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Iraq's Oil Outrage; Evidence Revealed in Anthrax Investigation

Aired August 6, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now: Incriminating evidence in the anthrax investigation, it's now public -- the chilling new details as the feds lay out their case against an Army scientist who killed himself.

Plus, Iraq's oil outrage. It's pulling in billions and billions of dollars of profits, while Americans keep on paying and paying for reconstruction inside Iraq. Startling new figures coming up.

And Michelle Obama reaches out to military wives, trying to win votes for her husband from the ranks that might save her favor John McCain -- all that and the best political team on television.

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

The Justice Department delivered its verdict in the anthrax investigation today, saying a dead scientist was the only person responsible for the deadly 2001 attacks.

We want to welcome our viewers in the United States and around the world.

The U.S. government released dozens of documents today to back up its case against Dr. Bruce Ivins who committed suicide last week.

Let's go to our Homeland Security correspondent, Jeanne Meserve. She's working the story for us.

Jeanne, how solid is this evidence?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Wolf, there is a war of words erupting over the government's case. Scientific breakthroughs led the FBI to Dr. Bruce Ivins, though there is no confession, no eyewitness, no hard evidence.


UNIDENTIFIED MALE: Dr. Bruce E. Ivins was responsible for the death, sickness, and fear brought to our country by the 2001 anthrax mailing, and that it appears based on the evidence that he was acting alone.

MESERVE (voice-over): Scientific breakthroughs, the government says, genetically linking the anthrax used in the attacks to a flask solely maintained by Bruce Ivins. UNIDENTIFIED MALE: The spores used in the attacks were taken from that specific flask, regrown, purified, dried and loaded into the letters. No one received material from that flask without going through Dr. Ivins.

MESERVE: The government alleges that, during the anthrax probe, Ivins submitted false samples of anthrax from his lab to mislead investigators and pointed the finger at other scientists.

It says that Ivins could not adequately explain the long hours he was working alone in his lab around the time of the anthrax attacks, that the envelopes used in the attacks were sold at a post office in the Frederick, Maryland, area, where Ivins had a post office box, that Ivins frequently drove long distances to mail items, sometimes using fake names, and that Ivins had a long history of mental issues.

The evidence is all circumstantial.

UNIDENTIFIED MALE: What they lay out as potential motive seems very thin at best. They certainly do not have, you know, anyone saying they saw him mail it, anyone saying that he admitted it. It's a case that clearly has room for argument regarding reasonable doubt.


MESERVE: And what was that motive? According to the government, Ivins was concerned in 2001 that an anthrax vaccine program he was working on would be discontinued, but the anthrax attacks guaranteed its future.

Meanwhile, Ivins' attorney this afternoon released this statement. "The government press conference was an orchestrated dance of carefully worded statements, heaps of innuendo, and a staggering lack of real evidence, all contorted to create the illusion of guilt by Dr. Ivins. Nothing could be further from the truth" -- Wolf.

BLITZER: Jeanne, thanks very much.

Let's turn to presidential politics right now.

Barack Obama did something today that's causing a little bit of chatter, some second-guessing. What's going on?

Let's go to our senior political correspondent, Candy Crowley.

He was out with the Indiana Senator Evan Bayh today. And that created some sort of buzz. You were there, Candy. Give us an update.


You know, Indiana is not a place you think you would find a Democratic presidential candidate. But everybody here looking at the polls say, Democrats actually have a real shot at this state. So, voters everywhere, at least on the Democratic side, were full of conversation today about how Barack Obama might improve his chances here. (BEGIN VIDEOTAPE)

CROWLEY (voice-over): It is vice presidential season. So, every picture looks like a campaign brochure. Introductions sound like tryouts.

SEN. EVAN BAYH (D), INDIANA: Now, Barack Obama's opponent, John McCain, is not a bad man. But he is badly mistaken when he has embraced the Bush and Cheney economic policies. And he is badly mistaken when he has embraced their energy policies.

CROWLEY: And standard fare is read through the prism of one of the campaign's real mysteries, veep or no veep?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I would like everybody to give a huge round of applause to one of the finest United States senators that we have, Evan Bayh.

CROWLEY: Barack Obama and Indiana's Evan Bayh have been pretty chummy of late, joint press releases, some co-campaigning, and, worth noting, there was an Obama ad team crew shooting video of Bayh at this Elkhart event today. Hmm. There are non-denial denials all around.

But for the day, anyway, and particularly in Indiana, the buzz is Bayh. A former governor, as well as a current senator, he is a Midwest moderate Democrat, and a platinum name in Indiana politics. The state is still a Republican stronghold, but an Indianan on an Obama ticket could change the pattern of history, could it not?

