Return to Transcripts main page

THE SITUATION ROOM

Dems Lay Out Economic Ideas; McCain Launches Biographical Tour; Mario Cuomo on the Democrats Long-Fought Battle

Aired March 31, 2008 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, CNN ANCHOR: Happening now, Hillary Clinton and Barack Obama battle -- is it setting up Democrats for political disaster? Former New York governor Mario Cuomo says yes. And he's here with an interesting idea to avoid the worst.
John McCain wants you to get to know him a little better. Might a biographical tour help add the title "president" to his political biography?

And the Bush administration proposes the most sweeping changes to the nation's financial system since the Great Depression. How might this ambitious plan help Wall Street and Main Street?

Wolf Blitzer's off today. I'm John King. You're in THE SITUATION ROOM.

Hillary Clinton and Barack Obama of course know they're the top issues to you -- the mortgage meltdown, recession fears, and higher prices for everyday things Americans need. Both Democratic presidential candidates are using competing messages to pitch what they'd do if elected.

Today they campaigned in the next key battleground state of Pennsylvania, all part of their effort to win votes there in that critical Democratic contest which is now just a few weeks away. CNN senior political correspondent, Candy Crowley, is in Harrisburg.

And Candy, three weeks now finally to Pennsylvania, and the economy issue one for the Democrats.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. You know, John, how campaigns are always saying, we need to get back to the issues that really matter to the voters? Well, today they did that.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Hillary Clinton and Barack Obama pushed their economic proposals through Pennsylvania with some new material -- the Bush administration plan to overhaul the financial regulatory system, which oversees everything from mega-banks to mortgage brokers.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: What you see is a handful of intelligent proposals for streamlining some of our regulatory systems, but a completely inadequate proposal to deal with the crisis that's going on right now. CROWLEY: She doesn't like it much either.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: They've announced a plan that comes late and falls short. No amount of rearranging the deck chairs can hide the fact that our housing and credit markets are in crisis.

CROWLEY: To win Pennsylvania by the margin she'd like, Clinton needs a big turnout of working class traditional Democrats, the voting group which has formed the base of her primary wins. He needs to cut into that core to keep her from running up the score.

Both go after it the same way, with populist themes about the unfairness of an economy gone sour. The signs of distress quite literally on the streets of Harrisburg, Clinton detoured for a "feel your pain" moment with truckers slammed by fuel prices.

CLINTON: They can't afford to be on the road.

UNIDENTIFIED MALE: But it's -- and it's not just the drivers. It's the fishermen.

CLINTON: Right. Farmers.

UNIDENTIFIED MALE: Farmers.

CROWLEY: Campaigning in the heart of Lancaster, Obama blasted Countrywide Financial, a major distributor of subprime loans which engineered its own sale and then paid two of its executives multimillion-dollar bonuses.

OBAMA: So they get a $19 million bonus while people are at risk of losing their home. Now, what's wrong with this picture?

UNIDENTIFIED MALE: Everything.

OBAMA: Everything's wrong with it. But the problem...

CROWLEY: For the most part, they laid off each other Monday, opting instead for November's target.

CLINTON: Senator McCain recently gave a speech on the economy. And the best I could determine, his plan was not to have a plan. If he got the 3:00 a.m. call on the economy, he would just let the phone ring and ring and ring.

(APPLAUSE)

(END VIDEOTAPE)

CROWLEY: As for Obama, he says he honors McCain's service but disagrees with him on both the war and the economy -- John.

KING: Candy Crowley for us in Harrisburg, Pennsylvania.

Candy, thank you very much. Now, that White House plan to overhaul the regulation of the financial system, it is the biggest change in that regulation since the Great Depression. We'll have complete details of how it will work and how it will impact you a little later on.

Let's look now at CNN's Poll of Polls in Pennsylvania, compiling data from several recent surveys. Likely voters in the Democratic primary were asked their choice for the party's presidential nominee. Fifty-two percent said Hillary Clinton, 38 percent said Barack Obama, 10 percent were undecided. On a national level, Obama edges out Senator Clinton 46 percent to 42 percent, with 12 percent still on the fence.

John McCain appears just fine watching Democrats squabble while he tends to his own presidential ambitions. Today the likely Republican nominee kicked off a tour to reintroduce himself to the American people. McCain will travel to five states over the coming days.

Today's stop, Meridian, Mississippi. That's where CNN's Dana Bash is.

And Dana, the McCain campaign sees an opportunity while the Democrats struggle.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: He definitely does. You know, Democrats are definitely trying to paint John McCain as a 71-year-old creature of Washington who will just provide more of the same. And you heard Candy's report that Democrats are starting to turn more towards John McCain. But for the most part, they're definitely still squabbling amongst themselves.

This is why the McCain campaign thinks this is a perfect time for them to market their candidate the way they want.

