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Clinton-Obama War of Words Over Race Escalates; Interview With Michigan Governor Jennifer Granholm

Aired January 14, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now: a divisive battle for Democrats between the man dubbed the first black president and the one hoping to be the real thing. The best political team on television takes all of us on the campaign trail, the war of words between Bill and Hillary Clinton and Barack Obama.

Also coming up, the driving issue in tomorrow's Michigan primary and across the nation. That would be the U.S. economy. We're looking at the candidates' plans and how they're responding to voters' fears.

And the president brings a $20 billion gift to Saudi Arabia. Will the arms deal he's offering affect the balance of power in the region? It's already volatile. It's already tense.

We want to welcome our viewers in the United States and around the world.

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

Bill Clinton is firing right back today at Barack Obama's campaign, saying he has a list of dozens of personal attacks Obama has leveled against Hillary Clinton. The former president is disputing suggestions he, his wife and campaign surrogates are using racial code words to try to undermine Barack Obama.

Bill Clinton appeared today on the radio show of CNN contributor Roland Martin. Martin pressed him about comments made by Hillary Clinton supporters, including black entertainment television founder Bob Johnson. Some say Johnson made a veiled reference to Obama's drug use as a young man.

Listen to this exchange between Roland Martin and Bill Clinton.


ROLAND MARTIN, CNN CONTRIBUTOR: When you take the comments made by New York attorney General Andrew Cuomo, the shuck and jive comment, he then comes out and says, well, no, that's not what I meant, and then of course Bob Johnson then says, well, that's not what I meant, you sort of have this back and forth.

What is going on here with this whole issue? Is this -- this whole notion of race, is this an attempt to draw Obama out to discuss it, or this just, in your opinion, them seeing it one way, and the Clinton campaign seeing it another?


First of all, I don't think that -- Bob Johnson said what he said yesterday. Nobody knew what he was going to say. And it wasn't part of any planned strategy. And certainly nobody had any advanced notice of anything Attorney General Cuomo said.


MARTIN: But Bob defended his comment. He has tried to defend it. He has tried to say when we asked, he's trying to defend it by, "It's not what I mean."

But anybody listening can knows what he was talking about. He wasn't talking about community organizing. That was kind of clear.

B. CLINTON: Well, that's something between Bob Johnson and Barack Obama.


BLITZER: We're going to have a lot more on this growing dispute, the full report on the sparring over race. Candy Crowley is coming up with that. Also, the best political team on television will weigh in. Lots more on this story.

There's a driving issue in this presidential campaign, at least right now. Americans' economic jitters are giving way to outright fears of a recession and the enormous impact that could have on all of us.

The candidates of both parties can't help but listen to the American people, and they are responding.

CNN's Jessica Yellin is in Nevada right now, looking at the Democrats' new economic plans, what they would do.

But Dana Bash is watching the Republicans right now.

They have a huge primary tomorrow with enormous ramifications. Set the scene for us, Dana. What is going on?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, the scene is a pretty grim scene when you look what's going on here with the economy. The unemployment rate, Wolf, is 7.5 percent. That is by far the highest in the country.

So, that is topic A, B, and C for Republican candidates whose viability may well be determined by tomorrow's primary here.


BASH (voice-over): In Michigan, it's all about the struggling economy, convincing people a vote for you is a vote for jobs. SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The most productive workers in the world reside in this state. My friends, as president of the United States, I will herald a new day for Michigan.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Now, I don't know about the Washington politicians, but I can tell you this. If I am president, I will not rest until Michigan has come back.

BASH: Campaigning in conservative western Michigan, John McCain is trying to repeat his win here eight years ago with what he calls straight talk: Many lost automotive jobs won't come back. It's time for retraining.

MCCAIN: We have got to go to the strongest part of our educational system in Michigan, and that is our community colleges.

BASH: At the Detroit Economic Club, Mitt Romney blames Washington for exacerbating Michigan woes with too many mandates and regulations, sells himself as a CEO who can fix it.

ROMNEY: That's what I have done all my life. I have taken on complex situations, led tough negotiations, found solutions, and then gotten things back on track.

BASH: A native son whose father was governor and an auto executive.

ROMNEY: I have got Michigan in my DNA. I have got it in my heart and I have got cars in my bloodstream.

BASH: Aboard his bus, McCain says his years of Senate committee work includes the auto industry and he derides Romney's "It's personal" pinch.

MCCAIN: Governor Romney doesn't have that relationship with them. He's been gone since he was a kid.

BASH: Polls suggest a McCain/Romney battle for first. But Mike Huckabee is also competing here, courting evangelicals, preaching populism.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: One of the reasons we have lost so many jobs starting here is because we have a system of taxation that penalizes productivity.


BASH: Now, the polls here show Mitt Romney and John McCain in a neck and neck race. And the outcome tomorrow, Wolf, really could have a major impact on the dynamic inside the Republican race, because Mitt Romney has not had any wins so far, at least a big win. And that is why this state, his home state, really could -- if he loses it, it could fatally wound his candidacy.

