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THE SITUATION ROOM

Hillary Clinton Vows to Fight On; Obama Looking Beyond Clinton?; McCain Probes Obama's Weak Spots; Interview With Obama Chief Campaign Strategist, David Axelrod

Aired May 7, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Certainly am, guys. Thanks very much.
Happening now, Hillary Clinton vows to move full speed ahead after a primary night that failed to give her any momentum. But a former presidential nominee says it's time for her to go. We will size up the state of her campaign and her supply of cash.

Also this hour, Barack Obama comes off the latest round of primaries with more superdelegates and a changing strategy. I will ask Obama's adviser David Axelrod about the candidate's sharpening focus right now on John McCain.

And, West Virginia, here they come. We will zero in on the next primary battleground and we will tell you why increasingly divided Democrats are seeing red, as well as blue.

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

Hillary Clinton says she's staying in the presidential race until there's a Democratic nominee. But there's growing speculation about how long she will put up a fight against Barack Obama. He won big in North Carolina last night. She squeaked out a victory in Indiana. And that left Obama with more delegates and more bragging rights.

CNN now estimates that Obama has widened his lead over Clinton in the total delegate count to 159. He's now 180 delegates short of clinching the nomination. There are six Democratic contests left with a total of 217 delegates at stake, up first, West Virginia.

That comes up next Tuesday.

Let's bring in our senior political correspondent, Candy Crowley. She's out there watching this campaign unfold in West Virginia.

All right, Candy, give our viewers a sense of what's going on. I know you're in Washington right now. But what's happening, as we get ready for this next battleground?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You know, Wolf, I have talked to at least half-a-dozen superdelegates, some of them Clinton superdelegates, some of them uncommitted, all of them antsy, but a number of them saying, listen, if she's going to get out of this race, it's going to have to be her call. And her call right now is, stay in. (BEGIN VIDEOTAPE)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: West Virginia...

CROWLEY: Hillary Clinton is determined, tireless and in West Virginia.

H. CLINTON: West Virginia is one of those so-called swing states. Democrats need to win it in the fall. I want to start by winning it in the spring to lay the groundwork for a victory in November.

(CHEERING AND APPLAUSE)

CROWLEY: West Virginia should not be a problem. Everything else is. Clinton has had to lend her campaign more than $6 million recently. And a new e-mail urgently asks for donations. "We have never campaigned with the stakes as high or the time as short" -- perhaps shorter than she thinks.

George McGovern, whose ties to the Clintons date back to McGovern's 1972 campaign, has switched his support from her to Barack Obama. McGovern argues, the math makes it all but certain Obama will win. "The time has come," he said, "for all of us to unite."

Clinton put on her game face.

H. CLINTON: Well, I respect him, and he has a right to make whatever decision he makes. I was pleased today to get Heath Shuler's endorsement.

CROWLEY: McGovern is a psychological blow, but he is not a superdelegate.

Senator Dianne Feinstein. She is also a Clinton supporter. Today, Feinstein told reporters the race is reaching a point of "negative dividends" for the party. It is a simple sentence and an ominous sign for Hillary Clinton, who cannot withstand large superdelegate defections. Clinton wants time to try to close the delegate gap with Obama while arguing other equations...

H. CLINTON: Look, if we had the rules that the Republicans have, I would already be the nominee.

CROWLEY: ... and other criteria.

H. CLINTON: We should stay focused on nominating the stronger candidate against Senator McCain and who would be the best president.

CROWLEY: Clinton met privately today with a group of superdelegates, pushing her case, asking for time. Hillary Clinton wants to move on.

H. CLINTON: Thank you all. Thank you all very much. We're getting on the road again. CROWLEY: Barack Obama was home in Chicago today. His advisers are looking ahead to the fall campaign.

(END VIDEOTAPE)

CROWLEY: Still nothing left for granted here, Wolf. Obama will be back here in Washington tomorrow. He too will be meeting with those superdelegates -- Wolf.

BLITZER: All right, thanks very much, Candy, for that.

And, coming up, I will be speaking about all of this with the former senator, the former Democratic presidential nominee George McGovern. I will talk to him about his decision to jump over to the Obama camp and whether he thinks Clinton will take his advice and drop out. My interview with George McGovern here in THE SITUATION ROOM coming up.

Now, more than ever, the delegate math is working against Hillary Clinton.

Let's go to our chief national correspondent, John King. He's watching this story for us.

All right. So, where does she stand right now, John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, let's look at the math, not many contests left, the dark blue Obama, the light blue Clinton. They split Texas. So, time is running short.

And let's look at that delegate math. You see these contests out there, Indiana and North Carolina, a split in terms of victories, but advantage Obama, because he picked but up a net gain of delegates. You now see that reflected up here. He also picked up some new superdelegates.

