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THE SITUATION ROOM

President Bush Set to Unveil Economic Plan; Interview With Black Entertainment Television Founder Bob Johnson

Aired January 17, 2008 - 18:00   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: President Bush is ready to tell the nation what a recession-fighting plan should look like. We're taking a closer look at the growing economic urgency over at the White House and on the presidential campaign trail.
Also this hour, Bill Clinton getting riled up again on the campaign trail. Are he and Hillary Clinton playing good cop/bad cop? And, if they are, is it working?

Plus, allegations of serious dirty tricks in South Carolina. We are going to tell you who's being attacked and how and which presidential hopefuls are fighting back.

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

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

For the first time, the White House says President Bush is now on board with new efforts to try to jump-start the economy. And that was before the Dow Jones industrials closed down more than 300 points today and recession fears intensified.

CNN's Brianna Keilar is over at the White House -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, the White House announced President Bush will speak tomorrow, Press Secretary Dana Perino saying he will lay out principles of what he thinks would be a good economic stimulus package.

(BEGIN VIDEOTAPE)

KEILAR (voice over): With fears of a recession growing, Fed chairman Ben Bernanke was on Capitol Hill Thursday urging Congress to act quickly on an economic stimulus package.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Stimulus that comes to late will not support economic activity in the near term, and it could be actively destabilizing if it comes at a time when growth is already improving.

KEILAR: This afternoon, the president had a conference call with Senate and House leaders from both parties. The White House characterizing it as a consultation rather than a negotiation. All sides are indicating partisan bickering will take a back seat to finding a solution. Today marks the first time the White House has said President Bush is backing a stimulus plan, but spokesman Tony Fratto shied away from discussing specifics.

TONY FRATTO, WHITE HOUSE DEPUTY PRESS SECRETARY: The headwinds that we're dealing with right now are things that we see over the next coming quarters. So we do want to try to pass something quickly.

KEILAR: House Speaker Nancy Pelosi and House Minority Leader John Boehner met yesterday to discuss the stimulus package and are expected to meet again this afternoon. Proposals are still vague.

One option Democrats and Republicans seem to agree on, tax rebates, checks sent to taxpayers in an attempt to quickly pump money into the economy. Democrats say they will scuttle any Republican attempts to extend the president's tax cuts as part of the stimulus package.

Privately, congressional Republicans acknowledge it's a fight they can't win. What's more, Bernanke told Congress Thursday making the tax cuts permanent won't help in the short term.

BERNANKE: I think that the evidence suggests that measures that involve putting money in the hands of households and firms that will spend it in the near term will be more effective.

(END VIDEOTAPE)

KEILAR: Speaker Pelosi says her hope is to have a final agreement before the State of the Union on January 28 -- Wolf.

BLITZER: All right, Brianna, thanks very much.

Brianna is over at the White House.

John McCain wants everyone to know -- and I'm quoting now -- "We will get through this." Today, the Republican presidential candidate unveiled his own plan to help the economy, and he used a contested primary battleground to do it.

Let's go out to Dana Bash. She's in Columbia, South Carolina, right now.

It's part of the McCain strategy to appeal himself to voters. What's going on?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: It sure is.

And it appeared to have been thrown together rather quickly, Wolf. Senator McCain gave a speech today where he included talk of the economy, but it wasn't until after he was done that we saw on our BlackBerrys that his campaign meant for it to be a new economic stimulus plan.

And it's a prime example of how each of these Republican candidates in this very tight race wants to get in front of the issue that is now dominating.

(BEGIN VIDEOTAPE)

(CHEERING AND APPLAUSE)

BASH (voice-over): Just before this South Carolina primary he needs to win, it's clear what John McCain learned from the Michigan primary he lost: Focus on the economy.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Obviously, we're seeing the news. We're seeing the concerns that people have out there.

BASH: Unveiling a new economic stimulus plan.

MCCAIN: I will cut your taxes. I will encourage the growth. I will eliminate the wasteful and unnecessary spending.

BASH: Specifically, McCain says he would lower the corporate tax rate, allow a tax write-off for equipment and technology investments, establish a new tax credit for research and development.

McCain has stopped warning voters that lost jobs aren't coming back. That didn't work in Michigan. Now it's optimism.

MCCAIN: This is still the most powerful and greatest nation on Earth. We are the greatest innovator, the greatest exporter, the greatest importer, the strongest economy.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I will be releasing soon my economic stimulus plan to give the economy a short-term boost.

(CHEERING AND APPLAUSE)

BASH: In a hurried appearance before he left South Carolina for Nevada, Mitt Romney promised he will soon announce an economic plan of his own.

ROMNEY: I do believe it makes sense for Congress to take immediate action. The consequence of the economy falling into a recession is one which can be calculated in large numbers for the government, but in very important, heartfelt changes for the families of America.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: I want to say to you, I was probably the one candidate, particularly in my party, who started seeing that we had some economic challenges.

BASH: As for Mike Huckabee, no talk of stimulus, just, I told you so.

HUCKABEE: Now, a few months later, all of them are saying, boy, we have got some economic challenges. Well, they would have known that a little bit ago if they had gotten out of Washington and out of the ivory towers.

