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Gov. Ed Rendell on Current State of Democratic Party; Obama Speaks Out on Pastor's Remarks; Presidential Candidates and Their Stance on Earmarks; Struggling U.S. Economy Remains No.1 Issue

Aired March 14, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: But happening right now, President Bush warns against overreacting to the nation's economic problems. And the Democrats, who want his job, complain he's not doing enough. Can any of them do anything to ease the pain?
Plus, new progress in setbacks in the campaign for primary do- overs. Can Democrats actually reach a compromise? I will ask the governor of the next big primary battleground, the governor of Pennsylvania.

And we will have more on Barack Obama drawing a sharp line now between his longtime pastor's controversial views and his own. But is it enough to put the matter to rest?

I'm Wolf Blitzer along with the best political team on television. You're in THE SITUATION ROOM.

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

President Bush took yet another stand today at trying to ease economic jitters. But he may have given the Democrats more political ammunition on this issue, this the issue being number one on the minds of American voters right now. That would be the U.S. economy.

One senator says Mr. Bush -- and I'm quoting now -- "is on a different economic planet than the rest of the nation."

Suzanne Malveaux is out of the presidential campaign trail, covering the Democrats and the economy.

But let's go over to the White House first. Our Elaine Quijano is watching this story for us.

All right, Elaine , tell us what the president said, what he didn't say. What's going on?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, President Bush tried to strike an optimistic tone today, predicting that the economy will start looking up later this year. But even some within the president's own party say the president's policies have led to a weak economy.


QUIJANO (voice-over): Steady hands on the economic wheel, that's what President Bush says Washington needs to provide.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When you overcorrect, you end up in the ditch.

QUIJANO: Even as Americans find themselves buffeted by high gas and food prices, the president offered no major new initiatives, telling business and finance leaders at the Economic Club of New York that markets need time to self-correct.

BUSH: Any time the government intervenes in the market, it must do so with clear purpose and great care.

QUIJANO: The president also argued again that Congress should make permanent his tax cuts.

BUSH: If Congress doesn't make the tax relief permanent, they will create additional uncertainty during uncertain times.

QUIJANO: But economists and actor Ben Stein...

BUSH: Ben, you always draw a good crowd.

QUIJANO: ... who in 2005 campaigned with the president to overhaul Social Security, blames tax cuts in large part for today's economic troubles.

BEN STEIN, FORMER NIXON SPEECHWRITER: I love Mr. Bush. And he will always have my vote. And he will always have my appreciation for the many good things he's done. But I think he did this wrong. And we have had fiscal mismanagement on this -- in this country for a very long time now.

QUIJANO: Stein argues that deficit spending under President Bush's watch has left America's economy weak, with much of the U.S.' debt owned now by foreign countries.

STEIN: The chickens have come home to roost. We have to stop, and we owe it to our grandchildren or else we're going leave them as peons of the Asians and of the petro states.


QUIJANO: Now, President Bush and Democrats did agree on a stimulus package to help boost the economy. And the president says those checks will be in the mail starting in May. But Democrats say even more needs to be done, while the president maintains those rebate checks should first be given a chance to work -- Wolf.

BLITZER: All right, Elaine, thanks very much -- Elaine Quijano watching the story.

Meanwhile, Democrats say they know how to solve the nation's economic problems. Suzanne Malveaux is joining us now from Pittsburgh, watching this story.

They have been quite critical, these two Democratic presidential candidates, of the president's economic strategy, and sort of critical of each other as well. What's the latest, Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, Senator Clinton is here in Pennsylvania. She's really playing up the significance of this state, saying that this is the sixth largest state in the country and that this is really a microcosm of the United States.

Obviously, she feels very confident here, the demographics working for her of older women, white rural working-class folks here. She is appealing to them. Barack Obama is, rather, saying that he believes this is just one of 10 contests, but both of these candidates is stressing one thing that voters say very important. That's the economy.


MALVEAUX (voice-over): For the guy who has the top job and those who cannot wait to replace him, there is one thing they can agree on. Issue number one is the economy.

BUSH: We have got an active plan to help us get through this rough period. We're always open for new ideas.

MALVEAUX: Senators Hillary Clinton and Barack Obama have got some of their own. And they are desperately trying to convince voters theirs is the fix.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: You know, too little too late is not an economic strategy. But that seems to be the best that President Bush can offer.

MALVEAUX: The cliche photo-op, Clinton in front of a gas pump, talking about the skyrocketing price of oil.

CLINTON: Both Senator Obama and Senator McCain have sided with Dick Cheney and with big oil.

MALVEAUX: Addressing those hit especially hard in Pittsburgh, Obama is popping up his economic recovery plan, too, touting its affordability.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: "The Wall Street Journal" did an article several weeks ago evaluating our claims, and saying that, if I was able to move my agenda forward, I could in fact pay for all the proposals I have made.

