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Barack Obama Criticizes Hillary Clinton; Turkish Government Pulls Ambassador From U.S.; Military Secrets Up for Grabs on Black Market; 'American Jihadist' Caught on Tape

Aired October 11, 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: Happening now, Barack Obama sharpening his criticism of Hillary Clinton, what he calls her flawed judgment. This hour, the Democratic presidential candidate talks to me about Senator Clinton, the war and the next phase of his campaign.
Also, why white men won't jump. Do they keep voting Republican because they've been neglected by Democrats? And the conservative commentators Ann Coulter stirring up a new hornet's nest after some stunning comments about Jews and America. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Tonight, Democrat Barack Obama admitting he needs to do a better job explaining how he would be different as president than Hillary Clinton. So he's reminding voters of what happened exactly five years ago today. That's when Clinton and 76 other U.S. senators voted to authorize the use of force in Iraq. Listen to this from my one-on-one interview with Senator Obama.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I think her judgment was flawed on this issue. And I know that she was not the only one who voted for this authorization. John Edwards, for example, has acknowledged it was a mistake. I do think that Senator Clinton has tried to massage the past a little bit, suggesting that it was a vote for inspectors. I think everybody at the time, including you and the media and the American people, understood this was a vote for war. You can't give this president a blank check and then be surprised when he cashes it.

(END VIDEO CLIP)

BLITZER: Senator Obama also suggests Senator Clinton is making another mistake again by supporting a resolution that could give President Bush what Obama calls a new blank check for military action against Iran. We're going to have the interview with Senator Barack Obama, the interview here in THE SITUATION ROOM. That's coming up this hour.

Meanwhile, a strong reaction tonight from an angry U.S. ally. The Turkish government is actually pulling, recalling, withdrawing its ambassador from the United States -- something that has not happened in recent history. No one can seem to remember a time when any NATO ally has withdrawn its ambassador from the United States. The tough action coming after a House committee passed a resolution saying Turkey committed genocide during World War I. The fallout could get worse and the enormous ramifications for the United States are out there. Our State Department correspondent Zain Verjee is following this developing story. Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, at the State Department today, diplomats are doing a little damage control. They're worried that Turkey, who is a friend, could turn into an enemy.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Turks take to the streets, tired of supporting the U.S. and having little to show for it. Turkish officials say they just don't trust the U.S., which they thought was their closest ally. They feel betrayed by a Congressional committee vote calling the killing of Armenians by Turks in World War I genocide.

Turkey warned of consequences and now it's making good on its threat, recalling its ambassador the U.S. for consultations.

TOM CASEY, STATE DEPARTMENT SPOKESMAN: That is their decision. I think that it certainly will not do anything to limit our efforts to continue on reach out to Turkish officials.

VERJEE: Turkey is threatening more action if the resolution passes the full House.

EGEMAN BAGIS, FOREIGN POLICY ADVISER TO TURKISH PRIME MINISTER: Despite our warnings, the U.S. Congress wants to play hardball. We know how to play hardball, as well.

VERJEE: Like cutting off its air space the U.S. military, like it did with France and Canada, who passed similar measures. It could also end access to Incirlik Air Base, which the U.S. military uses to transport critical cargo and fuel supplies to Iraq.

CONDOLEEZZA RICE, SECRETARY OF STATE: The passage of the resolution at this time would, indeed, be very problematic for everything that we are trying to do in the Middle East.

VERJEE: And might open a dangerous new front in the Iraq War. Turkey wants to destroy Kurdish rebels, called the PKK, that have launched cross border attacks from Northern Iraq, killing Turks.

BAGIS: PKK for us is what Al Qaeda is to you.

VERJEE: And Turkish officials say if the U.S. won't go off after the PKK, Turkey will. Turkish helicopters crossed into Iraqi aerospace Thursday and troops are dangerously poised along the border.

(END VIDEO TAPE)

VERJEE: Secretary of State Condoleezza Rice has spoken to the Turkish foreign minister. She is waiting to speak to the Turkish president and the Turkish prime minister. The message, Wolf, that she is going to have for all of them is that the administration regrets the resolution, opposes it, and is going to do everything it can to make sure it does not pass the full house. Wolf?

BLITZER: Zain, thank you very much.

Let's get some more now on the history in question. In April 1915, the Ottoman Empire that encompassed the general area of what is now Turkey, but it was disintegrating in World War I. Its Armenian population wanted independence. Russia encouraged it. Ottoman Turks considered the Armenian/Russian alliance a huge threat and targeted Armenians.

Between 1915 and 1923, Armenian leaders were rounded up and executed. Villagers were either driven out or killed. Independent historians over the years have put the death toll at anywhere between 600,000 and a million, some suggesting even more. The Turkish government says no more than 300,000 people perished and that Armenians shouldn't count themselves as the only victims.

