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Hillary Gears Up to Campaign with Obama; McCain Appears with Arnold; Dobson Takes Swipe at Obama, Dem Hopeful Hits Back

Aired June 24, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, the Clintons stay in the picture. She's back at her day job, talking to reporters. He's out with a new statement about Barack Obama. We're tracking their sensitive relationship with the presumptive Democratic nominee.
Also, John McCain adds star power to his energy policy rollout. But Arnold Schwarzenegger and McCain don't entirely see eye to eye. This hour, conflict in California.

And a new slap at Obama from the religious right, a top evangelical leader accusing the Democrat of distorting the Bible.

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

Well, begin with Hillary Clinton, she was welcomed back to the U.S. Senate today by open arms by Democrats eager to unite their party. She showed no outward sign of her disappointing defeat by Barack Obama, but she faced some serious questions about her future relationship with Obama and her political ambitions. Senator Clinton spoke off camera but on the record with reporters for the first time since she suspended her campaign.

Listen to this audiotape of some of the Q&A.


QUESTION: What is your role?

SEN. HILLARY CLINTON (D-NY), FMR. PRESIDENTIAL CANDIDATE: My role is to be the very best senator I can be and to represent the greatest state in our country.

QUESTION: Last week a member of the Congressional Black Caucus said that you're not interested in becoming vice president. Is that...

CLINTON: I am not seeking any other position.

QUESTION: But are you not interested?

CLINTON: You know, it is not -- it is not something that I think about. This is totally Senator Obama's decision and that's the way it should be.

QUESTION: Senator Clinton, tell me about your event in New Hampshire that's coming up. Senator McCain has made a concerted effort to go after some of your voters. What's your message to your supporters and the party generally?

CLINTON: Well, it is that anyone who voted for me has very little in common with the Republican Party. If you care about the issues I care about and the future that I outlined during my campaign, then you really have to stay with us in the Democratic Party and vote for Senator Obama to be our next president.

On Friday, I will be with Senator Obama in Unity, New Hampshire, which is well-named for the occasion, and it is particularly significant because it is an area where Senator Obama and I each got exactly the same number of votes. So, this is going to be a symbolic event that I hope will rally the Democratic Party behind our nominee.


BLITZER: Let's discuss all of this with our senior political correspondent, Candy Crowley. She's here in THE SITUATION ROOM.

Candy, what struck you about Senator Clinton's remarks today?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: She -- the totality of those remarks which struck me is, I have learned on the campaign trail how very important it is that Democrats not only seize the White House but that we add to our numbers in the Senate. It was very much Hillary Clinton, the party player.

As you know, there are some hard feelings up on Capitol Hill, both on her side, where she saw some of her longtime colleagues not endorsing her, but, in fact, going over to Barack Obama. But on the other side, where some people on Capitol Hill, lawmakers and staffers say, you know, she went too far when she was roughing him up. It was unnecessary, and at times they didn't seem like team players. It seemed to be about her getting the nomination.

So, this was very much Hillary Clinton, party player, Hillary Clinton, I'm going to do the best job I can as the senator from New York.

BLITZER: What kind of hurdles, other hurdles, does she face?

CROWLEY: Well, what's interesting here is here is a woman who won 18 million votes returning to the Senate now. And it's hard for that to translate into Senate terms. The Senate is rule-bound, it is tradition-bound, it is seniority-bound. She is 34th in seniority on the Democratic side of things, out of 51, so it's going to be hard for her to have a chairmanship, that kind of thing, yet she is still very visible.

They're going to want her to help raise money, various senators. They're going to want her at their side when they're trying to push a bill. So, she has got this brand name that needs a little refurbishing up there, but it's still very strong. And they're going to find a very key way to use her in this election.

BLITZER: And we heard from the former president, Bill Clinton, today. What is he saying? CROWLEY: We did. In fact, his office put out a statement, let me just read it to you. As you know, there were questions yesterday when he sort of turned aside a weekend question about when he was going to endorse Barack Obama. Here's what his spokesman had to say: "President Clinton is obviously committed to doing whatever he can and is asked to do to ensure Senator Obama is the next president of the United States."

So clearly they are, again, sensitive to this party player idea, the idea that they would drag their feet. Both very -- not concerned, but aware of their role in the party and the Clinton name. So, the president's office coming out today and saying, listen, of course he's going to support him.

BLITZER: We're going to have lots more on the Clintons coming up here in THE SITUATION ROOM. Candy Crowley reporting.

Now that Hillary Clinton is back at her day job, she may move down on the list of senators with the most missed votes. Check out the top five. They're all current or former presidential candidates except for Tim Johnson, who has been recovering from brain surgery. The latest tally by The Washington Post shows John McCain has missed the most Senate votes, 61 percent. Barack Obama is third, missing over 42 percent of the votes. Clinton is fourth, missing nearly 33 percent of those votes.

