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Hillary Clinton Set to Campaign With Barack Obama; McCain's Border Wars; Interview With David Axelrod

Aired June 20, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama preparing momentarily facing tough questions from reporters since the first time rejecting public funding for his general election campaign. We'll go there live once he starts talking.
Two for the road. Hillary Clinton is set to campaign with Barack Obama. When will Bill Clinton do the same thing? I'll ask Obama's chief strategist, David Axelrod. He's standing by live.

And Michael Bloomberg's intervention. The New York mayor shows his Independent streak and defends Barack Obama in front of Jewish voters in Florida.

And McCain's border wars. He's pushing free trade in Canada, and he's also privately making promises to Hispanic leaders about immigration reform.

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

It's the photo opportunity many Democrats have been waiting for, others still aren't ready to accept. Hillary Clinton standing by side by side with Barack Obama as a supporter, not a rival. The flashbulbs will be popping next week when Obama and Clinton kick off their show of togetherness out on the campaign trail.

Let's begin with our Suzanne Malveaux. She's watching the story for us.

All right, Suzanne. What you are hearing about this Obama- Clinton relationship?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, close associates of Obama and Clinton say that there is still tension between them and their camps. The sticking point, Clinton's debt estimated as high as $30 million.

Now, while Obama's camp says they're going to help Clinton pay it off, there is still no deal yet. But aides I've been talking to today say that these regular conference calls are paying off. They have set a date for the joint appearance of the candidates.


MALVEAUX (voice-over): Get ready for the Obama/Clinton unity tour heading to a town near you. SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Our party and our country are stronger because of the work that Hillary Rodham Clinton has done throughout her life.

MALVEAUX: One week from today, former rivals Barack Obama and Hillary Clinton will hit the campaign trail together to promote his candidacy for president of the United States. A reality she accepted two weeks ago, four days after Obama won the nomination.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Today I am standing with Senator Obama to say, yes, we can.

MALVEAUX: Those familiar with Clinton's thinking say this is not about friendship but political accommodation. It's in her interest for her own political future to help Obama capture the White House. Her appearance with him will send a powerful message to her faithful.

REP. EMANUEL CLEAVER (D), Missouri: She's going to be out campaigning. And I think that will say to her supporters, it's OK. The water is fine, come on in.

MALVEAUX: Not too hot, not too cold. No circling sharks. But Clinton supporters are still leery.

REP. CAROLYN MCCARTHY (D), NEW YORK: He can't do it all in one day. I mean, there are a lot of people he needs to reach out to.

MALVEAUX: Clinton and Obama met secretly for an hour a couple of weeks ago to try to get comfortable with one another following their bitter race. Voters, to be sure, will be watching their body language on the campaign trail. While close associates of the two say they haven't exactly kissed and made up, they have been working hard to merge their teams.

OBAMA: And I look forward to working with her.

MALVEAUX: This week, Obama reached out to key voting groups who had supported Clinton -- Hispanics, union leaders and White women. Wednesday, Obama hosted a Democratic National Committee fund-raiser at the home of Ethel Kennedy, where Clinton and Obama loyalists gave $28,000 a pop to the party. Senator Clinton has called on 100 of her top campaign fund-raisers to meet with her and Obama next week at the Mayflower Hotel in Washington, D.C., to join forces.


MALVEAUX: Clinton's advocates say it's in Obama's interest to retire her debt, because the less time Clinton has to spend fund- raising, the more time she has to go out and campaign for Obama. And secondly, with her high-powered donors, she has the ability to raise anywhere from $50 million to $100 million for him -- Wolf.

BLITZER: What about Bill Clinton? What's his status?

MALVEAUX: Well, right now Bill is not yet a part of this unity tour. He doesn't have a role yet. He's in Canada today, he's giving speeches. This weekend he's going to attend the U.S. Conference of Mayors.

Next week he is going to be in Europe with Nelson Mandela, celebrating his 90th birthday. So he's not going to be campaigning for Obama next week. But Wolf, I am told to stay tuned.

BLITZER: I'm sure he will sooner rather than later. But we will stay tuned.

Suzanne, thanks very much.

And we're standing by to hear directly from Barack Obama momentarily. He's due to hold a news conference in Jacksonville, Florida. As soon as he starts there, we'll go there live.

This is going to be the first time he's answering questions since his very public decision to reject public funding for his general election campaign. Barack Obama coming up right here in THE SITUATION ROOM.

Meanwhile, John McCain took a political jab at Barack Obama today from across the border. McCain used his speech to the Economic Club of Canada to tout his own support for free trade and to paint his opponent as a protectionist. But then he began to pull his punches somewhat.

Dana Bash is in Ottawa watching this story for us.

He didn't go as far, Dana, as some had suggested that he was going to go in going after Barack Obama on the issue of trade.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: It's interesting, Wolf. He in the end tried to abide by that old adage, politics stop at the water's edge. Or in this particular example, it's obviously stopping at the northern border.