BAYH: Well, I would like to think that kind of thing wouldn't hurt his chances. But on his own, without any help from a native son or daughter, he is competitive in Indiana.

CROWLEY: As Bayh took Obama around Indiana, half a country away, Michelle Obama was being escorted around Virginia by Governor Tim Kaine, last Friday's buzz. Either, or neither, could end up on Obama's ticket.

"Trust me," said one Obama adviser, "the people who actually know what's going on aren't talking."


CROWLEY: At least on the Democratic side, Wolf, you can wait for a pause of about 10 days. As you know, Obama's about to go on vacation. So, nobody is looking for this V.P. pick either this week or next -- Wolf.

BLITZER: All right, Candy, thanks very much. Hope he enjoys himself, gets some rest out there.

Senator Obama and Senator McCain, their supporters say the other candidate will bring political and economic gloom and doom if elected. But who do you think is more risky?

Our brand-new CNN/Opinion Research Corporation poll shows many of you think both of them are risky, 57 percent for Obama, 54 percent for McCain. McCain would surely like to see that change in the coming weeks and months.

CNN's Ed Henry has more.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT: A new one-two punch from John McCain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The cost of everything is going up, and in the face of this, Washington is on vacation.

HENRY: First McCain is on the attack charging government is broken and Barack Obama is too inexperienced to fix it.

MCCAIN: My opponent, Senator Obama, opposes both storage and reprocessing of spent nuclear fuel. He opposes offshore drilling immediately. And he's out of touch.

HENRY: At the same time, McCain is trying to present a positive agenda, making the case he has better plans to improve the economy and solve the energy problem.

MCCAIN: We need to crack down on those who have abused our credit market and caused this housing decline. We need to take action to support American businesses so that we can stop jobs from going overseas.

HENRY: A tricky balancing act for McCain, who may come across as too negative. He's walking that same fine line in a new ad that again charges Obama as a celebrity, but with a forward-looking twist.


NARRATOR: If the biggest celebrity in the world ready to help your family? The real Obama promises higher taxes, more government spending, so, fewer jobs. Renewable energy to transform our economy, create jobs and energy independence, that's John McCain.


HENRY: This ad is toned down, no images of Paris Hilton that were in last week's ad and prompted so much outrage in the Obama camp. Nevertheless, the previous ad sparked a humorous response from none other than Paris Hilton.

PARIS HILTON, CELEBRITY: Hey, America, I'm Paris Hilton and I'm a celebrity, too. Only I'm not from the olden days, and I'm not promising change like that other guy. I'm just hot.


HENRY: Trying to go positive and negative at the same time, may be a difficult balancing act for McCain. Whenever he attacks Washington, Obama reminds everyone McCain has been in Washington for 26 years. The key for McCain needs to reestablish his reputation as a maverick, not an insider -- Wolf?

BLITZER: All right, Ed, thank you.

Let's check in with Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: All eyes are focused on the presidential race these days between Barack Obama and John McCain. But the battle for the Senate could wind up having as big an impact as the race for the White House.

Democrats could win a filibuster-proof majority of 60 seats in the Senate in November. And, if they do, it will be the first time that's happened since 1977. The so-called magic 60 would mean a fast track for the Democrats' agenda. They already enjoy a substantial majority in the House. And, if the polls are accurate, they stand to pick up some more seats there as well come November.

Add to that the possibility that Barack Obama becomes the next president, and the stage is set then for a Democratic deluge, legislation, judicial appointments, you name it. This stuff will go through Congress like bacon through a goose. That would be fast.

The good news is, the federal government might actually get something done. And that would be in sharp contrast to the gridlock and finger-pointing and obstructionism that have paralyzed Washington for years. The bad news is, though, what if they don't do the right things? Our Washington politicians have a long history of disappointing us.

And, as a result, a lot of people think that gridlock is better than no gridlock. However, the nation's problems are now so large and so far-reaching that we may no longer be able to afford the luxury of a government that simply does nothing. If the Democrats hit the trifecta in November, I guess we will all just have to pray that they don't make things worse than they already are.

Here's the question: Which is better, gridlock or one party controlling both Congress and the White House?

Go to Post a comment on my blog -- Wolf.

BLITZER: Good question, Jack. Thank you.

A Pulitzer Prize-winning journalist drops one of many bombshells. Ron Suskind says the White House ordered the CIA to forge a letter drawing links between Iraq and al Qaeda to justify the 2003 invasion. I will ask him if he will release his taped interviews to prove it.

Plus, Barack Obama is questioned by a 7-year-old, and uses humor to answer a very serious question.

And Hillary Clinton on whether or not she has inside information on who Barack Obama will select as his vice president. She will tell us exactly what she says she knows or doesn't know. Stand by.


