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THE SITUATION ROOM

Obama Looks for Palin Antidote; Palin's Faith Explored

Aired September 8, 2008 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: But it's happening right now here in THE SITUATION ROOM.
Barack Obama looks for an antidote to Sarah Palin fever. We're waiting to hear from the Democratic presidential nominee, Barack Obama. He's standing by live. He's standing by live. Once he starts talking, we will go there.

And Hillary Clinton reemerges on the campaign trail herself to try to help Obama counter the Palin effect. Is she prepared to go on the attack? She's also standing by to speak live this hour. Once she starts talking, we will go there as well.

And John McCain rides the wave of Palin's popularity, but his hopes for convention bounce may be falling flat. The best political team on television is standing by.

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

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

Senator Obama's in Michigan right now, fighting to win a crucial battleground state, one he desperately needs, and reclaim the spotlight from John McCain and Sarah Palin. We're standing by to go there live, once Senator Obama starts speaking.

Democrats are debating the best way for the Obama campaign to counter Sarah Palin's popularity and star appeal.

Let's go to right to our senior political correspondent, Candy Crowley. She's in Michigan watching all of this unfold.

They are going to be having this event right behind you, Candy. But tell us about Obama and the strategy, now that both of these conventions are over with.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, I will tell you what they're trying to do right now is push back against Palin power.

And the way they're doing it is trying to focus on the top of the ticket, on John McCain, and on the whole change mantle, because one of the things they're saying here is, wait a minute. Regardless of how fresh a face John McCain puts on his ticket, he is still Washington.

Today, they talked -- Barack Obama talked in Flint, Michigan, about all of the former lobbyists that are on the campaign for John McCain. He's pushed back, saying, how can you be for change if you voted for George Bush 90 percent of the time? So, this is very much a strong pushback about the whole change mantle, as the McCain campaign obviously would like to see using the fresh face of Sarah Palin -- Wolf.

BLITZER: And Senator Obama is also pushing back on Sarah Palin's assertion that she opposed that so-called bridge to nowhere.

Listen to what he said earlier in the day. Listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: When it came to the bridge to nowhere, she was for it until everybody started raising a fuss about it, and she started running for governor. And then, suddenly, she was against it. Do you remember that, for it, before you were against it?

(LAUGHTER)

OBAMA: I mean, you can't just make stuff up.

(LAUGHTER)

OBAMA: You can't just recreate yourself.

(APPLAUSE)

OBAMA: You can't just reinvent yourself.

(END VIDEO CLIP)

BLITZER: I got to sense, Candy, correct me if I'm wrong, that Senator Obama and others in his campaign, they are becoming more assertive now in going after Governor Palin.

CROWLEY: Well, you know, the problem they have is, they really don't want the top of the ticket going after number two on the Republican side.

But this entire ad of Sarah Palin the McCain campaign put out saying that she opposed the bridge to nowhere, it really does seem to have gotten in the craw of the Obama campaign. Several people I talked to today said that ad is just flat-out wrong. She campaigned for the bridge to nowhere.

So, what they're trying to do here is to drive a wedge obviously between John McCain and Sarah Palin, saying, look, this is not a group of reformers here. She's no reformer.

BLITZER: All right, Candy, stand by. Let us know when Senator Obama starts speaking there in Farmington Hills, Michigan. That's outside of Detroit. We will go there live once he actually starts speaking substance. Meanwhile, Hillary Clinton, as you know, was passed over as Barack Obama's running mate, but she may find herself up against Sarah Palin after all, this time on Barack Obama's behalf. Senator Clinton is busy campaigning, including this hour, for the Obama/Biden ticket in Florida.

Let's go to CNN's Jim Acosta. He is working this story for us.

Was she specifically deployed to Florida, a key battleground state, as a result of Sarah Palin, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, the Obama campaign is saying no. They are stressing this was a previously scheduled set of events for Hillary Clinton today, but it is safe to say that much of the political world and the Obama campaign are watching just how she handles her.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Hillary Clinton may be out of the horse race, but some Democrats see her riding to the rescue of Barack Obama. And it didn't take long to put her own brand on the campaign.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: No way, no how, no McCain, no Palin.

ACOSTA: Her backdrop of voters decidedly female, Senator Clinton never singled out rising GOP star Sarah Palin in her attacks. Instead, she linked the Republican ticket to an unpopular president.

CLINTON: What does Senator McCain and Governor Palin offer for you and your families? More of the same. Barack Obama is my candidate, and I hope he is your candidate as well.

ACOSTA: Returning to her role as middle-class warrior, she argued the GOP can't be trusted to fix the economy.