And, on the other hand, you have John McCain. If he gets the top slot here, it could put him in command of the Republican field, at least temporarily, until the very next race on Saturday in South Carolina -- Wolf.

BLITZER: We will be watching every step of the way, Dana. Thanks very much.

Dana Bash is joining us from Michigan.

Let's check the bottom line of Michigan's auto industry. The state's share of car production in the United States has fallen sharply over the past few decades. It peaked at 35 percent back in 1982, dropped to 24 percent in 2001. Vehicle production in Michigan actually went up recently to a three-month average of 9.5 percent at the end of last year. Michigan bucked the national trend, vehicle production falling 2.5 percent across America in that same period.

The Democrats have their own issues involving the economy right now. Barack Obama unveiled his own plan today.

Want to go out to Nevada, which hosts the caucuses out in Nevada on Saturday for the Democrats.

CNN's Jessica Yellin is watching all of this and has more.


JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Senators Clinton and Obama want you to know they feel your pain, and they know you're worried about your wallet.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I represent a lot of hardworking people across the country in New York. And they began to say, wait a minute. It's like nobody even sees us anymore.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We also have to have a tax code and a set of laws that are responsible and make sure the people who are working and not making huge amounts of money, that they are able to make ends meet and live out the American dream, and that increasingly is fading away for a lot of people.

YELLIN: Now both campaigns have released plans to show just how they would jump-start the economy. Here is how they would get money directly to working Americans. Senator Clinton wants to add $10 billion to extend unemployment insurance, and she would consider $40 billion in tax refunds to some Americans.

Senator Obama would also add $10 billion to unemployment insurance. He would also give an up to $500 tax credit to 150 million workers and a one-time $250 payment to people on Social Security who would not be eligible for that tax credit.

On the home mortgage crisis, Senator Clinton would place a three- month freeze on some subprime mortgages, and she would create a $30 billion relief fund for states whose coffers have run dry because of plummeting real estate prices.

Senator Obama would give states $10 billion to deal with the housing crisis and set aside another $10 billion to counsel homeowners who need to refinance their homes. Clinton's plan also would help reduce energy bills for 37 million Americans.

Now, John Edwards was the first to prose a program to jump-start the economy. It would raise the minimum wage and create a jobs plan. Officials with the Republican Party quickly jumped on all the major Democratic plans, pointing out none of them is paid for and saying they're more tax-and-spend liberal policies.


YELLIN: Wolf, Senator Clinton's campaign maintains her plan is better because it offers assistance for energy and because it includes alternative energy support.

But the Obama campaign insists, no, no, his plan is superior because it puts more money directly into the pockets of working Americans. The bottom line is, neither plan is likely to become reality at any point. It's just an indication of what these two people would do if they were president right now to help you and me with everyone's economic problems if they were in the Oval Office -- Wolf.

BLITZER: Useful information for potential voters out there.

Jessica, thanks very much for that.

Let's check in with Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The chairman of the Joint Chiefs of Staffs says he wants to close the Guantanamo Bay prison as soon as possible.

During a visit there, Admiral Mike Mullen said he would like to see Gitmo shut down because he thinks the negative publicity around the world about U.S. treatment of terror suspects there has been -- quote -- "pretty damaging to our image."



CAFFERTY: Mullen adds that closing Gitmo is not his decision to make, and he understands there are a lot of complex legal questions that have to be addressed first, things like, where do you move the prisoners?

Officials say the prison population at Gitmo has shrunk in the last year to 277. At one point, there were more than 600 suspects being held at Guantanamo. Critics charge that some detainees have been mistreated and that their detentions have not been consistent with the rule of law.

Both President Bush and former Defense Secretary -- or current Defense Secretary Robert Gates have spoken in favor of closing Gitmo, but Mullen says he's not aware of any moves to actually do that. Mullen's visit there came just two days after the sixth anniversary of that notorious facility's opening.

So, the question is this: How far would closing the Guantanamo Bay prison go toward restoring America's image around the world? You can go to and post a comment on my blog -- Wolf.

BLITZER: Excellent.

Thanks very much, Jack, for that. See you in a few moments with the best political team on television.

I want you to listen to the anger of one big-state governor. Listen to this.


GOV. JENNIFER GRANHOLM (D), MICHIGAN: Boy, here in Michigan, I can tell you, we are mad as well. We are mad as hell.


BLITZER: Michigan's governor is upset about what she sees as a dis to her state. It involves the presidential race, the dis coming from Democrats. Jennifer Granholm, standing by, will -- she will explain.

Also, sources tell CNN thousands of U.S. Marines about to be sent to Afghanistan to fight the Taliban. You will want to hear just why that is.

And it involves a $20 billion sale of weapons to a Mideast ally, but will this U.S./Saudi deal activity the balance of power in the region? What message does it send?

