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Rescuing the Bailout; Obama Prodding Congress on Bailout; McCain: Inaction 'Not an Option'; Interview With Congressman James Clyburn
Aired September 30, 2008 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: And happening now, stocks rebound on hopes that Congress can get its act together and help the economy. This hour, breaking news from Wall Street and Capitol Hill a day after the bailout debacle that rocked the nation.
Plus, John McCain and Barack Obama rally behind a proposal that could salvage the bailout. Will their calls for action be drowned out by a new round of partisan bitterness and blame?
And a new economic warning from the president. But after weeks and months of hearing him sound upbeat, many Americans have simply tuned Mr. Bush out.
Wolf Blitzer is off today. I'm John Roberts.
You're in THE SITUATION ROOM.
And first this hour, some short-term relief for America's economic gloom. The Dow Jones industrials closing up almost 500 points just moments ago, a day after a historic nosedive. This just minutes after we learned that the Federal Deposit Insurance Corporation is asking for a temporary hike in the $100,000 cap on insured deposits. The move could help break the stalemate over a financial bill defeated by the House yesterday. Investors are not ready to exhale, though, at least not just yet.
The closely watched index released today shows home prices falling over 16 percent in July from the previous year. That is a record plunge.
And a new report shows consumer confidence hovering near a 16- year low, though it unexpectedly inched up this month before the recent market madness.
It's a volatile mix as Congress and the White House take another shot at hammering out a bailout package.
Let's bring in CNN's Brianna Keilar.
Brianna, there appears to be growing support on the Hill for this idea of raising the cap on insured deposits. Why do they like the idea?
BRIANNA KEILAR, CNN CORRESPONDENT: Well, that's one of the ideas actually being floated by House Republicans here on the Hill. But I have to tell you, John, there is no comprehensive alternative that is being proposed, a comprehensive alternative to the plan the House rejected yesterday. That said, members of Congress have an eye on the markets and an ear to what their constituents are loudly demanding.
UNIDENTIFIED FEMALE: Congressman Sestak's office, how may I help you?
KEILAR (voice-over): Call after call and a flood of e-mails into Pennsylvania Democrat Joe Sestak's office.
BIBIANA BOERIO, REP. SESTAK CHIEF OF STAFF: Our economy isn't going to wait for this to be fixed by itself. We're out of options. The fate of millions of Americans depend on this.
"I'm a self-employed carpenter for 27 years. I'm afraid for the first time since I've been in business. Nobody is going to help me when I have no work. Nobody is going to bail me out of debt. I have a problem with bailing out these banks."
KEILAR: Sestak voted for the bailout plan Monday. His colleague, Ohio Republican Congressman Mike Pence, voted against it but has his own stack of 2,500 e-mails.
There is so much e-mail traffic from constituents, the House of Representatives voter feedback Web site crashed. Much of the e-mail, voters concerned this is a bailout of Wall Street. But the key negotiator for Senate Republicans says that's a misconception.
SEN. JUDD GREGG (R), NEW HAMPSHIRE: The problem here is very simple. Credit is freezing up. What is credit? Credit is what you buy your home with, what you buy your car with. If you have a job, it's what probably the person pays you uses to pay you.
KEILAR: Now, the House will be back on Thursday, but it's not clear when they will take up an alternative and exactly what that alternative will look like -- John.
ROBERTS: All right. Well, they are working on something, though, it would appear.
Brianna Keilar for us on Capitol Hill this afternoon.
John McCain told me this morning that he placed a call to President Bush early today. The White House says Barack Obama did the same thing to discuss the economy and efforts to rescue the financial system. The candidates are prodding Congress to act while also trying to gain political advantage over one another.
Ed Henry is covering the McCain campaign. First, though, to Jessica Yellin, who is covering Senator Obama. Jessica, what's Obama's message today on the bailout, and where do we go from here?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: John, Barack Obama is selling the bill. He's selling it both to voters and to politicians on Capitol Hill.
YELLIN (voice-over): Today, Barack Obama is selling the so- called financial rescue package to two audiences. To voters, he argues the bill will help working families.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: What it means is, is if we don't act, if will be harder for you to get a mortgage for your home or the loans you need to go to college, or a loan you need to buy a car.
What it means is that thousands of businesses could close around the country. Millions of jobs could be lost. A long and painful recession could follow.
YELLIN: And to members of Congress, he says it's time to compromise.
OBAMA: To the Democrats and Republicans who opposed this plan yesterday, I say, step up to the plate. Do what's right for this country.
YELLIN: The Democrat floated one idea he believes could win more votes. Currently, the government insures up to $100,000 in bank accounts. Obama proposes increasing that federal insurance to cover up to $250,000. He's calling it...
OBAMA: ... a step that would boost small businesses and make our banking system more secure, and help restore confidence by reassuring families that their money is safe.
