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Obama Hoping for Groundbreaking Win in Virginia; McCain Seeks Joe-Mentum; Dow Dips, Credit Loosens

Aired October 17, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, a possible earthquake in Virginia. Barack Obama trying to do what no Democrat has done in more than 40 years, while John McCain fighting very hard right now to hold Republican ground.
President Bush makes a new appeal for confidence in the economy, and he's going to new lengths to work with world leaders on crisis management.

Plus, why Senate Democrats now are daring to think their wildest dreams -- they're thinking some of those dreams might actually come true.

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

In a presidential race jam-packed with never-before-seen twists, Barack Obama is positioning himself today possibly to break more ground. Only 18 days before America votes, the Democrat is campaigning in traditionally red Virginia. This, just two days after a dramatic change in CNN's electoral map, Virginia shifting from a tossup state to leaning toward Obama.

CNN's Suzanne Malveaux is covering the Obama campaign -- Suzanne.


Barack Obama used a new line today. He said that John McCain does not look like President Bush, he doesn't share his same Texas accent, but that they do share the same policies. This is a message that he certainly hopes will resonate with Virginia voters to turn this red state blue.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I'm sure Virginia's ready for change.

MALVEAUX (voice-over): Virginia hasn't put a Democrat in the White House in more than four decades, but Barack Obama says yes, he can.

OBAMA: Thank you, Roanoke.

MALVEAUX: The once solidly Republican state is up for grabs. Southwest Virginia is John McCain country. The northern part of the state Obama land. The key to an Obama win here will be voter turnout. OBAMA: I need you to talk to your friends and your neighbors. And if you will work with me and organize with me, we will not just win Virginia, we'll win this general election.

MALVEAUX: State officials say nearly 500,000 new voters have registered, many drafted by Obama's army of volunteers. Fifty field offices blanket the state, and Obama is nearly outspending McCain three to one in advertising.

This is Obama's seventh trip to Virginia since the primary, but his first time to Roanoke, located in a conservative part of the state Obama is trying to cut into.

OBAMA: I said you might want to try the Democrats for a change.

MALVEAUX: On this day, Obama took on McCain over his health care plan.

OBAMA: It's like those ads for prescription drugs. You know, they start off everybody's running in the fields and everybody's happy. Then there's a little fine print that says, you know, "Side- effects may include..."

MALVEAUX: Obama specifically addressed the needs of seniors, who make up 15 percent of Roanoke County voters.

OBAMA: It turns out Senator McCain would pay for part of his plan by making drastic cuts in Medicare, $882 billion worth. I don't think that's right. In fact, it ain't right.

MALVEAUX: A McCain spokesman responded saying, "John McCain's plans for health care do not punish struggling businesses with fines and taxes, and they certainly do not cut a single benefit for Medicare or Medicaid. Obama is simply lying."


MALVEAUX: An Obama spokesperson says that McCain needs to explain how he's going to cut out nearly a trillion dollars in Medicare without impacting services. John McCain is going to make his case here tomorrow when he comes to Virginia, and obviously to try to cut into Barack Obama's lead -- Wolf.

BLITZER: Suzanne, thanks very much.

And as you said, Senator McCain will be in Virginia tomorrow after a swing through Florida today. Senator McCain doesn't want to let go of traditionally Republican turf or, for that matter, his favorite new campaign talking point.

Let's go to Dana Bash. She's down in Florida, in Melbourne, Florida, right now, a critical part of that battleground state. What's the latest, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, the latest, you talked about the fact that John McCain doesn't want to let his new talking point go. This is evidence of it. This is what they're handing out outside of John McCain's rallies here in Florida, at least: "Hello, my name is Joe the Plumber." And we've had some sightings of various people here wearing these T-shirts coming in here.

But with regard to your question about red states, you know, Wolf, the fact that the Republican ticket, Sarah Palin and John McCain, split and they're both in states that were critical to George Bush winning, speaks volumes where they are right now.


BASH (voice-over): Embarking on a tour of red states he's desperately trying to keep from turning blue, John McCain is still channeling "Joe the Plumber."

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Senator Obama says that he wanted to spread your wealth around. All he had to do to say to "Joe the Plumber" and millions of small business people around this country, I won't raise your taxes. But he couldn't do that because he's going to raise your taxes.

BASH: McCain is not only using the plumber story to warn voters to watch their wallet with Obama, he's also now lashing out at his Democratic rivals for what McCain aides call disparaging comments about Joe Wurzelbacher.

From "The Tonight Show"...