CLINTON: Choosing a Republican to clean up this mess is like asking the iceberg to save the Titanic. It is not going to work.

(LAUGHTER)

(APPLAUSE)

ACOSTA: Some Democratic strategists say there's only so much Clinton can do when she's not on the ticket.

TAD DEVINE, POLITICAL CONSULTANT: Hillary can campaign so actively, can be such a forceful presence on the national stage, that those 18 million voters who supported her can listen to her voice and heed her call. I think, in terms of people out there who are not on the ticket, she may be the most important person of all.

ACOSTA: So far, Obama's running mate, Joe Biden, has avoided hammering Palin, leaving that job to the top of the ticket. The Illinois senator accused the governor of double-talk on congressional pork.

OBAMA: When you have been taking all these earmarks when it's convenient and then suddenly you're the champion anti-earmark person, that's not change. Come on.

ACOSTA: For Hillary Clinton, there's good reason to be a team Obama player. Think 2012.

MARK PRESTON, CNN POLITICAL EDITOR: Hillary Clinton and even her husband, Bill Clinton, are going to do anything and everything that is asked of them to help get Barack Obama elected. Anything short of it would be political suicide.

(END VIDEOTAPE)

ACOSTA: If Hillary Clinton pulls out all the stops and Obama somehow still loses, the thinking among some Democratic strategist is that nobody could possibly blame her, and that puts her in the driver's seat for the next election -- Wolf.

BLITZER: All right, thanks very much, Jim Acosta, working that story.

And we're watching both of these venues right now, the Hillary Clinton campaign rally for Barack Obama -- you see it on the left part of your screen -- and the Barack Obama campaign event outside of Detroit. Once they start speaking, we will go there, share with you what they're saying on this important day.

But let's get to the McCain/Palin ticket right now. The Republican running mates have been campaigning in the battleground state of Missouri today, where she's trying to be a magnet for votes, as well as attention.

Dana Bash is on the scene for us. She's watching what is going on.

And, Dana, she certainly is bringing a lot of new energy to this McCain campaign.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: She certainly is. And, in fact, a new CNN/Opinion Research poll just out today, Wolf, shows an 11 percent spike among Republicans in enthusiasm for voting this year.

But, if you come out on the campaign trail with McCain while Palin is with him, unlike before, you don't need a poll to tell you that.

(BEGIN VIDEOTAPE)

BASH (voice-over): Thousands of Missouri voters wait in line to get in.

(on camera): Would you have come if it was just McCain, pre- Palin. UNIDENTIFIED FEMALE: Possibly, but for sure with -- with Palin.

(LAUGHTER)

UNIDENTIFIED FEMALE: Probably, I would have been here only if Palin was here.

BASH: Yes.

UNIDENTIFIED FEMALE: I would have stayed home and watched it on TV on CNN.

(LAUGHTER)

BASH (voice-over): Sarah Palin's ability to draw unprecedented McCain crowds is a key reason he scrapped plans for her to campaign solo, and aides scrambled to arrange this in suburban Kansas City, where McCain must win big to take the state.

UNIDENTIFIED FEMALE: I'm leaning a lot more since he picked Palin.

BASH (on camera): Why?

UNIDENTIFIED FEMALE: I like her spirit, and I like her no- nonsense attitude.

BASH (voice-over): Inside, McCain and Palin played up that attitude as proof they're a pair of reformers offering new examples from her little-known record as Alaska governor.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: And I put the state -- our government's state checkbook, I put it online for all the world to see. You're going to see every penny that we spend up there.

(CHEERING AND APPLAUSE)

PALIN: So...

(CHEERING AND APPLAUSE)

PALIN: ... doing that though, of course, it didn't thrill all the bureaucrats.

BASH: But McCain aides concede the only way their agents of change message will sell is to discredit Barack Obama. McCain seized on a comment Barack Obama made over the weekend that one way he would reach across the aisle and buck his fellow Democrats is expanding the military.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: He says now he wants to increase it, but, during the primary, he told a liberal advocacy group that he would cut defense spending by tens of billions of dollars.

(APPLAUSE)

MCCAIN: And that's not bucking his party. That's telling them just what they want to hear.

(END VIDEOTAPE)

BASH: Now, the Obama campaign says that McCain is taking him out of context, that he was talking about cutting wasteful spending in the military, Wolf.

And, as for McCain and Palin, they are going to be together now through midweek. There were plans originally for Palin to be out solo, but McCain aides insist that the senator thought himself that having her with him would help sort of keep this energy, this post- convention energy going.

But it also has another benefit, Wolf, and that gives her a little bit more time to study up on foreign affairs and other issues before she goes out campaigning solo -- Wolf.

