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Obama Blasts 'Failed' War Policy; McCain: 'I Know How to Win Wars'; Drilling for Answers

Aired July 15, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama and John McCain warning voters, be very worried about the other man becoming president. Regarding Iraq and Afghanistan, Obama blasts McCain's overall judgment, while McCain suggests Obama simply can't be trusted when it comes to the wars.
On a day that one of the world's largest companies revealed it will slash thousands of jobs, President Bush acknowledges the pain you're feeling.

And as you struggle with waves of disturbing economic news, the presidential candidates are struggling to prove they're not out of touch.

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

Barack Obama says elect John McCain president, and U.S. troops can expect to stay in Iraq, and you can expect to be spending billions of dollars every month there indefinitely. But if you vote for Obama, McCain says expect to have a commander in chief who's flip-flopped on the war and will be commanding on a learning curve. The rivals gave rival speeches today, warning that what you do in less than four months will impact what happens for many years to come.

Dana Bash is standing by with more on McCain. But let's go to our senior political correspondent, Candy Crowley. She's watching what Obama had to say.

He delivered a major speech on the war in Iraq, Afghanistan, and he minced no words.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. It was sort of a speech that walked both sides of this. That diplomacy had to be used more and would be used more in a Barack Obama administration. But he also had some very tough words in particular for Pakistan.


CROWLEY (voice-over): The Iraq war, says Barack Obama, distracts from every threat the U.S. faces.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: As should have been apparent to President Bush and Senator McCain, the central front in the war on terror is not Iraq. And it never was. And that's why the second goal of my new strategy will be taking the fight to al Qaeda in Afghanistan and Pakistan.

CROWLEY: Obama's foreign policy speech came as he prepares for an expected trip to the Middle East after a couple of weeks of criticism that he was wavering on his plan to withdraw troops, and as his new numbers suggest he needs to power up his foreign policy pitch. An ABC/"Washington Post" poll found 72 percent of Americans think John McCain would be a good commander in chief for the military; 48 percent say that of Obama. And even though the vast majority of Americans are against the war, McCain has a marginal lead when respondents were asked who do they trust more to handle Iraq.

OBAMA: George Bush and John McCain don't have a strategy for success in Iraq. They have a strategy for staying in Iraq. They say we couldn't leave when violence was up. And they now say that we can't leave when violence is down.

CROWLEY: Continued reports that increased U.S. troop levels, decreased violence have given McCain a chance to pressure Obama for refusing to change his position on withdrawal. Obama concedes the surge successes, but focuses on broadening the discussion.

OBAMA: The greatest threat to the security lies in the tribal regions of Pakistan, where terrorists train and insurgents strike in Afghanistan. We cannot tolerate a terrorist sanctuary. And as president I will not.

CROWLEY: The message he hopes to send, Barack Obama is willing to use U.S. military muscle if the time and place are right.


CROWLEY: Part of what the Obama campaign knows is that people have to begin to see Barack Obama as a commander in chief, as the leader of the western world. And that's why they're hoping that an overseas trip of some sort will begin to give people a picture of what he would be like on that international stage.

BLITZER: Because in addition to Iraq, he's going to be heading to Europe as well, including Israel. And presumably, that will give him a showcase to show he's got that international stature.

CROWLEY: Right. Got the stuff, yes.

BLITZER: OK, Candy. Thanks very much.

Apparently, John McCain was listening pretty closely to Barack Obama's speech, because only a short while afterwards, he responded, and even mocked, Senator Obama. McCain then made one very bold vow.

Let's go to Dana Bash. She's working this part of the story for us.

Was this all planned for one to follow the other, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, you know, it's interesting, Wolf. The answer to this that is not really. Not initially.

John McCain was supposed to talk once again today about the economy, but his aides scrambled to move up a speech about Afghanistan in order to offer a contrast to Obama's address today. They saw it as a chance to plan what McCain aides believe is their turf, foreign policy.



BASH (voice-over): Experience is his calling card, and on a day both candidates talked national security, John McCain laid this down as a basic test...

MCCAIN: I know how to win wars.

BASH: He offered proof: a new proposal for Afghanistan, where violence has spiked.

MCCAIN: And I'll turn around the war in Afghanistan, just as we have turned around the war in Iraq, with a comprehensive strategy for victory.

BASH: McCain was an early supporter of the military surge in Iraq, which he repeatedly tells voters is working. He said he would apply those lessons to Afghanistan -- more troops and a better strategy for how to use them.

