether he wants to go. Senator Specter who has supported Larry Craig all along said that there has been a lot of favorable talk about Larry Craig in the Republican cloakroom, but of course Larry Craig still has to try to clear his name in court, and that will be on his hearing on September 26th -- Wolf.

BLITZER: As we reported yesterday, the ACLU now joining on his behalf, saying that that whole sting operation was unconstitutional. All right, thanks very much, Jessica Yellin on the Hill.

Let's go to Brianna Keilar. Carol Costello is on assignment. Brianna, you're monitoring some other stories incoming into THE SITUATION ROOM right now.

BRIANNA KEILAR, CNN CORRESPONDENT: Yes, Wolf, a deadlocked jury in the Phil Spector murder trial. After eight days of deliberations jurors announced today they cannot reach a unanimous verdict. Spector, of course, a well known music producer, is accused of killing actress Lana Clarkson four years ago. The judge is expected to announce tomorrow how he wants to proceed. He says he may allow jurors to consider a lesser charge of involuntary manslaughter.

Meanwhile, Dole Foods is voluntarily recalling its "Hearts Delight" salad mix after a package tested positive for E.coli. Officials say the tainted lettuce was found in Canada and the recall also involves at least nine states, so far there are no reports of anyone getting sick. The E.coli was discovered during a random screening and now Canadian officials are trying to figure out how the lettuce was contaminated and if any other products are affected.

The nation's Capitol will not be getting a seat in Congress for now. Today the Senate voted to stop debate on a bill that would have given Washington, D.C. residents their first ever representative in the U.S. House. Critics called the measure unconstitutional. Utah also lost out. The bill would have granted the state its fourth House seat, which it narrowly missed getting after the last census -- Wolf.

BLITZER: Thanks, Brianna for that, Brianna Keilar reporting.

O.J. Simpson was charged today with conspiracy to commit kidnapping and a long list of other felony counts.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: You'd think a guy in his position with the baggage he brings, the reputation he has, leave the gun at home, maybe.

(END VIDEO CLIP)

BLITZER: I'll talk about the Simpson bust, Larry Craig, a lot more, presidential politics with the comedian Bill Maher.

And no more cheap flights for the presidential candidates. Why they'll now have to start paying at least what you pay out on the campaign trail.

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

(COMMERCIAL BREAK)

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

Happening now -- serious accusations against the State Department's inspector general, a congressional committee now investigating whether Howard Krongard interfered with fraud investigations in Afghanistan and Iraq. Krongard denies the accusations.

Growing concern about the relationship tonight between North Korea and Syria, a Pentagon official confirming to CNN that for weeks the U.S. has been tracking shipments of material they believe left North Korea and is headed for Syria, or already there perhaps. The official said some of the material is believed to be high-grade metals that could, could be used in missiles. He says there's no evidence nuclear material is involved.

And controversy at the University of Florida after a student there was Tasered during a John Kerry speech. The school wants the state to investigate. We're going to have more on this story. That's coming up.

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

Nobody every accused the comedian Bill Maher of pulling a punch especially when it comes to politicians. This election campaign is already providing a lot of opportunities.

Joining us now is the host of HBO's "Real Time with Bill Maher". That would be Bill Maher. Bill, thanks for coming in to THE SITUATION ROOM.

BILL MAHER, HOST, "REAL TIME WITH BILL MAHER": It is always a situation every day, isn't it Wolf?

BLITZER: It's funny how these things develop.

Let's talk about the war in Iraq, first of all, because the Democrats got the majority, in large part, I think it's fair to say, because they promised they were going to end this war and bring the troops home. That's clearly not happening right now and there's a lot of frustration out there as a result of that.

What do you think?

MAHER: Well, they just don't have the votes. That's true. The -- I guess we need another election to turn out more of the people who are basically keeping this war going.

It's tough for the Democrats to explain that one to the American people, but that's the truth.

BLITZER: Is there more that they could be doing, should be doing?

MAHER: Yes, I guess there is.

But, you know, what can you do with a situation where there's one man who stubbornly has the power and will not relinquish it?

And he's such a liar, you know?

I think that -- if he would just be straight with the American people instead of saying things like the people who are attacking us in Iraq are the same people who attacked us on 9/11 -- what a blatant lie. Or every day, every month since January, we've killed over 1, 500 terrorists and other extremists.

Who is a terrorist? Who are extremists? Who are the enemy? What do these terms mean?

Would they even be the enemy if we weren't in their country?

BLITZER: But you ...