MALVEAUX: So, what are their proposals? Obama is offering a $1,000 tax cut for working-class families, amending the North American Free Trade Agreement to protect U.S. jobs, and create new ones by investing in renewable energy.

Clinton promises to also lower taxes for the middle class, confront the housing market crisis, and create new jobs, like Obama, by investing in alternative energy.

(END VIDEOTAPE) MALVEAUX: And, Wolf, a feather in Hillary Clinton's cap. She got endorsement of the mayor of Pittsburgh. He is only 28 years old and he said he's proud to be a young person who is supporting Senator Hillary Clinton -- Wolf.

BLITZER: She got the support of the mayor of Pittsburgh, Philadelphia, and the governor, Ed Rendell. We are going to be speaking with him shortly.

All right, thanks very much, Suzanne, for that.

Barack Obama has been besieged by criticism over what many see as some very outrageous remarks by his spiritual adviser. Today, the candidate offered a very, very blunt response.

Let's go Chicago. Susan Roesgen has been watching this story for us.

Update our viewers on what the reaction from Barack Obama has been, Susan.

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Well, it has been long and forceful, a long and forceful repudiation of the remarks of his retired pastor, Reverend Jeremiah Wright.

Senator Barack Obama says, Wolf, that Reverend Wright has never been his political adviser. He is his pastor. And yet here again is an excerpt for one of the sermons that Senator Barack Obama himself today says is appalling.


REVEREND JEREMIAH WRIGHT, TRINITY UNITED CHURCH OF CHRIST: Hillary was not a black boy raised in a single-parent home. Barack was. Barack knows what it means to be a black man living in a country and a culture that is controlled by rich white people. Hillary can never know that. Hillary ain't never been called a (EXPLETIVE DELETED). Hillary has never had her people defined as a non-persons.


ROESGEN: Well, today in this blog, part of this blog here that you can find on, Senator Barack Obama says: "I categorically denounce any statement that disparages our great country or serves to divide us from our allies."

He says: "I also believe that words that degrade individuals have no place in our public dialogue, whether it's on the campaign stump or in the pulpit. In sum," he says, "I reject outright the statements by Reverend Wright that are at issue."

Now, Wolf, I tried to reach out to Reverend Wright to get his response now to the fallout from this particular sermon, which was on Christmas Day, shortly before the reverend retired, and to some of the other things he has said, and I was told by a church spokeswoman that the reverend is overseas on vacation -- Wolf. BLITZER: Susan, thanks very much -- Susan Roesgen in Chicago watching this story.

This important programming note for our viewers. Senator Obama will be a special guest tonight on "ANDERSON COOPER 360" 10:00 p.m. Eastern. They are going to be speaking about this controversy and a whole lot more -- Obama and Anderson tonight, "ANDERSON COOPER 360."

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

JACK CAFFERTY, CNN ANCHOR: In the off chance you haven't had your fill of political debates this primary season, well, you're in luck. Hillary Clinton, Barack Obama have already faced off 20 times. They could meet for at least one more, maybe two more debates.

Both candidates have agreed to debate in Philadelphia next month ahead of the April 22 Pennsylvania primary. Obama also has agreed to a debate on April 19 in North Carolina, but no word yet on whether Hillary Clinton is in for that one.

It is not clear exactly how much effect these debates have on voters, although the TV ratings for most of them have been very high. Throughout this primary season, we have pretty much seen it all during these face-offs. Clinton and Obama have been nice to each other. They have been nasty to each other. They have been honored to share the stage with each other. And then they have attacked each other.

The single most memorable moment in all of these meetings may have been when Senator Clinton was asked about giving driver's licenses to illegal aliens. That idea was put forth by her good friend and supporter, client number nine, also known as New York Governor Eliot Spitzer. So, what is yet to come in Pennsylvania, perhaps North Carolina? Anyone's guess.

Here's the question: How interested are you in more debates between Barack Obama and Hillary Clinton?

Go to You can post a comment on my blog -- Wolf.

BLITZER: Jack, thanks for that.

Jack Cafferty will be back shortly with the best political team on television.

The governor of a state with a key upcoming primary apparently would rather watch what is happening amid a fierce presidential race. Listen to this.


GOV. ED RENDELL (D), PENNSYLVANIA: I am sure as heck glad I'm not the Democratic chairman in 2008.

(END VIDEO CLIP) BLITZER: The Pennsylvania governor, Ed Rendell, he talks to me about Democrat vs. Democrat, problems facing Howard Dean, the Democratic Party chairman. We will talk to the governor just coming up.

And what's the potential for a presidential ticket featuring John McCain and Colin Powell as his running mate? You're going to find out what John McCain thinks about that.

And, attention, car owners. Don't park certain GM vehicles in the garage. They're being recalled. The company says they could catch fire.