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


BLITZER: Democrats are not campaigning in Michigan's primary. Its national party is punishing Michigan for moving up its primary to tomorrow.

Michigan would have 156 delegates to the Democratic National Convention in Denver, but the party is stripping all of them for holding its contest before Super Tuesday, February 5. Barack Obama and John Edwards actually withdrew their names from the ballot. Hillary Clinton, Dennis Kucinich and Mike Gravel are still on that ballot. Clinton is expected to win easily.

But Obama and Edwards supporters can cast an uncommitted vote, which many would see as a vote against Clinton.


BLITZER: Joining us now is the Democratic governor of Michigan, Jennifer Granholm.

Governor, thanks very much for coming in.

GRANHOLM: You bet, Wolf. Thanks for having me on again.

BLITZER: Was this a mistake, because tomorrow's vote on the Democratic side, not the Republican side, is really not much of a vote, doesn't really have much implications, does it?

GRANHOLM: Well, I think it was a mistake on the part of the Democrats who pulled their names off the ballot. It's very disappointing.

You know, Wolf, we have got the most challenged economy in the nation. Can you blame a state like Michigan, who has lost -- we have lost hundreds of thousands of jobs due to the policies, frankly, supported by the Bush administration. We wanted to be relevant in this election.

We said, if any others were going to break the cycle and move up, we would, too. And, when we do, we have candidates who actually pulled their names off the ballot. We put everybody on, and they pulled their names off. It's very disappointing.

BLITZER: It would have -- but it's only really a beauty contest, because the Democratic National Committee, Howard Dean and company, they say, you're not going to have any delegates that will actually be able to determine who the nominee is, if it comes down to a brokered convention, let's say, right? Isn't that what you're understanding?

GRANHOLM: Well, let -- I mean, look at Florida and Michigan. Both have the same issue. Do you really think that the Democratic National Committee can afford to lose all of those delegates at the convention?

BLITZER: That's what they say. They say they're going to do that.

GRANHOLM: Well, I understand that they want to protect the privileged status of Iowa and New Hampshire.

But Iowa and New Hampshire, with all due respect to them, they don't have the same issues that the industrial Midwest does, where we have lost so many jobs. We need to be heard. I'm glad that the conversation nationally has turned to the economy. I'm glad that Hillary Clinton decided to keep her name on the ballot, but the Democratic National Committee has got to get a different system for selecting our president in the future.

Michigan took a stand because we need to be heard. We are hurting. And we need the attention and the partnership of the federal government, including a president.

BLITZER: She may have kept her name on the ballot, but she isn't campaigning there. They're not -- the Democratic candidates are not spending money there on advertising. With hindsight, what would have been so bad for Michigan if you would have been part of the February 5 Super Tuesday?

GRANHOLM: Or later.

The -- the problem was that we would not have necessarily had our voice heard. I mean, this -- this unfortunate circumstance where everybody is clumped together at the end, well, usually, in many election years, Iowa and New Hampshire are the ones who have the disproportionate say in who gets elected.

We're fortunate this year that we have got a more robust contest. But the bottom line is that the issues that are important to Michigan are being raised. I think that's one of the reasons why candidates now, wherever they are campaigning, are talking about the economy. Clearly, those issues are important to the American public.

Boy, here in Michigan, I can tell you, we are mad as well. We are mad as hell at these unfair trade agreements that have not been enforced by the Bush administration. We are mad that we don't have a partnership out of Washington.

So, we need to have that attention, and we need it early.

BLITZER: Here's what a lot of Democrats are worried about. Michigan is a pivotal state, a very important state in the national election next November 4. And you have got a whole bunch of Republican candidates right now appealing to Michigan voters. They're all there in droves.

The Democrats basically boycotted Michigan. Are you concerned that this is going to hurt the Democrat, the Democratic Party, whoever that Democratic candidate is, in November?

GRANHOLM: I think there will be an awful lot of time spent here in Michigan. But I do think it's something that the Democratic National Committee needs to think about, is whether they really want to strip states like Michigan and Florida of all of their delegates. They need to devise a system that is more fair going forward.

But the bottom line is, there is a lot of time between now and November, a huge general election to play out. You will see these candidates here in Michigan. And I think you will see them in Florida as well.

BLITZER: Your fellow Democrats can show up and vote for Republicans tomorrow if they want. Do you think a lot of them will?

GRANHOLM: I -- I don't know. I can't tell you. I know that the last time this came up, there was some mischief that was played in the primary. And I think that's one of the reasons why McCain was elected here last time. There was a loss of crossover vote.

I don't know what will happen. I'm encouraging people to get out and vote for the candidate who stuck by Michigan, which is Hillary Clinton. Plus, she has got the best policies that will help the Industrial Midwest and a state like Michigan that is the epicenter of this global shift in manufacturing jobs. BLITZER: Jennifer Granholm is the governor of Michigan.

Good luck, Governor. You have got your hands full out there.


BLITZER: We wish all the people of Michigan only the best.