(END VIDEOTAPE)

BASH: Now, as for McCain's stimulus plan, his campaign tells us that it would ultimately cost at least $50 billion. Asked how he would pay for it, Senator McCain said he would do so by cutting pork- barrel spending.

And, of course, Wolf, there's no surprise there. That has been the message that John McCain has been pounding away at, cut spending, while he's trying to appeal to conservatives by preaching fiscal restraint -- Wolf.

BLITZER: Thanks very much, Dana Bash, reporting for us from Columbia, South Carolina.

In Nevada right now, rules for the next big Democratic contest stand. A judge in Las Vegas threw out a legal challenge to rules allowing many Las Vegas casino workers to caucus on Saturday where they work. It's widely viewed as a boost for Barack Obama and a serious blow to Hillary Clinton.

Let's go out to Jessica Yellin. She's in Las Vegas, watching this story.

What's the reaction from both camps to this decision?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, they are fighting words from both campaigns in reaction, Obama's spoke saying that the Clinton campaign, which clearly believed that the voices of workers -- quote -- "should be silenced in service of their perceived political interests," the Clinton camp saying the current system would seem to benefit other campaigns -- hint, hint Barack Obama's -- that the system is unfair.

But, up until this ruling, both camps seemed to be playing it cool.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Listen to Senators Clinton and Obama, and you would think this lawsuit is just another petty distraction on the campaign trail.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Obviously, we want as many people as possible to be able to participate.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We're confident that our people are going to show up, and I think we will do very well.

YELLIN: When a judge rule that tens of thousands of workers along the Vegas Strip can caucus at nine casino sites this Saturday, it was great news for Barack Obama and could be a blow to Senator Clinton. That's because many of the people who work along the Strip belong to a union that has endorsed the Obama campaign. LYNN WARNE, PRESIDENT, NEVADA STATE EDUCATION ASSOCIATION: It certainly is advantageous for one particular group of employees. Those are the Strip workers that are going to be at work.

YELLIN: What about the charge she and the others who brought the suit were trying to suppress the vote?

MARK FERRARIO, ATTORNEY: My clients were never about disenfranchising people. This case was about fairness.

YELLIN: Democratic leaders say it's time to put this behind them.

JILL DERBY, CHAIR, NEVADA DEMOCRATIC PARTY: And we're ready to move forward. All Nevadans want to see January 19 go well. And it will.

(END VIDEOTAPE)

YELLIN: Now, the Clinton campaign is holding their chin up and saying, the Barack Obama people, they think just because those shift workers endorsed Obama, he's going to win. They say, not so fast. Let's see what the people of Nevada have to say on Saturday -- Wolf.

BLITZER: Only two days away. Thanks, Jessica, for that.

Let's go to Jack Cafferty. He's got with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: All right, Wolf.

Americans are revved up and ready to vote. That's according to a big-front page story in "USA Today." We saw it with those record turnouts at the Iowa caucuses and New Hampshire primary, and now this. By a 2-1 margins, Americans are pumped up for the upcoming election.

A new "USA Today"/Gallup poll shows, compared to previous elections, 62 percent of those surveyed say they are more enthusiastic about voting this time around.

So, what's getting people so fired up for the election? The reasons are many, including opposition to the war in Iraq, anxiety about a possible recession, dissatisfaction with President Bush, and disgust with gridlock in Washington.

It's a good thing then that Americans seem optimistic about what they're seeing out there on the campaign trail. The same poll shows that 87 percent of those surveyed say it makes a real difference who's elected president, and 84 percent say there is a candidate running who they think would make a good president.

That's a bipartisan view, by the way; 72 percent say the candidates are talking about issues that they, the people, really care about. And 67 percent say the election process is working the way it should.

So, here's our question: Are you more enthusiastic than usual about this year's election?

You can go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: Love your blog. Those are very encouraging numbers, Jack.

CAFFERTY: I know. I'm not sure I understand what they're all jacked up about, after I have listened to some of this stuff. But we will see.

BLITZER: We are going to talk about it later in our roundtable, Jack.

CAFFERTY: All right.

BLITZER: Thanks very much.

Regarding that Nevada caucus fight, by the way, an angry Bill Clinton gives a TV reporter a piece of his mind. Listen to this.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: If you want to take that position, get on the television and take it. Don't be accusatory with me. I had nothing to do with this lawsuit.

(END VIDEO CLIP)

BLITZER: You are going to hear what an irritated Clinton said. He's fighting for his wife. At the same time, he's forcing Barack Obama to battle two Clintons.

And days after the billionaire businessman Bob Johnson said something against Barack Obama, Johnson now has a new message for him. You are going to hear what it is, Bob Johnson, right here in THE SITUATION ROOM.

And one presidential candidate says -- and I'm quoting now -- "Nasty things are going on." It involves dirty tricks being used to try to sink a campaign. We will share them with you.

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

(COMMERCIAL BREAK)

BLITZER: Barack Obama is often beating back criticism, not just from one Clinton, but two. It's rare in presidential politics that a candidate has to fight so hard against a rival and that candidate's spouse.

But, of course, it's never happened that a candidate is married to a former president.

