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The Senate Approves the Bailout Bill

Aired October 1, 2008 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: We begin with "Breaking News."
Just moments ago the Senate approving a bailout plan for Wall Street that supporters call vital to saving Main Street. It took a full court press to do it. Both presidential candidates, Joe Biden, President Bush and Former President Clinton also all weighing in.

It also took a lot of sweetening; billions of dollars worth in upgrades and add-ons to the bill. A lot of lobbyists are probably happy right now. The question tonight though is will it make enough to make it through the House on Friday. And if it does, will it deliver as promised and head off an economic disaster?

A lot to cover; let's start off with the vote and Jessica Yellin.



REP. PETER DEFAZIO, (D) OREGON: The whole thing stinks. It's just is so reminiscent of the run-up to the war and the stampede. I mean, Congress is really easy to stampede when they're up for election.

YELLIN: He plans to vote no. The focus though is on Republicans. On Monday as the stock market plummeted two-thirds of House Republicans voted against the bill. The Senate version is designed to woo some of those conservatives like John Shadegg of Arizona who is thinking of changing his vote to a yes.

REP. JOHN SHADEGG, (R) ARIZONA: I think we are under tremendous pressure quite frankly from the White House and from the American people because Secretary Paulson created a fear or kind of an atmosphere of fear in America.

YELLIN: He says he'll make his decision after the Senate vote.

But there's a looming problem. New provisions in the Senate bill like additional tax breaks were added to appeal to Republicans but could actually drive away Democrats.

To House leaders this is a high wire act without a net. They're still unsure if they have the votes and clearly feel the Senate has put them in a tight spot.

UNIDENTIFIED MALE: Frankly, an awful a lot of people are going to look at this bill and not be pleased with what the Senate has done in adding provisions that make the debt worse.

YELLIN: That is from the man who decides if the House even votes on the issue this week.


COOPER: So Jessica, what are you hearing right now? Will passage in the Senate really make a difference in the House?

YELLIN: The sense is, is it helps a lot, Anderson. But it's not a done deal.

I passed a group of Republican senators in my way over here after the vote and I asked them is it going to pass the House? And one of them gave an emphatic yes and no one else said anything.

I heard from Dianne Feinstein. And she said this is a potent message to the House. They're all very optimistic. And certainly, it passed by a larger and much larger margin than they needed. That helps but it doesn't seal the deal and no one is certain.

COOPER: So Jessica, tomorrow what happens?

YELLIN: What happens is a lot of arm twisting and phone calls. I've been in touch with a bunch of House aides and even some leadership themselves. And what they're going to do is just start going through their call lists, and they've already done it, but continue to see if they can get people to come over and vow to vote.

Democrats have to make sure they don't lose any Yes's, Republicans need to gain more Yes's. And they have one day to do it. Because the House leaders say, they're not even going to hold a vote unless they're absolutely certain the bill passes.

So it's still in question whether it'll happen this week.

COOPER: All right, let's talk to a man who should know. Jessica thanks very much.

Let's turn to lawmakers who's got a lot of arm twisting ahead of him. Democratic Congressman Barney Frank of Massachusetts, Chairman of the House Financial Services Committee.

Congressman thanks for being with us. The bill is passed in the Senate, has got an additional $100 billion in tax breaks and sweeteners and there's even a provision on mental health care coverage. What's going to happen in the House now?

REP. BARNEY FRANK, (D) MASSACHUSETTS, CHAIRMAN OF THE HOUSE FINANCIAL COMMITTEE: Well, it's still uncertain. And I think it is likely to pass than before. But the major difference frankly Anderson, is not what the Senate did, to be honest.

Representatives and Senators have rarely taken each other as role models. There's not a lot of love lost between the branches. But what I think has changed is reality. On Monday there were a number of people who were still skeptical that there'd be some serious economic difficulty.

It is also the case that we were hearing as is often the case politically only from those who were oppose because the people who are for it presumed that it would pass. Once it failed a number of people began to hear about economic difficulty.

In my own state, Boston University shut down some construction jobs. The state was unable to roll over some paper. So I think the reality hit some members to be honest I think, some of my colleagues on Monday were voting no and praying yes.

COOPER: There were 12 of the 37 Democrats on your own committee who voted against it. I know the Republicans certainly are the ones who voted mostly against it. But a lot of Democrats voted against it as well.

Have they changed their minds now and are you concerned that some Democrats in the House may now, who voted for it originally, may now oppose it because of some of these add-ons?

FRANK: That is possible. Remember, the tax incentives that were added are not in themselves unpopular and most of them are very supported. But there are a number of Democrats who are very hawkish on the deficit. But the only people who really seem to care about the deficit this days are the -- are a group of moderate Democrats who are the blue dogs.

And they in fact were able to get a bill through the House that extended these tax incentives but in a way that offset the deficit.

As to my committee, let me be very clear. The chairmanship does not come with the power to command people how to vote. And what you have on the House side frankly is a concern that not enough will be done to forestall foreclosures.