YELLIN: Obama says the fiscal crisis is an outrage and he promises changes will come.
OBAMA: But while there's plenty of blame to go around, and many in Washington and Wall Street deserve it, all of us now have a responsibility to solve this crisis, because it affects the financial well being of every single American. There will be time to punish those who set this fire, but now is the moment for us to come together and put the fire out.
YELLIN: And John, that's an analogy you hear a lot on Capitol Hill -- the house is on fire, now is the time to put it out. To that end, Democratic leadership says they are in touch with Barack Obama consistently. Obviously they'd like him to gain political advantage in all of this, but it's not clear that either candidate benefits from this current crisis -- John. ROBERTS: All right. Jessica Yellin for us in Washington.
Now to the McCain campaign. The Republican telling Congress that inaction on the bailout is "not an option."
Let's bring in CNN's Ed Henry, covering the McCain campaign.
What is the senator's strategy here, Ed, in trying to move the ball forward?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, John, Senator McCain realizes that it's not smart politics to get mired in the tit- for-tat on Capitol Hill. So, today, even as he pushed back on the notion that it's his fault that the bailout failed, he also changed his tone with speaking in a much more bipartisan tone.
HENRY (voice-over): Advisers to John McCain say he's tired of being a political punching bag over the failure of the bailout. So he's fighting back.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Yesterday, the country and the world looked to Washington for leadership, and Congress, once again, came up empty handed.
HENRY: McCain trying to shift blame away from himself for parachuting in on negotiations. But he was careful to only take aim at Congress as a whole, never slamming Barack Obama by name, trying to strike a bipartisan tone.
MCCAIN: I think I need to talk to America and hear what their solutions are, because we're going to have to get the support of all Americans to address this together.
HENRY: Leaders in both parties want to pivot out of the debacle of Monday's finger-pointing to show voters they're ready to work together. Democratic sources say Senate Majority Leader Harry Reid was planning to rip McCain in a speech Tuesday morning but pulled back.
SEN. HARRY REID (D), MAJORITY LEADER: The blame game needs to end and we need to move forward on doing what's right for our country.
HENRY: To that end, McCain declared that, like Obama, he supports raising the FDIC insurance limit from $100,000 to $250,000 as a way of reviving talks on Capitol Hill. But the partisan ship is far from over. As McCain spoke in positive tones, his campaign released a new ad alleging Obama and other Democrats sparked the crisis by not reining in Fannie Mae and Freddie Mac.
UNIDENTIFIED FEMALE: The Post says McCain pushed for stronger regulation while Mr. Obama was notably silent. But Democrats blocked the reforms. Loans soared. Then the bubble burst. (END VIDEOTAPE)
HENRY: Now, the Obama campaign rejects those charges, and they point out that Senator McCain has faced questions about his own advisers having big ties to Fannie and Freddie as well. When you peel back the allegations back and forth, what's really going on here, you heard Senator Obama a minute ago in Jessica's piece talking about, how do we work together? Let's not focus on what happened before.
It's about both sides realizing that Independent voters are going to flee if they get caught in this Washington partisan game. That's why they're trying to speak out and say we want to find solutions moving forward -- John.
ROBERTS: At the same time though, Ed, no shortage of people pointing fingers.
Ed Henry for us this afternoon.
Ed, thanks so much.
Time now for "The Cafferty File." And Jack joins us here in New York.
Good to see you again.
JACK CAFFERTY, CNN ANCHOR: Thank you, John.
Last Friday we ran a piece of tape from an interview that Governor Sarah Palin did with the "CBS Evening News" anchor Katie Couric. She was asked about the bailout package.
Palin rambled on incoherently for a minute or more about trade and jobs and health care, and an all manner of things, except the bailout package. Her answer made no sense at all.
That segment of "The Cafferty File" found its way on to YouTube after the broadcast last Friday. As of about an hour and a half ago, it had received more than 1,100,000 hits. Well, guess what? She's back.
Palin did another interview with Couric. This time she was asked about the first interview.
Check this out.
(BEGIN VIDEO CLIP)
KATIE COURIC, "CBS EVENING NEWS": Governor Palin, since our last interview you've gotten a lot of flak. Some Republicans have said you're not prepared, you're not ready for prime time. People have questioned your readiness since that interview, and I'm curious to hear your reaction.
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Well, not only am I ready, but willing and able to serve as vice president with Senator McCain if Americans so bless us and privilege us with the opportunity of serving them. Ready with my executive experience as a city mayor and manager, as a governor, as a commissioner or regulator of oil and gas.
(END VIDEO CLIP)
CAFFERTY: A regulator of oil and gas. How can -- how can anybody, including John McCain, take this woman seriously?