But you know, he took his campaign here to Ottawa, yet he was greeted by the U.S. ambassador. It was kind of a formal moment there, an official moment there. And that was probably the first indication of how unusual this is. A campaign trip that the politician, the candidate insists wasn't political.


BASH (voice-over): No, this isn't a battleground state. It's Canada.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: There aren't any electoral votes to be won up here in the middle of a presidential election.

BASH: That much John McCain knows. But before his visit, advisers called this a chance to establish differences with Barack Obama on NAFTA, the U.S. trade agreement with Canada and Mexico. He did, but not by name.

MCCAIN: Threatening to abrogate an agreement that has increased trade and prosperity is nothing more than retreating behind protectionist walls.

BASH: That was intended to draw a contrast with Obama's rhetoric against the agreement in economically hard-hit Ohio during the Democratic primaries.

OBAMA: I want to be very clear, I don't think NAFTA has been good for America, and I never have.

BASH: But at a press conference following the speech, McCain refused to go there.

MCCAIN: This is not a political campaign trip.

BASH: Not even a question about Canada-related policy differences with Obama.

MCCAIN: I cannot here. I can as soon as I return to the United States. And I've described it numerous times, and as short a time ago as yesterday. And I want to assure you I'll discuss it again tomorrow and in the coming days. But that would then lend a political bent to this visit.

BASH: (INAUDIBLE). How is that not political?

MCCAIN: Because we didn't feel it was appropriate for the taxpayers while I'm the nominee of my party to pay for a trip that would accrue to the cost of the taxpayers.


BLITZER: Dana Bash reporting from Ottawa.

Let's go live to Barack Obama. He's in Jacksonville, Florida, right now, making an opening statement. Then he's going to answer some questions. Let's listen in.


OBAMA: ... but couldn't even afford to fill up his gas tank to go look for a new one. And along with the skyrocketing costs of health care and college, and even food, this is a crushing burden on working families all across America. And we've got to provide relief.

That's why I've proposed taxing the record multibillion-dollar profits of oil companies, and using some of that money to pay for a $1,000 middle class tax cut that would go to 95 percent of all families and offset some of these rising costs in fuel. It's also why I've proposed a second fiscal stimulus package that would mail another round of rebate checks to the American people.

These steps, along with investigations of possible market manipulations in the oil markets, would ease some of the short-term pain of these gas prices. But what wouldn't do a thing to lower gas prices is John McCain's new proposal, a proposal adopted by George Bush as well, to open up Florida's coastline to offshore drilling. In what's become a bit of a regular occurrence in this campaign, Senator McCain once had a different position on offshore drilling. And it's clear why he did. It would have long-term consequence for our coastlines, but no short-term benefits since it would take at least 10 years to get any oil.

Well, the politics may have changed, but the facts haven't. The accuracy of Senator McCain's original position has not changed.

Offshore drilling would not lower gas prices today. It would not lower gas prices tomorrow. It would not lower gas prices this year. It would not lower gas prices five years from now.

In fact, President Bush's own Energy Department says that we won't see a drop of oil from his own proposal until 2017. And in fact, you wouldn't see any full production out of any oil drilling off the coast until 2030.

It will take a generation to reach full production. And even then, the effect of gas prices will be minimal at best.

So let me just repeat, John McCain's proposal, George Bush's proposal to drill offshore here in Florida and other places around the country would not provide families with any relief this year, next year, five years from now. Believe me, if I thought there was any evidence at all that drilling could save people money who are struggling to fill up their gas tanks by this summer or this year or even the next few years, I would consider it, but it won't. And John McCain knows that.

The fact is, Senator McCain's decision to team up with George Bush on offshore drilling violates the bipartisan consensus that we've had for decades that has protected Florida's pristine coastline from drilling. And just like Senator McCain's gas tax holiday gimmick, this is a proposal that would only worsen our addiction to oil and put off needed investments in clean renewable energy.

It's not the kind of change that the American people are looking for. They're looking for leadership that moves this country forward and actually offers real solutions to the serious challenges that we face.

And that's why I've unveiled an aggressive and comprehensive energy policy that raises our fuel standards, invests $150 billion over the next 10 years in clean, affordable, renewable sources of energy. A policy that promotes realistic energy conservation.

And when I'm president, I intend to keep in place the moratorium here in Florida and around the country that prevents oil companies from drilling off Florida's coasts. That's how we can protect our coastline and still make the investments that will reduce our dependence on foreign oil and bring down gas prices for good.

That may not poll well. And I understand that Senator McCain may have looked at the polls and said, you know, people might buy drilling, or they might buy a gas tax holiday. My job is not to go with the polls, my job is to tell the American people the truth about what's going to work when it comes to our long-term energy future and how we can provide some short-term relief to families.

That's what I intend to do as president as well.

With that, let me open it up for questions.

QUESTION: (OFF-MIKE) a price threshold or another situation where you would consider drilling -- offshore drilling?

OBAMA: Well, keep in mind, first of all, as has been suggested by some of the congressmen who represent coastal areas, we've already dedicated areas in the Gulf for drilling. Not all of those potential reserves have been tapped, but what I know, having spoken to experts in this field, is that we can't drill our way out of the problems that we're facing.