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: We're kind of worried about, you know, Joe the fireman, Joe the policeman, Joe the real plumber with a license.

BASH: ... to the stump.

OBAMA: He's trying to suggest that a plumber is the guy he's fighting for. How many plumbers do know making a quarter million dollars a year?

MCCAIN: And Americans ought to be able to ask Senator Obama tough questions without being smeared and targeted with political attacks.

BASH: Meanwhile, McCain's campaign is also stepping up its attempts to link Obama to ACORN, a community organizing group now under federal investigation for alleged voter fraud in several battleground states.

Sarah Palin in Ohio...

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: And John and I are calling on the Obama campaign to release communications it has had with this group, and to do so immediately.

BASH: On a conference call with reporters, McCain campaign manager Rick Davis went even further, saying that because camp Obama won't come clean with connections to ACORN, a "cloud of suspicion" is hanging over the election.


BASH: And a spokesman for the Obama campaign says that they did give some money to an ACORN affiliate during the Democratic primaries just simply to get out the vote, but they haven't worked with the group since. And the spokesman for the Obama campaign also says that they never worked with ACORN on the issue that they're being investigated for, and that's voter registration -- Wolf.

BLITZER: There could be a dramatic announcement this Sunday, Dana. General Colin Powell, the former secretary of state, he's set, we are told, to come out finally and make an endorsement. We're not told who he's going to endorse yet, although he said very nice things about both of these candidates over the past several months. What are you hearing from sources whether in the McCain camp or elsewhere?

BASH: Well, it seems to be what you said, that it is much more likely that he would go for Senator Obama at this point than Senator McCain, according to all the signs that we've gotten from people around Colin Powell. But we don't have that firmed up yet.

But I can tell you just from the perspective of the McCain campaign, clearly, Wolf, that would be an enormous, enormous disappointment. I don't think anybody inside the McCain campaign or even McCain himself at this point in time thought because it's so late that Colin Powell would actually come out and endorse John McCain, but they were really hoping he wouldn't endorse Barack Obama. So if that happens, I think that would be more than a little bit of a punch in the gut, maybe even pretty politically damaging to Senator McCain in these last two weeks of the campaign -- Wolf.

BLITZER: I think you're right, Dana. Thanks very much.

We'll stand by. We're working the story. We'll see if Colin Powell is going to go forward and endorse Barack Obama.

Another volatile day, meanwhile, on Wall Street. The Dow Jones industrials closing down only within the past few moments, down more than 120 points. They were up more than 200 points earlier in the day before retreating. This amid a new sign the credit squeeze is easing just a bit. Bank-to-bank lending rates dipped, suggesting government moves to juice the economy are in fact, having an effect. We're watching this.

Meanwhile, President Bush said Americans will see more of an impact from the bailout in the weeks ahead.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: People look at this crisis and say, oh, it's only on Wall Street. I don't think so. As a matter of fact it, I know if we had not acted, it was going to affect the American people directly.

The actions will take more time to have their full impact. It took a while for the credit system to freeze up. It's going to take a while for the credit system to thaw.


BLITZER: Let's go to our White House correspondent, Elaine Quijano. She's working this story. Elaine, the president's got some important meetings with world leaders over the weekend. What's going on?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: That's right. At Camp David tomorrow, in fact, Wolf, President Bush is going to be sitting down with the presidents of France, as well as a European Commission, to talk about not only tackling the current financial crisis, but also discussing how to prevent another financial crisis from happening in the future. Now, aides say top administration officials will be on hand for that meeting, including Treasury Secretary Henry Paulson, as well as Secretary of State Condoleezza Rice, and National Security adviser Stephen Hadley.

Now, this Camp David meeting tomorrow is coming on the heels of the group of eight industrialized nations. The leaders agreeing that they will meet at some point in the "near future" to talk about the financial crisis. Asked about reports on whether or not European leaders might try to press President Bush tomorrow into setting a date for that meeting, here is how White House Press Secretary Dana Perino responded.


DANA PERINO, WHITE HOUSE PRESS SECRETARY: I think the most important thing we can do is make sure that we stop the bleeding here before we move on to the next project. We will move on to it. We will have a meeting. It will be one that has a robust and full agenda. But finding a date for that meeting and a location for that meeting really is not the top priority at the moment.


QUIJANO: And aides say do not expect any kind of announcements out of the meeting tomorrow. They say, look, with countries putting forward various ideas on how to prevent, how to reform the world's financial system, it's going to take time to decide whether or not those will work for individual countries, let alone a worldwide financial system. So they say at this point, don't expect any kind of decisions or policy moves to be announced after tomorrow's meeting -- Wolf.

