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McCain Campaign on the Attack

Aired October 8, 2008 - 18:00   ET


JOHN ROBERTS, CNN ANCHOR: Wolf Blitzer is off today. I'm John Roberts at the CNN Election Center. And you're in THE SITUATION ROOM.
And breaking news this hour: the price tag of America's financial crisis is going up billions of dollars more. We learned just a short while ago that Federal Reserve has agreed to loan up to almost $38 billion additional to the insurance giant AIG. That is on top of the $85 billion that it lent the troubled company last month.

Let's bring in our senior business correspondent, Ali Velshi. He has been following all of the news for us this afternoon.

What is going on here, Ali? I thought that they were supposed to be out of the woods?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Eighty billion -- $85 billion was the first loan just a few weeks ago, and now AIG going back to the well, the Federal Reserve offering them $37.8 billion. The Federal Reserve says it is against good, trustworthy security.

But the bottom line is, we thought we were done with this. When you think about the size of that AIG bailout, compared to the fact that we have authorized $700 billion to help companies out, and this wasn't in that $700 billion. So, this is quite a mystery that they're already said, the $85 billion they first took is gone. And I should tell you, that $85 is a very expensive $85, at today's rates, about 12 percent to 13 percent, now going back to the well for $37.8 billion. We need to find out more about this is about.

ROBERTS: Do we know the terms of this latest loan?

VELSHI: Well, they are getting real collateral. They're getting what the government is describing as real securities that they will hold in exchange for the loan. But, again, what are these real securities? I think we have got some questions that we need some bigger answers to.

ROBERTS: So, they keep throwing things at this financial crisis.

VELSHI: Right.

ROBERTS: And it kind of slows the slide, but the slide continues. And this has been going on since August of last year. Do we know, as I asked Lou Dobbs a moment ago, where the bottom is and what it will take to finally end this crisis?

VELSHI: There were a lot of people, John, who thought today or this week, we might see the bottom, particularly after everything that happened in Asia overnight. We saw massive losses and we would have seen what we think of as capitulation.

But here's -- this might be a little bit of comfort to some of you out there looking at your 401(k)s, which, by the way, if they are well diversified, might be down 30 percent since the beginning of the year. We have a lot of medicine that we have thrown at this problem. Let's see how it's going to work.

On October 3, we sent the bailout package up, $700 billion, but we did hear from Treasury Secretary Hank Paulson that it's going to be several week before we first see that $700 billion at work and it could take 18 to work.

Then, yesterday, we saw the Federal Reserve say that it is agreeing to buy bad loans directly from companies. Again, that is unprecedented. Typically, if you need -- sorry, they are agreeing to give loans to companies in trouble. Typically, a company would got to an investment bank and then they would get that loan. Now they can go to the Federal Reserve, that is going to happen probably starting within the next week and probably take about between a week and six months to work.

And then finally today, you saw this coordinated global effort to reduce interest rates around the world. But one thing that we have known from our years and years of covering interest rate cuts is they typically take nine to 18 months to kick in. And that is the problem, John, that none of these things is designed to solve the problem that we have got in markets right now.

And a lot of the market experts say in fact we should not be looking at solving this problem right now. We need those markets to capitulate. That is a financial firm for believing that the last lifeboat is leaving, getting out of the markets, and letting it find a bottom. Then you will see people coming in and buying into that market, but we don't know where that bottom is.

ROBERTS: It is like an episode of that medical program "House." You try one treatment, it doesn't work. You try another one. And, eventually, hopefully, House will diagnose the problem.


VELSHI: That's a very good analogy. That looks like what is going on right now.

ROBERTS: Well, let's hope it's a little more certain than a fictional television show.

VELSHI: Let's hope House comes up with a solution, yes.

ROBERTS: Ali, thanks so much for that.

One financial expert simply says -- quote -- "This better work." He is talking about the rate cut calming investors' fears. It is just one way that the government is trying to stop this stock sell-off. So, why are investors still running for the doors.

CNN's Brian Todd is here.

And, Brian, is an awful lot of psychology involved here.

BRIAN TODD, CNN CORRESPONDENT: Right, John. Experts say it is often more than just the bad psychology often at work here. They say the two most powerful emotions on Wall Street are greed and fear and right now one of them has clearly got the upper hand.


TODD (voice-over): First, the government bails out the mortgage industry. Then it decides to lend money directly to companies. Then it slashes interest rates, all moves designed to build confidence. Still U.S. stocks tank over the past few days. European markets follow suit, and financial anxiety is felt across the world.

UNIDENTIFIED MALE: You have to wonder if this is going to get better before it gets worse, or if it's going to do the opposite.

UNIDENTIFIED MALE: People start selling, it's like a panic and then people just might jump on a bandwagon.

TODD: Georgetown law professor Donald Langevoort studies investor behavior. He says greed and fear are the two most prominent emotions on Wall Street and fear is far more powerful. Langevoort says this is at least partly a fear market because of uncertainty about whether these government efforts to shore up the economy will really work.

DONALD LANGEVOORT, GEORGETOWN UNIVERSITY: The more we come to the conclusion, if I don't get my investment decisions right, my kids don't go to college, I can't live out my retirement without being a burden on my family, those hot-button things, they can very much influence somebody to buy or sell emotionally, rather than sensibly.

