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Dow Jumps Nearly 900 Points; McCain, Palin Call For Alaska Senator to Resign

Aired October 28, 2008 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now: One week before an election about change, Barack Obama is careful not to change his message, while John McCain scrambles to change his standing in the polls.

Also, one-party rule and the fear factor. Are voters spooked by McCain's warnings about a government controlled by Democrats?

And stock prices shooting through the roof today, investors apparently undaunted by plunging consumer confidence -- all of that and the best political team on television.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer at the CNN Election Center. You are in THE SITUATION ROOM.

The finish line is in sight. Barack Obama is doing all he can do to get there without stumbling, knowing John McCain is determined to try to trip him up.

Our senior political correspondent, Candy Crowley, is with the Obama campaign in Virginia right now.

Candy, let's look ahead. This is the final week right now. What is the Obama team planning for?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, listen, at this point, this campaign is about steady as she goes.

This is Harrisonburg, Virginia, Wolf, not exactly a liberal bastion. This is a conservative place. These are the sorts of places that Barack Obama is going to now, Republican areas in previously Republican states, because, right now, this campaign is less about policy than it is about place.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): He had stepped up the game, and the everyday big crowds are sometimes enormous. And there is always a new way to hit the most enduring theme of his campaign, John McCain as a Bush acolyte. SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: John McCain has ridden shotgun as George Bush has driven our economy toward the cliff, and now he wants to take the wheel and step on the gas.

CROWLEY: At Chicago headquarters, the daily blasts of e-mails continues, focussing today on a statement by a McCain official that, under McCain's health care plan, young, healthy workers would probably stick with company-provided insurance because it would -- quote -- "be way better" than any plan they could buy with McCain's $5,000 health care credit.

OBAMA: We were offered a stunning bit of straight talk, an October surprise.

CROWLEY: But, mostly, this is a campaign on cruise control. As one Obama aide said, why would we change things now? It is working.

Inside camp Obama, they are determined to let the weather be the unpredictable element.

OBAMA: This is unbelievable crowd for this kind of weather. Thank you so much. If we see this kind of dedication on Election Day, there is no way that we are not going to bring change to America.

(CHEERING AND APPLAUSE)

CROWLEY: On the ground and at this podium, it is all about driving voters to the polls now. There is a reason they call them rallies.

OBAMA: The belief deep down inside each of us that we can do better than we're doing right now, that there are better days ahead if we are willing to work for it, if we are willing to shed our fears and our doubts.

CROWLEY: Wednesday, an Obama show of deep pockets, he has purchased 30 minutes of airtime across several networks, including the highest-rated Spanish network, Univision.

Then there's the freebie appearance on "The Daily" Show," and then a Florida power play, the party's popular past and its hope for the future on stage in Orlando. Bill Clinton and Barack Obama campaign together in the final days for the first time.

(END VIDEOTAPE)

CROWLEY: Not that long ago here in this room, Wolf, the Democrats got their wish list all in one picture, Governor Tim Kaine, the Democratic governor of Virginia, Mark Warner, the former Democratic governor who is now running for the U.S. Senate, and polls say he has a big chance -- he is leading now -- and, of course, Barack Obama, who really wants to take this state, sort of a gateway to the South, a state that has been Republican since 1964 in presidential races, so, quite a picture for Democrats, certainly demonstrating their hopes here in this state a week from today, Wolf. BLITZER: And in our poll of polls among likely voters, still a seven-point advantage right now, 51 percent to 44 percent for Obama. Candy, thanks very much for that.

I will go one on one with Senator Obama on Friday. He will be here in THE SITUATION ROOM. And you can play a part in that interview. Submit your video questions at ireport/Obama. We will try to get some of the best questions to Senator Obama in the interview on Friday.

John McCain and Sarah Palin are competing with Obama to get the last word in states that could decide this presidential contest. Dana Bash is standing by in Pennsylvania, where the Republican running mates have been spending a lot of time.

Dana, they are pinning a lot of hopes on those 21 electoral votes in Pennsylvania.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: They absolutely are. They are pinning a lot of hope here, but John McCain is also actually as we speak, Wolf, speaking in the state of North Carolina. That is one of the many red states that he is trying to defend. This state here is one of really pretty much at this point the only, but most important blue state that he basically needs in order to take the White House.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: And the next president of the United States, John McCain!