GRANHOLM: I appreciate you saying that, Wolf. Thank you.


BLITZER: On the eve of the Michigan primary, CNN beginning a special program on this riveting presidential campaign. It's called "CNN Election Center."

Tonight, our own Anderson Cooper and John Roberts, they will co- anchor our coverage of the candidates, the stakes, the issues, and a lot more. That program begins at 8:00 p.m. Eastern, 5:00 Pacific, only here on CNN.

In Afghanistan right now, six people are dead after a suicide bombing in a luxury hotel in Kabul, this as sources tell CNN thousands of U.S. Marines about to be sent there to fight the Taliban. What's going on?

And a tragic accident at a Donald Trump construction project. One person is dead, and now investigators want to know what happened.

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



BLITZER: We're following a new round of attacks between the Hillary Clinton and Barack Obama campaigns. Disputes over race, code words, political tactics, they're dominating the Democratic presidential race right now. We're going to have a full report. Candy Crowley is standing by. We will also bring in the best political team on television.

Also ahead it, sounds like a compliment, so why is Mitt Romney struggling with suggestions he's simply too perfect?

And officials in Tehran are accusing President Bush of stirring up Iranophobia in the Middle East. We're taking a closer look at how a new U.S. arms deal with Saudi Arabia might impact the region.

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


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

Happening now: Democrats divided by rhetoric about race. The Clinton and Obama campaigns caught up in an increasingly nasty fight which carries lots of political risk, in the thick of it all, the former President Bill Clinton.

Also, on the eve of the Michigan primary, Republican rivals show up at Detroit's big auto show. Could one of them end up in the driver's seat? All of this, plus the best political team on television.

And President Bush makes his first visit ever to Saudi Arabia and brings a very pricey gift, a promise to sell $20 billion in high-tech weapons to the kingdom. Is that a message, though, to Iran?

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

The top Democratic presidential candidates are adding more fuel today to their nasty fight over race and politics. And voters are left reading between the lines of what's been said by Hillary and Bill Clinton, Barack and Michelle Obama and their surrogates.

Our senior political correspondent, Candy Crowley, is watching this unfold in Nevada right now.

This is an issue that's brought a lot of concern, not only to these campaigns, but to Democrats. What's the latest, Candy?


The latest, Wolf, is that it's apparent that Barack Obama is trying to tamp this down. Within the past hour, he gave a news conference in Reno here in Nevada and said: Listen, I am really disturbed by the tone of this campaign over the past couple of days. I may disagree with Senator Clinton. I may disagree with John Edwards. But I don't question their commitment to civil rights.

So, this follows, as you mentioned, a pretty nasty couple of days.


CROWLEY (voice-over): The latest eyebrow-raising comment came from a head of Black Entertainment Television. Bob Johnson was introducing Hillary Clinton and attacked Barack Obama for allegedly questioning the civil rights credentials of the Clintons.

BOB JOHNSON, FOUNDER, BLACK ENTERTAINMENT TELEVISION: Hillary and Bill Clinton, who have been deeply and emotionally involved in black issues...


JOHNSON: ... when Barack Obama was doing something in the neighborhood that I won't say that what he was doing, but he said it in his book.

CROWLEY: Johnson denies he was talking about Obama's admitted drug use while a teen. Bill Clinton, once referred to as "the first black president," was under fire late last week for seeming to suggest Obama's experience was a "fairy tale". Clinton denied it, but felt the need for damage control on black talk radio, most recently with Roland Martin.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I'll tell you, I've got a list of 80 attacks on her going back six months. When his campaign referred to as the senator from Punjab, on the very same day, they put out a three page printed release attacking me.


CROWLEY: Also in the mix, a statement from Hillary Clinton that critics said downplayed the role of Martin Luther King in passing civil rights legislation.


SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: You know, this is a -- you know, an unfortunate story line that the Obama campaign has pushed very successfully.


CROWLEY: Without flat out saying it, each side blames the other for playing the race card.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: For them somehow to suggest that we're interjecting race as a consequence of a statement that she made that we haven't commented on is pretty hard to figure out.

CROWLEY: On both sides, there is a festering ill-will and the fear that the fracture could leave permanent scars within the party. In New York, at a Martin Luther King birthday event, Hillary Clinton seemed to try to calm things down.


H. CLINTON: We may differ on minor matters, but when it comes to what is really important, we are family.



CROWLEY: And, once again, Wolf, Barack Obama in Reno, within the hour, has said he wants to get past this tone. This, of course, is a campaign that has gone on as a transcendent campaign -- above racial police, above partisan politics. Obama wants to move the conversation, he says, back to people who need jobs and health care.

So we may be seeing an end to this. Neither side thought it was particularly helpful to them.

BLITZER: Yes, I think that's an understatement.

All right, Candy.

Thanks very much.

Candy is out in Nevada for us.

So race and politics -- Clinton versus Obama, let's get some analysis.