MCCAIN: ... a nationwide civil/military campaign that is focused on providing security for the population. Today, no such integrated plan exists. When I'm commander in chief, it will.

BASH: Specifically, McCain would send three more brigades to Afghanistan, call for a doubling of the Afghan army to 160,000 troops, and said a unified military commander must be in charge of all forces there. But this was as much about slamming Barack Obama's war plans as presenting his own. Obama wants to take troops out of Iraq and send them to Afghanistan.

MCCAIN: Senator Obama will tell you we can't win in Afghanistan without losing in Iraq. In fact, he has it exactly backwards. It is precisely the success of the surge in Iraq that shows us the way to succeed in Afghanistan.

BASH: He mocked Obama for outlining his plan for Afghanistan before ever visiting the country.

MCCAIN: Fact-finding missions usually work best the other way around. First, you assess the facts on the ground. Then you present a new strategy.


BASH: Later, on his bus, McCain continued to hit Obama on his national security credentials. McCain reminded reporters that Obama is the chairman of the Senate committee that oversees NATO, which has command in Afghanistan, but Obama has never held a hearing -- Wolf.

BLITZER: It's only going to get more intense, this debate between these two presidential contenders.

Dana working the story for us, as she does every single day.

While Obama and McCain talk about the wars, we want to remind you exactly what's actually happening in them.

Right now there are still about 150,000 U.S. troops in Iraq. And just more than 4,100 American troops have died since the war began.

In Afghanistan right now, there are about 36,000 U.S. troops. Five hundred and fifty-two American troops have died since the Afghanistan conflict began right after 9/11. A month afterwards, to be precise.

Let's go to Jack Cafferty. He's watching -- he's got "The Cafferty File" for us.

But before we get to that, Jack, I want to alert you, in case you didn't know, and our viewers, that today, THE SITUATION ROOM was nominated for an Emmy for our breaking news coverage last year of the Benazir Bhutto assassination. We're very proud of that.

JACK CAFFERTY, CNN ANCHOR: Well, indeed, you should be. And when it comes to covering breaking news on the other side of the world, no one can -- can touch the capability of this network.

We can be up and running from anywhere on the globe within usually a few minutes, if the location is somewhere where we can get a satellite up. And it doesn't matter whether it's Myanmar, where we went in and Betty...

BLITZER: Betty Nguyen.

CAFFERTY: ... Betty Nguyen just got back from -- I mean, or whether it's, you know, something that happens in Rome. It just doesn't matter. Nobody has got the chops when it comes to global news coverage that this place has. And it's comforting and reassuring to know that our efforts are recognized by our peers.


CAFFERTY: So congratulations to you and the folks who worked on that story.

BLITZER: We'll wait until September 22nd to see if we actually win. But in and of itself it's a great honor to be nominated.

CAFFERTY: Well, yes, but it's better to win.

BLITZER: You're right.

CAFFERTY: So, win already.

BLITZER: All right.

CAFFERTY: The clouds over America's economy and financial system are growing darker and more ominous. Federal Reserve chairman Ben Bernanke telling Congress this morning, the economy's facing "... numerous difficulties, including strains on the financial markets, rising unemployment, the housing crisis."

Bernanke warned that rising prices for energy and food are making the chances of inflation worse. And inflation is getting worse. The Labor Department reported wholesale prices shot up 1.8 percent last month, which means inflation is now rising at a faster pace than at any time in the last 25 years.

Bernanke's testimony comes two days after the federal government made provisions to assist Fannie Mae and Freddie Mac in the event they need it. These two companies hold or guarantee $5 trillion in mortgages, almost half of all the mortgages outstanding in the nation. And as more and more people default on those mortgages, the bigger the problems that are created for the companies that are holding that paper.

One of the nation's big banks, IndyMac, failed. It was taken over by the federal government last Friday. People in southern California waited in long lines to withdraw their money in scenes reminiscent of the Great Depression.

Investment bank Bear Stearns went belly up in March. It was eventually taken over by JPMorgan Chase.

More than 90 banks nationwide are currently on the FDIC watch list. There's more.

Corporate profits are slowing. The stock market is tanking. Energy prices continue to surge. And the dollar hit a record low again today against the euro. But this morning President Bush assured us that our financial system is "basically sound."

Here's the question: How concerned are you about the health of America's financial system?

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

BLITZER: All right, Jack. Thank you.