Here's the question: Is Sarah Palin helping her chances by continuing to do these interviews with Katie Couric? When this is all over they all write books. Hers will be titled, "How I Committed Political Suicide on the 'CBS Evening News.'"
Go to CNN.com/caffertyfile. You can post a comment on my blog.
It must be embarrassing on some level to John McCain to have to go around sweeping up after her.
ROBERTS: I talked to him this morning, and we'll actually play some of that later on today. And he still has full confidence in her and her ability to be president should the need, God forbid, ever arise.
CAFFERTY: I'll bet that's not a true statement.
ROBERTS: Check please.
A day after the financial bailout plan was rejected by the House, I'll ask the Democratic vote counter, House Majority Whip Jim Clyburn, if he shares some of the blame for the defeat.
President Bush weighs in again today on the bailout and the consequences if it's not passed. But given his past take on the economy, has he lost all credibility with the public?
And our Ali Velshi suggests that you may want to stop panicking about stocks and start thinking hard about the credit crunch. The bottom line on your money and the markets.
You're in THE SITUATION ROOM.
ROBERTS: It's an idea that many of you welcome if your bank fails. More of your savings, checking and other bank deposits would be safe. That's what the FDIC does. Since we just reported, it wants a temporary hike in its insurance limit.
The FDIC is an independent agency of the government signed into law by President Franklin Roosevelt in 1933. Currently, it insures up to $100,000 in deposits in banks and thrift institutions. The FDIC examines and supervises more than 5,000 banks, and when a bank fails, as did IndyMac and Washington Mutual, the FDIC sells deposits and loans of the failed institution to another back. Again, Barack Obama and John McCain separately both support raising that insurance limit to $250,000 from the current $100,000 limit.
Joining me is Democratic Congressman James Clyburn. He's the number three Democrat in the House. He's the whip, he's the vote counter, he's the guy who gets all of the Democrats in line to vote or not vote for his favorite bill.
What happened -- what happened yesterday during that vote? A third of the Democratic Caucus turned its back on you and said no.
REP. JAMES CLYBURN (D), HOUSE MAJORITY WHIP: Well, no, that's not what happened. I was asked to produce 118 votes and I got 140. And so I think 60 percent of the Democrats voted for it when we only promised 50 percent. But, you know, we're at the point where I think we ought to get beyond pointing the finger of blame at anybody.
Our country is in crisis. I do believe that we ought to be working together to get something done about it.
I think that you could be a lot of help with this -- on this. All the media could be of help.
The problem we have is so many people look upon this as bailing out Wall Street, and they don't seem to relate this to their student loans. They don't relate this to their supermarkets and whether or not they'll be able to stock the shelves in the supermarkets because of the lack of credit.
They only relate it to their automobiles that they want to purchase. They don't seem to relate it to those things that happen there in their communities that could very well be jeopardized, their credit cards and everything else, if we do not stabilize the markets and shore up our financial institutions around the world -- around the country.
ROBERTS: I mean, there's no question that there's a credit crisis going on. And what we see in the stock market is just a symptom of the psychology and the nervousness surrounding all of this. And our Ali Velshi will actually fill us in a little bit more on this whole idea of the credit crunch and how it affects people.
But back to this idea, you say that we can help out by telling people what it's all about. There are a lot of people who are saying, Congressman, that the people on Capitol Hill can help out by not pointing fingers at each other, by not trying to gain political advantage on this, by trying to work out a compromise here that's in the best interests of everyone in America, and they just haven't seen that in the last 48 hours.
CLYBURN: Well, because they weren't looking in or listening in on the one hour and 20 minute conference call that the Democratic leadership had today. We were -- all of the leadership today working out what we think could be done. We agree with Senator Obama that we ought to lift the FDIC insurance up to $250,000. I would say that would be good for personal loans -- or personal bank accounts. It ought to be maybe a little bit higher for businesses and other corporations. So that ought to be done.
I also think -- well, take a look at giving some profit tax relief to people. I think this is a tremendous opportunity to go in and allow people to claim up to maybe another $1,000 on their property tax relief. That would be helpful.
There are things like that that we could do that I believe would bring everybody back to the table and will allow more than 33 percent of the Republicans to vote for it. And that's what happened yesterday -- 67 percent of them voted against this. I do believe we could get 50 percent or 60 percent of the Republicans to vote for that kind of a bill.
ROBERTS: Let me come back to this idea of raising the limit on FDIC insured deposits. Today, the minority leader in the House, John Boehner, said that this was an idea that the Republicans had floated in the negotiations over the weekend and Democrats didn't want to sign on to.
He said, "The presidential candidates support for increasing the FDIC cap" -- I would assume, too, Democrats in Congress -- "is welcome news. Increasing the FDIC cap is a proposal put on the table by Roy Blunt and House Republicans but ruled out by Democrats during the negotiations that led to yesterday's unsuccessful vote."