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


BLITZER: In the never-ending Democratic presidential race -- it seems like it is never-ending at least -- the Pennsylvania contest is certainly one that could be a be-all, could be an end-all of this primary season. We shall see on April 22. At least that's what some people are suggesting with all the attention now being paid to that very delegate-rich state.

And joining us now from Pittsburgh, the governor of Pennsylvania, Ed Rendell. He's a strong supporter of Hillary Clinton's.

Governor, thank you for coming back.

RENDELL: My pleasure, Wolf.

BLITZER: Let's talk about this memo that the Obama campaign manager put out.

Among other things, it says this: "The Clinton campaign would like to focus your attention only on Pennsylvania, a state in which they already declared that they are unbeatable. But Pennsylvania is only one of 10 remaining contests, each important in terms of allocating delegates and ultimately deciding who are our nominee will be."

What do you make of that? What -- does he have a point?

RENDELL: Well, first of all, I don't think -- I have been searching for someone in the campaign who said we were unbeatable. You heard me say, I guess on this program, Wolf, that any time Barack Obama has five, six weeks to campaign in a state, you know that that's going to be a tough struggle. He's such an effective campaigner. So, that is for number one.

Number two, of course. The Clinton campaign is not just campaigning straight out in Pennsylvania. We think we can do very well in West Virginia, in Kentucky, in Indiana, hold our own in North Carolina, win a big victory in Puerto Rico.

But, clearly Pennsylvania, I think the memo misses a key point, Wolf. And that is, everyone knows there are four states that generally wind up deciding tight presidential elections, Ohio, Florida, Michigan, and Pennsylvania.

When I was DNC chair, I spent the last month with a yellow pad going over electoral strategies. There wasn't one where the Democratic candidate could win without carrying Pennsylvania.

BLITZER: So, let me interrupt, Governor. Whoever wins the Democratic primary in Pennsylvania, should that person be the Democratic nominee?

RENDELL: No. But the person who shows that they can win in Florida, Michigan, Ohio, and Pennsylvania should have a very persuasive case...


BLITZER: Even if that person is behind in the elected or so- called pledged delegates?

RENDELL: Well, sure, because the general election, Wolf, is not about even a popular vote. It is about an electoral vote.

And we Democrats who want to elect a president have to keep that in mind. I think Hillary Clinton may actually go ahead if we revote Florida and Michigan, or we count Michigan and Florida, may wind up being ahead in the popular vote, even though she will be behind in the delegates.

But, either way, the key here is, it is electoral votes in the fall. We're not carrying Idaho. We're not carrying Wyoming. We have to carry three of the four --

BLITZER: So, basically, the superdelegates -- and you're one of those superdelegates -- the most important factor in deciding who to support would be electability against John McCain; is that what you're saying?

RENDELL: Absolutely. I think that's the role of the superdelegates. That's why we're there. If Barack Obama had won or continues to win states like a Pennsylvania, then I would consider voting for him as a superdelegate, as much as I love Senator Clinton.

But the key for me is winnability. We have two great candidates. I could support either one of them in the fall wholeheartedly. I like Senator Obama very much. I just think Senator Clinton is uniquely qualified at this time.

BLITZER: So, I take it you don't think -- you don't necessarily agree with Mark Penn, the Clinton strategist, who said this on a conference call yesterday: "We believe that the Pennsylvania primary result will show that Hillary is ready to win and that Senator Obama really can't win the general election"?

RENDELL: No. Can't win, absolutely not. I don't agree with that. But I do agree with the fact that, looking at the Electoral College, Hillary Clinton is the safest and surest way for Democrats to take back the White House.

BLITZER: If you were still chairman of the DNC, what would you do about Florida and Michigan right now?

RENDELL: I would revote both of them.

BLITZER: Full-scale primaries?


RENDELL: Full-scale primaries. That's the only way to do it fairly. I would revote both of them.

And I think, look, Senator Obama has always said the popular vote should be important. Well, how can we have a national popular vote that is going to determine which of our two contenders should get it without letting the people of two crucial --


BLITZER: What about the mail-in ballot in Florida, that proposal? Does that make any sense?

RENDELL: I think as a last resort. But let's have real primaries. Real primaries are like real elections. We're not going to have mail-in ballots come November. Let's have a real primary. Let's see who can win a real primary in Florida and Michigan.

BLITZER: Is your successor over there, Howard Dean, is he showing the leadership you want?

RENDELL: He's in a very tough position. I'm sure as heck glad I'm not the Democratic chairman in 2008. But I think Howard should grab the bull by the horns here and say, we're going to revote as long as we can persuade the Michigan and Florida legislature to do so.

We're going to revote. And we're going to have full-fledged primaries, and let's get this done. Let's get it done fairly. And whoever wins, take a look at Florida and Michigan and Pennsylvania and Ohio and Texas and California and Massachusetts and the big states, and throw in Wisconsin, which Senator Obama won, and Virginia, and let's figure out who our strongest candidate is going to be, because the stakes are so high.