Let's get to John McCain right now. He's trying to put a bigger spotlight on his energy plan with help from California's larger-than- life governor. But there were some bumps in the McCain/Arnold Schwarzenegger road show today, including protests and a biting response from Barack Obama. Let's go to Dana Bash. She's watching this story for us.

Dana, McCain turned to Arnold Schwarzenegger even though they do have some major disagreements on energy.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right, he did. But, you know, Schwarzenegger decided to focus today on their common ground when it comes to the environment. And despite protests against some of McCain's recent proposals, for the second day in a row he pushed a new energy-related idea, to convince voters, at least try to convince them, he's looking for solutions.


BASH (voice-over): A joint appearance with Arnold Schwarzenegger, and an environmental plug from California's green Republican governor.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Once Senator McCain is in the White House, America will get back to the game of having a sensible, consistent and forward-looking energy policy.

BASH: John McCain tried to live up to that by arguing federal buildings and cars should lead the way in fuel efficiency. SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Well, I propose to put the purchasing power of the United States government on the side of green technology.

BASH: Outside the event, protesters, decrying McCain's reversal last week to support offshore drilling, unpopular in California. Schwarzenegger strongly opposes offshore drilling. An adviser told CNN the governor planned to make his differences with McCain known here, but instead engaged little in the panel discussion.

But McCain did get an earful on offshore drilling from another invited guest.

MICHAEL FEENEY, LAND TRUST FOR SANTA BARBARA: It would be 12, 15, maybe 20 years before those resources came on-line and got to full production. That's not going to impact the price of gasoline anytime soon.

BASH: Meanwhile in neighboring Nevada...

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: John McCain still doesn't get it.

BASH: ... Barack Obama seized on this from McCain a day earlier on offshore drilling.

MCCAIN: Well, it may take some years. The fact that we are exploiting those reserves would have a psychological impact that I think is beneficial.

OBAMA: A psychological impact. In case you're wondering, in Washington-speak, what that means is, it polls well.


BASH: And he mocked McCain's idea for a $300 million cash prize for inventing an alternative car battery.

OBAMA: When John F. Kennedy decided that we were going to go put a man on the Moon, he didn't put a bounty out for some rocket scientist to win. He put the full resources of the United States government behind the project and called on the ingenuity and innovation of the American people.


BASH: McCain advisers responded that by devoting $300 million taxpayer dollars to innovation, McCain is putting the government resources behind an idea, but also trying to spur private sector competition. And the McCain camp also accused Obama of not understanding oil markets, insisting the promise of more oil from drilling should have a psychological effect, as McCain talked about, one that could potentially help lower gas prices -- Wolf.

BLITZER: And, Dana, the McCain camp also has a new line that they're using against Barack Obama. BASH: Right, what they're trying to develop inside the McCain campaign is a theme on the idea that Obama is supportive and a part of inaction in Washington, because they think that is something that burns up the voters more than anything else. So what they have talked about on a conference call earlier today and also in a statement that they just put out, over and over, calling Barack Obama "Dr. No."

That is something that we heard from them and clearly are going to hear from them, expect much more often as they try to paint Barack Obama as somebody who is for inaction now.

Obviously we should point out that Obama does have some proposals when it comes to the energy and the environment, like, for example, he does support a windfall profits tax on oil companies. And it's a little dicey, Wolf, for the McCain campaign to be talking about this, because McCain himself voted against several energy proposals in the Senate.

BLITZER: Dana, thanks for that.

Let's go right to Jack Cafferty. He has got the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, women who supported Hillary Clinton during the primaries are suddenly the belles of the ball. Barack Obama, Hillary Clinton getting ready to woo her supporters, but John McCain wants them, too. Polls suggest that Obama leads McCain when it comes to women. But what if McCain picked a woman as his vice presidential nominee?

The Politico looked at McCain's options for filling out the Republican ticket, noting that any of these women would be a symbolic turn away from Dick Cheney, quote, "the ultimate D.C. old boy's club insider," unquote.

Although some have suggested Secretary of State Condoleezza Rice, she has repeatedly said she's not interested. So that leaves McCain with these choices. Alaska Governor Sarah Palin, at 44 she would add youth to the ticket. Lord knows they could use that. Palin may not be well-known nationally, but she's one of the country's most popular governors, with approval ratings as high as 90 percent. She's also stridently anti-abortion, recently giving birth to her fifth child who she knew beforehand would have Down syndrome.

Former Hewlett-Packard CEO, Carly Fiorina, another option. Fiorina is in charge of preparing the party's crucial get-out-the-vote operation. She has been all over the campaign trail, on TV supporting McCain, and has become one of the campaign's top economic advisers.