Is that true?
CLYBURN: Well, it may be true. I'm not going to -- I do believe that Boehner is a good friend of mine. We do interact with each other. Roy Blunt is a good buddy.
But the fact of the matter is, that was never on the table. And one of the reasons we never brought it up on the Democratic side is because it was a non-starter. We had to so-call skip this conference. Pete DeFazio...
ROBERTS: Well, what are you saying? Are you saying Republicans didn't want to entertain it over the weekend?
CLYBURN: That's exactly what I'm saying, because that group that had a press conference earlier today had that issue on the table. It was discussed among us. And we never put it forth because we were -- we understood it was a nonstarter. So it's absolutely not true that they brought that to the discussions.
ROBERTS: And Congressman, let me come back if I could to this idea of the vote. You said that you delivered two-thirds of the Democratic Caucus, which...
CLYBURN: No, 60 percent.
ROBERTS: Well, that's almost two-thirds of the Democratic Caucus...
ROBERTS: ... which is more than you say it was your job to. But again, 95 Democrats voted against this proposal. And let's take a look at the Congressional Black Caucus.
Twenty-one members of the Congressional Black Caucus voted no. Only 18 voted yes. The Hispanic Caucus, 12 voted no, only 8 voted yes.
Why couldn't you get more members of those caucuses to vote -- to come along with you?
CLYBURN: Because we didn't ask them to. We didn't ask them to. We put together...
ROBERTS: Yes, but even if you had asked, would they have?
CLYBURN: Because we didn't put things in the bill that we knew they wanted in the bill. Like the pay-fors. There are a lot of people in the Hispanic Caucus who wanted us to put legislation together that would allow us to pay for this thing. And they didn't like the one that we put together.
And so we said we know we can't bring all of you to the table with this. But we put together enough to get us to 118. And that's why we didn't do it.
If they wanted us to produce more Democrats, we could have produced more Democrats. All they had to do was to agree to some -- say, for instance, bankruptcy stuff. Or the...
ROBERTS: OK. Well, the bottom line is, will you be able to get it done this week?
CLYBURN: Absolutely. We're going to do this this week.
I think that it's already been framed now, this proposal that both presidential candidates have agreed to. And there'll be other things that will be talked about over the next 24 hours. And some time Thursday, Friday, over the weekend, we'll have a good deal that the president can sign.
ROBERTS: All right. Congressman Clyburn, it's always great to see you. Safe travels back to Charleston tonight.
CLYBURN: Thank you very much for having me.
ROBERTS: Thanks for being with us.
CLYBURN: Take care. ROBERTS: It's a high-profile case against a long-time Republican senator, and the prosecution's star witness could give damaging testimony against Ted Stevens. We have the latest on that.
And do you fully understand the Wall Street bailout plan? If not, well, you're not alone. But between Barack Obama and John McCain, who is doing the best job of explaining it? Listen closely and you decide.
ROBERTS: You're in THE SITUATION ROOM.
And happening now, a helicopter on a lifesaving mission crashes in Maryland. Now a CNN investigation finds that more than half of these kinds of accidents could have been avoided. How red tape may be to blame.
Governor Sarah Palin faces criticism that she is not ready from Republicans, but is the real problem the McCain campaign's handling of her?
And efforts towards unity dissolving into bickering and finger- pointing regarding the Wall Street bailout plan. You'll hear from one congressman who voted for it and another who voted against it. Would you believe that they cite the very same reason?
Wolf Blitzer is off today. I'm John Roberts. You're in THE SITUATION ROOM.
A howl of protests from many of you caused hundreds of lawmakers to sink the $700 billion Wall Street bailout plan. Many Americans either don't understand it or they are just not buying it. But it could be, the Bush administration has not done a good job of selling it.
CNN's Christine Romans joins me.
You have been looking at what officials had been saying recently and prior to this.
CHRISTINE ROMANS, CNN CORRESPONDENT: That's right.
And, over the past couple of weeks, stark and frank language increasingly about what's happening in the capital markets and the economy.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Government action in this...
ROMANS: It's about as dire as a president can get on the economy.
BUSH: We're facing a choice between action and the real prospect of economic hardship for millions of Americans.
ROMANS: This from an administration that for months said the economy was vibrant, the financial system strong. The president didn't acknowledge -- quote -- "storm clouds" until last December. By then, it was raining.
BUSH: There's definitely some storm clouds and concerns. But the underpinning is good. And we will work our way through this period.
ROMANS: Then, with each disastrous job report or capital market crisis, an upbeat assessment.
BUSH: Our economy is flexible. It is resilient.
ROMANS: In February, the president surprised by spiking gas prices.
BUSH: What did you just say? You're predicting $4-a-gallon gas?
QUESTION: A number...