For that, we're joined by our chief national correspondent, John King, our own Jack Cafferty and our senior political analyst, Gloria Borger. They are all part of the best political team on television.

And what do you make of this spat, Jack?

CAFFERTY: It's sad, is the first thing that occurs to me -- really, really sad. We've got some problems in this country that are gargantuan in nature. And to allow the dialogue to degenerate into this garbage is very pathetic.

Where was the repudiation of Johnson by Hillary Clinton?

Robert Johnson, the founder of BET, he's a close friend. They vacation together. He's raised tons of money for her. So he makes this very thinly -- not even so thinly veiled reference to activities in the neighborhood by Barack Obama when he was a young guy. And the silence out of Hillary and Bill Clinton is deafening.

And yet when Bill Sheehan, the co-national chair of the campaign, raised the same issue ahead of the New Hampshire primary, he suddenly resigned and she issued a repudiation of the comments, saying that kind of dialogue was unacceptable and she apologized.

But when Johnson did the same thing -- nothing.

BLITZER: That's a good question -- Gloria.

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, you know, Wolf, I think what you're seeing in Candy's recent report is that both of these campaigns really understand that this argument hurts each of them. Barack Obama never wanted to run a race-based campaign. He unveiled an economic stimulus program and we're talking about what Bob Johnson said. That's not what he wants.

And Hillary Clinton, for her part, knows that she's considered divisive. These kind of race-based arguments don't help her get rid of that kind of a reputation.

So I think she was trying to cool things down today. I think Barack Obama just recently, within the hour, was trying to cool things down because they're -- it's not allowing them to go on with their campaigns. They're kind of frozen now and that's not where either of them wants to be. BLITZER: And, you know, John, Bob Johnson insists he wasn't referring to drug use when Barack Obama was a teenager, he was referring to his -- Barack Obama's community activity as a teenager.



KING: Wolf, Bill Clinton used to have a phrase for things like that. He would said that dog won't hunt.

BORGER: Right.

KING: It was pretty clear what Bob Johnson was trying to get at. And Gloria is right on the larger point. Hillary Clinton cannot win as the Democratic nominee unless she has significant African-American turnout because of her own high negatives among white male Independents.

Barack Obama Barack Obama cannot win, if he's the Democratic nominee, unless he can win some states where he needs the support of white rural Democrats, who do not have a history of voting for African-American candidates.

So the last thing either of these candidates needs right now is an ugly debate over one of the ugliest issues in the history of the United States.

So if Senator Obama is trying to turn the temperature down and Senator Clinton is trying to turn the temperature down, that would be a wise thing.

CAFFERTY: Is it my imagination or is this a bit of a one way street?

I don't think it's so much both campaigns. I didn't hear the word race come out of but, Barack Obama's mouth all the way up until after he won the Iowa caucuses.

BORGER: Right.

CAFFERTY: And then all of a sudden we started to hear it. And started to hear it first from the Clinton campaign.

BORGER: Well, you know, Jack, there are a lot of people who think -- and they're mostly anti-Clinton people -- who believe that this was actually all orchestrated by the Clinton campaign, in fact, you know, going back to the Billy Sheehan remark in New Hampshire and that all of these racial sounding remarks were coming out, including from Bill Clinton.

But I think that the Clinton reputation on fighting race relation -- on the race issue -- is quite strong. I mean, nobody can really question their credentials on the issue of race.

And, again, why would you do this in it's going to, in the end, work against your campaign?

So I don't really buy that this was -- you know, that the Clintons orchestrated this.

BLITZER: What do you think, John?

KING: Well, the inflammatory statements have certainly come from the Clinton side of the equation. There are those who think that Barack Obama seized the opening -- seized the potential to win even more support in South Carolina...

BORGER: Right.

KING: ...the first contest where you will have significant African-American support. So that it was in his interests to, perhaps, keep the story line going for a few days.

But certainly the statements by people referring to Obama's youth or other things that would be racially tinged or inflammatory, those statements have come from the Clinton side, no doubt about it.

BORGER: But I do agree with Jack that be Hillary Clinton could have demanded that Bob Johnson apologize, in the same way she demanded that Billy Sheehan apologize to Barack Obama in New Hampshire...


BORGER: And she did not do that.

BLITZER: And for those of our viewers who don't know, Billy Shaheen was...


BLITZER: the husband of the former governor of New Hampshire, himself a co-chairman of her campaign in New Hampshire. And he was asked to step down, and he did.

All right, guys, stand by. We have a lot more to talk about.

Republican White House hopefuls are making their final push in Michigan right now, promising help for the state's ailing economy.

We're going to show you what's at stake.

Plus, President Bush's big bet on Saudi Arabia -- details emerging today of a massive arms deal.

Stay with us.



BLITZER: The economy is certainly the number one issue in Michigan ahead of tomorrow's Republican primary. And the Republican candidates -- all of them -- are promising help is on the way.

We're back with the best political team on television.

Let's start with Jack once again.