(BEGIN VIDEOTAPE)

BASH (voice-over): John McCain opened a carefully-orchestrated weeklong journey through his life story with an emphasis on service, looking to turn his family history into a unique political brand.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I'm the son and grandson of admirals. My grandfather was an aviator, my father a submariner. They were my first heroes.

BASH: He spoke in Meridian, Mississippi, near an airfield named for his grandfather, where the candidate himself served as a flight instructor before he headed to Vietnam and became a prisoner of war. Then his father commanded U.S. forces in the Pacific.

MCCAIN: My father seldom spoke of my captivity to anyone outside the family, and never in public. He prayed on his knees every night for my safe return. Yet, when duty required it, he gave the order for B-52s to bomb Hanoi in close proximity in the prison in which I lived.

BASH: On one level, these family stories taken from McCain's memoir Politics 101. Knowing a candidate's biography helps voters connect, especially when it appeals to patriotism. But it doesn't always work.

SEN. BOB DOLE (R), FORMER PRESIDENTIAL CANDIDATE: Well, there I was over in Italy in 1945, a young second lieutenant.

BASH: Bob Dole reluctantly played up his World War II experience and lost to someone who never served. Vietnam-veteran-turned- protester John Kerry touted his service as he objected to Iraq, but was also defeated.

But this candidate's biggest obstacle is convincing war-weary Americans to stay in Iraq. And advisers hope explaining his deep military roots will instill trust in his judgment.

MCCAIN: They gave their lives to their country and taught me lessons about honor, courage, duty, perseverance and leadership.

(END VIDEOTAPE)

BASH: McCain made a brush -- sharp turn, I should say, from talk of his family to discussion of his principles for how the government should or should not be involved in American families and their lives. He talked about the need for limited government intervention, John, only when it is necessary to help parents raise their children.

He didn't give any specifics at all. His campaign insists that right now he is laying the foundation for his campaign, and they promise that he will have some more specific policy proposals in the future -- John.

BASH: And Dana, as they lay that foundation, is there any worry in the McCain campaign that highlighting his life story and his experience might also highlight his age? He would be the oldest man ever elected president.

BASH: You know, the answer to the question that the McCain campaign gives is basically it is what it is. He is 71-years-old. He would be the oldest elected president ever in American history.

And, you know, they understand that voters do see that. They see the same polls that we do that basically shows that that is -- that leaves a big question mark in some voters' minds.

But what they're trying to do with this tour is try to turn that experience and turn that age into an asset by saying, because of that experience, because he has been around so long, he has a better sort of sense, intuitive sense, from their perspective, of what to do and not to do than his Democratic candidates, who they are pointing to implicitly and explicitly with this tour as having less experience -- John.

KING: Dana Bash at the beginning of the McCain bio tour in Meridian, Mississippi.

Dana, thank you very much. And you heard Dana note the experience of Bob Dole and John Kerry. Well, here's another instance. Former president George Herbert Walker Bush, a World War II pilot, lost his bid for a second term to Bill Clinton in 1992.

As many Americans fear losing their homes, the nation's housing chief is resigning. It was exactly four years ago Housing and Urban Development Secretary Alphonso Jackson was confirmed. His announcement today comes amid allegations of cronyism and favoritism involving HUD contractors and multiple ethics investigations. Jackson denies any wrongdoing and today he did not mention any of it.

(BEGIN VIDEO CLIP)

ALPHONSO JACKSON, HUD SECRETARY: I am truly grateful for the opportunity. During my tenure here, I have sought to make America a better place to live, work and raise families.

We have helped families keep their homes. We have transformed public housing. We have reduced chronic homelessness. And we have preserved affordable housing and increased minority homeownership.

(END VIDEO CLIP)

KING: Secretary Jackson there earlier today. And coming up, you'll hear why Jackson's critics think all of this distracted him amid the nation's mortgage crisis.

Time now for "The Cafferty File." Jack joins us from New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: So why is he living?

KING: A lot of people leave at the end of an administration, Jack.

CAFFERTY: The administration's not over until the end of the calendar year. I know, he's leaving to spend more time with his lawyer.

"Chill out" is the former president Bill Clinton's advice to Democrats who think the race between Senators Hillary Clinton and Barack Obama has gone on too long. Clinton says letting all the voters have their say will actually strengthen the party.

This comes on the heels of two senior senators -- Patrick Leahy, Chris Dodd, themselves Obama supporters -- calling for Hillary Clinton to pull out of the race, something she says she won't do. Clinton told "The Washington Post" that she will take her campaign all the way to the convention floor if need be. Barack Obama says Clinton have every right to say in the race as long as she wants to.

Meanwhile, Obama picked up an endorsement today, another one, from Democratic Senator Amy Klobuchar of Minnesota. He's also expected to get the backing of all seven of North Carolina's Democratic House members. Party officials say that Senator Klobuchar, like her colleague in the Senate, Bob Case, who endorsed Obama on Friday, had planned to remain neutral. Klobuchar's also a superdelegate whose vote could help decide the fate of the Democratic race.