BUSH: That's interesting. I hadn't heard that.
ROMANS: In March, Bear Stearns was in a death spiral, and the Fed brokered its sale.
BUSH: We're under -- we're in challenging times. But another thing is for certain, that we have taken strong and decisive action.
HENRY PAULSON, U.S. TREASURY SECRETARY: Our financial institutions are strong. Our investment banks are strong. Our banks are strong. They're going to be strong for many, many years.
ROMANS: In July, IndyMac bank failed.
BUSH: I believe we will come through this challenge stronger than ever before.
ROMANS: The three trying to sell this $700 billion rescue didn't see it coming.
The Treasury secretary told NPR last year of the global economy:
PAULSON: It's as strong as I have seen it at any time during my business career.
ROMANS: And again last October.
PAULSON: This is happening against the backdrop of an economy that -- which, in other respects, is -- is very solid. So far, there's very little evidence that it's bleeding over into other areas.
ROMANS: As the subprime crisis devolved, early last year, the Fed chief:
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We don't expect significant spillovers from the subprime market to the rest of the economy or to the financial system.
ROMANS: And now?
BERNANKE: This plan is an emergency plan to put out a fire, to resolve a serious crisis which has real Main Street implication.
ROMANS: Slowly, over the last 10 or 11 months, the administration has been acknowledging the problem, always with the caveat that the underlying system is vibrant and flexible and strong.
It's all about confidence. The administration can't very well set off a panic by talking down the economy. But many, John, are saying, in hindsight, if they didn't see it coming, how can they lead us out?
ROBERTS: Well, did they see it coming, and, again, maybe they just didn't want to talk down the economy? I remember a big battle in the year 2000, right after President Bush had -- had just been awarded the election. And he had got into a big fight with the Clinton White House.
They thought that he was talking down the economy, might actually drive it into a recession. And, lo and behold, a couple of months later, it went into one.
ROMANS: There are a lot of people talking about a squeeze on the middle class and all these issues in the middle class over the past maybe 18 or 24 months. And the Bush administration over and over again kept saying, the economy is really doing well. Corporate profits are great. Productivity is fine. We do business around the world. We are a great place to invest.
It was the same message over and over again. And now people are saying, gosh, now, the tune has really, really changed. You either didn't see it coming or you weren't talking straight.
All right, Christine Romans for us this afternoon -- Christine, thanks so much.
Every American should care about what happens with this bailout plan, according to our senior business correspondent, Ali Velshi.
It's got everything to do with credit, Ali. And you have got something there that looks like a government management flowchart. You want to explain it to us, sir? ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I'm going to walk you through it to tell you why this matters to you. There's been a firestorm of response to congressmen's offices of people opposing this bailout. They're calling it a Wall Street bailout. And they don't want the fat cats on Washington benefiting from $700 billion.
But let me please explain to you how this flows to you. And it might help you make a decision about whether you like a plan, this plan, no plan, whatever the case is.
This is the credit market. A lot of money flows through the credit market. It goes between banks, major banks, and major investors, major investors, like hedge funds, pension funds, sovereign wealth funds, central banks of foreign countries.
These people have money to lend, and they want to lend it. So, the number-one most direct way that this touches you is, it goes from these big banks, to your bank, to you as a mortgage, an auto loan, a student loan, a home equity line of credit. That might be tougher to get now, unless you have perfect credit, you're buying a house that is likely to only go up in value, and you're able to put a lot of money down on that.
But let's say you're trying to sell a house. Well, that same money would be flowing to the person who's trying to buy a house from you. And they may not be able to buy that house. That gives you a bigger problem, because you can't get access to that capital.
But here's where it really matters to you. You might have done nothing wrong in this whole thing, but some of this money goes to corporation, small and big businesses that take money on a short-term basis to deal with operating expenses, like rent, like utilities, like supplies, and maybe even salary.
And here's the problem. If these companies -- and we are hearing about some of them -- start having trouble raising that cash for the short term, until their, you know, revenue starts coming in, that points back to you. You might lose your job.
And if you're a Wachovia or Washington Mutual bank teller or something, you may not have had anything to do with this financial crisis, but, in the end, all of these things in this credit crisis come back to you. So, before you think that this is a Wall Street bailout, just take that into account.
That doesn't mean, John, that it's a good plan. It doesn't mean that it should be this plan. But inaction is paralyzing the credit markets.
ROBERTS: It's interesting, too, Ali, how it all flows down to the average taxpayer.
VELSHI: That's right.
ROBERTS: Ali Velshi, thanks so much for that. The presidential candidates offering dueling pitches for a financial bailout. Are they playing the blame game? Hear from them for yourself.
In our "Strategy Session": Did a lack of leadership in Congress leave the bailout and the economy in peril right now?
