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CNN LATE EDITION WITH WOLF BLITZER

Interview With Senators Kyl, Bayh

Aired October 26, 2008 - 11:00   ET

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


WOLF BLITZER, HOST: This is LATE EDITION, the last word in Sunday talk.
(BEGIN VIDEOTAPE)

BLITZER (voice-over): Nine days left.

SEN. JOHN MCCAIN, R-ARIZ.: The answer to a slowing economy is not higher taxes.

SEN. BARACK OBAMA, D-ILL.: It's time to turn the page on eight years of economic policies that put Wall Street before Main Street.

BLITZER: As the clock ticks down, the campaigns are going all out. But who has a better plan for issue number one, the failing economy? We'll ask Indiana Senator Evan Bayh, a supporter of Barack Obama, and Arizona Senator Jon Kyl, who's backing John McCain.

MCCAIN: When you are in an extraordinary crisis, obviously, you have to take extraordinary measures.

BLITZER: In my one on one interview, John McCain spells out the details of these extraordinary economic measures.

GOV. SARAH PALIN, R-ALASKA: Someone called me a redneck woman once. And you what I said back? I said why, thank you.

SEN. JOSEPH R. BIDEN JR., D-DEL.: I know Halloween is coming, but John McCain as a candidate of change? Whoa, come on.

BLITZER: Yes, they are good on the stump. But from pricey wardrobes to scary scenarios, are the vice presidential candidate actually hurting their running mates? We'll discuss that and the final campaign strategies with the best political team on television.

LATE EDITION's line up begins now.

(END VIDEOTAPE)

BLITZER: It's 11:00 a.m. here in Washington, 8 a.m. in Los Angeles and 6 p.m. in Baghdad. Wherever you are watching from around the world, thanks very much for joining us for LATE EDITION. As this dramatic presidential race enters its final days, John McCain and Barack Obama are out there on the campaign trail and they are hammering away at the No. 1 issue with voters, that would be the troubled U.S. economy. Joining us now to discuss that and much more, two leading members of the U.S. Senate. In Phoenix, the Senate's second ranking Republican, Jon Kyl of Arizona. He's strongly supporting John McCain. And here in Washington, Senator Evan Bayh of Indiana, he's strongly supporting Barack Obama.

Senators, to both of you, thanks very much for coming in. Senator Kyl, let me start with you and play for you this clip of Senator Obama in Indianapolis on Thursday hammering away at Senator McCain's policies. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: John McCain strongly defended the bush policy of lavishing tax cuts on corporations, including those that ship American jobs overseas. He made kind of a strange argument that the best way to stop companies from shipping jobs overseas is to give more tax cuts to company that is are shipping jobs overseas.

(END VIDEO CLIP)

BLITZER: Do you support Senator Kyl, Senator McCain in this notion of reducing the corporate tax races, including for those companies that are shipping, as he says, jobs overseas?

KYL: A couple things wrong with the foundation of the question. First of all, there was no tax cut for corporations shipping jobs overseas. But it is true that John McCain supports reducing the corporate tax rate, as well as keeping the rate for small businesses low because to the extent they both create jobs here at home. They rely upon a favorable economic client and low taxes.

If you go to a country like Ireland, for example, you've got an 11 percent tax rate. What John McCain is proposing is that the corporate tax rate come down from 35 to 25. That would still make it higher than most of the competing countries, but right now, we have the highest corporate tax rate in the world, except for Japan. And so our companies can't compete as well here in the United States. Why not go to Ireland where they don't have to pay as much in taxes?

BLITZER: All right, a fair argument. Senator Bayh, what do you say?

BAYH: Barack Obama wants to target middle class families for tax relief, Wolf. Independent analysis showed that he would do three times more for middle class families than Senator McCain's proposal. He would make college more affordable with a $4,000 tax credit. He would reach out to small businesses and provide a 50 percent tax credit for their health care cost. And his approach to creating jobs is to provide a $3,000 tax cut for small businesses that create new jobs. So I guess the final thing I'd like to see though, your viewers are pretty smart and they'll listen to Jon. They'll listen to me. They'll listen to candidates. But we have tried these policies before. Barack Obama has more or less embraced the approach of Bill Clinton and the economy grew -- let me finish. John McCain has embraced the policies of George Bush more or less and they brought us to where we are. I think most people want a change.

BLITZER: The argument though that if these American companies can go overseas where there's a much lower corporate tax structure, isn't that an incentive to them to go to Ireland or go someplace else and save money and take the jobs with them in effect?

BAYH: The international tax system is very complicated. There are things that effectively reduce the tax rate for American companies here at home -- doing business overseas. And Barack Obama wants to make it easier to create jobs, as I mentioned Wolf -- a $3,000 tax credit for every job you create. Accelerated expensing for small businesses. As a matter of fact, he actually has a lower capital gains tax rate -- I know this is something near and dear to Jon Kyl's heart -- a lower capital gains tax rate for entrepreneurs and people who invest in small business because he wants to reduce that to zero.

BLITZER: Is it realistic, Senator Kyl, and you're the second ranking Republican in the Senate. At a time when there's a half trillion dollar budget deficit this year and it could go up to $700,000, maybe even a trillion dollars. The national debt gas from $5 trillion to $10 trillion over the last eight years. Is it realistic to think that any of these tax cuts are in the cards right now, given what's going on with the economic crisis?

KYL: Wolf, I've got here a headline, "How is Obama going to raise $4.3 trillion?" This was a piece by Alan Reynolds in the "Wall Street Journal" this week in which he points out that Obama would have to raise $4.3 trillion over 10 years to pay for all of the things that he said he was going to pay for.

BLITZER: But Senator McCain's very, very ambitious tax cuts are going to cost a lot of money as well.

KYL: Could I just finish this thought, please, because your question was, in a time of economic disruption, to say the least, I think recession, do you want to raise taxes to pay for this kind of spending?

And what Obama says is he's going to raise taxes on the wealthy. Do you know how much he would get? He would get about $30 billion a year. What he has to raise $430 billion a year.

So in terms of the deficit, if that's the primary concern, Obama would create the largest debt tat the country has ever seen with more spending and more taxes, exactly the wrong policies when you're in the time of recession.

So that's why we need to keep the tax rates right where they are, except in a couple targeted areas, on capital gains and corporate tax rates, where you can actually increase the opportunity for job creation and not raise the tax on small business, which is what Barack Obama would do.

BLITZER: Let me let Senator Bayh respond and I'm going to play for you this clip of what Senator McCain said at a rally in Denver on Friday, because he makes a similar point. Listen to this. (BEGIN VIDEO CLIP)

MCCAIN: To pay for nearly a trillion dollars in new government spending, his tax increase would impact 50 percent of small business income in this country and the jobs of 16 million middle class Americans who work for those small businesses. I'm not going to let that happen to you, my friends.

(END VIDEO CLIP)

BLITZER: All right, Senator Bayh, go ahead.

BAYH: Well you raised a couple of good points, Wolf. First, on the budget deficit, it is a big problem. And independent analysts have looked at the proposals of both candidates. Both the tax side, which you mentioned, and the spending side, which John mentioned, and they totaled it up. And they concluded that Barack Obama's would be actually several hundred billion dollars better in term of keeping the deficit from growing than John McCain's when you add up both the taxes and the spending -- tax cuts and the spending.

Now, on the tax cut side, anybody who makes below $250,000 a year, which is the vast majority of Americans and the vast majority of small business people is going to get a tax cut under Barack Obama. It's a question of priorities and you raised a very good point. With the kind of deficit that we have, how are we going to be able to fulfill all of these proposals? You're going to have to set priorities.

Barack Obama's priority is tax cuts for the middle class. And if we have to do further tax cuts for the well to do, well in a time of scarce resources, that would be the priority that he would set. Remember when he cut taxes for everybody? When we had a surplus? We cut taxes for everyone. Now we no longer have that surplus and if we are going to have further tax cuts, maybe we should focus on those folks who actually need it most.

BLITZER: You know, it's interesting Senator Kyl that earlier today on "Meet the Press," Senator McCain really went further than he has in recent days in trying to distance himself from President Bush and the policies of the past eight years. I'm going to play a little clip for you. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: I am not George Bush. The fact is that I was not popular within my own party. The fact is that when I said, we were failing in Iraq and we were going to lose, I was criticized by Republicans. When I did campaign finance reform with Russ Feingold, I was opposed by my own party and my own president.

(END VIDEO CLIP)

BLITZER: He then went on to offer several more examples where he disagrees pretty strongly with President Bush and the policies of the past eight years. Are you comfortable with the Republican presidential candidate so publicly going out and saying, "You know what, I don't like what's happened over the past eight years of Republican White House control?"

KYL: Well, that's an exaggeration of what he said. Look at his examples. For example, John McCain was the first one to call for more troops in Iraq in a different strategy, the surge.

KYL: Eventually, the Bush administration agreed with John McCain and the surge was implemented. It's been a great success. The only one who apparently hasn't been willing to acknowledge that is Barack Obama.

So, yes, there are differences between McCain and the Bush administration. And John McCain, I think, has been proven right.

Also, I wish that President Bush had vetoed more of the big spending legislation that John McCain rightly says he criticized.

By the way, I've just got to respond to one thing that my friend Evan Bayh said. Bob Schieffer, in the last debate, said, and I quote, "The nonpartisan Committee for a Responsible Federal Budget ran the numbers and found otherwise."

And what he was referring to is that talking point about the comparison between the Obama and McCain tax cuts and who they would help.

That's quoted in the same piece by Alan Reynolds that I pointed out, in which Barack Obama would spend -- have to spend $430 billion a year more to satisfy all of the things that he's promised. And he's only going to get about $30 billion a year more with these tax increases on the upper two tax brackets, and hurt small business in the process.

BLITZER: Let me let Senator Bayh respond to that. Go ahead.