Our senior political correspondent, Candy Crowley, is in Las Vegas -- Candy. (BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Wolf, the other day at a Clinton event, someone introduced Hillary Clinton as the most famous woman in the world. Her husband's no slouch either in the headline department. And they have been working it.

CROWLEY (voice over): One of the problems with running against Hillary Clinton is that she has a pit bull.

B. CLINTON: If you want to take that position, get on the television and take it. Don't be accusatory with me. I had nothing to do with this lawsuit.

CROWLEY: That's the latest Clinton brawl over whether his wife's campaign pushed a failed lawsuit to block nine Nevada caucuses where Barack Obama is expected to have considerable support.

UNIDENTIFIED MALE: Do the caucuses in the casino help Senator Obama? Or do you think...

CROWLEY: Not much need for an answer, anyway. It's a pretty good bet that if Bill Clinton feels that way -- and he does -- then she does, too.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Obviously, we want as many people as possible to be able to participate.

CROWLEY: It's been like that a lot lately, a rendition of good cop/bad cop, ganging up mostly on Barack Obama.

She applies the velvet shiv.

H. CLINTON: I'm running for president because I believe that there is not a contradiction between experience and change.

CROWLEY: He favors heavy artillery.

B. CLINTON: Give me a break. This whole thing is the biggest fairy tale I have ever seen.

CROWLEY: Earlier on they traveled together. It's more like tag team now. She debates in Nevada, he revs up voters in California. Today, she's in California. He picks up the slack in Nevada.

How much does he help? For Democrats, Bill Clinton is the good old days, the high times. Eighty-nine percent of them view him favorably. It makes running against her difficult -- getting people to vote for you who once voted for him.

Obama and Edwards tread lightly on the Bill Clinton era, but they tread, arguing mostly that the country needs a sea change.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not. And in a way that Bill Clinton did not.

CROWLEY: Still, it's tricky business. In New Hampshire exit polls, 49 percent of Democrats had a strongly favorable opinion of Bill Clinton. A majority of them voted for Hillary Clinton.

The only thing better than having a pit bull on your side is having a pit bull with high favorables.

(on camera): In many ways, they are a perfectly balanced couple. He, not running for anything, can say whatever he wants, very often the things she can't say -- Wolf.

(END VIDEOTAPE)

BLITZER: Candy Crowley in Las Vegas watching the story.

Hillary and Bill Clinton are trying to put a major blowup with the Obama campaign behind them. That would be the recent dust-up over racial politics, codewords and campaign tactics.

Today, a prominent Clinton supporter is doing his part to support a truce between the Clinton and Obama camps. That would be Black Entertainment Television founder Bob Johnson. He apologized to Obama for a remark that was widely seen as an allusion to Obama's acknowledged drug use as a teenager. The Obama camp says it accepts the apology.

This is what Johnson said on Sunday.

(BEGIN VIDEO CLIP)

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

(APPLAUSE)

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.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now on the phone is Bob Johnson.

All right, Bob. Explain to our viewers what you were thinking when you made that very controversial comment.

JOHNSON: Well, Wolf, and you know, I'm a strong supporter of Hillary Clinton for president, as you know, and sometimes in campaigns you get carried away in your zeal to support your candidate. And you say things that are inappropriate and not proper for a campaign that should be based on the issues.

And that is why I issued this personal apology to Senator Obama, I know Senator Obama. I have a great deal of respect for him. And I'm glad that his campaign has responded and accepted the apology.

And I think that as we saw in the last debate, that matter is settled, both by the Clinton campaign and the Obama campaign, and certainly by myself.

BLITZER: Give us your mind -- the process that you went through. I know you struggled whether to support Hillary Clinton or Barack Obama. Tell us why in the end you decided to support Hillary Clinton.

JOHNSON: Well, it wasn't a struggle. As you know, I have been friends with the Clintons for almost 20 years -- President Clinton and Hillary. And I have a great, as I said, respect for Senator Obama. But Hillary Clinton, in my opinion, has far more experience and is ready on day one to be president of the United States.

She has been in the Senate longer than Senator Obama. She has been engaged in international affairs issues as it relates to involvement with -- as a first lady and the traveling she has done. She has been on the Armed Services Committee ever since she has been in the Senate.

She has been actively involved in public policy issues, health care, economic, education, all of those matters that I think are critical to a -- what I would call a CEO of the nation, or a leader of the nation, taking control of this country on day one and being able to deal with everything from the economic recession we are facing to terrorism to moving this country forward with a positive change in leadership to get things done, sometimes in a very tough environment in Washington, D.C.

BLITZER: But what do you say to your fellow African-Americans, Bob, who say, you know what, given the history of racism in our country, and all that we have gone through, this is a moment, this is an opportunity right now potentially for a black man to be elected president of the United States and the country should really grab it, especially, especially African-Americans?

You have heard that argument, I'm sure, from a lot of people. What do you say to them?

JOHNSON: Well, Wolf, I think -- yes, I have heard that argument. That argument just resounds to the bottom of the heart of African- Americans. And I myself look at pride and what I have been able to accomplish with African-Americans who work with me in the business arena. It is certainly something that we should be proud of when we overcome all of the challenges that we face. And all of us can be really proud of Senator Obama.