High-tech military secrets up for grabs on a booming black market by communist governments and some of America's sworn enemies. The Justice Department now saying it's a very serious threat, one it's about to try to crack down on. Our Justice correspondent Kelli Arena has details how big this problem is. Kelli?

KELLI ARENA, CNN JUSTICE DEPARTMENT: It's a big problem, Wolf and it has been for awhile and it's growing. Officials say that the United States is target number one for technology theft. The Justice Department says that China and Iran pose particular concerns, but they're certainly not alone.

(BEGIN VIDEO TAPE)

ARENA (voice-over): Night vision equipment, missile and nuclear technology, fighter jet parts -- officials say China, Iran and entities in at least 106 other countries are trying to steal U.S. secrets.

KENNETH WAINSTEIN, ASSISTANT ATTORNEY GENERAL: It's a threat that's carried out in the shadows and does not raise the same level of alarm as the violence of a terrorist attack or the sword rattling of a belligerent rogue state. But it is a very serious threat nonetheless.

ARENA: Just last week a case involving the illegal export of F- 14 fighter jet parts widely sought by Iran. And another involving missile and nuclear reactor equipment illegally sent to Pakistan. The Justice Department is creating task forces to crack down on these black market networks.

DARRYL JACKSON, ASST. COMMERCE SECRETARY: Our enemy has openly and plainly stated that they seek weapons of mass destruction and there's no doubt that if they gain access to them, they'll use them.

ARENA: The first step, train prosecutors who either don't want or don't know how to pursue such complex cases. Gary Milhollin, an arms proliferation expert calls it long overdue.

GARY MILHOLLIN, ARMS PROLIFERATION EXPERT: We have seen a lot of cases where U.S. firms or U.S. citizens have illegally exported things to Iran, to China. And basically we see the slap on the wrist or very little attention or no prosecution at all.

ARENA: Next, tighten restrictions on technology that can be used for multiple purposes like this. It's a triggered spark gap which can be used to blast kidney stones or trigger nuclear weapons.

(END VIDEOTAPE)

ARENA: But one big problem may be the U.S. government itself. A recent congressional probe found that agencies had difficulty coordinating investigations and agreeing on how to proceed. Now this new initiative is designed to correct that and with so much at stake, let's hope it works, Wolf.

BLITZER: Kelli, thanks very much.

In Iraq, this word just coming in. The U.S. military now reporting 15 Iraqi civilians were killed by coalition forces during a raid targeting al Qaeda in Iraq. Six were women, nine were children, and it happened northwest of Baghdad. It's one of the heaviest civilian death tolls in a U.S. military operation in recent months. The U.S. military spokesman saying al Qaeda terrorists chose to deliberately place Iraqi women and children in danger by their actions. We're watching the story. We'll get you more information as we get it.

Let's go to Jack Cafferty. He's in New York with "The Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Hillary Clinton is invoking some unlikely names on the campaign trail in New Hampshire, the names of Republican presidents: Dwight Eisenhower, Abraham Lincoln, Theodore Roosevelt.

The "New York Sun" reports Clinton's references to that popular Republican trio could be a sign much how she plans to defeat more left-leaning rivals like Barack Obama and John Edwards. It could also be an attempt to build support with Independents and moderate Republicans that she would need to win a general election.

In talking about some of her initiatives, Clinton said they were in line with bipartisan efforts of earlier presidents. Quote, "I like to think about President Lincoln. In the middle of a civil war, he supported the construction of the first transcontinental railroad and the creation of land grant colleges. Theodore Roosevelt stepped in and made the economy safe for competition again by busting up the big trusts that were forcing small guys out of business and trying to monopolize the markets. President Eisenhower challenged our nation to respond to the Soviet Union's launch of Sputnik," unquote.

The Republicans, understandably, don't seem too thrilled with Clinton citing some of their own. The RNC says Clinton's lesson, quote, "conveniently ignores the fact that great leaders have made necessary and tough decisions to protect America, character traits she has failed to demonstrate," unquote.

Nevertheless, a recent poll in New Hampshire shows Hillary with a lead over Obama by a margin by more than 2-1.

So the question this hour is this. Hillary Clinton's invoking Republican presidents like Eisenhower, Lincoln, and Theodore Roosevelt on the campaign trail. Will that help her? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile. Wolf?

BLITZER: Jack, thank you.

You're about to see a very different Barack Obama. He's getting ready to step up attacks against his rivals, especially Hillary Clinton. Barack Obama here in THE SITUATION ROOM. The interview coming up.

Also one man says if you're a white male, the Democratic Party is apparently not for you. Could white men cost Democrats the White House?