BAYH: Well, we can all cite our studies. But I think that the American people understand, Wolf, that when the price that John McCain had to pay -- and I like John McCain -- but the price he had to pay to win his party's nomination was to embrace the Bush policies.

Back when he was running for the nomination...

KYL: What policies?

BAYH: Back when he was running for the nomination, he said he agreed with President Bush on "virtually every major issue." That's a direct quote. He voted with him 90 percent of the time. So...

(CROSSTALK)

KYL: And which one was wrong?

BAYH: Excuse me. That's just a fact.

So, if you like the way things are; if you think the economy is going well; if you think the policies of President Bush have succeeded, you should vote for John McCain.

(CROSSTALK)

BAYH: If you think we can do better and we need a change, you should support Barack Obama.

KYL: What policies of the Bush administration created the problem we are in today?

The problem started with the fact that we didn't have enough regulation of Freddie Mac and Fannie Mae, something Republicans and the Bush administration were pushing for and your Democratic colleagues opposed. That was the beginning of the problem of the housing bubble.

George Bush doesn't run the economy. He didn't create this problem. His tax rates being lower actually helped, for six years, to create the second largest economic growth that we've had in the history of the country in recent years. So...

BAYH: Well, it sounds like you're agreeing that -- with John McCain when he says that economics and running the economy is not his strong suit. Apparently, it wasn't George Bush's strong suit, either, Jon, because, according to you, the president doesn't have much to do with the economy.

So we shouldn't even be talking about taxes and spending and jobs because, according to you, the chief executive of the country doesn't have much to do with that.

KYL: First of all...

BAYH: We have a different point of view. We think the president should lead on economic policy, to create jobs, foster investment and business expansion. The policies of the last eight years have not done very well.

KYL: The Bush tax cuts created this growth, coming out of a recession, creating six years of economic growth. Do you want those tax rates, which have been responsible for this economic growth and job creation, to go back up?

(CROSSTALK)

BLITZER: Very quickly?

BAYH: Wolf, therein lies the fundamental difference. John McCain says he thinks the fundamentals of the economy are sound, that we've made, quote, "great progress" these last eight years. My friend Jon Kyl apparently believe that as well.

I think we can do better. And I think the American people believe we can do better, and that's what Barack Obama stands for.

BLITZER: OK, Senator Kyl, very quickly, I'll give you the last word. KYL: Not by raising taxes, particularly not in a time of recession. Don't raise taxes on the small businesses that create 80 percent of the jobs in the country. Keep taxes where they are.

BLITZER: Senator Kyl, Senator Bayh, thanks to both of you for coming in. A good, serious discussion on issue number one, the economy.

Still to come, James Carville, Donna Brazile, Alex Castellanos, and Leslie Sanchez. They're standing by live. We'll talk about these final nine days of the presidential campaign.

But, just ahead, John McCain in his own words, what the Republican presidential candidate's prescription for the ailing economy. You're going to want to hear what he told me this week in Manchester, New Hampshire.

You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: Coming up in our next hour, two influential congresswomen join me to discuss an emerging issue in the campaign: Will the Democrats sweep Capitol Hill and the White House?

But now, my one-on-one interview with Republican presidential candidate John McCain. As we sat down in Manchester, New Hampshire, this week, we began our conversation with a hard look at the economy.

(BEGIN VIDEOTAPE)

BLITZER: Senator McCain, thanks very much for joining us.

MCCAIN: Thank you for having me on, Wolf.

BLITZER: Let's talk about issue number one, as we call it, the economy.

Colin Powell was pretty biting in his criticism. He said you were a little unsure of how to deal with the economic crisis. You seemed to have, he said, "a different approach every day."

He sensed you didn't have a grasp of the economic crisis the American people are going through right now. I wonder if you'd like to response to Secretary Powell?

MCCAIN: I just have to say that I'm happy to have the endorsement and support and belief of five former secretaries of state, Henry Kissinger, George Shultz, Jim Baker, Larry Eagleburger, and General Al Haig, and over 200 retired military generals and admirals that have supported my campaign. I respect General Powell, but I respectfully disagree. I especially disagreed when he said the comments that he made about Governor Palin, the most popular governor in America, a governor who knows energy issues, $40 billion pipeline, reformer, took on the governor of her own party. And I hope that sometime General Powell will take time out of his busy schedule to meet with her. I know she'd be pleased to meet with him.

BLITZER: But on the economic issues, his criticism was that you were going back and forth on some of the specific issues, and he didn't like that. He thought that Senator Obama had a consistency in his approach.

(LAUGHTER)

MCCAIN: All I can do is laugh. We've been very consistent about cutting spending, cutting taxes, and the fundamentals of our economic message.

Senator Obama's been al over the place, including wanting to, quote, "raise taxes on only the rich," 95 percent tax cut for 95 percent of Americans, when 40 percent of them pay no federal income taxes as it is.

You know, whatever it is, he's changed. Look at the positions that he held on tax increases when he was first running in the primary and look at them now. They're vastly different.

And the fundamental difference -- and maybe Secretary Powell agrees with him; I don't know -- but to spread the wealth around is certainly not something that I would ever do -- that I would ever do.

BLITZER: Do you agree with Ben Bernanke, the chairman of the Federal Reserve, who said this week -- who said that said it's now a good time for a second economic stimulus package, seeming to join hands with Nancy Pelosi and Harry Reid.

Is it a good time to do that, to come up with another $150 billion stimulus package?

MCCAIN: I would be glad to look at anything that could be helpful to our economy. I respect Ben Bernanke.

MCCAIN: I'm sick and tired and the American people are sick and tired of the pork barrel spending. Why don't we cancel the $18 billion in pork barrel projects that we put in last year, at a minimum, and use some of that money to help stimulate the economy as well, instead of bridges to nowhere and projectors in planetariums, such as Senator Obama asked for?

He asked for nearly $1 billion in pork barrel projects. Why don't we ask those -- him to make give -- make sure that money that was given to pork barrel projects back to helping American families? And then I think that Americans would be more likely to support such a thing.

Approval rating of Congress is at 9 percent. No wonder. We have put out -- we have got a $10 trillion debt to our kids, $500 billion to China. We don't want to continue that spending practices. And Americans are sick and tired of it. BLITZER: But you voted for that $700 billion rescue plan, or bailout plan, even though it had another $100 billion or so in unrelated expenditures that some would call pork or earmarks, whatever.

MCCAIN: Yes. So did...

BLITZER: Where would you, as president, draw the line between vetoing that kind of spending bill or accepting it because of the greater good that it also includes, as you decided in the bailout?

MCCAIN: I would have vetoed literally every spending bill, even those that I had voted for, if I were president of the United States, and made them famous, the way Ronald Reagan did.

Let's have no doubt about this situation. We've presided over the largest increase in the size of government in the last eight years than any time in history. So we can take a hatchet and we can take a scalpel and we can reduce the spending. And we can start by vetoing the normal appropriations bills. We all know that we are in a situation of severe financial crisis. And the Democrats shouldn't be proud of adding $100 billion in pork barrel spending. They should be embarrassed.

BLITZER: But you voted for it too.

MCCAIN: I had to vote for it, obviously, when we were in a situation of huge financial crisis. But we wouldn't be in the crisis we're in if a couple of things hadn't happened.

One, $10 trillion of debt, dramatically overspending, increasing the size of government, and Democrats defending Fannie and Freddie in their outrageous practices which put us into the ditch to start with. The same people that are for the rescue package are the same people that defended Fannie and Freddie, and when some of us proposed legislation to fix it. And so we should have started long ago towards vetoing these bills.

When you are in an extraordinary crisis, obviously you have to take extraordinary measures.

BLITZER: We asked some of our viewers to send us some questions, I-Reports, as we call them.

We got one from Steve Urquhart of Quincy, Massachusetts. He says he plans to vote for Obama, but he considers himself an Independent.

(BEGIN VIDEO CLIP)

STEVE URQUHART: Senator McCain, don't you think it is hypocritical for you to be accusing Senator Obama of being a socialist, when you also signed on to the $750 billion bailout of our financial system?

(END VIDEO CLIP)

MCCAIN: Well, thanks, Steve.

We all know that we are in a severe financial crisis. And the big mistake that the administration has made now, and the secretary of treasury, is not going out and buying up these home loan mortgages that are bad, and give them back to the homeowners at a mortgage rate they can afford and stay in their homes.

It was the housing crisis that started this. It is the housing values that are going to start getting us out. During the Depression -- Senator Clinton suggested -- the Homeownership Loan Corporation, which we did -- which was an enactment of the Depression era, and we ended up having more money go back to the Treasury.

Instead, we are bailing out the banks and other institutions that were complicit in this. So, extraordinary circumstances require extraordinary action.

BLITZER: Because you do want to spend...

MCCAIN: But it was a failure. And if we had done what I wanted done, and what I have fought for, for reform and transparency, and fixing Fannie and Freddie, as I did, we wouldn't have been in the situation we are in, and I wouldn't have been faced with a decision of whether to vote for it or not. We never -- it never should have happened.

BLITZER: Because you want to use $300 billion of that $700 billion to buy up what are called these bad mortgages, and then try to renegotiate them at a reduced price. Is that too much...

MCCAIN: Not try to. It's exactly what we did during the Depression. It is not a new invention.

BLITZER: But is too much federal government involvement in the free market system?

MCCAIN: Of course it is. But we are in an extraordinary crisis.

The homeowners are the innocent bystanders in a drive-by shooting by Washington and Wall Street, greed, excess, and corruption. So, why shouldn't we help? The first role of government is to help people who are in crisis or need. That is why we have government. But, if we had not done what we did to set this whole house of cards up, we wouldn't be faced with these situations we have today. I'm proud of my record of reform, taking on my own party. Senator Obama has never taken on his party on any major issue. And that is just a matter of record. And he is the most liberal senator, and the biggest taxer and the biggest spender. That's not the way out. We have stark differences.