But when it comes down to -- I tell my African-American friends, you have got to look at this issue, not only with your heart, but with your head. And when I look at it with my head, my head tells me that the best person to lead this country, the person who I think can deal with the issues that are certainly important to African-Americans, education, access to housing, health care, job creation, criminal justice, someone who has a long, long term of involvement with us in those issues, that is Senator Hillary Rodham Clinton. And so I look at it, I say, my heart goes out to those people who want to see a people of color, who looks like us, in the White House, great achievement, historic beyond words, but at the end of the day, this nation has to be run by a leader. And I think Hillary Clinton is the better candidate to lead this nation for the next eight years.

BLITZER: Bob Johnson, thanks very much for joining us.

JOHNSON: Wolf, thank you very much. Appreciate it.

(END VIDEOTAPE)

BLITZER: A tour bus full of passengers rolls over and catches fire. We're following this developing story out of Nevada. Dozens of people are hurt. We will be back with the latest. Carol Costello has that.

Also, Mike Huckabee raising eyebrows when talking about gay marriage. You're going to want to hear what he's saying today.

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

(COMMERCIAL BREAK)

BLITZER: There's been a horrific bus crash out in Nevada.

I want to go to Carol Costello. She's watching this story for us.

What do we know?

CAROL COSTELLO, CNN CORRESPONDENT: Yes, this is a developing story, Wolf. And it's a terrible scene in Jean, Nevada. That's about 30 miles outside of Las Vegas.

It was a charter bus ferrying employees from Las Vegas to a casino. It ran into the Jersey wall and burst into flames. You can see the picture here. The passengers were still inside that bus when it happened. This is I-15 near Las Vegas.

And on the phone with us right now is Doug Bunjes. He as about a half-mile behind the bus when it veered out of control. And he saw the whole thing.

Doug, tell us what you saw.

DOUG BUNJES, EYEWITNESS: Suddenly, the bus veered to the side of the road and impacted the concrete retainer.

COSTELLO: And then what happened?

BUNJES: It slipped over onto the retaining wall, slid along it a little bit, and then flipped over the other side off the freeway, and burst into flames.

COSTELLO: And the passengers were still inside that bus? Did you witness them getting out?

BUNJES: I just got there just as all of them that I could tell got out. But it was just amazing. It was one of the things I don't want to see again in my life.

COSTELLO: We certainly understand that.

Thank you, Doug. And thank you for sending us that picture, I- Reporter Doug Bunjes.

And just an update on the passengers. All of them appeared to have gotten out of that bus. Three are critically wounded. One has been airlifted to a hospital by helicopter.

We understand what they're terming 20 are walking wounded; 20 others are injured. And you're looking at live pictures now from the air from Jean, Nevada. You can see how desolate it is how there. So, it took emergency vehicles a little bit of time to get there, Wolf.

They called in three helicopters, and ambulances from all over the area, because they didn't know how many passengers were aboard that bus. But, as far as we know right now, no one has died as a result of this accident -- back to you.

BLITZER: Thank God they're all alive, at least for now. Let's hope it stays like that.

Carol, thanks very much.

Republican Mike Huckabee is pushing some conservative hot buttons.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: South Carolina people have historically not only picked the president, but South Carolina people know true conservatism when they see it.

(END VIDEO CLIP)

BLITZER: We're going to tell you about Huckabee's head-turning comments on the Confederate flag and gay marriage. And the best political team on television will read between the lines.

Plus, Republicans trading charges of dirty tricks in the South Carolina primary, and one example is caught on tape. Is the presidential race taking a nastier turn?

And are Republicans starting to steal the Democrats' thunder as they sharpen their focus on the economy?

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now: dirty tricks on the campaign trail caught on tape, why the campaigns are mobilizing so-called truth squads to fight back against lies and slander.

Mike Huckabee in the heart of the South speaking out about the Confederate flag and gay marriage, is he speaking from the heart?

And the Fed chairman says the economy needs help and it needs it fast -- the president talking about providing a shot in the arm. Do Democrats have better ideas?

All of this, plus the best political team on television.

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

Dirty tricks helped torpedo John McCain's 2000 presidential run in South Carolina. Now, as Republican candidates gather for this weekend's primary, they're all on guard against more of the same.

Let's go to CNN's Mary Snow. She's in Charleston. She's watching this story for us.

A lot of cheap shots being hurled two days before the Republican primary, Mary.

MARY SNOW, CNN CORRESPONDENT: Yes.

And Wolf, you know, here in South Carolina, rough politics, anyone will tell you, is nothing new. Still, some veterans in the political scene, the Republican political scene, say, so far, it's been fairly tame.

However, the chairman of the party, the Republican Party, here says he's getting complaints.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

UNIDENTIFIED MALE: Does the fact that former Senator Fred Thompson refuses to sign the no new tax pledge and that Governor Huckabee has signed the no new taxes pledge not to raise taxes as president, make you more likely to trust Governor Huckabee on the issue of tax relief?

SNOW (voice-over): This phone call posted on YouTube is the kind that has is Republican candidates on guard in South Carolina, eager to expose dirty tricks. The group behind the call, Common Sense Issues, says it's calling homes in South Carolina to inform voters. Critics call what they're doing push polling -- an attempt to plant negative perceptions of rival candidates.