Remember the day when Hillary Clinton was so far ahead among superdelegates? Now Barack Obama just 10 superdelegates back. The end result is, here is the finish line under the existing rules. Senator Clinton says she would be ahead if she had the Republican rules. Well, she doesn't. She has the Democratic rules.

And it has Obama ahead at the moment. A better way to look at it perhaps is to use this graph, which shows you where we are.

And, Wolf, what does it mean at this point? It means for the first time in the campaign, there are more superdelegates at play than delegates who will be decided in the half-dozen remaining contests of primaries and caucuses. So, the superdelegates are now the key point.

And here's the stark math for Senator Clinton. As we go forward now, she needs -- my fingers don't write so well, but about 339 of the remaining 498 or so delegates. Barack Obama needs only 180. She needs 68 percent. He needs about 36 percent.

So, even if they split them about half the way -- and I'm going to give her a little more than half -- I will be kind to Senator Clinton in this math -- we give her a little more than half. Let's bring these down here for Barack Obama. Again, I'm going to give her a little more than half here. She gets a little more than half, and what happens? She can get 60 percent, Wolf, 55 percent, and Barack Obama is still your Democratic nominee.

So, the math going forward for Senator Clinton is daunting, which is why, when you see Senator Feinstein and other comments from the superdelegates saying we're at the point where this might be negative on the party, Hillary Clinton needs to win big in West Virginia, obviously, but her bigger challenge is convincing the superdelegates to not go to Obama. If anything, wait. And this math tells you just simple numbers.

She needs 339. He needs only 180 -- time and the math on Barack Obama's side.

BLITZER: Well, speaking of math, she makes the argument that look ahead to the math in November, the Electoral College math, specifically.

And she's making the argument to these superdelegates that she is more electable, given the Electoral College, than he is.

KING: Let's look quickly at the argument she makes and her advisers make when they meet one on one with superdelegates.

They say this is the math, McCain in place of George W. Bush. This is the last race for president. George W. Bush got 286 electoral votes. John Kerry got 252. If you start with the same math, what Hillary Clinton says is, look, I did so well in Pennsylvania, that I could flip Ohio back to the Democratic column. I think I can get West Virginia. I'm pretty confident I can win Florida. I might have a chance at Arkansas. Remember, I used to be the first lady there. And I can put Missouri in play.

So, what Senator Clinton says, look at that. I can put at least 320 Electoral College votes into play. I'm a stronger candidate.

What the Obama campaign says is, essentially, nonsense. They say, let's accept Senator Clinton's argument. He thinks he will win Ohio, but let's just even accept her argument for now. Barack Obama says, I can put Virginia in play because of the African-American population. I will come down here and I will get Florida, I promise you. I will put Missouri into play. And I'm bringing all these new voters into the party. And that will help us out here in Colorado, out here in Nevada, maybe someplace else, say New Mexico out here. He says, I come to the table as well.

So, you look at the side by side, Wolf. The superdelegates are being inundated with this. Barack Obama says, don't worry. I'm recovering. I will fix my problem with the white working class. I'm perfectly competitive in the fall campaign. Hillary Clinton says, I think I'm a little stronger.

The superdelegates are getting these briefings. They're seeing all the maps. But what they're looking at most of all, Wolf, who has the most pledged delegates, who has the popular vote, who has the momentum. Three out of three on that score, at the moment, Barack Obama.

BLITZER: All right, John, we have a lot more to talk about. Stand by -- John King reporting for us.

And, by the way, lots of questions about the road ahead for Senator Barack Obama. I will be speaking with him tomorrow here in THE SITUATION ROOM. The senator will join us for an interview. This will be the senator's first national interview since the North Carolina and Indiana primaries.

Senator Barack Obama joins me tomorrow in THE SITUATION ROOM.

Let's go to Jack Cafferty. He joins me right now in THE SITUATION ROOM -- Jack.

JACK CAFFERTY, CNN ANCHOR: Is he the presumptive or probable nominee yet, do you suppose?

BLITZER: He's certainly the front-runner.

CAFFERTY: No, the question was, is he the presumptive or probable nominee?

BLITZER: I think -- I don't think yet.

CAFFERTY: You don't think so?

BLITZER: He's getting closer, but he's not there yet.

CAFFERTY: All right. Well, listen to what I got here.

BLITZER: All right.

CAFFERTY: Maybe you will change your mind.

BLITZER: All right.

(CROSSTALK)

CAFFERTY: The campaign may go on, but the contest is now over. Barack Obama is the Democratic nominee for president. That's strategist Bob Shrum talking to "The New York Times." He says the only decision left for Hillary Clinton now is how she wants to end this.

"New York Daily News" columnist Michael Goodwin says, unless Obama falls off a cliff or the Reverend Jeremiah Wright pushes him, he will be the nominee. "The New York Post" calls Hillary Clinton toast.

All this points to a pretty grim scenario for Hillary Clinton. Her 14-point loss to Obama in North Carolina, coupled with the narrowest of wins in the primary season in Indiana, means that Obama got up this morning and actually had a larger lead in both pledged delegates and the popular vote.