Another good sign for Obama is a new Gallup national tracking poll. It shows him with an eight-point lead over Hillary Clinton, 51 to 43 percent. Over the weekend, Obama actually topped her by 10 points in that tracking poll for Gallup -- the first double digit leader that either candidate's had over the other since February when Clinton was leading Obama by 11 points. And a new Pew Research poll also has Obama up by 10 points.

So here's the question: Bill Clinton says the Democrats need to chill out and let the election process play out. Is he right?

Go to CNN.com/caffertyfile, post a comment on my blog.

Where's Wolf?

KING: You know the answer to that. You'll be advised on a need- to-know basis. He's chilling out somewhere.

CAFFERTY: Well, I need to know, because I need to know these things.

KING: I'm sure he's just chilling somewhere. That's what Wolf does.

CAFFERTY: He's just chilling? The Wolf man chilling?

KING: See you in a bit, Jack.

Hillary Clinton and Barack Obama say they can resolve problems with some controversial world leaders. The one Democrat raises an interesting question.

(BEGIN VIDEO CLIP)

MARIO CUOMO (D), FMR. NEW YORK GOVERNOR: You would have thought if they could -- if they could do it with Ahmadinejad, they could do it without one another.

(END VIDEO CLIP)

KING: Mario Cuomo says there is a way for the Democrats to solve their primary battle, and he's right here to explain.

Also, both Clinton and Obama say they can win the states that normally vote Republican. But who'd have a better chance at that?

And their ideas for the most sweeping changes to the nation's financial system since the Great Depression. But will they be too late to prevent worsening economic conditions?

Stay right here. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

KING: As Hillary Clinton and Barack Obama swipe at each other, one prominent Democrat says it could ruin the party's chances for winning this fall. He says the Clinton/Obama spat sets up the party for a potentially stunning political blow.

(BEGIN VIDEOTAPE)

KING: And the former governor of New York, Democrat Mario Cuomo, joins us now in THE SITUATION ROOM.

Governor, thanks for being with us today.

CUOMO: Thanks for having me.

KING: You write in this op-ed essay in "The Boston Globe" today you worry about the potential for a disaster for Democrats in November if this race does not come to a conclusion. That either the Clinton camp or the Obama camp would be so embittered by a long, drawn-out race, that a percentage of one camp might stay home, and therefore the Republican wins.

And you write in that essay, "Who can solve the problem?" And you say, "Obama and Clinton can by putting aside personal irritations and, to some extent, personals aspirations, and agreeing to end the hostilities and form a ticket that offers both of them, a candidate for president and a candidate for vice president, who's clearly good enough to serve as president, should the occasion arise."

But, sir, in that essay you don't say which one you think should be the presidential nominee and which would should be the vice presidential nominee. Why not?

CUOMO: That's right, John. I said something else too that you've left out that has proven to be more inviting to people.

I said, alternatively, if you can't get together and agree on who should be president, and who should be vice president -- and apparently you can't -- then at least you should do this to mollify the constituency of the person who loses, because we are losing votes against McCain every day. The constituencies are getting angry at the opposing candidate. That's the problem here.

So, how do you do it? You do it this way -- if you insist on fighting all the way through the convention on all the hairy questions that are going to come up, then do this: agree in advance that if you win, you win, and you're the candidate for the presidency. And your opponent becomes the candidate for the vice presidency. That would at the very least mollify some of the constituents of the person who does not succeed, whether it's Hillary or Obama.

Now, what am I after? Something very positive. The objective should be to defeat the Republicans. One of you is going to be defeated. But the object is to defeat the Republicans. And every day that's getting harder, because the polls show that people who voted for Obama would be reluctant, many of them, to vote for Hillary as presidential candidate. And vice versa.

And it's almost even, except I think the Obama people are less likely to vote for Hillary than the Hillary people for -- and I'm trying to help solve that problem, or at least reduce it. And agreeing that the loser becomes vice president might do that for you.

KING: But, sir, you've watched quite a few of these play out over the years. You thought about running once or twice yourself.

Do you really believe that an Obama voter or a Clinton voter now -- sure there'd be hard feelings now, but we're at the end of March heading to April. Do you really believe come November, that a significant number of Democrats are likely to vote Republican because their guy or their lady lost the nomination?

CUOMO: Well, you ought to read the comments to "The Baltimore Sun" blog today on this proposition. And they said things like this: "I wouldn't vote for a ticket with Hillary on it whether she's the top or the second.. I wouldn't vote for McCain, but I wouldn't vote for her."

So, no, they wouldn't vote for McCain. They wouldn't vote for Bushism. They wouldn't vote for a continuance of the war. But they -- a lot of them -- could bring themselves not to vote for a person they've come to dislike because of the campaign.

Yes, I'm worried about it. The Pew poll shows it. All the polls show it. And I don't think they show an immediate turnaround when, miraculously, we get a winner and everybody who is with the loser says, OK, I changed my mind about Obama, I changed my mind about her, she's the presidential candidate.