BLITZER: Elaine Quijano working the story. Important meetings over the weekend on the economy.

Up ahead, John McCain's supporters say it's something you must know about Senator Barack Obama. And Obama's campaign is calling it -- and I'm quoting them now -- "despicable." You may hear exactly what Republicans want to tell you the next time you answer your phone if you're in a key battleground state.

And there's an air of mystery and suspense, as we've been reporting, surrounding Colin Powell. He's expected to make a big announcement this weekend. Will he endorse McCain or Obama? What will he say?

And Democrats are dreaming, but will it turn into a nightmare come Election Day? Bill Schneider standing by to report what we know, right here in THE SITUATION ROOM.


BLITZER: The Democratic vice presidential nominee, Joe Biden, speaking out in New Mexico right now. Want to listen in briefly to hear what he's saying.


BIDEN: -- Senator McCain's running mate. Now, this is serious stuff I'm about to say, and it's disappointing. And I hope it was just a slip on her part and she doesn't really mean it. But she said -- it was reported she said that she likes to visit "pro-American" parts of the country.

Ladies and Gentlemen, I like your senators and governor. I've been all over this great land. I've never been to a state -- I've never been to a state that hasn't sent its sons and daughters to serve and die for this country.

Right here in New Mexico right now, there are 1,400 Mexican sons and daughters -- New Mexico sons and daughters deployed in Afghanistan and Iraq. Thirty-six of them have already given their lives for this country.

Folks, it doesn't matter where you live. We all love this country, and I hope it gets through. We all love this country.


BIDEN: Folks, one of the reasons why Barack and I are running is that we know how damaging the politics of division that continues to be practiced by the McCain campaign, how damaging this policy of division has been for Americans over the last decade or more. It's put -- it's time to put this behind us.

Folks, it is not a corny thing. It's real. We are one nation, under God, indivisible.

We are all patriotic! We all love our country in every part of this nation! And I'm tired -- I am tired, tired, tired of the implications about patriotism!

Folks, that's the reason why Barack and I are running. We are absolutely, totally, thoroughly confident that we can get through these difficult times, and like every generation before us, be better for it.

The American people have never ever, ever ever, ever let their country down. Our greatest power -- our greatest power and our genius of our democracy is that we know -- we know we don't have to accept things the way they are. There's nothing that's beyond our ability to change it, Ladies and Gentlemen.

And folks -- folks, we can change this country. That's what we've always done. And great presidents have always turned dire circumstances into real opportunities.

And Ladies and Gentlemen, I believe Barack Obama will be a great president.

BLITZER: All right. Joe Biden there going after Sarah Palin, his Republican counterpart. We're going to get you the clip, exactly what she said that got him so irritated just now. We'll play it for you and we'll discuss later with our strategists. Stand by for that.

Also, this note. In the next hour it, Governor Sarah Palin herself will be speaking before a rally in Indiana. We'll go there live when she's up there behind the podium.

The next time your phone rings, it may be John McCain's supporters calling you. They say you need to hear something about Barack Obama, a man he worked with in the past. But the Obama campaign calling the so-called robo-calls despicable.

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

Ed, give us the background, tell us what's going on, because a lot of people may be surprised about what's happening in these, the final days of this campaign.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it's typical in the final days for it to just get nastier, and both parties decry these kind of attacks. But the fact is that each party has used this very tactic in recent years when it soothed their interest if their particular candidate was behind.

In this case, it's a $70 billion effort by the McCain camp and the Republican National Committee using, in part, these robo-calls. They're automated telephone calls that go out to people in bulk that really hit the other guy pretty hard.

It's all meant to try to get the Republican vote out to the polls. It's running right now in key states like Virginia, North Carolina and Ohio, and one of the calls really goes after Obama on the question of Bill Ayers, this former 1960s radical. It's pretty direct and pretty blunt. Take a listen.


UNIDENTIFIED MALE: Hello. I'm calling for John McCain and the RNC because you need to know that Barack Obama has worked closely with domestic terrorist Bill Ayers, whose organization bombed the U.S. Capitol, the Pentagon, a judge's home and killed Americans. And Democrats will enact an extreme leftist agenda if they take control of Washington. Barack Obama and his Democratic allies lack the judgment to lead our country. This call was paid for McCain/Palin 2008 and the Republican National Committee at 202-863-8500..