No offense to Senator McCain, who you know I like, but we need to change the direction in Washington.

BLITZER: All right.

RENDELL: And we have got to put our strongest horse in the race.

BLITZER: Governor Rendell, we will speak next week.


BLITZER: Thanks very much. RENDELL: See you, Wolf. Take care.

BLITZER: So much work, so little time, Congress right now to go -- it's set to go on spring break. With so much gridlock, is now a good time to take a vacation? I will talk about that with the best political team on television.

And new developments in the case of John Ritter's death. A jury gives a verdict regarding two doctors who diagnosed and treated the actor, who died back in 2003.

We will have the latest -- right here in THE SITUATION ROOM.



BLITZER: John McCain is getting plenty of advice about possible running mates.


UNIDENTIFIED FEMALE: My father wants to let you know that you should consider Colin Powell for vice president.


BLITZER: So, would Colin Powell even consider the number-two spot? Who else might be a powerful asset to John McCain?

Plus, Barack Obama has opened up about the pet projects he has pushed for. Did he reveal anything that might turn off voters? We're taking a closer look.

And will all the talk about revotes in Florida and Michigan ever lead to real action? The best political team on television standing by for that and more -- right here in THE SITUATION ROOM.


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

Happening now, Barack Obama releases details of his pet project spending, include one that is raising some eyebrows. We're going to show you why.

A fresh wave of troubling economic news -- President Bush now saying we're facing tough times. So, who is to blame and what can the president do about it, any president?

Plus, it's one of the major campaign claims, but how did -- how big of a role did Hillary Clinton actually play in creating that popular children's health insurance program? We're checking the facts, all of this coming up, plus the best political team on television.

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

Barack Obama is coming clean about some of his pet projects, the special funding requests he's made as a U.S. senator.

Let's go to Brian Todd. He's watching the story for us.

The question, I guess, is, is this going to help or hurt his campaign, Brian?

BRIAN TODD, CNN CORRESPONDENT: The jury is still out on that a little bit, Wolf. He has just released some new information, as you just mentioned, some of it leading to some serious questions.

Recently, pork projects have become everyone's favorite boogeyman in politics. John McCain started railing on them years go. Hillary Clinton and Barack Obama now joining him on that score. But, as we mentioned, for at least one of them, there are some political land mines.


TODD (voice-over): Each major candidate trying to capture momentum by squaring off against that old staple of machine politics, earmarks, those funding requests made by lawmakers often for their home districts, sometimes tacked on to unrelated spending bills.

John McCain maintains his line of attack on pork.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I have never asked for, nor received a pork-barrel project from my state, and I'm proud of that.

TODD: Barack Obama has, but is now coming clean on the details.

OBAMA: And I have been consistently in favor of more disclosure around earmarks.

TODD: Responding to a challenge from McCain, Obama releases his list of earmarks during his three years in the Senate, nearly three- quarters-of-a-billion dollars worth.

ROGER SIMON, CHIEF POLITICAL COLUMNIST, "POLITICO": He didn't say, I'm only going to release those things that make me look good. He released some things that don't make him look so good.

TODD: Like a 2006 request for a million dollars for the University of Chicago Hospital. Obama's wife, Michelle, was a vice president there at the time.

The Obama campaign says Michelle Obama had nothing to do with that request, with which was turned down by Congress. And, in fact, Barack Obama also asked for money for several other Illinois hospitals, as well as dozens of other projects for public works.

Another request that raised eyebrows, $8 million for updated ammunition for the Bradley fighting vehicle. That project was overseen by military contractor General Dynamics.

On that company's board of directors James Crown, a major Obama fundraiser who's on the candidate's Finance Committee. The Obama campaign and an official at General Dynamics tell us Crown had nothing to do with that earmark.

Analysts say these disclosures likely won't cost Obama many votes.

CHRIS CILIZZA, "THE WASHINGTON POST": This is in keeping with Senator Obama's pledge that he's going to do things differently. He's going to reform Washington. It's going to make an open book. And I think a lot of it, though, is designed to draw a contrast with Senator Clinton.


TODD: So far, Hillary Clinton has resisted pressure from Obama and McCain to release all of her past earmark requests in the Senate, but she has announced and disclosed, in fact, the earmarks that she has already won. And her campaign tells us they'll start to release all of her requests this year. John McCain always refused, as we said, to ask for spending projects for his home state -- Wolf.

BLITZER: On Hillary Clinton, Brian, any timetable for when she'll actually release that information?

TODD: Her Senate office says they're going to do that every time they make a request and they just let us know today about more than $22 million they've asked for in military construction projects for the next fiscal year. So as of now, they're making good on their promise.

BLITZER: All right, Brian, thank you.

