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THE SITUATION ROOM

Interview With South Carolina Senator Lindsey Graham; Obama Slams McCain Over Iraq War; Joe Biden vs. Sarah Palin

Aired September 9, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: And happening right now, a shift in U.S. military strength from Iraq to Afghanistan. Barack Obama grabs at the chance to slam John McCain on the war in Iraq and say, "I told you so."
Plus, the McCain campaign now accusing Joe Biden of sinking to a new low. Is Biden going on the attack against his Republican rival, Sarah Palin?

And the dustup over the infamous bridge to nowhere -- Obama accusing Palin of being for it before she was against it. We're checking the facts.

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

President Bush issuing new marching orders today for U.S. troops in Iraq and Afghanistan, until a new commander in chief takes over on January 20 of next year. The current president plans to bring 8,000 combat and support troops home from Iraq by February of next year, but no more withdrawals this year. About 4,500 other U.S. service members will be deployed to Afghanistan.

Mr. Bush says the moves are in response to an increasingly volatile situation in Afghanistan and greater stability in Iraq.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Reduced levels of violence in Iraq have been sustained for several months. While the progress in Iraq is still fragile and reversible, General Petraeus and Ambassador Crocker report that there now appears to be a degree of durability to the gains we have made.

(END VIDEO CLIP)

BLITZER: About 145 U.S. -- 145,000 U.S. troops are in Iraq right now.

And Senator Barack Obama wasted no time responding to the president's plans for U.S. troops. And, as you would expect, he was -- the -- the Democrat was not impressed by what the president had to say.

Let's go to Suzanne Malveaux. She's covering all of this for us. She's in the battleground state of Virginia right now. Certainly, the president -- the president was criticized by Barack Obama. But the Republican presidential candidate was criticized by him as well.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, absolutely, Wolf, a real opportunity for Barack Obama to hit them hard when it comes to the Iraq war.

I'm in Lebanon, Virginia. This is southwest Virginia, population 4,000. It is a coal town that went bust, invested, brought back to life by high-tech industry. It's a model, Barack Obama says, of success, the kind of change he will bring this country. And he linked the economic situation also with the Iraq war.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Barack Obama, who's been running on his opposition to the Iraq war, slammed President Bush's plan to bring home 8,000 U.S. troops by February, too little, too late, he said, to fix the mess in Iraq and fight the terrorists in Afghanistan.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: President Bush also announced additional troops for Afghanistan. I'm glad that the president's moving in the direction of the policy that I have advocated for years. His plan comes up short. It is not enough troops, not enough resources, with not enough urgency.

MALVEAUX: Obama seized on the announcement to link his opponent to the unpopular war.

OBAMA: And Senator McCain goes further than President Bush in opposing the sovereign Iraqi government's own support for a timetable to redeploy our troops, while offering no plan to press the Iraqis to reconcile.

(CHEERING AND APPLAUSE)

MALVEAUX: Obama also went after John McCain and his running mate, Sarah Palin, over their portrayal as the real agents of change. But, he argued, it works in his favor.

OBAMA: The Republican Party, which had been trying to make an argument about experience, basically got off that and came to our field. And they realize that this is going to be a change election. That's a debate we welcome.

MALVEAUX: In Riverside, Ohio, Obama highlighted how he would change the country's education system.

OBAMA: I want experimentation, but I also want accountability.

MALVEAUX: His agenda includes investing in early childhood education, doubling funding for successful charter schools, providing $4,000 tax credits for students doing community service, and increasing training and pay for teachers.

(END VIDEOTAPE)

MALVEAUX: So, Wolf, the question is, how does Obama propose to pay for all of this?

Well, he circles back. He brings us back to Iraq. He says that the United States, by getting out, would save some $10 billion a month that it spends on the war -- Wolf.

BLITZER: And you're in Lebanon, Virginia, right now, Suzanne. I take it that Senator Obama is getting ready to speak there pretty soon. Is that right?

MALVEAUX: Well, that's right. He is on his way here. He's going to be talking about the economy, about education.

And, Wolf, this is really important to voters that he is talking to now in rural Virginia, southwestern Virginia. These are not folks who voted for him in the primaries and the caucuses. These are folks who are taking a listen, sometimes for the first time, to see what he's got to say.

He only got 14 percent of his group the last time around. Much of the support went to Clinton. So, we will see how he does.

BLITZER: All right, Suzanne, we're going to go there live once he starts speaking, Barack Obama. Stand by for that.

I want to go live to John McCain right now. He's speaking about the war in Iraq and making a very different case from what we just heard from Senator Obama.

(JOINED IN PROGRESS)

(CHEERING AND APPLAUSE)

AUDIENCE: USA! USA! USA! USA! USA!

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: You know...

AUDIENCE: USA! USA! USA! USA! USA!

MCCAIN: I was deeply moved -- I was deeply moved to be in the presence of brave young Americans who were willing to continue to serve, because they knew it wasn't just for the freedom of the Iraqi people, but our security.