BLITZER: More now of my interview with the Pulitzer Prize- winning journalist Ron Suskind. In his brand-new book, "The Way of the World," he claims the White House concocted a fake letter meant to come from Tahir Jalil Habbush, Saddam Hussein's director of intelligence.

The former CIA deputy director of clandestine operations, Robert Richer, flatly denies Suskind's allegation.


BLITZER: Another explosive allegation or charge in the book is that the president of the United States knew for sure, based on what the head of Iraqi intelligence, who was working with the U.S. secretly...

RON SUSKIND, AUTHOR/JOURNALIST: Right. We paid him $5 million...


BLITZER: ... covertly, that there was absolutely no stockpiles of weapons of mass destruction in Iraq. Yet, the president of the United States used an expletive, according to your book, and said, we're going to war anyhow.

SUSKIND: I never say the president knew, by virtue of Habbush, the Iraqi intelligence chief, meeting with the British and essentially the British and the Americans for his information.

What I show in the book is that the case for war was already a rickety structure by early 2003, in January, when Habbush...

BLITZER: And the war started in March.

SUSKIND: The Iraq intelligence chief arrives. We handle a secret mission. We conduct -- the Brits are the point of the spear. We set it up. And he meets again and again with the British intelligence leader chief and they talk it through, many meetings, many phone calls.

What does Habbush say in January of 2003? He says there are no weapons of mass destruction. Now, there's debate in the CIA. Can we verify it? Is it denial and deception? All that is in the book.

BLITZER: But that is what the Iraqis were saying publicly at the time. I remember interviewing Tariq Aziz, the deputy prime minister. He said they didn't have any weapons of mass destruction.

Why would they believe the Iraqi intelligence chief, because he was saying secretly to the U.S. what Iraqi leaders were saying publicly? SUSKIND: Well, he was certainly a more credible witness by far than anyone who had spoken publicly or privately to the United States.

He is their intelligence chief. He himself overseas whatever the biological program would be in the country. That's the way it works there. As well, he is in a secret back-channel mission with us to inform us. Now, what's interesting about it is, it's not just his information that there's no WMD.

It's also -- and Richer (ph) talks about this, Maguire (ph), too, and others -- he gives us the mind of Saddam Hussein, something we really didn't understand. The British talk about this, too, because the British head of intelligence and deputy head of intelligence...

BLITZER: What Tenet and the others are saying now is, they say, you know what, he didn't have any evidence to back up what he was saying, that there were no stockpiles of weapons of mass destruction.

SUSKIND: Well, Richer deals right with that question in the book, because, of course, I asked him.

He said, well, the problem was is that we essentially have Habbush having to prove the negative, prove that weapons he says don't exist actually don't exist. He says, we weren't very strident in helping him prove that point. Beyond that, what you have here is a situation, as Richer says, where we -- we helped them prove the negative -- we didn't help them, and we fell in behind them.

BLITZER: All right.

It looks like there's high interest on Capitol Hill right now, once they get back from their recess, opening up some investigation, some hearings. Will you cooperate? Will you release the audiotapes that you have from your various sources and help them get to the bottom of what's going on?

SUSKIND: At this point, as a reporter for 25 years, I have never dumped tapes or notes to anybody. I am hesitant to do that.

If someone were to call, I will deal with that at that moment. What's going to happen first, almost assuredly, is that people will be put under oath, with threat of perjury, in front of Congress to deal with all of these issues, all of the issues of Habbush, as well as other issues in the book.

BLITZER: And if you're subpoenaed to make all your documents and stuff available, what do you do then, as a reporter?

SUSKIND: Well, first, you talk to your lawyers and say, what should I do? And then you look at the broader national interests of the country, I suppose.

BLITZER: The question I have is, some of these people are now questioning your integrity, your reliability as a journalist. But you say you have the audiotapes to prove what you wrote in this book. Wouldn't it be in your inclination to just go ahead and release these audiotapes and say, you know what, here's the evidence?

SUSKIND: I have worked with confidential sources, on the record, off the record, for many, many years. And I have always hesitated, and still hesitate to ever dump tapes.

I deal with many people in background information, all sorts of things. I simply don't want, and, understandably as a reporter, people to go into that closed room.

BLITZER: Based on everything you know, should the president be impeached?

SUSKIND: Based on everything I know, based on the evidence in this book, and the direct testimony of people involved in many, many instances, there, I believe, should be further investigation, with the powers of government, subpoena power, congressional authority, which is something people have been asking for, for a very, very long time.

BLITZER: Ron Suskind is the author of "The Way of the World: A Story of Truth and Hope in an Age of Extremism."

Ron, thanks for coming in.

SUSKIND: My pleasure.


