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Obama Tackles Race in America; Economic Crisis Wages on: Fed Cuts Rates; Clinton Focuses on Iraq; New New York Governor Admits Affairs

Aired March 18, 2008 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, taking heat for the racial rhetoric of his former pastor -- Barack Obama takes on the issue of race in America, but he may be taking a bigger political risk in laying bare some of the nation's deepest scars.

Financial markets rally as the Fed throws them another lifeline. But if there's a prolonged economic crisis, do any of the presidential candidates have the experience to handle it?

And just a day after replacing Eliot Spitzer, caught up in his own prostitution scandal, New York's new governor, David Paterson, reveals he had affairs with several women, including a state employee.

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

Barack Obama lays it all out in the open. In a bold and risky speech today, he took on the issue of race in America, race in the campaign and his own identity as what he called, "the son of a black man from Kenya and a white woman from Kansas."

It began as a response to the racially charged rhetoric of his former pastor, the Reverend Jeremiah Wright. And it morphed into both a campaign pitch and an earnest appeal to heal the deepest wounds of American history.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We can accept a politics that breeds division and conflict and cynicism. We can tackle race only as spectacle, as we did in the O.J. trial, or in the wake of tragedy, as we did in the aftermath of Katrina, or as fodder for the nightly news. We can play Reverend Wright's sermons on every channel every day and talk about them from now until the election and make the only question in this campaign whether or not the American people think that I somehow believe or sympathize with his most offensive words.

We can pounce on some gaffe by a Hillary supporter as evidence that she's playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies. We can do that. But if we do, I can tell you that in the next election, we'll be talking about some other distraction and then another one and then another one. And nothing will change.



BLITZER: So can Barack Obama rise above the issue of race by tackling it head on?

Let's bring back Carol Costello. She's watching this part of the story.

Carol, did the speech help Americans learn more about Barack Obama or find some more information out about ourselves?

CAROL COSTELLO, CNN CORRESPONDENT: That's such a tough question, Wolf. You know, voters we talked with today said the speech was both inspiring and disappointing, and here's why.

Obama's comments on race in America did touch a cord. But at the same time, Obama admitted for the first time he was present when Pastor Wright made some of his controversial remarks. In some voters' minds, that is confusing.


COSTELLO (voice-over): Who is he? Is Barack Obama a unifier?

OBAMA: What gives me the most hope is the next generation.

COSTELLO: Or is a secretly a divider -- a man who sits in church passively listening to a pastor who is capable of delivering incredibly divisive words.

REVEREND JEREMIAH A. WRIGHT TRINITY UNITED CHURCH OF CHRIST: No, no, no. Not God bless America, God damn America.

COSTELLO: Who is Barack Obama?

OBAMA: I'm the son of a black man from Kenya and a white woman from Kansas.

COSTELLO: In part because of his white roots, Obama has been accused of not being black enough. Because of the color of his skin, he's been accused of being too black. Now, after the Wright video surfaced, some voters wonder if he's shown a racial side by refusing to totally denounce Pastor Wright.

OBAMA: I can no more disown him than I can disown my white grandmother -- a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed her by on the street and who, on more than one occasion, has uttered racial or ethnic stereotypes that made me cringe.

COSTELLO: The general minister, the head of the United Church of Christ, says Obama's personal story proves he can unify because of his life experience.

JOHN THOMAS, PRESIDENT, UNITED CHURCH OF CHRIST: It is important, as the senator said this morning, to embark on a serious, profound conversation on race beyond the distractions of sound bites and our own particular agendas.

COSTELLO: Some white Democratic voters who watched Obama's speech Tuesday feel they do know Obama little better now. But most wanted a stronger repudiation of Pastor Wright.

UNIDENTIFIED MALE: He has to take a bigger stance and denounce it a hundred percent.

UNIDENTIFIED FEMALE: He's going to try to distance himself from that minister, but I don't know that that's going to fly.

UNIDENTIFIED MALE: Just walk away from that church and that minister. There are plenty of good churches that would welcome him.


COSTELLO: And analysts I spoke with today say Independent voters or Republicans who are tempted to switch sides will find Obama's explanation for Pastor Wright's comments no explanation at all -- Wolf.

BLITZER: Carol, thanks for that. Carol Costello.

While Barack Obama was confronting America's racial divide, Hillary Clinton was nearby, taking on a very different challenge facing Americans -- the war in Iraq.

CNN's Jessica Yellin is joining us now from Philadelphia with more on this story -- Jessica, first of all, how is Senator Clinton reacting to Obama's address?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, Senator Clinton appeared just a mile away from where Barack Obama was speaking in Philadelphia. But her focus, as you say, was a world away in Iraq. But both in her comments and in the question and answer period, she did at least acknowledge Obama's speech.