MAHER: Not to mention all the ...

BLITZER: You listened closely to General David Petraeus and Ambassador Ryan Crocker. Both are career professionals -- a career military officer, a career diplomat. They made the case, effectively for President Bush, that the U.S. should continue this strategy.

MAHER: Wait a second. He put the words in their mouth. That wasn't the Petraeus report.

BLITZER: But they say those words were their own.

MAHER: Well, it was a White House written report. We know that. Bush has an interesting little scam going. He also quoted in his speech on Thursday night, Maliki. And he said basically that the Iraqi leadership is asking us to stay. So in other words, he puts words into his stooges' mouths. And then, he quotes them.

It's the same thing that ...

BLITZER: Let me point out. General Petraeus who has been a military officer for more than 30 years, the first thing he basically said out of his mouth, last week, is I didn't show this testimony to anyone. I wrote it myself. I didn't have it vetted by the chain of command. Not by the White House. Not by anyone at the Pentagon. Not by anyone in Congress. Don't you believe him when he says that?

MAHER: No. I'm sorry, I don't. That report was -- I called it the Enron surge report because they manipulated the statistics the same way Enron did. It didn't count. Violence didn't count if it was a car bomb. It didn't count if it was Sunni on Sunni violence. It didn't count if you were shot in the back of the head, instead of the front of the head. That's utter nonsense.

They manipulated that report. Every independent report that came out about the surge contradicted what David Petraeus said. It said that the violence has not gone down. It just moved to different areas. It was never a case, Wolf, that we were wondering whether if we put 20,000 or 30,000 troops in a certain area, violence would go down. Of course, violence would go down in that area.

But violence in the country didn't go down. And even Baghdad residents said, no. Violence is as bad as it ever was. Is from a reason why 93 percent of the Sunnis in that country think it's OK to attack Americans? And want us dead? Fifty percent of Shiites want ...

BLITZER: Here's one thing the Democrats could do in some anti- war critics say they should do. Just stop funding the operation over there. Use the power of the purse. They have the majority in the House and the Senate. Just stop funding the war.

MAHER: Yes. I agree whole-heartedly. Stop funding the war. Make the case to the American people, that if we stop funding the war, it's a different thing than abandoning the troops. This is always where the Democrats fall down. They are afraid to make the counterargument. And that is the counterargument. And it can be made.

BLITZER: Here's what Senator Clinton, Hillary Clinton, the Democratic front-runner said on AMERICAN MORNING this morning. When asked about the moveon.org ad, that raised questions about General Petraeus, they called him "General Betray Us," you remember the ad. Here's what she responded when asked about it.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I certainly speak for myself. And I am a very strong admirer of General Petraeus. His record of service for our country. The dedication he has brought to a very difficult job that many of us think does not have a military solution.

(BEGIN VIDEO CLIP)

BLITZER: So, would you agree with her on that?

MAHER: Of course. The Republicans who attacked that ad, it was very convenient it gave them something to divert from the issue, which is that the war is a total mess. And it allowed them to excite their fake outrage base once again.

But basically, they did it on a big lie, as they usually do. Hillary, in the hearings, said the report, the Petraeus report required a willing suspension of disbelief. She didn't attack him personally. And, of course, they turned it around and said, how dare you attack him personally?

That's exactly the opposite of what she did. Hillary Clinton is a little too careful to attack a general personally.

BLITZER: Well, you attack him personally. You just did on our show. You said you don't believe him when he said he never cleared his testimony with anyone in Washington.

MAHER: Call me a cynic, Wolf. Look, I understand that he's doing an impossible job over there. And I have no doubt that he actually does more before 9:00 a.m. than I do all day or perhaps all year. Yes. I admire anybody who is in the war zone. But that doesn't mean that he is not performing a political function for the White House. Now, you can read into that what you will. But I'm sorry. Just because he's wearing a uniform, I can't not see what I see, which is that the man is doing a political job for George Bush.

BLITZER: Is Barack Obama ready to be president of the United States?

MAHER: Ell, I think he could be a good president, yes. Look, when you're in your 40s, as everyone like myself who is in my 50s will tell you, you're probably too young and green for anything. I only really got my seasoning in the last couple of years. But I think he could be president. He certainly would be better than the president that we have.

BLITZER: Who do you like among the republican candidates? Who would be the best candidate among the Republicans?

MAHER: Ron Paul.

BLITZER: I knew -- I suspected you were going to say that, I told our producers.