(END VIDEOTAPE)

BLITZER: And we're going to have part two of my interview with Senator McCain, that's coming up in our next hour. Also coming up, John McCain's real estate on the electoral map appears to be shrinking. What does he need to do to try to turn things around and do it quickly? We'll get insight from James Carville, Donna Brazile, Alex Castellanos and Leslie Sanchez. They're standing by live. And our own Ed Henry, he's standing by live in the battleground state of Ohio. We'll go there when LATE EDITION continues.

(COMMERCIAL BREAK)

BLITZER: With only nine days to go until the presidential election, both national as well as battleground state polls are indicating a very tough road for John McCain right now. Here with their take on where this race stands are CNN contributors for the best in the business. Democratic strategist James Carville is in New Orleans, Republican strategist Alex Castellanos is in Boston, Republican strategist Leslie Sanchez is in New York and Democratic strategist Donna Brazile, she's with me right here in Washington, D.C. Guys thanks very much for coming in.

Let me read to you from what an unnamed McCain adviser told our reporters here at CNN. There's a lengthy story on it at CNN.com. For those of you who want to get there, you can read it. They are referring to what's going on in the McCain campaign right now, specifically Sarah Palin, the vice presidential candidate.

One adviser saying, "She is a diva. She takes no advice from anyone. She does not have any relationships of trust with any of us, her family or anyone else. Also, she is playing for her own future and sees herself as the next leader of the party. Remember, divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom." Wow, that's a pretty strong comment coming from a McCain adviser, Alex. What's going on? Because it looks like the finger pointing has already started.

CASTELLANOS: Well, that's what happens sometimes in the campaign when things are not going too well. I don't think that's exactly an accurate picture of what's going on. One thing we all know about presidential campaigns, the new vice president nominee is always very heavily scripted. Every single word that comes out of Sarah Palin's lips really for the past month or so, has been scripted by the campaign.

So for the campaign to say that she's not reflecting what they intend her to say I think is very misleading. As a matter of fact, I'm told that when she was on the airplane and got that copy of the speech about William Ayers and Obama palling around with terrorists, I'm told that her instincts were, that's not a good place for the campaign to go. But she was talked into doing that by the campaign. And so her instincts, I thought in that case were better than the campaign's. And she was a loyal trooper and did her job. But I think it's unfair for the campaign to do that.

BLITZER: Let's bring in James first. James, you have been around a lot of campaigns. Many of them winning, I think, in your case, but not all of them.

CARVILLE: Not all of them.

BLITZER: Give us your perspective as a Democratic strategist. CARVILLE: Wolf, Paul Begala and I wrote a piece, called "The Finger Pointing Begin" on October 20th. And they've taken our advice. And obviously the Palin people point at McCain people and McCain people at Palin people. And you have the eggheads pointing at the ditto heads. And today's paper, everybody blaming everybody. David Frum and David Wolfe blaming Rush Limbaugh. And they call it a triage in the party and everything else. This is what happens when a campaign falls behind, if it falls apart. And right now the entire right wing movement of the United States is pointing at each other. And this is going to continue to happen.

BLITZER: Leslie, it looks sort of ugly out there.

SANCHEZ: You know Wolf, it does, but I don't think that's unusual to campaigns. I think with respect yes, it's a competitive race. Yes, John McCain is behind.

But listen to what he was saying earlier. As long as if he's within four to six points, it is a competitive race. There are going to be people that are either circling the wagon or shooting in. But bottom line, I think with Governor Palin, she's been a strong candidate and she can't win either way. In one sense, she's too scripted, too controlled by the campaign. On another, she's exerting her authority and reflecting her own views. I think the bottom line, the answer is probably right down the middle. And it's going to continue to tighten up in this race.

BLITZER: You know Donna, one of the intriguing things from this anonymous quote, from this McCain adviser, she sees herself, we're talking about Sarah Palin, potentially as the next leader of the Republican Party if in fact McCain loses. And that's still a big if, because there are nine days to go. But do you see her, potentially as the leader of the Republican Party, if McCain loses?

BRAZILE: She'll be in a cast of thousands. I'm sure Mike Huckabee and my home state governor, James' home state governor, Bobby Jindal any many others will see themselves as leaders of the Republican Party. But you know Wolf? This is a symptom of a campaign that's falling behind. When you see staff people attacking the candidate, saying sloppy, unready, that's a sign that the campaign has turned internal at a time they should be putting on the last minute attempt to convince undecided voters. It's a terrible sign for the campaign.

BLITZER: How much of a problem, would you say, Alex, the whole clothing, make up, hair issue has been for Sarah Palin and for the Republican ticket. We did some checking, she spent as you know about $150,000. Not she, but the Republican National Committee put up the money at Saks and at Neiman Marcus. But look at this, a make-up artist for the first half of October, the RNC spent $22,800 for her make-up. That compares to McCain's chief foreign policy adviser who got $12,500. The hair stylist got about $10,000 for the first half of October, compared to the senior communications staffer who got $12,000. How much of a problem is this for the woman who says she is a hockey mom? CASTELLANOS: Oh I think we all know that she's pretty frugal up in Alaska. But looking good for the TV cameras, for CNN, is expensive, Wolf. You know how that is, Wolf. And besides that, all the clothes. It's going to be a cold winter in Alaska. We have to get ready.

Look, this is a minor distraction. Nobody really cares about this. This is not central to their lives. What is central is that Sarah Palin actually did something remarkable for the McCain campaign. She gave him a message. John McCain has been the outsider, the maverick, the guy who is going to change Washington. But he couldn't give his own campaign that message until Sarah Palin came along. Vice presidential nominees usually don't do that. She did that for him. And those were the best, that was the best month of the campaign until her standing was eroded I think by a lot of the attacks and then the economic meltdown.

BLITZER: There's no doubt, James, that she did rally the base. If that was her mission, she did an incredibly excellent job rallying the conservative religious base of the Republican Party. But at that point, it was up to John McCain to bring in the Independents, the undecideds, the middle of the roaders. But a lot of them say they were turned off by what Sarah Palin said and what she stood for. So it seemed she did some good for the Republicans, but she also did some bad.

CARVILLE: Wolf, she did rally the conservative base. That's a very fair analysis, Wolf. But she also -- again, this is this egghead, ditto head divide they have. A lot of highly respected conservative intellectuals just out and out question her ability to be president of the United States. And this is part of the civil war that is going on in the Republican Party. If you look at the "New York Times" Sunday magazine section today, Robert Drake, an excellent journalist, they were all pointing fingers about how the McCain campaign had different messages and things like this. This is a very typical of a party and a movement that is falling apart before an election. I think they're going to have a hard time to maintain this between now and Election Day.

BLITZER: Go ahead, Leslie.

SANCHEZ: Wolf, if it's not unusual for economic conservatives and social conservatives to clash within the Republican Party. That's been happening historically. You're exactly right. Governor Palin mobilized this base and got it so John McCain could be within four points. Look at the Reuters/C-Span/Zogby poll came out last night or basically early this morning, shows within five points, that John McCain is closing that gap with incomes of $35,000 and higher.

If he can continue to maintain that, and even if you look at the fact you take out California and New York out of that, you look at the other 48 states, it is really probably closer to dead even. This is still a competitive race. And before people are writing the eulogies, I think you need to focus on the positives.

And the last thing, with respect to this make-up stuff, why aren't we talking about what Hillary Clinton spent? Why aren't we talking about Michelle Obama who has her own traveling staff as well? I just think it's sometimes disingenuous just to focus on one and all the others.

BRAZILE: Let me just say two things. She's been quite alienating to Independents who clearly are the majority in this election, the majority of undecided voters. Certainly on the make-up, clothing scandal, so to speak, historically women candidates have faced obstacles and discussing policy issues when many journalists want to talk about their hair and their hemline and their clothes. So I understand why they had to dress her up. But I think this is a case of being all dressed up with no place to go. If she cannot go into blue states and rally Independents, then clearly Sarah Palin has not been a net plus to the ticket.

BLITZER: Hold on guys, because we're just starting. We have a lot more to talk about. Our panel is going to stand by. We're going to talk about their prescription for both of these presidential candidates in these, the final nine days of the campaign. Also coming up, we'll hear from Ed Henry. He's out there in the battleground state of Ohio. No Republican has ever won the White House without winning Ohio. What's the latest in that state? LATE EDITION continues right after this.

(COMMERCIAL BREAK)

BLITZER: We'll get back with the best political team in just a moment. But first, Ed Henry, he's following the McCain campaign out in the battleground state of Ohio. Ed, what is the latest now, only nine days to go in this state, which could make or break the prospects of the White House for John McCain.

HENRY: Wolf, you're absolutely right. John McCain will have a rally here in a few hours. He's visiting this state once again because it is pivotal. As you mentioned a moment ago, no Republican has ever won the White House without winning the Buckeye State. It's not just about symbolism for McCain, it's also math. He desperately needs these 20 electoral votes to offset likely gains by Senator Barack Obama in other states the Republicans have previously carried.

Now the good news for Senator McCain is that he has been tightening the race a bit here in Ohio. The latest CNN poll of polls has him down just five points. But the bad news, of course, Republicans wish at this point he were up in Ohio and he could be focusing his time, his resources elsewhere.

The other bad news, as you've been talking about, these distractions popping up for the McCain camp. First, the $150,000 wardrobe for Governor Sarah Palin. Now some of the sniping back and forth. Advisers to Palin suggesting she's been ill served by McCain advisers. McCain advisers saying she's essentially been off script, off message.

John McCain today appeared on NBC's "Meet the Press." He tried to sort of rise above that and just focus on moving forward, saying he's confident that he's going to close very strong in these final nine days. He's going to be here, not just tonight, but also more events on Monday. Barack Obama, not to be outdone will be here Monday as well. And they both have some high-profile surrogates. Bill Richardson is going to be here for a couple of days on behalf of Barack Obama and Governor Arnold Schwarzenegger going to be here this week for McCain, trying to pump up the turn out, Wolf.