The candidates will do that. The candidates will forget about it. They'll be pragmatic. I don't believe the constituents will.

KING: But both of the campaigns say thanks but no thanks, Governor Cuomo.

CUOMO: No.

KING: We don't think it's time to focus on the vice presidential choice right now. How do you think you can get them -- to convince them to say, if I win I'll pick the other one?

CUOMO: No, John, they haven't said no to the alternate proposition. They haven't said no to, OK, the winner will win the presidency, or the nomination for the presidency, and the loser will -- they haven't said no to that. They haven't said yes to it, but they haven't said no to it.

What they have obviously said no to is, no, we're not going to be able to get together now and negotiate who should be on the top. That's a disappointment, especially since they both thought they could negotiate with Ahmadinejad, one of them, without even preconditions. You would have thought that if they could -- if they could do it with Ahmadinejad, they could do it with one another.

KING: Well, how do you answer, Governor, the flip side of the argument articulated most recently by Bill Clinton, when he says everybody just needs to chill out and let this play out, and there are other Democrats who say, look at the record-high turnout, look at the extraordinary advantage the Democrats have in fundraising, there's no evidence this is hurting the party yet?

CUOMO: OK. So have the fight, keep going, slug it out. Argue about Florida, argue about Michigan, argue about superdelegates and what their mandate really is. Do all of that. Keep aggravating the constituencies on both sides.

See, nobody's saying you have to stop. If you can't bring yourself to stop, go ahead. But recognize that the polls are showing every day that people who want Hillary, a lot of them, a lot of them -- and one of them is too many, but a lot of them will not vote for Obama. And people who are crazy about Obama will not vote for a ticket with Hillary as president. And you know that in advance.

So mollify them. Say that the winner will win and the loser will be vice president. What have you got to lose? There's plenty for you to win.

And incidentally, both of you are sufficiently young so that eight years from now, if you happen to have been the vice president, you wouldn't be too old to be running for president yourself. That means over eight years it's possible for you to elect the first African-American and the first woman in the United States of America if you're smart.

And everybody says you're both smart -- you with your poetry and she with her prose. Then show us. Make a deal.

KING: Governor Mario Cuomo with the latest proposal to end this protracted Democratic race.

Governor, I'm sure it will be debated and debated. We'll wait. We'll push the candidates for more specific answers.

And we appreciate your time today.

CUOMO: Thank you, John.

KING: Thank you, Governor. Take care.

(END VIDEOTAPE)

KING: And that Democratic primary race is uncertain, to say the least. And in the end, superdelegates might be the deciders. We show you an online project to keep tabs on who they are and what they're doing.

And in a legal showdown between a congressman and the FBI, the Supreme Court says it's staying out of it.

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

(NEWSBREAK)

(COMMERCIAL BREAK)

KING: You're in THE SITUATION ROOM.

Happening now, under a spot of suspicion and a barrage of criticism, President Bush's housing secretary resigns. CNN's Ed Henry explores Alphonso Jackson's decision to leave in the midst of the housing and mortgage crisis.

A stack of unpaid bills, some unhappy vendors. Is the Clinton campaign struggling?

And the TSA's new screening tool: music and mood lighting. What's behind the mellow moods?

All that and more in our next hour.

Wolf Blitzer's off today. I'm John King. You're in THE SITUATION ROOM.

The lull in the presidential primary season is about to pass. The remaining two Democrats in the race gearing up for the next run of primary contests. CNN's Brian Todd joins us now.

Tell us, Brian, how are things in this wacky race shaping up?

BRIAN TODD, CNN CORRESPONDENT: About as close as they always have been, John. Three weeks and one day until Pennsylvania holds its primary. It is a state Senator Hillary Clinton needs to win and win big, but that is just the start.

(BEGIN VIDEOTAPE)

CLINTON: With Pennsylvania's help, I believe I will be the Democratic nominee for president.

TODD (voice-over): And she just may get that help. Our new CNN Poll of Polls gives Hillary Clinton a comfortable lead in Pennsylvania. Indiana and North Carolina vote two weeks later.

OBAMA: Hello Greensboro.

TODD: Polls indicate Barack Obama leading in North Carolina, possibly because of the state's large African-American population and upscale voters. Indiana is more of a tossup. West Virginia votes one week later. It's a heavily rural state, which favors Clinton -- same story for Kentucky, which holds its primary one week after West Virginia.

Oregon votes the same day, but its affluent voters may side with Obama. June could see a split, with Puerto Rico leaning towards Clinton, and Montana and South Dakota toward Obama. Neither candidate is expected to finish the primary season with enough delegates to clinch the nomination, so it could come down to a decision by the superdelegates.

Clinton argues she's more electable because she can win the crucial battleground states in November.

CLINTON: And I don't think anybody doubts that a Democrat has to have a number of the big states anchored in order to put together the electoral votes needed to win. There's a generally accepted position that Ohio, Pennsylvania, and Florida are the critical swing states for Democrats.