My own view is that we were able to write into this bill over the initial objections of the Bush administration significant advances in protection. We weren't able to get everything we wanted. In fact, I tried earlier today with the support of Speaker Pelosi to rewrite some of those protections to make clear that they would be useful. We were rebuffed by the Republicans.

So I don't expect any of the people on the committee who were most concerned about that to switch. I think the hope we have is that the switches will come among the Republicans. And again, I want to say that on both sides, reality bites. And reality bit on Tuesday and today. So that members who were figuring there was no downside politically to voting no some of them have now encountered one.

COOPER: Yes, as you know there's a lot of anger out there at Wall Street and people who took out loans they couldn't repay. And certainly at Washington, at lawmakers and at the president, you have said repeatedly the couple of weeks that this resulted because of too little regulation over the years; allowing the financial community to make a lot of mistakes in your words.

Do you personally feel any responsibility for part of that failure?

FRANK: No. Some of the Republicans have been trying to make a point about Fannie Mae and Freddie Mac. Here are the facts on this. The Republicans of course, controlled Congress and especially the House from 1995 until 2006. They never passed a bill to improve the regulation of Fannie Mae and Freddie Mac.

COOPER: But in 2003 --

FRANK: May I respond?

COOPER: Sure. Go ahead.

FRANK: Yes, in 2003 I said there wasn't a crisis. And there wasn't a crisis in 2003 but I was for regulation. And in 2000-- when we were in the minority, in 2007, when I became Chairman of the Committee, within four months we passed a bill that gave all the increased regulatory power they wanted. It's true. There wasn't a crisis in Fannie Mae and Freddie Mac or Lehman Brothers, et cetera.

The sub-prime crisis came after that or the sub-prime problems. And of course, the crisis -- but the facts, Anderson, are undeniable. They had 12 years, when they were in the majority and passed nothing. And we came to power and within four months the committee I chaired passed a tough regulatory bill on Fannie Mae and Freddie Mac. And the rest of the Congress did it.

COOPER: So you feel point blank you were not protecting Fannie Mae and Freddie Mac too much over the years?

FRANK: Well, frankly the notion that I stopped them from doing anything they wanted to do. You know, if I could've stopped them from doing something, I would've stopped the Iraq war, the Patriot Act and multi $100 billion tax breaks for very rich people.

They were in control. When did I suddenly require the ability to stop the House Republicans under Newt Gingrich and Dick Armey from doing anything?

Secondly, the facts are I enforced some reform of Fannie Mae, I also wanted to preserve the Housing mission. But the facts are very clear. I became Chairman in January of 2007 and within four months we passed the bill.

So what's the argument?

COOPER: What do you think the likelihood of getting something passed is?

FRANK: I think it's better than even. And again, I think the main change is reality. I think that it's not possible now to scoff at the predictions of doom if we don't do anything.

COOPER: Congressman Barney Frank, I appreciate your time.

A lot more angles tonight, to the "Breaking News," let us know what you think. Join the live chat, you'll also find Erica Hill's live web cast during the break.

Up next, McCain and Obama, did either one as Senator Obama said really step up to the plate on this one?

And John King with a magic map with some surprising new poll numbers in key battleground states.

And Sarah Palin, she's talking again to Katie Couric. This time about the Supreme Court and, yes, her answer or lack of an answer has a lot of people talking again. And hear for yourself, judge for yourself.

Plus, Governor Palin getting ready to debate, we'll show you what Joe Biden has learned about her from her past debates. Here is a sample.


GOV. SARAH PALIN, (R) ALASKA, VICE PRESIDENTIAL NOMINEE: Are you aware now of the impact of that lack of leadership in your gridlock, what that caused to the people of Alaska?

UNIDENTIFIED MALE: You have one minute to respond.

UNIDENTIFIED MALE: I have no idea what you're driving at.




SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: Did nothing everything would turn out OK. There's a possibility that that's true. And there's no doubt that there may be other plans out there that had we had two or three or six months to develop might be even more refined and might serve our purposes better. But we don't have that kind of time.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Crises often have a way of revealing our better selves. Of showing what we're made of and how much we can achieve when we're put to the test. This is true as well of the grave challenges we face in Washington.


COOPER: John McCain and Barack Obama today, they both voted for the bill. They're both urging their House colleagues to do the same. But beyond that how much political heavy lifting is each one is doing and how much leadership if any, is either man really showing.

Ed Henry has the "Raw Politics." And tonight's "Breaking News" -- Ed.

ED HENRY, CNN CORRESPONDENT: Well, Anderson, it's interesting only the briefest of encounters between these two men here in the Capitol. They shook hands on the Senate floor very briefly. They are both making calls behind the scenes. Besides voting for this bill each of them, they are making calls to each of their caucuses.

Their colleagues in the House hoping that they'll vote for it on Friday because they both have a lot at stake now. It's quite interesting, sort of surreal, to even see them in the Capitol hallways right now.

