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Mad Dash Before Super Tuesday; McCain: Big Spender; Big Economic Highs and Lows

Aired February 1, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, everything counts. Barack Obama and Hillary Clinton are on a mad dash for votes only days before Super Tuesday. They could be coming to a place near you.
John McCain and Mitt Romney also crisscrossing the country right now. Wait until you hear what McCain is doing to try to edge out his rivals.

And billion-dollar business. Microsoft makes an offer that could affect how you use Yahoo!

And as Americans struggle with high gas prices, Exxon Mobil posts the highest profit ever seen by any U.S. company.

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

And they're off. It's the day after Hillary Clinton and Barack Obama had their first one-on-one debate right here on CNN, and now they're looking for momentum. Both of them eying the delegate bonanza that comes into place on Super Tuesday.

Clinton started her day in Los Angeles, went on to San Diego, and has events in San Jose and San Francisco. Meanwhile, Obama turns his eye to New Mexico with events in Albuquerque and Santa Fe.

Obama also began his day in Los Angeles, and that's where our Suzanne Malveaux is right now.

Suzanne, he once again criticized Clinton for her war -- for her vote, that is, on the Iraq war.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, he absolutely did. He made himself available to reporters. We got a chance to ask him a few questions this morning about that.

Obviously, he sees this as an opening to attack her on her position in the Iraq war. They believe that he performed well in the debate on that particular issue. So he's trying to hit back, and hit back hard.

He is also trying to cover -- crisscross the country as quickly as possible, covering lots of ground, hitting obviously a big state here, lots of delegates, but also some of the smaller ones as well.

(BEGIN VIDEOTAPE) MALVEAUX (voice over): Obama is on the move, leaving California and its mother load of delegates, some 370, behind. He insists he's not conceding the state to Hillary Clinton. He's just got a lot of other places to go.


MALVEAUX: Coming off his first one-on-one debate with Clinton, a visibly tired Obama said he was satisfied his experience was no longer an issue.

OBAMA: I feel like voters who watched last night recognized that I know what I'm talking about.

MALVEAUX: In the race to the finish, everything counts. A big unknown is where the former candidate John Edwards' supporters will go. One good sign for Obama, California's SEIU, one of the largest labor unions in the state which backed Edwards, announced it's now endorsing Obama.

The liberal activist group jumped on the Obama train, too. The far-reaching organization has more than three million members across the country, nearly two million in Super Tuesday states ready to mobilize. Obama is still working hard to win the coveted endorsement of John Edwards, but says he is not making deals.

OBAMA: I have specifically asked him for his endorsement. We haven't had specific conversations about an Obama administration post.

MALVEAUX: One of Obama's stops today, New Mexico, home state of former candidate Governor Bill Richardson.

OBAMA: We have no plans of receiving an endorsement, but I would love to be pleasantly surprised.


MALVEAUX: And Wolf, that certainly would be a surprise. CNN has learned that Bill Richardson on Sunday is going to be watching the Super Bowl with his former boss, the former boss no other than the former president, Bill Clinton. So you can only imagine what that conversation is going to be like -- Wolf.

BLITZER: A lot of sports fans, indeed.

Thanks very much, Suzanne.

Senator Obama is speaking in Albuquerque, New Mexico, right now. That's a Super Tuesday state. Let's listen in briefly.


OBAMA: ... less pockets in the money of working Americans at the same time that they are paying more for just about everything else. Oil hit $100 a barrel. The cost of health care has never been higher. The price of college has never been higher. And this means that American families are saving less than they ever have before. An average of just $400 last year. It also means that they owe more than ever before, with the average middle class family now having more than $8,000 in personal debt.

In this kind of economic climate, where millions of Americans, the most productive workers in the world, are literally living paycheck to paycheck, the housing crisis was simply the straw that broke the camel's back. The equity people own in their homes. It's often their largest source of savings. And as that has declined or disappeared, so has their American dream.

In this election, at this moment, it is time to restore that dream for every single American and put America back on the path of prosperity. It is time...


It is time not only to provide a much-needed storm-term stimulus to our economy, but to finally address the long-term inequities and insecurities that have kept opportunity beyond the reach of too many hard-working Americans. So the first step is to provide a quick boost to the economy.

A few weeks ago I offered an economic stimulus package based on a simple principle -- get immediate relief into the hands of people who need it the most and will spend it the quickest. I propose sending each working family a $500 tax cut, each senior a $250 supplement to their Social Security check. And if the economy gets worse, we should double those amounts.

Now, neither George Bush ore Hillary Clinton had that kind of immediate relief in their original stimulus proposals, but I'm glad that the stimulus package moving through Congress does have such a stimulus -- does have such an approach, at least for the working families. But I do hope that we also provide relief to seniors. And I also hope we can extend unemployment insurance for a longer period of time and offer it to more Americans who find themselves out of work.