BASH (voice-over): Down double digits in a Democratic state he needs to win the White House, John McCain remained the gritty warrior.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I choose to fight. Don't give up hope. Be strong. Have courage and fight!

(CHEERING AND APPLAUSE)

MCCAIN: Fight for a new direction for our country! Fight for what's right for America!

BASH: One week to go, and Pennsylvania Republicans are looking for some red meat to keep their energy and spirits up.

Sarah Palin was there, too, and delivered with the S word.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: Joe Biden calls higher taxes, he calls that patriotic. But to Joe the Plumber, Joe said it sounded to him like socialism.

BASH: McCain aides insist internal data shows him inching back up thanks to relentless rhetoric that Barack Obama will raise taxes. Always looking for a fresh angle, McCain seized on a Pennsylvania interview Joe Biden gave a day earlier. SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: What we're saying is an $87 billion tax break doesn't need to go to people making an average of $1. 4 million. It should go like it used to, it should go to middle class people, people making under $150,000 a year.

MCCAIN: Senator Biden said tax relief should only go to middle class people, people making under $150,000 a year. You getting an idea what's on their mind? Huh? A little sneak peek. It's interesting how their definition of rich has a way of creeping down.

BASH: An Obama spokesman called McCain desperate, insisting Obama will only increase taxes on families making $250,000 or more. Still, McCain had plans to push on with his tax argument in critical Pennsylvania, but his visit was cut short. An outdoor rally abruptly canceled due to bad weather, even though a few diehards had trickled in to brave the rain.

(END VIDEOTAPE)

BASH: And with such little time to waste and a huge struggle here, having to cancel a rally really was a big blow to John McCain.

But, you know, you heard Candy talk about the fact that Obama is buying all this TV time tomorrow night. McCain tried to appeal to the locals here, to Phillies fans, and use a little dig at Barack Obama. He said, no one will delay the World Series' game with an infomercial when I am president.

Little joke there -- Wolf.

BLITZER: All right. You know what, Dana? Stand by for a moment, because I want to listen in for a minute to hear what he is saying right now in Fayetteville, North Carolina.

(JOINED IN PROGRESS)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: The other night, the other night in the debate Senator Obama -- while I acknowledged his eloquence -- said we will, quote, "consider drilling off shore, we'll consider possibly nuclear power. We'll drill off shore and we'll drill now, my friend. We'll bring down the price of oil.

(CHEERING AND APPLAUSE)

MCCAIN: Senator Obama will argue to delay drilling, obviously, and against building new nuclear power plants in America. If I'm president, we'll drilling now. We'll invest in all alternatives nuclear, solar, wind, solar and tide. We'll encourage...

(CHEERING AND APPLAUSE)

MCCAIN: We'll encourage the manufacture of hybrid, and flex fuel and electric automobiles. We'll invest in clean coal technology. We'll lower the costs of energy within months, and we will create millions of new jobs in the United States of America.

(CHEERING AND APPLAUSE)

BLITZER: All right, a little bit of the stump speech, a little flavor of what he is saying down there in North Carolina right now.

On this day, the Dow Jones industrials up a whopping 889 points today. It is the second biggest point gain ever, the index up through much of the day, but then soaring toward the end. Investors brushed aside a gloomy new report on consumer confidence.

Let's bring in our senior business correspondent, Ali Velshi.

Ali, consumers in a dark mood right now?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes.

Investors seem to be doing OK today, but consumers are in a dark mood. In fact, we have a measure of consumer confidence that comes out every month. It came out today. It is the lowest level that has ever been recorded in that index since it started in 1967.

Now, it asks some particular questions of Americans and let me just show you what some of the responses have been. The question was, well, how do you think business conditions are in America? Well, how do you feel about business conditions? Only 38 percent -- 38 percent are saying that it is bad. Jobs are hard to get, 37 percent of people agreeing with that statement.

We also have news about homes. Home prices in the United States are down. Existing homes are down 9 percent compared to last year to a median price -- that is the price at which half of all homes are sold above that and half below -- of $191,600.

New homes, which is where all the construction jobs come in, those prices are down, too. They are a lot more expensive, $218,400. But there is a bright -- there's a bit of a silver lining to this cloud. And this is what it is. While these prices are down, some people are finding homes affordable. They're actually thinking they can get into those homes.