My friends, the consequences of failure would have been devastating. We would have had a greater Iranian influence, a base for al Qaeda, expanded possibility of a wider war. And these young men and women knew that. And, so, on the plane on the way back -- and, by the way, the temperature, I think, that day in Baghdad was around 117 degrees.

These young people put on 40 pounds of body armor, pounds and pounds of equipment, and go out every single day, defending the Iraqi people... (CROSSTALK)

(CHEERING AND APPLAUSE)

MCCAIN: So...

(CHEERING AND APPLAUSE)

MCCAIN: So, on the way back, I was talking with my friend Senator Graham, and I said, we can't allow America to surrender. We can't afford to lose this war.

And, yes, I'm running for president, but the fact is that we have to put America first. So, we went on a little tour around America. We called it the No Surrender Tour. And we talked to large groups of people and small groups of people. And we tried to explain to them the consequences of doing what the Democrats and some Republicans wanted to do, and that was set a date for withdrawal from Iraq, which would have deprived us of victory.

And, my friends, as Governor Palin just mentioned, a lot of the pundits said we were finished. And I will repeat to you again, I would rather lose a political campaign than see America lose a war.

(CHEERING AND APPLAUSE)

BLITZER: All right. So, there you hear it. There he is, John McCain. And we heard earlier from Sarah Palin, his running mate.

Remember, we're standing by later. We're going to take live Barack Obama. He's going to be speaking in Lebanon, Virginia.

But Dana Bash is in Lancaster, Pennsylvania.

We see the senator right behind you, Dana. He's speaking to a huge rally. He's got the enthusiasm. He's got that base really energized. And I think you can thank Sarah Palin for that.

What's the major theme he's trying to stress on this day?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: The major theme, Wolf, is the same theme we have heard for all of the days basically that we have seen these kinds of crowds and seen the rallies that John McCain and Sarah Palin have been attending at these battlegrounds, like this one in Pennsylvania, change, change, change, a pair of mavericks that know how to change Washington and intend to drain the swamp.

That is the major theme. However, this morning, in a rally where the two of these candidates started the day in Ohio, we heard something from John McCain that you haven't heard since Palin, who, of course, has been governor for less than two years, since he put her on the ticket. And that is a specific attack on Barack Obama for lacking the experience and the judgment to be commander in chief.

Take a listen. (CHEERING AND APPLAUSE)

(BEGIN VIDEO CLIP)

MCCAIN: Senator Obama was wrong about Iran. He was wrong about Iraq. He was wrong about Russia. He's wrong about America's national security challenges in the future. And he has no experience. And, more importantly, he lacks the judgment to lead this country.

(END VIDEO CLIP)

BASH: Now, that, I am told, is a direct response to Senator Obama kind of mocking McCain and Palin for dropping this idea that they had been pushing for -- for months, really, before the Republican Convention and before Palin was on the ticket, that the major theme in this campaign should be about experience and judgment.

Well, one thing that I think is really noteworthy, so far, we haven't heard, we haven't heard -- that is very telling about how the McCain campaign thinks this campaign is going, Wolf -- we have not heard John McCain from the podium talk about the major news with regard to Iraq today, and that is President Bush announcing that 8,000 troops are going to come home.

That's something you would think that he would tout as success, but they are loathe, loathe to mention President Bush's name, especially something -- especially coming from John McCain's lips at this time.

BLITZER: They really think that even mentioning the president's name would be poisonous in that kind of atmosphere? Is that what you're saying, Dana?

BASH: It certainly seems to be.

Now, I can tell you that the McCain campaign issued a written statement in Senator McCain's name really about the issue, about the news today, very much, as you can imagine, going after Senator Obama for not supporting the surge to begin with and saying that his approach is wrongheaded.

But, unless he's saying it behind me, and I can't hear it -- I don't think he is -- Senator McCain -- I'm told from one of his senior advisers, it is not an accident that Senator McCain himself was not planning to talk about the news, because they are trying as hard as they can to stay away from anything that has to do with President Bush.

(CHEERING AND APPLAUSE)

BLITZER: All right. Lancaster, Pennsylvania.

Dana, stand by. We're going to be checking back with you as well.

When Senator McCain tapped Sarah Palin as his running mate, many Republicans hoped she would be a magnet for women voters, including some who supported Hillary Clinton.

Let's go to our senior political analyst Bill Schneider. He's got some new poll numbers for us.

So, how much does Sarah Palin actually help McCain, or, as some suggested, she hurts McCain? What's the answer, bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, in some ways, she does help. But, in other ways, she hurts.

(BEGIN VIDEOTAPE)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Thank you so much.

SCHNEIDER (voice-over): If Sarah Palin is helping the Republican ticket, it's not because of her appeal to women. Consider the question, is Palin qualified to serve as president? Most men say she is. Most women say she's not. Where Palin really helps the Republican ticket is in stirring up enthusiasm among conservatives. She rallies the party base.