And we should...

BLITZER: All right. So Barack Obama talking about the economy and the economic stimulus package that's going through the Congress right now. It's passed the House, it's going through some hurdles in the Senate. Unclear what its fate will be as a result of the changes some U.S. senators are seeking, including Barack Obama, as you just heard right there.

We'll continue to monitor his speech in Albuquerque, New Mexico, and update you on what else he's saying.

Meanwhile, we're going to have live coverage of Hillary Clinton's events later today as well.

Also coming up, Barack Obama's wife talks to our own Soledad O'Brien in an exclusive interview. She caught up with Michelle Obama just a little while ago. Stay tuned for that. The interview will air here in THE SITUATION ROOM.

On the Republican side, meanwhile, to the winner go the spoils. Since John McCain's wins over these last few presidential contests, his campaign says it's raking in the cash. McCain is campaigning in the Midwest today, and that's where CNN's Dana Bash is standing by, in Villa Park, Illinois.

Dana, how is McCain spending all that new cash that he's raising?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, I think we should first point out that we don't exactly know how much money John McCain has raised. His campaign is one of the few, I think the only one, one who hasn't officially given a financial report.

CNN is told by somebody familiar with his fundraising that he raised about $12 million just in January alone. So that does give you a sense that he is doing much, much better than he was before, because he was really having major financial troubles.

And one hint as to how well they're doing is just to take a look at the McCain ad strategy. Of course, the big challenge for all of these campaigns is how much they advertise in the Super Tuesday states. Well, CNN is told that the McCain campaign has bought ad time on national cable, and also in 20 of the Super Tuesday states. And I think we have a map to show you on the wall just to sort of illustrate what this is.

Twenty out of the 21 Super Tuesday states is where the McCain campaign is going to advertise. That one state that they're not going to advertise is in Utah because that is a Mormon stronghold, obviously, going to go for Mitt Romney. So, this is -- this is their strategy.

And in terms of the message that they're going to have in this ad, it's -- they're going to go, Wolf, directly as McCain's biggest challenge, and that is his appeal, or maybe lack thereof, with conservatives.


ANNOUNCER: Guided by strong conservative principles, he'll cut wasteful spending and keep taxes low. A proud social conservative who will never waiver. The leadership and experience to call for the surge strategy in Iraq that is working. John McCain, the true conservative.


BASH: "The true conservative." Again, they're trying to get out what still is John McCain's biggest challenge, Wolf, when he's trying to appeal to Republicans in all of these primary contests -- Wolf.

BLITZER: All right, Dana. Thanks very much. Dana is in Illinois. By the way, you've helped make our politics podcast one of the most popular on iTunes. To get the best political team to go, you can subscribe at You can read my daily blog as well. I just wrote something about the debate last night.

We're getting the numbers in for last night's Democratic presidential debate. It's the highest-rated primary debate in the history of cable news, with a whopping 8.3 million viewers tuning in. And more young people watching than ever before.

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

That's really encouraging, that millions of young people tuned in to watch what was perhaps a very wonkish discussion on substantive issues.

JACK CAFFERTY, CNN ANCHOR: Well, the keyword is "substantive". And it was grownup. And I thought it was terrific. And we'll talk a little bit more about it, but 8.3 million people.

The people who did well last night, Obama and Hillary, did themselves some good with an audience that big watching. And you weren't bad yourself.

BLITZER: Thank you.

CAFFERTY: You have your own blog?


CAFFERTY: I'm going to check it out. Let me read this first.

BLITZER: OK. Thank you.

CAFFERTY: Last night's debate, Hillary Clinton and Barack Obama, was, frankly, a surprise. It was good. It was pleasant to watch.

They were cordial, polite to each other. The discussions were about real issues -- health care, Iraq, some other things. They were conducted by a couple of adults who didn't resort to hackneyed cliches and tired, old campaign slogans. I actually learned something watching it, and I suspect a lot of other Americans did, too.

Gone were the insults and the innuendoes and the child accusations that have marked the previous encounters between these two. And the fact that there was just the two of them allowed the audience to focus in, not be distracted by seven answers to the same question, most of them coming from people who had no more chance of being the next president than I do.

If the tone of last night's debate could somehow be transferred to Washington, replacing the bitter partisanship and gridlock that are currently destroying this country, well, the possibilities would seem limitless.

And at the end of the night, Hillary won. She was smoother, more confident, and more in command of the facts. She had him right at her fingertips. Obama was good, but she was better last night. Assuming the audience was as large as it was, 8.3 million people, I think we can conclude she probably did herself a lot of good last evening.

Here's the question. How important will last night's debate prove to be on Super Tuesday?

You can go to file, which is my blog, and you can post a comment there. And we'll read some of them in a little while.