We have about 3 percent of the world's proven reserves. We consume about 25 percent of the world's oil.

China has seen a huge increase in their own consumption. The only reason that prices went down yesterday was because China decided that it was going to increase its gas prices by about 18 -- 17, 18 percent. So they're having a huge impact on the world oil market.

India, same thing. The same thing in the Middle East, where there's a lot of development taking place.

And so we can project where we're going in the future. The demand is going to continue, and supplies, at best, will creep up.

And so what we have to do is to find significant ways to use less oil, to find alternative energy strategies. When it comes to our transportation system, for example, I was with Democratic governors this morning, and all of them talked about the possibilities of creating a smart electricity grid that when you combine with new battery technology, could create a fleet of plug-in hybrids that would reduce drastically our dependence on foreign oil, also save our environment in the bargain, and put people back to work here in the United States.

That's a smarter strategy. That's the kind of strategy that I think we have to pursue.

Yes, sir?

QUESTION: Your decision to opt out of the federal campaign financing for the general election, you said yesterday the system was broken. But critics say it wasn't broken until you broke it yesterday. What's wrong with it, and why aren't you going to participate?

OBAMA: Well, the system's broken because what we've got is a system, as I said yesterday, that -- where we see 527s, the RNC, or the DNC, outside groups, raising vast amounts of money, much of it undisclosed from special interests, from PACs, from lobbyists. And that amount of money last election cycle dwarfed some of the money that was spent within the system.

Now, if you've look at what we've done, we don't take PAC money from -- we don't take money from federal registered lobbyists. We've now imposed those same rules on the DNC.

Ninety percent of our contributions are from small donors. And what we have done is to create a system that allows us to free ourselves from dependence on special interests and from lobbyists. That stands in contrast to Senator McCain's operations right now where he says he's in the system, and yet a huge proportion of his money is raised from special interests, from lobbyists. I don't think that's a recipe for reform.

I am a sponsor of a public financing bill that can strengthen the system, because I recognize not every presidential candidate may not be able to do the same things that we've done in this campaign. And so my commitment to fixing the system remains. But in this campaign, it's my belief that in fact what we've built is something that frees ourselves from special interests and allows us to run an effective campaign as well.

You had a question earlier.

BLITZER: All right. Barack Obama answering the question about campaign financing of his general election. Barack Obama defending his controversial decision yesterday, changing his mind earlier. He was indicating he supports public financing of the general election campaign. Now he's decided to reverse himself on that.

We're going to continue to monitor what Barack Obama is saying, go back there as he continues to answer questions.

But I want to go to Jack Cafferty for "The Cafferty File" right now.

Jack, I know this subject is very much on your mind as well, precisely what Barack Obama's talking about.


Barack Obama's become the first major party candidate to opt out of public financing since Watergate. It's no big surprise, because when it comes to fund-raising, Obama has turned out to be a virtual ATM machine.

Candidates who take public financing get about $85 million to spend in the two months leading up to the general election. If Obama can tap in once again to the 1.5 million donors who contributed to his primary campaigns, along with Hillary Clinton's donors -- you heard Suzanne Malveaux saying earlier they could kick in maybe $100 million -- some out there predict that Obama could raise $500 million for this run for the White House, and that would put him, of course, at a tremendous advantage over John McCain, who says he will take the public financing.

Experts say Obama could use this wad of money, big wad of money, to run a national ad campaign similar to the marketing campaigns done by companies like McDonald's or Nike. He'll be able to compete in Republican states where the GOP rarely gets any competition.

The downside for him, though, is he's opened himself up to charges of hypocrisy. Last year he vowed to work with the Republican nominee to "preserve a publicly--financed general election." Those were his words. Now he's drawing fire from both friends and foes for his change of heart.

McCain lashed out at Obama, saying he's gone back on his word. Although campaign finance is not a top issue with voters, the McCain camp's pouncing on this as an issue of trust, as well as evidence that Obama doesn't really represent a new kind of politics.

And watchdog groups are also disappointed with Obama's decision. Senator Russ Feingold, who co-sponsored legislation with Obama to change the public finance campaign system is calling his decision on this "a mistake."

Here's the question: How much does it matter that Barack Obama is opting out of public campaign financing?

Go to file. You can post a comment on my blog. Or not -- Wolf.

BLITZER: A lot of people do, Jack. Hundreds, and sometimes thousands.

CAFFERTY: Thousands.

BLITZER: Every day.

Jack, thanks.

CAFFERTY: You know what I did yesterday?

BLITZER: What's that?

CAFFERTY: I had the day off yesterday. Know what I did?

BLITZER: Relaxed?

CAFFERTY: I went to "Sex and the City."


BLITZER: Tell me about it later, OK? Thanks, Jack.

CAFFERTY: I don't want to.

BLITZER: All right. Thank you.

We're going to follow up on Jack's question.