BLITZER: All right, Ohio, all eyes on Ohio, Florida, Pennsylvania, a bunch of states. We'll watch it with you, Ed. Thanks very much.

And coming up, more with our political panel. James Carville, Donna Brazile, Alex Castellanos and Leslie Sanchez, they are four of the best on television. LATE EDITION will continue after this. (COMMERCIAL BREAK)

BLITZER: We're talking about the state of the presidential race. Welcome back. Joining us are Democratic strategist James Carville, Republican strategist Alex Castellanos, Republican strategist Leslie Sanchez and Democratic strategist Donna Brazile. They are all part of the best political team on television.

James, as much as we are hearing all this controversy surrounding Sarah Palin, Joe Biden, the Democratic vice president nominee, he got himself into some controversy this week saying you know what, Obama is going to be tested, if elected, in the first six months, internationally. Now while that factually might be true given history, is it wise for him to be raising the whole issue of national security in these final days? An issue where McCain might be strongest among all of the issues when the Obama campaign really wants to focus in on the economy?

CARVILLE: First of all, as you pointed out, it's absolutely true. Secondly, I'm not sure that it doesn't show that Senator Biden and people have given some thought and they are prepared for it. But the truth of the matter is, it doesn't matter. As I said on October 7th on this network, this race is over. Everybody knows that Obama is going to win. The country is ready for a change. And it's hard for me to think that if someone is saying a fact and telling the truth, that it's very much of a gaffe. He was just saying what was a historical fact. But in the scheme of things, the race is done, it's over.

BLITZER: Alex, let me bring you in and play a clip for you a little clip of this ad, the National Republican Senatorial Committee's ad. It is an ad for Elizabeth Dole, the senator in North Carolina, who is struggling for her political life right now. But it makes this point and I'm going to play it for you and our viewers, let's discuss it afterwards.

(BEGIN VIDEO CLIP)

UNKNOWN: These liberals want complete control of government in a time of crisis. All branches of government, no checks and balances, no debate, no independence. That's the truth behind Kay Hagan. If she wins, they get a blank check.

(END VIDEO CLIP)

BLITZER: All right, we are also hearing this argument now from the McCain campaign, that there will be no checks, no balances if the Democrats expand their majority in the House and Senate and take over the White House. It's a pretty good argument, but why is it coming so late?

CASTELLANOS: Usually that's the kind of argument you make late in the campaign because you want to try to elect your own senator or you want to try to move your presidential candidate forward as opposed as get into a contest between the House, Senate and the presidential campaign. But right now it's a pretty good argument, you know. The Republicans are making the argument that Bill Clinton was actually a very lucky president. He has a Republican Congress to stop him from nationalizing health care, from spending and taxing crazy.

And right now, Barney Frank, the guys in Congress are proposing the new tax increases when the top 1 percent of all taxpayers are already paying I think more than the bottom 95 percent in taxes. So we can either grow Washington's economy, I think Republicans would say or we can grow your economy. And the Democrats would have a blank check to do that. I think that's a pretty powerful message to close the campaign.

BLITZER: Donna, Americans do like those checks and balances, historically. How do the Democrats counter this argument which the McCain campaign is making and a lot of Republicans are now making?

BRAZILE: Well first of all, to tell the American people that we will not behave like Republicans when they have the majority and add trillions of dollars to our debt and of course get us into a war that we didn't need to get into. Look the 41 percent of the people in the "New York Times"/CBS poll said they are against what we call a one party rule. But the rest of the country would like to see the end of partisan gridlock, obstructionists on either side and they would like to see the government function on behalf of the American people. So I think it's a losing argument by people who have basically done everything to ruin our economy and put us in harm's way in terms of national security.

BLITZER: All right Leslie, go ahead.

SANCHEZ: An interesting part of that argument is it appeals most to Independents who like to see bipartisanship, like to see people work together. If it says anything, the underlying current there is overreaching. Are they going to overreach in their taxes and spending? Are they going to overreach in cutting defense spending in the strength of our military? Those are the concerns that a lot of people who are undecided are probably weighing the most now. And it could have an impact.

BLITZER: Let's talk about these final nine days. I want everybody to weight in. We'll start with James Carville. Look at our CNN poll of polls. This is the nationwide average as of today, 50 percent say they will vote for Obama among likely voters, 42 percent for McCain. That's an eight point advantage. Eight points unsure. Give us some advice, what you would say to Barack Obama right now, in these final nine days, James, what he needs to do.

CARVILLE: What I would say to Barack Obama is don't say things like James Carville is saying on TV, which is, of course, the truth, that the race is over.

CARVILLE: I would say, you know, that we're out there; we're going to be fighting for Americans. I think all he's got to do is just close on his same message of change. I don't think he needs to get fancy. I think this race is done.

You see the Republicans are very interested in what he's saying. The Senate campaigns are saying, we're going to lose the presidency, so vote for us for the Senate. And the presidential campaign is saying, we're going to lose the Senate, so vote for me for president.

Something tells me that's a losing message by a losing campaign. But, for whatever you do, Senator Obama, pay no attention to what I'm saying on television. I'm a pundit; you're a candidate -- big difference.

(LAUGHTER)

BLITZER: Good advice from James.

All right, Alex, give us some good advice for Senator McCain in these final nine days.

CASTELLANOS: Well, stick to the message that he's had, that, you know, Barack Obama lacks the experience to be captain of the ship at this uncertain time, and stay with that.

But, on the positive side, close strong. Say, look, I know, America, that you're concerned, you're uncertain about the future, wondering where this country is going. Well, get over it. There's nothing wrong with Americans. Americans are the greatest people on earth. Washington's broken, not Americans. And if we fix Washington, we can achieve anything in this world, and I know how to do that; I'm the guy who is the maverick who's worked on fixing Washington and knows how to get that done.

So, go with that message, close strong, lift us a little bit. It's not just about disqualifying Barack Obama. We know the McCain story. We want a story about America. Where would America go under president John McCain?

BLITZER: All right. Donna, I want you to give us some advice for Senator Obama right now, but specifically, what he needs to do in that 30-minute television address he's purchasing on three broadcasts, networks for Wednesday night in primetime.

What does he need to focus that message on? BRAZILE: Well, first of all, I think he needs to reinforce the message of change and really spell out, in very vivid details, what that means, in terms of the next 100 days or the next 100, you know, months, in terms of whether where the country will go under Barack Obama. I think he can close on a very strong note, a very positive note. He doesn't need to take down John McCain or Sarah Palin. They're doing a fine job of doing that.

I think he needs to elevate this conversation and really appeal to those undecided voters who still want to know what President Obama will do, in terms of their lives.

BLITZER: All right. Leslie, you have some advice for Senator McCain?

SANCHEZ: Well, you know, I think, despite all the deficits and especially despite the massive army that Senator Barack Obama's been able to build, and grassroots support and everything else, it's still very tight.

And a lot of that is tightening because of the tax-and-spend message and also this conversation he's having about depleting the military, or a national security issue.

I think he's -- the interesting thing about Senator McCain, he's got his game face on. He talks about that. He's going to continue to fight. And I think anybody that underestimates that doesn't see how close this is finally going to be. He's on the right message.

BLITZER: Leslie Sanchez, thanks very much. James Carville, thanks to you. Alex Castellanos, of course, and Donna Brazile. They're four of the best political team on television.

And, remember, November 4th, election night, they will be here. We'll be here all night long, bringing you the results not only of the presidential contests but the Senate and House races as well.

At the top of the hour, we'll speak with Democratic Representative Debbie Wasserman Schultz and Republican Representative Heather Wilson. We'll talk about the race for the White House.

But up next, Jack Welch, the former CEO of G.E. He gave a prediction for the failing U.S. economy. You might be surprised by what he had to say today. Stay with us. "Late Edition" continues after this.

(COMMERCIAL BREAK)

BLITZER: In case you missed it, let's check some of the highlights from the other Sunday morning talk shows here in the United States. The former General Electric CEO, Jack Welch, was interviewed on ABC about how he sees the coming hard times in the economy here in the U.S.

(BEGIN VIDEO CLIP)

JACK WELCH, FORMER GENERAL ELECTRIC CEO: We will have tough times, but we will see a sunny late '09, early '10 period. We've been through this before. We're getting the actions that we need. And this country will come out as a better de-leveraged society with improved regulations, maybe a little slower growth, but a much better foundation.

(END VIDEO CLIP)

BLITZER: A note of optimism -- nice to hear, for a change. We're going to have more of the Sunday morning talk show highlights coming up in our next hour. And there's much more ahead on "Late Edition," including Congresswomen Debbie Wasserman Schultz and Heather Wilson. They're standing by live. "Late Edition" continues right after this.

(COMMERCIAL BREAK)

BLITZER: This is "Late Edition," the last word in Sunday talk.

(BEGIN VIDEOTAPE)

BLITZER (voice over): The end game.

OBAMA: I feel like we've got a righteous wind at our backs here.

(APPLAUSE)

But...

(APPLAUSE)

But we're going to have to work.

MCCAIN: We love being the underdog. And we're going to win.

(END VIDEOTAPE)

BLITZER: The presidential race begins its final week with Barack Obama holding a steady lead. What will it take for John McCain to overtake his Democratic rival? Two outspoken congresswomen weigh in, Obama supporter Debbie Wasserman-Schultz and McCain supporter Heather Wilson.

MCCAIN: They know I've been tested. They know I've been tested. I've been tested many times.

BLITZER: In part two of my one-on-one interview, the Republican presidential candidate blasts Barack Obama and Joe Biden.

And with the election just nine days away, we'll assess the electoral map and key battlegrounds that could tip the scales with three of the best political team on television. LATE EDITION's second hour begins right now.

(END VIDEOTAPE)

BLITZER: And welcome back to the second hour of LATE EDITION. As another week has passed with the stock markets around the world in serious crisis, American voters are deeply worried about the future. So let's talk about the presidential candidates' plan for the economy and more with two influential congresswomen, Democrat Debbie Wasserman-Schultz who is joining us from Davie, Florida. And Republican Congresswoman Heather Wilson is joining us from Albuquerque, New Mexico. Thanks very much, congresswomen, for coming in.