MAHER: Well, the other ones -- the other ones all sound alike. You know, they all come from the part of the party -- they're all appealing to the part of the party, the base, that wants this war in Iraq to keep going. I asked this of Chuck Hagel on our show on Friday night. I don't understand the strategy. I guess I do, you have to get the nomination first. But how does a Republican who is supporting this war to the degree they're all supporting the war, then turn around after he gets the nomination, and wins a general election in a country that is overwhelmingly against this war?

That's a pretty tough one.

BLITZER: You know, we were watching the Emmys the other night. You were nominated for an Emmy. And you had a clip that was shown to the viewers. I want to play that little clip. And then, we're going to talk about it. Listen to this.

(BEGIN VIDEO CLIP)

ANNOUNCER: "Real Time with Bill Maher." Scott Carter (ph), David Feldman (ph), Fran Jacobsmeier (ph), Jay Yarrow (ph), Chris Kelly (ph), Danny Martin, Danny Vermont (ph). And Bill Maher.

(END VIDEO CLIP)

BLITZER: You know, he's back. Larry Craig. He came back to Congress today. He showed up for a Republican strategy meeting. Still saying his intent is to resign. But it's not 100 percent. What do you think he should do?

MAHER: I'd love to see him stay. I'd love to see him stay and run for president. I'd love him to take what's left of that party down with him. When I say down with him, I don't mean any pun.

BLITZER: What about O.J. Simpson? Do you think he could get a fair trial if this does go before a jury, given the notoriety?

MAHER: That was very disappointing, Wolf. First, he kills his wife. Now, this. I begin to think he's something of a scofflaw. But O.J. is someone who has benefited from not getting a fair trial.

BLITZER: But does he have a case when he says, that was all my stuff, that had been stolen from me including some photos and some sports memorabilia. Does he have a case when he says, I was trying to retrieve stuff that had been taken illegally away from me?

MAHER: I'm sure he does. But from what I hear, what I heard last night, at least, on LARRY KING, and now, on your show, is that he had a gun or somebody with him had a gun. You think a guy in his position, with the baggage he brings, the reputation he has, leave the gun at home, maybe. When you hear "gun" and "O.J.," the first thing you think is, oh. Couldn't find the knife, huh?

BLITZER: Bill Maher. You have material for a few more seasons on "Real Time with Bill Maher" on our sister network, HBO. Thanks for coming to THE SITUATION ROOM and I hope you'll come back.

MAHER: Always a pleasure. Glad there's always a situation for us to talk about.

(END VIDEOTAPE)

BLITZER: And tonight there's a major announcement coming out from Senator Barack Obama. He says it could save Americans thousands in taxes by taking from the rich and giving to the not-so-rich. Find out how it will impact you if he's elected president.

And presidential candidates have to travel like the rest of us, how a new law could keep the contenders from flying in style. Stick around, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: A bold new plan that could affect millions of people's bank accounts. Senator Obama, saying, and I'm quoting now, "Some CEOs make more in 10 minutes than a worker makes in 10 months."

So the presidential candidate is promising to overhaul the tax code. Our Tom Foreman explains who might benefit. Tom?

TOM FOREMAN, CNN CORRESPONDENT: Well, Wolf, in "Raw Politics" we would call this a classic Democratic approach, although you could call it the Robin Hood method -- take from the rich and give to the poor.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: At a time when Americans are working harder than ever, we are taxing income from work at nearly twice the levels that we're taxing gains for investors.

FOREMAN (voice-over): Barack Obama says the current tax system is working against most of us, and he wants to fix it.

OBAMA: I will restore simplicity to the tax code and fairness for the American middle class. It's time to stand up to special interest carve outs.

FOREMAN: The senator from Illinois and Democratic presidential hopeful laid out his plan which calls for...

OBAMA: By cutting taxes for working people, cutting taxes for homeowners, cutting taxes for seniors.

FOREMAN: Among the specifics, a tax cut of up to $1,000 for 150 million working Americans, a tax credit for homeowners who don't itemize their deductions. Eliminating the income tax for seniors making less than $50,000 a year, and...

OBAMA: The final part of my plan will be simplifying the process of filing a tax return for all-Americans.

FOREMAN: Obama says he will pay for all of this by...

OBAMA: Cutting down corporate loop holes and tax savings. We will also turn the page on an approach that gives repeated tax cuts to the wealthiest one percent of Americans even though they don't need them and did not ask for them.