BLITZER: It's a very popular blog.

CAFFERTY: You know, that's what debates are supposed to be like, I think.


CAFFERTY: Instead of all the carping and people interrupting and bells and whistles. And, you know, folks in the audience distracting, as opposed to -- this was terrific.

BLITZER: We let them answers the questions. We let it breathe. We had a good, serious discussion. And then we moved on. And, you know, it was encouraging that people actually watched.

CAFFERTY: Were you surprised at -- I mean, during the day yesterday, it just sort of caught up with me how big this thing had suddenly become.

BLITZER: Yes. I was -- I mean, I knew there would be a huge audience. We had a huge audience in Myrtle Beach, South Carolina, at the last Democratic presidential debate. This one I think was almost twice as large. It was really, really...

CAFFERTY: Just amazing.

BLITZER: The excitement is building towards Super Tuesday. Excitement building towards the Super Bowl, but there's also Super Tuesday.

CAFFERTY: Well, that's one of our questions later on.

BLITZER: I know that.

CAFFERTY: Which is more super?

BLITZER: Yes. I'll be interested in that, Jack.


BLITZER: Thank you.

Eye-popping price in profit. Microsoft offers billions to buy one of the most popular Internet search engines.

And the world's largest public oil company posts the highest profit ever seen by any U.S. company.

Also, Hillary Clinton campaigns hard in one important Super Tuesday state. We're going to tell you where.

And which presidential candidate would be the best for your taxes? You're going to find out what one skeptical voter thinks.

Stick around. You're in THE SITUATION ROOM.


BLITZER: Much more on the race for the White House coming up, but there are some other big stories we're following right now. A couple of big -- and we mean big -- business stories that we're reporting on.

First, Exxon Mobil, the world's largest publicly-traded oil company, reported fourth quarter profits of $11.7 billion -- billion dollars, and annual profits, get this, of $40.6 billion. These are the highest quarterly and annual profits logged by any U.S. company in history. That would be ever.

Also today, Microsoft made an unsolicited bid of $44.6 billion in cash and stock to acquire Yahoo! Microsoft hopes to close by the end of the year.

Today's news stands in stark contrast to a downturn in the U.S. jobs picture. Listen to this.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are certainly some troubling signs. There's serious signs that -- that we -- that the economy is weakening, and we've got to do something about it.

The other day we got such a sign when, after 52 consecutive months of job creation, we lost 17,000 jobs. The unemployment rate went down, but nevertheless, the serious matter is, is that for the first time in 52 months that we didn't create jobs.


BLITZER: Our senior business correspondent, Ali Velshi, is here with us in THE SITUATION ROOM.

The president acknowledging signs of weakness. Normally he says the economy is strong.

What's going on? Are there any, first of all, signs of strength out there?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: There are. The bottom line is jobs are more important than energy prices or house prices, because without a job you don't have the car to buy the oil, you don't have the money to buy the house. So, 17,000 jobs were lost in January. The president is right, the first time in more than 15 months. But the problem is that we just haven't been creating as many jobs as we should. So the jobs number is the one that's most important.

Now, there are signs of strength. And one of the biggest indicators of some strength or interest in an economy is when companies move to take over other companies, mergers and acquisitions. You talked about that deal, Microsoft making a big bid to take over Yahoo!


VELSHI (voice over): It's the most money ever offered for an Internet company, $44 billion, because Yahoo! is the most visited site on the Internet. But it's not number one when it comes to search. That's Google.

About two-thirds of all Internet searches take place on Google. And search is where the money is. In fact, online advertising is the fastest-growing area in all of advertising. Ads that show up when someone searches for something are the most valuable. Google has been the most successful at bringing in the ad bacon.

A Microsoft/Yahoo! combination would be a strong number two, processing about 30 percent of all searches. And while this deal is not without its hurdles, this industry watchers says if it happens it could change the way we use the Internet.

KEVIN HEISLER, SEARCH ENGINE WATCH: Where you'll start to see innovations will be in things like voice search and video search, and the universal search where they combine all types of different media. And that's going to make searching online much more exciting.


VELSHI: Now, that's the view of most people, that this deal will go through. But the hurdles are there. Yahoo's board has not responded to this offer yet. And the Department of Justice has said they're going to be very interested in seeing the details of this deal.

BLITZER: Ali Velshi, thanks very much.

Let's get back to the race for the White House, head out to Thornton, Colorado, right now. Mitt Romney is speaking at a rally. Let's listen in briefly.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And I believe -- I believe that the experience I've had as a dad, as a person of faith, as a person who lived in the private sector for 25 years -- you see, I've had a real job in the real world, and I think that's important.

(APPLAUSE) And my experience in helping organize the Olympic games and also being a governor has given me the skills to help get America right at a time when we face such extraordinary challenges, and to assure that America always remains the greatest nation on earth.