Coming up, some liberal Democrats, as you know, have some harsh words for Barack Obama's controversial decision to opt out of that public financing system. I'm going to be speaking live with Obama's chief strategist, David Axelrod. We'll talk about this and more. He's standing by live.

Also coming up, Obama's new campaign seal. Does it look familiar? Donna Brazile and Leslie Sanchez will have plenty to say about that in our "Strategy Session."

And new complaints that John McCain shows two very different sides on the issue of immigration, depending on his audience. We'll tell you the latest right here in THE SITUATION ROOM.


BLITZER: Now that he's the Democrats' nominee-in-waiting, Barack Obama is certainly getting tougher scrutiny on a wide range of issues, including his rejection of public campaign funding and his position on free trade.

Let's discuss this and more with his chief strategist, David Axelrod, who's joining us from Chicago.

David, thanks for coming in.


BLITZER: McCain in Canada today was going after Barack Obama for being protectionist because of his policies opposing free trade. He says it's going to cost a lot of jobs in the United States, export- related jobs, and hurt this economy. Listen to McCain's point.


MCCAIN: Demanding unilateral changes and threatening to abrogate an agreement that has increased trade and prosperity is nothing more than retreating behind protectionist walls.


BLITZER: Is Senator Obama if president going to unilaterally abrogate NAFTA?

AXELROD: No. And what he says, he's had a conversation already with Prime Minister Harper. He'll speak to President Calderon. They -- Wolf, his plan, and he's said it all along, is to sit down and say let's make some adjustments and see what we can do.

The reality is that NAFTA has been good in some ways and bad in others. And there are plenty of places -- I note that Senator McCain is making his case in Canada. He ought to come and make it here in the United States and listen to what people around the this country are saying.

We're going to lose our consensus for trade in this country if we don't make the appropriate adjustments to our negotiating and our treaties so that they include standards for workers, standards for the environment. That was Senator Obama's objection to NAFTA in the first place, and I think most Americans agree with him.

BLITZER: And what if the Canadians and the Mexicans say no can do, they don't want to make any changes, they like it exactly the way it is?

AXELROD: Well, let's see what happens. Let's sit down and have a discussion about these issues. And that's what Senator Obama is proposing.

But in the larger sense, on the issue of trade, he's saying we ought to take a new approach. He believes in trade. He's said that. He's been very clear with opponents of trade and supporters of trade, that he believes in trade. But he feels that we have to be much tougher in our negotiations, and take into account the country as a whole, you know, our workers, our environment, and put together treaties that are not just good for select interests, but for the country as a whole.

BLITZER: As you know, Senator Obama is getting some sharp criticism not only from McCain and Republicans, but even from Democrats. Some Democrats, some liberal groups' editorial pages, "New York Times," "Washington Post," for his decision to opt out of the public financing -- public funding for his general election campaign.

Russ Feingold, a supporter of Barack Obama, Democrat of Wisconsin, saying, "This is not a good decision. While the current public financing system for the presidential primaries is broken, the system for the general election is not." And he says Obama's decision was a mistake.

Go ahead and explain why Senator Obama decided to change his mind on this.

AXELROD: Let me say that the whole point of campaign finance laws is to try and reduce the influence of large money in our politics. No one's done more to do that at the presidential level than Senator Obama in this campaign. Because of the grassroots support that he's had, 1.5 million or more contributors, average donation less than $100, he's really returning control to people at the grassroots.

He's refused money from lobbyists, federal lobbyists. He's refused money from PACs. He's now -- now the Democratic National Committee has followed suit.

He's asked these 527 committees who pledged so large in the last campaigns to stand down, and two of the larger ones have disbanded. He's doing more to reform our system as a candidate than anybody in my memory.


BLITZER: But isn't the real -- yes, let me just say, isn't the decision behind this, and let's be blunt, this is going to help him be elected president of the United States? Because he can obviously raise $200 million, $300 million, maybe $400 million, which is a lot more than $85 million that he would get under public financing.

Isn't that the real reason why he's doing this, smart policies?

AXELROD: Wolf, let's be clear about one thing. John McCain's taking this money in the general election, but it doesn't preclude him from raising money for the Republican National Committee. And he's already raised tens and tens and tens and tens of millions of dollars for the Republican National Committee.

By the time this is through, between Senator McCain, the Republican National Committee, and the 527s that he refuses to discourage, they're going to spend plenty of money. And they may well spend more money than we do.

We need to be prepared for that, and we're going to be prepared for that. But on the system of public financing, there's still no clarity as to whether Senator McCain is operating legally right now.

He opted in at one point, he opted out at another point. He used being in the system to get a loan, to get on ballots. Then he said, no, I'm not part of the system. And that issue is still being looked at as he spends all this money in the primary season toward his general election campaign.

So for all his pieties, there are many questions about how he's operating in this campaign. Plus, his average donation is much, much higher, more -- closer to $1,000 than $100. And so I -- you know, I don't think that he is in a position to moralize too much about this.

BLITZER: But it is smart politics on your part, isn't it?

AXELROD: Well, I think that it's good politics to be competitive with your opponents. We expect our opponents to spend a lot of money and to do it with a ferocity that has become the hallmark of the Republican Party in these national elections.