PALIN: What exactly is our opponent's plan? What does he actually seek to accomplish after he's done turning back the waters and healing the planet?

(CHEERING AND APPLAUSE)

PALIN: The answer...

(CHEERING AND APPLAUSE)

PALIN: The answer is to make government bigger.

SCHNEIDER: The whole Republican Convention, right up until McCain's acceptance speech, was an effort to get Republican juices flowing. There was a lot of smearing.

RUDOLPH GIULIANI (R), FORMER NEW YORK MAYOR: I'm sorry that Barack Obama feels that her hometown isn't cosmopolitan enough.

(LAUGHTER)

(APPLAUSE)

GIULIANI: I'm sorry, Barack...

(LAUGHTER)

GIULIANI: ... that it's not flashy enough.

(LAUGHTER)

SCHNEIDER: McCain's image as a uniter was not helped by the Republican Convention or by the Palin nomination. Both play to the Republican base. Palin excites the base, at a cost. She is a divisive figure. Eighty-seven percent of Republicans believe Palin is qualified to be president. Eighty-four percent of Democrats say she's not.

As a result, McCain's appeal as a unifier continues to lag. Before the conventions, Obama had a clear advantage over McCain as someone who can unite the country. After the conventions, Obama's advantage was virtually unchanged.

(END VIDEOTAPE)

SCHNEIDER: So, what's the net effect of the vice presidential nominees? Well, when we asked voters to choose between McCain and Obama, the result was a dead heat. Then when we asked voters to choose between the Obama/Biden ticket and the McCain/Palin ticket, the result was a dead heat -- Wolf.

BLITZER: Bill Schneider with the latest numbers, thank you for crunching them.

Jack Cafferty is off today.

But, up ahead, shameless, that's how Barack Obama describes Sarah Palin's claims about the so-called bridge to nowhere. What's the real story? We're doing a fact-check for you.

Also, they're cast as political boogeymen in virtually every election. So, why is John McCain surrounded by former lobbyists, and why should Obama be careful to criticize? We're watching this story as well.

And you're still paying for Iraq's reconstruction. Why, when Iraq is awash in oil revenues? We will talk about that and much more with one of Senator McCain's closest friends. You just heard him talk about him, Republican Senator Lindsey Graham. He's standing by live on Capitol Hill.

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

(COMMERCIAL BREAK)

BLITZER: New evidence today the next administration will be saddled with debt, no matter what. The Congressional Budget Office on Capitol Hill now estimates that the U.S. budget deficit will skyrocket to $407 billion -- that's almost a record level -- for the fiscal year ending September 30. That's $246 billion more than last year's budget deficit.

Lawmakers of both parties seized on the numbers, and they cast blame on one another.

(BEGIN VIDEO CLIP)

SEN. JUDD GREGG (R), NEW HAMPSHIRE: So, this -- this Democratic Congress really does deserve the name do-debt, do-deficit, and do- nothing. And, as far as being effective in the managing of the American taxpayers' dollars, it deserves a D-minus, if not necessarily an F.

SEN. KENT CONRAD (D), NORTH DAKOTA: It is Republican policies on spending and taxes that have exploded deficits and debt. By the time they're done on their watch, under their control, they will nearly have doubled the national debt. They will far more than doubled foreign holdings of U.S. debt, and the economic consequences are just becoming clear.

(END VIDEO CLIP)

BLITZER: The CBO, by the way, predicts the red ink will continue next year, as the government takes over mortgage giants Fannie Mae and Freddie Mac. And that could cost all of us -- all of us -- taxpayers perhaps as much as $200 billion. Let's hope it's a lot closer to a much lower estimate, maybe $30 billion or $50 billion. But everyone has to brace for the worse.

Let's discuss all of this and the political fallout with one of Senator McCain's closest friends, Lindsey Graham the Republican senator from South Carolina.

Senator, thanks very much for coming in.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Thank you. Thank you, Wolf.

BLITZER: Let's talk about these budget numbers.

Remember, President Bush, four years ago, at his convention, he promised to cut the budget deficit in half by the time he leaves office. Instead of doing that, it's effectively doubled by the time he leaves office.

And the national debt, during his eight years, has gone from about $5 trillion to almost $10 trillion, almost all of this on Republican watch. Why shouldn't the American taxpayers blame the Republicans and Senator McCain, who is part of the Republican Party, for this economic mess?

GRAHAM: Well, you have had a Democratic Congress for the last two years. And we were reducing the budget deficit. Now it's gone back up.

From an American taxpayer point of view, I would say we have all done a pretty -- pretty lousy job of taking good care of your money. We spent more than we take in. That has happened when we were in charge. It's now happening when our Democratic colleagues are in charge.

And I would argue that, of all the people in Washington, Wolf, who's tried to do something about spending, particularly wasteful pork barrel spending, John McCain's name stands out at the top, including going after members of his own party. So...