Now, there have been some politicians in Washington who worked very hard to do the same thing, but they find themselves up a pretty difficult structure there. As a matter of fact, you listen to people who stood up over the last several decades and said the things they wanted to do. Politicians from Washington have said, look, we're going to fix Social Security for you. But they haven't. And then they said that they would rein in excessive spending and balance the budget. But they haven't.

AUDIENCE: But they haven't!

ROMNEY: And then they said that they would find a way to live by the highest ethical standards. But they haven't.

AUDIENCE: But they haven't!

ROMNEY: And they said they'd get health care for every citizen that was affordable and portable. Not Hillary care, not socialized medicine, but health care we can afford. And they haven't.

BLITZER: All right. So Mitt Romney railing against Washington, the subtext railing against his arch rival right now, John McCain, who has been in Washington for a long time.

Let's assess what's going on, on the GOP race for the White House. Joining us now is William Cohen. He's a former Republican senator from Maine. He's the chairman and CEO of The Cohen Group in Washington.

Let's talk about John McCain, Mr. Secretary. Can he win the nomination by appealing predominantly to moderates and Independents rather than some of the arch party conservatives?

WILLIAM COHEN, FMR. DEFENSE SECRETARY: Well, I think that has to be his strategy right now.

They are many wings to the Republican Party. There is the right wing, to be sure, the fiscal conservatives, the religious conservatives, social conservatives. And so you have many wings of the Republican Party.

What John McCain has tried to do is to show that he is a conservative in the sense of a Teddy Roosevelt conservative, someone who's concerned about the environment, about taking on big issues, about taking on big business, and about being fiscally conservative. So I think he can appeal to enough of the conservative wings in the Republican Party and still appeal to the center.

BLITZER: Can he unify, unite the Republican Party? COHEN: I'm not sure about that. There may be those in the Republican Party who would rather been right than to win. But I think that Senator McCain does present a very formidable force for those in the middle and perhaps even some Democrats who would like to vote for a Republican like John McCain.

I think he's going to be a force to contend with, but there may be those on the right who simply say we would rather lose and try again four years from now.

BLITZER: And quickly, also, because we're almost out of time, if he does get the Republican nomination, is there a Republican -- a GOP dream ticket, some running mate that he should look at that would be perfect?

COHEN: I'm not sure there would be a perfect candidate. I think the conservatives are trying to position themselves to force John McCain to pick someone quite more conservative than even he is.

If he picks a moderate, I think that would tell them he's not interested in getting their vote. So I think they're putting pressure on him to move to the right as far as his VP is concerned.

BLITZER: Secretary Cohen, thanks for coming in.

COHEN: A pleasure to be with you.

BLITZER: And there's a major development involving the U.S. and Iran under way right now. The U.S. reportedly set for new security talks with Tehran. You're going to find out when that's expected.

Also, the presidential candidates declare a national ad war. It's all part of the huge media campaign with only days to go before Super Tuesday.





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

Happening now, U.S. funds funneled into the war in Iraq at a rate of $12 million an hour. CNN's Barbara Starr is standing by to take a closer look at the toll that the war spending is taking on the nation's ailing economy.

Also, she could become the first African-American first lady of the United States. Michelle Obama sits down with CNN's Soledad O'Brien. We'll have part of that exclusive conversation. That's coming up.

And last night's Democratic presidential debate through the eyes of undecided Democrats. We will look back at how Hillary Clinton and Barack Obama fared in the dial testing, as it's called.

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

With no clear winner after last night's Democratic presidential debate, Senator Hillary Clinton begins her post-debate push to Super Tuesday by meeting voters in California.

Joining us now is our senior political correspondent, Candy Crowley.

Candy, what were her goals last night, and did she achieve them?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Her goals last night were to show herself as the person most capable of making change.

It was also to kind of reach out, to say to voters, I understand your problems. They believe that is really what won her in New Hampshire. They believe that's her best asset that she has, to say, I understand that you're worried about health care. I understand you're worried about gas prices, to kind of to relate to the audience.

And that was what it was aimed for. And that's certainly what they think she did.

BLITZER: Is there some thinking in her camp that it's still hers to lose, basically?

CROWLEY: Well, I think they believe, going into Super Tuesday, that they have some advantages. Obviously, this is the candidate that has the establishment Democrats behind her, for the most part, exceptions, Teddy Kennedy, Patrick Leahy, who, of course, have backed Obama.

But that really matters in these states, where there are so many of them, that you need to rely on the infrastructure of some of these establishment Democrats.

And there's also the idea that still in some of these states the name Clinton is much more familiar than the name Obama. So, she does have that going for her. So, there are several things moving into that, but here's the question. She has done much better with base Democrats, working-class Democrats, sort of lower educated than Obama's kind of wine Democrats, as they call them.