Nobody in America believe the Republicans are not going to have a lot of money. And if you look at how they're raising money at $28,000 a pop for the Republican National Committee, you can see that there's not going to be any tag days over there for John McCain.

BLITZER: One final question. Bill Clinton, he's been sort of silent since Hillary Clinton came out enthusiastically and endorsed Barack Obama. What does that say to you, if anything?

AXELROD: Well, look, I think that Senator Obama has respect for President Clinton. There are only four presidents alive, and he's a repository of unbelievable insights and wisdom about government and politics.

I know that they're going to get together, they're going to have the opportunity to speak, and that he's going to -- and that he's going to be someone who Senator Obama consults with not just during the campaign, but after the campaign. But these things take time.

We just went through a 17-month struggle, the most competitive nominating fight in the history of the Democratic Party. Give us a few days to get our family back in order here, Wolf. We're going to be fine.

BLITZER: But I just want to be clear, you want Bill Clinton out there campaigning for Barack Obama, right?

AXELROD: Bill Clinton is an asset to the Democratic Party. And he is, as I said, a repository of extraordinary knowledge about not just politics, but particularly government and public policy. We want him involved. And I hope he will be.

BLITZER: Do you know when there's going to be a meeting between the two of them?

AXELROD: I do not, Wolf.

Look, again, I don't think that all of these things have to be resolved in a day or a week. We're going to get together. I'm absolutely confident of that. I don't want you to worry about it all weekend long. We're going to be -- we're going to be all right.

BLITZER: All right, David Axelrod, the chief strategist for Senator Obama, thanks very much for coming in.

AXELROD: OK. Thanks for having me.

BLITZER: Appreciate it very -- appreciate it very much.


BLITZER: In Boca Raton, Florida today, the New York mayor, Michael Bloomberg, addressed a group of Jewish voters, and he had some strong words about rumors about the Democratic presidential candidate.

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

What was the message here from Michael Bloomberg to voters down in Florida, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, his message was, reject rumors in the presidential campaign intended to spread fear.

And Mike Bloomberg took that message to the state that is home to many former New Yorkers.



SNOW (voice-over): New York Mayor Mike Bloomberg talked presidential politics in Florida, telling a group of Jewish voters he hasn't picked a candidate yet to endorse yet, but urged them to focus on facts, and not rumors.

MICHAEL BLOOMBERG (I), MAYOR OF NEW YORK: In this election, we have to stand up against this whisper campaign against Senator Obama. It is our obligation to do.

SNOW: Part of that whisper campaign against Democratic presidential hopeful Barack Obama has come in the form of e-mails targeting Jewish voters. They question his support for Israel and portray him as being Muslim. Obama is Christian. Bloomberg, who's Jewish, took his message to an audience in Boca Raton, home to many former New Yorkers who are Jewish.

BLOOMBERG: Let's call these rumors what they are, lies. They are cloaked in concern for Israel, but the real concern is about partisan politics.

SNOW: But the man who himself toyed with running for president, and who has been dangling a possible endorsement over both candidates, says, don't read his defense of Obama as backing him. At the same event, Bloomberg praised Republican John McCain as a stand-up guy and honest leader.

BLOOMBERG: I would be happy to speak out against intolerance for both McCain and Obama, and not take sides there.

SNOW: Bloomberg says he hasn't decided yet who he will vote for. But one political observer in South Florida says, Obama stands to gain from Bloomberg speaking out in a state where it's estimated that 5 percent to 8 percent of the electorate is Jewish.

SUSAN MACMANUS, UNIVERSITY OF SOUTH FLORIDA: Let's face it. Florida is going to be such a close state yet again that swaying either 1 or 2 percentage of the Jewish vote in one direction or the other can mean victory or defeat for Obama in this state.


SNOW: Now, of course, questions arose about what Mike Bloomberg gets out of all this. He was asked about his own political future, shooting down any suggestions he might be anyone's vice presidential choice. But he is keeping himself on the national stage, and, today, met with former Florida Governor Jeb Bush at an education summit -- Wolf.

BLITZER: Mary Snow, thanks very much.

In both business and politics, Michael Bloomberg certainly has a reputation for making changes. After working on Wall Street, Bloomberg broke out on his own and went into the financial news business and made a fortune. In 2001, he was elected mayor of New York, but not before switching from being a Democrat to becoming a Republican. That allowed him to avoid a tough primary battle.

Last summer, he changed party affiliation once again, leaving the GOP and declaring himself an independent. He says it's emblematic of his nonpartisan approach to govern.

We're also going to remind you we are going to be speaking with a top adviser to John McCain, Frank Donatelli from the John McCain campaign, the deputy chairman of the RNC. We're going to get his reaction to what we just heard from David Axelrod and what we heard earlier from Barack Obama here in THE SITUATION ROOM.

Also, as you know, the McCain camp accusing Barack Obama of flip- flopping on trade, campaign finance. We will explore with our "Strategy Session" and a lot more -- right here in THE SITUATION ROOM.