HENRY: Now, an Obama campaign spokesman said that this was a sign of desperation, that the allegations in these various phone calls are dishonest. There's not just phone calls about Bill Ayers, there are also phone calls that attack Barack Obama's national security credentials, attack him on the issue of abortion, for example. But the big question really is whether or not it's going to work.

The fact is that on the Ayers matter, John McCain has now talked about it openly in that third and final debate. Sarah Palin has used it out on the stump, accusing Barack Obama, in her words, of palling around with terrorists. And there's really no visible evidence that these attacks have worked so far.

Obviously the Republicans believe they want to give it one final shot in the final days, but so far there's no sign it's really working. In fact, it could even backfire with some of the swing undecided voters in the middle -- Wolf.

BLITZER: Ed Henry, thanks very much.

Barack Obama isn't the only one hoping to win big on Election Day. Senate Democrats also hope to see their dreams come true.

Our senior political analyst, Bill Schneider, is joining us right now. Bill, the Democrats, they have a lot of dreams. What are their wildest dreams?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Their wildest dream is to end up with 60 Senate seats, enough to stop Republican filibusters and control the Senate agenda.


SCHNEIDER (voice-over): Right now, each party has 49 Senate seats, but two Independents caucus with the Democrats, giving them a bare majority of 51 votes. To get to 60 votes, enough to control the agenda, Democrats need to pick up nine more seats.

Likely? No. Possible? Yes.

Of the 35 Senate seats up this year, 12 are currently held by Democrats and 23 are held by Republicans. Only one Democratic seat appears to be in any trouble right now -- Mary Landrieu in Louisiana. Louisiana may have lost as many as 100,000 voters since Hurricane Katrina three years ago, most of them Democrats from New Orleans.

Ten Republican-held seats look vulnerable this year, including three open seats where the incumbent is not running. Republican incumbents also look vulnerable in two states leaning toward Barack Obama, Minnesota and New Hampshire. In the tossup state of North Carolina, Elizabeth Dole is fighting for her political life. Democrats are accusing her of losing touch with North Carolina voters.


UNIDENTIFIED MALE: I'm telling you, Libby Dole is 93.


UNIDENTIFIED MALE: Yes, she ranks 93rd in effectiveness.

UNIDENTIFIED MALE: After 40 years in Washington?

UNIDENTIFIED MALE: After 40 years in Washington, Dole is 93rd in effectiveness.


SCHNEIDER: Oregon is a solid Obama state. So what's an incumbent Republican senator like Gordon Smith to do? Join the wave.

UNIDENTIFIED FEMALE: Who says Gordon Smith helped lead the fight for better gas mileage and a cleaner environment? Barack Obama.

SCHNEIDER: Alaska's a solid McCain state now that he's put Alaska's governor on the ticket, but incumbent Republican Senator Ted Stevens is far from secure. He's on trial for corruption right now.


SCHNEIDER: Stevens' fate will be decided not by Alaska voters, but by 12 jurors thousands of miles away in Washington, D.C. The first time District of Columbia voters ever got a chance to elect or defeat a senator -- Wolf.

BLITZER: Interesting stuff, as usual. We'll be counting down. Bill Schneider, thank you.

In these final days before America votes, both campaigns are intensifying their so-called ground game. We're keeping tabs on the fight, especially for Ohio, in our special battleground coverage.

And later, why many top military officers are refusing to cast a vote for president. Stand by for that.




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

Happening now, you could be paying less than $3 a gallon for gas for the first time in months. So what's not to like about falling gas prices? Stand by.

The longest-serving Republican in the U.S. Senate says he's done nothing wrong. Ted Stevens takes the stand to call the government's star witness a liar.

And it hasn't voted for a Democratic presidential candidate since Lyndon Johnson. Now Virginia leaning blue. Some Republicans say the McCain campaign has no one to blame but themselves.

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

The U.S. Supreme Court ruling today on a dispute over allegations of voter registration fraud in the battleground state of Ohio. The court blocked a lower court order requiring the Ohio secretary of state to do more to verify voter eligibility.

The Ohio Republican Party had asked for the changes, saying they would help prevent fraud. But the Democratic secretary of state accused the state GOP of trying to disenfranchise voters. The justices sided with the secretary of state on a legal technicality. There may be more court challenges, more wrangling once all the votes are cast in Ohio.

Our latest Ohio poll of polls, by the way, shows the race remains very close, with Barack Obama holding a two-point edge over John McCain in that battleground state.