The top Republican in the House of Representatives, he's drilling for answers. But what Congressman John Boehner wants to do to help lower high gas prices, at least in part, puts him at odds with John McCain. I'll ask Congressman Boehner to explain why he thinks McCain is wrong on one specific issue.

The presidential rivals want you to know about their plans to fix the ailing economy, but they also want you to know they're not out of touch. And after a magazine cover drew Senator Obama and his wife using several negative mischaracterizations, Senator Obama is now speaking out to our own Larry King and telling us what he thinks of that cover.


OBAMA: I know it was The New Yorker's attempt at satire. I don't think they were entirely successful with it.



BLITZER: A delegation of House Republicans will leave on Friday for a trip to the Arctic National Wildlife Refuge in Alaska. It's also known as ANWR. They're drilling for answers to help break America's dependence on imported foreign oil.

Let's discuss this with the leader of that delegation. Congressman John Boehner is the House minority leader, the top Republican in the House of Representatives. He's joining us now from Capitol Hill.

Mr. Leader, thanks very much for coming in.


BLITZER: You know you disagree with the putative, the incoming leader, of the Republican Party, when it comes to drilling in Alaska. Here's what John McCain said recently about his opposition to drilling in Alaska, because of the pristine environment and all of that.

Listen to what he says.


MCCAIN: It's called the Arctic Natural Wildlife Refuge for a reason. It's a refuge.


BLITZER: All right. Why do you think McCain is wrong?

BOEHNER: I just think that House Republicans and myself, we're for all of the above. We need more conservation. We need more biofuels. We need to speed the development of alternative sources of energy, but we need more nuclear electricity produced in our country, and we need to produce a more American-made energy.

And while John McCain and I may disagree on one part of that American-made energy, John McCain believes that we ought to drill on the Outer Continental Shelf, that we ought to be drilling in the Intermountain West, where Barack Obama and most Democrats on Capitol Hill don't want to drill anywhere to produce more American-made energy. And so, while we may disagree on a piece of it, John McCain and I agree on much more than what we disagree on. BLITZER: But this is a significant debate, because the Democrats, by and large, have opposed drilling in ANWR, in Alaska. John McCain is with them. As the -- as the Republican presidential candidate, doesn't he deserve some flexibility in terms of setting the agenda for your party?

BOEHNER: Wolf, Democrats in Congress have blocked drilling, not just in ANWR, but they've blocked the drilling on the outer -- the deep waters off our coast. They've blocked drilling in the Intermountain West. They have blocked it for the last 25 years. And the reason we're in this problem today is because of their opposition to more domestic production.

Now, we can do this in an environmentally friendly way. And while John McCain and I may disagree, again, on a small part of this, I think we agree, certainly agree much more so than where Barack Obama and his Democrat colleagues in the Congress are.

BLITZER: There's another Republican leader whose disagrees with you on offshore oil drilling. That's the Republican governor of California, Arnold Schwarzenegger. And he even goes further in slamming the Bush administration when it comes to global warming.

Listen to this exchange he had Sunday with George Stephanopoulos.


GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If they would have done something this year, I would have thought it was bogus anyway.


SCHWARZENEGGER: Well, because you don't change, you know, global warming and you don't really have an effect by doing something six months before you leave office.


BLITZER: All right. You agree with Governor Schwarzenegger on those two issues? Obviously you disagree with him on offshore oil drilling, but on the issue of global warming?

BOEHNER: Well, on the issue of offshore oil drilling, under the proposal that we're supporting, each state would have the right to decide whether they would be drilling off their coast. Let's let the people of California decide.

But when it comes to global warming and the whole global climate change issue, America has to work with the other industrialized countries in the world. And if we're not working with the Chinese to reduce their emissions and the Indians to reduce their emissions, along with the Europeans, we will have accomplished nothing other than to ship American jobs overseas.

I think the president has worked hard to try to bring the Indians and the Chinese along in this process, which it is critical if we're serious about solving the climate change problem.

BLITZER: Senator McCain has been outspoken in his determination to deal with global warming, and in contradiction to some of the Republicans out there who have some doubts about the whole science of that. I don't know if you want to get a little glass of water or something.

BOEHNER: I think, Wolf...


BOEHNER: I think that John McCain's position is not really very different than most Republicans.

BLITZER: You agree with him on global warming?

BOEHNER: The fact is, is that we have had climate change. Clearly, humans have something to do with it, and we ought to begin reducing our CO2 emissions.

But we need to do it in conjunction with other industrialized countries around the world. Otherwise, we're just going to ship our jobs to China and India and elsewhere. That is not what's in the best interest of the American people.