BLITZER: In recent days, Barack Obama has backed off his harshest criticisms of the North American Free Trade Agreement, and he's changed his stance on campaign financing, electing to decline the federal funds for the general election.

It's prompted charges of flip-flopping, as you have heard. Obama's camp says John McCain has contradictions of his own.

Let's go to our political analyst, Bill Schneider. He is following all of this for us.

The McCain campaign basically says there are two Barack Obamas on these various issues, Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, and the McCain campaign -- the Obama campaign -- I'm sorry -- the Obama campaign says, back at you. They say there are two McCains on the issue of illegal immigration.


SCHNEIDER (voice-over): On Wednesday night, John McCain held a private meeting with more than 150 Chicago-area Hispanic leaders. According to the Associated Press, several people who were at the meeting said McCain assured them he would push for comprehensive immigration reform if he's elected president.

In 2007, McCain's sponsorship of comprehensive immigration reform angered conservatives and very nearly derailed his presidential campaign. At a Republican debate in January, McCain was asked whether he would still vote for his original measure.

MCCAIN: No, I would not, because we know what the situation is today. The people want the borders secured first.

SCHNEIDER: McCain's critics were reassured.

MIKE ANTONOVICH, L.A. COUNTY SUPERVISOR, 5TH DISTRICT: The original proposal, I opposed. Senator McCain's new proposal, I support, which is to ensure you have border security before you have any other types of reform.

SCHNEIDER: After the Chicago meeting, the Obama campaign's communications director charged, McCain was trying to have it both ways.


ROBERT GIBBS, OBAMA CAMPAIGN COMMUNICATIONS DIRECTOR: It's hard for me to understand how you could sit in front of 150 Hispanic leaders in Chicago and leave them with the impression that you would support comprehensive immigration reform, and have that not directly contradict the fact that, sitting in the Reagan Library, in the midst of a Republican primary, how you could say that you didn't intend to vote for your own bill.


SCHNEIDER: Right now, McCain is getting just over a third of the Hispanic vote nationwide. Last time, Bush got about 40 percent.

McCain's got to keep conservatives happy, while making sure his Hispanic support doesn't collapse. How is he going to do it? His campaign says he will be addressing several major Hispanic groups in the next month.


SCHNEIDER: We asked the McCain campaign for a response to Mr. Gibbs' comments. They said -- quote -- "Despite the wildly misinformed opinions of Barack Obama's spokesman, John McCain fundamentally believes that we need to secure our border, and then move forward to address the need for immigration reform in a respectful and compassionate manner that recognizes we are all God's children. That's his position yesterday, today, and every other day, before all the groups he meets with" -- Wolf.

BLITZER: All right, Bill, thank you for that.

Barack Obama out on the campaign trail today meeting with Democratic governors.


OBAMA: What you need, I believe, is a partner in Washington that understands your people.


BLITZER: But it's not as important what he's saying. It's how he's saying it. We're going to show you what's going on.

And the sky's the limit for Obama's fund-raising efforts. So, how high will the money go. I will ask Donna Brazile and Leslie Sanchez. They're here in our "Strategy Session."


BLITZER: Carol Costello is off today. Brianna Keilar is checking some other stories incoming to THE SITUATION ROOM.

Brianna, what is going on?


Well, legal troubles for family members of indicted Louisiana Congressman William Jefferson. Jefferson faces federal charges in connection with an alleged international bribery scheme. Today, in New Orleans, his sister, brother and his niece were arraigned on fraud charges in a separate case. They're accused of pocketing more than $600,000 in public grant money for charitable and educational programs. All three pleaded not guilty -- Wolf.

BLITZER: Brianna, stand by. We are going to get back to you shortly.

Barack Obama has a brand-new logo, but some are questioning whether it's respectful. We will take a closer look. We will talk about it and more in our "Strategy Session" right after this.


BLITZER: Let's discuss what's going on in the world of politics today in our "Strategy Session."

Joining us, our two CNN contributors, the Democratic strategist and Washington-based political consultant Donna Brazile, and former adviser to President Bush Republican strategist Leslie Sanchez. Leslie heads a market research firm specializing in Hispanic outreach for corporate clients.

Guys, thanks very much for coming in.

What do you think about this new seal that was unveiled today by Barack Obama's campaign? We're going to put it up on the screen behind you. There it is, right there. There, you see the president of the United States' seal, and there you see "Obama for America" seal,

What do you think about that?


Look, he's running for president of the United States. He is clearly now becoming a general election candidate. I would hope that he would darken up the blue so it's more presidential blue. But I think it's a very creative use of the seal.

BLITZER: What do you think?


I think it shows that anybody with Photoshop can do pretty much anything they would like. And what is interesting, I called a few presidential historians, and they were laughing on the phone. They couldn't believe it. And they were reading the Latin to me. And they said that it's a couple iterations, either, yes, we can, or, truly, we can. It's got its own message.

I mean, the Ramones took the logo and created something for themselves.

BLITZER: I don't remember a time candidate for president has unveiled a sort of presidential-looking seal. Do you remember that?