TODD: Experts say once fear sets in, the herd mentality takes over. Even professional investors see others fleeing the markets and simply join in.

How to turn it around? From financial analyst to psychiatrist, experts say don't sell just for the sake of selling.

DR. GAIL SALTZ, ASSOCIATE PROFESSOR OF PSYCHIATRY, THE NEW YORK PRESBYTERIAN HOSPITAL AT WEILL-CORNELL SCHOOL OF MEDICINE: If you can hold on to that fact that, historically, we always come out of these things, we always come out, and that what you need to do is to get yourself in as conservative a stance as you can and then know you have done what you can do.


TODD: But that also does not mean do nothing. Financial analysts say that you should look at your 401(k) statement, look at the investments you have in there, get prudent advice on what is good to hold on to or sell. Just try to have some balance in there until these markets turn around again -- John.

ROBERTS: You know, Brian, a lot of people are afraid to look at their 401(k) statement.

TODD: Right. Sure are.

ROBERTS: But I guess it is the prudent thing to do.

Thanks, Brian Todd, with that for us today.

And you have spoken to analysts whose job it is to look ahead at things like retirement and planning here, right, Brian? Are they optimistic about any of this.

TODD: Well, one of them says there is no reason not to be optimistic. He makes the same argument that the psychiatrist in our story makes, that the U.S. has weathered a lot of these storms before. He says, some very basic things are very key here, the productivity of American workers, the earning power of U.S. companies. Those are things that are not just going to disappear overnight. They're going to remain in place. Watch for those things to get stronger.

ROBERTS: All right, Brian Todd, thanks very much.

Fear is also running rampant through the housing market. And if you paid close attention to last night's debate, something John McCain said about housing makes him sound more like a Democrat than the conservative Republican that he always claims to be.

CNN's Dana Bash explains for us.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: John, before the debate, a top McCain adviser told me that pushing a new economic idea now would look -- quote -- "panicky." Though it might tell you something about where McCain aides thinks he is in the race now that he ended up doing it anyway.

(voice-over): With the dragging economy pulling down poll numbers, John McCain started the debate with this.

MCCAIN: I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes.

BASH: But McCain did not make it clear to the millions of voters watching that he was trying to unveil a new proposal which advisers scrambled to explain the next day. Aides say McCain would order the government to spend $300 billion which would come out of the $700 billion bailout package on buying bad mortgages directly from homeowners. They would be provide with new fixed rate mortgages so they could stay in their homes.

MCCAIN: Is it expensive? Yes.

BASH: Not only is his plan expensive, ordering the government to buy toxic mortgages is a major departure from McCain's conservative credo. In fact, it's an idea long pushed by liberal groups and despite McCain trying to use this to distinguish himself...

MCCAIN: And it's my proposal. It's not Senator Obama's proposal. It's not President Bush's proposal.

BASH: ... Hillary Clinton proposed virtually the same idea just last month, and discussed it on CNN's AMERICAN MORNING.


SEN. HILLARY RODHAM CLINTON (D), NEW YORK: We also have got to give authority to rewrite these mortgages, so that we go to the root of the problem.


BASH: There are still a lot of unanswered questions about how the government would go about buying people's bad debt.

PENELOPE PATSURIS, CNNMONEY.COM: Three hundred billion represents I don't know how many millions of mortgages. So, I mean, is Hank Paulson going to be there or whoever's, you know, the Treasury secretary, you know, signing off on everybody's mortgage individually? I mean, I don't -- you know, that's -- that's tremendous -- it's just mind-blowing.

BASH: While the details may be complicated, the politics for McCain and simple and obvious. Helping homeowners, voters, is politically popular. Bailing out Wall Street is not.

(on camera): But McCain, of course, voted for the bailout. What is perplexing is why he didn't push for this mandate to directly help homeowners before the package became law -- John.


ROBERTS: Dana Bash reporting for us from New York -- Dana, thanks so much.

Less than four weeks to go, so every visit will be critical. Where might Barack Obama and John McCain focus their energies in the remaining days? We will tell you.

Obama's motto is, he offers change. So why is he reaching back and using Ronald Reagan's words?

And what was already a campaign affair now appears to be a family affair. Cindy McCain joins her husband and his running mate in attacking Barack Obama.

(COMMERCIAL BREAK) ROBERTS: Barack Obama is promising voters that there will be better days ahead for the U.S. economy, especially if he is elected president.

The Democrat's chances have been looking better as the financial crisis has gotten worse. And now the clock is running down with just one more debate to go and 27 days until the election.

Here is CNN's Jessica Yellin with that story.


JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: John, from Barack Obama today, a laser-like focus on the economy and new contrasts with John McCain on health care reform. Obama's campaign is convinced that health care will be a winning issue for them in battleground states.

(voice-over): In Indiana, flanked by a group of sought after women voters, Barack Obama sounded confident.


YELLIN: But cautious.

OBAMA: So if I'm president -- no, no, no I'm superstitious.

YELLIN: And on the attack.

OBAMA: Back in 1980, Ronald Reagan asked the electorate whether you were better off than you were four years ago. At the pace things are going right now, you're going to have to ask whether you are better off than you were four weeks ago.