President Bush conceding the U.S. economy right now going through what he calls a tough time. Let's discuss that and more with our senior political analyst, Gloria Borger. She's here in Washington. And joining us from New York, our own Jack Cafferty and our senior analyst, Jeff Toobin.

They are all part of the best political team on television.

Jack, let me play a little clip of what the president said today about the economic times we're all going through.

Listen to this.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You know, I guess, the best way to describe government policy is like a person trying to drive a car in a rough patch. If you ever get stuck in a situation like that, you know full well it's important not to overcorrect.


BLITZER: All right. Is that going to reassure the American public to hear that?

CAFFERTY: When was that he's talking about, going into a skid in his car? The economy is going into the toilet here, Mr. President. We've got, actually, kind of a perfect economic storm going on.

We have rising commodity prices, falling interest rates, a slowing economy. It is the Fed's worst nightmare. They're expected they're going to cut interest rates at least three quarters of a point, maybe as much as a full point, next Tuesday.

But that's inflationary. It will drive down the value of the dollar, which in turn drives up the price of oil price, the price of gold. Gasoline has already hit $4 a gallon. We're losing jobs. The foreclosure subprime mortgage crisis.

Bear Stearns having to barely avoid not being able to meet the calls at the teller window thanks to the help from the Federal Reserve. We need a little more analysis than it's like driving your car on the slippery road, I think.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, but let's give the president and the Congress a little bit of credit here, Jack, because they did pass an economic stimulus plan. There is some controversy over whether or not people believe it's going to help.

But the checks should be arriving sometime this spring. And it just might help a little bit. And insofar as the Congress can work with the president, that's as fast as if ever seen anything happen.

CAFFERTY: Well, that's a --

BLITZER: Can a president --

CAFFERTY: That's fair.

BLITZER: Let me just -- go ahead, Jack, if you want to respond quickly.

CAFFERTY: No, no, I say that's a fair point. But those checks aren't going to go out until the middle of May. Most of the money probably will be used by people in trouble to pay down some of their debt and not be used to accelerate consumer spending, which is what needs to be done in order to start to bring the economy off the bottom of a recession.

So it's questionable how much help that will be. But they did work together. I've got to give you that. That's a good sign.

BLITZER: Jeff, can this president -- in fact, can any president really do anything to turn the economy around, because it's really going through some tough times right now.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, I know there is a tremendous academic literature on how much, if anything, the government can do. But the one thing I know for sure is that when there are good times, the president certainly takes credit.


TOOBIN: But when there are bad times, oh, it gets very complicated, there are large forces at work. Look, the party -- the presidency changes hands in recessions. It happened in 1992. It happened in 1976. I mean this is a bad time for Republicans to be running for president.

BLITZER: Because whenever the -- there's bad economic times, Jack, and you know this from history -- the party in power in the White House, as Jeff is alluding to, they suffer almost always. And you can only go back to the '92 election, when a little known governor from Arkansas beat an incumbent and because it was the economy, stupid, as they were saying then.

CAFFERTY: Well, and this time around it will be the economy, stupid again, along with the war and $9 trillion in debt and low approval ratings -- I mean John McCain has got a lot of work to do if he wants to win this election, I think, because this recession, according to economists surveyed by "The Wall Street Journal," is expected to be worse than the previous two recessions. And one of those, at least, was pretty bad so.

BORGER: And when there's economic anxiety, Wolf, it always tends to favor the Democrats. This is their issue set. They can talk to you and say we want to cut taxes for the middle class. We want to figure out a way to provide health insurance for everyone in this country so you don't have to pay for it. These are the kinds of issues that speak to Democratic voters. And that's why the Democrats feel it's going to be such a good year for them.

TOOBIN: And the Republican Party currently stands for one thing in the economy -- tax cuts. That's all they're for -- and in good times and bad times. And it's going to be interesting to see whether the public responds to that, because if they don't, the Republicans don't have much else to offer.

BLITZER: Well, if you listen to McCain, though, Jeff, he says tax cuts -- make sure that the Bush tax cuts of 2001 and 2003, which he initially opposed, but make them permanent now. But he also says greater deregulation and he'll veto any pork barrel spending. He never went with those so-called earmarks and he said that will be the law of the land if he's president.

TOOBIN: He does, certainly. But I don't think anyone thinks earmarks are a major impact on the national economy. I mean they may be a tremendous waste of government money, but I mean, in terms of national economic policy, it's really all about tax cuts, I think (INAUDIBLE).

CAFFERTY: One other quick point on the tax cuts. The worst time in the world to raise taxes is when the economy is weak. And the Democrats are saying they've got to roll back the Bush tax cuts. McCain might be right to leave them alone short-term. Because if you start rolling back tax cuts and putting additional tax pressure on people who don't have any money as it is -- they're losing their houses, we're losing jobs -- it's only going to prolong and perhaps make the recession worse.