And there's Kay Bailey Hutchison in Texas, the longest-serving female Republican senator. Hutchison has held key posts within the party, she has been a surrogate for McCain in the race, and has proven that she can get out the Hispanic vote.

Although Republican insiders point to downsides for each of these three women, they say a woman on the ticket could add some excitement to McCain's candidacy. And in case you hadn't noticed, the Republicans are a little short on excitement these days.

Here's the question. Would John McCain's selection of a woman as vice president help him get some of Hillary Clinton's supporters? Go to, you can post your comment on my blog -- Wolf.

BLITZER: It's an interesting question, I suspect it couldn't hurt. But let's see if it could actually help, right?

CAFFERTY: We'll find out.

BLITZER: Jack, stand by.

The McCain camp is trying to protect the candidate from any fallout after an adviser suggested the Republican would benefit from a new terror attack.


MITT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: They want to be characterized by their positions on issues and John McCain's is record is somebody who knows foreign policy, knows what it takes to protect America and understands how the economy works.


BLITZER: Former McCain rival turned ally, Mitt Romney, our interview coming up.

Plus, a top evangelical stinging criticism of Barack Obama, James Dobson saying the Democrat has a "fruitcake view of the Constitution."

And Nancy Pelosi says Hillary Clinton isn't the only powerful woman who has been subject to sexism. The house speaker speaking out. Stay with us, you're in THE SITUATION ROOM.


BLITZER: John McCain's campaign still on the defensive today about the politics of terror. This after the strategist Charlie Black apologized for suggesting McCain's campaign would benefit from a new attack on U.S. soil.


BLITZER: And joining us now from Boston, the former governor of Massachusetts, the former Republican presidential candidate, Mitt Romney.

Governor, thanks very much for coming in.

ROMNEY: Thanks, Wolf, good to be with you.

BLITZER: If there were, God forbid, a major terrorist attack here in the United States between now and November, who would that help in terms of the presidential race? ROMNEY: I can't imagine, it's an unthinkable scenario, wouldn't want to consider it. And that kind of political punditry I don't think is really helpful in this process.

BLITZER: I ask the question only because Charlie Black, a senior adviser to John McCain, suggested in Fortune magazine that it would help -- it would help John McCain. And Senator McCain quickly repudiated that and Charlie Black later apologized. But I wonder substantively, factually, is it your assumption that that simply would, in fact, wind up helping John McCain politically?

ROMNEY: You know, I think that you can leave those things to the pundits on the Sunday talk shows to talk about. I don't think people who are running for office want to be characterized by that kind of punditry, if you will. Instead they want to be characterized by their positions on issues. And John McCain's record is somebody who knows foreign policy, knows what it takes to protect America, and understands how the economy works.

Those are the things he wants to get elected on. And -- and the other circumstantial elements are things I just don't think he can comment about.

BLITZER: All right, fair enough. Let's talk a little bit about some other issues. We asked some of our viewers to send in some video questions for you. Stephen Davis (ph), he's a Democrat, he supports Barack Obama, but he poses this question. Listen to what he says.


UNIDENTIFIED MALE: I wanted to ask you about your thoughts on Mike Huckabee. During the primary, you two were competing over the same conservative base and it seemed to me like that allowed a moderate like John McCain to win the nomination. I wanted to know, do you blame Mike Huckabee for costing you the nomination? And do you think that his "Merry Christmas" political ad with a glowing white cross in the background, was that in any way a subliminal dig at your Mormon faith or do you think that was inappropriate?


BLITZER: All right. What do you think?

ROMNEY: You know, I think Mike Huckabee is a good man. I respect him as a good competitor. He ran a campaign very effectively. But, look, John McCain is the guy who won. It was not -- it was not Mike Huckabee. It was not me or Fred Thompson or Rudy Giuliani. John McCain won, and he won by having a very clear position on the issue of critical importance, which was making sure that we were successful in Iraq and getting rid of the old policy, putting in place a new surge policy that has worked.

That got him -- that got him great support and he also won on the basis of experience. Somebody who had been around long enough in the Senate to deal with economic issues, energy issues, health care issues, and, of course, national defense issues in a way that distinguished him from the other people running.

So, look, I don't blame anyone for my loss. I credit John McCain for his win.

BLITZER: All right, here's another question from Corbin Harlene (ph). He says he's a registered Republican. He voted for you in the primary, says he'll probably vote for McCain in November. Listen to his question.


UNIDENTIFIED MALE: Hi there, my question for you is in the 2002 Winter Olympics, there was mismanagement of federal funds and it was heading into debt. You came in and turned it around and made it a huge success and even made a profit. Can you turn around the U.S. economy like you did the 2002 Olympics?


BLITZER: I assume he's assuming you were the vice president, let's say, or secretary of the treasury or secretary of commerce or some other cabinet position in a McCain administration.