Plus, she's broke. Her campaign is out of money.

In the last month, Clinton was forced to loan her campaign $6.4 million out of her own pocket. He, on the other hand, can't rake it in fast enough. Then there are the superdelegates, who could now begin to move in larger numbers to Obama. He picked up three or four this afternoon. And even superdelegates who currently support Clinton could switch to Obama.

And, finally, "The New York Times" suggests, senior Democrats who support Clinton, like her good friend the Pennsylvania Governor Ed Rendell or New Jersey Governor Jon Corzine, could now go to her and ask her to consider quitting.

On all of this, Hillary Clinton is absolutely tone deaf. Last night, she told supporters -- quote -- "It is full speed on to the White House."

What you're witnessing, boys and girls, is denial in full bloom.

Here's the question: What will Hillary Clinton do now?

Go to CNN.com/caffertyfile. Post a comment on my new blog.

(CROSSTALK)

BLITZER: I'm sure you are going to get a lot of comments on that, Jack.

CAFFERTY: We already have. The questions go up a couple hours early -- lots of mail coming in.

Are you excited about the interview with the senator?

BLITZER: I'm -- I'm excited I am going to have an interview tomorrow with Senator Barack Obama. I think that will be good. We will have a chance to ask him some of the most important substantive issues out there, domestic, economic issues, foreign policy issues. And, hopefully, our viewers will learn a little bit more about this Democratic candidate than they knew before the interview.

CAFFERTY: Under the -- under the masterful hands of your interviewing technique, I'm sure that he will reveal all.

BLITZER: I will try to do my best, Jack.

(LAUGHTER)

CAFFERTY: OK.

BLITZER: Thanks very much.

Hillary Clinton is playing up the importance of West Virginia right now. No wonder. That state plays to her strengths. We're going to have a live report from the Democrats' next battleground this coming Tuesday.

Also coming up, Barack Obama's fall battle plan. What message is he sending to Clinton, and to John McCain, for that matter? I will ask Obama adviser David Axelrod about the campaign's strategy right now.

And the McCain camp starts to really focus in on defeating Obama. Is the Republican candidate ready to count Clinton out?

Stay with us. Lots of news happening right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: With two more contests done, six more to go, we're looking at who's supporting whom in the Democratic race, what groups appear to be supporting Hillary Clinton, and just who Barack Obama appears to have an edge with.

Our senior political analyst, Bill Schneider, has been going through all of these numbers.

Did yesterday's results show us something new, something really important that we have to appreciate?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Yes, they did. And that is a red/blue division in the Democratic Party that could create a problem.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): You have heard about the red/blue divide in American politics. Barack Obama condemns Republicans for exploiting it.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: ... to slice and dice this country into red states and blue states, blue-collar and white-collar, white, black, brown, young, old, rich, poor.

SCHNEIDER: Well, it's happening already -- inside the Democratic Party.

Barack Obama is winning the blue Democrats, young voters, upscale urban professionals, well-educated liberals, and African-Americans. Hillary Clinton is getting the red Democrats, seniors, whites, blue- collar and rural voters, and more conservative Democrats. The split has gotten bigger since Clinton became a gun-toting, whiskey-drinking, street-fighting, tax-cutting populist.

H. CLINTON: And I know how hard you're working, working for yourselves and working for your families. And I will never stop fighting for you.

SCHNEIDER: In Indiana, nearly half the Democratic primary voters said they have a gun in their household. They voted for Clinton. And the half of Democrats who did not own a gun? They voted for Obama. Red versus blue means left versus right. In Indiana, Clinton lost liberal Democrats to Obama. They're the blue voters. Clinton and Obama split the moderates. Conservatives -- or red Democrats -- voted heavily for Clinton.

This is the first time this year we have seen such a sharp ideological division among Democratic voters. The deeper that split becomes, the greater the risk to Democrats in the fall if Obama wins the nomination.

Among Clinton voters in North Carolina on Tuesday, fewer than half said they would support Obama over McCain, whereas 70 percent of Obama voters said they would vote for Clinton over McCain.

(END VIDEOTAPE)

SCHNEIDER: Red Democrats, older, more blue-collar, more conservative, are the most likely to vote for a Republican. The Clinton supporters' argument? She would be the stronger nominee, they say, because she would be more likely to hold them. The Obama supporters' argument? He will hold them because they're hurting so much under a Republican president -- Wolf.

BLITZER: Bill Schneider, thanks very much.

Hillary Clinton is hoping to maintain her edge with white working-class voters in West Virginia, its primary now six days away.

And, in her hastily arranged stop there earlier today, she appealed for votes by appealing to voters' concerns about the economy and other top issues.

CNN's Jim Acosta is in Charleston, West Virginia, watching this story for us.

She's certainly hoping for a big showing there next Tuesday, Jim.