Barack Obama had not cast a vote in the Senate since July; John McCain had not cast a vote since April. But they both realized right now, the nation is in crisis. And then, while it could be a very risky vote. Because it's very unpopular, this bailout, right now, all around the country; they both made the calculation it would have been a lot riskier for them individually, if they had done nothing -- Anderson.

COOPER: The past two nights, Ed, you've been reporting that the pressure is really been on to McCain to get a deal on the bailout with House Republicans. But is it now shifting to Obama?

HENRY: It could be. Because it's interesting, John McCain is breathing a sigh of relief tonight. As you noted, as we've been saying in the last couple of nights, he has really put a lot of political capital on this bailout.

When it stalled in the House John McCain was really in the spotlight and any bad economic news with the Republican growing in the White House is bad for John McCain. This just added to that.

And now, all of a sudden all eyes turn to the House of Representatives. A lot of pressure on Speaker Pelosi and by extension some pressure on Barack Obama to deliver more Democratic votes. And in fact that's why Barack Obama today in addition to coming back to the Capitol, was working the phones, calling House Democrats.

In addition to John McCain doing that, all of a sudden, Obama is stepping up his lobbying. He knows, he now as he gets more involved in this he has more at stake just like John McCain does. And Obama is probably going to have to continue making calls right through Friday to make sure that this actually does pass -- Anderson.

COOPER: All right, Ed Henry with "Breaking News" thanks.

More now with what the Senate voted for exactly tonight. Call it plan "B" and how it differs from plan the "A" that failed in the House on Monday, real differences, expensive differences.

Ali Velshi has been checking out the fine print "Up Close." Ali, how is the bill different than the one that's defeated just few days ago?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: There are some key differences as you've mentioned, let me start with the big one right off the top.

The amount that your deposits are insured for in a bank has gone up from $100,000 to $250,000 per account in this bill. A lot of that is psychological to prevent people from having a run on the bank. Because if people take their money out of the banks, companies can't borrow that money. Again, largely psychological helps small business.

There are a couple other things. Tax breaks for individuals and tax breaks for businesses. Many of those tax breaks were already on the books. They needed to be renewed. Some of them are new.

The total reduction in revenue, the total tax cut involved in this bill is $110 billion, that's on top of the $700 billion expense. But the part of this bill that was -- the $700 billion is that stays intact.

In fact that's got a lot in common with the House bill that wasn't passed on Monday, the one that failed. $700 billion bailout for bad loans, and oversight committee which means that it's not a blank check for the Treasury Secretary.

These things have to be approved by a committee that has been established by this bill. Ownership in the companies that are being bailed out if they don't pay the loans back so that taxpayers might actually benefit if there some is profit in those companies they might actually make money back. And of course some very limited impositions on CEO pay.

So it has everything in common with the bill that failed on Monday plus a few additions that reduce taxes -- Anderson.

COOPER: We've been talking about the credit markets. And how important they are; everyone is looking at the stock markets. But it's really the credit market that we should be looking at. How do all these additions influence that?

VELSHI: None whatsoever. And in fact the only thing is that addition of that increase to $250,000 for your insured deposits makes people feel safer about their money.

But the credit markets are seized. They will not un-seize until there are some sense that the House is going to vote on this thing. And Anderson today, we had news that AT&T is the latest company to have trouble raising money because of these credit freeze.

It still remains a very serious problem.

COOPER: All right, Ali Velshi thanks so much.

Up next, deadly fishing lines and millions of sharks killed every year. And in many cases it's illegal but keeps going on. Our "Planet in Peril" report when "360" continues.


COOPER: A few hundred miles off Costa Rica you can see first hand the devastating effects of the unregulated shark fishing industry. It's called long-lining, miles of fishing lines spooled out with thousands of hooks killing millions of sharks each year. In international waters it's not illegal. But most countries have been banned the practice close to their shores. But as Lisa Ling in our "Planet in Peril" team found out firsthand it is hard to stop.


LISA LING, CNN CORRESPONDENT: I'm Lisa Ling and here at Coco's Island which is this tiny island off the Pacific coast of Costa Rica. And it has one of the most diverse fish populations on earth. This island is considered a world heritage site but there's very little enforcement of the law.

In fact that little boat out there is an NGO the Marvesa and they regularly patrol the island but that's really it.

We went out on patrol with them and it's just wild because it is this game of cat and mouse.

They can chase the fishermen out but once the Marvesa disappears they'll come back in. Often they come in, in the middle of the night.

And you can see more on this investigation our "Planet in Peril" series which is airing this December on CNN.


COOPER: As Lisa mentioned you can watch worldwide investigation of "Planet in Peril: Battle Lines" with me, Lisa and Dr. Sanjay Gupta coming this December.

Still ahead, new polling on the key races this fall, Obama pulling ahead. Our political panel weighs in and John King works his magic map to show you what all the numbers mean.

And Sarah Palin prepping for her debate tomorrow night. What her old debates tell us about what might happen tomorrow.