Existing homes, the sales of those homes are up 5.5 percent, compared to the same time last year. And new homes are up 2.7 percent. So, there are some people thinking, they have waited a long time to buy a home. They can still get a mortgage a little better than 6 percent for a fixed rate on a 30-year mortgage, if you can get that mortgage, and there are some people thinking it is time to get in. So, that is one indication that maybe, maybe at least part of this recession is start to move its way through -- Wolf.

BLITZER: All right. Let's see. Ali Velshi, thanks very much.

Let's go back to Jack. He has got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: We have got an election going on, record early voting under way now in 30 states. And voters are casting ballots, either at the polls or through the mail. In both Georgia and North Carolina, for example, an estimated 20 percent of all registered voters have already voted as of Monday. In some states, voters have been willing to stand in line for hours in order to vote early.

This kind of energy and interest is in stark contrast to some elections past, where you could not get voters out of bed on Election Day to go to the polls. The eight years of the Bush administration have energized our democracy like never before. And indications are Republicans are not going to like the outcome very much.

An estimated 122 million Americans, about 60 percent of all registered voters, cast ballots in 2004. That's according to the Committee for the Study of the American Electorate. That was a 6 percent increase from 2000 and the highest turnout since 1968.

But if new registrations and early voting this year are any indication at all, this could well be an election for the record books.

Here's the question. What does record early turnout mean for next Tuesday's election? Go to CNN.com/caffertyfile. Post a comment on my blog.

It is like the beginning of an earthquake out there. There's a lot of folks already going to the polls.

BLITZER: I know.

CAFFERTY: They're getting it done early.

BLITZER: There's nothing wrong with that.

CAFFERTY: No.

BLITZER: Let them do it.

CAFFERTY: Yes.

BLITZER: It is a real fear, African-Americans not getting their chance to vote. That fear in one battleground state prompting a lawsuit. It is the state in which you live?

He could go back to the U.S. Senate, perhaps could go off to jail. A convicted U.S. senator asks for reelection, but should he resign? John McCain and Sarah Palin weighing in.

And McCain says you should be afraid if Democrats control Washington. What are the pros and cons to one party in the White House and Congress?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: He could certainly go back to what is called one of the most exclusive clubs in the world, but he could also land in the place criminals call home. We are talking about Senator Ted Stevens of Alaska. He is running for reelection right now, but he has got another title that is added to his resume. That would be convicted felon.

Let's bring in Brianna Keilar. She is working the story for us.

Lots of talk about whether or not the Republican incumbent should resign, Brianna. What is going on?

BRIANNA KEILAR, CNN CORRESPONDENT: A whole lot of talk, Wolf. Senator Stevens has said, though, he will appeal his conviction, but up next, he will actually be stumping for votes as he faces a really tough fight for another term.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Guilty of felony crimes Monday, vowing to get back on the campaign trail by Wednesday, Alaskan Senator Ted Stevens insists he was wrongly convicted for lying about receiving $250,000 worth of gifts and home renovations.

The Senate's longest-serving Republican is fighting for reelection and resisting intense pressure to resign. Republican presidential hopeful John McCain said: "Senator Stevens has broken his trust with the people, and he should now step down."

Sarah Palin, Stevens' own governor, has even weighed in.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Now he needs to do the right thing, and the right thing is, as he is proclaiming his innocence and proclaiming, too, that he will go through the appellate process, OK, then he needs to step aside.

KEILAR: Though Alaska law allows him to remain on the ballot, members of both parties say, if Stevens win, the Senate Ethics Committee should take up the case, a move that could lead to a vote for Stevens' expulsion.

Voters may have their say before Stevens' colleagues do. He is in a neck-and-neck race with his Democratic challenger, Anchorage Mayor Mark Begich. And observers in the 49 states say it doesn't look for Alaska's iconic politician.

MICHAEL CAREY, "ANCHORAGE DAILY NEWS": I find it very difficult to believe that Alaskans, as independent and cussed as they could be, would actually vote for somebody who had been convicted.

KEILAR: In Alaska, many voters are standing by Senator Stevens.

UNIDENTIFIED MALE: Didn't change my vote.