BLITZER: Michelle Obama feels their pain. She meets with families of American troops serving in the wars. And it surely involves some sympathy, also a bit of political strategy. We will take a closer look at what's going on.

Also, every American with a credit card or debit card should be worried right now. Hackers allegedly steal more than 40 million credit and debit card numbers from stores you know, and likely shop at. We will have a full report.

And you're paying to rebuild Iraq, but Iraq is awash in oil profits by an eye-popping amount. Why are American taxpayers paying, when the Iraqis have billions?

Stay with us.



BLITZER: To hear Barack Obama tell it, the idea to run for president just hit him. The Democrat's surprising and amusing response to a youngster's question, you will want to hear it.

And Michelle Obama campaigning for her husband on turf John McCain would like to claim for himself. Does Senator Obama have a shot at winning military families?

And the bottom line on Iraq's massive oil profits, stirring outrage here in the United States, as Americans fork over billions to rebuild Iraq. We will discuss that and more with the best political team on television.


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

Happening now: Iraq's massive oil windfall. Why are billions of your tax dollars being spent to rebuild the country while it enjoys a giant surplus?

And John McCain calls Barack Obama the world's biggest celebrity. Now Americans are weighing in. Is the Democratic candidate overexposed?

All of this, plus the best political team on television.

Plus, Hillary Clinton reveals what she knows about Barack Obama's vice presidential selection.

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

An eye-opening new report about cash simply pouring into Iraq, thanks to oil. The government's General Accounting Office documents the billions of dollars the United States is spending on reconstruction, even as Iraq rakes in massive oil profits.

Let's go to CNN's Brianna Keilar. She's working this they for us.

Brianna, as you know, it's generating a lot of outrage here in the United States.

BRIANNA KEILAR, CNN CORRESPONDENT: It is, Wolf, because even though it's long been understood that Iraq hasn't spent nearly as much money on its reconstruction as the U.S. has, this new report by the Government Accountability Office has so many people wondering why.


KEILAR (voice-over): Record high oil prices, a pain at the pump for Americans, but a windfall for the Iraqi government. A new report says Iraqi oil revenues since 2005 could total up to $169 billion. With the U.S. government on the hook for almost $50 billion in war reconstruction costs, members of Congress are fuming.

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: This is not rocket science. They have got tens of billions of dollars of surplus in banks around the world, $10 billion in American banks alone. They wrote a check to get that money into the bank. They could write a check to reimburse us for these reconstruction costs.

KEILAR: Shortly after the U.S. invaded Iraq, a top Pentagon official told Congress rebuilding Iraq would be paid for with Iraqi oil money.

UNIDENTIFIED MALE: There's a lot of money to pay for this. It doesn't have to be U.S. taxpayer money.

KEILAR: But it didn't happen that way. Since 2003, American taxpayers have largely funded security, oil, water resources, and electricity in Iraq. While the Iraq promised to spend tens of billions of dollars, it's only spent a fraction of that.

White House spokesman Tony Fratto says Iraqis "should and will be spending a whole lot more of their money, and we will be spending a whole lot less U.S. money going forward."


KEILAR: Fratto says Iraq has increased its financing of reconstruction efforts, spending $10 for every U.S. dollar on reconstruction that this year.

But when I asked him about the U.S. being reimbursed for past costs, he said that's not the appropriate way to deal with Iraq, and reimbursement will come in the form of a U.S. ally who can help ensure the safety of Americans -- Wolf.

BLITZER: All right, Brianna, thank you.

Let's discuss this and more. Joining us, our senior political analyst Gloria Borger, our own Jack Cafferty, and Steve Hayes, the senior writer for "The Weekly Standard." They're all part of the best political team on television.

Jack, you know, a lot of people hear this and their blood starts to boil.

CAFFERTY: Well, understandably so. It's much more than the $50 billion. We've spent $700 billion or $800 billion on this -- on this war. The Iraqis could say hey, we didn't ask you guys to invade. You came over here, invaded our country, blew up our infrastructure, killed a couple of hundred thousand of our people, maybe you should pay to fix it.

The thing that really gets up my nose is somebody like Carl Levin sitting there expressing this moral outrage. The Democrats in 2006 said give us the majority in the House and Senate, we will end the war. We will cut off funding for the war. We will bring the troops home.

Well, that was a bald-faced lie. And to sit here two years later and try to grab the high ground on $50 billion worth of reconstruction costs when you did nothing to end this war two years ago, after you told us you would, I ain't buying it.

BLITZER: You know, Obama spoke out on this. He was outraged today, Gloria.