So, what trumps what? Does the kind of passion that Obama tends to bring out, does that trump what has been sort of the traditional Democratic base? And that's really the big question as we move into Super Tuesday.

BLITZER: Candy, thanks very much -- Candy Crowley reporting.

As part of Hillary Clinton's Super Tuesday strategy, she announced an interactive town-hall meeting that will be broadcast Monday night on the Hallmark Channel and online.

Let's go to our Internet reporter, Abbi Tatton.

Abbi, how is Senator Clinton reaching out to voters for this event?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this town meeting basically combines YouTube, e-mail, text-messaging. Basically, everything that the campaign has been building over the last year to reach out online to voters, they will be putting into play on Monday night to try and get to those voters before they head to those Super Tuesday polls.

They're asking for people to submit questions online, much like they did, remember, over a year ago, when Hillary Clinton first got into the race. But there's also questions being submitted on text message and also in the form of online video. All of it is going to be streamed online at

In the last month, it's been that has seen a big gain in Web traffic, much of it from first-time visitors. Now the Hillary Clinton team trying to push people to their site in the final hours before Super Tuesday -- Wolf.

BLITZER: Thanks very much for that, Abbi Tatton.

There's a host of issues at stake in this year's presidential race, not least of which are taxes and, more specifically, the entire U.S. tax code.

Let's bring in our senior correspondent, Allan Chernoff. He's watching this story for us.

A lot of candidates still left out there with very different tax proposals.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Yes, the Democrats are saying that the wealthy, Wolf, should be paying more in taxes. But all of the leading candidates are talking about tax relief for the middle class. For some voters, though, it's just a matter of who they trust to deliver those lower taxes.


CHERNOFF (voice-over): As much as Donna Rook hates paying taxes, it's tax preparation that really bugs her.

DONNA ROOK, MANAGEMENT CONSULTANT: It's a paperwork nightmare. I'm -- the files and paperwork I have to keep fill -- fill cabinets.

CHERNOFF: Files and files to document business expenses, necessary because Donna, who is a Republican, is a self-employed management consultant.

ROOK: The current tax code is just a mess. It's just a mess. And it takes tons of time.

CHERNOFF: Republican presidential candidates are promising to ease the pain of taxpayers.

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: Simplify the tax code, reduce taxes, keep taxes low.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: My record is 24 years of opposing tax increases.

CHERNOFF: Leading Republican candidates want to retain tax cuts President Bush championed, which are due to expire at the end of the decade. Mitt Romney says he would end taxes for savings on those earning less than $200,000.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And that tax rate should be zero for middle-income Americans.

CHERNOFF: It's Mike Huckabee, though, who has the most radical approach to tax reform, pushing what he calls a FairTax.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: We will be able to escape the tax code.

CHERNOFF: Huckabee claims he wound end income taxes and instead institute a higher sales tax, so Americans pay for what they consume, not what they earn.

On the Democratic side, leading candidates say tax relief should be only for the less fortunate and middle class.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We need to put those tax breaks and tax loopholes back into the pockets of hardworking Americans.

CHERNOFF: Barack Obama and Hillary Clinton say they would give tax credits to the most needy and eliminate tax breaks for wealthier Americans.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I want to restore the tax rates that we had in the '90s. That means raising taxes on corporations and wealthy individuals.

CHERNOFF: Such a plan might benefit Donna Rook. She is solidly middle class. But, as a Republican, she believes in lower taxes for everyone. She put her trust most in Fred Thompson, but, now that he's out of the race, Donna favors Mitt Romney as the candidate most likely to deliver lower taxes.


CHERNOFF: For many voters, this is the issue, especially with the economy slowing down. Wolf, you know tax policy can have a huge impact on the economy.

BLITZER: Well, people are worried about their taxes. And very few like to pay taxes, although we all do.

Thanks very much, Allan, for that. The federal income tax has jumped around since it took effect back in 1913. Back then, the rate in the lowest bracket was one percent. The highest bracket was seven percent. With America in the midst of World War I, the highest bracket jumped to 77 percent. When the Great Depression hit, the top income tax rate returned to the 20s, then roared to record highs during World War II.

During Ronald Reagan's presidency, the upper rates fell dramatically. Right now, Americans in the highest bracket pay 35 percent, while those in the lowest bracket pay 10 percent.

The next four days would be a challenge for any presidential hopeful. Each campaign has one candidate with almost two dozen states. We're going to examine how they plan to get their messages out in the push to Super Tuesday.

Also, Senator Barack Obama picks up another endorsement, but, depending on whom you ask, it could be either a blessing or a curse.

And, later, a lot of voters still on the fence about the two major Democrats still standing. Will get some real-time reviews of last night's debate through the eyes of the undecided.