And, later, we will get an update on bailout negotiations from a leading player, GOP Senator Judd Gregg of New Hampshire.
ROBERTS: Some political observers say John McCain is swimming upstream in Iowa. He's visited the state four times recently, today in Des Moines for the second time and previously in Cedar Rapids and Columbus Junction.
But McCain didn't campaign heavily in Iowa during the Republican primary. And, right now, our latest CNN poll of polls shows Barack Obama with a seven-point lead there. But that is not stopping McCain from trying to win Iowa, as President Bush did back in 2004.
Today, McCain talked about the Wall Street bailout plan with business leaders and local employees.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: One of the reasons why Congress failed to act effectively is because it hasn't really sunk in that the people who are hurting and are being hurt are Main Street families, small businesses, those kinds of people that are the engine of our economy, families being able to stay in their homes or purchase a new home or new automobile. Small businesses that function on a steady line of credit are now seeing that dry up.
And there is a perception out there that this is just something for Wall Street. I don't want to give anything to Wall Street. I want executive pay for anybody who is involved in this rescue to be at the level of any -- of the highest paid federal government worker.
I think it's very clear that we need more oversight. We need more transparency, that the taxpayer, when the economy recovers -- and I say when -- that they will then be the first ones paid off. The first ones paid off will be the American taxpayer.
And, so, these are fundamental principles we have to operate by. And I think the American people are beginning to understand that. And the unfortunate aspect of this seems to be, we are finger-pointing and trying to place the blame, rather than trying to fix the problem.
ROBERTS: Senator John McCain today in Des Moines.
Now let's hear what Barack Obama is saying today about the financial bailout and where negotiations go from here. He spoke to voters in Reno, Nevada.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: This is not a plan to just hand over $700 billion of your money to a few banks on Wall Street.
If this is executed the right way, then the government will temporarily purchase the bad assets of our financial institutions, so that they can start lending again, and then sell those troubled assets once the market settles down and the economy recovers.
In other words, if this is managed correctly, we will hopefully get most or all of our money back, possibly even turn a profit on the government's investment, every penny of which will go directly back to you, the investor, or will be going into drawing down on our national debt.
And, if we...
(CHEERING AND APPLAUSE)
OBAMA: And, if we do have losses, I have proposed to institute a financial stability fee on the entire financial services industry, so that Wall Street foots the bill, not the American taxpayer.
(CHEERING AND APPLAUSE)
OBAMA: I have also said that, if I'm president, I will review the entire plan on the day I take office to make sure that it is working to save our economy, and that you are getting your money back.
(CHEERING AND APPLAUSE)
OBAMA: So, that -- that is why I believe it is important to move swiftly in Congress.
But, understand, even with all these taxpayer protections, I know that this plan is not perfect, and it's not foolproof. No matter how well we manage the government's investments under this plan, we're still putting taxpayer dollars at risk. And I know that there are Democrats and Republicans in Congress who have legitimate concerns about this.
I know there are many Americans who share these concerns. What I also know is, we can't afford not to act. So, both parties, who are close to accepting this plan, over the next few hours and the next few days, should seek out any new ideas that might get this done.
(END VIDEO CLIP)
ROBERTS: Senator Barack Obama speaking today in the important swing state of Nevada. In the "Strategy Session": picking up the pieces. As the House voted down the financial bailout plan, Obama and McCain try to put the puzzle back together again. But will the voters buy it?
And one simple piece of equipment that allows pilots to see and could protect hundreds of lives, but it's not available because of the war. Miles O'Brien investigates -- ahead.
ROBERTS: In today's "Strategy Session": the plan to bail out Wall Street and the impact on the presidential race.
Joining me now, Democratic strategist Jennifer Palmieri, formerly a press secretary for John Edwards, and Republican strategist John Feehery.
In a column in "The New York Times," David Brooks said, where is the leadership in Congress?
Here's how he put it -- quote -- "The American century was created by American leadership, which is scarcer than credit just about now."
What we saw in Capitol Hill, Jennifer and John, in the last couple of days, was that more about politics than it was about getting something done?
JOHN FEEHERY, REPUBLICAN STRATEGIST: You know, I think that the leaders were trying to get this thing done. You know, I think Republicans were doing their best. They're in the minority. And it's very hard to get all the votes you need when you're in the minority. They didn't quite deliver.
But the fact is, the American people just didn't want this piece of legislation. And they called overwhelmingly to kill this legislation. And, you know, I think a lot of the elected representatives said, I'm going with my constituents, and not with the leaders.
JENNIFER PALMIERI, DEMOCRATIC STRATEGIST: Right.
ROBERTS: Jennifer, do you believe that, that the majority of the American people believe that that is the wrong thing?
PALMIERI: Well, right.
ROBERTS: He said, Congress needs to step up to the plate and do what's right for this country.