ROMNEY: Well, I'm not sure exactly what my role would be, so I won't speculate on that. But I can say that sound economic policies, long-term, put the economy on the track to do better and better. If you look at our country, for instance, and the policies we've had over the last quarter of a century and compare our country with -- with nations in Europe, you see that we've created tens of millions of new jobs, when they haven't, that our unemployment rate has been almost half of what their unemployment rate has been.

We've created greater wealth for our citizens from the very bottom economic rung to the very top, as they have not. We have really outpaced the nations that are, if you will, other Western nations. And so the policies that we adopt in critical times like these will determine how successful, how prosperous and how safe we'll be long-term. And I frankly believe that the policies that Senator McCain has laid out, keep us on that track, but reverse the problems we have.

BLITZER: But there are a lot of people, a lot of people are suffering right now, Governor, we've lost a lot of jobs since January 1st and over the years millions of manufacturing jobs have simply gone away. What do you say to those people who are obviously out of work or those who are worried about their jobs?

ROMNEY: Yes, you go to work and make sure that we fight for every single good job. You just don't say good-bye to any jobs, and you fight to make sure that we keep our jobs here. I do not like seeing manufacturing leave this country. I would fight. I think you've got to fight to keep manufacturing here.

There is -- there is no -- in my view, no precondition that says that America can't build cars, can't build tires, can't build airplanes. Look, we have to compete in the major economic sectors of the world, and writing off sectors of the economy is not acceptable to me. And in places where we have structural disadvantages, you go fix that disadvantage. And that's what we're going to have to do and I think John McCain is the guy to do it.

BLITZER: By all accounts you're on the short list as a possible vice presidential running mate. Has the McCain campaign already started asking you for your IRS returns, starting to vet you possibly for that job?

ROMNEY: No. I know that John McCain has a lot of great people to choose from. I'm not going to jump in and speculate on the V.P. sweepstakes. You know, I'm concentrating on helping him get elected and avoiding the V.P. speculation altogether.

BLITZER: Governor Romney, thanks for coming in.

ROMNEY: Thanks, Wolf, good to be with you.


BLITZER: Iraq is negotiating oil deals with some U.S. and European oil companies, but not some senators want the U.S. to step in and stop it. We're going to tell you what's going on.

And now that the Democratic primary is over, is Barack Obama becoming more of a centrist for the general election? We'll talk about that in our "Strategy Session."


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

Carol, what's going on?

CAROL COSTELLO, CNN ANCHOR: Well, Wolf, Iraq and some U.S. and European oil companies are negotiating deals to develop Iraq's oil fields. Two U.S. senators want the Bush administration to butt in, but the administration says it will butt out. New York Senator Charles Schumer and Massachusetts Senator John Kerry urged the administration to block the oil deals. They're worried that unfair distribution of oil revenue could inflame violence. But the administration says Iraq can make its own decisions as a sovereign country.

Condoleezza Rice calls it a terrible reminder of dangers American diplomats face working in Iraq. In Sadr City, Americans and others entered a room at a municipal building when out of nowhere erupts a strong, hot wind, smoke, dust, and shattered glass. A bomb had just exploded. Ten people were dead, including four Americans. Iraqi officials believe it was an inside job.

On Sunday, Israeli Prime Minister Ehud Olmert will ask his cabinet to approve a deal with Hezbollah. It would involve exchanging prisoners for two kidnapped Israeli soldiers. Hezbollah militants kidnapped those soldiers and killed three other Israeli soldiers in a July 2006 raid in northern Israel. That triggered the 34-day war between Israel and Hezbollah militants in Lebanon.

That's a look at the headlines right now -- Wolf.

BLITZER: Thanks very much, Carol, for that. We'll check back with you shortly.

She's the most powerful person in the House of Representative, in the Congress, for that matter. But Nancy Pelosi says she has been a victim of sexism, Pelosi says -- is willing to talk about this and she's also talking about Hillary Clinton's run for the White House. We'll tell you what she's saying.

And a leading evangelical tangles over the Bible with Barack Obama. We'll look at what Obama said to get James Dobson riled up. We'll be right back.


BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, amid the political debate over whether or not to talk to Iran, is President Bush now following Barack Obama's lead? Sources telling CNN the State Department is considering talking to Tehran in a way the U.S. has not in almost 30 years. Stand by for details.

Fears of an assassination attempt on the president of France. Nicolas Sarkozy and his wife are fine. But an Israeli police officer shot himself to death, disturbingly close to them. You're going to see the panic. You're going to find out how it all turned out.

And California has seen a gold rush. Might there be a rush for black gold next? Experts believe there are billions of barrels of oil underneath L.A., if only they could get to it.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

A top evangelical leader is offering some sharp new criticism of Barack Obama. James Dobson accusing Obama of distorting the Bible, and he goes on to suggest the Democrat has a "fruitcake interpretation of the U.S. Constitution." Let's go to our senior political correspondent, Bill Schneider, watching this story for us.