Debbie Wasserman-Schultz, I'll start with you and I'll play a little clip of what Senator McCain said in Denver on Friday, because he's hammering away what the Republicans have always said are Democrats' traditional tax and spend policies. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: Senator Obama may say he's trying to soak the rich, but it's the middle class who are going to get through the ringer, because a lot of his promised tax increases misses the target.

(END VIDEO CLIP)

BLITZER: All right. I want you to tell us, though, why you think that Senator Obama's strategy right now to increase taxes on big corporations and on the wealthy is not going to have that effect down to the middle class and eliminate jobs, for example.

REP. DEBBIE WASSERMAN-SCHULTZ (D), FLORIDA: Wolf, Senator Obama's tax cut focus has been almost exclusively on the middle class, 95 percent of working families would get a tax cut under Barack Obama. Small businesses that create a new American job would get a $3,000 tax cut. A 50 percent tax cut on health benefits if they provide them.

So, what Senator Obama is saying is that the wealthy have had their presidents, they've had their leadership in Washington and it is time for working families to make sure that we can focus on them and give them some tax relief. That's what his focus has been. And unfortunately, Senator McCain just wants to continue to expand the tax cuts, the Bush tax cutting policy for the wealthiest Americans.

BLITZER: The Democrats make this argument, Congresswoman Wilson, saying, look at the dramatic tax cut, the 2001, 2003, the Bush tax cuts. The economic situation in the United States has not necessarily worked out all that well over these past eight years.

REP. HEATHER WILSON (R), NEW MEXICO: We have some serious challenges in our economy, Wolf, and that's why it's the wrong thing to do to increase taxes on working families. Senator Obama's plan to increase taxes is the wrong way to go. And, in fact, he has voted for tax increases on people making $42,000 a year or more.

And as we saw in a very unscripted moment of honesty with Joe the Plumber, his intention is to spread the wealth around. That's not what government is for. We need low taxes. We need to control the growth of government spending so that we can create jobs. And if you look at Senator Obama's tax increase plan, what it does, 50 percent of those tax increases will impact small business, and that is the engine of economic growth in America. Seven out of 10 jobs come from small business.

BLITZER: Let's let Congresswoman Debbie Wasserman-Schultz respond. WASSERMAN-SCHULTZ: You know, Wolf, it really is emblematic. Heather's comments are emblematic of the situations that the McCain campaign find itself in right now. They really are struggling from issue to issue. Last week it was Ayers. This week it is spreading the wealth around.

It's very clear to Americans that John McCain would leave out 101 million Americans from a tax cut and Barack Obama would cut taxes for 95 percent of Americans. How could you possibly suggest that it is a bad idea to give a tax break to working families? Barack Obama would raise taxes only for people who make more than $250,000 a year. You know what? Those people have been well cared for -- excuse me, Heather.

(CROSSTALK)

WASSERMAN-SCHULTZ: See, that's not true. And you are making things up, and I'm not going to allow you to do that. Barack Obama has not ever voted for taxes for that level of -- WILSON: Yes, he has and so did you in the Democratic budget this year.

WASSERMAN-SCHULTZ: No, no, no, see that, you are just making that up and that is not so. You tell me what instance that occurred, Heather. You can't because --

WILSON: The Democrats' budget this year, for fiscal year '08.

WASSERMAN-SCHULTZ: John McCain doesn't have a tax cut policy other than to continue to help the wealthiest Americans, and people are tired of that. Working families --

BLITZER: Congresswoman Wilson, you point to the Democratic budget resolution that would lay out an increase in taxes.

WASSERMAN-SCHULTZ: That's not a tax increase.

BLITZER: Hold on one second. The point, though, is these are nonbinding. These are not appropriations.

WASSERMAN-SCHULTZ: That's right.

BLITZER: These budget resolutions are supposed to give a direction but they don't have any impact on really cutting taxes or increasing taxes.

WASSERMAN-SCHULTZ: Exactly.

BLITZER: Is that right, Congresswoman Wilson?

WILSON: Wolf, you are right, that what the Democrat budget resolution does is set out the architecture for the entire year. It is actually one of the most important votes that we have every year, and I know that because I've been on both sides of those votes when Republicans controlled the House of Representatives, because it sets the overall architecture and plan for the year. What that did was say, yes, I favor increasing taxes on those making $42,000 a year or more.

WASSERMAN-SCHULTZ: But it is not a tax bill and you know it, Heather. That is the only straw you have to grasp.

WILSON: Not only did Obama vote that way, but Debbie, you did, too, and that was the wrong way to go for our economy.

WASSERMAN-SCHULTZ: That is the only straw you have to grasp, to stretch the truth. And that people are tired of that. People want to move in a new direction, Wolf. They want to make sure we have universal health care. They want to make sure that they bring the troops home from this misguided war in Iraq.

WILSON: And you are moving in the wrong direction and so is Senator Obama.

BLITZER: Hold on. WASSERMAN-SCHULTZ: They want to make sure they can invest in alternative energy. I'll tell you what they don't want. In Florida, people don't want to have $828 billion cut out of Medicare, which is what John McCain would do to give a paltry $5,000 tax credit.

WILSON: He never said that and even Independents have said that is absolutely false.

BLITZER: Hold on, ladies.

WASSERMAN-SCHULTZ: He has so. Doug Holtz-Eakin specifically said that in order to pay for McCain's health care plans, he would cut Medicare by $882 million.

BLITZER: Before we get to that issue, hold on one second. Debbie Wasserman-Schultz, in that budget resolution, which is nonbinding, sort of just sets out, as Congresswoman Wilson said, an architecture, if you would, some guidance, was there, in fact, an increase on taxes for those individuals making $42,000 a year?

WASSERMAN-SCHULTZ: No, no, there was not.

WILSON: Yes, there was, Debbie.

WASSERMAN-SCHULTZ: I really don't know -- we can go yes there was, no there wasn't. But the bottom line is that you are specifically accusing me and Senator Obama of voting to raise taxes on that group of people, and we did not. A budget resolution does not raise taxes. It lays out a blueprint. And the bottom line --

BLITZER: But was there a blueprint for -- without actually raising taxes, was there a blueprint --

WASSERMAN-SCHULTZ: No.

BLITZER: -- that included $42,000 a year, an increase in taxes.

WASSERMAN-SCHULTZ: No, there was not.

WILSON: That's exactly right.

(CROSSTALK)

WILSON: Here's the reality, Wolf.

BLITZER: Go ahead, Congresswoman Wilson.

WILSON: Here's the reality. We have one candidate who is proposing to increase taxes. We have another candidate who is saying that is the wrong way to go, particularly with small business.

We have Senator Obama in a moment of candor in Ohio saying we need to spread the wealth around, and that's why Joe the Plumber should pay more taxes if he ever gets the opportunity to run his own business. We need some serious change. We can't -- we can't rest our hopes in somebody who says the right way to go is massive new government spending and massive taxes to pay for it.

WASSERMAN-SCHULTZ: Ninety-eight percent of small businesses, Wolf, make less than $250,000 a year. And the McCain campaign knows it. Heather knows it. The bottom line is that they just are trying to throw enough stuff up on the wall during the last nine days of this campaign and hope something sticks. And they know that people want to move in a new direction. They wouldn't do it.

BLITZER: Debbie Wasserman-Schultz, here is the latest argument we're hearing from Senator McCain. What happens if the Democrats take the White House and expand their majorities in the House and Senate. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: You know, my friends, you've got Nancy Pelosi, Harry Reid and Barack Obama. You've got a recipe for tax and spend, tax and spend, tax and spend.

(END VIDEO CLIP)

BLITZER: That was at a rally in Florida on Thursday. How you going to respond to that argument?

WASSERMAN-SCHULTZ: Oh, I'm going to respond to it by saying that all the McCain campaign has left is name-calling and manufacturing issues that just aren't there.

John McCain knows that Barack Obama has proposed tax cuts for 95 percent of working families, has proposed investing in alternative energy and making America energy independent within the next 10 years, bringing our troops home finally from this misguided war in Iraq and our resources home. We're spending $12 billion a month in Iraq. We need that revenue here at home so we can turn this economy around, and that's all that McCain's got left.

BLITZER: Heather Wilson, are you embarrassed that the Republican National Committee spent $150,000 buying designer outfits for Sarah Palin at Saks and Neiman-Marcus, another $20,000 for make-up in the first two weeks of October alone, $10,000 for hair? Is this what a hockey mom should be getting?

WILSON: Well, that sounds like there are some staffers at the RNC who need a little education on how to shop at Wal-Mart and Ross Direct. But it does concern me in the last 10 days of an election campaign we're talking about those things.

WILSON: And we could talk about Barack Obama's ties or the vice president's hair transplants or something like that.

WASSERMAN-SCHULTZ: Barack Obama doesn't spend that kind of money on ties. He buys them himself.

WILSON: But I would rather talk about things that matter like which direction we go to get our economy back on track. And we have two very different candidates in very different directions here, and I think that Americans should be concerned about Pelosi, Reid and Obama because Katie bar the door on government spending if that's the way Americans choose to go. And we will go back to very big government and government in your lives in every aspect of your life.

WASSERMAN-SCHULTZ: Wolf, when it comes to spending, it's the Republicans under the Bush administration that have gotten us into the biggest deficit in American history. We had a --

WILSON: It is the Congress that appropriates, Debbie, and you of all people know that.

WASSERMAN-SCHULTZ: And the Congress was controlled by Republicans for eight out of the last 10 years, so let's keep that in mind.

WILSON: And we balanced for the first time since 1969.

WASSERMAN-SCHULTZ: No, no, no, my dear, you got us into a deficit situation within three years of the Bush administration. So, we had a Clinton surplus and we have a Bush deficit and that's what John McCain would continue more of the same.