Mary Snow is our battleground correspondent in Ohio. She's joining us now from Montgomery with more on what is going on.

The ground war is going to be significant. Who can get the vote out on that day, November 4? Will it be the Democrats, the Republicans? Mary, what are you picking up?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, certainly, these ground battles are intensifying. We're in suburban Cincinnati in Hamilton County, a county that is seen as key as to what will happen in Ohio. Campaigns are turning up the volume on calls, making more of them, knocking on more doors, also -- also concentrating on their get- out-the-vote efforts in some unconventional places.


UNIDENTIFIED FEMALE: Good evening. My name is Sophie (ph). And I'm a volunteer calling on behalf of the Ohio Republican Party.

SNOW: They are the foot soldiers on the John McCain side.

UNIDENTIFIED FEMALE: Behalf of John McCain (INAUDIBLE) Palin, and the entire Republican team, we are asking for your vote.

SNOW: And, on the Barack Obama side, the Obama team is hitting the ground with a novel approach. It's enlisted help from barbershop owners like Larry Joiner.

LARRY JOINER, BARACK OBAMA SUPPORTER: Any information that you want to get crossed -- across to people abundantly in masses, the barbershop and the beauty salons in the black community is an excellent place.

SNOW: Obama supporter Eric Kearney says the emphasis is on broad reach.

ERIC KEARNEY (D), OHIO STATE SENATOR: Talking to them where voters are, again, places like grocery stores, car washes, anywhere where people are, you have got to go out and reach them.

SNOW: Republicans have a different approach.


SNOW: McCain supporter Greg Hartmann told college Republicans the focus is to zero in on specific issues with targeted voters.

HARTMANN: We can have somebody deliver a message to one person at one household, and move to the next household, and talk to them about different issues.

SNOW: And what happens on this particular battlefield could be very telling.

ERIC RADEMACHER, PROFESSOR, UNIVERSITY OF CINCINNATI: Hamilton County is a real important to watch on Election Day, simply because it's an urban area in the middle of what John McCain would consider his home territory here in southwest Ohio.

SNOW: Hamilton county includes Cincinnati, an urban area where Obama is expected to do very well. It's surrounded by suburban areas that have deep Republican pockets. But the GOP says, that's no guarantee.

HARTMANN: We have had a rough two weeks, for sure. The numbers have slid since then. But, you know, I will tell you that Ohio's very winnable. Hamilton County is very winnable.

SNOW: The Obama team is trying to chip away at the Republican margins, targeting independents, senior citizens, and sees African- American voters and young voters as its key to victory.

KEARNEY: It's very pragmatic. It's very focused. And it's the strategy. It's like, follow the playbook, get it done, and reach as many people as you can.


SNOW: Now, the Obama team, Wolf, is hoping that high turnout will turn this county blue. That's something that's only happened once since 1940.

Republicans, meantime, are counting on their red streak and their money. The Center For Responsive Politics says, this is the highest money producer in this state. And John McCain has out-raised Barack Obama in this county -- Wolf.

BLITZER: Mary Snow, in the battleground state of Ohio, thank you.

November 4, Election Day, could also be independents Day. Independent voters could determine who becomes president. Just look at how close the race is in this battleground state, Colorado, right now. Obama leads in our CNN poll of polls by 6 percent, but 6 percent also say they're unsure in that state.

With only 18 days left in this contest, some people truly cannot make up their minds.

CNN's Dan Simon is also among our battleground coverage reporters. He introduces us to a married couple joined in a matrimony of political indecision -- Dan.


DAN SIMON, CNN CORRESPONDENT: Wolf, we're in Arapahoe County, inside the warehouse that houses the 1,200 or so voting machines that will be fanned out on Election Day.

We are in this county because it is truly representative of the rest of the state. About a third of the voters here are Republican, a third Democrat, and a third independent. It is a so-called swing county, and there are still some people out there who have yet to decide.

(voice-over): If you think everyone by now has pretty much made up their mind, then you haven't met Henry and Sue Wightman. Henry owns a plumbing business. Yes, McCain, here's another one. And like Joe the plumber, he likes your economic plan, too.

HENRY WIGHTMAN, UNDECIDED VOTER: You get to that profit stage, and then you get crushed with taxes. So, taxes are a big deal.

SIMON: Yet, Henry and Sue are both undecided in this election, even though both are registered Democrats. In 2004, she went for Kerry. He voted for Bush. This time around, Sue says she has changed her mind at least four times.