UNIDENTIFIED MALE: Ms. Palin, do you want to enter this race? 15 seconds if you do?

PALIN: Glad I'm sitting in between them to make sure it doesn't get out of hand.


Also the latest exchange with Katie Couric and what she said when ask the names of the Supreme Court ruling other than Roe v. Wade she disagree with. It'll over the Internet tomorrow and see it tonight.


COOPER: You are looking at the electoral map. Tonight, the colors are changing and moving closer to Barack Obama. The latest CNN "Time" magazine opinion research polls show him with a commanding lead over John McCain in several key battleground states.

And as we all know it's really in these states where this election will be won or lost. John King breaks it down for us at the magic man tonight -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Remarkable new numbers Anderson. And they show in the midst of this economic crisis, the map is trending toward Barack Obama.

I'm starting here with the map of 2004 election and not the Electoral College you have. Because I want to make this point and make it very clear.

Florida, a red state, George W. Bush carried it last time and the time before. Right now, our new poll shows Obama ahead 51 percent to 47 percent. Let's go out western, Nevada again, a red state last time. Our new poll shows Barack Obama ahead 51 percent to 47. Let's move over to Minnesota. This was a blue state last time, but just barely 51-48; Barack Obama leading here 54 percent to 43 percent; a comfortable lead there.

Here in Missouri, in the mid-west, Missouri has been right in every presidential election except for one since 1900 and Missouri has voted for the winner. Right now, we had this is a dead heat, Obama 49 percent, McCain 48 percent. McCain was ahead this state just two weeks ago.

And lastly, the state of Virginia, again and look at that a red state last time. Right now, look at these numbers; 53 percent for Obama, 44 percent for McCain. Again, four of the five states I just mentioned were red states last time.

How does that all translate Anderson? It translates into this. What you've just said in the electoral map, you need 270 to win. We now have Barack Obama leading in states with 250 electoral votes, John McCain trailing with 189.

Translation, the gold states are the tossup states. To get to 270 from this map it's a lot easier for Barack Obama than it is for John McCain.

Again, this will change but for the sake of argument. If Barack Obama only won Florida based on the map we have here today, he's the next president of the United States. So John McCain has to keep Florida, has to keep Ohio, has to somehow win Missouri and then, still have to do business and have this tossup states.

Anderson, as you look at the map tonight, a long way to go. Things can change. But advantage Obama even more so. The biggest advantage now at any time in this race when it comes to the Electoral College.

COOPER: Is this all about the economy?

KING: It is all about the economy. Here is an interesting number from the Pew Center National polls today, by a 14 percent margin now voters favor Obama to handle the economy. And how is that affecting the sub-groups in the poll, one of the key demographics to watch older voters they are among the most reliable voters among voters over the age of 50 under the age of 64. Those who are looking at their 401(k)s, closest to retirement.

The Pew Center says this, Barack Obama now has a 51 percent to 39 percent lead. That's a decent lead anyway. But just two weeks ago John McCain led among those same voters 48 percent to 43 percent, translation. The more those voters closest to retirement worried most about the financial markets as they have watched this race over the past ten weeks they had dramatically turned to toward Barack Obama.

COOPER: John stay with us, let's "Dig Deeper" let's bring in CNN's senior political analyst and former presidential adviser, David Gergen and CNN's senior political analyst, Gloria Borger.

David Gergen, as you look at that map, I mean, a clear drip for Obama has got to be incredibly troubling for the McCain campaign?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Absolutely. It's worth remembering Anderson, if the election had been held two weeks ago, if John McCain would have won. But if the election were held today Barack Obama would win and win handily.

But we've still got four-plus weeks before the election is held. So there can be a lot of twists and turns between now and then. But there is no doubt that this economic crisis and the way John McCain responded to it along with the first debate have really shifted the momentum.

So that John McCain has got an uphill fight now. And very strikingly those same seniors and near seniors that John King was just talking about who have changed their views, and are beginning to change those states, a lot of those were the same people who are calling Capitol Hill urging the Senate and the House now to pass this bill because they're seeing their nest egg shrivel up.

COOPER: So Gloria Borger, there are some and especially on state levels, the GOP state leaders who were telling the McCain campaign from what I read that they should go negative, that they should use Reverend Wright, that they should try to reverse this trend.


COOPER: Is there time for McCain to do that? Is he inclined to do that?

BORGER: Sure. There's time. They do have to try and switch the subject, Anderson, because over half of the voters right now think that the economy is the key issue.

The last time that happened was in 1992 when 43 percent of the voters said that the economy was the key issue and Bill Clinton became President of the United States. So what John McCain has to do is try to go back to his I'm bipartisan, I'm a leader. I've got the experience. You can trust me. I think you know, the question in this campaign has always been, who is more of a risk.

And if you look at the last two weeks a lot of the voters are thinking ironically that John McCain is actually more of a risk when it comes to managing the economy. That's his problem.

COOPER: John King, the fact that these numbers shifted so dramatically over the last two weeks as David Gergen said you know pointed out, two weeks ago John McCain very likely would have won this thing.