JIM ACOSTA, CNN CORRESPONDENT: That's right, Wolf.

And Hillary Clinton made a last-minute campaign stop in the northern part of the state today. But the sad fact is, there are only 28 delegates up for grabs in West Virginia. It's another indication the nomination math is getting tougher every day she stays in the race.

(BEGIN VIDEOTAPE)

CHELSEA CLINTON, DAUGHTER OF BILL AND HILLARY CLINTON: Hillary Clinton.

ACOSTA (voice-over): For the candidate who has remade herself as the fighter, there's no sign she's ready to throw in the towel.

H. CLINTON: I'm staying in this race until there's a nominee. And I obviously am going to work as hard as I can to become that nominee. ACOSTA: Hillary Clinton campaigned in Shepherdstown, a town near the Virginia-Maryland border, where some residents make long commutes into the Washington, D.C., area. Coal may be king in West Virginia, but another fuel, gasoline, is running a close second.

GOV. JOE MANCHIN (D), WEST VIRGINIA: I have never felt more helpless as being governor of my great state of West Virginia, that I just want to jump in and do something. It's wrong.

ACOSTA: Which is why West Virginia Governor Joe Manchin is open to Hillary Clinton's plan for a gas tax holiday. But at Charleston's Bluegrass Kitchen, even some of Clinton's own supporters see the proposal as a campaign gimmick.

UNIDENTIFIED FEMALE: I mean, I think we need something more long-term. And...

ACOSTA (on-camera): Does it sound like to you that Hillary Clinton is pandering a little bit to voters when she...

UNIDENTIFIED FEMALE: Maybe. I'm sure...

(CROSSTALK)

ACOSTA: I don't want you to dis (ph) your candidate.

UNIDENTIFIED FEMALE: I know. She's my -- yes, maybe. I'm sure.

ACOSTA (voice-over): West Virginia plays to nearly all of Clinton's demographic strengths. It's older, whiter and more rural than the rest of America. But that doesn't mean voters here are resistant to change.

DAVID LOVEJOY, RETIRED COAL MINER: I think it's time. Either a woman or black person, or an African-American. I think it's time.

ACOSTA: Professor Robert Rupp likes Clinton's chances in what he calls the Appalachian primary.

ROBERT RUPP, WEST VIRGINIA WESLEYAN UNIVERSITY: I think you describe West Virginia as Pennsylvania without Pittsburgh or Philadelphia. It's these core Appalachian voters that have to be won over and convinced that they're going to have a fighter in the White House.

(END VIDEOTAPE)

ACOSTA: And Governor Manchin told us he has no plans to endorse a candidate before Tuesday's primary. He says he has his own reelection campaign to worry about -- Wolf.

BLITZER: Thanks very much, Jim, for that -- Jim Acosta on the scene for us in Charleston.

Superdelegates are getting more antsy about when the Democratic nomination might be wrapped up. Will Hillary Clinton stop short of a convention floor fight? We're going to get the latest buzz about the battle ahead. That is coming up in our "Strategy Session."

But, coming up next, it just gets more and more horrendous -- a new warning of an astounding death toll from the cyclone in Myanmar.

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

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Barack Obama heads into the next round of primaries closer to clinching the nomination, but he is not there yet. Is he effectively writing Senator Clinton off already and setting his sights on John McCain? I will ask Obama adviser David Axelrod about the message the campaign is sending.

Meantime, McCain is looking for Obama's weak spots. Is the fall campaign already effectively under way?

We're live here at the CNN Election Center. And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, make up your minds right now. That's the pressure some superdelegates are under when it comes to Barack Obama and Hillary Clinton's race for the White House. Will they step in as a group and pick a side, or might they let the race go on to the Democratic Convention?

Also, Clinton says she will fight on, but more people say she should bow out. And they say there's a laundry list of reasons why. We're investigating.

And Rush Limbaugh urged his listeners to throw chaos into the Indiana contest and prolong the Democrats' primary uncertainty. Did his so-called Operation Chaos work?

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

Barack Obama is promising Democrats that they will unite behind their nominee this fall. And he's sounding more and more like he will be the party's choice.

Listen to Senator Obama last night, marking his solid win in North Carolina and the fact that he kept Clinton's win in Indiana to a bare minimum. His focus? The Republican's all-but-certain nominee.

(BEGIN VIDEO CLIP)

OBAMA: Because we all agree that, at this defining moment in our history, a moment when we are facing two wars, an economy in turmoil, a planet in peril, a dream that feels like it's slipping away for too many Americans, we can't afford to give John McCain the chance to serve out George Bush's third term. We need change in America.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: And joining us now, Barack Obama's chief campaign strategist, David Axelrod. He's joining us from Chicago.

David, thanks very much for joining us. Congratulations on the impressive win in North Carolina.

DAVID AXELROD, CHIEF OBAMA CAMPAIGN STRATEGIST: Thanks, Wolf. Yes, it was a great night. We were -- we were very pleased.