TODD: Obama says, that's so 2004. He says he can compete in states Republicans traditionally win, like Missouri, North Carolina, and Virginia. He wants:

OBAMA: To build a coalition for change that stretches through red states and blue states, because that's how we will win in November.

TODD: So, who's right?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: She says, she will win the big states; the Democrats have to win them. He says, so can I. He says, I can win a lot of the states the Democrats need to carry. But many of the ones he's won in the primaries are just hopeless for the Democrats in the fall.

(END VIDEOTAPE)

TODD: And with polls showing hypothetical matchups between McCain and Clinton and McCain and Obama basically a dead-heat, just about every state could be crucial this November -- John.

KING: Counting the days to Pennsylvania.

Brian Todd -- Brian, thank you very much.

Now, how the Democratic candidates are playing with the voters is being followed by the daily Gallup tracking poll, even down to what they say and when they say it.

On March 18, for example, Senator Barack Obama was at 42 percent. That day, he made his big speech on race relation relations, and has since climbed back up to 53 percent.

On March 25, Senator Hillary Clinton told a Pittsburgh newspaper she misspoke when she said she landed in Bosnia under sniper fire during a visit as first lady. At that point, she was under 46 percent. She has since dropped three points.

Clinton is leading the superdelegate count, but Senator Obama narrowing that gap with the endorsement today from Senator Amy Klobuchar of Minnesota. So, who are the superdelegates, and where do they stand? One Web site is tracking them all. Let's bring in our Internet reporter, Abbi Tatton.

Abbi, what does the site show?

ABBI TATTON, CNN INTERNET REPORTER: John, it's, who are the superdelegates? Who are they backing? How does that match up with the way their districts voted?

This is the Superdelegate Transparency Project, launched last month by a group of liberal bloggers, along with Web sites Congresspedia and "The Huffington Post." It's asking anyone to weigh in with the information that they're finding online from news reports, voter tallies, profiles of the superdelegates. They're even saying that they're going to put up a wobble list in the coming hours, superdelegates that they think have the potential to switch.

The site's organizers say that they're not trying to lobby anyone; they're just trying to get all of that information out there to try and shed light on who these decision-makers are.

Well, I spoke to one of those decision-makers earlier on this afternoon, Edward Espinoza. He is a superdelegate in California, undeclared.

He says he's not just hearing from the campaigns and the media, but he's also hearing now from members of the public who want to know where he stands, appealing for his vote, as it -- as it were. He says he doesn't mind at all. He thinks it's nice that people are becoming part of this process.

CNNPolitics.com, of course, we have got our track of the superdelegates as well -- John.

KING: We will see how long he thinks it's so nice, Abbi.

(LAUGHTER)

KING: Abbi, thank you so much.

And Abbi Tatton and Brian Todd are, of course, both part of the Emmy Award-winning best political team on television.

And, remember, for the latest political news any time, check out CNNPolitics.com. The ticker is the number-one political news blog on the web.

If the Bush administration gets its way, it would enact the most sweeping changes to the nation's financial system since the Great Depression. But exactly who would this massive new plan actually help?

And John McCain may be coming soon to a place near you. But, as he goes on a biography tour, should he talk more about himself or his rivals for the White House? And you might call it wheel of fortune, political fortune. TV game shows are getting a lot of attention from the presidential candidates these days. Our Carol Costello explains -- just ahead.

(COMMERCIAL BREAK)

KING: Today, the treasury secretary, Henry Paulson, announced a major overhaul in the way the financial system is regulated. It would be the biggest change since the Great Depression.

The plan would shift how government regulates thousands of businesses, from big banks to your local mortgage broker -- among the changes, give the Federal Reserve much more power, combine the agencies that oversee the financial markets, and create an agency to regulate mortgage lending.

CNN senior correspondent Allan Chernoff is here to break down the changes for us.

And, Allan, we should note, all of this, of course, would need to go through the Congress.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: It most certainly would. And, John, you know what that means? The lobbyists already are trying to shoot down portions that they don't like, and this, of course, even as they're admitting our regulatory system is totally out of date.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Treasury Secretary Henry Paulson is trying to prevent crises like the one we have experienced in the past month, where millions of American homeowners are at risk of foreclosure and some consumers and companies are finding it tough to borrow money.

HENRY PAULSON, U.S. TREASURY SECRETARY: A strong financial system is vitally important -- not for Wall Street, not for bankers, but for working Americans. When our markets work, people throughout our economy benefit.

CHERNOFF: The blueprint calls for the Federal Reserve to become a supercop, with authority to watch over all players in the financial system, with the goal of maintaining stability.

A separate financial regulator would ensure the safety and soundness of banks and insurance companies. A Wall Street trade group calls the proposal very wise. But some veterans of past administrations fear, regulation may be no stricter than today.