BLITZER: Let me shift gears for just a second, because we're almost out of time.

There's a move, the Bush administration seems to support it, a lot of Democrats and many Republicans in Congress support, almost a knee-jerk reaction. You've got to bail out these huge mortgage lenders, Fannie Mae and Freddie Mac, and maybe even other financial institutions.

Is that something you're comfortable with, U.S. taxpayers going out and bailing these -- these mortgage lenders?

BOEHNER: Well, I think it was appropriate for the Federal Reserve and the Treasury to do what they did on Sunday in terms of intervening to open up a line of credit at the Federal Reserve. Some of what is being called for by Secretary of the Treasury Paulson has far-reaching consequences. And while some of it may be necessary, I just think that before Congress approves this, there at least ought to be hearings, because we're setting a precedent here.

We're taking actions that are clearly unprecedented. And I want to make sure that before I vote yes or no, I've got my arms around this issue and can make an educated decision on behalf of my constituents and the American people.

BLITZER: All right, Congressman. Have a safe trip to Alaska. We'll talk to you when we get back.

BOEHNER: I'll be looking for all that wildlife up there, Wolf.

BLITZER: Yes, I'm sure you will. Enjoy. Thank you. What's it like to be interrogated at the U.S. Naval Base at Guantanamo Bay in Cuba? For the first time ever, we're going to get a firsthand look. You're going to see the newly released videotape.

And family vacation nightmare. We'll show you incredible video and tell you what happened to the people riding inside.

Oh my God.

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



BLITZER: As Americans struggle with a declining economy, the presidential candidates are struggling to come up with a plan. Our senior political analyst, Bill Schneider, is standing by with a much closer look.

And Iran's president is once again planning to visit the United Nations in New York. And now John McCain's campaign is ridiculing Barack Obama, suggesting this could be an opportunity for Senator Obama to sit down with the Iranian leader.

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


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

Happening now, drastic measures. General Motors moving to try to ensure its survival in these very tough economic times. Executives are now announcing major cuts, but are downplaying rumors the company could go under.

Also, deporting deserters. A Canadian court clearing the way for the country to say no more to American war resisters.

And political springboard. Reality TV has helped some of its stars launch careers in other fields. But now one familiar face to MTV viewers is actually running for Congress.

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

In a major economic address this morning, President Bush moved to calm Americans' fears about their money.

Our White House correspondent, Elaine Quijano, is covering the story for us -- Elaine.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Wolf, against a backdrop of bad economic news, President Bush insists the fundamentals of America's banking and financial systems are sound.

(BEGIN VIDEOTAPE) QUIJANO (voice-over): With fears of banks going belly up after people rushed to take out their cash from California's IndyMac Bank...

UNIDENTIFIED FEMALE: I might go home and put them under my mattress.

QUIJANO: ... so concerned about public anxiety, President Bush told Americans, the money in their bank accounts, if less than $100,000, is safe.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My hope is, is that people take a deep breath and realize that their deposits are protected by our government.

QUIJANO: On gas prices, the president acknowledged again, no quick fixes.

BUSH: If I had a magic wand -- but the president doesn't have a magic wand. You just can't say, low gas.

QUIJANO: But he urged Congress to follow his lead and lift its ban on offshore oil drilling. The president also defended his decision to bolster mortgage finance giants Freddie Mac and Fannie Mae.

BUSH: The purpose was to send a clear signal that, one, we understand how important these institutions are to the mortgage markets, and, two, to kind of calm nerves.

QUIJANO: Yet, on Capitol Hill, a fellow Republican blasted the president's decision, calling it a blank check bailout.

SEN. JIM BUNNING (R), KENTUCKY: The Fed purchase of Bear Stearns assets was amateur socialism compared to this. And for this unprecedented intervention in our free markets, what assurances do we get that it will not happen again? Absolutely none.

QUIJANO (on camera): But the president insists the action, which still requires congressional approval, is not a bailout, because the companies will still have to answer to shareholders -- Wolf.


BLITZER: All right, Elaine, thanks. Elaine's over at the White House.

Let's get to the campaign trail once again right now, where both campaigns are keeping a very close eye on the economic news, hoping to find a way to use it to their advantage.

Our senior political analyst, Bill Schneider, is following it all for us.

Tell our viewers how these two presidential candidates right now, Bill, are dealing with this very, very troubling economy. WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Same as everybody else. They're making a mighty effort just to keep up with events.