BLITZER: All right.

He sounds, if you listen to the speech last night, that little clip we just aired, it sounds like he thinks he has this thing wrapped up. Do you believe that?

AXELROD: Well, I think that we're in a very strong position, obviously. We were in the lead before last night. We extended that lead last night.

Obviously, there are six more contests and more decisions to be made. But, you know, we feel good about our position and we are -- you know, we're going to respect the system. We're going to compete for every vote and every delegate.

But we also as a party have to keep our eye on the ball here. And the ball is to elect a president in November and change these policies that are so devastating to families across the country and have us on the wrong track. And so we're going to be talking about that in the weeks and months to come.

BLITZER: Do you have any immediate message though to the Clinton campaign right now based on what happened yesterday?

AXELROD: Look, we respect Senator Clinton. She's a formidable person, a tenacious candidate. She's poured her heart into this. And it's not for us to tell her what to do.

She'll -- I believe that she cares about the Democratic Party. I believe she cares deeply about this country. She cares deeply about changing the direction of this country. And I think she'll make the decision that she thinks is appropriate at the time she thinks is appropriate.

So I'm not here to tell them -- or to tell her what to do. That wouldn't be a respectful or appropriate.

BLITZER: And there's been so much passion. There's been a lot of intensity in this campaign. Obviously you appreciate that.

Here are some numbers that a lot of Democrats look at from the exit polls yesterday in Indiana and North Carolina. And they're very worried when they see among Clinton supporters and they were asked if Obama's the nominee, who would you vote for?

Look at this in Indiana. They say -- 31 percent of them actually say they would vote for McCain, 49 percent say they'd vote for Obama. This is in Indiana. Sixteen percent say they wouldn't vote.

That's a big chunk of Clinton supporters who aren't ready to commit for Obama right now.

North Carolina, similar numbers. McCain, 35 percent of Clinton supporters say they'd very for McCain, 47 percent say they'd vote for Obama, 12 percent say they wouldn't vote.

How do you bring these passionate Clinton supporters who right now are refusing to commit to Barack Obama, how do you bring them back into the fold?

AXELROD: Look, Wolf, I think it's only natural when you've had a long and very competitive process that there are going to be some raw nerves right now. But the fact is that Democrats I think are united in their commitment to try and change the direction of this country.

And as Senator Obama said last night, they're not -- we know we're not going to get that from John McCain. He's embraced the Bush economics nostrums lock, stock and barrel. He's certainly embraced the Bush foreign policy.

We're not going to get change from John McCain. And I think Democrats are going to come together in the fall. I have no doubt about it.

Of course, at this juncture you're going to see some of that. And you saw some of that in the Republican Party as well during their primary process. But it does speak to the need to get this done as quickly as is possible so that we can begin that process of coming together and setting our sights on the bigger goal.

BLITZER: You speak to the Clinton people. They keep harping at Michigan and Florida. And they warn that if those Democrats in those two important states are disenfranchised, don't have a say in selecting the Democratic nominee, the Democrats in November will pay for that in those two states.

What are you going to do about that?

AXELROD: Well, I think that -- I firmly believe that Michigan and Florida will be seated at the Democratic convention, will participate in the selection of our nominee. I know that there are going to be discussions ongoing in the coming weeks. I know there's a meeting set up for May 31 on this issue.

I think we're all of one mind that Michigan and Florida should be seated. We want it done in a way that's fair and reflects the rules of the party. But I think that's going to get done. I think this is a non-issue. It will be resolved.

BLITZER: Here's what Mitt Romney said on CNN's "AMERICAN MORNING" this morning, taking a pretty strong swipe at Barack Obama.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: He has not accomplished anything during his life in terms of legislation or leading an enterprise or making a business work or a city work or a state work. He really has very little experience. And, you know, the presidency of the United States is not an internship.

(END VIDEO CLIP)

BLITZER: Pretty strong words. But I presume that's going to be a main theme of the Republicans' argument against Barack Obama going into the fall.

AXELROD: Well, I assume Governor Romney is auditioning for vice president there, and assuming the role of hit man that he thinks is required of that job. The reality is he doesn't know anything about Barack Obama or his history if he said that.

He doesn't -- and he should talk to Senator Lugar, who worked with Senator Obama to pass the most significant arms control legislation in recent years. He should talk to Senator Coburn, who passed significant legislation to put our budget on line so Americans can search the budget and find out where their dollars are being spent.

He should come to Illinois and talk to the Republican legislators here who worked with Senator Obama on the most significant health care reforms we've had in this state, or all the legislators who watched him lead the fight for ethics reform in Washington and in Springfield when he was here in Illinois. He should talk to the people who Senator Obama worked with as a community organizer, changing lives from the bottom up here in communities that were laid low by steel plant closings.