And why would Ann Coulter say she wants quote, "Jews to be perfected?" There's outrage over her latest comments. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: If only President Bush could have it his way. Right now, there is some positive news on the U.S. economy. The problem is millions of Americans simply don't feel that way and the White House is willing to admit that. Let's go right to our White House correspondent, Suzanne Malveaux. She's watching this story, a mixed bag of economic numbers unfolding today, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, unemployment is down, the trade deficit is down. This is really good news, but the Bush administration is having a tough time getting traction on this. That's because so many Americans just say they aren't feeling this good news, particularly the middle class.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): If you listen to President Bush on the economy, it's all good.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As a result of the hard work of the American people, this economy is growing.

MALVEAUX: There was good news today. The trade deficit dropped nearly 2.5 percent between July and August. The U.S. selling more goods than it's buying, exporting more American wheat, chemicals and steel, importing fewer cars and furniture.

Even the U.S. trade deficit with China closed a little, by five percent. BUSH: We've had 49 consecutive months of uninterrupted job growth, which is a record.

MALVEAUX: But that record growth isn't good for everyone. Economists say while it benefits the highest-paid workers in white- collar jobs and the lowest wage earners in the service industry, it's been devastating to the middle class.

BRIAN BETHUNE, GLOBAL INSIGHT: These are assembly line workers that have worked in the domestic automotive industry, or perhaps in a supplier to that industry. They're construction workers, so they would be definitely middle income, middle to upper income-type families that have been affected.

MALVEAUX: The housing bust, the shrinking American dollar, and sluggish retail sales are making some American workers downright anxious about their economic future.

The latest AP-Ipsos poll shows a six percent increase since July, up to 15 percent of those who identify the economy, not the Iraq war, as the country's biggest challenge. Those numbers jumped to more than 20 percent among minorities and those without a college degree. The administration concedes that not everyone is benefiting from this economy.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: The president has encouraged new types of job training programs, trade adjustment so that people who lose jobs that have gone overseas can actually get new training for jobs that they can get here.

(END VIDEOTAPE)

MALVEAUX: But Wolf, as you know, that training does take time. In the meantime, many families that simply trying to put their kids through college, save their homes, and the Democrats are quick to point out that the U.S. has lost some three million manufacturing jobs since President Bush first took office -- Wolf.

BLITZER: Thanks Suzanne, very much -- Suzanne Malveaux at the White House.

If there's any place voters are likely to focus on the negative news about the U.S. economy, it would be in Michigan. It's a key battleground state where many people are simply hurting a lot more than in other parts of the country. Our chief national correspondent John King is just back from Michigan.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): The blight makes this battleground unique.

SAUL ANUZIS, MICHIGAN GOP CHAIRMAN: Listen, it's all about jobs here in Michigan. You know, we're the only state in the country that has lost jobs six years in a row. KING: The brief strike against Chrysler was yet another reminder of the American auto industry's struggles and of the economic anxiety of workers like Albert Matras, who see a way of life disappearing.

ALBERT MATRAS, UNION AUTO WORKER: We're working for the middle class. Where is it anymore? You've got people that are rich, you've got people that are poor. We're in the middle.

KING: It was here in the Detroit suburbs the term "Reagan Democrats" was coined, and here, perhaps more than any other state, where the economy will shape the presidential race.

Michigan's unemployment rate is 7.4 percent, compared to just 4.7 percent nationally. In the past six years, although the national economy has added 5.7 million jobs, Michigan has lost more than 332,000 -- 100,000 of those in the past year alone.

ED SARPOLUS, MICHIGAN POLLSTER: It impacts the political environment. Luckily for Democrats here in Michigan, they continue to blame the president.

KING: Yet Republicans see possibilities. Democratic governor Jennifer Granholm just pushed through a sales tax increase. And the Democratic presidential candidates won't campaign here for now because Michigan broke national party rules by moving its primary up to mid- January.

ANUZIS: So if the Republican candidates have a chance to campaign in Michigan, to make their points in Michigan, I think this will be a very competitive state.

KING: Most Michigan Republicans see native son Mitt Romney as their best hope. The former Massachusetts governor is the son of former Michigan governor George Romney, who made his name at the heyday of the U.S. auto industry.

SARPOLUS: If Romney wins the nomination, Michigan Democrats have to e concerned. We have a history in Michigan of voting for Republican presidents, especially voting for Republican presidents when we have a Democratic governor.

KING: Republicans though haven't carried Michigan for president in 20 years. The pollster Ed Sarpolus says the odds favor the Democrats this cycle, too. But he says overconfidence would be a big mistake especially given the turbulent economy. John King, Warren, Michigan.

(END VIDEOTAPE)

BLITZER: Democratic presidential candidate Barack Obama. He's mired in the polls in second place behind Hillary Clinton. Now he's about to start using some new and aggressive tactics against her. We'll talk about that. My one-on-one interview with Senator Obama, that's coming up next.