BLITZER: Well, would you agree that President Bush, who has the veto power -- he can veto those bills if he wants to... GRAHAM: He should have.

BLITZER: ... that over eight years, that he deserves the most blame for this economic mess, the -- the huge budget deficit and the huge national debt?

GRAHAM: I think, when it comes to appropriating, apportioning blame, I think all of us are to blame up here.

And, yes, you're right. President Bush should have vetoed some of these bills. Maybe I should have voted more -- no more times than I did. But, at the end of the day, we have got to look toward and fix it.

And, of all the people I have meat in Washington, John McCain has talked -- not only talked the talk; he's walked the walk when it comes to spending. He's never asked for an earmark. He's been one of the most fiscally conservative people in town. And I do believe he and Governor Palin bring the best hope of changing this place, not Senator Biden and Senator Obama, who have never seen a budget they didn't like.

BLITZER: You -- you -- I don't know if you heard Dana Bash's report from Lancaster, Pennsylvania, where Senator McCain is speaking now. But she said, you know, it's interesting that, even on this day, when President Bush announced there would be troop withdrawals next year from Iraq, by February, maybe another 8,000 or 10,000 U.S. troops would leave from the 145,000 who are currently there, and some would be deployed to Afghanistan, even today, he's refusing to even mention President Bush's name in his speech, because it potentially is politically so poisonous out there out on the campaign trail.

Is that a problem for Senator McCain, to run away from President Bush as much as he possibly can?

GRAHAM: As I recall Senator McCain's speech at our convention, the first thing he did was mention President Bush in acknowledging that we haven't been hit since 9/11, 2001, and giving President Bush credit for taking the fight to the enemy.

At the end of the day, this is not going to be about President Bush. It's going to be about a President McCain vs. a President Obama on spending and national security issues. And who's going to control out-of-control spending? I would argue that John McCain's got a record of trying to do that. When it comes to national security, John's probably the most prepared person to be commander in chief since Eisenhower. So, that's going to be the issue, Obama-McCain.

BLITZER: One of the major themes today from Senator Obama was that Senator McCain, when it comes to the war in Iraq, is even worse -- even worse -- than President Bush. He argues that, as far as Senator McCain is concerned, he's ready to spend $10 billion a month indefinitely, money that could be well spent, obviously, here in the United States, even at a time when the Iraqis themselves are generating huge oil exports, $80 billion in surplus in bank accounts, some of them right here in the United States right now. I will play you a little clip of what Senator Obama...

GRAHAM: OK.

BLITZER: ... said today, and I will get you to react.

GRAHAM: OK.

BLITZER: Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: Senator McCain goes even further than President Bush in opposing the sovereign Iraqi government's own support for a timetable to redeploy our troops, while offering no plan to press the Iraqis to reconcile.

(END VIDEO CLIP)

BLITZER: All right, those are tough words.

But what do you say to the argument that -- that -- that Senator McCain is even worse than President Bush?

GRAHAM: I think we're watching different movies.

It's pretty clear to me that the surge has worked beyond expectation politically, militarily, and economically. We're coming home under a McCain administration, but we're coming home with victory. Senator Obama has had one goal, to withdraw from Iraq. Senator McCain has had another goal, and that's to win in Iraq.

And, quite frankly, we're winning. We're winning across the board. A stable, functioning democracy in the heart of the Arab world, where Muslims rejected al Qaeda, and they will be a buffer to Iranian ambitions, makes us all safer, where a woman can have a say about her children.

If it had been up to Senator Obama, we would have withdrawn troops. There would never have been a surge, and chaos would continue to reign. We would have a bigger war. So, the record is pretty clear as to who was right about Iraq or right about the surge and how to go forward.

I think Senator Obama has been wrong about Iran, Russia, and Iraq, and that will resonate with the American people.

BLITZER: What about repaying U.S. taxpayers, the Iraqis? Should they use their billions to start paying the bills, and to start repaying the U.S., or at least sell oil at a discount to the United States?

(CROSSTALK)

GRAHAM: Well, here is what I think. I think the Iraqis are paying more and they're fighting more. And, yes, they should be responsible for all major reconstruction projects. And, if they can pay us back, that will be great. But the best way to pay us back is to embrace democracy, reject al Qaeda, be a buffer to Iran, be a part of the solution in the Mideast. That makes us safer.

The Iraqi people have suffered themselves. Their -- their army has grown by 100,000. They have died at three times our rate. So, I would like to acknowledge one thing, that the Iraqi people have fought for their own freedom. They have turned a corner against extremism. And I'm proud of this alliance and this association.

I think the Iraqi people will be good allies to this country for years to come. And Saddam Hussein certainly was not a good ally to freedom. So, yes, I would like to get some of our money back, but, more than anything else, I would like to have a nation in the heart of the Arab world that rejects al Qaeda and will embrace democracy. And that's priceless to me.