Senator Obama has a long, long history of bringing about real change that touches people's lives. And Governor Romney may or may not know that, and he may not be interested in that, but the American people will know that. And I think that's going to be the reason they're going to turn to him for the kind of new leadership this country needs.

BLITZER: David Axelrod is the chief strategist for the Obama campaign.

David, thanks very much for coming in. And congratulations again for last night.

AXELROD: Thanks, Wolf. Great to be here. Thank you.

BLITZER: And we'll get a different prospective later in THE SITUATION ROOM. Howard Wolfson will be joining us from the Clinton campaign. We'll talk to him at length as well.

And this important programming note for viewers. Tomorrow in THE SITUATION ROOM, I'll interview Senator Barack Obama himself. It will be his first national interview since the North Carolina and Indiana primaries. You'll be able to see it right here tomorrow.

And if you have a question, by the way, for Senator Obama or some ideas you want to float by me as I prepare for the interview, you can go to my blog at CNNPolitics.com. Let me know what's on your mind. Remember, Senator Barack Obama tomorrow with me in THE SITUATION ROOM.

John McCain is sharpening his focus on Barack Obama with an eye toward the Democrat's weak spots. We're going to tell you where the Republican thinks he can do the most damage.

Also coming up, Senator and superdelegate Dianne Feinstein raising a red flag, and waves it at her candidate, Hillary Clinton. What's she doing?

The growing pressure on Clinton, at least some think so, to rethink the road ahead. That's coming up in our "Strategy Session."

And one county that held up the final results from Indiana for hours and hours. What went wrong in that county last night? We're investigating.

Lots of news happening today right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: John McCain campaigning in Michigan today, his sights set on winning in November. But the Republican also is keeping an eye on the Democratic race, and he can't ignore the results from last night.

Let's turn to CNN's Dana Bash. She's watching the story for us.

You're speaking to McCain's sources, you're speaking to people close to the Republican presidential candidate. Are they changing their strategy based on what happened last night, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: You know, Wolf, they're not really doing that. And here's why. Ever since February, when John McCain first accused Obama of platitudes and empty rhetoric, when the presumptive Republican nominee singles out one of his Democratic opponents, it's almost always Barack Obama.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Thank you. Go ahead.

BASH (voice-over): Listen to John McCain rail against Democrats about Iraq at this Michigan town hall. Equal time for both Democratic candidates.

MCCAIN: If you want to set a date for withdrawal and surrender the way that Senator Obama and Senator Clinton want to do, that'll be a decision that the American people will make. BASH: McCain advisers still insist, despite Tuesday night's results, that they won't count Hillary Clinton out until the day she bows out. But McCain aides do at admit to CNN it reinforces a strategy that has been under way for some time, one laying the groundwork to run against Barack Obama.

MCCAIN: Somehow Senator Obama's standards proved too lofty a standard.

BASH: Even before polls closed Tuesday in North Carolina, McCain used his speech there about judges to hit Obama for "partisan votes" against the president's nominees, even though Clinton opposed them too.

MCCAIN: But when Judge Roberts was nominated, it seemed to bring out more the lecturer in Senator Obama than it did the guy who can get things done.

BASH: And he's recently been pushing this...

MCCAIN: It's just a fact that Hamas -- apparently their North American spokesperson is endorsing Senator Obama. People can make their own judgment from that.

BASH: McCain advisers have been scouring Democratic data, looking for openings against Obama. The most obvious, his weakness with rural Democrats. After Obama lost big with blue-collar Democrats in Pennsylvania, McCain visited the battleground state and appealed directly to those voters.

MCCAIN: Senator Obama refuses to endorse a tax -- gas tax holiday. It's a nice little break for Americans.

BASH: McCain aides say to expect more rhetoric like that after seeing these eye-popping exit polls -- 31 percent of Clinton voters in Indiana, 35 percent in North Carolina, say they'd vote for McCain over Obama.

(END VIDEOTAPE)

BASH: McCain aides say they're pleasantly surprised at the large number of Clinton voters who appear available to them if Obama wins the Democratic nomination. But they also say they realize that reflects the fresh wounds from the Democratic battle, really what you were just talking about, Wolf, with Obama adviser David Axelrod, that many of those wounds, even Republicans inside the McCain camp realize they'll heal by the time we get to November -- Wolf.

BLITZER: Fair enough. All right, Dana. Thanks very much.

Coming up in our "Strategy Session," Clinton offers this explanation on why she lent her campaign millions of dollars.

(BEGIN VIDEO CLIP)

H. CLINTON: It's a sign of my commitment to this campaign. It's a sign of how much I believe in what we're trying to do. And my supporters have been incredibly generous. You know, they are putting money into this campaign on an hourly basis.

(END VIDEO CLIP)

BLITZER: But what does her need for cash really say about the health of her campaign? And did last night's exit polls in Indiana reveal a potential Achilles heel for Obama?