YELLIN: Market turmoil seems to be adding urgency to his message that John McCain is bad for the economy.

OBAMA: Senator McCain's campaign announced last week that they plan to turn the page on the discussion about our economy and spend the final weeks of this election attacking me instead. I can take four more weeks of John McCain's attacks but the American people can't take four more years of John McCain's Bush policies.

YELLIN: A new ad takes aim at what Barack Obama calls John McCain's radical health care plan and tells voters to read the fine print.

OBAMA: What he doesn't tell you is that he is going to tax your employer based health care benefits for the first time ever. So what one hand giveth, the other hand taketh away.

YELLIN: But on the stomp Barack Obama continues to hit his patented high note, that there is still cause for hope and optimism.

OBAMA: This isn't the time for fear or for panic. This is time for resolve and steady leadership. I know that we can steer ourselves out of this crisis.

YELLIN: John, Obama's campaign manager tells reporters he believes the McCain campaign has had a quote, terrible few weeks and is -- quote -- "acting desperate. "

He also says that come Election Day Obama will be helped by hundreds of thousands of newly registered Democratic voters who outnumber newly registered Republicans in many battleground states -- John.


ROBERTS: Jessica Yellin reporting from Nashville -- Jessica, thanks.

Obama has got some reason to cheer, but not feel comfortable. He is beating John McCain in four key battleground states in our latest of polls, but not by much.

Let's take a look. First of all, in Florida, Senator Obama is ahead of John McCain by four points, 49 to 45 percent. He is ahead by five percent in the latest poll of polls in Ohio. Take a look here in the state of Nevada, a battleground state in the West, an important state. He is ahead by three points, 49-46 percent.

But take a look at this. He has stretched out his lead. He was 10 points ahead. He is now 12 points ahead, 52 to 40 percent, in the key battleground state of Pennsylvania in our latest poll of polls.

Joining us now with more analysis of these poll numbers and what it means going forward at our Electoral College map on the magic wall today is John King, our chief national correspondent.

Where is this all heading, John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, right now, it is leaning heavily, John, in Barack Obama's favor.

The electoral map -- you know the magic number -- 270 wins. Barack Obama is so close at the moment. We project him leading in states with 264 Electoral College votes, John McCain only 174. What that means essentially is, if nothing else changed, McCain would have to run the map. Seven tossup states -- they're the gold ones -- all carried by Bush four years ago, to get to 270, unless he can turn of these blue states, McCain has to win everything left, a pretty daunting challenge.

But let's look where the candidates are today, because where they are tells you a lot about how they see the race. The Democrats, for starters, the vice presidential candidate, Joe Biden, down here, Fort Myers, as you see, that's the blue from four years ago. Bush carried the state. But there's a small Democratic base down there.

Also, John, you have been on a lot of bus tours right across the corridor.

ROBERTS: Fond memories, back and forth, back and forth.


KING: ... back of a bus.

This is critical. Independent voters, other voters from Tampa, across to Orlando, out to Daytona Beach, that is a critical spot in the state of Florida. Again, the Democrats competing in a red state they think they can win.

Even more audacious, to borrow a word, Barack Obama in the state of Indiana today. We still project this one is leaning Republican. But Barack Obama thinks, with new voters and others, he can turn this around. He was out in Indianapolis today.

The luxury of the lead, you're campaigning in the other guy's territory.

ROBERTS: And the luxury of money to be able to go in here...


KING: Luxury of the money.

And the Republicans -- the Democrats -- the Republicans, on the other hand, trying to take this one away. This is Pennsylvania. They're down, McCain/Palin right now down 10, 12 points, depending on which polls you look at. Where were they today? They were out here. They were in Bethlehem, just to the east of Allentown.

You remember this area. I'm going to back to the Democratic primaries. This is an area where the Republicans think they can do some business, because that light blue is Hillary Clinton. She spanked Barack Obama in this blue-collar, largely white part of the state. Barack Obama trying to get those voters back. That's a key battleground.

One last place we want to visit is the state of Ohio. And we go back to 2004 for our perspective, John McCain and Sarah Palin also up here in the Cleveland suburbs. Now, Cuyahoga County is going to go for the Democrats. It did for John Kerry four years ago. But where you find the Republican ticket is down here, in the suburbs, where they need to shrink the Democratic margins, and then trying to appeal also to the rural voters you see further out of the city area.

But, again, it is the Democrats on offense in the red states competing.

ROBERTS: We spent a lot of time on buses in that area, too.


KING: You will spend -- and these guys are going to spend a lot more time on buses out here. You want to go on a bus tour right down in here, this may be where the election is decided, John, right down this stretch of Ohio. ROBERTS: So, what does it mean in terms of the Electoral College and where we are with the path to get to the Oval Office?

KING: The path to get to the Oval Office, again, let's come back to this map.

I'm going to do it this way. It's I think it favors Barack Obama, without a doubt. The math tells you that. So, let's look at this way. How does John McCain get to the White House? He has to keep Florida, 27 electoral votes, has to put North Carolina back in the red, has to win Virginia, has to win Ohio -- we just talked about that -- has to win Missouri.

Again, Bush won all these states, and McCain is either just ahead or behind in most of these battlegrounds. Even that would get him just back in the hunt, and we could be going out into the Mountain and the Western time zones. If he won Colorado, he would still be just shy. And he would need to win Nevada as well.