Is Obama campaigning -- he says he's campaigning to bring people together, Bill. Is he meeting some resistance? At least on this front, he apparently is.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT: Well, he is finding out that when it comes to values and religion, bringing people together may not be so easy.


SCHNEIDER (voice-over): James Dobson, the founder of Focus on the Family, is using his radio broadcast this week to respond to something Barack Obama said two years ago when he gave a speech about ways to bridge the divide between religious and secular Americans.

Obama called on secular Americans to show greater respect for religious values.

OBAMA: Secularists are wrong when they ask believers to leave their religion at the door before entering into the public square.

SCHNEIDER: He also called on evangelical leaders to define their agenda in terms of common values.

OBAMA: Democracy demands that the religiously motivated translate their concerns into universal, rather than religion-specific values.

SCHNEIDER: Dobson's response?


DR. JAMES DOBSON, FOUNDER & CHAIRMAN, FOCUS ON THE FAMILY: What he's trying to say here is, unless everybody agrees, we have no right to fight for what we believe.

I thank God that that's not what the Constitution says.


SCHNEIDER: Take abortion. The public is sharply divided on the issue. Obama advised abortion opponents:

OBAMA: I have to explain why abortion violates some principle that is accessible to people of all faiths, including those with no faith at all.

SCHNEIDER: Dobson's response? That's nonsense.


DOBSON: What the senator is saying there, in essence, is that, I can't seek to pass legislation, for example, that bans partial-birth abortion because there are people in the culture who don't see that as a moral issue. And if I can't get everyone to agree with me, it is undemocratic to try to pass legislation that I find offensive to the Scripture.


Now, that is a fruitcake interpretation of the Constitution.

SCHNEIDER: That's why we have elections, Dobson argues, to fight for our values. Obama believes elections should be more about finding common ground.


SCHNEIDER: Obama's campaign has responded with a statement that -- quote -- "Barack Obama is committed to reaching out to people of faith -- -- unquote -- adding that a full reading of his 2006 speech shows that.

This is a dispute over values, and values are much harder to compromise than interests -- Wolf.

BLITZER: What does Dobson think about McCain? Remind our viewers.

SCHNEIDER: Well, he sent a message to -- released a statement, really, to "The Laura Ingraham Show" back in February of this year, after McCain had -- was apparently clinching the nomination, in which he said, "I am convinced that Senator McCain is not a conservative and has gone out of his way to stick his thumb in the eyes of those who are." He added that, if the nominees are McCain and either Clinton or Obama -- quote -- "I simply will not cast a ballot for president for the first time in my life."

So, he's refusing to support McCain or Obama -- Wolf.

BLITZER: Not a fan of either one of them.

All right, Bill Schneider reporting.

Now, that Hillary Clinton is back at her day job, some of her supporters blame one thing for putting her back there, and that would be sexism. Now the House speaker, Nancy Pelosi, is weighing in on that issue.

Carol Costello's here.

What's going on? She talked about it, the speaker, in a magazine interview.


She talked about -- she talked about it to "The Christian Science Monster." Nancy Pelosi talked sexism in politics, and she said sexism is a given. She's experienced it herself, but says she doesn't spend much time worrying about sexist comments people direct her way. She did say sexism played a role in Hillary Clinton's run for president, but she would not say if it brought down Hillary Clinton's candidacy.



REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: On the positive side, Senator Clinton has advanced the cause of women in government. And her candidacy was -- has been a very, very positive tonic for the country and had a very wholesome effect on the political concept.

I really don't know. I haven't analyzed, and the rest. And I'm a victim of sexism myself all the time, but I just think it goes with the territory. I don't sit around to...


COSTELLO: One more thing about Hillary Clinton's run. Nancy Pelosi says Clinton may run again and repeat that bright moment for women. Pelosi says there is an upside to being a woman in political office. And she says Hillary Clinton -- and, actually, I have heard that from a lot of women politicians, who say women are better at compromise, they're better at bringing people together, which I guess Hillary Clinton will be doing on Friday when she and Barack Obama campaign together in Unity, New Hampshire.

BLITZER: What a name, Unity, New Hampshire.

COSTELLO: Never heard of it, right?

BLITZER: You can't make that kind of stuff up, can you?



BLITZER: But it's a nice place to find some Democratic Party unity.

COSTELLO: Yes. And they tied there, so, that's a cool touch.

BLITZER: Very cool.

All right, we will be all over that story on Friday.

Carol, thank you.