The group is pro-Mike Huckabee, but says it's independent of the campaign. The Huckabee campaign denounced the calls, quoting the former Arkansas governor saying: "As I've said before, our campaign has nothing to do with push polling and I wish they would stop."

Republican presidential hopeful Fred Thompson isn't sold. FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: I won't call any names, but Governor Huckabee says he doesn't know anything about it.

SNOW: Mike Huckabee has been targeted himself, with these anonymous flyers passed around suggesting he's too liberal for Republican primary voters. Back in December, this Christmas card, purported to be from the family of candidate Mitt Romney, was fake and was actually meant to spotlight his Mormon faith.

And Senator John McCain knows all too well about dirty tricks.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I need your vote. I need it. This is a pivotal election. You know that a lot of nasty things are going on. Ignore that kind of stuff.

SNOW: Back in 2000, McCain became the target of a smear campaign.

LACY FORD, UNIVERSITY OF SOUTH CAROLINA: A rumor was spread about Senator McCain and -- having feathered a black child. And that was portrayed in the most negative manner possible.

SNOW: This election, the McCain campaign distributed a mailing of the senator's biography, including the story of his adopted daughter Bridget. McCain's wife Cindy brought her home from a Bangladesh orphanage 15 years ago. McCain has dispatched a so-called truth squad to knock down mailers like this one, suggesting he turned his back on POWs during the Vietnam War, which supporters say is the opposite of the truth.

(END VIDEO TAPE)

SNOW: Now, still, some inside Republican campaigns here note that there are two days to go before the primary, so they are being watchful. But the head of the Republican Party here in South Carolina says that by exposing these dirty tricks, he believes people here will see right through them -- Wolf.

BLITZER: Mary Snow watching this story for us.

Thanks very much.

Dirty tricks out on the campaign trail -- let's discuss that and more with our chief national correspondent John king. He's in South Carolina.

Jack Cafferty is in New York.

And our senior political analyst, Gloria Borger, she's here in Washington. They're part of the best political team on television.

You know, it goes back, I guess, for hundreds of years -- dirty tricks in politics. But for some reason in South Carolina Jack, there's a history. It gets pretty nasty down there.

CAFFERTY: Well, and there's precedent. I mean McCain got wiped out down there eight years ago. The favorite one going around on McCain now is the one that he has voted in favor of medical experiments on unborn children. That's stem cell research. I mean this stuff is vicious and nasty gutter politics. It's, I guess, part of the downside of democracy and free speech.

But part of the onus is on the voter. You know, we've got to -- we're supposed to inform ourselves and make an intelligent choice. And part of that is finding out what's truth and what isn't.

BLITZER: It's really amazing, Gloria. I'm sure all of us get so many e-mails from real -- you know, average viewers out there who start believing this junk that's out there. It's really nasty but they believe it because, you know, maybe it's true.

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, you know, I think -- I agree with Jack. The voters have a certain responsibility here. But I also think the candidates, Wolf, have a certain responsibility. You saw that Huckabee got out there and said, you know, I don't condone this, I wish these people would stop. And then had you Fred Thompson saying well, I'm not quite sure that's enough.

I think, you know, the candidates, at some point, could do themselves some good if they all got together and said these mailers you are getting are stupid and wrong and spreading lies and we all don't condone them and we have nothing to do with them and pay no attention to them. But it's part of the system.

BLITZER: And it's not just the mailers, John. It's these so- called push polls that are out there, as well -- people getting these really nasty phone calls smearing these candidates.

JOHN KING, CHIEF NATIONAL CORRESPONDENT: That's right, Wolf. And both McCain and Thompson complaining about phone calls in recent days from a group that is supporting Mike Huckabee. And as Gloria noted, Mike Huckabee says he has nothing to do with it.

In those phone calls, both McCain and Thompson say their records on abortion are being distorted. That's very important in a culturally conservative state like South Carolina.

And it is very difficult to keep track of all of this, because, you're right, it goes back years and years and years. But with the explosion of technology, you can do this now with robotic phone calls done by machines. People don't even have to do it. You do it by e- mails. So it's not just flyers on the windshields when you leave church or when you leave work, it's the whole new technological way of delivering this information.

BLITZER: Remember...

BORGER: And you know it...

BLITZER: Go ahead, Gloria.

BORGER: It's sort of flying under the radar here because the things the public says they don't like -- oh, those negative ads we see on television -- well, you don't have to have those negative ads on television if you're trying to convince a few thousand voters to go one way or the other. This way is sort of under the radar although this time John McCain in particular is really prepared for this because he's thinking about what was done to him in 2000 and he's thought about it every day since then, I can tell you that.

BLITZER: The confederate flag -- it always seems to be a big issue in South Carolina.

Jack, listen to what Huckabee said about it.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: You don't like people from outside the state coming and telling you how you ought to raise your kids. You don't like people from outside the state coming down and telling you what to do with your flag. In fact, if somebody came to Arkansas and told us what to do with our flag, we'd tell them where to put the pole. That's what we'd do.