So, if nothing else on the map changed, John McCain has to run the board of the seven tossup states to win. Or, the flip side of that coin, Barack Obama needs to win just one of seven, and he's in the White House.

ROBERTS: So, it -- obviously, the math would favor Barack Obama at this point, but still a little less than four weeks to go. A lot can change.

KING: The one thing we have learned in this race, it can change while you're having your three-hour sleep.


ROBERTS: All right. John King for us today -- John, thanks so much.

ROBERTS: A former secretary of state getting ready to take the stand in a congressional corruption trial. We will tell you who and why.

And how far is too far?

Hear what Joe Biden said about Sarah Palin's attacks today.




ROBERTS: Cindy McCain is accusing Barack Obama of sending a cold chill through her body -- Mrs. McCain joining her husband and Sarah Palin on the attack.

Many people say that Obama won last night's debate, but why are some reluctant to vote for him? The best political team on television standing by with that.

And it took lots of time and wrangling to come up with the rules for the town hall forum in Nashville. Would all of us have been better off if they had tossed out the rules next time?



And happening now: Fresh off of his latest debate with Barack Obama, John McCain is stepping up his fight with new attacks, but some supporters fear McCain's chance of overtaking Obama's lead is dwindling.

Also, accusations that McCain and Sarah Palin are going overboard on Obama, even inciting people to anger. We take a look at that with the best political team on television.

Plus, our own focus group said that Obama won the debate, but a majority of them plan to vote for John McCain -- why Obama can't close the deal with some voters.

Wolf Blitzer is off today. I'm John Roberts, and you're in THE SITUATION ROOM.

John McCain's campaign is feeling the weight of the nation's economic crisis. And, by most accounts, the Republican's latest debate performance didn't do much, if anything, to help pump him up. McCain and running mate, Sarah Palin, appeared together today in the battleground states of Pennsylvania and Ohio.

CNN's Ed Henry is in Ohio.

So, he didn't score the punch that he needed to get last night in terms of a knockout, Ed. So where does he stand tonight going into tomorrow's campaigning?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, John, he just wrapped up this rally just outside Cleveland. He's working the rope line with Sarah Palin. He is on to Wisconsin next.

What the campaign is trying to do is turn the page on last night and build some momentum into next week's third and final presidential debate.


HENRY (voice-over): John McCain immediately came out swinging, the morning after failing to score the knockout his campaign so desperately wanted in the second debate.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Who is the real Senator Obama? Is he the candidate who promises to cut middle-class taxes or the politician who voted to raise middle-class taxes?

(AUDIENCE BOOING) MCCAIN: Is he the candidate who talks about regulation, or the politician who took money from Fannie Mae and Freddie Mac and turned a blind eye as they ran our economy into the ditch?

HENRY: McCain is most steering clear of personal attacks on Barack Obama, leaving that to running mate Sarah Palin and now his wife, Cindy, who this week charged, Obama is running the dirtiest campaign ever, but is now raising the stakes herself.

The McCains almost never talk about their son, Jimmy, a Marine serving in Iraq, but Mrs. McCain decided to use him to blast Obama's opposition to a war funding bill because it did not have a timetable to withdraw U.S. troops.

CINDY MCCAIN, WIFE OF SENATOR JOHN MCCAIN: But let me tell you, the day that Senator Obama decided to cast a vote to not fund my son, when he was serving...


C. MCCAIN: ...sent a cold chill through my body, let me tell you. I would suggest that Senator Obama change shoes with me just for one day.

HENRY: The attacks came as veteran conservative activist Richard Viguerie expressed frustration that McCain is not focusing hard enough on sharp differences with Obama on issues like taxes and the size of government.

Viguerie said after the debate: "For John McCain, the opportunities to win this election are dwindling down to a precious few. This was an opportunity squandered."


HENRY: Now, McCain advisers say that given the severity of the financial crisis, they believe they should actually be down in some of these battleground states by double digits. So they're still hopeful they can chip away at Barack Obama's lead. But they're acknowledging privately it's going to be an uphill climb -- John.

ROBERTS: It certainly looks like it will be.

Ed Henry for us Strongsville, Ohio, just outside of Cleveland this evening.

And let's talk more about this with three members of the best political team on television.

Joining us now, Mark Halperin. He's the senior political analyst for our sister publication, "Time" magazine and the author of the ever so terrific blog, The Page. CNN special correspondent Soledad O'Brien and CNN senior analyst Jeffrey Toobin. All part, again, of the best political team on television.

So Sarah Palin didn't seem to have any question who won last night's debate.

Let's listen to how she put it on the campaign trail today.


PALIN: You know, when this campaign started, John McCain had asked Barack Obama to join him in 10 town hall meetings across the country. And our opponent, though, said no. And now I think that we know why. John McCain won. The truth won out.


ROBERTS: You know, earlier today, I was talking to Ed Rollins, who, of course, engineered the famous 49-state victory for Ronald Reagan back in 1984. And he said John McCain should be thankful that Barack Obama did not take him up on his offer of 10 town hall debates.

What do you think, Mark?

MARK HALPERIN "TIME" MAGAZINE: I could argue it either way. I thought Obama was perfectly fine in the format last night. Obama is currently winning and so he didn't really need them.