BLITZER: We will be watching every step of the way with you, Dana. Thank you.

Barack Obama and Hillary Clinton are getting ready to speak at separate campaign rallies. Hillary Clinton has actually just started. She's thanking some people there.

Also, Barack Obama, he's getting ready to speak in Michigan. We're going to be watching both of these events, and we will go there live for you. Stand -- stay tuned for that.

And Governor Sarah Palin wants to you get to know her. She continues to drive home items she says she did in Alaska.

And a deadly storm right now on a killer path. Hurricane Ike, it has taken lives already and turned others upside down. Should you be worried as it gets closer and closer to the Gulf Coast?

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

(COMMERCIAL BREAK)

BLITZER: Let's go right to Tampa, Hillary Clinton making the case for Barack Obama.

(JOINED IN PROGRESS)

CLINTON: ... because you don't have insurance, or you have got insurance, and it doesn't amount to anything, because every time you try to go to the doctor, the insurance company says they won't pay for it.

Now, for some of you, you're going to college or you want to go to college, or you decided you couldn't go to college because you can't afford to go to college in George Bush's America.

(CHEERING AND APPLAUSE)

CLINTON: I bet there are those of you living in this beautiful state who are worried a lot about energy, the environment and global warming and want something done about it.

I imagine there are at least a few teachers and students who are worried about No Child Left Behind. And I am sure that there are those of you here with sons or daughters, husbands or wives, brothers or sisters who have served in the United States military, who have been deployed once, twice, three times, active duty, Guard and Reserve, and you know that we are breaking the military and it is time for us to bring our troops home.

(CHEERING AND APPLAUSE)

CLINTON: And I'm sure there are those of you worried about the value of your homes and whether or not you will be foreclosed on in the next months. So, there is a myriad of reasons why you're here today. And...

(SHOUTING)

CLINTON: I love you, too. Thank you very much.

(CHEERING AND APPLAUSE)

CLINTON: And I especially love Tampa and Hillsborough County for supporting me in the primary.

(CHEERING AND APPLAUSE)

CLINTON: I ran for president. I was proud to run. I wanted to go all the way through the process. And for the first time ever, we have more Democrats registered, engaged and energized and ready to win.

(CHEERING AND APPLAUSE)

CLINTON: But, as I said in Denver, I haven't spent the last 35 years in the trenches, advocating for children, campaigning for universal health care, helping parents balance family and work, trying to get the economy to work again for middle-class families, fighting for women's rights at home and around the world, I haven't done that to see us squander this opportunity.

This is bigger than any one person. It's way bigger than Barack and me. This is whether or not we will have the future for our country that our country deserves to have.

(CHEERING AND APPLAUSE)

CLINTON: That is why Barack Obama is my candidate, and he must be our president in January!

(CHEERING AND APPLAUSE) BLITZER: All right, so there you have it, Hillary Clinton making it clear she wants all those supporters of hers in Florida and elsewhere to vote for Barack Obama and Joe Biden.

Meanwhile, Senator John McCain and his running mate, they have been campaigning today as well in Missouri. When both of them spoke earlier today, we went live out to Missouri to hear what they had to say.

Governor Palin fired up the crowd by echoing statements she's been making about herself. Listen to this.

(BEGIN VIDEO CLIP)

PALIN: So as mayor, I took a voluntary pay cut, which didn't really thrill my husband. And then as governor, I cut the personal chef position from the budget, which didn't really thrill my kids.

(LAUGHTER)

PALIN: And then, as governor, I cut the personal chef position from the budget, which didn't really thrill my kids. And then I put the state's -- our government's state checkbook, I put it online for all the world to see. You're going to see every penny that we spend up there. Doing that, though, of course, I didn't thrill all the bureaucrats. But, OK. And then the luxury jet. It came with the office, but I put it on eBay.

So, I came to office promising to control spending, by request if possible, but by veto if necessary. Today, our state budget is under control. We have a surplus. I had put the veto pen to nearly half a billion dollars in wasteful spending.

We suspended the state fuel tax. And now that we have a surplus, I'm returning a chunk of that surplus straight back to the people because they can spend it better than government can spend it for them. We gave their money back to the hard-working Alaskans. And in these tough times, I'm ready to help John McCain bring tax relief to all Americans. To all of you.

I championed earmark reform -- you're going to hear about this from the senator -- to stop Congress from wasting public money on things that don't serve the public interest. I told Congress, thanks but no thanks for that bridge to nowhere. If our state wanted to build a bridge, we would build it ourselves.