UNIDENTIFIED MALE: I know the man personally, and he has done a lot for the state of Alaska. He's done a lot for a lot of us. And he is just a very good, decent human being.

KEILAR: Still, Stevens cannot afford to lose votes, and some say his conviction will cost him theirs.

UNIDENTIFIED FEMALE: It is about time we get somebody that is honest and truthful. And we haven't gotten that in a long time.

(END VIDEOTAPE)

KEILAR: Senator Stevens is Alaska's statesman. He is really a lawmaker with some unshakable support in his state. The question of course, will it be enough? As we said, some have their doubts. And we will know for sure after the election next week -- Wolf.

BLITZER: We certainly will. Brianna, thank you for that report.

John McCain says you should be very afraid. He says, if Barack Obama wins and Democrats control Congress, you will be looking at higher taxes and big government intrusion into your life.

Our senior political analyst Bill Schneider has more.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, voters are a little worried about giving the Democrats too much power, but they are also worried about getting things done.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's almost Halloween. John McCain has a scary story.

MCCAIN: Can you imagine an Obama/Pelosi/Reid combination? We can't let that happen.

SCHNEIDER: Are the voters scared? A little. Only 36 percent believe it would be better for the country to have a president and Congress controlled by the same party. Slightly more, 41 percent, prefer to see divided government.

In recent years, the public's experience with unified government has not been happy. Under President George W. Bush, Republicans controlled the White House and Congress for four years. That ended badly with a voter revolt in 2006. President Bill Clinton had a Democratic-controlled Congress for only two years. That ended badly, too, with another voter revolt in 1994.

In the old days, unified governments sometimes lasted a long time. The Republicans controlled everything for 12 years starting in the 1920s. When Democrats swept into power with Franklin D. Roosevelt in 1932, they controlled everything for 14 years.

Are voters becoming more inpatient? Or are the parties becoming more extreme? The argument for unified government is that it's a way to get things done.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: With your help, we will add to the majority of Democrats in the House. And, yes, we will get a filibuster-proof majority of Democratic senators. (CHEERING AND APPLAUSE) SCHNEIDER: The risk, Republicans argue, is that the Democrats will go too far.

MCCAIN: My opponent is working out the details with Speaker Pelosi and Senator Reid of their plans to...

(AUDIENCE BOOING)

MCCAIN: ... raise your taxes -- raise your taxes, increase spending, and concede defeat in Iraq.

SCHNEIDER: The Republican Congress got in trouble for abusing its power and moving too far to the right. Now they're arguing, don't let the Democrats do the same thing from the left.

(END VIDEOTAPE)

SCHNEIDER: The downside of unified government is the potential for the abuse of power. The downside of divided government is gridlock. Either way, there is a risk -- Wolf.

BLITZER: Bill Schneider, thanks very much.

Some of John McCain's own top aides are criticizing his vice presidential pick. Do you want to know more about this story, or are the news media simply unfairly obsessed with it?

And a fresh look at a posh mayor's office. It has now become a bare jail cell. So, why is the former Detroit Mayor Kwame Kilpatrick smiling on this, the day of his sentencing? His sentence has been handed down.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: An alarming charge against the governor of the state of Virginia, the governor there accused of not being prepared for a huge turnout on Election Day. We're going to have a battleground report on the lawsuit and the allegations that minority votes could be in jeopardy.

And Sarah Palin is ready to give another policy speech, as opposed to a stump speech. Will it help erase voter doubts about her qualifications? The best political team on television is standing by.

And, as Democrats hope for a big sweep next week, some Republicans have deep concern that the Republican brand could be in ruins.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now. Overwhelmed by the turnout, the NAACP says Virginia is not ready for the number of voters heading to the polls, the group calling for immediate action.

Insider potshots -- we have been hearing a lot about the sniping within the Republican campaign about Sarah Palin. We're going to focus in on the media attention to this story.

And Joe the plumber's vote -- at first, he would not say which side he supported, but his position is now very, very clear -- all of this, plus the best political team on television.

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

Today, we heard John McCain acknowledge that he and Sarah Palin don't always see eye to eye. Reports of tension between the two running mates and their aides have been spreading through the news media.