BLITZER: Senator Graham, thanks for coming in.

GRAHAM: Thanks, Wolf.

BLITZER: Their performance wasn't good enough to keep their jobs, but get -- get this. The heads of the mortgage giants Fannie Mae and Freddie Mac, they could be getting still eye-popping payouts, even as they leave. They were fired, but they're standing by to take in millions. What do you think of that? We're looking at this story.

And it's killed in Cuba, and its reach appears to have struck in -- even in Florida. That would be Hurricane Ike. We will have the latest on the storm, where it's heading, and if it -- you could be in its sights.

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

(COMMERCIAL BREAK)

BLITZER: We're standing by to hear from Senator Barack Obama. He's getting ready to speak in Virginia. We will go there live once he starts.

(NEWS BREAK)

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

Happening now: They were fired for what happened at Fannie Mae and Freddie Mac, but the two CEOs could walk away with millions. You're about to see why.

Ten thousand scientists, 85 countries, and a $10 billion project, it's the biggest scientific experiment ever, all to unlock mysteries of the universe. We have a report.

And as North Korea celebrates its 60th anniversary, why was its leader, Kim Jong Il, missing? We take a closer look at concerns that he's ill, or perhaps even dead -- all that coming up, plus Bill Maher, a special interview. He will be joining us live. That's coming up right here.

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

The federal bailout of mortgage giants Fannie Mae and Freddie Mac will have major implications for homeowners, investors, and the nation, possibly for years to come. Senator Barack Obama is talking about the takeover out on the campaign trail.

Here's what he's saying today. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: I've always said that any action with respect to Fannie Mae and Freddie Mac needs to put taxpayers first and can't, under any circumstances, bail out shareholders or senior management of that company -- those companies. As a consequence, I'm troubled by the news reports that the outgoing CEOs of Fannie and Freddie be in line to receive multimillion-dollar severance packages as part of the Treasury plan.

The legislation I supported over the summer gave the government the authority to deny golden parachutes in the event of taxpayer funds being used for the companies. Yesterday, I sent a letter to Secretary Paulson and Director Lockhart to make clear that it would be unacceptable for executives of these institutions to earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources.

I hope that the Treasury secretary is giving this matter serious consideration. Certainly, I think taxpayers here in Dayton would not want to hear that part of their -- this package includes multimillion- dollar bonuses, particularly when so many people here are out of work.

(END VIDEO CLIP)

BLITZER: And Mary Snow is working on this story. Exactly how many millions will these CEOs from Fannie Mae and Freddie Mac actually get? Stand by. We've got the details, and they aren't very pretty right now.

Sarah Palin, meanwhile, is trying to get political mileage for opposing the so-called Bridge to Nowhere. But the Obama campaign says the Alaska governor wasn't always against the infamous project. We're taking a much closer look at Palin's actual record on this so-called Bridge to Nowhere.

And a sensational magazine cover story on Palin is sparking out rage online. We'll tell you what's going on right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Republicans say John McCain and Sarah Palin are mavericks, but in a new ad the Obama campaign says not so fast. How can they be mavericks, the Obama camp says, when they're surrounded by lobbyists, people that represent the old way of doing business here in Washington? Meanwhile, Republicans say Obama should be careful in his criticism.

Let's go to Ed Henry. He's working this story for us.

Ed, you're doing a fact check on the whole issue of lobbyists, the campaigns. How deeply and meshed are these campaigns with these long-time Washington lobbyists?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: It's interesting, Wolf. The controversy centers around whether seven key McCain advisers have previously served as lobbyists. The answer doesn't necessarily please the McCain camp, but they point out the Obama camp's hands, not totally clean either.

(BEGIN VIDEOTAPE)

HENRY (voice-over): Barack Obama is trying to undermine John McCain's reform credentials.

OBAMA: John McCain says that he is going to tell all those lobbyists in Washington that their days of running Washington are over, which sounds pretty good until you discover that seven of his top campaign managers and officials are, guess what, former corporate lobbyists.

HENRY: It's true. Seven top McCain officials were lobbyists, though the campaign stresses none are currently registered to lobby Congress.

One, campaign manager Rick Davis, a major telecom lobbyist.

Two, senior foreign policy adviser Randy Scheunemann recently faced scrutiny over his foreign lobbying on behalf of the Republic of Georgia.

Three, senior adviser Charlie Back was a former lobbyist for dictators in Zaire and Angola in the 1980s. Fodder for liberal MoveOn.org.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Charlie Black said he didn't do anything wrong. John McCain should tell Black he did. Call John McCain and tell him to fire Charlie Black.

(END VIDEO CLIP)

HENRY: Four, Frank Donatelli, the Republican National Committee's liaison to the McCain camp whose clients included ExxonMobil.

Five, economic adviser Nancy Pfotenhauer has lobbied for corporate giants like Coke Industries. NANCY PFOTENHAUER, MCCAIN ECONOMIC ADVISER: Both John McCain and Sarah Palin have challenged special interests, challenged their own party. That's the test of courage.