BRAZILE: Well, look, I think this is an extraordinary political year.

And what the campaign is doing, especially today, meeting with governors, is to try to give the look, the feel of a presidential campaign with a candidate who clearly is defining himself by using this new seal. He has a new patriotic ad. This is really good for Obama.


BLITZER: Because, if you looked at him, he has got a lot of flags there, the lapel pin.

Let's talk about money for a second, because you heard Barack Obama make his defense. You heard David Axelrod make the defense. It's smart politically. I don't think anyone can deny he would rather have $300 million or maybe even $400 million for a general campaign election than $85 million.

SANCHEZ: No, no doubt about it.

The bottom line, he broke his promise on campaign finance because he was seduced by the money. There's a potential to raise a lot of money, do a lot. And more ammo in war is a good thing, I mean, in terms of the dollars he can use.

I think it's an interesting case. People John McCain's making the case of trust. I think it's a valid argument. But look what you can do with that money. If you do have half-a-billion dollars, $1 billion, Barack Obama, even his first campaign ad was an ad that you could run in a Republican primary. He's talking about tax cuts, welfare to work, welfare reform, strengthening our troops.

It's interesting. I think he can run a Democratic campaign, a Republican campaign, a Hispanic, an evangelical, a black campaign. That's what money does.

BLITZER: He will have a lot of money. He will be able to run ads in a lot of states, so-called red states, where, if he only had $85 million, he wouldn't be able to run those ads.

BRAZILE: You know, it's extraordinary that the Republicans are saying he has broke his promise, a week that John McCain changed his position on drilling on the coasts.

Look, the truth is, is that Senator Obama has a grassroots campaign. Wolf, I have never seen anything like it. My family members -- I mean, when I was campaign manager, they would never call and say, hey, Donna, can I come to the controversy? They would never call and say, where can I send $5?

They're calling me to find out how they can give to Senator Obama. This is a grassroots movement. He will raise a lot of money. But, more importantly, he will inspire people to get involved... (CROSSTALK)

BLITZER: In the schemes of things, though, Americans care about the economy, the war in Iraq, their health care, the price of a gallon of gas. Do you think that they really care about campaign finance reform?

SANCHEZ: I think they care about authenticity. I think that they care about people that are going to keep their word.

And I think, with the sense of this -- just admit what he did, instead of trying to dance around it. John McCain said, yes, I changed my mind on offshore drilling. The economy merits that I change my mind for working-class folks who are paying -- sweating at the gas pumps. I think there's merit to that argument, but not just saying that you -- I just want to have an open bank account.

I mean, what, do you want to have signs on the blimp? What are we looking at?

BLITZER: Because I write in my little blog post today at, I say, you know what, he can make the case and simply say, it's really important to the American people. He could say, I really feel it's important that I'm the next president of the United States. I have to do whatever I can, legally, obviously morally, to go ahead and be elected. And that's why I opted out of this campaign finance system, even though Russ Feingold, "The New York Times" editorial page, and Public Citizen, other liberal groups, are criticizing him for it.

BRAZILE: That sounds like a good speech. I'm going to make sure he reads your blog and send it to him.

But, look, the truth is that...


BLITZER: But politicians hate to admit that they change their minds, as you know.

BRAZILE: Well, and politicians hate to tell the American people often the truth about what is really going on in the country and the world.

One out of 10 people check off that little $3 piece on our income tax return. The campaign finance system is broken. I agree in principle that the system should be used, should be enforced. But Senator Obama made this decision. His campaign was in talks with the McCain campaign. Look, Senator McCain earlier this year agreed to take matching funds, got a loan based on that. And he backed out. So, you know...


BLITZER: Let me just pick your brain for a second on John McCain, a champion of comprehensive immigration reform. And there's some suggestion -- you heard Bill Schneider's piece -- that he's articulating that very, very effectively before Hispanic groups, who like comprehensive reform, but is not necessarily that outspoken on this, as blunt as it is, before other groups. Is there two sides to this story that we're hearing from him?

SANCHEZ: I don't think there's two sides of the story. It's a delicate road to walk. There's no doubt about it.

One thing people that most people don't know is that Hispanics are split on immigration reform. I mean, you have got 50 percent that really believe something needs to be done and 50 percent that are supporting amnesty, and just bring everybody on board, or -- and even a strong percentage of people who want to build a fence.

So, Hispanics are very divided. It's not a top-of-mind issue. What the Democrats can't do is paint John McCain as somebody who's anti-immigrant. And that's what the immigration tends to be about.

BLITZER: All right, hold your fire for a second, because I want to take a quick break. But I want to continue this conversation with both of you.

We will take a quick break.

Also coming up: He's making a list, and we're digging to find out who's on it -- up next, new words on Barack Obama's vice presidential search.

And, later, truckloads of household supplies, finally, finally making it to Hurricane Katrina victims. We're following up on a CNN special investigation. And there's good news to report, thanks to the reporting we have done.


BLITZER: We're back with Donna Brazile and Leslie Sanchez.