How solid is this support for Obama? Could it just as easily shift back?

KING: Yes, it could shift back. And we should make that crystal clear. However, it is very unlikely that the issue of the economy is going to fade. If this plan passes the House which is still a big "if" tonight and if the markets rally over the next couple of weeks, perhaps we'll get back to the ground John McCain would prefer, which is leadership, commander-in-chief not micromanaging or managing the economy from Washington, D.C. perhaps.

But the map can change. There's no question about it. Anderson, to the question you just asked Gloria, what many Republicans wish for, whether he has to go negative, or do something else, they want John McCain to be consistent. If you've watched him over the past few weeks, he's attacking Barack Obama one day and he's being Mr. Bipartisan the next day.

Even today, he was Mr. Bipartisan but his ads on television are highly negative on the very same issue on which he is calling for bipartisanship. And what Republicans around the country would like is a single consistent message from John McCain.

BORGER: He is doing it in the same speech, Anderson. He's attacking Barack Obama and then, saying now is not a time for partisanship.

COOPER: We're going to talk more with Gloria and David and John after this commercial break.

We want to get your take on our "Breaking News." More on the Senate tonight, approving the bailout deal for America's financial firms and what it all means for us and for the election but more importantly for America and the future.

Plus, Sarah Palin speaking out in the interview everyone has been talking about. And what she told Katie Couric about Roe v. Wade and other Supreme Court decisions. Couric pressed her for specifics. Did Palin deliver? Well, you'll hear it and you can judge for yourself.

Plus, on the eve of the vice presidential debate a "Strategy Session" is Palin being over-coached or underestimated? A lot to talk about with Bay Buchanan and Paul Begala they are standing by. Including Bill Clinton's first major stump speech on behalf of Obama. Did he silence critics who say he hasn't supported Obama enough? Well, you can decide for yourself all that ahead on "360."



UNIDENTIFIED MALE: On this vote the ayes are 74, the nays are 25. Pursuant to the previous order, the bill having attained 60 votes in the affirmative, the bill as amended is passed.


COOPER: That is the breaking news; senators tonight approving the financial rescue package. That's our breaking story.

The House expected to vote on Friday although that is no guarantee; the outcome there much less certain.

Back with our panel, digging deeper with David Gergen, Gloria Borger, and John King.

David, it is incredibly frustrating to -- I was literally having flashbacks to hurricane Katrina where tonight we saw senators basically patting each other on the back, praising each other for taking action. And I can just imagine folks out there watching this and just getting more and more mad listening to these people and no one seems to be taking responsibility.

They are all pointing the fingers at the other guy and the other party. No one ever says, "You know what? I had a role in this lack of oversight over the last years. I helped allow this to happen."

Where does the anger, how does it break over the next couple of weeks? We have just been looking at those polls. Clearly it is breaking in favor of Obama, but does either candidate have more to lose on this?

GERGEN: Both men have a lot to lose if the House votes it down on Friday or whatever day it happens, Anderson.

If the Republicans are responsible for yet defeating it once again, John McCain will pay a huge price. If the Democrats now peel away and defeat it, then Barack Obama's going to pay a big price. Each man has a lot on the line.

What I do think is worth underscoring, is what most Americans say if they get it passed, well, we've taken care of it now then we can go on. The House defeat on Monday night, that irresponsible vote on the House has cost us enormously already just in the succeeding days.

As you pointed out, $100 billion of extra benefits have been added into this bill. That is going to drive next year's deficit up $100 billion. We're going to go up next year from $500 billion to an eye popping $600 billion; worst deficit in American history. That extra $100 billion is squarely attributable to the defeat of the bill by those members on Monday night in the House of Representatives. They ought to be held accountable by the voters.

COOPER: It is terrifying, Gloria, that $100 billion in the scheme of the deficit and the scheme this bailout almost is like a blink of the eye. It doesn't seem to count for that much.

BORGER: And you know, Anderson, $100 billion was added to the bailout in order to get it passed with all kinds of tax incentives, some of them very worthwhile. But they had to kind of load it up to make it more palatable to all different constituencies just so they could get it together.

I don't think either presidential candidate really benefits in the end. This gets passed hopefully. But in the end they both have to go back to the campaign trail and say they are going to be the ones to fix it next time. And people just don't trust government to do it.

COOPER: John, Bill Clinton made his first campaign appearance on behalf of Obama today. I want to play just some of what he said.

Maybe. Maybe not. All right.

Well, he spoke out for Obama. He says he is going to be campaigning aggressively over the next 30 or so days. How much of a difference can he make in a state like Florida?

KING: Obama has to win this election but Bill Clinton can certainly help, Anderson, and let's talk about the state of Florida.

What he focused on there today is mostly was the economy. He said you can trust Barack Obama and his advisers. They have a better plan.

Let's go back and look at the map. I'm going to pull this out. This might not look familiar unless you have been paying attention.