YELLIN (voice-over): Senator Clinton says she did not watch Senator Obama's speech, but she's glad he delivered it.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: It's an important topic. You know, issues of race -- race and gender in America have been complicated throughout our history. And they are complicated in this primary campaign.

YELLIN: She seemed reluctant to go further.

Has Senator Obama done enough to denounce Reverend Wright's comments?

CLINTON: Well, I think that question should be directed at him.

YELLIN: Is there anything she would add to the discussion of race?

CLINTON: Well, I'd have to read it first.

YELLIN: Did her supporters inject race into this campaign?

CLINTON: Obviously, it's something that take, you know, seriously and will remain as vigilant as I can.

YELLIN: Senator Clinton made these remarks at Philadelphia's city hall, flanked by her supporter, Philly explained by her supporter, Philly Mayor Michael Nutter.

MAYOR MICHAEL NUTTER (D), PHILADELPHIA: Senator Clinton's ability to end the war in Iraq and serve as commander-in-chief from day one.

YELLIN: And she was eager to remind voters that Obama is not the only trailblazer in this campaign.

CLINTON: We will be nominating the first African-American or woman for the presidency of the United States. These are difficult issues. And we have seen that in this campaign. Race and gender are difficult issues.

YELLIN: Still, one political watcher says the controversy over Reverend Wright's comments could help Clinton, even if she never addresses it again.

STUART ROTHENBERG, "THE ROTHENBERG POLITICAL REPORT: People are going to raise questions about his judgment as to why he sat there. And he has acknowledged now that he sat there during some controversial comments. People are going to want to know exactly what were those comments and how offensive were they or weren't they, and why did he accept them?


YELLIN: Now, Wolf, we reached out to six different Clinton supporters, asking them to comment on Barack Obama's speech. None was available to talk to us.

Senator Clinton was asked -- in addition to the Obama remarks, she was asked about the economy and she offered far more in depth answers and lengthy answers to those question -- obviously a topic she didn't want to delve too deeply into today -- Wolf.

BLITZER: All right, thanks very much. Jessica Yellin in Pennsylvania. For the latest political news, by the way, any time, you can always check out our political ticker at The ticker has become the number one political news blog out there on the Web. That's also where you can read my latest blog post. I just posted one before the show on the Obama speech.

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

JACK CAFFERTY, CNN ANCHOR: Barack Obama's campaign is suggesting Hillary Clinton will do just about anything to win -- and that includes destroying the Democratic Party. The Politico reports that Obama's chief strategist, David Axelrod, calls Clinton "the ultimate Washington inside player," who keeps trying to change the rules.

"When they started off," he says, "it was all about delegates. Now that we have more delegates, it's all about the popular vote. And if that doesn't work out, they'll probably challenge us to a game of cribbage to choose the nominee."

Another senior aide thinks Clinton is willing to destroy the party as long as she gets the nomination.

Clinton's campaign has called these comments "unhelpful." Communications Director Harold Wolfson says he doesn't think either side would destroy the party. He says the primary process isn't over yet and we should "let democracy run its course."

At this point, the Clinton campaign is holding out hope that she can top Obama in the popular vote. And if that happens, she'll then try to convince the super-delegates to give her the nomination. Both Bill and Hillary Clinton are calling on the leaders to look at more than just pledged delegate counts when they pick the nominee.

Meanwhile, a new CNN/Opinion Research Corporation poll shows that a majority of Democrats prefer Obama over Clinton -- 52 percent want Obama, 45 percent prefer Clinton.

So here's the question: Barack Obama's campaign suggests Hillary Clinton would do anything to win, including destroying the party. Do you agree?

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

BLITZER: And, Jack, by the way, a lot of viewers were not near a television earlier this morning when Barack Obama gave that speech on race here in America. Coming up here in THE SITUATION ROOM, we're going to have an extended excerpt for our viewers in case they missed it.

Jack, thanks very much for that.

Wall Street surging today, but no one knows what tomorrow will bring. If there is a longer and deeper economic crisis, do any of the candidates have the background to deal with it? And just a day after replacing Eliot Spitzer because of a prostitution scandal, New York's new governor, David Paterson, makes a shocking admission.

And the right to bear arms versus Washington, D.C. 's ban on handguns -- the United States Supreme Court takes on the Second Amendment, this for the very first time. History being made.

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


BLITZER: Stocks surged today after the Federal Reserve slashes a key interest rate by three quarters of a percentage point. The Dow Jones Industrial Average gained 420 points -- its best day in five- and-a-half years. But there's still deep concern about the shape of the overall U.S. economy.