BLITZER: Yes. But what Obama and Clinton are saying, Jack...

TOOBIN: Right.

BLITZER: only roll back the tax cuts for those making more than $200,000 or $250,000 a year, keep the tax cuts in place for everybody making under that sum.

BORGER: Um-hmm.

CAFFERTY: Well, but, still, the sum game at the end of that is you're going to raise taxes on somebody and economic theory says you don't do that during times of economic weakness. I mean I'm not a professor at the Harvard Business School...

BORGER: We thought you were.

CAFFERTY: ...but that's the stuff I gather reading the financial pages. No, I'm not -- not yet.

BLITZER: But, you know what, he did get a good night's sleep at a Holiday Inn Express.


BLITZER: And I think that is quite obvious.

All right, guys, stand by. We've got a lot more to talk about.

Hillary Clinton and health care for kids -- how much credit does she deserve for a popular children's insurance program?

We're doing a Fact Check. Mary Snow is all over that story.

And John McCain asks about Colin Powell as a possible running mate. You're going to find out why there's growing buzz about what he didn't say.

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



UNIDENTIFIED FEMALE: My father wants to let you know that you should consider Colin Powell for vice president.

MCCAIN: Thank you.

UNIDENTIFIED FEMALE: And... MCCAIN: Could I respond to that first? Colin Powell is a true genuine American hero. I admire and respect him and he is -- he's one of the finest Americans that this nation has ever produced. And I'm proud to know him.


BLITZER: All right, Jack Cafferty, what do you think, a McCain/Powell ticket?

CAFFERTY: Amen to that. I mean I second everything McCain said. I wish McCain would have -- I mean Powell would have run for president. It would have made a lot of what's going on right now irrelevant, in my humble opinion.

I think Colin Powell is a giant and I wish he would take a more active role in the setting of the direction for this country. I would follow him damn near anywhere.

BLITZER: You know, I interviewed him a few weeks ago, Gloria. He refused to endorse any of the candidates. He even left open the possibility he could go with Barack Obama. He said some very nice things about him. He's staying out of this race right now.

BORGER: Yes. I think Powell is sort of smart to sit back. I think McCain is smart to compliment Colin Powell. But if I had to guess, I would guess that Colin Powell would not be on a ticket with John McCain because Colin Powell has the same problem with conservatives that John McCain has. They don't trust him.

And I think McCain really, probably, has to go to his right in terms of choosing a running mate. And Colin Powell, by the way, doesn't bring any particular state along with him, say Ohio, Pennsylvania, Michigan. McCain may need to bring someone who can actually bring a state with him.

TOOBIN: No chance in the world.


TOOBIN: Powell has had many chances to run for national office...


TOOBIN: He's always turned it down. He's also very ambivalent to negative on the Iraq War, which is McCain's signature issue. And, finally, the two of them would be, combined, 140-years-old. And I don't think that's really what they're going to want to give the American people.

BORGER: But, you know, Powell's complaint on the Iraq War, at least at the outset, was that if you're going to fight it, you'd better bring in enough troops to fight it the right way. And that is, of course, what John McCain has been saying about the Iraq War all along. So, you know, they at least are on the same side of... TOOBIN: Gloria, do you really think there's any chance that they...

BORGER: No. No, no, no. Not at all. But I'm saying these guys are on the same side of the Iraq argument.

CAFFERTY: The first Democratic commercial would be Colin Powell showing those pictures at the U.N. of those little trucks saying these are mobile weapons labs and that would be the end of that deal.

TOOBIN: And he...

BORGER: Right.

TOOBIN: ...and Powell knows that...


TOOBIN: ...which is yet another reason why he doesn't want to (INAUDIBLE).

BLITZER: I don't think he's politically ambitious at this stage in his life at all.

All right, Jack, tell me if this is good for the American people or bad for the American people. Congress right now, today, they're going on spring break until March 31.

They're taking two weeks off. Is that good or is that bad?

CAFFERTY: I don't know. You know, these people are worthless whether they're in town or out of town.


CAFFERTY: It doesn't matter, where they are. They're just worthless. Worthless.

TOOBIN: Oh, boy, that was a...

CAFFERTY: Vote against every incumbent in November.

TOOBIN: That was such a hanging curve ball to Jack.


CAFFERTY: Vote against...

TOOBIN: Boy, I mean, you knew that (INAUDIBLE)...

CAFFERTY: Vote against every single incumbent in November regardless of what party they belong to. Throw them all out in the street -- all of them.

(LAUGHTER) BLITZER: But there's one school of thought, Gloria, that says, you know, we need these members of Congress working every single day, every single hour. They've got to be passing legislation. And there's another school of thought that says let them leave because they won't be causing damage if they're in Washington.

BORGER: Send them home, I say. You know, look, as someone who's spent a great deal of my career covering members of Congress, I have to say that I like a lot of members of Congress. I respect a lot of members of Congress.