SUE WIGHTMAN, UNDECIDED VOTER: I actually like them both. I was leaning towards McCain for a long time. And then I read more about some of his stands on issues, and I have -- I have kind of swung back a little bit towards Obama.

SIMON: Henry, he seems to side with McCain on all the major issues, including Iraq.

H. WIGHTMAN: The war thing is -- though, on the flip side, the war thing, I feel more confident with McCain.

SIMON: Still, he can't seem to commit to McCain because he's drawn to Obama's personality.

H. WIGHTMAN: I think that's a big factor when he's leading the country, the -- the persona.

SIMON: They live in Littleton, Colorado, a Denver suburb and part of Arapahoe county, one of the state's biggest and most influential when it comes to elections.

NANCY DOTY, ARAPAHOE COUNTY CLERK AND RECORDER: I have heard that, as Arapahoe votes, so goes the state, and that could very well be true, because we have an even number of registered voters.

SIMON: In other words, the county has about the same number of Republicans, Democrats and independents, a microcosm of the state. The voter turnout is expected to be a record. Seventy percent of the voters here have requested mail-in ballots. People have already starred dropping them off. But don't expect Henry --

H. WIGHTMAN: Oh, I don't -- I'm glad it's not right now. I'm not prepared to make it, make the decision yet.

SIMON: Or Sue --

S. WIGHTMAN: I don't know. I just you really knew what they could do.

SIMON: -- to make a decision any time soon.

(on camera): Back in the warehouse, already a lot of activity here. Workers have begun the process of sorting thousands and thousands of mail-in ballots. About 70 percent of the voters in Arapahoe County vote by mail.

They're expecting a record amount of voters. And you can bet that, on election night, campaign officials will be looking at this county early to see which way the state might go -- Wolf, back to you.


BLITZER: All right, thank you, Dan Simon and Mary Snow, once again, who are both part of our new battleground coverage, the newest addition to the best political team on television.

By the way, these reporters are stationed in the key battleground states. And they're using expert political eyes to bring us stories about all the issues you care about. We want you to stay tuned for their reports.

Eighteen days and lots of speeches and promises to make. We're monitoring the White House hopefuls out there on the campaign trail. You're going to hear for yourself what they're saying about your money and your future.

And, in our "Strategy Session": Will he or won't he? The prospect of a presidential endorsement by Colin Powell this weekend -- we're standing by.

And a U.S. army video that simulates combat, is it a recruiting tool that, as critics say, turns children into killers? Stick around. You're in THE SITUATION ROOM.


BLITZER: The economy certainly a hot topic for Senator McCain as he addressed a crowd in Miami earlier today, along with his wife, Cindy, and Senator Joe Lieberman.

McCain continues to defend Joe the plumber, saying that more Americans need to ask Senator Obama tough questions.


MCCAIN: The question Joe asked about our economy is important, because Senator Obama's plan would raise taxes on small businesses that employ --


MCCAIN: -- that employ 16 million Americans. Senator Obama's plan will kill those jobs, at just the time when we need to be creating more jobs.


MCCAIN: My plan will create jobs. And that's what America needs.


MCCAIN: Senator Obama says that he wanted to spread your wealth around.


MCCAIN: And you know what? He could have had a simple answer to Joe's question. All he had to do to say to Joe the plumber and millions of small-business people around this country, "I won't raise your taxes."

But he couldn't do that, because he's going to raise their taxes.


MCCAIN: My friends -- my friends, when politicians talk about taking your money and spreading it around, you better hold on to your wallet.


MCCAIN: Senator Obama claims that he wants to give a tax break to the middle class. But, not only did he vote for higher taxes on the middle class in the Senate; his plan gives away your tax dollars to those that don't pay taxes.

(BOOS) MCCAIN: That's not a tax cut. That's welfare.


MCCAIN: America didn't become the greatest nation on Earth by redistributing the wealth. We became -- we became the greatest nation by creating new wealth.


BLITZER: All right, Senator McCain speaking earlier in the key battleground state of Florida, but a very different tone coming out last night. Both Senator McCain and Senator Obama, at least for a little bit, they stopped some of their tough barbs.

Listen to this.


MCCAIN: I don't want it getting out of this room, but my opponent is an impressive fellow in many ways.

OBAMA: I want to especially say a word of thanks to -- to Senator McCain.


BLITZER: They were lovely toward each other. So, what's with all the niceness in the midst of a heated campaign? Donna Brazile and Kevin Madden, they are standing by.

And the NTSB urging action on hundreds of planes that may have defective engines. Carrie Lee is following that story, information you need to know, right now, right here in THE SITUATION ROOM.