And the McCain people, I take it they're beginning to respond now, as well?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes, I just got off the phone with a spokesman for John McCain, Wolf. And, of course, they're saying that this is all due to the success of the surge. That's pretty predictable. And they also say sort of like what the White House says -- American troops and American taxpayers have borne the lion's share of the costs of fighting Al Qaeda and Iranian-backed extremists in Iraq. Now it is time for the government of Iraq to take grarter responsibility to build on the progress to date, which remain fragile and reversible.

So they're saying OK, they'd better pony up now, but reminding you that, of course, this progress is fragile, so you can't do what Barack Obama wants to do, which is to get out.

BLITZER: What do you...

BORGER: That's their...

BLITZER: All right, Steve, as you look at this -- and you've studied this subject for a long time -- they have, what, $80 billion sitting around simply in banks.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes. It's a pretty remarkable report. I mean it's not every day that I find myself agreeing with Carl Levin.

But I think Jack is wrong on this. I think Carl Levin is right. It's pretty outrageous that the Iraqis, you know, effectively have lockboxes all over the world holding this surplus. It made sense, I think for a while for the United States to be careful about how much of a burden -- a financial burden we put on Iraq, as Iraq got the oil sector going and things of that nature. But now you're at a point where the country is stabilized in terms of its violence, for the most part, and Iraqis should be contributing more.

I don't think you're going to find very many people in Washington who will disagree with the findings of this report...

BORGER: Well, and by the...

HAYES: ...or suggest that they shouldn't.

BORGER: We have a $482 billion deficit coming up in this country. So I think we should be reimbursed for years of support. I don't just think they should just start ponying up now.

CAFFERTY: Well, I mean...

BORGER: I think it needs to be retroactive.

CAFFERTY: Who caused the damage to the infrastructure to begin with?

HAYES: Well, I'd disagree with you on that, Jack. The state of the Iraqi infrastructure before we went in, before we dropped one bomb was deplorable. It was far worse than any damage that we did during the war.

CAFFERTY: Are you suggesting that a five year war has helped things over there?

HAYES: No, I'm not suggesting a five year war has helped things, necessarily, although the reconstruction has. But most of the damage that was done to the Iraqi infrastructure was done well before the U.S. came. And you could complain that the U.S. intelligence community missed a lot of that, didn't know it, whereas journalists who were in country knew about the state of the infrastructure. We really didn't.

BLITZER: You know, it...

BORGER: But...

CAFFERTY: Just like the WMD, right?

HAYES: Well, they missed that, too.

BORGER: Well...

BLITZER: All right.

CAFFERTY: Yes. That's what I mean.

BLITZER: I want to ask Gloria, this Pew Research Center poll that came out, it asked, "How much have you been hearing about Obama and McCain?"

Look at this. As far as Obama is concerned, 48 percent say too much, 26 percent too much. As far as McCain is concerned, too little, 10 percent for Obama, 38 percent for McCain. The right amount, 41 percent for Obama, 35 percent for McCain.

I guess they want us to be reporting more about McCain and less about Obama right now.

Is that the way you read these numbers?

BORGER: Well, yes. I think well, I think they're saying they're hearing too much about Barack Obama and that's because the McCain campaign has made a strategic decision here, which is this election is about Barack Obama, they say. They'd rather have a referendum on Barack Obama, who they think they can define, than George W. Bush, who has already been defined. And he's been defined downward.

So, you know, they're talking -- every ad they do is about Barack Obama the celebrity, Barack Obama does this, Barack Obama does that. They're not talking about themselves. And I think that's what people are responding to.

BLITZER: What do you think, Steve?

HAYES: Well, I think Barack Obama might be the only person in America more overexposed than Brett Favre these days. Look, you have people at home, you know, clicking channels -- it's Barack Obama, Barack Obama, then Brett Favre, Brett Favre.

BORGER: Paris Hilton. HAYES: And Obama is going to be in trouble when Brett Favre finally is traded and he's no longer in the news.

BLITZER: Well, let's see what happens to Brett Favre.

You know, there are some people, Jack, out there -- and we have some producers who don't even know who Brett Favre is.

Can you believe that?


CAFFERTY: General election, really?


CAFFERTY: I thought our producers knew everything.

BLITZER: Some of them don't even know.

CAFFERTY: You mean there's some stuff they don't know?


CAFFERTY: I'm shocked.

BLITZER: That is true.

CAFFERTY: Yes. Amazing.

BLITZER: He's a great quarterback. I still don't understand why...

CAFFERTY: Well, he used to be.

BLITZER: ...Green Bay wouldn't take him back. But that's just me. That's just me. And we're not going to get into a discussion...

CAFFERTY: Because every year...

BLITZER: ...about Brett Favre.

CAFFERTY: I'll tell you why they won't take him back, because they're tired of him retiring every year and then saying I changed my mind. That's why.