WILSON: Well actually, this budge is bigger than the Republican budget. Did you want to spend more than President Bush did? And you passed that budget.

BLITZER: All right, guys, we've got to leave it there.

WASSERMAN-SCHULTZ: What we wanted to do is we wanted to move the country in a new direction for all Americans and you guys want to leave things just the way they are.

WILSON: Which is more spending and more taxes.

BLITZER: On that note of disagreement, we'll continue this conversation down the road. Debbie Wasserman-Schultz, Heather Wilson, a good, spirited discussion as usual. Thank you very much.

WASSERMAN-SCHULTZ: As always. BLITZER: Up next, we'll have more of my one-on-one interview with Senator McCain. I asked him about whether he expected the United States to be tested in the first six months of his presidency if he's elected. You're going to want to hear what he has to say. And later, the best political team on television will break down the electoral map and what each candidate needs to do to reach that magic number, 270. Stay with us, LATE EDITION continues after this.

(COMMERCIAL BREAK)

BLITZER: And welcome back to LATE EDITION, I'm Wolf Blitzer in Washington. In just a few moments, we'll discuss the increasingly negative presidential campaign with three of the best political team on television, John King, Candy Crowley, Campbell Brown. They're standing by live. But first, part two of my interview with Republican presidential candidate John McCain. We spoke this week in Manchester, New Hampshire.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk about taxes right now. It's a key issue. Among other things, you would like to cut -- and correct me if I'm wrong -- the corporate tax rate from 35 percent to 25 percent. Is that right?

MCCAIN: Absolutely, absolutely.

BLITZER: Because what he says and what Democrats, a lot of Democrats, say, that would be a corporate bonanza for ExxonMobil. They would get an extra $4 billion.

Here's the question. Should ExxonMobil be excluded from that cut in the corporate tax rate?

MCCAIN: Oh, of course not. We should -- we should be cutting corporate tax for every business in America.

You know, Barney Frank just said, we're going to take some of that money away from the rich people. That's what Obama is all about. That is what this is about. Let me tell you -- let me tell you, we tried a windfall profit tax back during the days of Jimmy Carter, OK? We tried it. It didn't work.

But the important thing is, if you talk to the CEO of FedEx, Fred Smith, if you talk to the CEO of Cisco, John Chambers, you talk to Meg Whitman, former CEO of eBay, you know what they will tell you? They will tell you, they pay their full 35 percent. And you know what else they will tell you? When they have the ability to go overseas, unfortunately, they do go overseas.

And you know why? Because we're paying -- they're paying 35 percent, full-freight, no evasions or escapes from the taxes. They're paying full-freight. And they will show you their tax returns. And guess what? If they go to Ireland, they're only paying 11 percent. So, where are they going to go where they can create wealth and create jobs? It's simple, fundamental economics. So, to somehow allege that a company or corporation that can be international is not going to go where they pay the lowest taxes and can create the most jobs is just foolishness. The last time we practiced this kind of isolationism and protectionism that Senator Obama espouses and higher taxes was a guy named Herbert Hoover.

BLITZER: Social Security, it's a potential problem out there for our children and grandchildren.

MCCAIN: Sure.

BLITZER: And you have said, nothing is off the table as far as coming up with some solutions, long-term solutions, to Social Security.

MCCAIN: That's the way you negotiate, and that's the way you negotiate and get solutions.

BLITZER: Right now, there's a cap at $102,000 for Social Security payroll withholding tax. Are you open, as part of an effort to save Social Security, to letting that -- that cap go up?

MCCAIN: I'm obviously against it. And I want to tell you again, the way you succeed in negotiations -- and I have done it many times across the aisle, whether it be Ted Kennedy, or Russ Feingold, or Joe Lieberman, or -- or anybody else -- is, you sit down and you negotiate.

You go in with your negotiating positions. I will go in with my negotiating oppositions. My position is that I won't raise taxes on anybody.

BLITZER: What about increasing the retirement age from 65?

MCCAIN: I am going in that I won't -- I will have -- there are things on the table we will negotiate.

Ronald Reagan, Tip O'Neill, 1983, went in, negotiated, and came out and saved Social Security. Guess what? That's what the American people want from us. That's what I have done all the time I have been in the Congress of the United States.

And -- and -- and, so, for me to say that anything, but I'm going to do what I saw two great leaders, Tip O'Neill and Ronald Reagan, do is -- it's just foolishness.

BLITZER: So, raising the retirement age..

MCCAIN: The Democrats -- the Democrats insist -- the reason why we couldn't -- couldn't get agreement in 2005 is because the Democrats insisted, as a precondition, that we raise taxes.

So, guess what? We never sat down at the table together. The Americans want us to sit down together, Wolf. And, so, all I can tell is, I will sit down with them. I have worked with them before. I will sit across the table from them. I'm against tax increases. I'm against a lot of the bad things that -- that -- that a lot of the people support. But I will get a result, and we will save Social Security.

BLITZER: And how do you feel about raising the retirement age?

MCCAIN: I feel very strongly that I will sit down with the Democrats, and we will negotiate out something that will save Social Security, because that's our obligation to future generations of Americans. And you can ask me, you know, for the next half-hour, if you would like.

BLITZER: All right.

MCCAIN: I mean, that would be kind of fun. And my answer is going to be the same. I will sit down and negotiate, the way have I done in the past, which Senator Obama has never done, whether it be in judicial nominations, or whether it be in immigration reform, or ethics or lobbying reform. He always went home to the Democrat leadership.

BLITZER: Let's talk a little bit about your support -- and correct me if I'm wrong -- you did support President Bush's plan to overhaul Social Security and allow Social Security recipients to use about 10 percent of their Social Security savings in the stock market. That collapsed, obviously. It didn't go forward. Knowing what we know now about the volatility of the stock market, is that still a good idea?

MCCAIN: The reason why the talks collapsed is because the Democrats insisted on agreeing to tax increases before we sat down. So, let's -- let's -- let's understand history.

(CROSSTALK)

BLITZER: What about private Social Security...

(CROSSTALK)

MCCAIN: OK. That's what they wanted to do.

BLITZER: ... investments in the stock market?

MCCAIN: And all this other stuff was -- was worth negotiating.

And I will protect, as president of the United States, the Social Security benefits of retirees and future retirees. I will protect those benefits and I will do whatever is necessary to protect those benefits. And I have said that time over time.

Every -- every even-numbered year, the Democrats run out, scare the senior citizens, say, they're going to raise your taxes, they're going to destroy Social Security -- same old stuff. I have seen it for, oh, so -- more years than I can count.

I'm not scaring any senior. I'm going to preserve their -- and protect their Social Security benefits, despite what ads may be run, and the senior citizens, as well as all citizens in this country.

(CROSSTALK)

BLITZER: And the notion of a 10 percent, using 10 percent in the stock market?

MCCAIN: They know me about -- about how I'm going to fix Social Security, and I'm going to make their Social Security the best I can, and we will preserve the benefits that they have, and I will protect Social Security.

BLITZER: And the 10 percent?

MCCAIN: And I will protect Social Security.

BLITZER: All right.

MCCAIN: And I will sit down at the table with the Democrats. And, by the way, we can keep -- you know, this is -- I will give you this -- this is -- I'm telling you, I'm going to protect Social Security.

(CROSSTALK)

BLITZER: All right.

MCCAIN: And that's what I have done my entire career. And I will do what Ronald Reagan and Tip O'Neill did. And that is save Social Security and make Americans aware that, unfortunately, present- day retirees are -- have -- working Americans today are not going to receive the same benefits as present-day retirees, unless we fix it. Now, I think I can do it, convince the American people that we will sit down together.

BLITZER: Let's move on and talk about national security.

MCCAIN: Good.

BLITZER: If you're elected president, of the United States, do you believe America's enemies, whether terrorists or hostile governments, would test you during the first six months of your presidency?

MCCAIN: I've already been tested. And I'm astonished and amazed to hear Senator Obama pre -- Senator Biden predict that the untried, untested President Obama will be tested by our enemies. And we may not agree -- his own backers may not agree.

Look, I've been tested. Senator Biden referred to the Cuban missile crisis. I was there. We came that close, as historians say, to a nuclear exchange.

Senator Biden expects his own running mate, expects Senator Obama to be tested in that way?

I mean that's a remarkable statement.

BLITZER: Because usually (INAUDIBLE)...

MCCAIN: That should concern all Americans.

BLITZER: ...they are tested early on by hostile powers out there.

MCCAIN: They know I've been tested. They know I've been tested. I've been tested many times.

BLITZER: The U.S. -- the Bush administration...

MCCAIN: And the thing that probably may encourage them a little is that Senator Obama has been wrong. He was wrong about the surge in Iraq. He still fails to acknowledge that he was wrong. I mean remarkable.

He was wrong when he said the Georgians should show restraint. He was wrong when he said he would sit down across the table from Ahmadinejad, Chavez and the Castro brothers. He was wrong about those.

So I can understand why the American people might be concerned, particularly when his own running mate says he's going to be tested. BLITZER: We have to wrap up the interview, but I...

MCCAIN: Sure.

BLITZER: I was reminded walking in, coming here to Manchester, June of 2007, I moderated one of the early Republican debates. You were up on the stage.

MCCAIN: You did a great job.

BLITZER: I don't know about that.

(LAUGHTER)

BLITZER: But there were eight or 10 of you Republican candidates.

And, at that point, it didn't look very good, if you remember, for John McCain. Your poll numbers were not very good. There were some formidable challengers.

MCCAIN: They were in the tank.

(LAUGHTER)

BLITZER: But you came back.

We only have a few days left to go right now. Can you come back from what the polls are saying and be elected on November 4?

MCCAIN: Sure, Wolf. And we will. And we are moving up rather significantly.

But I think we will be up late. It's going to be a tough race, and -- but we're working hard. And I am confident of victory. And, by the way, you still ask the best and toughest questions about -- more than anybody. And, so, I am glad to be on with you again.