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


BLITZER: In only four days, many more of you will get your chance to vote in this presidential campaign. On Super Tuesday -- that's next Tuesday -- voters in almost two dozen states will make their choices known.

Our senior political analyst, Bill Schneider, is standing by. He's joining us now live.

Bill, how are the candidates competing in what's essentially a national primary?



SCHNEIDER (voice-over): (AUDIO GAP) national. For the Democrats, it's total war. They have raised much more money than the Republicans. Obama was the first candidate in either party to run national ads, spending over $4 million a week in the Super Tuesday states. Hillary Clinton is spending slightly less, but her totals are climbing.

EVAN TRACY, CHIEF OPERATING OFFICER, CAMPAIGN MEDIA ANALYSIS GROUP: Clinton has been targeting most of the markets in the February 5 states. Obama, in some states, like California and New York, are really zeroing in on sort of the population centers.

SCHNEIDER: In much of the country, Obama is a less familiar figure than Clinton, so his ads often rely on endorsements from local figures.

UNIDENTIFIED MALE: I believe Senator Obama is our best hope for reconciliation.

SCHNEIDER: Ben Nelson is from Nebraska, which votes a few days after Super Tuesday. Obama is already advertising in post-Super Tuesday contests. Clinton has been around a long time. Her ads try to turn that to her advantage.

NARRATOR: She's endured nearly two decades of intense scrutiny. That she survives and thrives speaks to qualities that can serve a president well.

SCHNEIDER: The Republicans will have a limited ad war.

TRACY: All the campaigns right now on the Republican side are essentially out of money and can't carry their message, the difference being Mitt Romney, who can afford to do it himself. But with no competitor in the race that can really compete on a dollar scale, he's got no incentive at this point to go in and spend more of his own money on just TV ads.

SCHNEIDER: John McCain is set to start running ads in all the Super Tuesday states, except heavily Mormon Utah. This ad, fending off criticism of McCain from conservatives, will run on national cable news networks.

NARRATOR: A proud social conservatives who will never waver, the leadership and experience to call for the surge strategy in Iraq that is working.

John McCain, the true conservative.

SCHNEIDER: Mitt Romney's new ad doesn't even target McCain. He's after bigger game.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Hillary Clinton wants to run the largest enterprise in the world. She hasn't run a corner store.


SCHNEIDER: Mitt Romney wants to get conservatives' juices flowing. Now, who is more likely to do that, John McCain or Hillary Clinton? -- Wolf.

BLITZER: Bill Schneider in Los Angeles for us, thank you.

And you can see all the wins and all the losses on Super Tuesday right here on CNN. We're going to have all-day coverage. I will be here at the CNN Election Center in New York with the best political team on television. We will be covering the races before, during, and after the voting -- Super Tuesday right here on CNN.

Let's go to Carol Costello. There's a story that is just coming into THE SITUATION ROOM right now involving a high-profile actor. What do we know, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Yes, this involves Wesley Snipes.

That trial was taking place in Florida. He was accused of tax fraud and for failing to fire -- file tax returns for a few years running. Well, the court has just found him guilty of three counts of failing to file tax returns, but it acquit him of tax fraud. If he had been convicted of that, Wolf, he could have served 16 years in prison.

But he was -- you're actually looking at a live picture now. You see Wesley Snipes outside the courthouse giving a statement right now. This is not live. This is on tape. I apologize.

But he was found guilty of not filing tax returns from 1999 to 2004. He made at least $20 million during that span of time. When he is sentenced, he could face up to three years in prison. As far as I know, they haven't had the sentencing phase of this trial yet. That's to come later. Of course, when that happens, we will keep you posted -- back to you, Wolf.

BLITZER: Thanks very much, Carol, for that update.

In our "Strategy Session," Barack Obama and Hillary Clinton, they came, they saw, and they made nice.


BLITZER: Senator Clinton, that's a clear swipe at you.

CLINTON: Really?


CLINTON: We're having -- we're having such a good time.


BLITZER: But did last night shed any light on the Democrats' strategy for Super Tuesday? We're watching the story.

And Mike Huckabee, he won in Iowa, but has since faded. Can he capitalize, though, on Super Tuesday's Southern states and get back into the winner's seat? Stephanie Cutter and John Feehery, they're standing by right here for our "Strategy Session."



BLITZER: The race to Super Tuesday intensities, and we have plenty to contemplate as we head into this all-important campaign weekend.

Joining us now in our "Strategy Session," Democratic strategist Stephanie Cutter and Republican strategist John Feehery.

All right, guys, let's talk about last night.

First of all, Stephanie, did you think either Obama or Clinton won decisively?

STEPHANIE CUTTER, DEMOCRATIC STRATEGIST: I don't think anybody won decisively. I actually think it was a draw. They both made very strong closing arguments going into February 5.