I think McCain might have done better over time. He might have found that magic moment. But it's very difficult to rattle Barack Obama.

If you look at Barack Obama's skills as a debater compared to Al Gore and John Kerry, the last two people the Democratic nominee -- Democrats nominated, he simply does not have horrible moments in the debates. They're not all great, but none horrible. That's a big difference. And I think that's part of why he's ahead now.

ROBERTS: And, Soledad, you spent the evening with undecided voters in Ohio.


ROBERTS: What were they thinking about Barack Obama's performance last night?

SOLEDAD O'BRIEN, CNN CORRESPONDENT: You know, they actually -- if you look at the numbers, you saw both men were getting above 50, which meant it was in the positive range. And they both felt they did pretty well. My panel didn't think there was some huge victory for Barack Obama. They gave him a couple of points. He won by a couple of show of hands, but really not overwhelming. And so I think they felt that it was, you know, pretty close.

One thing that's interesting to see from these guys who are using these dial meters is that they're basically saying -- any time there's a negative moment, they would dial down.


O'BRIEN: And they thought that John McCain had more negative moments, more digs, more snitty kind of got you moments. A lot of times, right as handing it off to the moderator, which was kind of interesting timing. And so that drew those numbers down. They didn't like that.

But overall, I think that they felt that both men performed real fine.

ROBERTS: You know, Jeffrey, it really is fascinating to watch this instant feedback with the dial meters in the bottom of the screen. And sometimes people were just really humdrum about things, particularly on Iraq and Afghanistan. John McCain wasn't scoring many points. But on other occasions, both of them seemed to pin the meters.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST, "NEW YORKER" MAGAZINE COLUMNIST: You know, it's funny, because I talk to people out there in the real world. The thing they always talk to me about is our squiggly lines...


TOOBIN: Soledad's squiggly lines. I mean people are fascinated by that.

But, you know, I think we contribute to omission oppression sometimes in how we cover these debates. Because if you look historically, the idea that a candidate is going to land a knockout blow, is going to change the race, just is not borne out by history.

The number of times where debates have moved significant numbers of voters is very small. Most of the time, the race doesn't change much. And that's what we've seen in the three debates we've seen so far.

ROBERTS: But it is true, is it not, Mark Halperin, that these debates do help some undecided voters to make up their mind -- people who might have been sitting on the fence a little bit may decide to lean one way or the other, depending on what they saw?

HALPERIN: As hard it is for us to believe because of who we hang out with, there are still voters who aren't really paying attention yet. The debates have a big audience. They get a lot of news coverage.

One thing that I think has hurt John McCain is both of the presidential debates have taken place on huge news days in the financial crisis. So the debates have not been the dominant new story that they would have been, reaching an audience beyond those who watch it live and see news coverage.

I think there are voters who are still going to pay attention and have paid attention, though, to the debates, even with the reduced coverage.

ROBERTS: The Obama campaign has started to turn fire on Sarah Palin. They look at what she's doing out there on the campaign trail and some people suggest that maybe she's going a little too far, that she's inciting people to anger at some of these campaign events. I mean everybody wants to throw red meat to the crowd, but there's some sense that maybe the red meat that she's throwing is just a little too red.

Maureen Dowd said the other day that she is more Cheney than Cheney.

And it prompted this response from Joe Biden this morning on CBS.

Let's listen.


SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL NOMINEE: You know, the idea here that somehow these guys are, once again, injecting fear and loathing into this campaign is -- it's -- I think it's mildly dangerous. I mean here you have out there these kinds of, you know, incitements out there -- a guy introducing Barack using his middle name, as if it's some epitaph or something. This is over the top.


ROBERTS: Yes. That would be epithet, not epitaph.

But he's talking about the Lee County sheriff, who the other day, like Bill Cunningham did in Ohio earlier during the primary campaign, said Barack Hussein Obama -- Soledad, what are you picking up among undecided voters?

Do they think that Sarah Palin is going too far and maybe John McCain going too far, that, in fact, they're not just throwing red meat out there to the base, they are actually inciting anger?

O'BRIEN: Well, a couple of things. First of all, at the end of every debate, we've had roughly six people say I'm no longer undecided, this debate did it for me and they are ready to make a decision. That decision split down the middle. So there. That's one point.

Number two, you know, it's interesting, negativity does not play well with the crowd.

And so what -- and I said well, why?

What exactly is the reason for that?

And they all say it's a waste of my time. What I want to know is specific details about the tax plan and even what we heard earlier, differences between the two candidates, so I can really make up my mind.

So I think that they -- and I know we've had this discussion about...

TOOBIN: I'm a little skeptical of the self-reporting that -- you know, everybody, it's like when you ask people, do you think there's too much sex and violence on TV? Everybody says, oh, absolutely, yes. Well, you know what, they watch sex and violence.

ROBERTS: They watch it, yes.

TOOBIN: And negative campaigning, particularly negative commercials, historically has worked. So I'm not sure that all negative campaigning is bad.

But what Sarah Palin has been saying, frankly, strikes me as normal campaign noise. I think people mostly let it wash over them. I don't think it has a big impact one way, pro or con.

O'BRIEN: And it's...

TOOBIN: It's certainly not moving the polls very much.