Just the other day, our opponent brought up earmarks. And, frankly, I was surprised that he would even raise the subject at all. I thought he wouldn't want to go there. In just three years, our opponent has requested nearly $1 billion in earmarks. That's about a million dollars for every working day.

So we've reformed the abuses of earmarks in our state. And I'm ready to help president John McCain end these corrupt practices once and for all.

(END VIDEO CLIP)

BLITZER: All right, Governor Palin speaking earlier today.

Meanwhile, Senator Obama has not requested any earmarks this year, that according to the Associated Press. Last year, he did ask for some $311 million in earmarks. The AP says that's about $25 for every Illinois resident.

But, under Governor Palin, Alaska has for almost $200 million in earmarks, the AP saying that's almost $300 for every person in Alaska. The AP says Alaska is by far the biggest recipient of these federal pet project spending per capita.

Waiting for Barack Obama, the Democratic nominee, due to appear momentarily. Does he have an answer to Sarah Palin's sudden popularity? We will go there live to Michigan once he starts speaking.

And with Barack Obama tied up in a virtual dead heat with John McCain, can the Clintons come to the rescue? A team meeting is planned. The best political team on television tells us what's at stake.

And President Bush plans a key announcement on troop levels in Iraq -- why thousands are due to head home, but not necessarily this year. What's the latest?

Stay tuned. We will tell you.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Barack Obama is trying to reclaim his status as the political rock star of the campaign. So, what does he need to do right now to seize the momentum, as the McCain/Palin ticket grabs lots of the spotlight? The best political team on television is standing by.

And inside Governor Palin's church and her religion -- a live report from Alaska on the faith that helped shape Palin's political views.

And look at this. Michelle Obama busts a move. Could the presidential campaign turn into a dance-off?

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

(COMMERCIAL BREAK)

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

Happening now: her faith a central part of her appeal to millions of voters out there. We're live in Alaska, visiting the longtime church of Republican vice presidential candidate Sarah Palin. Stand by. Also, excitement over her nomination energizing the McCain campaign. The gap in the polls is closing. We have new numbers. So, who's got the momentum right now?

And they're among the best weapons Barack Obama has in his arsenal, That would be Bill and Hillary Clinton. What's the best use of them in this campaign?

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

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

Many Christian conservatives are now more revved up than ever about the Republican presidential ticket now that Sarah Palin is on it. The Alaska governor's faith has certainly helped shape her views of politics and the world.

CNN's Jessica Yellin -- she's now in Alaska.

She's covering this story for us.

You got a chance, Jessica, to go out there and actually visit Palin's long time church. You spoke to people there and you're also getting reaction from the McCain campaign.

Tell us what you're discovering.

JESSICA YELLIN, CNN CORRESPONDENT: Wolf, all the McCain campaign will say about Sarah Palin's faith is that she was born Catholic and that she now goes to a non- denominational Evangelical church. But they will not talk about the place where she has worshipped the most -- the place we visited this weekend.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): In June, Sarah Palin spoke at the Wasilla Assembly of God, where she had worshipped for much of her adult life.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

PALIN: It was so cool growing up in this church and getting saved here.

YELLIN: She was addressing graduates of a youth ministry program that promotes itself with this video.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: God has a destiny for the State of Alaska.

UNIDENTIFIED MALE: Masters Commission (ph) is one of the keys in God's plan for Alaska.

UNIDENTIFIED MALE: The United States the entire world.

(END VIDEO CLIP) YELLIN: The church teaches that Alaska will be a shelter at the end of the world.

(BEGIN VIDEO CLIP)

PASTOR ED KALNINS, WASILLA ASSEMBLY OF GOD: I believe Alaska is one of the refuge states -- come on, you guys, in the last days. And hundreds and thousands of people are going to come to this state to seek refuge.

YELLIN: Like many Pentecostal churches, the Wasilla Assembly of God practices speaking in tongues. Whether Palin shares these beliefs is unclear.

During her June visit, she described the Iraq War and a natural gas pipeline she's trying to build as part of God's plan.

PALIN: So pray for that.

YELLIN: Since she hit the national stage, the governor has not spoken publicly about her faith. This parishioner believes the Wasilla Assembly of God shaped Palin's beliefs.

TERRY NELSEN, PARISHIONER: She has a better idea of what God is wanting her to do and guiding her and leading her and that it's coming from him.

YELLIN: Since 2002, Palin has regularly attended a non- denominational church with more traditional practices. Her current pastor says...

PASTOR LARRY KROON, WASILLA BIBLE CHURCH: She really cares about her God. And it doesn't get in the way of anything. I think it enhances her in terms of how she approaches everybody with respect.