They both scored points against each other, but I think answered a lot of questions for the undecided voters.

BLITZER: What did you think, John?

JOHN FEEHERY, REPUBLICAN STRATEGIST: I thought the Oscar went to Hillary, actually. I think she won on the technical points of kind of pointing at Obama's lack of experience, which I think is the point that she need to make, whereas I think Obama really didn't go at the lack of trust issue that he needed to do with Hillary.

BLITZER: At one point, she was very strong in trying to defend her vote authorizing the war in Iraq, Stephanie.

CUTTER: Right.

BLITZER: Let me play this little clip.


CLINTON: I have said many times if I had known then what I know now, I never would have given President Bush the authority. It was a sincere vote based on my assessment at the time and what I believed he would do with the authority he was given. He abused that authority. He misused that authority.


BLITZER: What did you think of the answer?

CUTTER: Well, I think that, any time she has to explain her vote, it's not a good place for her to be in a debate. And it allowed Barack Obama to come back and have a very clear answer about the need to be right on day one. So, any time she's talking about Iraq or -- or things that she's got to over-explain, it's a bad place for her to be.

BLITZER: What did you think, John?

FEEHERY: Well, I think Stephanie is absolutely right. The more she explains that stuff, the more she deflates her excitement with the Democratic base. And she doesn't want to go there.

Actually, I think it gets back to that whole trust issue, too. Where Obama really needed to nail her on the trust issue, I think you did. I'm not sure Obama did. BLITZER: Here is -- I don't know if I did, but...


BLITZER: ... that -- that may be your -- your opinion.


BLITZER: Let's talk a little bit about this endorsement from, the liberal group, the group saying this, "The enormity of the challenges requires someone who knows how to inspire millions to get involved to change the direction of our country and someone who will be willing to change business as usual in Washington. Senator Barack Obama has proved he can and will be that president."

What do you make of this endorsement of Barack Obama, Stephanie?

CUTTER: Well, I think that MoveOn has three million members. About two million of them are supporting Barack Obama enthusiastically.

Their reasons for supporting him are similar to the reasons that other people across the country are coming out in support of him. These are not Hillary Clinton's traditional voters. So, it shouldn't be a surprise that Barack got this endorsement. In terms of what it means on primary day, it means more bodies, potentially more money, more votes. But now is the time that they need to start delivering on that.

BLITZER: I assume, John, you think that, in the Democratic contest, this could be a plus for Barack Obama. But, if he gets the nomination, it would not necessarily help him down the road. Is that your opinion?


FEEHERY: You got it, Wolf.

CUTTER: How did you know?


FEEHERY: This is the organization that has had "General Betray Us." And I don't think that the "General Betray Us" organization is going to be good with independent voters, especially, as it turns out, the -- the surge is actually working. And I think that this will hurt him with independent voters. But I think Stephanie is right. It will help him with the -- the Democratic Internet base.

CUTTER: However just one point, Wolf. He's already getting those independent voters. So, to the extent that it potentially hurts him in the general election, he's already appealing to those people. I don't think a MoveOn endorsement is going to change that.

BLITZER: We're just getting word -- and I want both of you to weigh in -- the "L.A. Times" -- California is big Super Tuesday state, the biggest on Tuesday.


BLITZER: The "L.A. Times" just now deciding to endorse John McCain and Barack Obama. That's a familiar refrain we're getting from a lot of newspapers around the country.

What do you think about that, Stephanie?

CUTTER: Well, that's the biggest paper in the state. And it's also considered a national paper. So, it's going to make major news. To the extent that you think endorsements matter, I think this is probably a big one.

BLITZER: Does this matter? What do you think, John?

FEEHERY: No. I think it actually marginally hurts McCain with the Republican base in California.

You know, the fact of the matter is, is that "The New York Times" endorsement didn't really help McCain that much, I don't think, with the Republican base. And I don't think the "L.A. Times" endorsement helps him.

You know, he has talked about how it helped in Manchester when he got "The Manchester Union." That was -- that was a big deal. But, for Republicans, they don't really like the "L.A. Times," but they really dislike "The New York Times."


BLITZER: And, John, Mike Huckabee is -- he's trying to stay really relevant in this contest.

I want you to listen to what he said. Listen to this little clip.


MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Very few news organizations would call on an election with 8 percent of the vote in. And, so, I think those who are saying, well, it's a two-man race, well, I have got about as many delegates as Mitt Romney.


BLITZER: All right. What does he need to do, though, to make sure that he is relevant?

FEEHERY: Well, you know, he needs to sweep the South. And he -- and then only be relevant at the convention. I don't think he's going to have a shot at winning the delegate count.