O'BRIEN: It's going to get worse. We've got 27 days. It's going to get worse, I guarantee you that.

ROBERTS: Yes. With Barack Obama starting to stretch out his lead in some of these battleground states, the McCain campaign will be doing everything they can in the playbook to try to close those numbers.

Stay there, folks. We've got a lot more to talk about, if you would, coming on the other side of the break here.

Sarah Palin keeps trying to link Barack Obama with '60s radical Bill Ayers. Michelle Obama is speaking out about that, part of her interview with Larry King, coming up next.


ROBERTS: Our focus group for last night's debate concluded that Barack Obama won. Yet a majority say they'll be voting for John McCain.

We are back with the best political team on television -- CNN special correspondent Soledad O'Brien, who spent the evening with those undecided voters in Ohio; CNN senior analyst Jeffrey Toobin; and Mark Halperin, the senior political analyst for our sister publication, "Time" magazine.

So let's talk a little bit about that...

O'BRIEN: A show of hands.

ROBERTS: ...because there was this contradiction between who these voters thought won the debate and who they would vote for.

O'BRIEN: Twelve thought Barack Obama won. Ten said they thought John McCain won. But when we said, if you were forced to vote today, who would you pick, 14 said that they would go with John McCain and 10 said that they would go with Barack Obama.

So I think that...

ROBERTS: That's different from the first debate, isn't it?

O'BRIEN: It's slightly different from the first debate. We had a much larger number who thought Barack Obama won the first debate. But remember, a different panel. Things change. And I think there's no question that winning a debate does not necessarily mean winning the election. I mean that's an important takeaway here.

And, also, at the end of the day, another statistic that I thought was interesting, when you say to them, who do you is going to win this election, 80 percent said Barack Obama.

TOOBIN: Really?

O'BRIEN: Eighty percent.

ROBERTS: So how do you...



ROBERTS: I mean you've been out on these campaign trails for a long, long time.

HALPERIN: I can't look into the souls of this particular group of people to see where their thoughts are. I think in -- within the press now and within the political community, it's pretty clear people are now talking more about an Obama landslide -- 350 electoral votes, or around there -- more than they are about a McCain win. That's just the reality of it -- a snapshot of where we are today there.

There's a ceiling on how much any Democrat is going to get. And that's the micro -- the macro percentage, 52 percent, 53 percent of the popular vote. I think when get down to individuals, what you're finding is he's just not going to get a certain number of people, people who are Republicans, people who won't vote for an African- American, people who like certain things about John McCain, people who don't trust him, for whatever reason.

There's a ceiling on how well he can do. He's not going to get everybody. He's just not.

ROBERTS: All right.


TOOBIN: You know what, I was puzzled. And, you know, it was a small group of people and I don't really know what to make of it. It did seem significant that every public opinion poll, involving hundreds of people, all showed Obama won the debate last night. And his lead seems to be substantial, especially...

ROBERTS: Yes. Our poll had him winning by a significant margin. TOOBIN: Fifty-four to 30. That's a big margin. And if you look at some of the margins in Pennsylvania, in Michigan, in Ohio, you're starting to get -- particularly in Pennsylvania -- to double digit leads. These are big leads in the polls.

ROBERTS: Soledad, you've done an awful lot of terrific journalism on this issue of race, particularly in this campaign.

We were talking with Willie Brown, the former mayor of San Francisco, this morning on "AMERICAN MORNING," who believes that this is going to be an issue between now and November 4th.

And then there's also this idea of voting booth conversion -- that people tell the pollsters who call, yes, I'll vote for Barack Obama, but they get in there and they just can't pull the lever for him and they pull it the other way.

What are you picking up on that?

O'BRIEN: Well, you know, I think that's -- the second part of that's very interesting to see and we're not going to know until November 4th. But, you know, there's no question race is going to be injected into this race over the next several weeks. I think there is no doubt about that.

And it's not -- it's -- you cannot avoid it. And it is so critical in this election. It really is. It is staring us all in the face. And anyone who tells you that race does not matter is lying to your face. It absolutely does matter, for a whole number of reasons.

African-Americans who are engaged come to the polls because they feel this is a realization, to some degree, of the dreams of Martin Luther King. There's a big population of that.

White people who feel like this is a symbol. Other people who feel that Barack Obama is the best candidate. That's why they want to vote. Other people who feel John McCain is the best candidate. Whatever.

Race is so critical here. There's no question about it. It will be interesting -- and I don't think we can gauge it until hindsight, really, do people say one thing and then go vote another way?

ROBERTS: All right. Not that this would have made a difference at all, but last night we saw Tom Brokaw, who was a fine moderator and he's a terrific journalist, really trying to throw the rope around these candidates and keep them within the parameters of their own rules.

But I thought that the best moment was when they finally, very close to the end of the debate, allowed for a rebuttal. So we had the one minute reply on both sides and then we had a rebuttal back and forth, because that's where you really see the candidates mixing it up.

Do you think it would have been better if they had allowed that from the beginning?

TOOBIN: Totally. You know, the Commission on Presidential Debates is really the villain here, because they bend over backwards. They accommodate the candidates. They ought to say to the candidates, you know what, we're holding a debate. You -- it's a free-for-all...

O'BRIEN: Come or don't come.