We were just talking about comprehensive immigration reform. John McCain's been a champion of that, working with Ted Kennedy, among others. They failed in their last effort.

But how do you think this is going to play out in this -- in this election campaign, especially, as Leslie said, with Hispanic voters?

BRAZILE: Well, I think Senator McCain made a mistake in doing this meeting behind closed doors. Clearly, he's a maverick when it comes to immigration reform. He should have held this meeting in the public, so that everyone, not just those in the room, but those on the Republican side who need to hear this message, who have been obstructionists when it comes to comprehensive reform, he could have educated them as well.

BLITZER: What do you think? How is he going to do with the Hispanic vote this time? Republicans were moving up, at least until recently. SANCHEZ: John McCain has a legacy of doing incredibly well with Hispanics. He's earned over 50 percent in his own Senate races.


BLITZER: In Arizona.

SANCHEZ: Absolutely.

And, don't forget, he learned how to appeal to Hispanics and a lot of independent conservative Democrats by Senator John Tower of Texas. He was a military veteran in the sense of appealing to their sense of patriotism. They had at one point over 25 military bases in Texas. They understood the idea that these are strong patriotic families. And that's something any Republican who's done well tends to do well on.


BLITZER: Hispanics loved Hillary Clinton, as you know, in the Democratic contest. And there were a lot of those, about 57 or 58 of those.


BLITZER: And she did well in almost all of them. What do you think?

BRAZILE: I think -- Senator Obama met yesterday with the Congressional Hispanic Caucus. He will have strong support from the Congressional Hispanic Caucus, with Bill Richardson, the former -- governor -- Mr. Pena of Colorado. He will campaign and do very well among the Hispanics.

SANCHEZ: He's not got the support of Latinas in Congress. You have Loretta Sanchez, who is voicing some concerns. And Latinas, period, I think are going to have concerns with Barack Obama.


SANCHEZ: Well, there's a couple of different things. He's not talking their language. It's one thing to say, "Si, se puede," and do the immigrant civil rights movement. But there's a lot of young bloods, educated, economically upwardly mobile Latinos that don't see themselves in the face of this party.

BLITZER: Very quickly, Donna.


BRAZILE: Hispanics want the same thing every American wants. They want us to get out of the war in Iraq. They want jobs. They want health care. They don't want four more years of the same.

BLITZER: Donna Brazile, Leslie Sanchez, guys, thanks very much.

SANCHEZ: Thank you.

BRAZILE: Thank you.

BLITZER: On our Political Ticker right now: We're calling it a vice presidential watch list. There's a new report that former Obama rival John Edwards is on the Democratic list of potential running mates, along with former Georgia Senator Sam Nunn. Congresswoman Carolyn Cheeks Kilpatrick tells the Associated Press, she offered the names of Edwards and Nunn to members of Obama's V.P. screening team. She says she was told they were already on the list.

Remember, for the latest political news any time, check out That's also where you can download our new political screen-saver, and you can check out my latest blog posts as well.

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

CAFFERTY: You can certainly do a lot of things there, can't you?

BLITZER: If you didn't download that screen-saver, you should.

CAFFERTY: I don't know how to download anything.

BLITZER: It's easy. You can do it in five seconds.

CAFFERTY: Well, I will get Sarah (ph) to do it.



CAFFERTY: The question this hour is: How much does it matter that Barack Obama is opting out of public campaign financing?

Patrick writes: "It matters, but this is a battlefield tactic. He would be letting down, in a way, all of his supporters who have contributed so far by giving up every advantage he has. And let's be honest here. If McCain was in his position, can anyone seriously say he wouldn't do the same thing?"

Jenn writes from Massachusetts: "He made a promise to the American people. Now he's breaking it. It doesn't sound like change you can believe in. It sounds like politics as usual."

Gretchen writes from Pennsylvania: "Obama is funded by donations of all amounts coming from people of all backgrounds, races, genders, et cetera. His is a campaign truly funded by 'the people.' What about that is not a good thing? Sometimes, circumstances change. Obama has looked at all the circumstances and he has found that change comes in many forms. This is one of them. I would have been disappointed if he had done otherwise."

Paul writes: "I was withholding judgment about Obama because I know very much about him. Now I know his word is worthless. Money trumps honor. Have a nice life back in Chicago." Christine writes: "What do you think John McCain would do if he had the realistic potential to raise $500 million? I'm sure he would forgo the money, take the high road, like he did on tax cuts, offshore drilling, et cetera. I, for one, am grateful that finally a Democratic candidate had a healthy dose of realism. He needs every penny to fight the Republican Party and their total lack of any moral compass. I'm looking forward to the swift boaters getting swift boated."

Jay writes: "Hey, Jack, as far as I'm concerned, he is using public funds. The Republicans are just upset because he's doing it very successfully."

And Larry in California weighs in with: "Money talks. Public campaign financing walks."

If you didn't see your e-mail here, you can go to my blog at and look for yours there. We post hundreds of them every hour -- Wolf.

BLITZER: Jack, thank you.

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