ROBERTS: But, a lot of people, as John said, do think that this is the wrong thing for the country.
PALMIERI: Well, I think that the polling suggests that it's -- that the country is pretty split, maybe favoring, mostly favoring the bailout package.
I think that it's difficult to lobby the individual pieces of it. I think the most productive thing that the presidential candidates can do is suggest that this is very important to act, and we need to act, and we need to act quickly.
I think, you know, there's probably a combination of factors that led to the bill going down. Both the House and Senate -- excuse me, both the House Republican and Democratic leadership probably could have been a little stronger.
But, moreover, I think the -- McCain suspending his campaign and directly involves himself and saying he was going to deliver the House Republican caucus just put these very delicate negotiations under a spot -- political spotlight that it did not need to be.
FEEHERY: And, John, Nancy Pelosi's speech didn't help things. It makes Sam Rayburn probably turn over in his grave.
ROBERTS: But, John, do you really believe, though...
FEEHERY: No, I don't think it really had that -- but you're talking about leadership.
And, in leadership, it's very delicate when you're doing these things. You want both sides to be on their best behavior. And we didn't see that last night, yesterday, in the House. And that's too bad.
ROBERTS: Jennifer, you mentioned the presidential campaigns.
ROBERTS: And, of course, last week, John McCain made a very big deal out of saying he was going to suspend his campaign, go to Washington, inject himself in the negotiations, try to get something done.
I spoke with him this morning on -- on "AMERICAN MORNING" and asked him what he planned to do now.
Here's what he told me.
(BEGIN VIDEO CLIP, "AMERICAN MORNING")
MCCAIN: I will do whatever is necessary, John. I spoke to the president this morning. And I think -- I recommended the treasury's exchange stability fund, which has $250 billion, which can shore up our institutions.
The FDIC insurance should be increased to $250,000, from $100,000. And, also, the Treasury has the ability to buy up a trillion dollars worth of mortgages.
(END VIDEO CLIP)
ROBERTS: So, John Feehery, a number of ideas, but a number of ideas that were floated from a distance, in Des Moines, Iowa, this morning.
Was it just a bad idea for John McCain to go back to Washington last week?
FEEHERY: I don't think so. And I will tell you why.
Because, when he came back, he actually put the spotlight to bring the House Republican leadership back to the table. It didn't work this time. But it's eventually going to work, which is why you see the stock market up right now.
FEEHERY: The fact of the matter is, is, we're going to get a package, and because of John McCain's leadership.
ROBERTS: But when you -- but when you -- but when you expend that much political capital...
ROBERTS: ... and the bill goes down to defeat, is that really a good thing for your campaign?
FEEHERY: Well, you know, not necessarily, unless it -- it's going to come back up and it's going to pass. And the fact is, John McCain did get these other ideas out there. And the fact of the matter is that, with the FDIC, that's going to work. And you already see it with the markets right now.
ROBERTS: And what about Senator Obama, Jennifer? He really sort of stayed on the sidelines through this whole thing.
PALMIERI: Right. There are Democrats...
ROBERTS: Well, I wouldn't stayed on the sidelines.
ROBERTS: Well, there are Democrats -- there are Democrats -- he didn't inject himself in the center of things, as Senator McCain did.
PALMIERI: Wisely did not, intelligently did not inject himself in the center of this.
ROBERTS: Well, but what about -- what about that? Because the McCain campaign is...
ROBERTS: ... saying, he showed a fundamental lack of leadership here by not getting more in the middle of all of this.
I think, if you -- if you step back -- and I suspect that the judgment of American people will be, when they look at the past 10 days and how each campaign and each candidate conducted themselves, Obama looked like a president from the first time he did a statement on the bailout package, where he was very measured. He said that we needed to act on something, but he -- and then he tried to keep politics out of this.
I mean, we have all seen negotiations come together. And when you inject high-level, high-voltage politicians, like presidential candidates in it, it's just not going to be -- it's just not going to be productive.
And I think that, you know, you intelligently assess a situation and where you can be helpful. I think both of them can probably be helpful from afar by making positive statements. But, by definition, when they -- when they -- when they propose a very specific proposal, it becomes political.
FEEHERY: Well, Jen's right...
ROBERTS: Go ahead, John.
FEEHERY: Jen's right in one sense. Obama didn't do anything. And that's to his discredit. But go ahead. I'm sorry.
ROBERTS: No, it's OK. We're out of time.
PALMIERI: ... get that in.
ROBERTS: I just wanted to ask you, John, if it's possible for them to keep politics out of the rest of the process, or if it's to their advantage to keep politics in it.
FEEHERY: We're 38 days from an election. Politics and this package are intertwined and will be until after the election.
ROBERTS: Well, that's not good for the American people.