And I'm going to play you a little clip of what will John McCain -- arguably the frontrunner right now among the Republicans, arguably -- told our Dana Bash earlier in the day.

Listen to this, Jack.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Well, I'd like to tell you that I think part of it is because they didn't really concentrate on the candidates until this point in the game. But a lot of it also has to do with we have a dispirited base. They get sick and tired of all the spending and corruption in Washington. And they're frustrated by the war. They're frustrated by Katrina.


BLITZER: He was asked why the Democratic base seems to be sort of lackadaisical -- I mean the Republican base, excuse me -- seems to be so lackadaisical right now about all of this.

But what did you think of his response?

CAFFERTY: Well, what they were talking about -- and we didn't, I don't think we had the right sound bite there. But they were all -- they were -- he and Romney were both running around Michigan promising help for, arguably, one of the more troubled economies in the country -- unemployment at 7.5 percent, etc. And I remember reading -- one of the things McCain said is, I won't rest until -- until Michigan is fixed.

Well, that's nonsense.

What do you think the first day he's president of the United States that Priority A is going to be Michigan?

It's not. And, you know, so they're pandering to voters and they're promising stuff they won't deliver.

And so what's new?

The thing about Michigan is it's Romney's home base. If -- he's 0 for the election so far.

If he doesn't win Michigan, how is he going to convince anybody anywhere in the country to vote for him?

It's like hey, your folks at home didn't care about electing you. It's like Gore losing Tennessee. If McCain comes out of there a winner, though, he's got the locomotive running in high gear then. He is the acknowledged frontrunner going into South Carolina and other places and he's going to be tough to overcome.

BLITZER: He didn't win in Iowa. He didn't win in New Hampshire, he came in second. But he did win the little noticed Wyoming caucus, Gloria. And he keeps pointing out he has two silvers and one gold.

But he really needs Michigan, doesn't he?

BORGER: Yes, he does need Michigan. And what's interesting to me is that he's running in Michigan almost as if he's a Democrat. Suddenly, Republicans have discovered the economic anxiety issue, because Michigan is really in bad shape.

And it's kind of like mirror, mirror on the wall, who's the most populist of us all?

And suddenly you see Mitt Romney standing outside of a general Motors plant talking about folks who have been laid off, as if he were a Democrat campaigning for elective office. And, you know, this Huckabee message of helping middle class and poor Republicans is resonating out there in the state. And that's what you see John McCain talking about, as well, although he says I can't tell you your jobs that you've lost are going to come back, but I'm going to make sure that the government retrains you so you can get a job.

KING: Yeah, yes.

BLITZER: All right, John, I'm sure you've noticed a different tone coming from a lot of the these Republican candidates, not just Romney.

KING: It's a fascinating race, Wolf, because it is the first big test of economic messages. And the Republicans are going to need that in the fall because the economy is increasingly the number one issue in the mind of all American voters.

You have the populism of Huckabee. You have more the candidness of McCain, saying your job on the floor of the auto plant isn't coming back -- or at least it isn't coming back soon. He's trying to make the case that with more research and development, that Michigan can become a laboratory for green technology -- if we move to hydrogen cars or some alternative power source for cars, that Michigan could have another boom time.

And what Romney is saying is that he'll use the levers of government to help Michigan as much as fast as he can. He sounds much more activist than many Republicans would sound, although part of the problem, Governor Romney says, is what he -- the government mandates on Michigan.

But you have these candidates competing and one of the key questions tomorrow is, who votes?

In the Michigan Republican primary, Independents and Democrats -- if they want to -- can jump into the Michigan contest. And it's a big question to see whether or not they turn out. I asked McCain this last week, is he counting on Democrats and Independents and he said he can't count on them, but he's sure like their votes. But he doesn't think that many will actually play on the Republican side.

BORGER: Which is why these Republicans are all sounding more and more independent.

And Romney is sounding more and more like an outsider, saying that if Washington could have fixed your problems here, Michigan, why didn't Washington do it?

And that's clearly a swipe at John McCain.

BLITZER: Everybody likes to swipe Washington. It's a popular statement out there...

BORGER: It sure is.

BLITZER: ...out in the campaign trail.

CAFFERTY: Don't...

BLITZER: All right, guys...

CAFFERTY: ...don't be defending those weasels just because you...

BLITZER: I'm not defending them.

CAFFERTY: inside that beltway down there.


BORGER: Uh-oh. Wait a minute.

CAFFERTY: They're worms, all of them.

BORGER: I'm in the beltway.

BLITZER: Stand by guys.

Jack's got The Cafferty File come up.

Gloria and John, thanks to both of you.

A massive arms deal -- President Bush is paving the way for a high tech weapons sale to Saudi Arabia. We're going to show you how Iran factors into all of this.

Plus, your e-mail on this hour's question -- how far would closing the Guantanamo Bay prison go toward restoring America's image around the world?

Stay with us.



BLITZER: Lou's getting ready for his show. That begins right at the top of the hour. He's standing by with a preview -- Lou.