Let's go the CNN's Howard Kurtz of "RELIABLE SOURCES" -- Howie.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, "RELIABLE SOURCES": Wolf, the hottest story in this final week of the campaign isn't about the top of the ticket, amazingly enough. The media are obsessed, once again, with Sarah Palin.

(BEGIN VIDEO CLIP, "ANDERSON COOPER 360")

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": As a political observer said today, John McCain trying to stir up buyer's remorse. Advisers are already pointing the fingers at one another and at Sarah Palin, one adviser today telling CNN she's a diva.

(END VIDEO CLIP)

KURTZ (voice-over): As some polls show, a majority of voters deeming Palin unqualified to be vice president, the finger-pointing in Republican circles is intensifying -- the press quoting unnamed Palin people as saying the McCain campaign has mishandled her, McCain loyalists blaming the Alaska governor for, among other things, going rogue -- the latest example, Palin defending herself on those expensive designer outfits, just when campaign officials were hoping the flap would fade.

PALIN: Those clothes, they are not my property. Just like the lighting and the staging and everything else that the RNC purchased. I'm not taking them with me.

KURTZ: The shootout among warring GOP factions has stunned even political veterans.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: What is rare is to have campaign aides putting a harpoon in the candidate and then some of the candidates' friends firing back.

BILL KRISTOL, FOX NEWS: I think Governor Palin has been ill- served by some of the staff and that she's now particularly ill-served that they're shooting at her on background, saying things that I don't believe are true.

KURTZ: Others say the criticism is demeaning to a female candidate.

(BEGIN VIDEO CLIP FROM "THIS WEEK," COURTESY ABC)

COKIE ROBERTS, ABC NEWS: Diva, right. Well, as you know, I love that, as if there isn't some sexism there. Please.

But at any rate, I think...

UNIDENTIFIED MALE: Sure.

ROBERTS: There is. Excuse me.

UNIDENTIFIED MALE: The last time I bought a suit...

ROBERTS: Men are not divas.

(END VIDEO CLIP)

KURTZ: And the unspoken assumption in many of these stories is that the McCain/Palin ticket is headed for defeat next week.

(BEGIN VIDEO CLIP FROM "HARDBALL," COURTESY MSNBC)

ROGER SIMON, POLITICO: She's absolutely running for 2012. She knows she's not going to be elected vice president this year.

(END VIDEO CLIP)

(END VIDEOTAPE)

KURTZ: The most striking thing about this McCain versus Palin subplot is that nobody's names are attached. Journalists are allowing both sides to take their potshots from behind a curtain of anonymity.

Now, why is this getting so much media attention?

Well, it's pretty juicy stuff. But a lot of journalists have also concluded -- and some of them, I believe, are prematurely projecting -- that Obama has this thing all but got this thing wrapped up.

So the behind-the-scenes sniping on the Republican side is filling a void at a time when we ordinarily would be consumed with who is going to win next Tuesday -- Wolf.

BLITZER: Howie Kurtz reporting for us.

Thank you. There's also a legal battle underway right now in a key battleground state. No Democrat has won Virginia in a presidential contest since 1964. But our latest poll of polls shows Barack Obama pulling ahead of John McCain by 7 points in Virginia.

We told you yesterday about the NAACP in Virginia sounding an alarm bell about election readiness.

Let's go to We go the Dan Lothian.

He's working the story for us -- Dan, you've been checking with sources there.

What's going on there?

Why is the NAACP so worried that African-American votes -- and other minorities, potentially -- could be endangered in the State of Virginia?

DAN LOTHIAN, CNN CORRESPONDENT: Well, what they say, Wolf, is they've pointed out the problems that they've had in African-American communities in the past. And then they point out that a lot of African-Americans have actually registered to vote in this election. And so they're very concerned that some of these poor, minority communities will not have the needed machines -- voting machines, in order to cast their votes and might be turned away from the polls.

Now, this is the lawsuit that the NAACP has filed -- 27 pages filed in a U.S. district court in Richmond. And they focus on three communities -- Virginia Beach, Richmond and here in Norfolk, where we are. This is the area where they feel that African-Americans might run into trouble if the state doesn't add additional voting machines.