SCHNEIDER (voice-over): The news on the economy is fast moving, and mostly down, confidence in banks down, the stock market down, housing prices down. The chairman of General Motors is hoping things will settle down.

RICK WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: Frankly, we're going to have to ride it out for a while until market conditions settle down.

SCHNEIDER: Not everything is down. Inflation up. Last month, prices rose at the fastest pace in 27 years. Politicians are struggling to keep up with events.

BUSH: I think the system basically is sound. I truly do. And I understand there's a lot of nervousness.

SCHNEIDER: The candidates talk about going after wrongdoers.

OBAMA: Predatory, unscrupulous lending, checked neither by a sense of corporate ethics or a vigilant government.

MCCAIN: Speculators and lenders who contributed to this mess.

SCHNEIDER: Barack Obama has a long-term energy plan.

OBAMA: I will invest $150 billion over the next 10 years, $15 billion a year, to put America on the path of true energy security.

SCHNEIDER: John McCain has a short-term plan, but the payoff may take a while.

MCCAIN: We should be drilling right now in places that are off our shores.

SCHNEIDER: The economy seems to be spinning out of control. The candidates are hard-pressed just to keep up. Obama added an event today to talk about how, if he's elected, the government will work with the auto industry to turn it in a new direction.

OBAMA: Rebuilding our manufacturing base and our auto industry and working with the auto companies to make sure that we're creating the fuel-efficient cars.


SCHNEIDER: Voters often behave as if the president is commander in chief of the economy. But he's not. Nobody is. The economy's too big and too complex. And, in turbulent times, that's a little scary -- Wolf. BLITZER: Turbulent, a perfect word, a lot of nervous people out there right now. Bill Schneider, watching the story for us, thank you.

According to CNN's most recent poll of polls, Barack Obama holds right now a five-point lead over John McCain nationally. That's up slightly from the weekend, when Obama's lead was four points. The poll of polls is the average of three national polls conducted over the past week.

It would surely be a worldwide spectacle, if -- if -- it ever happened, Osama bin Laden in the United States on trial for terrorism. You're going to hear what Senator Barack Obama has just told our own Larry king, what he thinks about that.

Plus some people wonder if Barack Obama's falling into a well- laid political trap, laid by John McCain's campaign.

And, when you're at the zoo, it may not necessarily be the animals you have to watch out for. It may be the humans. We will explain right here in THE SITUATION ROOM.


BLITZER: The real Barack Obama's now responding to that cartoon of Barack Obama and Michelle Obama featured on a magazine cover. Now, that "The New Yorker" magazine has caused a huge controversy, Senator Obama is telling our own Larry King just what he thinks of it.


OBAMA: I know it was "The New Yorker"'s attempt at satire. I don't think they were entirely successful with it. But you know what? It's a cartoon, Larry. And that's why we have got the First Amendment.

And I think the American people are probably spending a little more time worrying about what's happening with the banking system and the housing market, what's happening in Iraq and Afghanistan, than -- than a cartoon. So, I haven't spent a lot of time thinking about it.

LARRY KING, HOST, "LARRY KING LIVE": But didn't it personally sting you?

OBAMA: No. You know, we have -- one of the things, when you're running for president for almost two years, is, you get a pretty thick skin. And, you know, I have seen and heard worse.

I do think that, you know, in attempting to satirize something, they probably fueled some misconceptions about me instead. But, you know, that was their editorial judgment. As I said, it's -- ultimately, it's a cartoon. It's not where the American people are spending a lot of their time thinking about.

(END VIDEO CLIP) BLITZER: Senator Obama also talked about something all of us are very concerned about, our homes, specifically, efforts to make sure two mortgage giants don't fail.


OBAMA: I think some of the ideas that were offered with respect to Fannie Mae and Freddie Mac are good ones. I just want to make sure that we're not bailing out shareholders and CEOs, but that we're focused on maintaining liquidity in the housing market.


BLITZER: And then there's this about the world's most wanted terrorist, Osama bin Laden.


KING: Would you go into Pakistan, militarily, to get him?

OBAMA: As I said before, I would use -- if I had actionable intelligence, we would go after bin Laden.

KING: And bring him back here, if possible?

OBAMA: Well, I think that, you know, we want to capture him or kill him. And, as I have said -- as I just said this past weekend, if we captured him, then we would want to put him on trial. And I think he would be deserving of the death penalty.


BLITZER: Here's an important programming note for you. You can see the full interview with Senator Obama tonight, 9:00 p.m. Eastern, only -- only -- on "LARRY KING LIVE." Recommend you watch.