(END VIDEOTAPE)

YELLIN: Now, Wolf, a member of the McCain campaign reached out to me to offer further context for Sarah Palin's comments about the Iraq War and whether she believes that's a plan from God. They say she meant she hoped it's a plan from God, not that she was asserting it is. And they say this is a humble statement that any religious American will share, "the hope that our country's actions are, indeed, righteous. Other than this, Wolf, though they won't say much about that particular church and her visit there -- Wolf.

BLITZER: Jessica, stand by for a moment. I want to you participate.

I want to bring in our CNN political analyst Roland Martin. He's a syndicated columnist and radio talk show host. Also, Tara Wall. She's deputy editorial page editor for "The Washington Times." They're all part of the best political team on television.

Roland, our new poll of polls -- the average that we have of the major national polls right now shows this -- McCain 47, Obama 45, unsure 8 percent.

It was not that long ago that Obama was ahead by five or six points in this average poll of polls.

What's going on?

ROLAND MARTIN, CNN POLITICAL ANALYST, NATIONAL TALK RADIO HOST: Well, first of all, you obviously see a significant bump coming out of the Republican Convention, just like you saw after the Democratic convention. Sarah Palin also brings, frankly, enthusiasm to a walking dead ticket. And so you have Evangelicals who, frankly, who were suppressed, if you will, because John McCain was flat out boring them to death. And so that's what you see.

Anybody, though, who understands how the nation is set up knows that this is still a split nation. So the McCain camp obviously wants to push these numbers. But trust me, prior to this, they were saying focus on the battleground states. The reality, Wolf, is that we have a state by state election and really not a national election.

BLITZER: I think that's a fair point, Tara. As important as the national numbers are, there's not a popular vote that gets you elected president. You've got to win the Electoral College. And that means you got to win those key battleground states.

Right now, Obama -- at least based on the latest state polls -- seems to have a significant Electoral College lead -- at least in our estimate.

TARA WALL, FORMER SPOKESPERSON, DHS GULF COAST *REBUILDING EFFORTS, FORMER RNC PRESS SECRETARY FOR OUTREACH: Well, that's true. But this certainly is not a conversation that the Obama campaign has anticipated having.

I mean first and foremost, when you look at these national polls -- and the national will go up and down. You'd have to track it weekly as opposed to daily. But bumps aside, this is the first time John McCain is not trailing, but leading and, quite frankly, where Barack Obama's lead has all but vanished. He has been in a stagnant position, quite frankly, in this polling for weeks. And so certainly it should spell some danger for the Obama campaign. I'm sure at the very least it concerns them.

BLITZER: Here's another number out there in this new poll. And I'll let Jessica react to this. "Who is more likely to unite the country?"

In our CNN/Opinion Research Corporation poll, Obama got 53 percent, McCain got 37 percent. It's interesting that he does better in this area than McCain, Jessica.

YELLIN: That's right. It's part of Obama's message, which is that he will change the way Washington works. That's one of themes they want to continue to punching in the coming days.

They think, though, the message that will help them regain the lead is about the economy and that Obama can do more for economy. They're trying to hit McCain hard on the question of whether he's old Washington by spending too much time and getting too much influence with lobbyists.

But for Obama, that one number isn't enough. He really needs to do a better job of selling the economy message to turn this around right now -- Wolf.

BLITZER: Guys, stand by...

MARTIN: I'll tell you...

BLITZER: Hold on, Roland, because I want to take a quick break and let our viewers know, we're going to go listen directly to Senator Obama. He's speaking right now in Michigan. That's a key battleground state. Once we come back, we'll go there live and hear what he's telling these voters out there.

Also, they're a very powerful force in politics, so how can Barack Obama best use Bill and Hillary Clinton to try to regain his lead over John McCain?

And rumors swirling about Sarah Palin and banned books. We discover the truth online.

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

(COMMERCIAL BREAK)

BLITZER: Let's go right to Michigan. Barack Obama speaking live right now. Let's listen in.

OBAMA: To stimulate the economy in a time that we need it, making the tax code more fair and more balanced. That's change.

What John McCain is offering is not change. It's the same old stale, outdated, trickle-down economics, where you give the folks with the most more and hope it kind of settles down on everybody else.

We have tried this for eight years and it hasn't worked. And so when John McCain gets up there with Sarah Palin and says we're for change and now is starting to run television commercials saying that we're the change agent, you know, you've got to ask well, what are -- what are they talking about?

How do they have the nerve to say it, when you've been supporting this current president, your party has been in power and you are not offering anything new, how is it that you're serious about change?