Let's go to Mary Snow. She's looking into the story for us.

Is today's news enough to quell fear of a recession -- Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, the short answer is no. The rally today signaled some relief on Wall Street, but it doesn't erase fears about the overall economy. Economists say they see hope, but say the government needs to do more to help alleviate the housing crisis, which is just one part of the overall picture.


SNOW (voice-over): The Federal Reserve has stepped in again to help boost the economy by slashing interest rates. The president is working to calm nerves.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In the long run, Americans ought to have confidence in our economy.

SNOW: But that confidence was shaken when the Federal Reserve had to bail out investment bank Bear Stearns in the first move of its kind since the Great Depression. Nobody is predicting a repeat of history, but one economist won't completely rule it out, either.

PETER MORICI, UNIVERSITY OF MARYLAND: There is a possibility we could have a depression. We could be looking at 1929. I am not forecasting that and I don't want to be represented as such. But the dangers are real and apparent.

SNOW: Many economists predict those dangers will be contained, saying the Federal Reserve has learned from mistakes of the past, even highlighted in a recent study on its Web site. Its chairman, Ben Bernanke, is considered an expert in the era of the Great Depression.

ALAN BLINDER, ECONOMIST, PRINCETON UNIVERSITY: We're not on the precipice of the Great Depression. But we're facing similar problems, certainly problems in the financial system we haven't seen in the post-World War II era. SNOW: Former vice chairman of the Federal Reserve Board of Governors, Alan Blinder says there's one slice of the economy where the word depression is justified -- the housing sector.

BLINDER: If you look just inside the small sector of the economy -- it's about four percent that is housing -- building houses. They're back in the Great Depression.

SNOW: Some are calling on the federal government to bring back measures that could stem foreclosures.

LYLE GRAMLEY, FORMER FEDERAL RESERVE GOVERNOR: I don't think any of us have any cookie cutter solutions to the problem. But we need to begin thinking outside the box, because what we're experiencing now in financial markets is unlike anything I have seen in more than 50 years of looking at the economy.


SNOW: Now, economists point to a number of measures being considered right now that they believe could help, including a plan on Capitol Hill by Democratic Senator Christopher Dodd and Congressman Barney Frank to have government involvement to make mortgages more affordable. But those economists say the key thing right now is there needs to be quick action taken -- Wolf.

BLITZER: Mary, thanks for that. Mary Snow reporting.

And, by the way, you can check out's special report, "ISSUE #1" -- from protecting your money to finding a job that's right for you. There's a ton of information that could save you a lot of money and a lot of misery. You can go to

And don't forget noon all of this week -- noon Eastern -- "ISSUE #1," our special one hour program on the economy with a lot of information you need to know.

Most political analysts agree that America's economic problems and what can be done to solve them are likely to be at the front of the voters' minds when they elect a new president in November.

Let's go to Brian Todd. He's been looking at the candidates' positions and their credentials when it comes to the economy, which, as we know, Brian, is issue number one.

Here's the question: Which candidate is best poised to take advantage of this issue?

BRIAN TODD, CNN CORRESPONDENT: Well, depending on who you ask, Wolf, it's either all of the above or none of the above when you look at these three candidates. And they've all formulated positions on taxes. They've all been grilled recently about home foreclosures. But actual hands-on experience, especially dealing with one economic crisis after another, well, that's another matter.

(BEGIN VIDEOTAPE) TODD (voice-over): A mortgage meltdown, a credit crisis, oil skyrockets, the stock market slides -- and among America's top three choices for president, not one who's run a business or balanced a state budget.

LARRY SABATO, UNIVERSITY OF VIRGINIA: They basically draw down their capital from their life experiences up to the point of going into the White House. You know, so it a concern. At the same time, I think it's also true that no one can really run a $14 trillion economy who hasn't been there and tried it.

TODD: John McCain does have two decades on the Senate Commerce Committee dealing with a broad range of issues. But one economist says for McCain, Hillary Clinton and Barack Obama, voting on an economic stimulus package may not be the best preparation for what's ahead.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: As lawmakers, you know, there is this sense that you can take a decision, maybe even vote it into law, and then your job is done. And that's now how the economy works.

TODD: When the next president takes office in January, the U.S. may still be facing some tough economic problems. McCain wants to eliminate some taxes, reduce others and cut government spending. Hillary Clinton and Barack Obama want to raise taxes on the wealthiest Americans, while cutting them for low and middle income taxpayers. And they want to bail out struggling homeowners.

CLINTON: You know, a moratorium on home foreclosures for 90 days.