And if they want to go have a little bit of a spring break, as long as they don't go down to Fort Lauderdale or wherever, you know, my kids go on spring break, that's fine with me. I think, you know, they're allowed to have a few days off, too. Two weeks? That's a long time (ph).

TOOBIN: And, by the way, if we learned anything this week, it's you can get in plenty of trouble in Washington. So I mean the fact that they're out of town doesn't mean they're going to out of trouble.

CAFFERTY: Touche. You said it was a hanging curve ball. Billy Crystal tried could have hit that pitch.


BLITZER: Hey, guys, thanks very much.


BLITZER: Gloria, Jack, don't leave

Jeff, thank you. Welcome back from your spring break out in Maui.



BLITZER: You did an excellent job for us out there, as well. We...

BORGER: Pool side.

BLITZER: ...have a huge reach, Jeff, no matter where you go. You can run, but you can't hide from CNN.

TOOBIN: Well, thank you very much. I would say it's nice to be back, but that wouldn't be true.


CAFFERTY: A truthful lawyer. My god, make a note of it.


BORGER: We're happy to have you.

BLITZER: Honesty is the best policy, guys. Thanks for that.

We've got "The Cafferty File" coming up in a moment.

Let's check in with Lou to see what's coming up right at the top of the hour.

Lou, what are you working on? You're here in the nation's capital today, as well.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Absolutely. At the scene of the crime, if you will. Tonight at 7:00 Eastern, we'll be talking about one of this country's most prestigious financial institutions that's on the brink of collapse -- saved by the Federal Reserve and Wall Street rushing in to help. But who is helping our struggling working men and women and their families save their homes?

Also, a rising number of lawmakers appear to be taking our illegal immigration crisis seriously. But deep divisions in the Senate over how to stop this illegal immigration crisis. We'll have that report.

And new concerns tonight that the federal government is trying to undermine one of our most cherished constitutional freedoms -- the right to bear arms. We'll have the latest on a case that's being watched all across the nation now.

And Senator Obama finally responding to outrageous anti-American remarks by his long-time church pastor. We'll examine the issue of race and politics, group and identity politics on the presidential campaign trail.

Join us for all of that at 7:00 Eastern, at the top of the hour, right here on CNN, all the day's news -- Wolf, back to you.

BLITZER: Thanks very much, Lou. We'll be watching.

In the ever close Democratic presidential race, every word, every claim by the candidates is getting intense scrutiny, as well it should. At issue right now, Hillary Clinton's efforts to pass a popular children's health insurance program.

Let's go to Mary Snow. She's been doing some fact checking for us.

Mary, how did this dust-up get started?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the "Boston Globe" reports several lawmakers and staffers say Senator Hillary Clinton is exaggerating her role when she talks about getting health insurance for children.

We did a Fact Check.

(BEGIN VIDEOTAPE) SNOW (voice-over): On the campaign trail, Senator Hillary Clinton touts her role in enacting the State Children's Health Insurance Program or SCHIP.

CLINTON: And in 1997, I joined forces with members of Congress and we passed the State Children's Health Insurance Program.

SNOW: The question: Does she deserve so much credit? We posed that question to Democratic Senator Ted Kennedy, who was the driving force behind the legislation. He's also a supporter of Clinton's presidential rival, Senator Barack Obama. He declined comment.

But when the "Boston Globe" asked him if Senator Clinton exaggerated her role, he's quoted as saying: "Facts are stubborn things. I think we ought to stay with the facts."

It quotes Republican Senator Orrin Hatch, who was a sponsor of the bill, saying, "We all care about children, but does she deserve credit for SCHIP? No, Teddy does. But she does it."

His office sent a statement to us saying: "Senator Hatch was talking off the cuff about something that happened 12 years ago and never intended to downplay Clinton's advocacy on health issues."

In the summer of 1997, then President Clinton signed the SCHIP legislation after intense negotiations with Congress. And Senator Kennedy, at the time, credited Mrs. Clinton.

Clinton's former economic adviser, Gene Sperling, says Hillary Clinton had been the driving force behind children's health initiatives before the bill and says while Kennedy and Hatch deserve credit...

GENE SPERLING, FORMER NATIONAL ECONOMIC ADVISER: The reality is that the only way that ever became law was that President Clinton, inspired by Hillary Clinton, decided to make children's health a major press presidential initiative.

SNOW: "New York Times" reporter Adam Clymer, who wrote a book on Ted Kennedy, says both sides deserve credit.

ADAM CLYMER, AUTHOR, "EDWARD M. KENNEDY: A BIOGRAPHY": It's probably a case of a politician, in her case, taking maybe a bit more credit than she's entitled to. But she really did have a significant role.


SNOW: Now, the Clinton campaign says there's no dispute that Hillary Clinton played an active role in working to ensure children, saying any suggestion to the contrary is without merit -- Wolf.