You're not. It's empty words. You're just saying it because you realize I've been -- you know, gosh that guy Obama has been talking about change and that seems to be working so maybe we should try to say it, too.

BLITZER: All right. You get the point. He's really going after John McCain and Sarah Palin. Tara Wall, as you listen to what he's saying, that the Republicans -- he says they've been in power for all these years and if you want more of what you just had under the eight years of the Bush administration you know what, vote for John McCain and Sarah Palin.

Go ahead. When you hear him make that point, what do you think?

WALL: Well, I'm sure the Obama campaign thinks that this is working with some of their constituents, that it's resonating. But at the same time, I mean, this coming from a one-term senator, who's been there for two years, in a Congress whose approval ratings are lower than the president.

So one would question or ask what he's done since he's been there as senator to help with some of this.

Also, I think if you look at the polling, voters want someone, they say, who they see is bipartisan. The undecideds who are out there are looking for bipartisanship. And you could argue, you know, the first six years were well. These last two years absolutely have been challenges. But look at the areas in which McCain...

MARTIN: Whoa, the first six years?

WALL: ...McCain...

BLITZER: Hold on.

WALL: Wait. Let me finish please.

BLITZER: Hold on, Roland.

Finish your thought.

MARTIN: Wow!

WALL: The McCain campaign will argue that there are areas that Democrats even worked with him, whether it's education, whether it's housing, in other areas that there was bipartisanship, even the war in Iraq.

So I think that's where the gap has to be filled with both sides, is reaching out to those voters who want bipartisanship.

BLITZER: All right. Roland, go ahead.

MARTIN: OK. Tara has to be delusional to think the first six years were well. Not only that, Wolf, here's the problem with this whole notion of bipartisanship. I remember a certain guy from my home state of Texas who said the exact same thing -- George W. Bush. And we saw virtually no bipartisanship in Congress, in D.C. the last eight years.

And so come on now. The reality is this here. Obama -- it is a smart move to say -- to tie John McCain to President Bush. And won't you notice, McCain and Palin, they want to run as far away as possible from Bush, as well as Congress. It was Congress -- the Republican led Congress -- who had it for six years.

BLITZER: All right...

MARTIN: The Republicans controlled Congress and White House...

BLITZER: Jessica...

MARTIN: ...for six of the eight years. You've got to be honest, Tara.

BLITZER: Hold on a second. She's going to have a chance to respond.

But I want Jessica to weigh...

WALL: I will definitely respond.

BLITZER: ...weigh in on this new development we saw today. Hillary Clinton -- she's out there in Florida, two events on the campaign trail today, trying to make sure some of those disappointed Hillary Clinton supporters don't go for Sarah Palin and John McCain, but stay with Barack Obama and Joe Biden. What do you make of this?

YELLIN: Well, I'll tell you, Wolf, this is the one bit of good news for Barack Obama today. The new CNN poll shows that former Hillary Clinton supporters in the Democratic Party are increasingly moving behind Barack Obama. The number previously showed 27 percent of Hillary Clinton supporters were going to go for John McCain. Now it's 19 percent. So he is solidifying this group. It's a key group. And he needs to continue to deploy Senator Clinton to try to appeal to these blue collar working women with the message that he's going to bring economic change, that he is going to unite the country.

The bickering that we hear Roland and Tara going back and forth on, that's part of the white noise that gets upsetting to a lot of these voters. They want to hear an economic message. Senator Clinton is good at delivering it.

BLITZER: And if he goes out together with, Tara, with Hillary Clinton -- and we know that Barack Obama is going to have lunch Thursday in New York with Bill Clinton. If they go out together, especially Hillary Clinton and Barack Obama, that will be very effective in trying to ease the concerns of some of those disappointed Hillary supporters.

WALL: It will -- it will ease the concern of some of the Hillary supporters. I think that some of the ones that have already crossed over are the ones that are Democrats for McCain. For example, I've interviewed them for my column. And many argue that the reason they're going for McCain now -- they had supported Hillary for the reasons they're supporting McCain, because he's strong on foreign policy, because of being ready to lead on day one.

And those are the reasons now, because she's not on the ticket, they can't support her. So some of those voters who have already gone over, I don't see the Obama campaign recapturing. But those in the base who are still sitting on the fence, who he does need to recapture, that will go a long way in easing some of the concerns and getting them out there, particularly her...

BLITZER: All right...

WALL: ...now that Sarah Palin...

MARTIN: You know, Wolf...

WALL: ...is the big V.P. pick for John McCain.