ROBERTS: All right, John Feehery and Jennifer Palmieri, thanks very much. PALMIERI: Thanks, John.
ROBERTS: A strange scene outside a voting booth that looks like a line for a rock concert. Find out why these people camped out overnight.
And renowned economist Jeffrey Sachs used his shock treatment to help transform other nation's economies. Will it help the United States? He joins us live.
And two members of Congress, two different views on the bailout package -- hear from them and decide for yourself.
ROBERTS: On our "Political Ticker": Early voting began today in Ohio, a state that could decide the presidential election. Over the next week, Ohio voters can register and cast their ballots on the same day.
Yesterday, the state Supreme Court upheld a ruling allowing same- day registration and voting. Ohio has 20 electoral votes and tipped the election to President Bush four years ago -- big prize in terms of swing states.
The Obama campaign is seizing the moment and is pushing for people in Ohio to get out to the polls today.
Our Internet reporter, Abbi Tatton, has got more on this.
Abbi, what are they saying online about all of this?
ABBI TATTON, CNN INTERNET REPORTER: John, the Obama campaign is saying every day is Election Day. That's on their Ohio campaign Web site. And Barack Obama himself is on YouTube with a new video explaining to young voters why this is so important.
(BEGIN VIDEO CLIP)
OBAMA: You know, in 2004, Democrats lost Ohio by about nine votes per precinct -- nine votes. This year has to be different. That's why I encourage all of you to register for early voting.
(END VIDEO CLIP)
TATTON: Register early, get registered, register yourself online, these are messages that you're seeing all over web from the Barack Obama campaign on Facebook, on a new Web site that they launched called Vote For Change, a site that is promoted on YouTube by Hollywood celebrities.
Now, this isn't ground that the GOP is ceding entirely, from the Ohio Republican Party at their Web site, greeting visitors with the message, You don't have to wait another day -- John. ROBERTS: All right. Everybody wants to get those early voters locked up and then focus on those undecideds for the next five weeks.
Abbi Tatton, thanks.
The Boss and the Piano Man are teaming up for Barack Obama. The Associated Press reports that Bruce Springsteen will perform in New York on October the 16th, along with Billy Joel. Tickets to see the two music superstars will cost from $500 up to $10,000, all the money to benefit the Obama campaign. Senator Obama reportedly plans to be on hand for that big event.
And, remember, for the latest political news any time, check out CNNPolitics.com. That's also where you can down load our political screen saver.
Jack Cafferty asked a provocative question earlier this hour. He's back now with some of his responses.
CAFFERTY: Thank you, John.
The question this hour is: Sarah Palin helping her chances by continuing to do these awful interviews over there at CBS with Katie Couric? They're -- they're -- they're just frightful.
Karen in Missouri writes: "No, and she didn't do the interview with Katie Couric. Palin and McCain did the interview with Katie Couric. He didn't even let her answer a lot of the questions that she was supposed to answer. Palin always sounds the same. She sounds like a wind-up doll. Oil and gas regulator? Excuse me?"
Liz in Tucson: "I have no doubt she fits right in, in Alaska, but not on the world stage. McCain ought to have not asked her. If she were a sincere and honest person, she would not have accepted the place on the ticket. This was clearly not a decision for the betterment of our country."
Trudy writes: "Within three minutes, you remind me why I don't watch the opinionated news on CNN. It's difficult for the Republican Party to run against Obama and the entire broadcast media. Your condescending attitude toward Sarah Palin is another example of the lockstep left trying to portray a Republican as less intelligent."
Trudy, when it comes to Sarah Palin, that's not much of a reach.
Saar, Tel Aviv, Israel: "In the 1970s, Bette Midler said it best. This is what John McCain must believe too. Midler said: 'Of course I have standards. They may be exceedingly low, but I do have standards.'"
K. in Tallahassee: "I think she made it worse in the second interview. She had to bring daddy McCain to help her. She looks like she can't talk to the press on her own."
Carolyn in New York: "I agree with you completely. I have never before felt frightened for my country, but the idea of Sarah Palin becoming president is truly beyond belief. John McCain put our national interest in last place when making this selection. Country first? Far from it."
And Kev writes: "Katie Couric may very well be saving the U.S. and perhaps the World from the idiotic words of Sarah Palin. Can you imagine four years of her? I'm not sure she is qualified to be governor of Alaska. It's great, though. You couldn't write this stuff."
Indeed, you couldn't.
If you -- she makes Tina Fey look legit.
If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile, and look for yours there.
Every time we do one of these, the servers just begin to hiccup and sputter, and smoke comes out of them. Thousand of e-mails come in.
ROBERTS: You're costing of thousands of dollars in repairs.
CAFFERTY: That's all right.
ROBERTS: Jack, thanks much.
ROBERTS: We will see you in our next hour.
You're in THE SITUATION ROOM.