And I will be speaking with the House speaker, Nancy Pelosi, about this and lots of other issues on Thursday. She will be here in THE SITUATION ROOM. You know, you can participate in the interview. Send us some of your I-Report questions. You can do it. Go to and figure out there how to send us your I-Report questions. We would love to hear what's on your mind. Some of them, we may even ask the speaker of the House.

Hillary Clinton has suspended her campaign, yet she's still campaigning for cash. You're going to find out why and why she's using the Internet to do it.

Also, now that Barack Obama has opted out of public financing for the general election, how might that hurt him politically? Will it, especially since John McCain's campaign is hammering him over what they consider to be a major flip-flop.

And a man in Virginia masquerades as a woman to get married to a man. Carol Costello will be back with details on that story.


BLITZER: Carol Costello's monitoring some other stories incoming to THE SITUATION ROOM right now.

Carol, what's going on?

COSTELLO: Well, Wolf, the Senate is moving toward a vote on a $300 billion plan to help homeowners avoid foreclosure. It overwhelmingly passed a key test vote earlier today, despite a veto threat by President Bush and dispute among Democrats over details. The mortgage rescue plan got broad support from members of both parties eager to claim election-year credit for helping struggling homeowners.

If you're trying to get home of your home sweet home, you already know that job is not so sweet. And now we learn that U.S. home prices fell in April at the fastest rate since 2000. That's according to a Standard & Poor's/Case-Shiller index. Every one of the 20 metropolitan areas in the index posted annual declines for the first time.

The Justice Department is supposed to be nonpartisan, but one of its own internal investigations says officials previously gave plum jobs to lawyers with Republican leanings, while refusing to hire some lawyers with ties to Democrats. It's the first official probe to document whether the Bush administration used political considerations for what's supposed to be an independent agency and an offshoot of a larger probe triggered after those nine U.S. attorneys were fired in 2006.

More of hot, dry Northern and Western California up in flames right now -- another 200 wildfires broke out today, nearly all from lightning strikes. The state now battling more than 800 blazes, but many are spot fires that affect small half-acre areas. Firefighters hope to put those out relatively quickly -- back to you, Wolf.

BLITZER: We're going to have a story coming up in the next hour, Carol, about a lot of oil buried deep underneath the streets of L.A. It's going to be fascinating to hear what's going on. You might not believe it, but some say billions, billions of barrels of oil right underneath L.A.

COSTELLO: Somehow, I can't imagine them putting up big oils well in the city. But who knows?


BLITZER: There already is one. And we're going to tell you where it is. Stand by for that, Carol. That's coming up.

Over the last few months, Barack Obama and Hillary Clinton both fund-raised online as they were vying for the Democratic nomination. Senator Clinton suspended her campaign about two weeks or so ago, but that's not stopping her from using the Web to seek campaign cash right now.

Let's bring in our Internet reporter, Abbi Tatton.

Abbi, what is she doing online?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, these online fund- raising appeals just keep arriving in in-boxes across the country from Hillary Clinton. This is one of the latest, a Hillary Clinton photo album, pictures from the campaign trail. "I can't thank you enough," she says. She sends -- there's plenty of pictures here, favorite photos. Many of them feature Chelsea Clinton. Bill Clinton not included in this photo album, but all of it perched atop of a big contribute button.

And you will see that all over the Web site, all over these e- mails. The latest that arrived yesterday, a video thanking supporters.


SEN. HILLARY RODHAM CLINTON (D), NEW YORK: So, I hope you will continue to stand with me and support me by going back to


TATTON: This one puts it a little bit more bluntly, directly next to an appeal to help us out of a campaign debt. FEC data shows that at about $22 million.

Now, all of these are coming in as the Barack Obama campaign is also sending out their fund-raising appeals. This is the latest sent this morning, a Barack Obama video from YouTube -- this online push following the announcement that he's going to forego the public funding for the general election. The two are going to campaign jointly later this week -- Wolf.

BLITZER: They are so creative in using their Web sites now to raise money. And Obama especially has been extremely effective with that new tool.

Abbi's going to continue to watch it for us.

Coming up in our "Strategy Session": John McCain thinks he's found a winning issue in Obama's change theme, but do voters really care how Obama finances his campaign? And is Obama moving too close to the center for some of his key supporters' liking? Paul Begala and Kevin Madden, they are standing by right here in THE SITUATION ROOM for our "Strategy Session."


BLITZER: In our political "Strategy Session" that's coming up, let's discuss the political primary season.

Conventional wisdom said candidates tend to court die-hard party members during the primaries, with Democrats especially trying to please those on the left. But is Barack Obama now positioning himself more as a centrist as he gets ready for the general election campaign?

Let's get to the "Strategy Session."

Joining us, our CNN political contributor Paul Begala, a Democratic strategist, and Republican strategist Kevin Madden, a former spokesman for Mitt Romney.

You think he is moving to the center?