MARTIN: You know, Wolf, there was a Philadelphia "Daily News" story today where Joe Biden was in Philadelphia talking to these white blue collar workers. And I think the Democrats are going to go ahead and just go ahead and address the elephant in the room. They need to look those white voters in the eye and say you know what, you're a Democrat. And if you're going to sit here and vote against your economic interests, you're committing suicide. You should back this man.

Forget the fact that he's black. Forget the fact that he's Barack -- his name is Barack Obama. African-Americans have been with Democrats for years and you should be repaying the same thing.

Now, they may not want to say that, but the reality is they must hit it head-on, but that people that are dancing around the issue.

It was an amazing comment, Wolf, to hear an 89-year-old white woman say I can't look for this guy, look at his name, it would be a disgrace if he's president. But she says she's a Democrat.

BLITZER: Jessica, I want...

MARTIN: It doesn't quite go together.

BLITZER: Jessica, go ahead. You've covered the Obama campaign for some time now. They're treading gingerly, although a little bit more aggressive, in terms of the Sarah Palin factor. But this is sort of a delicate tightrope they have to walk.

YELLIN: It's very awkward for them. And you can even tell when I tried to have conversations with people today about Palin. They don't want to go too far. They don't want to sound like they're being too critical.

But over time, I think that they're going to be more and more comfortable just critiquing her record as the novelty of her wears off, because the polls are showing, Wolf -- and this is interesting -- that in general, Democratic women and swing women are not attracted to Sarah Palin, that she is not wooing them since the convention started.

Who she's -- I'm sorry, since the convention ended. The people she's wooed are that conservative base.

WALL: That's right.

YELLIN: So that swing group of undecided women, they are still a swing group. And Barack Obama will try to appeal to them, partly by critiquing Sarah Palin indirectly.

BLITZER: All right, guys stand...

WALL: That's right.

BLITZER: Hold on, Tara, because we've got to leave it right there. Unfortunately, we're out of time, but a good discussion. And all of you made it clear why we're the best political team on television.

WALL: Thanks, Wolf.

BLITZER: Thanks very much.

MARTIN: Thanks, Wolf.

BLITZER: Let's check in with Lou.

He's got a very special show coming up right at the top of the hour, indeed, all this week -- Lou, tell our viewers what you've got on the agenda.

LOU DOBBS, CNN ANCHOR: Well, we're going to be holding an Independent convention here on CNN every evening at 7:00 Eastern. Our special CNN event -- in fact, the first ever televised Independent convention, taking place right here in these studios. We'll be talking about the issues the presidential candidates want to ignore, want to avoid.

Tonight, on the day of the largest federal bailout in our history, this nation faces a crisis of historic proportions. We have $53 trillion of unfunded liability, some $16 trillion in national and trade debt.

This is starting to add up to real money, isn't it?

Our government is simply outright broken. Unaccountable corporate elites and special interests are dictating political and public policy. President Bush and this Congress facing record low approval ratings, which they've earned.

And what in the world is going on with our national media?

Many news organizations failing to shake off their liberal bias. They can't contain themselves. They're not covering this election in a non-partisan way.

Join us for all of that, as we discuss the issues that matter most to you, on this, the first day of the first ever televised Independent convention. It's all about you -- Wolf, back to you.

BLITZER: Mr. Independent, there he is. He's got a special week of convention coverage -- Independent convention coverage coming up -- Lou, thanks very much.

DOBBS: You're welcome.

BLITZER: It's one of the latest Internet hoaxes to plague the campaign -- this one about Sarah Palin and banned books. We went digging for the truth and we found it online.

Plus, is a former champ about to come out of retirement? We're following news about Lance Armstrong.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, in the great tradition of Brett Favre, biking great Lance Armstrong will come out of retirement and hopes to compete in the Tour de France next year. That's according to a report in a cycling magazine. It says the seven time Tour de France champion will compete in five races in 2009. The magazine also reports Armstrong will race for no salary or bonuses and will post his tested his blood work online.

Baltimore fire officials say it's too soon to tell what caused an enormous fire at a shopping center this morning. The fire was brought under control at around 12:30 p.m. -- three hours after it was reported. The fire department says the fire spread through three businesses and 12 others were evacuated for safety reasons. No one was injured.

Jury selection started for the O.J. Simpson robbery/kidnapping trial today. The case dates back to that encounter last year with two sports collectors in a Las Vegas hotel. The former NFL star and his only remaining co-defendant have pleaded not guilty to 12 charges. Simpson says he is confident of an acquittal. But if convicted, he could go to prison for life. The judge warned potential jurors not to be influenced by Simpson's 1995 acquittal on double murder charges.