(END VIDEO CLIP)

BLITZER: Why is this always an issue down there?

CAFFERTY: Well, it's not just down there. I mean we get stuck on stupid wedge issues every election cycle. Huckabee is going a little bit off the Evangelical deep end, I think. Yesterday, he was talking about he wants to amend the Constitution and put more God-like stuff in the Constitution.

Well, huh?

The Constitution is a secular document. To debate the confederate flag, when we are we're facing the kinds of problems in terms of foreign policy, our economy -- to focus on those kinds of issues, I think, is criminal. And if voters buy that garbage, then we'll wind up with another administration just like the one we're about to get rid of at the end of this year. I mean this Evangelical is part of why we got George Bush for eight years and look how well that's turned out.

BORGER: You know, I think it's -- it was a moment for Huckabee, Wolf, of political pander. I mean you -- I saw him morphing into a tried and true pal in front of my eyes, because he was pandering to folks on the flag issue. He's trying to get conservatives to vote for him. He's trying to bring out those Evangelical voters, to get them to the polls. And that's what he's doing.

BLITZER: And the other thing he's saying that's causing controversy, John, I'll read to you -- on the issue of gay marriage: "I think the radical view is to say that we're going to change the definition of marriage so that it can mean two men, two women, a man and three women, a man and a child, a man and an animal. Once again -- again, once we change the definition, the door is open to change it again." His spokesman later issued a statement to Brian Todd, telling us that he does not equate gay marriage with bestiality, he simply believes marriage should be between a man and a woman.

But this is becoming an issue out there, as well -- the whole abortion issue and the whole issue of gay marriage.

KING: Well, Wolf, Governor Huckabee is playing, especially in recent days, the flag issue, this gay marriage issue to a very conservative base here in South Carolina. Senator McCain supported taking the flag down off the South Carolina statehouse back in 2000. That is the base he is playing to.

Please excuse the sirens here. It seems like every time I do this, I attract noise out here.

(LAUGHTER)

KING: But this is -- there is a concern among many Republicans that if Governor Huckabee were to be the nominee, the Republican Party would have a huge problem north of the Mason-Dixon Line because of many of the things he is saying. That is one of the reasons many national Republicans and people back in Washington, even though they admire his energy and his strength as a campaigner, are beginning to worry they would have a huge problem in moderate and Independent parts of this country if he were the nominee.

(CROSSTALK)

BLITZER: We'll wait for that siren to die down over there.

CAFFERTY: Note to the roundtable producers -- indoor locations are soundproof...

(LAUGHTER)

CAFFERTY: ...and remove the possibility of freight trains, sirens, falling buildings, riots, tear gas canisters. And they're just as adequate for us to have a conversation. We don't have to put John King out on the railroad tracks every time he does one of these things.

(LAUGHTER)

BORGER: Didn't you know we sent police escorts with John now all the time?

That's what the sirens are.

(CROSSTALK)

CAFFERTY: ...arrest him.

BLITZER: ...more activity. John's a man of action. (LAUGHTER)

CAFFERTY: (INAUDIBLE).

BLITZER: He knows how to deal with this kind of stuff. Guys, stand by for a moment. We're going to continue this conversation.

And Democrats -- Democratic candidates, they're stumping on the economy right now.

Which of them has the right prescription for what's seriously ailing the country?

Plus, high flying politics -- candidates' antics up in the sky. We're going to show you what's going on.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Democratic candidates and the economy -- do any of them have the right prescription to cure what ails us?

Let's go back to the best political team on television.

We'll ask Jack Cafferty.

Are you hearing something out there on the campaign trail that's really going to make a difference?

CAFFERTY: No. And what I'm hearing is some last minute let's run around and pander to this issue because Ben Bernanke was talking about the fact that a recession is not only imminent, a lot of people think we're already in one. And not only do they think we're in one, but it's going to be a deep, long tough recession that has to do with the irresponsible fiscal policies of our federal government. And, instead, they want to talk about the confederate flag and stem cell research and gay marriage.

BORGER: Well...

CAFFERTY: I'm telling you, Gloria, this is a freight train that's been coming down the tracks at us at least since 1973, when the Arab oil embargo happened. And it's going to run over the top of this country if something isn't done about it soon.

BORGER: Well, I...

CAFFERTY: And none of these candidates has time enough to come together with a plan that they're going to put in place if and when they're elected nine or 10 months from now.

BORGER: Well, you know, I agree with you that this is coming like a freight train. But I also think, you know, that some candidates have given a great deal of thought to what you ought to do. I mean you have Hillary Clinton, for example, who came out with...

CAFFERTY: Oh.

BORGER: Well, but she did. she came out with a plan. Obama came out with a plan.

I think what's -- what's really interesting, though, is what's going on right here in Washington, because the president is going to come up with a plan that hopefully -- hopefully he and Democrats will be able to agree to, to come up with some sort of quick bang for the buck and get this economy stimulated again.

It's going to be interesting to watch how the candidates, particularly on the Republican side, react to any kind of a stimulus program, because they don't like a lot of government intervention.

BLITZER: All right, let me get John into this.