PAUL BEGALA, CNN POLITICAL ANALYST: I don't know if he's moving. But I think that it's going to be very interesting. It will be actually a test not only of Senator Obama, but of the progressive base of the Democratic Party. Will they be politically mature enough to support Obama, even though -- like I disagreed with this vote. I don't think big telecom companies should be given immunity. But will this...

BLITZER: Retroactive immunity...

BEGALA: Retroactive immunity.

BLITZER: ... for participating in the Patriot Act and...

BEGALA: For allegedly breaking the law, allegedly.


BEGALA: But what is interesting is, will progressives stay with him?

Bill Clinton, I worked for him in 1992. He supported the death penalty, which liberals hated. He supported welfare reform, which a lot of liberals hated. He supported NAFTA. The left stayed with him anyway.

And I think that's a sign of leadership. And I think Obama is showing some leadership here. He's voting his conscience. And, sometimes, it's out of step with the lockstep liberals. And they're hanging in with him. I think it's a good sign.


BLITZER: There's a petition that, among other things, says: "Last thing, after phone calls from MoveOn members and others, Obama went so far as to vow to support a filibuster of any bill that includes retroactive immunity for telecommunications companies. We need him to honor that prize -- the promise" -- excuse me."

But now he's indicating he's going to support the current legislation, which would grant that retroactive immunity.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: Well, look, I think both campaigns have decided that this general election is going to be decided with the big middle, those swing voters, those independents, conservative Democrats and moderate Republicans in the middle.

And Barack Obama seems to, with that support for that bill, seems to be trying to outmaneuver Republicans on national security issues and thereby take an issue off the table. I think we would have been in a much better place if Barack Obama had voted against it, because then we could have really hammered home, again, the contrasts, the differences between the two candidates.

But the big problem for Barack Obama is, there's always going to be that radical left gravitational pull in their party, which is going to really, really hurt his messaging on issues like this. BLITZER: Do you think so?

BEGALA: Well, but he has broken with them. I don't think they're radical. I think they're quite lovely and wonderful.



BEGALA: But contrast that with John McCain, right, who has been tugged to the farther fringes of the kook right.

When we first saw John McCain run for president in 2000, he called right-wing preachers like Jerry Falwell and Pat Robertson evil and agents of intolerance. Now he's -- he with them on everything. Before Falwell passed away, he went to Liberty University, McCain did, and spoke there. He has cut deals with all these right-wing preachers who...


BEGALA: So, it's McCain who has moved to the right.

BLITZER: But it makes a lot of political sense, Kevin, for a Republican during the primary season to run to the right, a Democrat to run to the left, then, once the nominees are picked, both of them to run toward that independent center.

MADDEN: Right. Yes, yes, yes, that's the standard calculation that most of us see. The question is, which one is more authentic in the middle?

I think John McCain, with a record of accomplishment as a bipartisan legislator in the Senate, and -- has a much better record of it than Barack Obama, who is an unknown quantity. And when you really look at his views and you really look at where he's been on the big issues, he's much more farther to the left than mainstream Americans.

BLITZER: Let's listen to this new the campaign camp has released.


OBAMA: Don't tell me words don't matter.

I strongly support public financing.

I will sit down with John McCain and make sure that we have a system that works for everyone.

I have promised that I will sit down with John McCain and talk about, can we preserve a public system?

We have made the decision not to participate in the public financing system for the general election. (END VIDEO CLIP)

BLITZER: What do you think of that web ad?

BEGALA: I'm sorry. I dozed off there.


BEGALA: Nobody cares. I'm sorry.

First off, Senator Obama is not taking taxpayers' money, and he's being attacked by John McCain for that? You know, I'm sorry. That's ridiculous. The question will be, how will Obama respond? Will he simply defend, or will he counterattack?

That's really a flip-flop ad. That's not a public financing ad. That's saying, Obama can't be trusted to keep his word.

BLITZER: It's basically saying that he's lying.


And, so, what Obama needs to do is crack right back on McCain's flip-flops. John McCain flip-flopped on abortion. He has flip- flopped -- in one commercial on a rival network, he flip-flopped on gay marriage in 60 seconds. He's flip-flopped on economics, embracing now the Bush tax plan. He's flip-flopped on drilling offshore.

So, it's McCain who is a man of his most recent word. And I want to see the Obama campaign counterattack, rather than defend.

MADDEN: Well, look, I think Paul is right.

This is not -- when you look at the top 10 list of issues that people care about, public financing is nowhere near there. But what this does -- and the parallel here for Barack Obama is that, again, it sets in place a narrative, a larger narrative, that he has gone back on his word. He's done it a couple of times on a couple of issues now.

The idea that you can do the same to John McCain, I'm very skeptical about that. John McCain has a solid, concrete brand of being -- always doing the right things, above politics, whereas Barack Obama now, with this and on many other issues, you can paint him as somebody who is more prone to political expediency on issues like this.