BLITZER: He's still a great quarterback.

CAFFERTY: And because he's old and because he had a crummy playoffs last year. And it's time for him to go away now.

BLITZER: He took him to the NFC...

CAFFERTY: Go to Tampa Bay.

BLITZER: He took them to the NFC Championships. CAFFERTY: And lost.

BLITZER: You know what, but not many teams get to the championship to begin with. He's still a great quarterback, in my book.

CAFFERTY: All right.

BORGER: I know nothing about this (INAUDIBLE).

BLITZER: I told you.

HAYES: I think he's still a great quarterback. But Jack is right on the fundamentals...

BLITZER: All right. All right.

HAYES: I mean he kept retiring and un-retiring.

BLITZER: We'll discuss later, guys. Thanks very much.

First he made a joke, then the real answer. Why is Barack Obama running for president?

That was the question. The candidate's own words, coming up, raw and unfiltered.

An American Olympic champion barred from Beijing -- the likely reason China revoked his visa at the last minute.

Stay with us.


BLITZER: The presidential candidates are hop scotching across the electoral map in these final weeks before the political conventions. Barack Obama landing in Indiana today and offering an unusual response to a little girl's question.

Let's listen to Senator Obama on the campaign trail.


NATALIA: Why did you start running for president?

OBAMA: Did you say -- what's your name again?

NATALIA: Natalia.

OBAMA: Natalia. That's a pretty name. How old are you, Natalia?


OBAMA: You're seven?

I've got a 7-year-old. Her name is Natasha. But she's pretty just like you. And smart.

Why did I start running for president? I got hit in the head with a rock.


OBAMA: And so when I woke up, I had made my announcement and then it was too late.

No, I'm teasing.

I'm running for president because of -- because I have two daughters just like you. One's seven and one's 10. And they are perfect, just like I'm sure your dad will tell me you're perfect.

And I think about what kind of America they're growing up in and what life's going to be like for them 20 years from now or 30 years from now, when they're raising their own families. And I think about the idea that maybe this country's become more divided instead of more unified and maybe our economic opportunities have shrunk, so only a few people are able to make it into the middle class and we've got a lot of people who are just struggling day to day and not able to live out their American dream.

And I think about us still being so dependent on foreign energy that our economy is grinding to a halt.

And our planet, because we didn't adjust from fossil fuels, has gone up two or three degrees and the polar ice caps have melted and the oceans have gone up and suddenly our ways of life have changed. And America is no longer what it could be, what it once was.

And I say to myself, I don't want that future for my children. I want -- I want America to better, to be stronger, to be more unified, to be more prosperous, to be kinder, to be more tolerant. That's the America I want for my daughters. That's what we're fighting for in this election. I need your help, Elkhart. I need your help, Indiana.


OBAMA: Let's go grab that better future for America, you and us together. Thank you, everybody. Bye-bye.


BLITZER: Hillary Clinton's prospects of being Senator Obama's running mate don't seem as good as they once did. But she's still getting and answering questions about whether or not she may be on the ticket.

Once again today, she's deferring on the matter to Senator Obama.


SEN. HILLARY RODHAM CLINTON (D-NY), FORMER PRESIDENTIAL CANDIDATE: This is a very personal decision for Senator Obama. And I have no inside information as to how he is proceeding with his decision. I'm out there supporting him, doing everything I can to make sure he gets elected. And I will do the same with whatever ticket there is.


BLITZER: Hillary Clinton speaking to reporters after an event in New York today.

Now to John McCain in Ohio talking about pocketbook issues and the need for an economic surge.


MCCAIN: And we need to crack down on those who have abused our credit market and caused this housing decline. We need to take action to support American businesses so that we can stop jobs from going overseas and create more jobs here at home. America has the second highest business rate in the entire world. It's any wonder jobs are moving overseas and we're taxing them out of the country.

Unfortunately, Senator Obama's plans would raise taxes on businesses even more. He's promised tax increases on income, tax increases on investment, tax increases on small businesses. That's exactly -- exactly the wrong strategy.

Raising taxes in a bad economy is about the worst thing you can do, because it will kill even more jobs when what you need are policies that create more jobs.

What we need today is an economic surge. Our surge has succeeded in Iraq militarily. Now we need an economic surge to keep jobs here at home and create new ones.

We need to reduce the tax burden on businesses that choose to make their homes in the United States of America. We need to open new markets to U.S. products and we need to reduce the cost of health care and we need to end the out of control spending in Washington that's putting our debt on the backs of our children.

Now is the time for action. And when I'm president, we are going to get it done.


BLITZER: Senator McCain speaking to voters today in Jackson, Ohio.