In our "Strategy Session," Barack Obama focusing in on national security. But is it a good strategy to emphasize an issue that's considered by many John McCain's strongest suit?

And, just weeks before Americans head to the polls, the Iranian president, Mahmoud Ahmadinejad, says he's planning to come to the United States. McCain -- McCain is planning to tweak Senator Obama about it. How will his visit play out on the campaign trail? Paul Begala and Kevin Madden, they are standing by live -- right here for our "Strategy Session" in THE SITUATION ROOM.


BLITZER: The presidential candidates right now sparring over the wars in Iraq and Afghanistan. But many Americans are focusing in on the economy.

So, what's going on politically?

Let's discuss this and more in our "Strategy Session." Joining us, the Democratic strategist and CNN political contributor Paul Begala, and Kevin Madden, the former national press secretary to Mitt Romney.

This is the one area, as you know, Paul, national security, where John McCain polls really well against Barack Obama. And some suggest, whenever Obama has to deal with this, he's sort of falling into a trap laid by the McCain campaign. What do you think?

PAUL BEGALA, CNN POLITICAL ANALYST: I think, tactically, McCain wins today, because he's stronger on national security in the eyes of the voters.

But I think what Obama's trying to do is be strategic. He can't allow that gap to continue, the strength gap, the national security gap. So, he's willing, I think, to sacrifice today. The news of the day should have been the economy, right?


BLITZER: But they both gave major speeches on Iraq and Afghanistan, Obama first, McCain second. And they gave it their best shot.

BEGALA: They did. And, so, they're both slightly out of touch with where the voters are today.

But I do think Obama is trying to be strategic. He doesn't want to go to he Election Day with the gap. And I thought the speech was smart and it focused on important things, like energy independence, like trying to defeat al Qaeda. And I thought it was strategically wise for him to do it.

BLITZER: And he's just released, Obama, a new ad on the Web, trying to make the case, the strategic case, that Paul was just discussing. I will play a little clip.


OBAMA: We are a beacon of light around the world. At least, that's what we can be again. That's what we should be again.

The single most important national security threat that we face is nuclear weapons falling into the hands of terrorists. What...


BLITZER: All right, he's not backing down. He says, you know what, I can compete with John McCain on these national security issues.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: Well, Barack Obama chased the rabbit here, and he did so in a way that he's caught in the bushes.

And this is exactly the type of terrain, the issue terrain, that John McCain wants. And this -- where he wins here is that John McCain has a certain degree of clarity here. And what Barack Obama is doing is re-litigating his position on Iraq. He's changed it in the last couple days. He's using rather amorphous language. He's trying to win on nuance, whereas, John McCain can go and make a very black-and- white issue.

And that's where John McCain wins. He looks more like a commander of chief. And the judgment of voters right now in a lot of these polls we're seeing is that John McCain wins...


BLITZER: And the McCain campaign is really ridiculing this passage, this excerpt from Senator Obama's speech today dealing with the Iranian president, Mahmoud Ahmadinejad.

Well, let me read it to you, because, we, unfortunately, don't have that sound bite, but I will read it.

"You know" -- this is what Obama said -- "I think this obsession with Ahmadinejad is an example of us losing track of what's important. I would be willing to meet with Iranian leaders if we had done sufficient preparation for that meeting."

And the McCain campaign is saying, why would you meet with this guy, who calls for Israel's destruction, and says it's nothing more than a stinking corpse.

BEGALA: Right, that is the extension Bush policy. We only meet with our friends. Well, guess what? We don't have any more friends to speak of around the world.

I think -- I think Barack Obama has the better of the argument here. But here's the thing we should look for. When will he counterattack? If John McCain is so all fired opposed to the Iranians, why is his chief economic adviser Carly Fiorina, a woman who, when she ran Hewlett-Packard as CEO, Hewlett-Packard was selling computers to the Iranian regime, a terrorist regime?

Counterattack, Barack. If I were advising Barack Obama, I would say, make Carly Fiorina the Ahmadinejad. She's already participated in a company that was selling equipment to the Iranians, and computers at that.


MADDEN: This once again shows Barack Obama's inexperience on this. It shows that he has a rather queasy stance when it comes to standing up to dictators like Ahmadinejad.

And this, again, is where John McCain can win when it comes to a question of whether or not you have the experience, whether or not you have the readiness to take over the Oval Office, and to be commander in chief. And Barack Obama's going to continue to lose...