HENRY: The final two lobbyists are McCain's congressional liaison, John Green, and national finance co-chair Wayne Berman. They both lobbied for Fannie Mae, the troubled mortgage giant, among others.

But Obama's case could be hurt by running mate Joe Biden's close ties to lobbyists, including his son Hunter, who has worked for credit card giant MBNA. Biden insists his son's employment had nothing do with his support of bankruptcy legislation backed by the bank.

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: I can look you right straight in the eye and guarantee you my son has never, ever, ever lobbied me.

(END VIDEOTAPE)

HENRY: Now, the McCain camp stresses that Donatelli and Berman are technically not officials of the campaign, though they are advisers to McCain. And the McCain camp also points out that the firm of Obama's chief adviser, David Axelrod, has won some major lobbying contracts, though the Obama camp insists Axelrod and his colleagues have never technically been registered as lobbyists.

The bottom line is that both sides are facing charges of ties to lobbyists. And that means it could be very difficult for them to back up the rhetoric about change and shaking up Washington if they're elected -- Wolf.

BLITZER: All right. Thanks for doing that "Fact Check." Good work.

Ed Henry reporting for us.

We're also looking at the truth of another issue that's come up in recent days, Governor Palin casting herself as a reformer by saying she stopped the wildly expensive proposal for all of us to pay for that so-called Bridge to Nowhere.

Brian Todd has been looking into this story for us.

And you're trying to get fact from fiction. What are you picking up, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, when she ran for governor, Sarah Palin found herself in the middle of a huge controversy over a bridge that never ended up being built. Now, the so-called Bridge to Nowhere would have indeed been in a remote spot. It would have connected the small city of Ketchikan, Alaska, down in the lower part there, to a remote island called Gravina Island. Only about 50 people live on that, but some people in Alaska believe the project had real merit.

Still, it became a symbol of government excess and is now causing a real dustup on the campaign trail.

(BEGIN VIDEOTAPE)

TODD (voice-over): A campaign with momentum and a message -- they're the real agents of change. And a new ad from the McCain/Palin team hits it hard.

(BEGIN VIDEO CLIP, AD)

NARRATOR: He fights pork barrel standing. She stopped the Bridge to Nowhere.

(END VIDEO CLIP)

TODD: The Bridge to Nowhere. In Sarah Palin's home state of Alaska, one end of this bridge would have been in Ketchikan, a city of only a few thousand, but also a popular cruise ship stop and a haven for the world's best salmon.

The other end? On the even more remote Gravina Island. Only a few thousand people live there, but it also holds Ketchikan's international airport.

In 2005, the proposed bridge was dubbed "the poster child for congressional pork spending." Two powerful Republicans, Congressman Don Young and Senator Ted Stevens, tried to push through more than $220 million in federal earmarks to fund the bridge. Sarah Palin now says those bucks stopped with her.

PALIN: I told Congress, "Thanks, but no thanks" for that Bridge to Nowhere up in Alaska.

TODD: A claim that provoked this ad from the Obama campaign and charges of a Palin flip-flop.

(BEGIN VIDEO CLIP, ad)

NARRATOR: She was for the Bridge to Nowhere before she was against it.

(END VIDEO CLIP)

TODD: Our "Fact Check" found that Palin, while running for governor in 2006, did voice general support for the bridge project.

PALIN: I would not get in the way of progress of this project or other projects that they're working so hard on.

TODD: But at the same time, Palin also questioned whether this was the best way to spend government money. By then, Congress had already canceled the earmark for the bridge but told Alaska it could keep the money to spend as it chose.

After Palin was elected governor, she decided the bridge wasn't worth it. The bridge had become a political liability, but Palin still gets credit from watchdog groups. TOM SCHATZ, CENTER FOR CITIZENS AGAINST GOVERNMENT WASTE: Anyone who takes on Ted Stevens and Don Young when it comes to transportation is taking on two very powerful interests in Washington, D.C.

(END VIDEOTAPE)

TODD: Now, one interesting footnote here. In late 2005, some senators pushed for the money that had been earmarked for that Bridge to Nowhere to be reallocated for victims of Hurricane Katrina. The measure failed. Two senators who voted against reallocating that money to hurricane victims were Barack Obama and Joe Biden.

Now, that could have been for very legitimate reasons. We've been working with the Obama campaign to find out some of the specific reasons on that. We're still waiting to hear back, some of those specific reasons. Also worth noting here, McCain did not vote on that measure -- Wolf.

BLITZER: Because the measure was part of a bigger package that included other stuff...

TODD: That's right.

BLITZER: ... or is it your sense that both Obama and Biden didn't want to use that -- I'm sure they would have loved to have used that money for helping hurricane victims instead of just being spent in Alaska, but it was part of a bigger legislative agenda?