FOREMAN: That sounds similar to Democratic rivals, including Hillary Clinton and John Edwards. They rolled out their tax cut plans earlier this year calling for ...

HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: By rolling back part of President Bush's fiscally irresponsible tax breaks for the highest income Americans.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Got to get rid of Bush's tax cuts for people who make over $200,000 a year.

(END VIDEOTAPE)

FOREMAN: This is a big policy push by Obama. Just yesterday he was in New York chastising executives at NASDAQ and Wall Street for looking out after themselves and not the middle class. Wolf?

BLITZER: Tom Foreman, thanks very much. Many are wondering what Obama's tax plan might mean for them. The Obama campaign gave us this calculation for a married working couple with an income of just under $69,000. In it the couple has a $80,000 home mortgage, because of that they'll get a $500 tax credit and because they work, another $1,000 credit. That would total $1,500. Meanwhile, the Obama plan would eliminate federal taxes for senior citizens making less than $50,000 a year. For a senior earning $49,000, Obama's plan would save them about $4,000 a year based on our calculation.

Now to another money matter. This one affecting the presidential candidates. They'll now have to budget in more money for their travel expenses. Our chief national correspondent John King explains. John?

JOHN KING, CNN CORRESPONDENT: Wolf, the price of traveling in style on the presidential campaign trail is going up.

(BEGIN VIDEOTAPE)

KING (voice-over): The price hike for cozy flights on private jets isn't because of rising fuel costs. It's part of a sweeping new ethics law signed by President Bush last week.

FRED WERTHEIMER, PRESIDENT, DEMOCRACY 21: This new lobbying reform and ethics reform law is the most important new law in this area that we have had since the Watergate scandals.

KING: Most of the changes deal with Congress and making fund- raising by lobbyists more transparent. But the law also closes the loophole that allows presidential candidates to accept rides on corporate jets and pay just a tiny fraction of the cost.

Take, for example, a trip from Washington to Los Angeles, a frequent itinerary for fund-raising. A small jet would run about $25,000 one way from a charter service. But, if a corporation made its jet available, the lucky candidate could reimburse the company only $800, the going rate for a first-class ticket on a commercial carrier.

WERTHEIMER: You get chits for that. You're doing real favors that matter for these people, and you can get access and influence as a result.

KING: The new law requires reimbursement at the fair-market value of such flight.

On the Democratic side, the candidate impacted the most is former Senator John Edwards. His campaign filing show more than $430,000 in payments over the first six years months of the year for use of a jet owned by his finance chairman. Senators Hillary Clinton and Barack Obama early on decided they would not fly on corporate jets. They already are paying out big bucks for more expensive private charters. On the Republican side, former Massachusetts Governor Mitt Romney makes frequent use of corporate jets. A top Romney adviser called the change "a very expensive headache."

Former New York Mayor Rudy Giuliani's filings show more than $400,000 in reimbursements for private planes. One of his top aides said the new law makes life more expensive, but we will deal with it.

(END VIDEOTAPE)

KING (on camera): This change, of course, is easier on the candidates with the highest money. They can afford the higher travel costs. The bottom line, though, for ethics watchdogs is one less way for the wealthy and big business to curry favor with the politicians.

Wolf?

BLITZER: All right, John. Thank you. John King reporting.

Jack Cafferty's question this hour -- should outstanding teachers in schools in poor areas be eligible for big bonuses. Jack with your e-mail. That is coming up.

Also taser tales caught on tape. Jeanne Moos takes a "Moost Unusual" look. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's go right to Jack Cafferty. He's got "The Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Interesting idea, Wolf. The question is, should outstanding teachers in schools in poor areas be eligible for bonuses of up to $12,500 a year?

Sharon writes from Cedar Rapids, Iowa. "We all deserve a bonus, but stop focusing on the teachers. Education is about students, not teachers, and the U.S. has got it all wrong. You can't teach if nobody wants to learn and this won't happen until we redevelop a culture that places value on raising kids who love to play and learn and do what comes naturally rather than sit around connected by wires to machines that make Bill Gates rich."

Josh writes, "Twelve thousand dollar bonuses would do nothing but promote competition among the teachers on a whole array of different levels. Not only that, it would cause teachers to be strictly about the bonus and less about the students. If they want to encourage teachers to do a better job, give them a better starting salary instead of the substandard paychecks they get now for the huge amount of stress they endure."

Omar in Miami, "No way my property taxes are going to go up when I don't have kids. I already paid $8,100 last year. Most of that goes to the schools. If teachers want more money, they ought to pick up summer school. After all, most of us only get two weeks off in the year."