And the other way he can be relevant is continue to pound on Romney, which will have an impact on Romney. And then, frankly, I think it will split the vote and make it easier for McCain to get it. And maybe he will be the vice presidential candidate. Who knows?

BLITZER: We will see.

All right, guys, thanks very much, John Feehery and Stephanie Cutter...

CUTTER: Thank you.

BLITZER: ... in our "Strategy Session."

FEEHERY: Thanks, Wolf.

BLITZER: If you have given any thought to the cost of running a presidential campaign, hold onto your hat. We have crunched the latest numbers, and they're not for the faint of heart.

And John McCain's star may be rising, but Mitt Romney certainly isn't giving up. How he plans to come back, that is coming up in our next hour.

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


BLITZER: In today's Political Ticker: Ever wonder how much money it takes to run for president? More money than many of us will ever, ever see. We're just getting fund-raising and spending numbers for the fourth quarter of last year for the campaigns. And take a look at this.

On the Republican side, John McCain spent just more than $10 million. But Mitt Romney spent more than three times that amount during the same time period. Mike Huckabee just spent more than $5 million.

On the Democratic side, Hillary Clinton and Barack Obama spent about the same amount. That would be Obama spending just more than $40 million -- million -- and Clinton spending just under that for the fourth quarter, huge sums of money.

The fun and games of Super Bowl are only two away, but a powerful Republican senator wants serious answers from the NFL right now. It involves the recent New England Patriots cheating scandal. Arlen Specter wants the league to explain why it allowed a taped piece of evidence to be destroyed. Specter calls it inexplicable.

Reacting to the news, the Patriots coach called it a matter for the league. The Patriots play in the Super Bowl Sunday against the New York Giants.

And politics causing a disagreement between husband and wife. New York's powerful Democratic Congressman Charlie Rangel is a staunch supporter of Hillary Clinton. But we're just learning his wife supports Barack Obama.

Obama's campaign has put out a campaign showing that Alma Rangel supports him in it. She says -- and I'm quoting now -- "I believe Barack Obama has the ability to unify this country and the character to stand up for what's right, instead of what is popular."

Remember, for the latest political news any time, you can check out Look at that, the Political Ticker.

Ann Coulter wants Clinton over McCain. They will have to go there and read that story, if they're interested. But it sounds intriguing.

CAFFERTY: Well, yes, it does. I -- well, I don't know. I -- my guess is that, if the country goes the way I think it's going to go in September, a lot of these people are going to be selling pencils, instead of being on the bestseller list.


The question this hour is, how important will last night's debate prove to be on Super Tuesday? Doesn't Arlen Specter have anything to do? This happened months ago, and it's up to the NFL. That has nothing to do with my question. It just occurred to me when I was listening to Wolf.

There are things he could actually be investigating that matter. But Bill Belichick isn't one of them.

How important will last night's debate prove to be on Super Tuesday?

All you have to do is say, I thought somebody won, and, boy, do you hear from people who disagree.

Anyway, William writes, "Last night a pleasure compared to the children who debated the night before. I am a registered Republican and was appalled at the Republican debate. I will be voting Democratic this time around. It was a pleasure listening to two adults compare the issues. Hopefully, we will have them both in the White House."

Thank you. That's for you.


CAFFERTY: That's live television. It's a funny thing.

J.C., "Mr. Cafferty, With all due respect, you could not be more wrong. Barack Obama won the debate. Why? Because the pleasant tone you liked so much is part of the kind of change Obama is bringing to American politics. After her rudeness toward Obama hurt her in South Carolina, Senator Clinton realized that she has to change her tone. Obama has always been polite and focused on the issues. Clinton had to change her approach to stay competitive. Obama set the tone. Obama won the debate."

Kayla writes, "If nothing else, the debate last night pumped up the Democrats to take on the Republicans. I think Democratic turnout at the polls on Super Tuesday will be record-breaking, and in November we will have the first black male or the first female president this country has ever had."

Roland writes from Colorado, "This was Obama's best debate. He was substantive, eloquent, presidential, and humorous. One of his best points regarding judgment was made. It's important to be right on day one. The Clintons had to clean up after the first Bush, and now the second Bush? No way. The two central issues in this campaign, character and the past vs. the future. Only Obama had the night and our future."

And, finally, Elena writes, "I really enjoyed the debate between two dynamic, intelligent people. All things being equal, Hillary got my vote. And, Jack, I am impressed by your question. Actually, I'm floored."

What do you mean?


CAFFERTY: We do questions every day.

BLITZER: Excellent questions.

CAFFERTY: Yes. All right.

BLITZER: And you have got an excellent blog, too.

CAFFERTY: I do, caffertyfile --

BLITZER: Love that blog.

CAFFERTY: There you go.

BLITZER: Thanks, Jack.

CAFFERTY: You're welcome.