BLITZER: There's a huge story that is developing right now. Colin Powell, will he finally endorse one of these two presidential candidates? Is he leaning toward Barack Obama?

Stay tuned. We will be right back.


BLITZER: Barack Obama and John McCain, they mostly are trading political punches. But, last night, they traded some political punchlines. Their jabs turned into jokes at an annual charity event in New York City.

But, in the end, they both showed what seemed to be rather sincere and rare displays of admiration for each other. Listen to this.

(BEGIN VIDEO CLIP) OBAMA: I want to especially say a word of thanks to Senator McCain. We are in the midst of a tough battle right now. And American politics, at the presidential level, is always tough.

But I have said before -- and I think it bears repeating -- that there are very few of us who have served this country with the same dedication and honor and distinction as Senator McCain. And I'm glad to be sharing the stage with him tonight and during the course of this nomination.


MCCAIN: I don't want it getting out of this room, but my opponent is an impressive fellow in many ways.

Political opponents can have a little trouble seeing the best in each other. But I have had a few glimpses of this man at his best. And I admire his great skill, energy and determination.

It's not for nothing that he's inspired so many folks in his own party and beyond. Senator Obama talks about making history. And he's made quite a bit of it already. There was a time when the mere invitation of an African-American citizen to dine at the White House was taken as an outrage and an insult in many quarters.

Today is a world away from the cruel and prideful bigotry of that time. And good riddance.

I can't wish my opponent luck, but I do wish him well.


BLITZER: All right, a lovely moment there at that dinner last night.

Let's discuss in our "Strategy Session." Joining us, our political contributor the Democratic strategist Donna Brazile, and Republican strategist Kevin Madden.

That was nice, to hear both of them heaping praise on one another, very different from the barbs that we often hear out on the campaign trail.

DONNA BRAZILE, CNN POLITICAL ANALYST: I approve of that ad. Just -- I just wish they had the money to put it on the air, because I think the American people would like to see the candidates come together, no matter who wins.

And, of course, I have a preference. The next president will have to reach out to the other -- to his opponent and say, I need to you help me govern. So, that was a great moment.

But, unfortunately, we know, because of these robocalls and all of the other gutter politics, that, often, our politics leave a lot to be left. BLITZER: I mean, he spoke movingly, Senator McCain, about the historic nature of potentially what could happen in 18 days, an African-American being president of the United States.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: He did. And I think it was important, because, last night, that's a very charitable -- that's a charitable organization in that crowd, so they were very charitable to each other.

But I think that's one of the things that happens on a political campaign, especially a presidential campaign. These are grueling contests that really require an amazing degree, an amazing level of intensity. And I think that, during those contests, you also tend to start to see the -- the best of your opponent, that you start to -- start to essentially gain a mutual admiration for having gone through the contest.


And I remember after, for example, Bill Clinton beat Bob Dole in '96, you know what? They starred working together on projects. And even Bill Clinton and the first President Bush, we see them all over the world working on all sorts of projects.

MADDEN: And whoever goes back to the Senate is going to go back to the Senate with an incredible degree of leverage and be able to work with this president, no matter who wins.

BLITZER: Let's talk a little bit about Colin Powell right now, because he's going to be making some announcement this weekend, suggesting that he's leaning toward one of these two presidential candidates.

And I know that this hasn't been an easy decision for him, because he's very friendly, has worked with Senator McCain for a long time, but he also senses the history in Barack Obama.

I spoke with him back in February. And -- and I asked him which way is he leaning. And I'm going to play that little clip.


COLIN POWELL, FORMER U.S. SECRETARY OF STATE: It's a historic moment. It's pretty exciting, a woman, a black man who started out his life in Indonesia, and a father from Africa, Mrs. Clinton with great experience, and John McCain, a great American hero, who served this country so brilliantly over the years, both in war and in peace.


BLITZER: And he also went on to say about Senator Obama: "I think he has energized a lot of people in America. He has energized a lot of people around the world."

What do you think he's going to do, General Powell? BRAZILE: Well, I don't know what he will do, but, if he decides to endorse Senator Obama, it will be a very powerful statement, because General Powell is well-respected across the board.

I mean, a four-star general, he's worked with Republicans and Democrats. It would give Senator Obama a great deal of credibility in the closing days of the campaign.

BLITZER: What do you think he will do?

MADDEN: Well, I think that there's a good chance -- I think the McCain people are worried that there will be an endorsement.