TODD: But most economists would tell you the president doesn't sit there and pull levers running the economy.

So what should we expect of the next president, with more market busting news looming on the horizon?

SABATO: Not specific expertise in the economy, as much as the good sense to surround himself or herself with real experts, people who understand the economic cycle.


TODD: Larry Sabato says that means people who understand what government can do to help the economy and what they cannot do. Now, one economic analyst told us a president who can act quickly but not rashly and at least project an air of decisiveness and confidence -- key there -- that will do more than you would imagine to at least start to revive the economy -- Wolf.

BLITZER: Brian Todd, thanks for that.

He's only been governor of New York for one day, but he's already admitting to a secret. Coming up, the infidelity that's sparking the confession of the state's history-making leader. The bad news about the economy is hitting workers at one of the nation's biggest airlines. Coming up, Delta Airlines offers severance to half -- yes, half of its employees. You're going to find out what's forcing the move. That's coming up.

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


BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

COSTELLO: Well, Wolf, CNN learned that President Bush will hold a special meeting on Iraq with the Joint Chiefs of Staff next week. The March 26 meeting will be the first step in a series of critical briefings and Congressional hearings about the next steps in Iraq. Military sources say that recommendations to the president could include reducing the length of Army tours from 15 months to 12 months.

Delta Airlines is cutting domestic capacity and trimming its workforce in response to record high fuel costs and a weakening economy. In a statement a short time ago, Delta said it would cut service in the United States by about five percent. The airline is also offering voluntary severance packages to more than half of its employees in hopes it will reduce its workforce by about 2000.

Federal investigators are shedding new light on the collapse of the I-35 West Bridge in Minneapolis. An update released a short time ago reveals that more than 191 tons of construction material was piled on the weakest sections of the bridge shortly before it gave way. Piles of rock and sand were piled over steel connecters that were thinner than they should have been. Those connectors have already been cited as a factor in the bridge collapse.

And now in headlines from around the world, China is blaming the Dalai Lama for violent clashes in Tibet and some nearby provinces. The Tibetan government in exile says at least 80 people have died in increasingly violent demonstrations against Chinese rule in Tibet. Local authorities put the death toll far lower. The Dalai Lama heads Tibet's government in exile and is urging his followers to refrain from violence. But China accuses him of orchestrating the clashes to taint the Summer Olympics in Beijing Games.

Back to you -- Wolf.

BLITZER: Carol, thanks very much for that.

It could be the biggest speech in Obama's political career.


OBAMA: If we walk away now, if we simply retreat into our respective corners, we will never be able to come together and solve challenges like health care or education or the need to find good jobs for every American.


BLITZER: If you weren't near a TV this morning when he delivered that speech, we're going to have an extended excerpt for you.

That's coming up in THE SITUATION ROOM.

Also, reaction from the neighborhood where Barack Obama's pastor preached for decades. Plus analysis from both a conservative and a liberal. Much more on this big story coming up.

And he just replaced New York's governor because of a sex scandal. Now he's revealing some secrets of his own -- Governor David Paterson's admission.

And a major cause of flooding plus thousands of stranded passengers equals one big mess. You're going to find out what's going on.

That and a lot more news, right here in THE SITUATION ROOM.


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

Happening now, federal regulators order checks of all maintenance records for all U.S. airlines. Earlier this month, Southwest Airlines was fined more than $10 million for missing inspections on some of its jets.

Severe rainstorms flood homes and ground hundreds of flights in North Texas. Some residents near Dallas had to be evacuated by boat and more than 700 flights were canceled at Dallas/Fort Worth International Airport.

Detroit city council turning up the heat on the city's mayor. A non-binding resolution passed just a short time ago calls on Kwame Kilpatrick to step down. Kilpatrick is accused of lying under oath about having an affair with a staffer.

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

Barack Obama today rejected the racially charged rhetoric of his former Chicago pastor, but tried to put those inflammatory words into the context of America's racially charged history.

So how do people feel about it back home, where the controversy erupted? Let's go to our national correspondent, Keith Oppenheim.

He's in Chicago. He's watching this story.

You're in the neighborhood there near the church. What are they saying, Keith?

KEITH OPPENHEIM, CNN NATIONAL CORRESPONDENT: Well, some mixed reactions overall, Wolf.

First of all, I'm standing right across the street from Reverend Jeremiah Wright's church, where Senator Obama has attended. And I should point out that 95th Street here in Chicago -- a portion of it has been named in honor of Reverend Wright. So it's safe to say that Senator Obama and Reverend Wright are two revered men in this neighborhood.