The Dow Jones Industrial Average gained almost 300 points today, with Wall Street rallying in reaction to the government's move to bail out Fannie Mae and Freddie Mac. Investors hope the plan pumps as much as $200 billion into the two mortgage giants and that it can help lower mortgage rates and stimulate the economy overall.

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

BLITZER: Did you notice that Brett Favre-led the New York Jets yesterday to a win over Miami?

COSTELLO: I did. And didn't Buffalo win too, Wolf?

BLITZER: Buffalo did win.

COSTELLO: Whoo-hoo.

BLITZER: That's good. Excellent.

COSTELLO: Good for you.

BLITZER: All right, Carol. Thank you.

On our "Political Ticker," the election certainly has been dogged by Internet rumors. The latest hoax circulating online alleges that Sarah Palin tried to ban a number of books, including Harry Potter. The rumor is false.

And our Internet reporter, Abbi Tatton, is standing by.

She's getting ready to set the story straight. All right, what do we know -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, the e-mail has been traveling at lightning speed. It claims that then-Wasilla mayor, Sarah Palin, wanted to ban some 90 books -- there's a whole list here -- from her local library, including classics like "The Catcher in the Rye," various books by Judy Blume and an assortment of Harry Potter novels, as well.

This e-mail is a hoax. It looks like this list was lifted straight from a Web site and sites like Snokes.com (ph) have debunked it.

In fact, the City of Wasilla's Web site has a statement saying we have no records of any books being banned ever.

What is out there is an "Anchorage Daily News" report that in 1996, Mayor Palin asked the city librarian if she would ever be all right with censoring books and was told no.

But CNN's investigative team says there's nothing to indicate any more.

A McCain spokesman calls the e-mail "transparently false" and he points out that some of these books weren't even written in 1996 -- Wolf.

BLITZER: Thanks, Abbi, for that correction and that update.

Instead of a debate, how about a presidential dance-off?

Yes, this would be a good idea. Take a look. Watching the Obamas bust a move gives CNN's Jeanne Moos an idea. And guess what -- it's "Moost Unusual."

(COMMERCIAL BREAK)

BLITZER: With the polls showing an extremely close presidential race, it is time to bust a move?

Our Jeanne Moos has a Moost Unusual look at some of the Moost Unusual moves out there on the campaign trail.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): It's another dancing Obama.

(VIDEO CLIP)

MOOS: Is that Ellen making eyes at Michelle?

(VIDEO CLIP)

MOOS: No. They're just having fun. Michele even emulated her husband...

(VIDEO CLIP)

MOOS: Brushing off mud thrown during the campaign.

(VIDEO CLIP)

MOOS: Ellen pronounced Michelle a better dancer than Barack and showed a split screen to prove it.

(VIDEO CLIP)

MOOS (on camera): Maybe what we need is a dance-off -- a presidential dance-off between the couples.

(voice-over): Wait a minute. "Mad TV" has already done it -- the Obamas versus the McCains.

(VIDEO CLIP)

MOOS: "So You Think You Can Dance: Presidential Edition" airs Saturday.

(VIDEO CLIP)

MOOS: It features an Asian actor, Bobby Lee, playing John McCain transformed by makeup.

BOBBY LEE, ACTOR: I look sub-human.

MOOS: He sure gave the actress playing Michelle a shock.

UNIDENTIFIED FEMALE: Oh, my God.

MOOS: Actually, there's a second Michelle who did the dancing -- but she's a he.

UNIDENTIFIED MALE: I'm getting into drag. You can call me Lou Paul (ph), if you will.

MOOS: And while he got into drag, he and Michael Key (ph) got some new ears. To make them look like the real thing they added... UNIDENTIFIED MALE: About an eighth of an inch extra ear inch.

MOOS: The actress playing Cindy McCain didn't need any body parts.

UNIDENTIFIED FEMALE: You've just got to keep your top lip up and not blink and you're good to go.

MOOS: Aren't you forgetting something?

UNIDENTIFIED FEMALE: I feel like there's three small children in there propping it up.

LEE: Bomb, bomb, bomb, bomb, bomb Iran.

MOOS: Give John McCain a little hair and he's ready to go. The McCains do a waltz.

(VIDEO CLIP)

MOOS: The Obamas hip-hop.

(VIDEO CLIP)

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Is that it?

MOOS: No, this is it.

(VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: He's good, really good. And Barack Obama is a good dancer, too.

Remember, check out our THE SITUATION ROOM screen saver and stay up to date on all the latest political news. You can download it at CNN.com/situationroom.

I'm Wolf Blitzer right here in THE SITUATION ROOM.

Up next, a very special "LOU DOBBS TONIGHT" -- Lou.