BLITZER: I'm glad we got through some substantive issues. Senator McCain, thanks very much.

MCCAIN: We certainly did.

BLITZER: Good luck.

MCCAIN: Thanks, Wolf.

(END VIDEOTAPE) BLITZER: And up next, our own Campbell Brown is standing by live. She's going to be joining us on her show weeknights here on CNN. She stresses "no bias, no bull." What's on her mind today? Stay with us. LATE EDITION continues after this. (COMMERCIAL BREAK) BLITZER: We want to get you to our political panel in a moment. But first, let's bring in CNN's Campbell Brown. She's the host of "CAMPBELL BROWN: NO BIAS, NO BULL" weeknights here on CNN 8 p.m. Eastern.

Campbell, I want to play for you something you said earlier this week on your show. You were reacting to the news that the Republican National Committee spent more than $150,000 on Sarah Palin's designer outfits, another $30,000 or so on hair and make-up. Here's what you said. Listen to this.

(BEGIN VIDEO CLIP)

BROWN: There is an incredible double standard here, and we are ignoring a very simple reality. Women are judged based on their appearance far, far more than men. This is a statement of fact. There has been plenty of talk and plenty written about Sarah Palin's jackets, her hair, her looks. Sound familiar?

There was plenty of talk and plenty written about Hillary Clinton's looks, hair, pantsuits. Compare that to the attention given to Barack Obama's $1,500 suit or John McCain's $520 Ferragamo shoes. There is no comparison.

Women get scrutinized based on appearance far more than men. And look, I speak from experience here. When I wear a bad outfit on the air, I get viewer e-mail complaining about it, a lot of e-mail, seriously. When Wolf Blitzer wears a not so great tie, how much e- mail do you think he gets?

(END VIDEO CLIP)

BLITZER: I guess no e-mail about my ties, actually, just to be honest. But that's because I always wear nice ties.

BROWN: Well, that's what I was going to say. I was teasing about your tie, Wolf.

But let me make sure that these two points don't get lost here. I do think $150,000 over a six-week period of time on clothes, hair, and make-up is an extraordinary amount of money and crazy. It certainly doesn't help her image, you know, that she's been trying to push this hockey mom, Joe Six-Pack, to having her wear these designer clothes.

All of that said, though, I do think there's a point here that women are judged on appearance in a way that men are not, on clothes, on hair, on make-up. It's written about it, focused on, and in my view, that means it should be for women a campaign expense -- $150,000, probably not. But a legitimate campaign expense, I think it should be.

BLITZER: And today there's this quote from an unnamed McCain adviser basically suggesting she's been a "diva" out there on the campaign trail. I know you have some strong thoughts about that. BROWN: Well, it's the word "diva." It's a word that is never applied to men. It's generally applied to a woman to describe an overly ambitious woman. And there may be many things you can say about Sarah Palin regarding her qualifications or experience, but she's no more ambitious than any other politician, certainly not Joe Biden or any other vice presidential candidate in history.

So, I think going to that level and using that word in particular says more about the person on the McCain campaign who used it and the way this is devolved into sort of low-level name-calling than it does anything about Sarah Palin.

BLITZER: And we're going the pick that thought up when we come back. Campbell, don't go away. John King, Candy Crowley -- they're going to be joining us. Remember, Campbell's show, "No Bias, No Bull," airs week nights, here on CNN, 8 p.m. Eastern. You're going to want to see it.

Up next on "Late Edition," polls show Barack Obama leading in a number of battleground states that went for President Bush back in 2004. John McCain, though, is not giving up. Can he pull off another comeback?

We're standing by. The best political team on television, right after this.

(COMMERCIAL BREAK)

BLITZER: And welcome back to "Late Edition." I'm Wolf Blitzer in Washington. Only nine days left in this historic presidential campaign, and John McCain certainly has his work cut out for him if he wants to close the gap.

Here to discuss his strategy and much more, three of the best political team on television. In Denver, CNN senior political correspondent Candy Crowley; in Santa Fe, New Mexico, CNN's chief national correspondent, John King; and continuing with us from our New York studios, Campbell Brown. She's the host of CNN's "Campbell Brown: No Bias, No Bull," every weeknight, 8 p.m. Eastern here on CNN.

John, I know you've been doing some reporting on some of the finger-pointing that we're already seeing, that's going on inside the McCain camp, right now, one McCain adviser quoted as saying this, referring to Sarah Palin, "She's a diva. She takes no advice from anyone. She does not have any relationships of trust with any of us, her family or anyone else."

"Also, she is playing for her own future and sees herself as the next leader of the party. Remember, divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom."

All right. What's going on, John, inside the McCain camp?

KING: Well, there's a lot of finger-pointing, Wolf, as you can see right there. There is, in one part of the McCain camp, some dissatisfaction with Governor Palin. They think she has decided to preserve her own political viability and not worry so much about the game plan they try to give her every day.

This happens in campaigns. This is extraordinary -- that language, the "diva" word, is extraordinary to a degree, but, inside the campaign, most top senior advisers believe they are likely to lose.

They're not giving up, but they believe, looking at the battleground states -- they're in a very difficult position right now -- that, Wolf, this is not helpful. They need to be near-perfect, if not perfect, from here through a week from Tuesday, if they are to have chance in this election.

I would only remind you, tensions between running mates and the top of the ticket are not unusual, especially in losing campaigns.

I remember Lloyd Bentsen hated the Massachusetts mentality of the Dukakis people. John Edwards was not in high standing with the Kerry people at the end of that campaign. We could go on and on and on.

But it's not helpful, without a doubt.

BLITZER: It's certainly not help to feel see these stories coming out, in these final days, for the McCain camp.

Give us your perspective, Candy, on what you see unfolding there?

CROWLEY: Well, you know, listen, John is perfectly right. This happens all the time. Remember, after Iowa, the very first contest which Hillary Clinton lost, there was a huge blowup inside her campaign, and finger-pointing. It happens a lot.

And the problem is that, in general, these vice presidential candidates come on board and, superimposed over them, are the staff of the candidates. They don't know each other. They've never seen each other. And it leads for a lot of misunderstandings.

And, again, when you look at some of the things that have come up about Sarah Palin, I think it's not just a problem of the staffs not knowing her, but it does go back to the whole vetting idea; what did they know about? And, you know, we were told that, in fact, they, kind of, tossed off this whole Troopergate, that she fired a public safety official because he wouldn't fire her former brother-in-law.

So there were a lot of things that have come up that have really stymied this campaign and controlled the headlines, that it does bring you back to the whole idea of vetting.

BLITZER: And listen to this, Campbell. This is from David Frum, a former speechwriter for this President Bush, a Republican, now with the American Enterprise Institute. He's writing in today's Washington Post. "There are many ways to lose a presidential election. John McCain is losing in a way that threatens to take the entire Republican Party down with him. The very same campaign strategy that has belatedly mobilized the Republican core has alienated and offended the great national middle, which was the only place where the 2008 election could have been won."

I think it's fair to say, Campbell, that, if McCain were way ahead in the polls, right now, we wouldn't be hearing all this sniping, all this criticism coming from those of his own party.

BROWN: And the only word of warning I would have, Wolf -- and this goes back to what Candy just mentioned -- is I can't help thinking about the conversation we were all having just before the New Hampshire primary.

We were talking about the circular firing squad within Hillary Clinton's campaign. They were playing the blame game intensely, and of course, she came back and won in New Hampshire.

Now, looking at all the polling -- and John King can certainly explain all this far better than I -- it looks like it is virtually impossible for him to come back at this stage. But there is still a week left, and a lot could happen.

What David Frum, though, is saying, here, is something I think we've seen throughout this campaign, and is going to be a long-term problem for Republicans after the election, assuming the polls hold, which is this split within the Republican Party, I mean, a real divide here and real negativity in terms of, you know, trying to come back together.

There is a large group of Republicans who want to go to the right and a large group of Republicans who think they should be going in the other direction.

And how do they come back together and unite to be able to challenge Barack Obama, if, again, the polls hold, four years from now?

There is a really, really strong divide and split between Republicans, right now, that they're going to have to get beyond.

BLITZER: Here's how Senator McCain, John, yesterday addressed all this speculation that it was virtually over, right now. He spoke in New Mexico, where you are. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: We just learned from a newspaper today that Senator Obama's inaugural address is already written. I prefer to let the voters weigh in before presuming the outcome.

(APPLAUSE)

What America needs now is someone who will finish the race before starting the victory lap.

(END VIDEO CLIP)

BLITZER: And this is how Governor Sarah Palin, the vice presidential nominee, said the same thing only a few moments ago. Listen to this.

(BEGIN VIDEO CLIP)

PALIN: Barack Obama and I, we both have spent some quite time on the basketball court. But where I come from, you have to win the game before you start cutting down the net.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: All right, John, some Republican strategists said, you know what?

BLITZER: The only thing they have to do is win those states that President Bush carried in 2004, including, of course, Ohio, and he's elected. Go ahead.

KING: Well, Wolf, you know, Hillary Clinton tried this, as well, to try to go with the idea that Barack Obama is arrogant, that he is presumptive, and most Republicans will tell you that's a fine argument. But in the last nine days, it's not going to win the election where Barack Obama has a 20-point lead in most polls on who's best to handle the economy in the middle of the meltdown.

There are a lot of Republicans, we talked about the finger pointing, forget all about that for a minute. There are a lot of Republicans saying why was John McCain here in New Mexico yesterday. He's down double digits. Why did he wake up today in Iowa? He's down double digits. Why is he not in Florida, in Missouri and in Pennsylvania, a Democratic state, where yes, he's down double digits, but their own top campaign people tell you that they cannot get to 270 without turning a big blue state like Pennsylvania red?