Michelle Obama courting a voting bloc that favors John McCain -- her meeting with military families. That's coming up.

And Paris Hilton for president?

You're going to meet the men behind her parody ads.

Stick around. You're in THE SITUATION ROOM.


BLITZER: Carol Costello is off today.

Fredricka Whitfield monitoring some other important stories incoming into THE SITUATION ROOM right now -- Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Well, Wolf, we're learning that there's word that a bus from the McCain campaign was involved in an accident and Connecticut Senator Joe Lieberman was on board. The bus collided with a minivan just after Lieberman left an interview at a Miami television station. There have been no reports as of yet of injuries.

And you're not welcome here -- that's what China tells an American Olympic gold medalist. 2006 medalist Joey Cheek was set to go to the Beijing Olympics to push for China to help make peace in Sudan's Darfur. But China has revoked his visa without explanation. That taking place just today as he was about to take off -- Wolf.

BLITZER: All right, Fred.

We'll see if that will change. Thanks very much.

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

CAFFERTY: The question this hour is: Which is better, gridlock or one party controlling Congress and the White House?

That could happen for the first time in a long time in November.

Dennis in Buffalo, New York writes: "We've had gridlock and abuse of power for the last eight years. I'm willing to try one party rule for the next term to see if at least we can get something done. With so many pressing issues being dumped on whoever gets elected, the last thing they need is to have to deal with idiots pulling filibusters."

Amy in Jacksonville, Florida writes: "Gridlock, no doubt. When Republicans figure out they can't just stomp their feet and throw a fit because they don't get their way, then they can start actually negotiating and Congress can find a balance on all these issues." Yes, that will happen Amy. "We're in trouble right now because the government became too one-sided."

Jesse in State College, Pennsylvania: "Thomas Jefferson once said, 'To render us again one people acting as one nation should be the object of every man.' That's a quote. He was also wary of one party control of government, but it's important in these times to get bills passed to help the citizens of this country, who are not being listened to. Gridlocked by both parties is leaving both the lower and middle classes behind."

Chief writes: "Gridlock is better. At least with gridlock, the Congress can't do anymore damage to the country with more laws paid for by more lobbies. Instead of passing more laws, how about if we enforce the laws already on the books?"

Mike in St. Petersburg Beach, Florida: "The problem isn't the system, it's the man. The founding fathers set it up this way in case a guy like Bush slithered his way into the White House."

And Ondrya in California: "Dear super old dude, is this a trick question or what? Why would we want like one party control and stuff? Something might get done for a change. Who wants that? Getting stuff to go through Congress, like bacon through a goose, that's like so gross."

If you didn't see your e-mail here, you can go to my blog at and search there -- Wolf.

BLITZER: A lot of people do.

Jack, see you tomorrow. Thank you.

In our "Political Ticker" today, Barack Obama's wife did something that involved a heavy dose of compassion and lots of political strategy.

Let's go to CNN's Jessica Yellin. She's working the story for us. All right, Michelle Obama, what exactly did she do?

JESSICA YELLIN, CNN CORRESPONDENT: Today, Wolf, Michelle Obama met with military spouses in Virginia. It's part of an effort that has not gotten a lot of national notice. But for more than a month now, Michelle Obama has been traveling the country and meeting with working women and their families.


YELLIN (voice-over): At a roundtable with military families...

MICHELLE OBAMA, WIFE OF BARACK OBAMA: Few sacrifice more to serve their country than all of you. And I know that too often, it seems like you're doing it all on your own.

YELLIN: Michelle Obama was on message, doing what political spouses do best.

M. OBAMA: His grandfather enlisted after Pearl Harbor and went on to march in Patton's Army. And his grandmother worked on a bomber assembly line.

YELLIN: It's a decidedly different tone from appearances during the primary like this one.

M. OBAMA: And we are still a nation that is too guided by fear. And it cults us off. It cuts us off from one another in our own homes, in our own communities and it has certainly cut us off from the rest of the world.

YELLIN: This Democratic strategist says Michelle Obama connects with voters.

UNIDENTIFIED MALE: So I think she really has a path to people's hearts. I think sometimes Barack Obama seems to want a path to your brain. And Michelle has a better ability, sometimes, to connect with the heart.

YELLIN: She still has her unscripted moments.

M. OBAMA: You are managing the checkbook, you are handing out the discipline, trying to get the homework done, trying to keep yourself together, looking good, in shape, hair done, nails polished.


M. OBAMA: I know we all try.

YELLIN: But no read red meat for the opposition to run with.