So the question for a lot of people is how do they react to Senator Obama condemning the words of his pastor without condemning the man?


OPPENHEIM (voice-over): Literally a stone's throw from Reverend Jeremiah Wright's church, we found the childhood home of Deborah Patula (ph). While her mom cooked bacon on the stove, Deborah, her friend Latasha Gardner (ph) and her brother-in-law Anthony Burton (ph) talked about the preacher, the politician and race with me.

DEBORAH PATULA, REACTION TO OBAMA'S COMMENTS ON PASTOR WRIGHT: It was the typical speech around America pretty much in the black churches.

OPPENHEIM: All three agreed Reverend Jeremiah Wright's fiery speech...

REV. JEREMIAH A. WRIGHT, TRINITY UNITED CHURCH OF CHRIST: Barack knows what it means to be a black man living in a country and culture that is controlled by rich white people.

OPPENHEIM: ... was somewhat representative of what goes on in African-American churches that historically, black ministers have preached politics sometimes provocatively.

Still, Anthony Burton felt Pastor Wright went overboard.

ANTHONY BURTON, OBAMA SUPPORTER: I don't agree with the use of harsh political and black liberation antics if it doesn't meet with what's in the Bible.

OPPENHEIM: Keep in mind all three are Obama supporters. All three felt that Reverend Wright's words put Obama on the defensive.

(on-camera): But you're all saying that there is more of a separation between the political beliefs of the pastor and the spiritual faith of a parishioner?

BURTON: No question. We don't all believe in what they're saying politically when I go to church but when I go to church I want to make sure that we meet together in our beliefs and our spiritual beliefs. Not automatically our beliefs politically.

OPPENHEIM (voice-over): Ultimately, these three are asking themselves the central political question. Did Obama help himself with his speech today?

OBAMA: Did I strongly disagree with many of his political views? Absolutely. Just as I'm sure many of you have heard remarks from your pastors, priests or rabbis from which you disagree.

PATULA: I think he's taken a tough situation and turned it to his advantage for the simple fact that he's trying to bridge the gap.

OPPENHEIM: What Latasha Gardner heard was a direct message to African-Americans.

LATASHA GARDNER, ON OBAMA'S PASTOR PROBLEM: There's people who want to hold government accountable and the society accountable for the things that happened in the past. I think he's trying to move forward and not say the issues are not to be dealt with, or, you know, but we're going to deal with them in a different kind of way.


OPPENHEIM: Wolf, I should note that these three people are not regular members of Reverend Wright's church, but they said they have all attended at this church that they know the Reverend Wright. And in terms of Obama's speech, they say they are really looking forward to the next few days to see how his speech today plays nationally because as Obama supporters, they're hoping that their candidate will have elevated the discourse about race.

And they want to see if it will actually help improve his position in the primary contest. Back to you.

BLITZER: And joining us now from Los Angeles, the popular conservative radio talk show host Larry Elder. And joining us in Columbus, Ohio, the Reverend Jim Wallis. He's the author of the huge bestseller, "The Great Awakening."

Gentlemen, thanks very much for coming in.

Larry, let me start with you. You've been critical of Barack Obama. What do you think of his speech today?

LARRY ELDER, AUTHOR, RADIO HOST: I was disappointed, Wolf, and I was saddened. I was saddened because he felt the need to give it in the first place, something that wouldn't have happened had he not joined that hateful anti-Semitic church that's been full of venom.

This is a pastor that has condemned America on 9/11 blaming America for it, has said that the government started the AIDS epidemic. Put drugs in the community. It's been hateful. For somebody like Barack Obama to even attend the church is appalling.

BLITZER: Larry, let me interrupt. When you say anti-Semitic, the Pastor Jeremiah Wright has been very critical of Israel but you're just lumping that to say he's been anti-Semitic because Barack Obama flatly says he never heard him say anything anti-Semitic.

ELDER: Well, the fact that Barack Obama never heard it doesn't mean that Jeremiah Wright does not condemn what he called Zionism and basically equated to racism.

But the other part of this is how Barack Obama handled this. What he should have done is what he's been urging Hillary Clinton to do with respect to her for the war and that is to renounce it. Say I was wrong. I never should have belonged to this church. I should not have stayed at the church. I should have left the church a long time ago. This is not your grandfather's America.

Black people have come a very long way. This is not Selma. This is not Birmingham in the 40s or the 50s or 60s anymore for crying out loud. This is the fairest and freest country where are the most upwardly mobile, best fed, best educated, have the greatest chances for opportunities. Barack Obama represents that.

BLITZER: Reverend Wallis, what did you think?