Also, is this man a homegrown terrorist? There's new video of what may be an American jihadist. You're going to hear what he has to say. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A disturbing new video that's coming out calling to mind the case of the Taliban American, John Walker Lindh. This time, a man believed to be an American caught on videotape in Somalia training for what's described as holy war. Let's go to Brian Todd, he's watching the story for us. Brian, what do we know about this man?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we have a short clip of him that intelligence agencies are looking at right now. But his identity and how he got to that remote battleground in the war on terror are still a mystery.

(BEGIN VIDEOTAPE)

TODD (voice-over): A man with what seems to be an American accent training with a Taliban-style group in Somalia. The young militant rails against the U.S.-backed Somali and Ethiopian forces that his group has been fighting for power.

On this video, he is called Abu Mansour, the American, a military instructor for the Islamic Courts Union, a group that's not formally affiliated with al Qaeda, but has been accused by U.S. officials of harboring al Qaeda operatives. The group denies that.

In this video, he tells American Muslims their brothers in Somalia stood up to, quote, "oppressive rule by the American-backed warlords."

He's later shown demonstrating how to make a bomb. The video was shot by Al Jazeera. CNN obtained it from the Middle East Media Research Institute, a group that monitors and translates media from the Middle East, mostly from the Muslim and Arab world, and is seen as sympathetic to Israel.

CNN ran this by three different U.S. intelligence agencies. Officials tell us they're examining the video, but could not immediately confirm who he is or if he's American. If he is, why would he join forces with a down but not out jihadist group in an obscure corner of the war on terror?

KARIN VON HIPPEL, CTR FOR STRATEGIC & INTL STUDIES: I suspect he's one of these volunteers like John Walker Lindh who really is taken by the movement. He -- just like people are into extreme sports. If you go to Somalia, you're a real thrill-seeking jihadi.

(END VIDEOTAPE)

TODD: Somalia is one of the world's most chaotic battlegrounds, with fragmented alliances. One terrorism expert who has been there says this young man probably doesn't understand fully those alliances, probably doesn't know his way around there and likely has Somalis translating for him in the field. Wolf? BLITZER: Brian, we'll stay on top of this story as well --- thank you. Somalia is located in the horn of Africa and the U.S. has had a troubled history there.

Back in 1992, you'll probably remember American forces joined peacekeeping efforts in Somalia, but Osama bin Laden objected to the presence of U.S. troops in a Muslim country and called for attacks on those American forces.

On October 3rd, 1993, fighting broke out when Somali gunmen believed to have been trained by al Qaeda got into the game. Two U.S. helicopters were shot down. Eighteen Americans were killed in the clashes leading the U.S. eventually to withdraw from Somalia. You remember that phrase, blackhawk down. It happened that day.

Barack Obama is turning the heat up on Democratic presidential rival Hillary Clinton for her vote authorizing the Iraq war.

(BEGIN VIDEO CLIP)

OBAMA: You can't give this president a blank check and then be surprised when he cashes it.

(END VIDEO CLIP)

BLITZER: So is this the start of a new phase in the campaign? Find out -- my one-on-one interview with Senator Obama. That's coming up.

Plus, what Ann Coulter said about Jews that shocked her interviewer. You're going to see the tape. You make the decision. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Senator Barack Obama today promising a more aggressive presidential campaign. The prime target, Hillary Clinton.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, the Democratic presidential candidate, Senator Barack Obama. He's joining us from his hometown in Chicago.

Senator, thanks for coming in.

OBAMA: Great to be with you.

BLITZER: Let's talk a little bit about what happened five years ago exactly today, October 11, 2002. The Senate voted 77-23 to authorize war in Iraq against Saddam Hussein. You, a few days earlier, had opposed going to war against Saddam Hussein in Iraq.

Hillary Clinton was among the 77 who voted in favor of that authorizing resolution. Looking back, does that disqualify her to be president of the United States? OBAMA: Well, I don't think it disqualifies her, but I think it speaks to her judgment and it speaks to my judgment.

You know, this was the most important foreign policy decision since the end of the Cold War. And when I stood up and opposed this war, I think I laid out a very specific case for why we shouldn't go in, that Saddam Hussein didn't pose an imminent threat, that we would be bogged down without an exit strategy, that it would cost us billions of dollars and thousands of lives and would distract us from the battle that had to be waged against al Qaeda.

So, I think that it does bear on the judgment of myself and Senator Clinton, and it speaks to how we will make decisions moving forward because the next president is going to have a number of difficult foreign policy decisions as well.

BLITZER: So, what I hear you saying is, it speaks to her judgment. And you're saying her judgment was simply bad?

OBAMA: I think her judgment was flawed on this issue, and I know that, you know, she was not the only one who voted for this authorization. John Edwards, for example, has acknowledged that it was a mistake. I do think that Senator Clinton has tried to massage the past a little bit, suggesting that it was a vote for inspectors.