UNIDENTIFIED MALE: Financial regulation shouldn't be about what's best for the financial sector, for banks, and investment banks, and mortgage brokers. It should be about what will cause the financial system to work best for American consumers and regular American businesses. CHERNOFF: The blueprint also calls for investor and consumer protection to be handled by combining the agencies that oversee financial markets, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Though the CFTC has been criticized for being soft on enforcement, the blueprint looks favorably on the commission's more hands-off approach to oversight, which worries consumer advocates.

TRAVIS PLUNKETT, LEGISLATIVE DIRECTOR, CONSUMER FEDERATION OF AMERICA: This plan is completely at odds with the current economic climate. And it has missed the lessons that we can learn now about how, if you don't regulate up front, you end up with bigger problems on the back end.

(END VIDEOTAPE)

CHERNOFF: Some consumer advocates wonder if the treasury secretary, a former co-chief of Goldman Sachs, is going easy on his old friends on Wall Street -- John.

KING: And, Allan, you mentioned, obviously, it has to go through Congress -- the lobbyists already out, trying to shoot down the portions they don't like. What do you see as the major pressure points going forward?

CHERNOFF: There's going to be a huge battle between the federal government and the states. The plan, on the one hand, calls for the feds to take over control, regulation, of the insurance companies. They're all regulated by the states now, the same thing for savings and loans, thrifts.

It's not going to happen that easily. Let's also keep in mind this plane has been in the works for more than a year. It's not a response to the crisis that we have had over the past month, even though it might appear to be so.

KING: Allan Chernoff breaking down a most complicated issue for us -- Allan, thank you very much.

And in the "Strategy Session" today: Senator McCain reflects on his family's legacy of military service.

(BEGIN VIDEO CLIP)

MCCAIN: I'm the son and grandson of admirals. My grandfather was an aviator, my father a submariner. They were my first heroes. And their respect for me has been one of the most lasting ambitions of my life.

(END VIDEO CLIP)

KING: Talking about himself, but what is he trying to say about Senators Obama and Clinton? And what if Senator Clinton goes on a winning streak? Could she convince the superdelegates that she has the momentum?

All that and much more with Donna Brazile and Kevin Madden -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: We're tracking some extreme weather in the Dallas, Texas, area.

Let's go straight to Bonnie Schneider in the CNN Weather Center for an update -- Bonnie.

BONNIE SCHNEIDER, CNN METEOROLOGIST: Well, John, we're watching three tornado warnings in and around the Dallas/Fort Worth area. Some of the most severe storms are south of Fort Worth in the town of Godley, some of our affiliates in the region are reporting homes damaged.

And the tornado warning that you see here, this massive area of thunderstorms south of Fort Worth, this continues until 4:30 p.m., just south of the Dallas metropolitan area. But it does certainly include the suburbs. We're also looking to the north, where we have another tornado warning, and that is to the north of this region, kind of zoom in the area. It's near the Highland Park area. And this one also continues straight for another 30 minutes or so.

So, we're watching severe weather, with rotating clouds, possibly tornadoes, in this region of Dallas/Fort Worth. Some of the strongest storms right now are south of the city. But Dallas right here, the downtown area, very close to where this warning is included. So, we will be watching this very closely and keep you up to date -- back to you, John.

KING: Bonnie Schneider in the Weather Center -- Bonnie, we will check back as conditions warrant. Thanks very much.

Presumed Republican presidential nominee John McCain is retracing the steps of his life, reintroducing himself to the American voters. Is this strategy compelling?

Joining us for today's "Strategy Session" are Democratic strategist and CNN contributor Donna Brazile and Republican strategist Kevin Madden.

Donna, I am going to ask this in reverse order. You're the Democrat.

But John McCain is out doing this, Meridian, Mississippi, today. He will be in the D.C. suburbs today, where he went to high school, tomorrow, on to Annapolis, retracing his life, trying to tell his biography, and connect the dots of his biography to why he wants to be president now.

You have managed a Democratic campaign for president. If you were running John McCain's operation right now, is this how you would be spending this valuable time?

DONNA BRAZILE, CNN POLITICAL ANALYST: Absolutely, because, otherwise, he would have to explain what's going on in Iraq, and Basra, and Mosul. And, of course, he would have to explain his -- his plan to keep us there for 100 years. So, I think it's -- it's important that he try to explain who he is, so that, later, when he has to explain why, you know, he supported the surge and, of course, where we are today, it might help him out a little bit.

KING: A little bit of the back of the hand there, but I think that was a yes.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: I have a feeling that that 100 years is going to be -- come up a lot from the Democrats.

(LAUGHTER)

KING: So, is this the way to do this? Or should he be saying, I'm different from Clinton on this; I'm different from Obama on that?

MADDEN: Well, look, I think this is exactly the right thing to do. This campaign, ultimately, I believe, is going to come down to an important contrast of attributes. And what John McCain is looking to do with this tour is to drive home those very positive attributes of leadership and experience, because whether he runs against Barack Obama or Hillary Clinton, those are going to be powerful contrasts in and of themselves in a general election.