YELLIN: Michelle Obama has a bigger staff these days. And, Wolf, you do see her reading from notes a lot more than she did before. But the campaign says these changes are all part of any campaign's move from the primaries to the general election, it's to be expected. And when asked, they say they think that her blitz of entertainment media -- you remember she did "Us" magazine, "People," "Access Hollywood" -- they say it was effective because it helped voters see the Obamas as what the campaign says they are -- a typical, average American family -- Wolf.

BLITZER: Typical. Two Harvard law school grads. A typical average American family.

YELLIN: Right.

BLITZER: Both of them very talented, very smart.

All right, Jessica, thanks very much.

Paris Hilton responds to John McCain's ad.

Listen to this.


UNIDENTIFIED MALE: A nice testament to Paris. We actually came with cue cards and she said, "No, I don't need them."


BLITZER: All right, Jeanne Moos finds all this "Moost Unusual." That's coming up next.


BLITZER: Here's a look at some of this hour's "Hot Shots." In Pakistan, a vegetable vendor counts his money as the government slashes fuel and food subsidies.

In Jordan, a diving demining team celebrates after completing a clearance project.

In South Africa, soaring power prices prompt workers to strike.

And in China, earthquake refugees receive Olympic and Chinese flags.

Some of this hour's "Hot Shots."

Paris Hilton goes political. It started with a John McCain ad and it could turn into a career rebuilder.

Jeanne Moos on a "Moost Unusual" turn of events.



HILTON: ...while creating taxes.

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Thanks to these two jokers, a funny thing happened to Paris Hilton.

HILTON: Then that wrinkly, white-haired guy used me in his campaign ad, which I guess means I'm running for president.


MOOS: She did a parody response ad to John McCain's real ad...


NARRATOR: He's the biggest celebrity in the world.


MOOS: And the response to Paris was good.

UNIDENTIFIED FEMALE: Well, I'm going to bump it up to maybe a seven.


HILTON: I'm just hot.


UNIDENTIFIED MALE: Nine out of 10.

MOOS (on camera): This could be Paris Hilton's come back among the intelligentsia, sort of.

UNIDENTIFIED MALE: Did she ever have something to come back from?

MOOS (voice-over): Now she does. These two made her a political star.

ADAM MCKAY, FUNNYORDIE.COM: We called her. We pretty much straight up gave her a call. She called back. We told her our idea and she was into it.

MOOS: Adam McKay and Pearl Harbor Henchy -- Pearl Harbor happens to be married to actress Brooke Shields -- are the brains behind Will Farrell's comedy Web site, FunnyOrDie. They wrote the parody and shot it out in the Hamptons with Paris contributing live.

MCKAY: Paint the White House pink -- wasn't that hers?



HILTON: I'll see you at the White House. Oh, and I might paint it pink.


MOOS: But it was Paris' energy policy...


HILTON: Why don't we do a hybrid of both candidates' ideas.


MOOS: That went over big, even with real pundits.


JOE SCARBOROUGH, HOST: Her energy policy, if you just look at the words, really is better than Barack Obama's and John McCain's.


MOOS: Her biggest laugh line included the word that rhymes with witches.


HILTON: I'll see you at the debates (OBSCENE WORD OMITTED).


MOOS: Even Jay Leno was impressed.


JAY LENO, HOST "The Tonight Show": Paris Hilton making sense. Wow! (END VIDEO CLIP)

UNIDENTIFIED MALE: She's a plunker. She really is a plunker.

MOOS: A whatter?

UNIDENTIFIED MALE: A plunker. It's -- she's an idiot.

MOOS: Now, if you think Paris Hilton is such an airhead, consider this -- she wasn't using a teleprompter, like I am. She memorized all that and did it in about four takes.

(voice-over): Yes, she can.


Paris for president?

UNIDENTIFIED FEMALE: And Paris for president?

MOOS: T-shirts are already available, "Vote Paris, Not Old Dude."


HILTON: Now if you'll excuse me, I have to pick out a vice president. I'm thinking Rhianna (ph).


MOOS: But there were other potential running mates.

CHRIS HENCHY, FUNNYORDIE.COM: We considered the 40 pound cat.

MCKAY: Right.

HENCHY: It was one we talked about. The Montauk sea creature was mentioned.

MOOS: And speaking of sea creatures, what's with the leopard cutout swimsuit?

HENCHY: Classic Paris.

MCKAY: That was classic Paris. She answered the door in that suit.

MOOS: As one person posted: "Just be glad it's Paris talking politics and not McCain releasing a sex video."

That would wake up this faker.


HILTON: I'm Paris Hilton and I approve this message because I think it's totally hot. (END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.


BLITZER: That's it for us.

I'm Wolf Blitzer in THE SITUATION ROOM.

"LOU DOBBS TONIGHT" starts right now.

Kitty Pilgrim is sitting in for Lou -- Kitty.