BLITZER: Does he have a vulnerability here?

BEGALA: No, not nearly as John McCain's, right?


BEGALA: Obama changed on public financing because he's financing his campaign through voluntary donations of a very small amount.


BLITZER: But didn't he really change because he can spend a lot more?


BLITZER: He can raise a lot more money than $85 million?

BEGALA: And raise it ethically, right?

McCain is changing, critics will say, because of pressure from big oil companies. Now he's for drilling. He's changed because of pressure from right-wing preachers. Now he's for Bush's position with these very conservative ministers.


BEGALA: It's McCain who is responding to special interest pressures. And Obama is responding to small donors.


MADDEN: I think the big difference is political growth on issues that people really care about vs. going back on your word. There's a big difference here. Barack Obama went back on his word.

BLITZER: Kevin Madden, thanks very much.

Paul Begala, thanks to you as well.

Barack Obama ponders his luck. Who knew the presidential candidate is actually superstitious? You are going to find out exactly what he carries around to give him some good luck.

Also, fears of an assassination attempt on the visiting president of France -- Nicolas Sarkozy and his wife are fine, but an Israeli police officer shot himself disturbingly close to both of them. You are going to want to see the panic. You will find out how it all turned out.

And might there be a rush for black gold in California? Experts believe there are billions of barrel of oil underneath the streets of Los Angeles. The problem is, how do you get it?


BLITZER: On our Political Ticker today: John McCain is offering a free ride to supporters who make a donation between now and next Monday. They will be eligible to join him for a day of conversation and campaigning on his bus, the so-called Straight Talk Express.

In an online pitch to supporters, the McCain camp says, the last ride-the-bus contest was such a success, they decided to do it again.

Barack Obama is showing a superstitious side. He told voters in New Mexico yesterday he carries around a few good luck charms given to him by supporters. They include a lucky poker chip and a Native American eagle. Obama even pulled some trinkets out of his pocket to show them off.

A new move by Democrats to reach out to Latino voters -- Spanish- language coverage of the Democratic National Convention will be streamlined to the convention's Web site, along with English-language coverage. Convention planners predict that will make 35 million Spanish-speaking Americans feel more welcome to follow the Denver convention the last week in August.

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

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

You a little superstitious, too, Jack?

JACK CAFFERTY, CNN ANCHOR: Not at all, Wolf, not in the least.

BLITZER: All right.

CAFFERTY: The question this hour is: Would John McCain's selection of a woman as vice president help him get some of Hillary Clinton's supporters?

Damian writes: "As long as McCain has his track record against women's rights, he could fill every post in his fantasy administration with women. I would bet women are not going to swing for him, unless of course they want unequal pay and accept their body as being the property of the federal government."

Susan writes: "I can't think of a single Republican female that would bring a Clinton supporter over to the dark side. Not going to happen. GOP women are taught to behave themselves and not think. See the entire service of Condoleezza Rice for examples of the best the GOP has to offer."

Cindy in Mississippi: "Of course it would help. Unfortunately, given McCain's age and the possibility that his veep will one day be president, there are a lot of women who would vote for him on that basis alone. I'm voting for him whoever he chooses, but Palin sounds best to me."

Jim writes: "No, I don't think that a woman would help at all. McCain's problem lies with conservatives, and adding a woman to the ticket is only going to make his problem there more pronounced."

Cindy in Houston says: "Surely, you're not asking if women who supported Hillary would turn to support McCain if he had a woman on the ticket. Women support a ticket with a woman, no matter who it is? Please give us more credit. I'm all for a female candidate for president and/or vice president, but all of these female choices presented to us this year, including your list, just don't cut it."

Shane in Boston says: "Don't you have anything else to talk about today? We all know this is a ploy to keep you and Blitzer in business for the long summer months ahead. We all know that it will take a woman and the biggest Obama blunder in order for McCain to get elected."

And Justin says, "Somewhere in the country, Ann Coulter is drooling."

If you didn't see your e-mail here, you can go to my blog at Look for yours there, among hundreds of others -- Wolf.

BLITZER: They always think, Jack, you and I have some ulterior motive, don't they?

CAFFERTY: Just trying to pay the rent here, Wolfer. That's why I keep showing up.


BLITZER: That's a good motive, Jack.



BLITZER: Thank you.

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

Happening now: new hints that President Bush may agree with Barack Obama when it comes to talking with Iran -- why the White House is now weighing a diplomatic outpost in Tehran for the first time since U.S. diplomats were carted off into captivity there back in 1979.

World leaders at an airport departure ceremony when a shot rings out -- we have the extraordinary pictures as a president and his wife are hustled aboard their plane and guards rush in to protect their hosts. You will want to see this.