This is eight years ago, well actually, a little more than that. This is 1996, the last Democratic victory by a presidential candidate in Florida was none other than Bill Clinton. And look how he did it.

He ran up big numbers down here, in Miami-Dade, Broward and Palm Beach County where you have a lot of Jewish voters, a lot of retirees. The Democrats need to run up big numbers here.

Here is what Bill Clinton did that no Democrat has done since, win in the Tampa area, the Orlando area across to Daytona Beach. This is where the independents are, in Florida this is where the largest population center is outside of Miami. You need to win here to carry the state of Florida in a close statewide election.

Bill Clinton showed how to do it. So he can campaign in this state saying, number one he has strong support among the Jewish constituency. That is a problem for Barack Obama right now. Number two, he can say remember when the economy was humming along pretty good? I was the president. Trust me. Barack Obama is the guy to handle it.

So in places like this and all across the country where the economy matters, he is a good witness for Barack Obama. He can't seal the deal but he can push it along.

COOPER: All right. We're going to have to leave it there.

John King, David Gergen, Gloria Borger, on a night of breaking news. Thank you for your expertise.

Up next, we're going to turn our focus to tomorrow night's vice presidential debate; the one and only debate for them. Don't be fooled by anything else you may have heard. Both candidates are experienced debaters.

Here is Sarah Palin in a previous debate. Tonight we'll have the interview that everyone is talking about. What she told Katie Couric when pressed for specifics about Supreme Court rulings.

Also tonight, her opponent, Joe Biden. Who has the edge going off into tomorrow's face-off?

When "360" continues.


COOPER: We're all going to be watching history unfold tomorrow night as Governor Sarah Palin and Senator Joe Biden meet for the vice presidential debate. It's going to be the first and only opportunity to see the two candidates spar on the same stage. Though frankly, how much sparring there's actually going to be because of these debate rules, probably not that much.

Tonight, CBS News aired more of their conversation with Sarah Palin. Tonight they also talked to Joe Biden. Both were asked about Roe v. Wade, the landmark Supreme Court case that legalized abortion.

Here's what they said.


KATIE COURIC, CBS NEWS ANCHOR: Why do you think Roe v. Wade was a good decision?

SEN. JOE BIDEN, (D) VICE PRESIDENTIAL NOMINEE: Because I think it is as close to a consensus that can exist in a society as heterogeneous as ours. What does it say? It says in the first three months that decision should be left to the woman. Then the second three months, Roe V. Wade says well then the state, the government has a role along with the woman's health. They have a right to have some impact on that. The third three months they say the weight of the government's input is on the fetus being carried.

COURIC: In your view, is Roe V. Wade a bad decision?

PALIN: I think it should be a states decision not federal government mandating yes or no on such an important issue. I'm in that sense a federalist where I believe states should have more say in the laws of their lands and individual areas.

Now foundationally, also, though, it's no secret that I'm pro life. I believe a culture of life is very important for this country and personally that's what would like to see further embraced by America.


COOPER: In a moment we are going to show you what happened when Katie Couric asked Palin to name any other Supreme Court rulings she disagreed with. But first we want to look at what may happen tomorrow night.

Despite what you've heard or maybe even what you think, the running mates are season debaters. Their styles are as different as their views.

Joe Johns tonight has the "Raw Politics."


JOE JOHNS, CNN CORRESPONDENT: A political newcomer Sarah Palin on the biggest stage of her life up against a political veteran in a high stakes debate.

Actually, this is not new to her. When she was running for Governor of Alaska she was debating former Democratic Governor Tony Noles, who was well known and far more experienced. It was a test and Palin triumphed in part by going on the attack.


PALIN: Are you aware now of the impact of that lack of leadership in your gridlock, what that caused the people of Alaska?

UNIDENTIFIED MALE: You have one minute to respond, Mr. Noles.

TONY NOLES, (D) FORMER GOVERNOR OF ALASKA: I have no idea what you are driving at.

PALIN: What I was driving at is exactly that, there was gridlock and much of that was caused in that last year by that memo asking your cabinet to find ways to put the legislators in kind of more untenable positions.


JOHNS: In short, this candidate brings an impressive array of skills to a live televised debate.

UNIDENTIFIED MALE: Miss Palin, do you want to enter this fray? 15 seconds if you do.

PALIN: Glad I'm sitting here in between them to make sure it doesn't get out of hand.

JOHNS: We asked former Republican Congresswoman Susan Molinari who became a TV anchor, about how to view Palin versus Biden. She says even with his vast experience in the Senate and knowledge of politics, Biden has a serious challenge.

SUSAN MOLINARI, TV ANCHOR: He has to go after her without going after her. All I can say is good luck Senator Biden. It's a tough call.

JOHNS: Biden has two tendencies he has to guard against. He's got a reputation as an attack dog and he's known for talking too much and sometimes too bluntly.


BIDEN: Dennis, the thing I like best about you is your wife.


JOHNS: Remember this exchange with NBC's Brian Williams?