John, the conventional wisdom -- correct me if I'm wrong -- out there is that if there's a recession, or even serious fears of a recession during a presidential election year, it's going to help the Democrats big time no matter who the Democratic candidate turns out to be, no matter who the Republican candidate turns out to be.

What do you think?

KING: Absolutely right that that is the conventional wisdom. It is the historical guideline, if you will, that the president -- whoever is the president of the United States, his party gets hurt when the economy goes south. And you already have an unpopular Republican president. So by most estimations, yes, the Democrats would benefit from that.

But it is interesting, as Gloria noted, to watch how quickly the Republicans are reacting to this. You have the debate going on back in Washington, the president saying he would sit down with the Democrats. John McCain today came out with a stimulus plan. Fred Thompson -- I viewed him today. He has been very skeptical about any stimulus plan, but he said today he would be willing to support some small targeted things like a moratorium on taxes for lower income Americans for a year, extending and expanding the child care tax credit for middle and lower income Americans for a year. He says that would put more money back into the economy right away and he thinks it would help.

This is another example, Wolf, of where you will have a sharp contrast in the fall between the Republicans and the Democrats, because even though the Republicans are proposing some modest stimulus -- they don't want pork barrel spending, they don't want a big Christmas tree, as Fred Thompson called. So you will have another debate, just like on health care, about the role of government...

CAFFERTY: Well...

KING: And it will be a sharp contrast once we know the nominee.

CAFFERTY: The mood -- the mood in this country right now, if it's ever been right for somebody to take this bull by the horns, it's right now. That's why Barack Obama is getting the traction that he is. People understand, whether Washington does or not, that we're in serious, serious trouble. And it may be the last opportunity we get collectively to do something serious -- not short-term, not Band-Aid, not $500 billion this, $200 billion that, but to sit down and look at fiscal policy. Our expenses are accumulating -- $56 trillion in unfunded liabilities; the siphoning of jobs out of this country because of bad trade agreements; the decline of our dollar to where our credit rating is being threatened. Time is running out.

And the candidate who recognizes the public might be willing to get on board that train, I think, could be the next president, even though it's not a pleasant thing to talk about.

BORGER: But...

BLITZER: Very quickly, Gloria, because we're out of time.

BORGER: But, Jack, I mean I totally agree with you. But you -- in a way, you need a new president, because you need somebody that...

CAFFERTY: I'm not suggesting we don't need a new president.

BORGER: No, no, no, but you need somebody who has a mandate from the American public to do some things that are going to be painful and tough and important...

CAFFERTY: Well, the first candidate that starts talking about that, though, Gloria, I think gets the mandate.

BLITZER: All right...

CAFFERTY: I think the public is ready to understand this and do it.

BLITZER: We've got to go, guys. But we'll continue tomorrow. That's the good thing about THE SITUATION ROOM.

All right, John, thanks very much.

CAFFERTY: In never ends.

(LAUGHTER)

BLITZER: It looks like those sirens have gone away.

Gloria, we'll see you tomorrow, as well.

Jack, don't go. We've got The Cafferty File coming up.

This important programming note about the South Carolina primary. CNN and the Congressional Black Caucus Institute are sponsoring a Democratic presidential debate in Myrtle Beach on Monday, Martin Luther King, Jr. Day. Please join me and Suzanne Malveaux and Joe Johns for this Southern showdown Monday night, 8:00 p.m. Eastern, right here on CNN. Are you more enthusiastic than usual about this year's presidential election?

That's our question this hour.

Jack Cafferty -- he's standing by with your e-mail in the Cafferty File.

Plus, Barack Obama picks up a key endorsement from a powerful senator. We're going to show you who's now in his camp.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker this Thursday, another Democratic senator is choosing sides between colleagues Hillary Clinton and Barack Obama. The influential Judiciary Committee chairman, Patrick Leahy of Vermont, he decided to go with Obama. He says Obama is the best person to reintroduce America to the world.

Remember, for the latest political news any time, you can always check out CNNPolitics.com. That's also where you can read my daily blog.

Lou Dobbs is getting ready for his show. That begins in a few minutes at the top of the hour. He's giving us a preview -- hi, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Hi, Wolf.

Coming up at 7:00 p.m. Eastern here on CNN, the economy may already be in recession, but the Bush administration and Congress, well, they don't have a plan to help the middle class. We'll have that report.

And Federal Reserve Chairman Ben Bernanke does have an idea, at least. He's calling on consumers to spend their money in this country on American-made products. There's just one problem, Mr. Fed Chairman -- what are those products?

And the Bush administration pandering to corporate elites again and, as always, in a new effort to sell faith-based trade policies. The chairman of the Consumer Electronics Association, Gary Shapiro, has challenged me to a debate and accuses me of fear mongering on the issue of international trade. Gary Shapiro will join us as I accept his generous invitation to debate.

And you won't believe how much money pro-amnesty groups will be spending on advertising in this election campaign to promote amnesty and open borders. We'll have that report and a great deal more.

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

BLITZER: See you then, Lou.

DOBBS: Yes.

BLITZER: Thanks very much.

Let's go back to Jack.

He's got The Cafferty File -- hi, Jack.

CAFFERTY: Wolf, Patrick Leahy's endorsement of Barack Obama, it surprise you?