I think everybody at the time, including you and the media and the American people understood this was a vote for war. You can't give this president a blank check and then be surprised when he cashes it.

BLITZER: Explain to me this. I'm going to put some numbers up on the screen. Among registered democrats nationwide, she still is the front-runner, 47 percent in the latest Gallup poll. 26 percent for you, 11 percent for John Edwards, and specifically in a "The Washington Post"/ABC News poll, who did democratic voters trust to handle Iraq? Despite that vote, despite your opposition to the war, going into the war, among registered democrats, in this "Washington Post" poll, Clinton gets 52 percent, Obama gets 22 percent, Edwards 17 percent. Why are democrats still, despite her vote and a lot of them obviously oppose the war, siding with her when they're asked these sensitive questions?

OBAMA: Well, you know, I think those polls just reflect the fact that Senator Clinton remains the default candidate nationally. She's still better known than I am, and I think those national polls are going to change too much until the early state votes take place. Look if I was worried about polls, then I would be here celebrating the fifth Anniversary of me supporting the war, because at the time there was overriding support for that war.

The critical issue I think as democrats make a decision about who can lead them in this next difficult phase of foreign policy and repairing the damage that George Bush has done, is who has the judgment to know when to use military force, when not to use military force, who has the discernment to know how to use diplomacy effectively in order to achieve some of our national security goals? And that's something I am confident I can do and I think I have a track record of anticipating some of the problems that are out there the next president will have to deal with.

BLITZER: Some of your supporters have been saying increasingly publicly that they want you to become more aggressive, more forceful going against your democratic presidential opposition. Jesse Jackson saying this in "The New York Observer" the other day. "It's like boxing. You keep waiting for the big knockout punch, but while you've waited for the big knockout punch, you've lost so many points. And that one big one might not be coming." What do you say to the Reverend Jesse Jackson and others who want you to come out and start swinging away?

OBAMA: Well, look, we are three months away from the Iowa caucus, the first caucus. This has been a presidential season that's been greatly accelerated. The American people, though, they've been going about their business, getting their kids to school, working on the job, doing what they do every day. They are now focusing in on making these difficult decisions, and I think that now is the time where we're going to be laying out a very clear contrast between myself and Senator Clinton. Not just on the past, not just on Iraq, but moving forward. How would we approach Iran, for example?

BLITZER: Let's talk about that specifically right now. The other day the senate voted 76-22 in favor of what's called the Lieberman/Kyl amendment that said, "It is the sense of the Senate that the United States should designate Iran's Islamic Revolutionary Guards Corps as a foreign terrorist organization." Senator Clinton voted in favor of that resolution. You were absent. You didn't show up for that vote, but you say you would have voted against it. First of all, why didn't you come to the Senate and make your vote?

OBAMA: Well, I was in New Hampshire at the time. This is one of the problems with running for president. You can't always anticipate which votes are which, but I put out a statement at the time stating that this was a bad idea and that I would have voted against it and here's why.

We know in the past that the president has used some of the flimsiest excuses to try to move his agenda, regardless of what Congress says. We know that there was embodied in this legislation or this resolution sent to the senate, language that would say our Iraqi troop structures should in part be determined by our desire to deal with Iran. Now, if you know that in the past the president has taken a blank check and cashed it, we don't want to repeat that mistake.

BLITZER: Wouldn't that vote, Senator, this is what your critics are hammering away at you. Wouldn't that vote be more important than campaigning in New Hampshire, given the significance of what you're describing right now?

OBAMA: We don't always know what votes are scheduled and when. If you're in New Hampshire, then it's hard to get back, but this wasn't a close vote. What it should have been, though, is a vote that sends a message to the American people that we're not going to keep on giving George Bush a blank check. That's, unfortunately, what we did. BLITZER: Do you I come away from this interview correctly, Senator, and say that in these last let's say 100 days before the voting actually starts, we're going to see a more aggressive, assertive Barack Obama, trying to pinpoint the differences, sharpen the focus between you and your democratic opposition including Senator Clinton?

OBAMA: There's no doubt that we are moving into a different phase of the campaign. The first part of a campaign is to offer some biography and to give people a sense of where I've been and what I'm about.

In this next phase, we want to make sure that voters understand that on big issues like the decision to go into the war on Iraq, I had real differences with the other candidates and that reflects on my judgment.

BLITZER: Let me end the interview with one final question, Senator. If you do get the democratic presidential nomination, would you consider Hillary Clinton as your running mate?

OBAMA: Oh, you know, I think I'm not going to touch that one, Wolf. Right now I'm worried about getting the nomination. We'll have plenty of time to take a look at who would be a good vice-presidential candidate.

BLITZER: But would she be on the short list?