KING: You say -- you say --

(CROSSTALK)

KING: Hold on one second. You say the 100-year thing is going to keep coming up. It does keep coming up.

(CROSSTALK)

KING: Is it a problem? Is it a problem? It's something he said at a town hall meeting. The point he was trying to make was that, as long as the casualties are down, the American people have had no problem with the troops in the DMZ in Korea for all this time...

MADDEN: Well, I --

KING: ... the troops in Bosnia for all this time, as long as casualties are down. But, sometimes, people say things that might make sense in four sentences or five sentences, but, in that little snippet, hurt them. Was this a mistake?

MADDEN: -- Well, I think he's done a very good job explaining the difference between presence, an American presence, and the actual military conflict, which is not going to be there for the next 100 years, but, instead, that we have a strategic interest in stability in the region.

And John McCain has a great deal of experience in military affairs. He has a great deal of experience in diplomatic affairs and foreign affairs. So, he's making a very important point that, in order to be stable in that area, in order to have the political stability that we're going to need, that there's going to have to be a presence.

Now, the Democrats are going to try and twist that every single way. We know that. And Republicans have to be prepared to fight back.

BRAZILE: Luckily, he had Joe Lieberman on the trip when he went to Iraq, because Joe Lieberman helped him out a little bit in explaining that it's the Shias, not the Sunnis.

So, I think, look, John McCain is going to be like any other candidate, Obama or Clinton. He will have to explain his views on Iraq. He will have to explain his views on economy, health care. That's what the American people will want to know. But we honor John McCain's service to this country and, of course, we respect him as well.

KING: Anything you do in politics is aimed not only at saying something about yourself that you want to say, but you're drawing a contrast. That's what elections are about.

Some liberal bloggers have taken this, saying that John -- one of the taglines of John McCain's messages here in the Web ad is, the American president Americans have been waiting for.

And there are liberal bloggers saying that that is somehow some underhanded way of suggesting that Barack Hussein Obama is not American or is less of an American. Do you buy onto that? Is that what John McCain is trying to do here?

BRAZILE: No, I don't buy into that. Look, that's Barack Hussein Obama's name. What's in a name, or what is behind his name, who is the man behind the name, I think that's what the American people want to know. Look, your name is John. I'm Donna. That's Kevin. So what?

(LAUGHTER)

BRAZILE: The truth is, people want to know a lot more about us than just our name. And I think that's what they're finding out about Senator Obama and, of course, Senator Clinton and Senator McCain as well.

KING: Is there a flip side to this, that reminding people that "I was here at this military base 50 years ago" reminds them also that he's 71-years-old.

(LAUGHTER)

MADDEN: Well, look, I mean, I think -- Dana brought that point up in her package earlier. That's something that the McCain campaign knows you cannot change. You can't change your age.

Instead, what you have to do is drive home the positive attributes that come with age, which are, essentially, wisdom, experience, guile. Those are important things for people to make a judgment on when they're looking for their next president. And I couldn't agree with Donna more, that -- that, oftentimes, we get caught up in the subtext of what people are trying to say. Let's have a debate about the text.

(LAUGHTER)

KING: Not every day in this session do we spend more time on the Republicans than the Democrats, especially what is going on now.

Let's switch to the Democrats real quick. You hear what is going on, more Democratic Party leaders saying Senator Clinton should get out. Mindfully, most of them support Senator Obama. Let's be clear about that.

But, Donna, you're on the DNC. This is your job. You're a superdelegate. I know you keep saying, I don't want any part of making this decision. But is it real, the fear that this is hurting the party, to the point where you can't recover by November, and that Obama supporters or Clinton supporters would actually go and vote for John McCain or sit at home? Do you believe that?

BRAZILE: It's real. We saw it, of course, in some polling data last week, where 44 percent of Senator Clinton voters say that they would either vote for John McCain or stay home, and 35 percent of Obama supporters.

So, that's the real concern. Look, Senator Clinton should stay in the race. She should stay until the Puerto Rican contest in June. And some time after that, the party should start coming together.

We have a big job ahead of us. John McCain is going to be a very tough candidate. The sooner the better, in the terms of, you know, our ability to unify the party and begin to put a united front out there to defeat the Republicans.

KING: Do you believe that's a sizable pool of Democrats? And, if so, what should John McCain be doing to say, if you don't like the way your side ends up, come to me?

MADDEN: Well, I think that what's happened because of the Democrat internecine warfare is that you seem to be driving away a lot of conservative-minded Democrats. You seem to be driving away a lot of independents that could have been and were and have been up to this point ripe for an appeal by Barack Obama.

In a general election between those two, and even Hillary Clinton, if she were to become the nominee -- against all odds -- that would now -- John McCain is in a much better position with those swing independent voters than he was before this started to -- at some point, there was a breaking point, and it started to drive away a lot of independent voters.

(CROSSTALK)

BRAZILE: Once we get away from the personalities and get back on issues, John McCain will find a hard time reaching Independents. And, by the way...