BLITZER: Mary, thank you. Thanks very much, Mary, for that.

Jack Cafferty is asking -- how interested are you in more debates between the presidential candidates Barack Obama and Hillary Clinton? Jack and your e-mail coming up.

And the Democratic presidential candidates give support to New York's incoming governor, David Paterson. Barack Obama offers words of encouragement. Hillary Clinton plans to be at the swearing-in on Monday.


BLITZER: On our political ticker, Barack Obama gaining now ground over Hillary Clinton in a new daily tracking poll. The Gallup Poll shows it's been nip and tuck between the two Democrats so far this month, with Clinton holding an edge at one point and now Obama in the lead.

The tracking poll shows Obama now has 50 percent support of voters -- that would be nationwide -- compared to 44 percent for Clinton. That's the largest lead, by the way, either one of them has had since late February.

New shows of support for the incoming governor of New York from the Democratic presidential candidates. David Paterson will be sworn in as governor on Monday, when Eliot Spitzer steps down over his sex scandal. Hillary Clinton plans to attend the ceremony in her home state. Barack Obama called Paterson to congratulate him. Paterson, by the way, supports Hillary Clinton. But the governor in waiting says Obama did not pressure him to switch sides.

Remember, for the latest political news any time, check out The Ticker is the number one political news blog out on the Web. That's also where you can read my latest blog post. I wrote one about the economy and politics just a little while ago.

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

CAFFERTY: What did you say about the economy?

BLITZER: It's the economy, stupid.


BLITZER: Original thought, right?

CAFFERTY: Yes, I heard that before.

BLITZER: Brilliant.

CAFFERTY: The question -- well, it is.

The question this hour is: How interested are you in more debates between Barack Obama and Hillary Clinton?

There have been 20. There's going to be one, maybe two more between now and the Pennsylvania primary.

Wendy in California writes: "Debates are used to clarify a candidate's stand on the issues. If anybody doesn't know what these candidates stand for, they shouldn't be allowed to vote. I'm sick and tired of the debates. All they offer are sound bites, but nothing of substance. If they were run by the League of Women Voters, as was formerly the case, THEN I'd be interested. Those were much more substantial."

Rob in Maine writes: "I think debates are good. It forces the campaigns to stop attacking each other through surrogates. It makes the candidates actually say whatever they have to say to each other's face. Much more of an adult forum than the he said/she said then resigned that has been going on in the past few weeks."

O.A. In Austell, Georgia: "Come on. These debates are getting out of whack. You become weary of something when it's done too much and I think the Democratic debates are becoming quite weary, to say the least. The only debate I want to see from now on is between the Democratic nominee and John McCain. End of story."

Dick writes: "Yes, please. More debates. Here's my idea -- put the nomination on the line, ask each candidate personal questions, like that moment of truth TV show -- the one who tells the truth the most gets the nomination."

Dan in Arizona: "I thought the California debate was fun to watch. The Texas debate was a little boring. I would still love to see more debates between Clinton and Obama because it helps undecided voters become decide. What else is there to do on Thursday night, unless the Phoenix Suns are playing on TV?"

And Kevin in Warren, Michigan: "More debates? Jack, only if you, Bill Maher and Jon Stewart were the moderates. That would be an evening to remember" -- Wolf.

BLITZER: Kevin has got a point there.

You know, it's interesting, though, Jack, those debates, when we first started doing them -- I remember doing two of them back in June in New Hampshire. There were maybe two or three million viewers watching. The most recent ones -- the one at the Kodak Theatre -- that was 8.4 million. So they -- people may be getting tired of those debates, but they're watching them in huge numbers.

CAFFERTY: I don't think they're getting tired at all. I think there is more interest in this particular upcoming election than I can remember at any time in my adult life, which goes back farther than your adult life does.

BLITZER: I remember. And I agree completely with you, Jack.


BLITZER: I say the more the better.

CAFFERTY: Absolutely.

BLITZER: OK, Jack. See you back here on Monday. CAFFERTY: Good.

BLITZER: Have a great weekend.

CAFFERTY: You too.

BLITZER: Up next, the Hot Shots -- the best pictures of the day.



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

In Virginia, a man walks among the headstones at the Arlington National Cemetery.

In Tibet, protesters gather around burning debris. Buddhist monks continue demonstrations against Chinese rule, which turned violent Friday.

In Colorado, icicles hang from a roof during a snowstorm.

And in Georgia, a family pet dressed for Saint Patrick's Day peeks through her front door at parade goers.

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

Among my guests this Sunday on "LATE EDITION", the Treasury secretary, Henry Paulson, on issue number one for voters in this election year -- the economy. "LATE EDITION" airs at 11:00 a.m. Eastern.

Thanks very much for joining us. I'm Wolf Blitzer in THE SITUATION ROOM.

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