(BEGIN VIDEO CLIP)

KING SALIM KHALFANI, EXECUTIVE DIRECTOR, VIRGINIA NAACP: With the great increase of registrants for this year's elections, we're very concerned that blacks will not get their constitutional rights abridged.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JEAN CUNNINGHAM, CHAIR, VIRGINIA STATE BOARD OF ELECTIONS: I think we are prepared. We're as prepared as anyone -- any state could be.

(END VIDEO CLIP)

LOTHIAN: Now, what the state points out is that since 2004, they have increased the number of election officials by 50 percent. They've also added 300 additional polling stations. And they've also added additional machines. There's an about 77 percent increase over 2004. And while they say that they are prepared, they do stress that it will be difficult, there will be a lot of long lines. And one official telling me that folks who show up to vote on election day should bring their patience and comfortable shoes -- Wolf.

BLITZER: Good advice, Dan.

Dan working the story in Virginia.

Could the GOP brand be swept away in a blue tidal wave -- why some Democrats think they have a chance to take control of Washington. The best political team on television is standing by to take a closer look at what this might all mean.

And the candidates make another charge through a key battleground state.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We need to win Pennsylvania and we're going to win Pennsylvania.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: Pittsburgh -- Pittsburgh, I've got two words for you -- one week.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The Democrats become a permanent majority party in Washington -- is the Republican brand losing its luster?

Let's discuss this and more with our senior political analyst, Gloria Borger; our chief national correspondent, John King; and our senior political correspondent, Candy Crowley. They're all part of the best political team on television.

The first question, Gloria, to you.

Are Democrats poised right now to become, at least for the time being, a permanent majority party, as the Republicans were for a time?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes. I mean there's nothing permanent in Washington and there's nothing permanent in politics, Wolf. So while they're poised to clearly become the majority party controlling the House, controlling the Senate and controlling the White House, you know, the Republicans can tell you that these things don't last forever. And what the public demands is performance.

And, you know, be careful what you wish for, Wolf. I talked to lots of Democrats who say oh, my God what if we get to 60?

We're actually -- 60 votes in the Senate. People are going to hold them responsible to get something done. And it's going to be a tough road, even if they're in control of everything.

BLITZER: How worried should the Republicans, John, be about the Republican brand losing its luster?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: They believe it already has, Wolf. And they're very worried that this is going to be a devastating election. Now, they say they're trying to do as much as they can to focus on the House and Senate races they think they can save in the final week.

But after this election, even if John McCain wins this election, even if he pulls off a dramatic comeback, there are many who think the Republican Party needs a long, hard soul-searching session.

It will begin just a week after the election. The Republican governors are meeting in Miami. And already many of those governors are saying they want to try to take control of the party, to change the ways of Washington.

And so there's no question Republicans have had a terrible cycle this year, after a terrible cycle two years ago.

The only thing I would add, though, to what Gloria said, Wolf, is remember when Bill Clinton came to power in 1992, he got off on the wrong foot.

BORGER: Yes.

KING: His party controlled Congress in those days. And in 1994 is when the Republicans came sweeping back into power.

BORGER: Right.

KING: So the Democrats need to be careful if they win.

BLITZER: Right. They had the majority...

BORGER: Because they had ideas.

BLITZER: In '92 and '93, they had the majority in the House and the Senate. He tried to get comprehensive health care reform. It didn't exactly work out. In '94, the Democrats paid a big price and Newt Gingrich and the Republican Revolution came back.

So I guess the question to you, Candy, is how is Barack Obama -- if, in fact, he does win, and if there are significant Democratic majorities in the House and the Senate, going to be able to avoid the pain that Bill Clinton faced in '93 and '94?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, listen, regardless of how small a minority Republicans may or may not be in the Senate or in the House, they still have microphones. And so, you know, if Barack Obama is going to deliver on what he said he was going to deliver -- and, remember, this is the campaign that started out about changing the tone in Washington -- not unlike George Bush, by the way that said we have to work on bipartisan solutions.

You know, presidents, when they get in power, tend to find out it's not quite as powerful as they thought it was, because they have to deal with all of these people around them. And, you know, just because it's all Democrats doesn't mean it's all Democrats of like minds.

BORGER: Right.

CROWLEY: You've got some of those Southern Democrats, the blue dog Democrats, you know, conservative Democrats on the Senate side that will, as we're looking at these polls, some that will be elected from the South and very conservative states.