Scott in Michigan writes, "If they had the option, how many top notch teachers would work in a less affluent community? Probably not many. Anything we can do to entice top-notch teachers to work in these areas needs to be tried. Studies show that students do less on tests, and anything we can do to change that ought to be considered.

And Peter in San Francisco, "I am so tired of these teachers unions protecting their mediocrity. We need a meritocracy in teachers because a well-educated population is the only way that we won't all end up flipping hamburgers for our future Chinese overlords."

Please join us tomorrow night, 8:00 Eastern Time, we'll be doing a one hour special of "The Cafferty File" talking about how ugly it's getting out there. Go to cnn.com/caffertyfile where you can send us your I-Reports and you can e-mail me at jack@cnn.com. We'll read a bunch of those tomorrow night, get your thoughts on various issues and just generally have us a good old time between 8:00 and 9:00.

Wolf?

BLITZER: It's going to be great, Jack. Thanks very much, Jack Cafferty tomorrow night.

Let's see what's coming up right after this program. Rick Sanchez is standing by. Hi, Rick.

RICK SANCHEZ, CNN CORRESPONDENT: Just within the hour, Wolf, new charges against O.J. Simpson. We're going to break it down for you. And also you probably heard, it's starting to look like maybe O.J. Simpson was actually set up by one of his cohorts. Here's the question -- does that matter from a legal standpoint? Leo Terrell is going to be here, boy, he was fuming mad about this yesterday, he'll probably be fuming mad about it again tonight.

He is going to join us again to talk about that.

Then this, we talked about it last night, it took off, and we're going to bring it back. Talk to the other side. Is Spanish language television in the United States full of lefties? Is the message too leftist? We're going to continue our debate. Right here "Out in the Open" for you, Mr. Blitzer.

BLITZER: And for everyone else. We'll be watching, Rick. Thanks very much.

You may have seen video, I'm sure you have, you've heard the shouting, but now there is another side to the story, a "Moost Unusual" side, and only Jeanne Moos has it, that's coming up next.

(COMMERCIAL BREAK)

BLITZER: It's the taser zap seen and heard around the world. Here's CNN's Jeanne Moos. (BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): The taser has come a long way, baby. Nowadays they even come in pastels.

UNIDENTIFIED MALE: Metallic pink and electric blue.

MOOS: But if you're going to taser a student, it's probably better for officers if there aren't cameras around recording those now famous last words.

ANDREW MEYER, TASING VICTIM: Don't tase me, bro.

Don't tase me, bro.

Don't tase me, bro. Ow!

MOOS: The video electrified the web. "Moron got what he deserved," read one post. "Sure he got what he deserved," if this were communist China, responded another.

Whether he deserved it or not, Andrew Meyer sure didn't seem to win friends with his questioning technique addressing Senator John Kerry.

MEYER: Thank you very much, I'll ask my question. He's been talking for two hours, I think I can have a few minutes.

Thank you for cutting my mike. Thank you. Are you going to arrest me? Excuse me. Is anybody watching this?

MOOS: They weren't just watching. Some were applauding the officers. Meyer acted like he was being mugged.

MEYER: Help! Help!

MOOS: And once tackled but still resisting.

MEYER: Get the (EXPLETIVE DELETED) off me, man, I didn't do anything.

MOOS: He got tasered, thus joining the ranks of those electrified on cameras, from pigs used as guinea pigs to certain reporters who have shocked themselves to demonstrate the effect.

UNIDENTIFIED FEMALE: Oh, man.

MOOS: While on the ground, officers warned him he would be tasered if he didn't cooperate.

UNIDENTIFIED FEMALE: Back up, back up.

MEYER: What did I do wrong?

MOOS: He seemed to think his life was in danger.

MEYER: They are going to try to kill me. They are going to try and kill me.

MOOS: Actually he was released the next day. We don't know how many volts Meyer got hit with, but we at CNN delight in watching our very own Rick Sanchez take a 50,000 volt jolt.

SANCHEZ: Do it! Ayayayah! Oh. It hurts.

MOOS: On that, Rick and Andrew agree, we do have one tip to make it less likely you'll get tasered. Don't call the officers "bro."

MEYER: Don't tase me, bro.

MOOS: Jeanne Moos, CNN, New York.

MEYER: Ow! Ow!

(END VIDEOTAPE)

BLITZER: Let's go right to the man who was tasered. That would be Rick Sanchez. He's standing by -- Rick.

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