All that coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In today's "Strategy Session," we're looking at what happened yesterday in Indiana and North Carolina for clues to what might happen in the remaining Democratic contests. Specifically, one issue Indiana voters were thinking about. That would be experience.

And joining us now is the Democratic strategist Jonathan Prince and the Republican strategist Leslie Sanchez.

Guys, thanks very for much for coming in.

JONATHAN PRINCE, DEMOCRATIC STRATEGIST: You bet.

BLITZER: In this Indiana exit poll, Jonathan, among the top candidate qualities of experience, when that was considered to be really important, 97 percent of those who thought experience was a top issue wound up voting for Hillary Clinton, 3 percent for Obama. They really clearly see her as having more experience than Barack Obama.

PRINCE: Look, I think they have a long history with Hillary Clinton. A lot of times when you ask voters, you know, who do you think is more experienced, sometimes you get reflected back their experience with a candidate. We found, for example, that when John Edwards ran for president in 2004...

BLITZER: And you worked for John Edwards.

PRINCE: That's right. Experience was a big issue.

When he ran in 2008, after having been on the national ticket, experience wasn't an issue at all because voters were experienced with him. So, it doesn't really surprise me that voters who think experience is the number one deciding factor for them might be more in line with Hillary, just like it wouldn't surprise me if voters who were asked, you know, is political reform your top issue -- might be with him. But what I think unites that whole Democratic pool is they're all change orders (ph).

BLITZER: Is that your experience too?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Pretty much. I think there's two interesting points.

One, it's almost a quarter of the voters thought this was an important issue with respect to experience. And when you're talking about margins and whether or not Clinton voters would support a Barack candidacy, that's an important thing to look at.

And if you look at the distinction, I think it's also in contrast to who you're against. Are you against somebody who has economic national security experience? And I think there is this issue, is Barack Obama going to be somebody like a Jimmy Carter, who makes a lot of foreign affairs gaffes? Is he going to stumble, and does that leave the U.S. vulnerable?

Those are things I think top of mind.

BLITZER: Jonathan, assess the state of the Democratic campaign, the Democratic race right now.

PRINCE: Well, I think -- look, I think a lot changed yesterday, and not very much changed at the same time. From a technical perspective, we know that we're basically where we were, that they both need superdelegates to be put over the top. And Barack's ahead, and he's going to stay ahead, and there's no real math that gets her to beat him until the superdelegates kind of make a decision.

What did change a little bit is that there was an increasing perception that perhaps these contests over the last, you know, six weeks or so demonstrated some vulnerability on his part in terms of certain segments or voters, the kind of Reagan Democrats. I worked for the Edwards' voters who were out there.

Now I think she had an opportunity to really kind of sink that in. And that didn't crystallize for her yesterday.

So, what's going to happen over the remaining weeks is she's got to -- I think I don't see her really going away, although money I know we're going to talk about in a minute, will be an issue. But I think we're going to see her stay focused, try and stay in the game, and see if some of those doubts about him rise up again and give her a way to make an argument to those superdelegates that he's too risky.

BLITZER: Did anything change last night?

SANCHEZ: I think it's still -- right now, it's true psychological warfare. I would agree completely. It's an issue, is he vulnerable? Is he going to stumble? Is there that October surprise?

There is enough in the blogosphere right now to cast that doubt, where I think a lot of superdelegates are going to keep their powder dry and ultimately see. But you can't deny there is fatigue on the Democratic side, and there's going to be increased pressure to do something about it.

BLITZER: You know, this quote from Dianne Feinstein, a Democrat from California, a Hillary Clinton supporter, she said this. And I'll put it up on the screen.

"I'd like to talk to her. I think the race is reaching a point now where there are negative dividends in terms of strife within the party. I think we need to prevent that as much as we can." She went on to say, "I want to hear what your strategy is."

That's not a very confident statement from a major Clinton supporter.

PRINCE: Well, look, it's always legitimate for your supporters to say, how are you going to win? That's fair. And I also think it's fair to say that, you know, the path is narrower for Hillary Clinton.

She's got a very fine line to tread to try to put it together. And as I said, make that argument to superdelegates that she's the better nominee because he's too risky.

At the same time, I also think that, you know -- and we do this in our party. There's lots of hemming and hawing about, oh, are we beating each other up too much? Look, there's no question that anything that Hillary Clinton or Barack Obama say to each other will be massively dwarfed by what John McCain and the whole Republican attack machine brings against them.

There's just no way. I don't buy this notion. I know it kind of runs counter to the conventional wisdom. I just don't buy this notion that somehow they're going to beat each other up so much.

BLITZER: And whatever they do in terms of beating each other up, and I think you'll agree Leslie, it's going to be small potatoes to what the eventual Democratic nominee can face, can expect to face once the general election starts going and the barrage he or she will face from the Republicans.

SANCHEZ: Sure. Sure.

The Republicans' third party entities, 527s. You know, independent expenditures. There's no doubt about there's going to be a lot of money put into this, casting and rebranding these candidates.