(CROSSTALK) BLITZER: What about the argument that Senator Obama made today? And it was a major part of his speech, when he said, you know what, talk about national security judgment. Senator McCain was wrong back in October, November 2002, in supporting this war in Iraq, the biggest strategic blunder in recent years. I was right in opposing this war in Iraq.

And all of the negative consequences, the trillion dollars, Senator Obama says, that have occurred, the 4,000 Americans-plus who have been killed, wouldn't have happened if Senator McCain, among others, wouldn't have been a cheerleader for this war.

MADDEN: Well, I think that that is an effort by, you know, the -- that is an effort by the Obama campaign to make what they believe is their most compelling argument.

But I think a lot of Americans right now are not going to be making the judgment at this election at this time based on whether or not we ought to be re-litigating what happened when we went in, but, instead, what's your plan for going forward, how are you going to achieve success?


BLITZER: Is it just history? Is that...

MADDEN: Who has the best credentials to do that?

BLITZER: Can he make -- can he politically -- put down your strategic political hat -- can he make the case, as he did, as he tried to do repeatedly against Hillary Clinton, I was right in opposing this war; she was wrong in voting for it?


BLITZER: And now he would have to make the same case against McCain.

BEGALA: That's right.

It certainly worked in the primaries against Senator Clinton and his other opponents.


BLITZER: Does it work in the general election?

BEGALA: I think yes. I think it good to go right at the other fellow's strength. Don't make it the entire campaign, but go right at that.

And John McCain -- not just Dick Cheney -- John McCain said we would be greeted as liberators. John McCain said at one point the war would last a month or two. It was John McCain who was part and parcel of misleading us into this war. And I think that is an important thing. It also has the strategic advantage of linking McCain once more to George W. Bush, the most unpopular president in modern times.

BEGALA: Kevin, go ahead.

MADDEN: Well, I think no.

I think that this, again, becomes an argument of whether or not who has the judgment going forward, who has the credentials to be -- and who is ready. I mean, that's essentially the fundamental question that we're going to see right now is that Barack Obama is just not ready to lead the country at a very difficult time on national security issues, and that John McCain answers that question affirmatively.

BLITZER: If things continue to improve -- and that's a huge if -- in Iraq between now and November, I assume you agree that this whole Iraq war issue probably would be neutralized in the campaign.

BEGALA: It starts to lessen, and the economy becomes more and more important.

But, overseas, internationally, in foreign policy, Afghanistan becomes more important. This is where now McCain is chasing Barack.

Obama comes out today, as he has said for months, and said, Afghanistan, al Qaeda, Pakistan, that's where we need to be. Well, guess what? McCain -- Senator McCain almost never mentions Afghanistan. And, just a month ago, he said we have sufficient forces in Afghanistan. Then Obama says we need more troops in Afghanistan. It's McCain now chasing Barack, saying, well, I guess Barack is right. We do need more troops in Afghanistan.

MADDEN: Well, I think John McCain has shown that he has the experience and he knows a lot more about Afghanistan and this -- the whole entire theater in the war on terror than Barack Obama does.

Barack Obama right now -- I think what the American people are judging him very harshly on is that he's only just learning about many of these issues. He hasn't even held committee hearings for the committee that he's in charge of up on Capitol Hill on the -- that's tasked with oversight in Afghanistan. Yet, now he's actually going there and Iraq for the very first time? It's still a learning experience for him.

BLITZER: He was there once before.

MADDEN: Well, he's there once before, but this is going to be his first time going to this theater.


BLITZER: If you were advising his campaign it's a smart idea to go to Iraq right now?

BEGALA: Yes. Yes.

But the most important idea is to close down this war, bring those troops home. This is what the country wants.

BLITZER: All right.

BEGALA: I thought Obama's best line today was when he said, McCain says, when violence is up, the troops have to say, and, when the violence is down, the troops have to stay. McCain wants the troops there 100 years.

BLITZER: Paul Begala, Kevin Madden, guys, thanks.

MADDEN: Great to be with you.

BLITZER: Some stories we're covering here in THE SITUATION ROOM right now: Congressman Charlie Rangel of New York has a change of heart on his campaign headquarters location in New York City.

He -- also, he allegedly killed two American Border Patrol agents. You're going to be shocked to hear why the Mexican government now has set him free.

And an inside look at how intense those at Guantanamo Bay -- the interrogations, how those interrogations can be rather intense.