REV. JIM WALLIS, AUTHOR, "THE GREAT AWAKENING": Well, I think a lot of us are tired of that talk we just heard. I want Americans to read the speech. I just read it. It's a brilliant speech. It's about our future. It's about what could be our future, a more perfect union. It's a speech about opportunity and hope and unity. And that is the contrast to frustration and anger that does exist in the black community, in the black church.

I'm a white person. And I want to say that many white people in the country would be uncomfortable with what often in black churches is talked about week after week because our experience is very different. So Barack understands the anger and the frustration but he doesn't speak that way. He's critical of conclusions and language that he thinks goes too far.

There's a generational turn here. An older generation believes these realities can't change, aren't changing, maybe never will. Barack believes they can. And so here's somebody saying let's move forward. Let's deal with these issues. But the anger and the frustration that is real, it can't bring down the hope and the vision and the opportunity he's offering.

So listen. Americans should read the speech. If that's your vision for the future, then take Barack at his own word.

BLITZER: Larry, when you go to church, you don't necessarily always agree with your pastor, minister, or but you don't necessarily walk out of the church and leave that church.

ELDER: I've never gone to a church where the United States was referred to as the United States of KKK. I've never gone to a black church where the pastor has used the N-word from the pulpit. I've never gone to a church where the pastor has said 9/11 is a result of racism of America and the chickens have come home to roost, which, by the way, was a statement used by Malcolm X to explain why John F. Kennedy was assassinated. I'm not sure how many white people are aware of that.

This pastor is offensive and Barack Obama never should have belonged there. Oprah Winfrey used to belong there. She left precisely because of this pastor. Why hasn't Barack Obama done the same thing?

BLITZER: What about that, Reverend Wallis?

WALLIS: You know Jeremiah Wright's entire career has been boiled down to four or five angry sound bytes, the language of which Barack Obama has repudiated. This isn't the way he talks. He's offering a different kind of vision.

But you know a lot of what Pastor Wright said, America was the last democracy to support democracy in South Africa. He said the country is controlled by rich white people. Who is going to deny that?

The angry conclusion and the rage is what Barack says we have to move past. We have to take the anger and the frustration. We have to heal it. We have to deal with the issues that affect black and white people every day whose lives feel like they're beaten down week after week.

BLITZER: But Reverend Wallis, when Jeremiah Wright said the United States has itself to blame for what happened on 9/11. Barack Obama rejected, repudiated that strongly today.

WALLIS: Sure, and I do, too.

BLITZER: But you can't condone that kind of language.

WALLIS: And he didn't condone it. And I don't. He didn't and I don't. What I'm saying, we are going to miss a real opportunity here if we let anger and frustration, which is rooted in real experience, concrete life experience, defeat or bring down what is a clear proclamation of hope and unity.

Barack doesn't talk that way. He's a new generation. He's turning a page. He wants to talk about fixing those things, correcting the injustice. And not a perfect union, but a more perfect one. He said this time let us not that old language of hostility and hatred and confrontation bring us down.

If we just do the same thing over and over ourselves, we're missing the point of the speech. Read the speech. Americans should read Barack Obama's speech. Listen to it. If that's your vision of America's future, take him at his word.

ELDER: With respect, Reverend, if Barack Obama feels this is way, he never should have belonged to a church like that. This is a country where Tiger Woods is the world's most celebrated athlete, where Will Smith is the biggest box office drawer, where Oprah Winfrey is arguably the most important television personality, where the black GDP if it were a separate country would be one of the top 15 or 16 countries in the world.

We have come a very long way from a very long way behind. And Barack Obama we thought meant that. We thought represented that. How can you do that, say that, be that, and belong to this church? It doesn't make sense. BLITZER: Very quickly, Reverend Wallis.

WALLIS: Larry, the white members of Trinity Church do not regard it as a racist church. It's a black church on the south side doing lots of good things.

Jeremiah Wright's preaching has been prophetic in many ways and some things were said on these clips that he has repudiated. But this is a mainstream black church on the South Side.

Martin Luther King, Jr. spoke to America's condition in a way that sometimes made white people feel uncomfortable, but he talked about a beloved community and where we could go. He didn't dwell on the past. He said we can do better. Read Barack's speech.

BLITZER: All right. Jim Wallis, Larry Elder, this is a conversation we will continue down the road. Thanks to both of you for coming in.

WALLIS: Thank you.

ELDER: Thank you, Wolf.

BLITZER: Larry Elder, by the way, is the author of the book entitled "Stupid Black Men." Jim Wallis is the author of the book called "The Great Awakening," right here both books.