BLITZER: Not really.

CAFFERTY: He's a very well respected voice and it had to have stung Miss. Hillary a little bit to have him come down for Barack Obama.

The question this hour -- are you more enthusiastic than usual about this year's election?

A Gallup Poll -- a "USA Today" story saying that there is tremendous interest in this upcoming election we're going to have in a few months.

Evans writes: "To even fathom that this year's election isn't the biggest thing to hit America since sliced bread would be foolish. It's a huge election with tons of players and the stability of an entire nation at risk."

Jim in Los Angeles: "Enthusiastic? You bet. I just listened to Thompson interviewed on TV. He crowed about the First Amendment, illegals and the right to life -- no mention of the nation's issues. Huckabee promotes a Constitution more like the bible. McCain and Thompson are old, like me. We walk funny, can't get up off our knees, snore and generally stare a lot. And, of course, there's Mitt "Silver Spoon" Romney. Excited and ecstatic? Yes, you bet."

Jeff in Connecticut: "Hell, no, Jack. How can any intelligent American be enthusiastic about the same old dog and pony show? When Congress starts exercising its authority and obligation to impeach or indict corrupt, self-serving, treasonous politicians, then and only then will I become enthusiastic and proud to be an American again."

Shelley writes: "As a first time voter, I'm extremely excited about this election and the change that many of the candidates are offering. I think this election will have the highest turnout of voters ever, especially from the younger voters. The election will make history and everybody wants to have a part in that."

Pete writes from Florida: "I think many of us were, up until Tuesday. That's when "American Idol" started."

And James writes: "I think this sums up my true feeling -- erectile dysfunction -- the inability to become aroused over any of the choices for president put forth by either party in the 2008 election year." -- Wolf?

BLITZER: E.D. -- electile dysfunction.

(LAUGHTER)

CAFFERTY: Right.

BLITZER: Exactly.

See you tomorrow here.

CAFFERTY: OK.

BLITZER: Jack Cafferty with The Cafferty File.

Hillary Clinton at high altitude -- the candidate plays flight attendant following a long tradition of horsing around on campaign planes.

CNN's Jeanne Moos shows up with what they're up to. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Candidates and the reporters that cover them have a long tradition of, well, going a little bit crazy on campaign planes.

What are they up to?

CNN's Jeanne Moos brings us a Moost Unusual look.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Don't try this on a commercial flight.

(VIDEO CLIP)

MOOS: But on a campaign plane, where the candidates let their hair down, it's no surprise to see a wannabe president playing flight attendant.

SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: Once we've reached cruising altitude, we'll be offering in-flight entertainment -- my stump speech.

MOOS: But Hillary wasn't first. Candidate George Bush did it eight-and-a-half years ago.

(BEGIN VIDEO CLIP FROM JUNE 12, 1999)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Please stow your expectations securely in your overhead bins, as they may shift during the trip and could fall and hurt someone -- especially me.

(END VIDEO CLIP) MOOS: Back then, the press plane could get pretty wild.

(VIDEO CLIP)

MOOS: As documented in the film ""Journeys with George,"" when the campaign went airborne, paper plates could serve as TelePrompTers and the "fasten seat belt" sign didn't always apply while landing.

(VIDEO CLIP)

MOOS: And the candidate himself served cookies, demonstrated his cheerleading skills and even roamed the aisle wearing sleeping blinders.

(VIDEO CLIP, COURTESY HBO)

UNIDENTIFIED FEMALE: Are you OK, Governor?

BUSH: What?

UNIDENTIFIED FEMALE: Are you OK?

BUSH: I can't hear you because I can't see.

(END VIDEO CLIP)

MOOS: We could have used some blinders to avoid seeing President Reagan in his sweatpants. He could golf at 35,000 feet. But the favorite airborne sport seems to be rolling oranges. On Mike Huckabee's plane, it's called Huck-A-Ball (ph).

(VIDEO CLIP)

MOOS: After takeoff, while the plane's nose is pointed up, press people in back try to roll oranges up the aisle in the direction of the Huckabees, who seem to enjoy rolling them back to the media.

Even prim Nancy Reagan was known to participate.

(on camera): In addition to bowling with oranges, some members of the press occasionally do something known as aisle surfing. Even buttoned down Al Gore reportedly aisle surfed on his vice presidential campaign plane.

(voice-over): We couldn't find any pictures of aisle surfing on a campaign plane. But this YouTube video shows a fine example of a guy on a chartered plane using laminated safety instructions as skis to surf down the aisle on takeoff.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

UNIDENTIFIED MALE: There they go. And he's off! Keep your heads out of the runway, folks.

How about it?

(END VIDEO CLIP)

MOOS: And though the candidates may express the bipartisan desire to cross the aisle, it's hard to imagine them surfing it.

(VIDEO CLIP FROM YOUTUBE.COM)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: In fact, a lot -- a lot of memories. I spent a lot of time on those press charters, Air Force One -- a lot of happy times. And all of that, what you just saw, totally, totally true. But here's the bottom line -- a lot more -- a lot more happened, some of which you'll never know about.

Now you can take the best political team with you anytime, anywhere. Download the best political pod cast at CNNPolitics.com.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.

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