OBAMA: I think that Senator Clinton is a very capable person. Right now my goal is to make sure that I'm the nominee and that she is still the senator from New York.

BLITZER: Senator Obama, thanks very much for coming into THE SITUATION ROOM.

OBAMA: Great to talk to you, Wolf. Thank you.

BLITZER: Ann Coulter is known for her shock value but wait until you hear what the conservative pundit is now saying.

(BEGIN VIDEO CLIP)

ANN COULTER, AUTHOR: We just want Jews to be perfected, as they say.

DONNY DEUTSCH, MSNBC: Wow, you didn't really say that did you?

COULTER: That's what Christianity is.

(END VIDEO CLIP)

BLITZER: We have more of Ann Coulter's stunning comments and some powerful reaction from our analysts, James Carville and Terry Jeffries.

(COMMERCIAL BREAK) BLITZER: The award winning and best-selling author Ann Coulter has raised more than a few eyebrows with her latest off the cuff from the hip remarks. During an interview on CNBC's "The Big Idea with Donny Deutsch," the columnist and author took a sharp swipe at Jews. We have a report that contains some language that may be offensive to viewers.

Carol Costello is here in THE SITUATION ROOM.

So what did she say this time?

CAROL COSTELLO, CNN CORRESPONDENT: Well you know, first of all, Wolf, it was such an odd exchange, all giggly and flirty. It was just weird. At first Donny Deutsch, the host of the show, appeared OK with it, but then he clearly became upset by her remarks. But then again Coulter is a master at making certain groups of people uncomfortable.

Some say Ann Coulter is a fearless straight shooter. Others call her, well, I can't say it on TV. Your kids might be watching. So let's just say she's angered many a minority group, gays ...

(BEGIN VIDEO CLIP)

COULTER: I was going to have a few comments on the other democratic presidential candidate John Edwards, but it turns out that you have to go into rehab if you use the word faggot, so ...

(END VIDEO CLIP)

COSTELLO: Women. Coulter recently said, "If we took away women's right to vote, we'd never have to worry about another democratic president. And it is a good way of making the point that women are voting so stupidly, at least single women."

And now Jews. When CNBC's Donny Deutsch, who is Jewish, asked Coulter to describe her dream world ...

(BEGIN VIDEO CLIP)

COULTER: It would look like New York City during the republican national convention. In fact, that's what I think heaven is going to look like. People were happy. Christian. They're tolerant. They defend America.

DEUTSCH: Christian -- so we should be Christian, better if we were all Christian?

COULTER: Yes.

DEUTSCH: We should throw Judaism away and we should all be Christians then?

COULTER: Yes.

DEUTSCH: Really?

COULTER: Well, it's a lot easier. It's kind of a fast track.

DEUTSCH: No Jews?

COULTER: No, we just want Jews to be perfected, as they say.

DEUTSCH: Wow. You didn't really say that, did you?

COULTER: No, that's what Christianity is. We believe the Old Testament, but ours is more like federal express. You have to obey laws. We all know we're sinners.

DEUTSCH: You're an educated woman.

COULTER: That's isn't the issue at all.

DEUTSCH: That's even a scarier thought. OK.

COULTER: No, no, no, no. I don't want you being offended by this. This is what Christians consider themselves because our testament is a continuation of your testament. You know that. So we think Jews go to heaven. I mean, Falwell himself said that, but you have to follow laws, Christ died for our sins. We consider ourselves perfected Christians. For me to say that for you to become a Christian is to become a perfected Christian is not offensive at all.

(END VIDEO CLIP)

COSTELLO: Few republicans or conservatives I called would comment on Coulter's remarks, only those who observed conservatives would.

(BEGIN VIDEO CLIP)

JONATHAN MARTIN, THE POLITICO: She knows what she is doing. You can call Ann Coulter a lot of things but what you can't call her is stupid. She knows how to sell a product, be it a book or a radio show or a personality or brand. And that's really what she has become.

(END VIDEO CLIP)

COSTELLO: But Martin says Coulter has become too extreme, sort of like that crazy aunt it's best to ignore.

We have reached out to Ann Coulter. She did not reach back.

Wolf.

BLITZER: All right. Thanks very much, Carol Costello. Ann Coulter's comments are also the topic of today's political ticker.

Just a short while ago, I spoke with CNN political analyst James Carville and conservative commentator Terry Jeffries. He's the editor in chief of the Cyber Cast News Service.

JAMES CARVILLE, CNN POLITICAL ANALYST: I don't think much of Ann Coulter and I don't think much of the Republican Party. She headlines all the events. She is always on the news. In fact, I think very little of her. I'm not surprised by those comments. She's made other hideous comments, equally as hideous and equally as outrageous.