TODD: It was part of a bigger package. We're trying to get some more specifics on why they voted against that. It's unlikely they would have, as you said, voted against money for hurricane victims.

BLITZER: If it would have been a standalone piece of legislation. When you get that information, you'll let us know.

TODD: Will do.

BLITZER: All right. We'll update our viewers on that. Thank you.

Another excellent "Fact Check" by our team of reporters.

We're going to be doing this, by the way, almost every day between now and November 4th. We're going to be checking these accusations, checking this assertions by these presidential campaigns, and trying to get to the bottom, trying to get to the truth for all of you.

We heard John McCain live on the campaign trail just a short while ago. You're also standing by now to hear live from Barack Obama, what he's telling voters today in a key battleground state. That would be in Virginia. Once he starts speaking, we'll go there live in Lebanon, Virginia.

And in our "Strategy Session," what male voters see in Sarah Palin that many women voters don't necessarily see. And the comic Bill Maher, he's cracked jokes about Governor Palin. Could his humor cause a backlash? Bill Maher, he's standing by. He'll be joining us live right here in THE SITUATION ROOM.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: All right. We've got breaking news we're working on right now. Let's go to our chief medical correspondent, Dr. Sanjay Gupta.

You've got exclusive details on a story that's been rumored for the past 24 hours involving your friend Lance Armstrong. What do we know? Tell our viewers in the United States, Sanjay, and around the world, because you've got these exclusive details for us.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes. It is 100 percent confirmed. Lance Armstrong will be returning to professional cycling.

I can tell you all about it, but he has sent us a video outlining some of his reasons. Take a listen.

(BEGIN VIDEO CLIP)

LANCE ARMSTRONG, 7-TIME TOUR DE FRANCE WINNER: Hey, everybody. I know there's been a lot of reports in the media today about a possible return to racing. I just want to let you know that after long talks with my kids, the rest of my family, a close group of friends, I have decided to return to professional cycling in 2009.

The reason for this is to launch an international cancer strategy based on the fact that we lose eight million people around the world to this disease. More than AIDS, malaria, and tuberculosis combined.

(END VIDEO CLIP)

GUPTA: Now, Lance says you won't hear from him again until the 24th of September, where he's going to announce this formally at the Clinton Global Initiative. He's going to talk about that cancer burden and talk about having a stage on the international stage to talk about cancer overall. It might be part of the reason he is returning back to professional cycling.

Now, keep in mind, he's also going to chronicle his entire journey. He wants to make this as transparent a process as possible so there will be no doping charges levied against him in the future. And he's not going to take any money. No money, no bonuses, he went on to say that.

This is a 23-day race, 2,000 miles. He's 37 years old. It's a remarkable story -- Wolf.

BLITZER: And he's going to give the money, whatever money might be involved, to cancer research? Because I know how passionate he is, he himself being a cancer survivor.

GUPTA: Yes. I mean, he's had the LIVESTRONG Foundation. It's been running for over five years now. That has really been his passion since cycling. But the money, certainly a lot of the notoriety, and just his presence on the international stage, is all going to go towards cancer research and trying to alleviate that cancer burden that he talks so much about.

BLITZER: What a story that is, Sanjay. Thanks very much for bringing us those details.

And good luck to Lance as he makes this incredible, incredible journey. We'll be watching him, together with you, every step of the way.

Sanjay Gupta breaking the news right here in THE SITUATION ROOM.

Coming up in our "Strategy Session," Governor Sarah Palin drawing big crowds and playing up her record.

(BEGIN VIDEO CLIP)

PALIN: I'm returning a big chunk of it right back to the people of Alaska. It's their money. And they can spend it better than government can spend it for them.

(END VIDEO CLIP)

BLITZER: She's a huge hit out there on the campaign trail, but why is she apparently more popular among men than women?

And the battleground state of Ohio. Our John King is there. He's out on the campaign trail in the southeast corner of that key swing state. And you'll be surprised to hear what rumor is still plaguing Barack Obama in Ohio.

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

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session."

Joining us, Democratic strategist Jennifer Palmieri, former press secretary to John Edwards, worked in the Clinton White House, and conservative commentator Terry Jeffrey. He's editor-in-chief of the Cybercast News Service.

Guys, thanks very much for coming in.

Terry, they disagree on several of the social issues -- I'm talking about Sarah Palin and John McCain -- whether abortion rights. She goes much further. No exemptions, basically, except for the life of the mother. He says there should be exemptions on incest and rape. They disagree on gay rights for couples and stuff like that.

Is that a big problem among social conservatives or a small problem?

TERRY JEFFREY, EDITOR-IN-CHIEF, CYBERCAST NEWS SERVICE: Well, I think John McCain didn't really have total credibility with social and cultural conservatives, Wolf. And I think that Sarah Palin has clearly helped him. And quite frankly, I think the turning point in John McCain's campaign came at the Saddleback Church when he gave an excellent presentation, showed conviction on social and cultural issues. Obama did not do well.