TOOBIN: Show up or don't come.

HALPERIN: Jeff, I don't think the Commission has that power. They do not hold the ultimate card, which is the candidate's participation.

TOOBIN: Well, that -- but you know what?

Do you think these candidates are just not going to show up?


TOOBIN: These debates are totally...

HALPERIN: They'd stage -- they would stage their own.

ROBERTS: Yes, but they tried to use the thing, you know...

TOOBIN: I don't buy it. I don't buy it.

ROBERTS: ...OK, let's just make it a (INAUDIBLE)...

TOOBIN: I think...

ROBERTS: There's no rules...


HALPERIN: The commission has no standing or leverage with candidates who don't want to play by their rules.

TOOBIN: There is a history now of this commission running debate after debate, for, I think, four or five elections now. Let them hold the debate and let these chicken candidates not show up. These rules are awful. They ought to get rid of them and let people just talk.

ROBERTS: Mark, a rebuttal?


HALPERIN: I'm going to need 90 seconds.

O'BRIEN: Ready to back out of the way here?


ROBERTS: Sure, thanks.

HALPERIN: I -- they just -- the reality of how this works, I believe, in the past cycles is they don't have a lot of leverage. They need the candidates. And if the candidates come to the table and say we're going to negotiate a format, I don't think the commission can do much of anything.


TOOBIN: ...John McCain, I disagree with this one.

ROBERTS: OK, but what do you think, Soledad?


ROBERTS: We saw the candidates wanted to get out there with a rebuttal very early and Brokaw was reigning them in. Should he have just said, at one point, look it, you agreed to these rules...

O'BRIEN: Go at it.

ROBERTS: ...I'm willing to throw them out.

O'BRIEN: Go at it.

ROBERTS: I'll keep an eye on the time. Go at it.

O'BRIEN: Go at it. Yes. I think with some kind of format where you're actually guiding things, no question. And it's a town hall. I think people did want to hear some of the questions from the regular citizens.

But, yes, I thought it was frustrating, too, as did the people who were in the room. Every time people would -- you know, talk on top of each other and sort of get jabs in. And it was really annoying. And you would like to hear someone actually having a rebuttal and time for a rebuttal.

ROBERTS: We'll see if they loosen things up for the next debate.

We've got to run.

We're out of time.

Soledad O'Brien, Mark Halperin, Jeffrey Toobin, as always, thanks for being with us.

Lou Dobbs is getting ready for his show right at the top of the hour -- Lou, what are you working on?


Our economic leadership in Washington, if you can call it leadership, is out of control. Some say it's time for them to be out of a job.

This financial crisis could be far worse than anyone in Washington is acknowledging. The Federal Reserve giving the insurance giant, AIG, another huge loan -- $120 billion now the total. The stock market selling off for a sixth straight session. The Dow has lost 1,000 points in three days.

I'll be joined by some of the smartest economic minds in the country.

Also, Senators Obama and McCain are on the offensive after one of the most boring presidential debates in history and one in which both candidates lied through their teeth.

Do either of these men have the leadership qualities to be president?

Three top political analysts join me.

And spending by state and local government is out of control.

And guess who needs a bailout?

All to be paid for -- you guessed it -- by working men and women, taxpayers all.

Join us for all of that, all of the day's news and much more at the top of the hour -- all of that with an Independent perspective -- John, back to you.

ROBERTS: It will be an interesting program, no doubt.

Lou, thanks so much.

Michelle Obama is speaking out about the controversy over her husband's relationship with a former radical the McCain campaign portrays as a terrorist.

Plus, they've had the name for generations -- what the real mavericks think of John McCain.


ROBERTS: Susan Roesgen is monitoring stories incoming into THE SITUATION ROOM for us right now.

What have you got -- Susan?

ROESGEN: Some international news now, John.

Today, President Bush signed landmark legislation allowing American businesses access to India's multi-billion dollar nuclear market. This deal allows American companies to sell nuclear fuel technology and reactors to India in exchange for safeguards and U.N. inspections at India's civilian nuclear plants. This reverses a 30- year-old ban on that, imposed after India's first nuclear test.

And Justice Department attorneys are urging a federal court to block the release of more than a dozen Guantanamo Bay detainees. These are the 17 men, Chinese Muslims, who were taken into custody while they were fleeing Afghanistan for Pakistan in 2001. Yesterday, a lower court ordered the Bush administration to release those prisoners by Friday, saying they are no longer considered enemy combatants. But the Bush administration insists they still pose a security risk and it asked for a ruling on the standoff by the end of the day.

A small plane packed with tourists has crashed at an airport in Nepal near Mount Everest. Eighteen people were killed, almost all of them tourists from Germany, Australia and Nepal. However, the pilots -- one of the pilots, at least -- survived. Officials believe the plane's wheels snagged on a fence as it was landing in foggy weather.

And two American journalists are missing in Lebanon. Holli Chmela and Taylor Luck were vacationing in Beirut and disappeared last week, after telling friends that they were leaving for Northern Lebanon. They were scheduled to report to work in Jordan four days ago. The U.S. Embassy in Beirut is working with Lebanese security forces and the State Department to try to find them -- John.

ROBERTS: Let's hope that they're found safely.

Susan Roesgen, thanks.