I know Donny Deutsch. He's a good guy. I think he was probably shocked and offended by it but no one should be -- if you have Ann Coulter on your show, you have to expect her to say things that are like that. That's what comes with it and the republicans keep the headline, I think they're going to pay for it.

BLITZER: What do you think, Terry?

TERRY JEFFRIES, CONSERVATIVE COMMENTATOR: Well, first of all, Ann Coulter is a friend of mine. I know she is a good person. She's certainly not anti-Semitic and I don't think the Donny Deutsch place is the place to discuss profound issues of theology.

I had no idea if what Ann says or anything even that she said until a few moments before I came on the show, and I can't make any judgment, to tell you the truth, about what she said from those video clips. But I can guarantee you she's a good person. She's not anti- Semitic and that's what I can say given what you just showed me.

BLITZER: Do you think there will be pressure though on republican presidential candidates and other republicans to disassociate themselves from her now given the nature not only of these remarks but a lot of other remarks she's made?

JEFFRIES: First we'd have to get into pretty serious -- first of all, we'd have to discern actually what Ann Coulter said and actually what Ann Coulter meant and then are we really going to get into a debate in presidential campaigns about people's theology? Everybody is trying to say that we don't have a religious test for office in this country. Are we going to go to each candidate and ask them, OK, we want to know exactly what you think about the nature of Jesus Christ, the nature of Christianity, the nature of Judaism? No, I don't think we want to get into that.

BLITZER: James?

CARVILLE: First of all, she is a prominent republican that does many republican events. I have -- how do I say this without sounding ridiculous. I have thousands of Jewish friends, OK, and I would never want to hurt one of them by saying that the faith is not perfect and I think they would resent the hell out of that. I don't blame them. And I don't think their faith is imperfect. In fact, I'm sort of in awe of their traditions.

JEFFRIES: Do you think that you absolutely know for certain Ann Coulter denigrated Judaism from what you saw in that clip there or what you read in the few transcripts? Are you certain about that? You're morally certain, James?

CARVILLE: I don't know a single Jew that doesn't think she said that their religion was imperfect. I don't know a single one. But if there is one, I would glad to hear from one.

JEFFRIES: So you have gone around discussing this with Jewish theologians or Christian theologians?

CARVILLE: No, I've had Jewish friends call me. This may be a shock to you, but there are actually Jews that heard about this that picked up the phone and says, can you believe what that woman said? It's cause a little stir in the community.

BLITZER: He did give her several opportunities, Donny Deutsch, who told her he's a practicing Jew, and he was offended by what she said, but he did give her several opportunities to clarify, to amend, to revise, and she basically stuck with that line that Jews have to be perfected.

JEFFRIES: Yes, look, I can tell you what I believe. I am a Christian. My savior, Jesus Christ, is a Jew. I believe that Judaism is a great religion. I am not convinced from what I've seen that Ann Coulter has said anything wrong or anything that someone ought to attack her for. Let's see.

BLITZER: Let's leave it right there. There will be more, I'm sure, on this latest controversy involving Ann Coulter down the road.

In the thick of the race for the presidential nomination, candidates are courting every voting block possible. So why does a new book suggest white men are abandoning the Democratic Party? And where are they going?

Meantime, front running democrat Hillary Clinton stepping out of the box to invoke the names of some inspiring republican presidents. Jack Cafferty wants to know will all of this help her?

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

(COMMERCIAL BREAK)

BLITZER: A new book says white men are abandoning the Democratic Party. It claims democrats are neglecting them and that could cost their party the election.

Carol Costello once again here in THE SITUATION ROOM. It suggests a pretty ominous scenario for the democrats.

COSTELLO: It certainly does.

You know basically white men feel abused, ignored, and unloved by the Democratic Party. They divorced the democrats a long time ago and it's unclear whether they'll ever go back.

They might be born in the USA and love the boss, but they are no longer voting the democratic way. They are blue collar white male voters who, according to a new book, are the only chance democrats have to win in '08. But getting them to vote for Clinton, Edwards, or Obama won't be easy.

(BEGIN VIDEOTAPE)

DAVID PAUL KUHN, AUTHOR: The Democratic Party came for to stand up for everybody but them, for every group but them and in fact stand against them.

COSTELLO: Kuhn, who wrote "The Neglected Voter," says democrats are guilty of portraying white men as the only privileged group in the United States who deserve no help.

KUHN: They, ironically, became the scapegoat of liberalism, that they came to feel stereotyped as the bigoted Archie Bunker from "All in the Family."

COSTELLO: And that stereotype does play out in the democratic world of politics. The democrat that republicans love to hate, Michael Moore, wrote a book called "Stupid White Men," touted as outing that "Big, ugly, special interest group that plays waste to the world as we know it, stupid white men."

Conservatives fought back painting the Democratic Party as so into diversity it can't see the color white.