BRIAN WILLIAMS, NBC ANCHOR: An editorial in the "Los Angeles Times" said in addition to his uncontrolled verbosity, Biden is a gaffe machine. Can you reassure voters in this you would have the discipline you would need on the world stage, senator.



JOHNS: Obama chose Biden as running mate even though Biden in the primary debate, Biden sometimes sounded more like John McCain. He all but said Democrats who advocated defunding the Iraq war were gambling with U.S. troops.


BIDEN: Lives were at stake. I knew the right political vote. But I'll tell you what some things are worth losing elections over.


JOHNS: Molinari says debating a woman poses unique traps. Biden will have to choose his words carefully. He cannot risk female voters concluding he is overly aggressive or condescending.

MOLINARI: His job is going to be to defend Senator Obama and take down Sarah Palin. How do you take down Sarah Palin and not get women mad? JOHNS: A CNN opinion research poll shows public expectations on this debate are evenly divided as to who will win. What is safe to say is this, do not underestimate Sarah Palin.

Joe Johns, CNN, Washington.


COOPER: It is going to be a fascinating debate. No doubt about it.

For days there have been rumors about what Palin said to Katie Couric regarding other Supreme Court rulings besides Roe V. Wade. Tonight CBS News finally aired the question and answer that had so many people talking.

Here it is.


COURIC: What other Supreme Court decisions do you disagree with?

PALIN: Well, let's see. Of course in the great history of America there have been rulings that there's never going to be absolute consensus by every American. There are those issues again like Roe v. Wade where I believe are best held on a state level and addressed there. Going through the history of America, there would be others but --

COURIC: Can you think of any?

PALIN: I would think of any again that could best be dealt with on a more local level. Maybe I would take issue with. As a mayor and as a governor even as a vice president if I'm so privileged to serve I wouldn't be in a position of changing those things but in supporting the law of the land as it reads today.


COOPER: Joining me for our strategy session: CNN political contributor and former senior adviser to Mitt Romney, Bay Buchanan who supports McCain and Democratic strategist and CNN political contributor, Paul Begala who supports Obama.

So Paul, Conservatives say that Palin is over-coached; that she just needs to be allowed to be herself. Is that the problem?

PAUL BEGALA, CNN CONTRIBUTOR AND DEMOCRATIC STRATEGIST: Who knows. The two clips you showed, the one where she talked about her view on Roe versus Wade, I thought she was sensitive. She held back from some of her strident rhetoric that sometimes is on each side of the abortion issue. She seemed to understand federalism. Good answer for her. Great answer.

Then Katie asks her this question, what other, as a conservative what other Supreme Court opinions do you disagree with. This is straight out of the conservative cannon.

Every conservative, you don't have to be the governor of a state, even one close to Russia to know that -- I'll help you out, here you go Sarah, Governor, the answer is Angle Vitale which is the case where they banished school prayer or Lawrence versus Texas which was a gay rights case out of Texas or Johnson versus Texas which is a flag burning case.

It was pathetic. It was pitiful. It was a Miss South Carolina moment where she was babbling. I'm so staggered by the ignorance there. I'm sorry.

COOPER: Bay, it's interesting Bay because she actually spoke out against the Supreme Court ruling I think it was the court of Alaska versus Exxon over the Exxon Valdez. She wasn't happy with the results. She was on TV speaking out about it a long time ago. What do you think happened?

BAY BUCHANAN, REPUBLICAN STRATEGIST: Well, there's no question. I can tell you exactly what happened. It could have happened to me and very likely it could have happened to Paul Begala. You have the camera on you and you are supposed to come up with one. Oh, my gosh, what are they now?

And you just need a minute for somebody to throw ideas. She didn't have a quick answer, a name of a case. But I'll guarantee you states rights is key or go down a number of them that the Supreme Court should not be taking away those state rights. She tried to give you some idea where she would disagree.

This is not a fill in the blank test running for vice president. If she wants to ask three or four opinions on three or four cases she'd have fine answers. That is not what this is all about.

COOPER: Gwen Ifill is going to be the moderator of the debate tomorrow night from PBS. It turned out she's writing a book or has written a book that's going to be published on Inauguration Day. It's about Barack Obama and his impact on the race and on African-Americans in the United States.

There are some conservatives, Bay, who are saying this should have been disclosed. It was disclosed in some newspaper articles months ago. Is this an issue?

BUCHANAN: It is a blatant conflict of interest. There's no question about that. However, I've got to tell you something, anyone coming up there is more than likely going to be liberal. I think there are enormous pressures on Ifill to be as fair as she could possibly be. So I would go ahead and let her be the moderator myself.

COOPER: Paul, a lot of Democrats are saying this is just part of the McCain campaign effort to put pressure on a journalist. Is that fair?

BEGALA: Yes, it's a pretty sleazy thing to do, particularly, to Gwen Ifill. You know she covered the Clinton campaign for the "New York Times" when I worked for Bill Clinton. She's tough as nails right down the middle. I have probably called her and screamed at her a hundred times. But she is a very fair, tough-minded journalist.