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


BLITZER: On our Political Ticker; Something John McCain said has some people wondering if -- if -- he's leaning toward Mitt Romney as his running mate.

McCain recently showered praise on Romney for speaking out on McCain's behalf in various TV interviews. McCain even joked -- and I'm quoting now -- "He does a better job for me than he did for himself."

Romney has made it clear he would be honored if he were picked as a vice presidential candidate.

Charlie Rangel says he will move his campaign office from a rent- stabilized apartment in Harlem -- this after a newspaper report exposed the congressman's low-rent deal on that and three other apartments his family uses for housing. It's against New York State and city rules to used rent-stabilize apartments for an office and not as a primary residence.

On CNN's "AMERICAN MORNING" earlier, the powerful Ways and Means Committee chairman was asked if he was trying to skirt those issues.


REP. CHARLES RANGEL (D-NY), HOUSE WAYS AND MEANS COMMITTEE CHAIRMAN: But one thing that is clear is that we have decided that it's inappropriate to stay in that building, and we have so notified the landlord. And at the time that the campaign made the decision, there were many vacancies in the building. And so we reviewed this. And we will be out of there as soon as possible. And, certainly, the lease expires there anyway soon. So, it will be convenient for us to do just that.


BLITZER: Senator Barack Obama's wife has reportedly accepted an honor. "The Washington Post" reporting she's accepted an honorary membership in the Alpha Kappa Alpha sorority. That's the oldest African-American sorority in our country. Thousands of them are gathering right now here in Washington, D.C., to celebrate the group's 100-year anniversary.

Congratulations to Alpha Kappa Alpha.

And he's decided. The former Minnesota Governor Jesse Ventura says he won't run for the U.S. Senate. Ventura made the announcement right here on CNN on "LARRY KING LIVE" last night. If he had run, it would have added another celebrity to the race in Minnesota. The race to unseat Republican incumbent Norm Coleman includes the actor, former "Saturday Night Live" writer Al Franken.

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

So, did the Obama campaign scrub its Web site of criticism of the Iraqi military surge?

Let's go to our Internet reporter, Abbi Tatton. She is watching this story for us.

Is something missing from the page, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this is the Barack Obama campaign's Iraq Web page, the before and after, before the weekend, the problem, stated as the surge. Now, if you read it, the problem is inadequate security and political progress in Iraq.

"The New York Daily News" points out some of the older language on this Iraq page is now gone, like this fact sheet here that states that the surge is not working.

This comes at a time when Senator McCain is accusing Senator Barack Obama of dramatic shifts in his position on the situation in Iraq.

The Barack Obama campaign, through a spokesman, says this is just part of frequently updating their Web site. A spokesman said, Senator Obama has always stated the surge would reduce violence, but criticizes it for not leading to political progress. According to the spokesman, the new language on the Web site reflects that -- Wolf.

BLITZER: Abbi is watching the story for us, as she does every single day.

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

CAFFERTY: The question this hour is: How concerned are you about the health of America's financial system?

It's getting ugly out there.

Patricia writes in Boise, Idaho: "It's starting to get my attention. For the first time, I find myself thinking sure glad I don't have $100,000." That's the FDIC limit, of course, on bank deposits. I will tell you what really had me concerned, though, George W. Bush trying to educate me on the topic during the morning news conference."

Ben in Chicago writes: "I am very concerned, Jack. Although there are only 90 banks on the FDIC watch list, in fact, IndyMac," the bank that failed in Southern California, "was not on that list. When the powers-that-be don't see the second largest bank collapse in history coming, things could get pretty wild."

Bruce in Minnesota writes: "It sounds pretty bad, but thank God it's all in my mind. I think Ben Bernanke ought to talk to Phil Gramm before he goes spouting off about depressing trends. The liberal media are likely to misconstrue his comments to mean something negative, which I'm sure he did not intend. Personally, I am not too worried about the banks. I don't have much money left in my account anyway."

Jane in Oregon writes: "The financial mess is the perfect end to the Bush administration. Could we see a montage of all the film clips of Bush saying the fundamentals of the economy are sound?"

Bill in Alabama says: "I'm very concerned. It is beginning to sound like the start of a depression, instead of a recession."

Paulo writes: "I am more concerned than President Bush. Of course, the worsening economy affects me more than him. I am elderly and on fixed income."

And in response to President Bush saying this morning that our financial system is basically sound: Aaron in Illinois writes, "The president is basically an idiot."


CAFFERTY: 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: See you in a few moments, Jack. Thank you.

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