He then picked Sarah Palin. It's been uphill ever since then for John McCain.

BLITZER: Because a lot of people are now saying, you know, he's got that conservative base, which he had trouble with earlier on the social issues, especially. They weren't enthusiastic, but now they're really enthusiastic. That gives him the freedom to reach out to the moderate middle, if you will, the Independents, moderate Republicans, moderate Democrats, and try to bring them in because he doesn't have to worry about the cultural conservatives, if you will.

Is that a fair assessment?

JENNIFER PALMIERI, SR. VICE PRESIDENT OF COMMUNICATIONS, CENTER FOR AMERICAN PROGRESS: I think that -- I mean, that's a fair assessment of what I think they want to do. I think that perhaps if they really want to -- I mean, this is a tension that always exists for his campaign -- do we appeal to Independents or do we appeal to the right wing? And if he had wanted to appeal to Independents, perhaps Joe Lieberman would have been a much better choice.

Obviously -- I mean, I think that would have been a maverick.

BLITZER: But doesn't he have that opportunity -- he has that opportunity now because he really doesn't have to worry about energizing the base. He can go out there and focus in on what he really needs, those Independents.

PALMIERI: Well, but by picking someone who is very conservative, I think that he gave up some of his ability...

(CROSSTALK)

BLITZER: So is she a hindrance in that effort to reach Independents?

JEFFREY: I think she's a great candidate for the real swing vote in presidential elections, Wolf. If you look at the exit polls, you look at them on CNN's Web site, the swing vote in the 2004 election was married people, people who go to church, people in Ohio like that.

They're the people that John Kerry lost. They're the people who are going to Hillary Clinton in the Democratic primaries. Sarah Palin appeals to the culturally conservative Democrat that Obama has a hard time reaching.

BLITZER: You know, in our poll, in our new poll, our CNN/Opinion Research Corporation poll, men like her more than women like her.

PALMIERI: Right.

BLITZER: Among -- we asked the opinion of Sarah Palin. Sixty- two percent of the men say they have a favorable opinion of her, 53 percent of women said they have a favorable opinion of her.

How do you explain that?

PALMIERI: I think it's because men are generally more conservative than women. And I don't think women like where she is. I don't think they like that she's going to continue the economic policies of Bush, I don't think they like where she is on Iraq, and I don't think that they like where she is on choice.

So, you know, the McCain campaign decided they weren't running on experience. Last week they decided they're going to try to run on change. Change is a good message. It's worked for Barack Obama. It has worked for them for six days, but when...

BLITZER: Go ahead, Terry.

PALMIERI: ... you know when...

(CROSSTALK)

BLITZER: Why do men like her more than women?

JEFFREY: Well, I agree with Jennifer in part. You said that women tend to vote Democratic, men tend to vote Republican. The fact is though, married women now favor John McCain. And it's this cultural thing.

I think if you look at people who are married, they have children, they go to church, they tend to vote Republican in national elections even if they're Democrat, especially in swing states like Iowa and Ohio.

PALMIERI: That was true four years ago.

(CROSSTALK)

JEFFREY: Sarah Palin is the perfect candidate for the swing vote.

BLITZER: Well, remember, we still have three presidential debates, one vice presidential debates. There's going to be a lot of time between now and November 4th.

Guys, thanks very much.

PALMIERI: Thank you.

BLITZER: And some stories we're working on right now in THE SITUATION ROOM. The comedian Bill Maher, he's following this campaign, has an opinion on almost everything -- what Obama, for example, needs to do to win. Bill Maher will be joining us live.

And a subterranean view of Hitler's dream for Berlin. Our Fred Pleitgen takes us on a tour rarely seen.

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

(COMMERCIAL BREAK)

BLITZER: In our Political Ticker today, a controversial cover story in "US Weekly" magazine about Governor Sarah Palin is spurring thousands of angry people to comment online.

Let's go to Abbi Tatton, our Internet reporter.

Abbi, what are they saying?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, people usually go on to this Web site to vote for the best-dressed celebrities. But over the last few days, they've been going online to the Web site of "US Weekly" to comment on this cover of Sarah Palin. And people have been pretty mad.

Thousands of comments here. "Shame on you," says one. "This article is despicable."

Another from the last few days reads, "This is so biased I don't even know where to begin."

This has all been fueled by conservative blogs. The blog redstate.com invited people to go along to the supermarket, pick up a couple of copies, and deposit them in the toilet paper aisle of the supermarket. There's even a Web site calling for a boycott of the magazine, calling on people to call the advertisers.

A spokesman for "US weekly" wouldn't comment on the boycott, but he did say that sales have not been affected. About a thousand people wanted to cancel their subscriptions, the same amount wanted to sign up for new ones.

And as for visitors to the Web site, he said that this provoked the third best traffic they've ever had, second only to a cover story about Jennifer Love Hewitt -- Wolf.

BLITZER: Thanks very much, Abbi, for that.

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