If you don't have a good sense of who they are, of their experience, of their vulnerabilities, you're going to find out or they're going to be defined later. You can't have that problem as much -- with John McCain.

BLITZER: How big of a problem is the money for her right now?

PRINCE: Well, look, she's clearly made a demonstration that she wants to put her own money into the campaign. So, you know, any time you don't win or you don't do as well as you expect, money doesn't come in as fast as you'd like it to.

On the other hand, you know, put your money where your mouth is. It really does show a serious commitment to this. And I, for one, you know, will just say this -- I do think it's a narrow path, but I also believe that, you know, in a democracy, you're out there, you're making a decision what you think is right for you and most of all what is right for your country. Go ahead. SANCHEZ: You know, all morning long Clinton supporters that I was talking to, you know, that we were here at CNN talking to, were trying to get answers about fund-raising. Is the money coming in like it did for Pennsylvania?

Silent. You know, it's an eerily silent moment. I think that's a very telling sign of why she's giving her campaign money. It's trouble.

BLITZER: I'll be speaking with one of her top strategists, Howard Wolfson, later. And I'll ask him, what is the strategy for your candidate to go ahead and capture this nomination? We'll hear what he has to say.

Guys, thanks very much for coming in.

PRINCE: Great. Thanks, Wolf.

BLITZER: And just ahead here in THE SITUATION ROOM, Hillary Clinton hears some friendly advice, maybe quit now, maybe not. Former senator George McGovern is a long-time Clinton friend and ally, but he's now urging her to end her presidential bid.

What happened? Why? I'll ask him. He's standing by live, George McGovern, here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check our Political Ticker right now.

Americans are divided on whether to place their confidence in the Federal Reserve during these tough economic times. In our brand-new CNN/Opinion Research Corporation poll, almost half say they're very or somewhat confident in the Fed's ability to improve the economy. Slightly more than half say they're not very confident or not confident at all.

You may think differently, but the Treasury secretary reportedly says the worst of the credit crisis may be over. Henry Paulson also tells The Associated Press rising gas and energy prices may dampen the positive impact of those rebate checks being sent out to billions of Americans. But Paulson tells the "A.P." he's not in favor of a second stimulus package, at least not right now.

Remember, for the latest political news any time, you can check out CNNPolitics.com. It's also where you can check out my blog and submit, actually, some questions, some ideas for me. I'll be interviewing Senator Barack Obama tomorrow. Tell me what you want me to ask him.

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

CAFFERTY: Don't you find it comforting when the people in Washington who create most of the problems we have come out publicly and say, well, the worst may be over and don't worry, it's going to be OK? I mean, I always sleep better at night after they do that. The question this hour is: What will Hillary Clinton do now? And we got a lot, a lot of e-mail.

Emily in North Carolina: "The most telling thing to me was watching Bill and Chelsea when Hillary gave her speech last night. It was written all over their faces she had lost the nomination. She needs to get out of the race gracefully now, before she loses all credibility."

Cliff writes: "Fight on an don. Keep fighting until she completely embarrasses herself in front of the whole nation and the entire world. She has destroyed the Clinton brand among Democrats."

Deb in Pennsylvania writes: "Like putting an elderly relative into a home when they don't want to go but need to, the superdelegates need to do the right and responsible thing by announcing their support for Obama in large numbers. They need to do this now, as the Clintons can't see that it's time to go."

Debbie writes: "I hope she stays in the race, because I'm one of those Democrats who will not vote for Barack Obama."

Vicki in Pensacola suggests she will see a psychologist.

Kim in Kansas says: "What Hillary will do now is whine and moan about Michigan and Florida because she can't stand it when things don't go her way. If that doesn't work, she and Bill will twist the superdelegates' arms until she gets her way. The DNC could put an end to this buy sticking to their guns. It's the main reason people are wary of the Democratic Party. They don't seem to follow through on anything and cooperate with each other."

Ken in California says: "She can go home, learn how to make cookies."

And Travis in Los Angeles: "You heard her, Jack. It's full speed on to the White House, where she'll be part of history when she meets the nation's first black president."

If you didn't see your e-mail here, you can go to my blog. You'll find it at CNN.com/caffertyfile. Your letter might be posted there -- or not.

BLITZER: Hundreds of them are.

CAFFERTY: Lots of them are. If yours isn't, deal with it.

BLITZER: Thanks, Jack.

And to our viewers, you're in THE SITUATION ROOM.

Happening now, after a punishing loss and a weaker-than-expected win, Hillary Clinton right now back on the campaign trail. But she faces a cloud of dust from Barack Obama. Clinton may have counted on superdelegates to give her super powers at the convention, but those Democratic VIPs are starting to give Obama some extra muscle right now.

And a one-time Democratic presidential nominee switches sides and actually urges Senator Clinton to call it quits. Why?

I'll ask the former senator, George McGovern. That interview coming up live.