By the way, you can make up your own minds. Many of you were not near a television this morning when Barack Obama spoke. Coming up in the next hour, right here in THE SITUATION ROOM, we're going to be playing an extended excerpt from Barack Obama's speech. You'll have a chance to make up your own mind.

Just days after New York's governor arrives because of a sex scandal, the new governor makes his own admission. Coming up, David Paterson's confessions about his own infidelity.

And John McCain in a trip over the Middle East, trips over his words. You're going to find out what he said, what he didn't say. That and a lot more coming up right here in THE SITUATION ROOM.


BLITZER: As New Yorkers were breathing sighs of relief today over the transfer of power in their scandal tinged state house, they heard a stunning admission of infidelity today from the new governor of New York.

Let's go back to Mary Snow. She's watching this story for us.

What's going on, Mary?

SNOW: Well Wolf, to mark another rare day in New York politics, some might say another surreal day, David Paterson said he came forward to admit affairs that took place several years ago because he didn't want things hanging over his head and he didn't want to be compromised.


SNOW: One day after being sworn in as New York's new governor, David Paterson found himself answering public questions about his private sex life. His wife standing by his side.

GOV. DAVID PATERSON (D), NEW YORK: Both of us committed acts of infidelity.

SNOW: In an unusually candid press conference, Paterson answered questions about the couple's extramarital affairs.

PATERSON: I was angry. I was jealous. I exercised poor judgment.

SNOW: The disclosure came in the wake of his predecessor's resignation. Eliot Spitzer stepped down as New York's governor following accusations he'd taken part in a high-end prostitution ring.

Paterson says in light of recent events, he wanted to start with a clean slate. He admitted he had several affairs, including with a woman on the state payroll. His wife also admits straying from the marriage. Paterson said the couple turned to a counselor to make the marriage work and avoid divorce.

PATERSON: We both realized that I have a stepdaughter who I watched go through a divorce years ago. And I have a son that I would not want to have to watch go through this one. So I went to Michelle some years ago and said to her I was going to go to counseling, and that I wanted our relationship to work.

SNOW: Political analysts say the disclosure won't end his career.

DOUG MUZZIO, BARUCK COLLEGE: It's immaculation. Better to get it over on day one than have to deal with it and worry about it, that it will come out and somehow torpedo your administration.

SNOW: Paterson says he now wants to move to more relevant affairs like the state's budget.

PATERSON: My conscious is clear. I feel a lot better.


SNOW: And Paterson reiterated that he betrayed his commitment to his wife but says he doesn't feel he betrayed his commitment to New Yorkers and reiterated that he broke no laws -- Wolf.

BLITZER: What a story. All right. Thanks very much, Mary, for that.

Big crowds outside the U.S. Supreme Court for one of the biggest cases in years. The justices are making history, talking about gun control. You're going to hear what happened inside the courts today. This is the first time the U.S. Supreme Court has considered the second amendment.

And Hillary Clinton weighing in on the race issue. What she had to say about Barack Obama's big speech today. Stay with us. Remember, if you missed the speech earlier today you'll have a chance to see a major excerpt of the speech coming up right here in THE SITUATION ROOM.


BLITZER: Let's check back with Jack Cafferty. He's got "The Cafferty File" -- Jack.

CAFFERTY: Question this hour is: Barack Obama's campaign is suggesting Hillary Clinton will do anything to win, including destroy the Democratic Party. Do you agree with that assessment?

Carlos in Miami writes: "Yes. If she really cared for the party, she wouldn't have turned to negative campaigning knowing that it will hurt our chances in November. That fact alone says who she is, what she wants and how much she wants it."

Jim in Georgia writes: "She's running for president of the United States, not chairman of the tea party committee. I don't care whether 'the party' is run through the ringer and hung out to dry as long as the next president begins to fix some of this country's problems. Party be damned."

Marilyn in Florida writes: "The last few months have shown that the Clintons are willing to sell their legacy so Bill can have his do- over. If they'll do that to themselves, what won't they do to Obama? And all for nothing, Hillary's unelectable."

A. writes: "That's absurd. If Obama's camp is so worried that letting the Democratic process run its course will split the party, he should drop out. Neither candidate can earn enough pledged delegates to nail this down before the convention."

Brian in Idaho writes: "Obviously this has already come true. The math shows that Clinton is ultimately going to have to rely on superdelegates to give her the nomination and she hasn't withdrawn from the race. She intends to stay in until the end using any methods possible to coerce party insiders to overthrow the will of the people in the nomination battle."

Katie in Raleigh, North Carolina: "Although I don't find Hillary particularly pleasant, I don't believe that she's dividing the party on purpose. I am sure that in her head, she is just being fair and reasonable. In her mind, she is just fighting to win. Somebody really needs to give her a kick in the pants. Is her entire campaign delusional? Why isn't somebody telling her how stigmatizing she has become?