Coming up at 7:00 p.m. Eastern here on CNN, all the day's news. Much more on the divisive issue of race and the Democratic presidential contest. I'll be joined by four of my favorite political and social commentators, who will give us their assessment and prescription.

Also tonight, the Bush administration, Congress and corporate elites refusing to acknowledge the crisis now facing our middle class. We'll set the record straight and have the latest for you.

Also, our public school system in this country is failing an entire generation of students. The author of the biggest and most comprehensive report on education in this country joins us tonight.

And the State of California facing a massive financial crisis. You won't believe the extreme measures that Governor Schwarzenegger is consider.

Please join us for all of that, all the day's news and much more, coming up at the top of the hour -- Wolf, back to you.

BLITZER: Thanks very much, Lou, for that.

President Bush places a big bet on Saudi Arabia. As the president today made his first visit ever to the kingdom, his administration announced a massive arms sale -- including the latest smart bombs. That would seem to underscore the president's tough talk on Iran.

Let's go to Brian Todd.

He's watching this story, because the signal seems to be pretty clear -- Brian.

BRIAN TODD, CNN CORRESPONDENT: It is, Wolf. A lot of signals -- the one you just mentioned to Iran. But the president is also telling U.S. allies in the region, upgrade your security and confront the real threats before it's too late.


TODD (voice-over): Symbolically, strategically, the stakes only get higher for the Bush administration in Saudi Arabia. The White House is planning to sell the Saudis $20 billion in weapons, including targeting systems for F-15 fighter planes, radar equipment, light vehicles and...

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: Nine hundred Joint Direct Attack Munitions. The acronym for that is JDAMs.

TODD: Analysts say the JDAMs are the most controversial part of the package because of their offensive capability.

NATHAN HODGE, "JANE'S DEFENSE WEEKLY": JDAM and other precision bombs are precise enough that they can take out that one target, let's say, for instance, a building, a command post, a bunker. You only need one and you can carry, you know, multiple of these weapons on one aircraft.

TODD: A weapon that will upgrade what analysts call one of the best equipped and most effective fighting forces in the Middle East -- behind only Israel in overall strength. But despite Saudi Arabia's close alliance with the United States, Congressional sources tell CNN some lawmakers plan to introduce a resolution opposing this deal. Among the major concerns -- sophisticated weapons falling into the wrong hands and the Saudis' ties with extremist groups.

JON ALTERMAN, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: People look at the Saudis and they see what the Saudis are doing in terms of supporting groups and dialoguing and supporting an Islamization, and, in some cases, radicalization through the Arab world, through Muslim communities, and say why would we want to support that government?

TODD: Still, some usual officials the defend the Saudis, saying the regime has made great progress in fighting terrorists. And they say the Saudis provide a crucial balance against another threat cited by the president.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Iran has actually threatened the security of nations everywhere. So the United States is strengthening our longstanding security commitments with our friends in the Gulf.


TODD: It is, of course, no coincidence that President Bush speaks of that threat from Iran while he's in the Gulf and that this arms deal is being pushed at the very same time. Analysts say the administration's hope is that Iran will see the Saudis' upgraded weapons arsenal and military alliance with the U.S. and roll back some of its ambitions in the region. They also point out if the U.S. didn't sell this to the Saudis, someone else would -- namely, Russia, China, Great Britain or France -- Wolf.

BLITZER: They'd all love that -- a piece of that action, no doubt about it.

The Israelis are not complaining -- the Israeli government of Prime Minister Olmert.

What's going on?

TODD: Well, Israel is also in line with the U.S. thinking about the Iranian threat here. But Israel is also getting its own sweet deal -- some $30 billion in U.S. military assistance over the next 10 years.

BLITZER: Brian Todd reporting for us.

Brian. Thanks very much.

Let's check back with Jack.

He's got The Cafferty File -- Jack.

CAFFERTY: The question this hour is how far would closing Guantanamo Bay prison go toward restoring America's image around the world?

The Chairman of the Joint Chiefs of Staff thinks it would be a good idea to shut her down.

Rouzy writes: "This potential move would be too little way too late. Having traveled throughout Europe and the Middle East, I have to admit it's difficult these days to say 'I'm an American' in some places without feeling somewhat embarrassed. Let's win in Afghanistan, pull the troops out of Iraq, close GITMO and vote responsibly in November."

Spartansburg, South Carolina. John writes: "Closing Guantanamo would go a great distance toward improving our image throughout the world, not only in the Middle East, but throughout the entire world. America was once an example of freedom and human rights. We led the world in humanity. We now have secret prisons around the world, we wiretap, hold people in prison for years without legal representation and we debate whether or not torture is torture -- but only if it's us doing the torturing."

Dan writes: "Closing the base will help our image, but only a little. We'll never get back the respect of the rest of the world until and unless we're willing to bring Bush and Cheney up on charges of crimes against humanity. Only then will they see we're willing to clean up our own messes."