And I think that Donna's right. What this will really do -- what it could do is -- a lot of those people who have lingering doubts about Barack Obama on the issue of readiness and experience, you know, Colin Powell will be able to -- he's somebody who's always been able to transcend party. And I think that that will sort of be like a laying on the hands of Barack Obama. And it could help him with a lot of those people, those Democrats that are still soft supporters of Barack Obama, and those independents who have yet to decide.

BLITZER: It could be a closer for some of those undecided, General Powell, on this issue where -- where Senator Obama is seen as maybe not as strong as on domestic economic issues, the whole issue of national security.

If General Powell were to come out this weekend and say, "You know what, he's got my vote for president of the United States," I think that would be a significant development.

BRAZILE: Well, throughout this campaign, Senator Obama has consulted with General Powell. He's consulted with Republicans from -- of all walks of life.

And I think this would be an important moment in our country's history, once again to tell people that it's time to come together, not to continue to divide each other.

BLITZER: And what does -- what does Senator McCain do under those circumstances? What can he do if General Powell were to say this weekend, you know what, it's time for the country to vote for Obama?

MADDEN: Well, he can't be dismissive of Colin Powell, because I think he's always -- always said that he is somebody he respects and somebody that he -- he listens to for a lot of the advice.

So, he just has to go out there and again make the contrasts, and essentially make the argument that endorsements don't matter. It's up to the American people to decide which one of these candidates are ready, which one of them have the experience and the judgment. And, clearly, John McCain needs to make that case better for himself better than he can for Barack Obama.

BLITZER: He said yesterday, Senator Obama, he's really nervous, and he can't become cocky or overconfident, because he knows what can happen in -- in these final 18 days.

BRAZILE: Well, he's talking to supporters. And I'm telling everyone also that, if you want to win on November 4, you better keep working every day as if your candidate is 10 points behind. Trust me. I have experience with this.


BLITZER: You were the campaign manager for Al Gore.

BRAZILE: Oh, yes.

BLITZER: Were you cocky, overconfident going into 2000?

BRAZILE: Always prayerful, never cocky.

BLITZER: What do you think?

MADDEN: No, I think Donna is absolutely right. I mean, every candidate I have ever worked, whether we were -- when we were winning, we had to act as if we were four points behind. You have to make sure that all your volunteers are still stuffing envelopes, making the calls, knocking on doors all the way up until Election Day.

BLITZER: Kevin Madden, Donna Brazile, guys, thanks very much.

BRAZILE: Thank you, Wolf.

BLITZER: We haven't heard the last of Joe the Plumber. The push to get him into elected office? That story coming up.

Plus, the candidates praise him, but General David Petraeus says he's not voting in this election -- why some of the top U.S. military brass say, staying away from the voting booths, for military officers, is important. We will explain. Barbara Starr is at the Pentagon.

And it looks like the latest video game, but it's actually a recruiting tool for the U.S. Army -- why some say it's not playing fair.

Stick around. You're in THE SITUATION ROOM.


BLITZER: On our "Political Ticker" today: a new slew of newspaper endorsements for Barack Obama. "The Chicago Tribune" and "The Washington Post," "The San Francisco Chronicle," "The Charleston Gazette" in West Virginia all coming out in favor of Senator Obama. It's the first time, by the way, that "The Chicago Tribune" or "The Los Angeles Times" has endorsed a Democrat for president in the history of either paper. Wow.

Move over, Tina Fey. Sarah Palin is set to appear on "Saturday Night Live" this weekend. No word yet on whether Fey will also be on hand to do her dead-ringer impersonation of Governor Palin.

We do know who is the show's host, Josh Brolin, the actor who plays George W. Bush in director Oliver Stone's new film, "W."

Joe the Plumber's political star keeps rising. There's a new Web site aimed at drafting Joe Wurzelbacher to run for Congress in his home state of Ohio. The group wants -- the group behind the site wants Wurzelbacher to challenge Democratic Congresswoman Marcy Kaptur in 2010. The Web site urges the man who was mentioned numerous times during the final presidential debate to save America from going down the drain.

In other political-related news, check out this. McCain supporters greeted Barack Obama in Virginia today waving plungers. And some wore Joe the Plumber T-shirts -- that coming up.

Also, Roy Blunt and Claire McCaskill will be among my guests Sunday, this Sunday, on "LATE EDITION." "LATE EDITION" airs Sunday morning, 11:00 a.m. Eastern.

And, remember, for all the latest political news any time, you can always check out That's where you can download our political screen saver and check out all the other political news.

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