COULTER: I think democrats have hit on the perfect candidate with Barack Obama or as I call him, B. Hussein Obama. B. Hussein Obama is half white, half black, so there's somebody for every democrat to vote for.

COSTELLO: And it's all played into this. According to exit polls at every presidential election from 1980 on, no democratic candidate could even get 40 percent of the white male vote and, Kuhn says, as a result America has seen just one democratic president in 27 years. While some analysts say Kuhn is on to something, others say not so fast. Maybe democrats aren't going after white male voters because times have changed.

KEATING HOLLAND, CNN POLLING DIRECTOR: There's a lot of democratic analysts who would argue as a counter argument that the growing group in this country are not whites, not white men, but instead minorities, Hispanic Hispanics, blacks, and Asians.

COSTELLO: If that's true, what's a Springsteen-loving white man to do? Recent history says vote republican.

(END VIDEOTAPE)

COSTELLO: Now there is a small sign democrats are capturing more white male voters. In 2006, six percent more white men voted democrat but one election does not a trend make.

BLITZER: Thank you very much. Interesting stuff. Carol Costello.

He faced a congressional committee and is in the middle of one of the biggest controversies of the Iraq war. His company is under investigation for a shooting that left 17 Iraqi civilians dead and now some of the families are suing, the Blackwater founder and CEO Erik Prince. He will join me for a special one on one interview Sunday, 11:00 a.m. eastern on "LATE EDITION," "LATE EDITION," the last word in Sunday talk. Erik Prince's first TV interview since the scandal erupted. Hillary Clinton invoking republican presidential presidents, like Eisenhower, Lincoln, and Teddy Roosevelt on the campaign trail. Jack Cafferty wants to know will it help her? Jack standing by with the Cafferty file.

(COMMERCIAL BREAK)

BLITZER: Here is a look at some of the Hot Shots coming in from the Associated Press.

In Baghdad, a woman receives an aide package in the Shiite enclave of Sadr City.

In Jakarta, Indonesia, a man climbs through a crowded train as millions of people head home to celebrate the end of Ramadan.

In Myanmar, also known as Burma, young monks receive rice donations from locals.

And in Switzerland, look at this, pigs run during a race in an agricultural fair.

Some of this hour's Hot Shots.

Jack Cafferty joining us from New York with the Cafferty file.

Jack.

CAFFERTY: That picture looked like members of congress. The question, Hillary Clinton's invoking republican presidents like Eisenhower, Lincoln, and Roosevelt, Theodore, on the campaign trail. Do you think that will help her?

Soni in Oregon writes, "It's one thing to bring up the thoughts of great Americans, but what matter is what she thinks and how she asks. I can read about climbing Mt. Everest, and I can quote those who did climb it, but I am not capable of doing that. Actions speak louder than someone else's words."

Deb in North Carolina, "In my opinion, if Mrs. William Jefferson Clinton's political experts told her to do a back flip at a debate in order to get the votes of acrobats or to do a tap dance because there were millions of tap dancers registered to vote, she would do it. We need leadership in Washington, not products created by the demo republican party."

Otep writes, "I'm not sure if it will help her or not but it's refreshing to see a politician actually looking past party lines and recognizing the good on both sides."

Cleave in New York, "No. Invoking the names of past republican presidents won't help Hillary at all. She's just ticking off her base who should smarten up and realize that she and all her ilk are not just part of the problem, they are the problem. And she's ticking off the republicans who don't want her not matter who she invokes. She is, as she has always been, a pandering politician who will say or do anything to get elected."

Dan in California writes, "Showing her understanding of history can't hurt her among thoughtful democrats in the primaries, and certainly sets her apart from the lineup of goofballs on the republican side."

And John in Pittsburgh, "Sure it helps Hillary, Jack. Comparing herself to dead presidents reminds us that she'll look a lot better in the vital presidential swimsuit competition than they ever will. She'd only tie with cross-dressing Rudy."

If you didn't see your e-mail here you can go to CNN.com/Caffertyfile. We post more of them online along with video clips of the Cafferty File.

BLITZER: What do you think Barack Obama has to do in the final 100 days or so before the voting starts in Iowa to move up?

CAFFERTY: I don't know. I'm glad I'm not being paid to provide him with the answer to that question because I feel guilty about cashing the check. I have no idea.

BLITZER: But he told us, you heard there's going to be a new strategy. He has the biography part but now he's moving on to get tough. We'll see how he does, Jack. We'll see you back here tomorrow in THE SITUATION ROOM. Remember, we're here weekday afternoons 4:00 to 6:00 p.m. eastern, another hour at 7:00 p.m. eastern.

Until tomorrow, thanks very much for watching. I'm Wolf Blitzer in Washington.

Up next, Rick Sanchez with "OUT IN THE OPEN."

Rick.

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