Ryan writes: "For the people that use Guantanamo Bay as a way to criticize the U.S., its closure would only be a temporary change in their temperament, until they latched onto the next thing their propaganda overlords in the media or otherwise point them to. What is right is not always popular and what is popular is not always right."

Lisa in Virginia: "GITMO is an American gulag. Closing it would be the first sign we're really turning away from the lawlessness of Bush's regime of torture and detention without charge. We're violating the Geneva Conventions. What happens to our soldiers when they're captured? What moral authority will we have until GITMO is closed?"

And Sandra writes: "I don't know how it would go, but it sure as hell wouldn't hurt." -- Wolf.

BLITZER: See you tomorrow Jack.

Thanks very much.

Jack Cafferty with The Cafferty File.

He certainly has the looks, but does that help or hurt Mitt Romney?

Jeanne Moos takes a Moost Unusual look at the Republican candidate.

We'll be right back.


BLITZER: Here's a look at some of this hour's Hot Shots.

In Afghanistan, a policeman stands guard as hundreds of pounds of drugs are burned. The nation provides more than 90 percent of the world's heroin.

In India, Hindus pray before taking a dip in a river that's part of an annual tradition. Hundreds of thousands bathe in the river to wash away their sins.

In Nairobi, children peer through a crack in their classroom's wall in a Kenyan slum.

And in Germany, a polar bear cub sleeps against a stuffed animal over at the Nuremberg Zoo.

Some of this hour's Hot Shots -- pictures worth a thousand words.

He's got a face made for a campaign poster, but is Mitt Romney's mug just a little bit too handsome?

CNN's Jeanne Moos takes a Moost Unusual look at the Republican candidate.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): It may be do or die for Mitt Romney in Michigan.

But could perfection do him in?

UNIDENTIFIED FEMALE: He looks very done.

MOOS: Just perfect enough -- Mr. Perfect, perfect ten.


BILL MAHER, HOST: No one looks more like a president than Mitt Romney.

UNIDENTIFIED MALE: Right that's true.

MAHER: Is he human?



MOOS: He gets mocked for being robotic.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I support the second amendment.


MOOS: Journalists sneer at his lack of imperfections.


UNIDENTIFIED MALE: I actually made a point of getting really close to him to see if I could identify pores in his face.


UNIDENTIFIED MALE: His face is a completely smooth surface like a (OBSCENE WORD OMITTED) cereal box. It was unbelievable.


MOOS: When the former CEO of General Electric was asked on MSNBC which candidate would make the most competent president, he said Romney.

Then added...


UNIDENTIFIED MALE: But he's got this perfectness to him that doesn't seem to -- it misses a connection somehow with people.


MOOS: What should Romney do?


MOOS (on camera): Sweat a bit.


UNIDENTIFIED FEMALE: Mess up his hair.

MOOS (voice-over): Ah, yes, that perfect hair.

UNIDENTIFIED MALE: He's got a little gray hair on the sideburns, a full head of hair.

MOOS: When we showed folks the Republican candidates...

(on camera): Who looks most like a president?


UNIDENTIFIED MALE: Well, do you want to look at the rest of the pictures?


MOOS: You're not even going to look at the other ones?


MOOS: You don't have to?

UNIDENTIFIED MALE: Because (INAUDIBLE) married and I think he's the best looking man in the world. He's stunning.

MOOS (voice-over): Truth be told, almost half of the folks we asked thought Fred Thompson looked most presidential.

UNIDENTIFIED FEMALE: Oh, he has that look of experience.


UNIDENTIFIED MALE: For some reason, I don't think Mitt looks wizened enough.

MOOS: Once -- just once -- we actually saw a strand of Mitt Romney's hair out of place. Though he brushed it back, the unruly lock returned to dangle.


ROMNEY: Without raising taxes, without adding debt...


MOOS: Given his reputation for physical perfection, we wondered what the announcer on ESPN meant when a Boston Celtics player made a slam dunk and the announcer yelled...




MOOS: Mitt Romney's five sons even posted the clip on their blog, thinking ESPN had coined a new basketball catchphrase.


UNIDENTIFIED MALE: Mitt Romney! Mitt Romney!


MOOS: But instead of it meaning the perfect slam dunk, ESPN says it was an unfortunate reference made merely because the former Massachusetts governor is a Celtics fan.

Romney fans can buy campaign paraphernalia that says: "Mitt Romney -- Scruples and Good-Looking."

UNIDENTIFIED FEMALE: I think he smiles a lot. I think he's got nice teeth, but I think he looks really fake.

MOOS: Guess she won't be buying the "Mitt Romney Is Hot" thong.

Jeanne Moos, CNN, New York.


BLITZER: And now you can take the best political team with you anywhere, anytime. Download the best political pod cast at That's where you can read my daily blog there, as well. Go there right now and tell me what questions you want me to ask during the presidential debate.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Let's go to Lou in New York -- Lou.