In our Political Ticker today, Michelle Obama has just finished taping an interview with CNN's Larry King.

He asked about Sarah Palin's recent reflects to Barack Obama's alleged relationship with a former member of the 1960s radical group called the Weather Underground.


LARRY KING, HOST: She said that your husband pals around with terrorists.


KING: And she's referring to William Ayers, I guess.

M. OBAMA: Um-hmm.

KING: Do you know William Ayers?

M. OBAMA: Yes. Yes. Yes. Barack served on the board of the Annenberg Challenge with Bill Ayers. And...

KING: That was started by the Annenberg family, right?

M. OBAMA: Absolutely.

KING: Yes.

M. OBAMA: And Mrs. Annenberg, in fact, endorsed John McCain. So I don't know anyone in Chicago who is heavily involved in education policy who doesn't know Bill Ayers.

But, you know, again, I go back to the point that, you know, the American people aren't asking these questions.

KING: You don't think it affects the campaign?

M. OBAMA: You know, I think that we've been in this for 20 months and people have gotten to know Barack. He's written books. Books have been written about him. He, like all of the other candidates, have been thoroughly vetted.

And I think people know Barack Obama. They know his heart, they know his spirit. And the thing that I just encourage people is to judge Barack and judge all of these candidates based on what they do -- their actions, their character, their -- what they do in their lives, rather than what somebody did when they were eight.


ROBERTS: You can see the entire interview with Michelle Obama on "LARRY KING LIVE" tonight at 9:00 Eastern, 6:00 Pacific, only on CNN.

An Arizona pizza chain, Streets of New York, is offering presidential pizzas on its menu and keeping track of which pie is the hot sell. The McCain pizza features the senator's favorite toppings, pepperoni and onions. The Obama pie has a bit of an Hawaiian flair to it, pineapple and ham. A portion of the proceeds of the winning pie will be donated to that candidate's campaign.

Well, some supporters call John McCain the original maverick. But members of one Texas family say they are living proof that that claim is definitely not true.


ROBERTS: It's one of the hottest words on the presidential campaign trail.

So who's the real maverick?

Our Jeanne Moos has the Moost Unusual answer.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): He has branded himself...

PALIN: The maverick.

MCCAIN: A maverick of the Senate.

PALIN: Send the maverick from the Senate.

BIDEN: A maverick he is not.

PALIN: We're a couple of mavericks.

This team that is a team of mavericks.


UNIDENTIFIED MALE: The original mavericks.


MOOS: Hold your horses.



FONTAINE MAVERICK, DEMOCRAT: It's very irritating, because he is not a maverick.


MOOS: Fontaine Maverick says her family is the real original Maverick. Her Web site seeks to take back the family name that spawned the word we've come to know


MOOS: Back in the 1800s, Samuel Maverick didn't brand his cattle and they became known as Mavericks. The word came to mean an independent individual who doesn't go along with a group.

OBAMA: Pretty soon I'm going to have to start saying I'm a maverick.


JAY LENO, HOST: What should I call you?

PALIN: Maverick.

LENO: What should I call Senator McCain?

PALIN: Maverick.

LENO: How much do I have to pay you not to ever say maverick again?

PALIN: $700 billion a year.

LENO: I don't have that kind of money.

PALIN: Maverick.


MOOS: But guess who's not laughing?

(on camera): Members of the Maverick family say hearing John McCain is a maverick makes them want to shoot the TV -- it's like hearing fingernails on a chalkboard times ten. (voice-over): After all, they're liberal Democrats. Some family members have held office in Texas. They have nothing against the old TV show...




MOOS: They have nothing against "Top Gun."





MOOS: But when they hear the music from "Top Gun" at McCain rallies...


MOOS: must irk them. They know the McCain folks are free to use the word maverick. But...



MAVERICK: And I'm free to be annoyed by it.


MOOS: Maybe all the mockery helps.


UNIDENTIFIED CHILD: Sarah Palin is a maverick.

UNIDENTIFIED CHILD: Only a real maverick would wear these.


MOOS: From Swiss Kids for Truth to this Obama spoof of a McCain Strategy Session...


UNIDENTIFIED MALE: One word -- maverick.

UNIDENTIFIED MALE: He wants to overturn "Roe v. Wade".

UNIDENTIFIED MALE: Maverick. UNIDENTIFIED MALE: He doesn't know how many houses he owns.


UNIDENTIFIED MALE: We just keep saying maverick, maverick, maverick, until that's all they hear.


TINA FEY, COMEDIAN: We are not afraid to get mavericky in there.


MOOS: Sometimes getting branded hurts.

BIDEN: You can't call yourself a maverick when all you've ever been is a sidekick.


MOOS: But maybe only a true...

MCCAIN: Maverick.

MOOS: ...would inadvertently refer to his fellow citizens this way...

MCCAIN: This is the agenda I have set before my fellow prisoners.

MOOS: Coming from a maverick, no one even blinked.

Jeanne Moos, CNN, New York.


ROBERTS: And we want you to check out our political podcast. To get the best political team to go, room.

Thanks very much for joining us.

I'm John Roberts in THE SITUATION ROOM for Wolf Blitzer.

Up next, "LOU DOBBS TONIGHT" -- Lou.

DOBBS: Thank you, John.