(CROSSTALK)

KING: Time out. Time out. We have got to go.

(CROSSTALK)

BRAZILE: Age is a sexy thing.

(CROSSTALK)

KING: Age is a sexy thing.

(LAUGHTER)

KING: I'm all for that.

We have got to call it quits here.

Kevin Madden, Donna Brazile, thanks very much for being here today.

(LAUGHTER)

KING: It was a common theme in the 2004 election, when John Kerry's opponents hammered his so-called habit of flip-flopping. The onetime Democratic presidential candidate fires back now.

War and politics, McCain in Iraq -- it remains to be seen if his positions will help or hurt him. For President Lyndon Johnson 40 years ago, it was Vietnam that was his undoing.

And is the key to the presidential race a spot on "Wheel of Fortune"? The game show factor -- in our next hour.

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

(COMMERCIAL BREAK)

KING: In today's Political Ticker: When is it acceptable for a politician to change his or her mind and not be accused of being a flip-flopper? Senator John Kerry tackled that issue in an interview with the Associated Press.

Kerry says, voters should forgive politicians who change their minds. Kerry told the "A.P.," "Decisiveness wrongly applied can create a lot of pain for the nation and big, big, historic mistakes."

Regarding seating Michigan delegates at the Democrats' convention this summer, one Michigan congressman offers this idea: awarding delegates based on Michigan's January 16 -- 15, excuse me -- primary results and partly on the popular vote in all of the presidential primaries.

Congressman Bart Stupak proposed that compromise in a letter to the Democratic National Committee chairman, Howard Dean. It would give Hillary Clinton 47 delegates, Obama 36. Michigan's remaining 73 delegates would be handed out based on the percentage of the popular vote each Democratic candidate had after the last primary.

And remember, for the latest political news any time, check out CNNPolitics.com.

Today, many are looking back to a rare moment in presidential history. It was 40 years ago President Lyndon Johnson shocked many Americans by announcing he would not seek reelection. Since that time, many people have wondered why.

Here's part of what he said in his announcement.

(BEGIN VIDEO CLIP, MARCH 31, 1968)

LYNDON JOHNSON, PRESIDENT OF THE UNITED STATES: I do not believe that I should devote an hour or a day of my time to any personal partisan causes or to any duties other than the awesome duties of this office -- the presidency of your country.

Accordingly, I shall not seek, and I will not accept, the nomination of my party for another term as your president.

(END VIDEO CLIP)

KING: During that time, the Vietnam War was raging. And Johnson's approval ratings were very low. Some believe Johnson feared he would lose the election.

Jack joins us again now with "The Cafferty File" -- Jack.

CAFFERTY: Too bad it didn't happen in 2004, isn't it?

Here's the question this hour: Bill Clinton says Democrats need to chill out and let the election process play out. Is he right?

Dave writes from Iowa City: "I would tell Bill to wake up. The election process has played out. It is virtually impossible for Hillary to win. It's over."

Bill in Quarryville, Pennsylvania: "I would like to see Hillary Clinton get the nomination. But I cannot help wondering, if the roles were reversed, and Hillary had the lead that Obama has now, would her husband still be saying the same thing? I doubt that he would. I think it is time for the Democratic Party to step in and announce Senator Obama the winner."

Jane in New Hampshire writes: "Bill Clinton needs to get over himself. The wife isn't entitled to be president just by her name. And she's losing the race. He's starting to sound like a used car salesman."

B. in Baltimore writes: "Hillary Clinton has every right to stay in the race as long as she likes, but she should consider the consequences to her future, both nationally and in New York. If she hurts the party to the point of a McCain victory, New York Democrats may be out to elect anyone else. Ed Koch doesn't seem to be busy -- "

(LAUGHTER)

CAFFERTY: " -- Eliot Spitzer, for that matter."

Rick in Decorah, Iowa: "The Clintons are saying that everyone in the next 10 primaries deserves to have their votes counted, and, in the next breath, they say the superdelegates should be able to override the will of the people. More Clinton doublespeak. And who are they really looking out for?"

Kay in Pennsylvania says: "Heck, yes. Let it play out. I'm from Pennsylvania. I hear lots of election talk. People are really excited about the primary for the first time in my voting lifetime. I'm for Hillary. But, after it's over, I will vote for anyone who stands against the abomination that has been with us for the last eight years."

And John in San Diego writes: "Bill isn't black enough to be telling Democrats to chill out."

(LAUGHTER)

CAFFERTY: John.

KING: As always, quite interesting. Jack, see you in a little bit.

And you're in THE SITUATION ROOM.

Happening now, don't worry; be happy. That's the mantra from some top Democrats. But the reassurances may mask a real danger for a party: a sore loser. What happens if the nastiness lasts into November?

And the candidates bet their campaign dollars on "Wheel of Fortune" and other TV game shows. When it comes to reaching voters, you might say, the price is right.

And soothing lights, mood music: how airport security screeners plan to calm you down and catch the bad guys.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com