So there are a lot of Republicans not only questioning the infighting but questioning the basic strategy of this campaign, saying why are you wasting precious hours in the final days in a state where you're not going to win? BLITZER: Guys, stand by for a moment. We're just getting in some new CNN poll of polls. I'm going to share those with you right after the commercial break. So what are the latest numbers in Georgia, Iowa, Missouri and New Hampshire? That's coming up. Also, John McCain talks about his chances for a comeback on another Sunday show. It's part of our very popular "In Case You Missed It" segment. That's coming up as well. Much more LATE EDITION right after this.

(COMMERCIAL BREAK)

BLITZER: We'll get back to our political panel in a moment, but first in case you missed it, let's check some of the highlights from some of the other Sunday morning talk shows here in the United States. John McCain was on NBC where he was asked about how he was feeling right now going into these final few days of the campaign.

(BEGIN VIDEO CLIP)

MCCAIN: I feel like Newt Rockne at halftime when he said, "go out there and get one for the gipper." And, look, most polls have consistently shown me much further behind than we actually are. I choose to trust my senses as well as polls and the enthusiasm at almost all of our campaign events is at a higher level than I've ever seen. And I've been in a lot of presidential campaigns, usually as the warm-up act.

(END VIDEO CLIP)

BLITZER: On FOX, the subject was Virginia, where CNN's poll of polls shows Obama in the lead. Tim Kaine, the Democratic governor of Virginia, was blunt in his assessment.

(BEGIN VIDEO CLIP)

GOV. TIM KAINE, D-VA.: I think if Virginia goes for Senator Obama, I just do not see how the math can work out for Senator McCain. So I'm telling everybody in my state, you don't need to read all those 150 polls that come out that tell us how Nevada or Colorado or Pennsylvania are looking. Let's just do the job here in Virginia. And if we can do the job here, we can have some confidence that our candidate will be president.

(END VIDEO CLIP)

BLITZER: Some highlights from the other Sunday morning talk shows here on LATE EDITION, the last word in Sunday talk. And don't forget, coming up right after LATE EDITION at 1 p.m. Eastern, "FAREED ZAKARIA: GPS." He takes a comprehensive look at international affairs with world leaders, policy experts and journalists. This week, Fareed speaks with the former Treasury Secretary Robert Rubin.

(BEGIN VIDEO CLIP)

ROBERT RUBIN, FORMER TREASURY SECRETARY: I think given the circumstance we're now in, Fareed, which is a real crisis of confidence, this is a perfect storm. This is a very low-probability event that is having huge consequences. I think we have got to find a better answer in this mortgage foreclosure.

(END VIDEO CLIP)

BLITZER: Stay tuned for "FAREED ZAKARIA: GPS." That comes up right at the top of the hour only here on CNN. We'll have much more with our political panel. We have some brand-new CNN poll of polls for some critical battleground states. We'll share the latest numbers with you when we come back.

(COMMERCIAL BREAK)

BLITZER: And welcome back. We're talking politics with CNN's Campbell Brown, John King and Candy Crowley. They're part of the best political team on television. Guys, we're just getting some new numbers in from some states, including some battleground states. Poll of polls, the average of the most recent polls in those states.

Let's take a look at Georgia. Who would have thought that Georgia might be a battleground state? Right now McCain is ahead 50 percent over Obama, 44 percent, 6 percent unsure. Iowa, McCain is pretty badly behind, 52 percent for Obama, 39 percent for McCain, 9 percent unsure. Missouri is tied at 46, 46, 8 percent unsure. New Hampshire, a significant lead for Barack Obama, 52 to 42 percent, 6 percent unsure.

Candy, let's take two of those states right now, Iowa and New Hampshire. I interviewed Senator McCain in New Hampshire this week. If he's so significantly behind in states like Iowa and New Hampshire, why is he and Governor Palin, why are they still going there?

CROWLEY: Well, you know, as John said at the very beginning, you know, the way to win here is to pick up former Bush states. I mean, you know, you have to keep going. I mean, there's -- the strategy is being questioned, but he spent a lot of time in Pennsylvania, where he is also down, the last time I looked, by double digits.

After a while, you've got to go somewhere. There are a lot of these double-digit states. He needs to hold on to Georgia. Looks like he probably is at this point. But you have to go to these red states, you have to go to the Bush states, and you've got to find a blue state somewhere to make up for what you may lose, and that's Pennsylvania.

So, after a while, you look at the map and you've got to go somewhere, and I think that's where the McCain campaign is at this point.

BLITZER: Yeah. Pennsylvania, Campbell, specifically, the former governor of Pennsylvania, Tom Ridge, he said this week, unless we win Pennsylvania, I don't think McCain is elected president. But in Pennsylvania, he's down anywhere from eight or 10 or 12 points right now and they've put so many eggs in this traditionally blue state, this Democratic state, and they need Pennsylvania.

BROWN: They have. I have to point out, Wolf, Tom Ridge did go on to say if he'd been chosen VP, they'd probably be doing a lot better in Pennsylvania than they are right now.

But look, they don't have a lot of good options at this stage, and I think in Pennsylvania they're trying to bet a little bit on what was lackluster support for Obama during the primaries, certainly in western Pennsylvania.

And given -- I mean, I don't think it's going to work, looking at where those numbers are right now, but again, looking at that map, as, you know, we have done, there are very few directions they can go. And I think it's pretty clear they're not going to be able to do it just by defending those Bush states. They are going to have to, as Candy said, pick up a blue state somewhere along the way.

BLITZER: We look at the electoral map, John, and you spent a lot of time studying this map, 270 being the magic number. Right now in states either clearly for Obama or leaning toward Obama, we have him at 277, McCain states at 174, 87 remaining toss-ups or yellow, as you can see those real battleground states right now.

Traditionally, these races do have a tendency to tighten in the final day, don't they?

KING: They do have a tendency to tighten, Wolf, and we should watch that. Let's go below those horserace numbers you just mentioned. They underscore John McCain's predicament. He has to win just about every one of those yellow states on the board, the toss- ups, and even then still turn something from blue to red. As Candy said, Pennsylvania is the target.

But look below the horse race numbers. There's a reason this is happening. Barack Obama is running equal or better to John Kerry and Al Gore in the suburbs. Suburbs are critical in many of the big battleground states. He is running now about equal with what John Kerry received four years ago among white voters, which is very significant for an African-American candidate as we look at the impact of race in the final weeks.

And more and more he's starting to run as good or better than Democrats have in the past in rural America, where the economy is struggling. He is putting together right now, nine days is a long time in politics, but right now, he is putting together a coalition of voters that, if he can hold it nine days from now, will shatter what has been known the last 20 years plus as Ronald Reagan's presidential Republican coalition.

Barack Obama is at the verge of shattering the Reagan coalition if he can hold this together. It is a very steep hill for John McCain in nine days, Wolf.

BLITZER: A lot of experts believe, Candy, that Obama even now -- and this is unusual for a Democrat -- has a better so-called ground game to get out the vote, to bring out the Democrats and make sure they vote on November 4th. Based on what you've seen out there, how good is this Obama ground game compared to the McCain team?

CROWLEY: Well, consider that that ground game has been going on since before January of this year. Remember, he had all of those states that he has been through, which John McCain didn't have to go through.

But let me add another element to that, and that is money. Barack Obama has so much money at this point. That buys you a lot of cars to get people to go to the polls. That gives you an ability to pay staff and he has a lot of volunteers. So, he has an enormous ground game.

Now, I will say that the McCain campaign put out a big, long list of their ground game. Republicans have been known for that in the past. But what you need is energy. And at this point, when we look at the polls about enthusiasm, the enthusiasm is on Obama's side. But it always, always helps to have the money, and it is a huge, huge differential between John McCain, who is limited because he took federal funds, he is limited in his spending amount and there is no such limit for Barack Obama. He's got plenty to spend.

BLITZER: Candy Crowley, John King, Campbell Brown, excellent discussion as usual, guys. Thanks very much. And don't forget, weeknights here on CNN, "CAMPBELL BROWN: NO BIAS, NO BULL" 8 p.m. Eastern.

Up next, the third-party candidate, the libertarian, Bob Barr, the former Republican congressman from Georgia, he says he thinks the race for the White House is now a done deal. You're going to want to hear what he has to say, right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The libertarian presidential candidate, Bob Barr, doesn't really believe he has a chance to win the White House, but that isn't stopping him from spreading his message. I spoke with him earlier this week in "THE SITUATION ROOM," where he said he doesn't believe John McCain has a chance of winning this election either.

(BEGIN VIDEO CLIP)

BOB BARR (L), PRESIDENTIAL CANDIDATE: The numbers just aren't there. I mean, he's behind in several states that he ought to be way ahead as the Republican in. He's way behind. I mean, I think he's 12 points behind in Pennsylvania. That's a key state for them. There's no way that he's going to be able reasonably to make that up ground. And we've sent out a message to folks who might otherwise be predisposed to vote for him -- don't throw your vote away. Make it mean something. Vote for Bob Barr. Vote for, you know, the real choice, Wolf. BLITZER: But you're not going to -- you don't have a big chance of getting elected president, certainly nothing compared to John McCain, right? BARR: No. That isn't really the point though. The point is to influence public policy. Where you have votes going to Senator McCain or Senator Obama, you're basically voting for the status quo. That is big government or really big government. Now we urge people who might be predisposed to have voted for Senator McCain simply because he's the Republican to remind them of the fact that he's got not going to win, and therefore they need to do something to influence public policy for smaller government, and that's vote for me.

(END VIDEO CLIP)

BLITZER: The former Republican congressman from Georgia, Bob Barr, he's the libertarian presidential candidate. That's your LATE EDITION for Sunday, October 26th. Please be sure to join me again next Sunday and every Sunday at 11 a.m. Eastern for the last word in Sunday talk. Remember, I'm also here in "THE SITUATION ROOM" Monday through Friday from 4 to 7 p.m. Eastern.

Until tomorrow, thanks very much for watching. I'm Wolf Blitzer in Washington. "FAREED ZAKARIA: GPS" starts right now.

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