The book, by the way, is not about Barack Obama, so far as I know, and it's no secret. She's been working on this book for years. It's about the new generation of African-American and civil rights leader.

Obviously, one of them is Barack Obama. He's now the most famous. He's got a good chance to be the president of the United States. But it includes Artur Davis, who's a remarkable young congressman from Alabama, in fact he has Selma in his district.

It's got a lot of civil rights leaders. And I really think it's really loathsome for the right wing ...


BEGALA: ... to try to be bullying Gwen Ifill on the day before the debate.

BUCHANAN: Paul, she has a vested interest in Obama winning...

BEGALA: It's nonsense.

BUCHANAN: ... because that book goes right off the charts if he does.

BEGALA: I wrote a book about McCain.

COOPER: All right, I got to leave it there.

BEGALA: Do I have a vested interest in McCain winning?

COOPER: Got to leave it there.

Paul Begala...


COOPER: ... Bay Buchanan, thanks.

The presidential candidates have three debates but Sarah Palin and Joe Biden will go head to head only one time this fall. Who's going to win tomorrow night's showdown and how? Well, we'll have more from Bay and Paul ahead.

Also more in our breaking news, the Senate, tonight, approving the financial rescue bill. But will it get through the House? We're going to keep track of all the latest developments and what it means for you and your money.

Stay tuned.



BIDEN: If you want to know where al Qaeda lives, if you want to know where bin Laden is, come back to Afghanistan with me. Come back to the area where my helicopter was forced down with a three-star general and three United States senators at 10,500 feet in the middle of those mountains. I can tell you where they are.

Where is that safe haven? It is not Baghdad. It is in the mountains between Afghanistan and Pakistan where my helicopter was recently forced down.


COOPER: Senator Joe Biden, twice last month, rehashing a story about how his helicopter was forced down in Afghanistan. What he didn't mention is that, it wasn't al Qaeda or the enemy or the Taliban that caused the unscheduled landing. It was snow.

Both candidates, of course, have their assets and their liabilities, and in less than 24 hours they're going to be debating each other.

Let's get back to our strategy session. With me again, CNN political contributor and former senior adviser to Mitt Romney, Bay Buchanan, who's for McCain, and Democratic strategist and CNN political contributor, Paul Begala who supports Obama.

Bay, bottom line, advice for Palin and for -- Biden tomorrow?

BUCHANAN: Biden, easy. Just do not make any news whatsoever. Just answer the questions. Be gracious. Don't make news. All the momentum going with Obama right now, you don't want to cause anything to halt that at all.

As for Palin, be herself. Be her natural positive upbeat personable charming individual and speak for the people of this country, speak from her heart, and do what she does better than anyone, and that is emotionally connect with the people.

Don't try to be sophisticated. Don't try to give all kinds of facts and figures, and look like you're an authority on things which we all know you're not. But just give good solid answers, have a good grasp of the material, and then speak from your heart.

And she'll win that debate.

COOPER: Paul, same questions to you.

BEGALA: Yes, I'd say, Governor Palin, your biggest liability is that Joe Biden knows John McCain's record better than you do. So don't spend a lot of time on defense.

Attack Barack Obama. The reason the good Lord made running mates is to attack the top of the ticket. And I think Governor Palin, if I were advising her, and I'm not, would be -- I'd would say go after Barack not Joe. And the same thing with Joe Biden, right? He can't either patronize her or bully her so he should ignore her and attack John McCain. And I think he -- in that sense he may have an easier go of it because he is an old colleague and even friend of McCain's and I think he's pretty credible when he tears into him.

COOPER: All right, we're going to leave it there. We'll see if they take either advice because I'm sure both of them are watching.

Paul Begala, Bay Buchanan, thanks so much.

Up next, last words, stunning revelations about the role text messaging played in that deadly California train wreck.

And new details in the disappearance of aviator Steve Fossett; what hikers found can give clues to what happened to him.

That and more when "360" continues.


COOPER: Erica Hill joins us now with a "360 News and Business Bulletin" -- Erica.

HILL: Anderson, federal investigators today confirmed the engineer of a Southern California commuter train sent a text message from his cell phone just 22 seconds before that train collided head on with a freight train last month. 25 people were killed, including the engineer.

Two teenage train buffs reported receiving a text message from him shortly before the crash.

A new report predicts as many as 3,800 U.S. car dealerships, that is nearly one in five, could fail this fall. The consulting firm that issued the forecast says weak sales, tight credit and increased operating costs are squeezing car dealers.

Berkshire Hathaway shoring up another battered corporate icon; General Electric this time. Warren Buffett's investment firm will buy up to $6 billion of the common and preferred stock in a deal similar to its investment in Goldman Sachs.

And in eastern California, California hikers have found a pilot's license along with some other items that may belong to Steve Fossett. The millionaire/adventurer vanished on a solo flight more than a year ago. He was declared legally dead, Anderson, in February.

That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts right now.