And Brett writes here in New York: "I hope Hillary majored in miracles along with Huckabee because that is what she is going to need" -- Wolf.

BLITZER: All right, Jack. Thank you.

Today lines were waiting outside the United States Supreme Court to hear arguments in what could be a landmark case. The court could soon settle a constitutional issue that's been left unresolved for centuries. At issue, do you have an individual right to own guns, or does the constitution give that right collectively only to state militias?

Our justice correspondent, Kelli Arena, was inside the court today -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: I sure was, Wolf, and the debate was very spirited, both inside and outside the courtroom.


ARENA: The crowds outside the courtroom said it all. It's one of the biggest cases before the Supreme Court in year and believe it or not, the first time the justices have been asked to interpret the second amendment.

UNIDENTIFIED FEMALE: It's very controversial and exciting decision, and we just wanted to be around for it.

ARENA: At the center of the issue, Washington, D.C.'s handgun ban. The argument is both constitutional and highly emotional. And where people stand usually has a lot to do with life experience.

TOM PALMER, FILED LAWSUIT AGAINST HANDGUN BAN: I'm alive because I once had to use a handgun in self-defense. That's why I'm standing here in front of you.

CHIEF CATHY LANIER, D.C. METROPOLITAN POLICE: A weapon that is easily concealed that can be taken inside of schools, inside of churches, inside of government buildings, without anyone's knowledge.

ARENA: Here's the question before the justices. Do Americans have a constitutional right to own a firearm? If there is an inherent right, is there room for government regulation, and if so, how much? When talking specifically about D.C.'s handgun ban there was a lot of disagreement about whether it was reasonable.

UNIDENTIFIED MALE: What is reasonable about a total ban on possession?

ARENA: And justices wondered aloud whether things like the city's crime rate would matter.

JUSTICE DAVID SOULER, SUPREME COURT: Can they consider the extent of the murder rate in Washington, D.C. using handguns?

JUSTICE ANTONIN SCALIA, SUPREME COURT: All the more reason to allow a homeowner to have a handgun.

ARENA: We expect a ruling in June. Judging but the debate, it seems the justices will try to carve a middle ground on the constitutional question most likely upholding an individual's right to own a gun while allowing for some government regulation.


ARENA: What's less clear is how that will impact D.C.'s handgun ban in practical terms because after all, that is what will impact gun laws around the nation -- Wolf.

BLITZER: Kelli Arena at the Supreme Court. Thank you.

Dozens of people reported dead. Now the Dalai Lama talking about drastic measures to try to stop the violence in Tibet.

Also coming up, the video the Chinese government doesn't want you to see and is blocking from people in its own country.

And a huge rate cut by the Federal Reserve. The market has the biggest one-day jump in more than five years.

Lou Dobbs standing by live to talk about the future of the American economy.

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


BLITZER: Let's check in with Lou Dobbs.

Lou, the Federal Reserve cuts interest rates by 3/4 of a percentage point. The markets go up 400 plus points today. Are you happy with what the Fed and Ben Bernanke are doing?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": I think it's just -- bravo. I think the problems are all behind us now. The crisis is averted. All the issues resolved.

It's amazing what this market did today. The Fed is doing exactly what it should, cutting Fed funds rate by three quarters of a percent, reducing it to two-and-a-quarter percent, the lowest rate in just about three years. All positive.

The bad news is we still have a credit market crisis. We still have extreme difficulty in our housing markets and our credit markets. So this is one day I think perhaps one might safely say a bit overdone on the enthusiasm of the investors, if I may say so. But at least they were beginning to take steps, the Fed taking steps, the Treasury Department, of course and the rather recalcitrant Bush administration not doing much at all.

BLITZER: What else do they need to do, Lou?

DOBBS: Well, it's very simple. They need to put together a program to bail out homeowners facing foreclosure. They can rationalize all of their ideological nonsense about bailing out Bear Stearns, trying to explain how that really wasn't a bail out.

It's $30 billion of federal taxpayer money so they can can the 'it ain't a bail out' nonsense and in point of fact, provide some of that money for homeowners facing foreclosure. Because you rescue the homeowners, you rescue the institutions lending to them.

It's that straightforward. It's that simple. It's a matter of emphasis and the emphasis needs to be placed on working men and women and their families in this country for a change, pretty please, Mr. President.

BLITZER: We'll see you back here in one hour.

DOBBS: You got it.

BLITZER: With your show, Lou, thanks very much.

DOBBS: Thanks, Wolf.