So just because it's all Democratic, doesn't mean it's going to -- they're all going to ,be in unison, because certainly, if enough Democrats join up with the Republicans -- assuming they're in the minority -- they can cause a president quite a bit of trouble. And they can make that six -- that filibuster number if they join up. And sometimes those Democrats have more in common with the Republicans on some of these issues than they do fellow Democrats.

BLITZER: Gloria, Sarah Palin...

BORGER: The...

BLITZER: I was going to change the subject to Sarah Palin.

BORGER: Right. Sure.

BLITZER: But if you want to make another point, go ahead.

BORGER: No.. I'd love to talk about Sarah Palin.

(LAUGHTER)

BORGER: I was just going to say, any mistake early on is magnified. And I think the Obama folks really get that. And what he might do early on, say, is have a show to bipartisanship and look to a couple of Republicans to put in his cabinet.

BLITZER: Let's talk about Sarah Palin for a moment.

KING: Right.

BLITZER: She gave a speech -- a policy speech, as opposed to stump speech -- on women's issues; another one on special needs kids. Tomorrow, John, she's going to give a policy speech on energy, which is supposed to be her great strength as the governor of Alaska.

Is this too little too late in terms of trying to strengthen her reputation as someone qualified to be president?

KING: Well, it's certainly good that -- from the McCain campaign's perspective -- that she is out talking about an issue that is perceived to be her greatest strength -- the issue of energy and her knowledge from Alaska. And it certainly beats extending the controversy over whether she's mad at McCain aides or whether there's a dust-up over her wardrobe and the like.

Is it too late?

Wolf, voters pick a president based on the person at the top of a ticket. And in both campaigns they acknowledge that.

Sarah Palin has helped to the extent that she has energized the Republican base. Where she has failed the ticket is that many moderate, suburban voters, many Independent voters, don't think she's up to the policy challenge.

So if, in the final week, she can bring some of those voters back -- especially Independents -- it will make it more competitive.

In the end, this is about John McCain and Barack Obama. But Sarah Palin could, through this speech and some others, rehabilitate her policy image with the small constituency of Independents and suburban women especially, where she's hurting the ticket right now.

BLITZER: And she has to do it in a state like Pennsylvania, Candy, where our latest poll of polls among likely voters has Obama at 52 percent, McCain 42 percent. That's a 10 point split.

They've -- they've put a lot of their eggs, the Republicans, in this Pennsylvania basket and its 21 electoral votes. And it's by no means looking good for them right now.

CROWLEY: Well, it doesn't in our polls. But they have said internally in the McCain campaign that they believe it is closer than it looks. Now, mind you, they don't say they believe they're ahead. But they believe it is closer.

But the cold, hard fact here is that they had to look at this map and they had to decide. And they knew they'd have to go somewhere that John Kerry won in 2004. And they took a look around and they came out of Michigan and they went to Pennsylvania.

They are in for a penny, in for a pound. That's where they've chosen to kind of stake their claim in terms of a Democratic state.

So at this point, very little to do but go back there and back there and back there.

BLITZER: And if you're lucky, Gloria, you own a television station in Pennsylvania right now...

(LAUGHTER)

BLITZER: ...because there are a lot of ads that are being bought on those television stations.

BORGER: Yes.

KING: That's right.

BLITZER: And, presumably, it's a saturated market right now.

BORGER: Yes. It is a -- I'm sure. I don't know if there's anymore ad time left to buy in that -- in that state. And I think -- look, John McCain is doing exactly what Candy says. He's looking at the western part of the state, where their internal polls are showing them that it's closer than some of our polls would have us believe. And, look, they're looking for every vote they can get in a big state that matters, with a lot of electoral votes.

BLITZER: Gloria, John and Candy -- guys, thanks very much for that.

Let's check in with Lou to see what's coming up right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Thank you, Wolf.

We'll have the very latest on this presidential campaign and its final week. Much more of the media now convinced that Senator Obama will win, but some polls suggesting this race is tightening. We'll have complete coverage.

We'll also be telling you about an issue the presidential candidates are still avoiding -- the drug cartels' all-out war against the government of Mexico. The drug cartels infighting some of Mexico's most important law enforcement agencies.

And startling new evidence tonight of the outright abuse of our visa system by corporate elites. They're determined to import cheap labor to compete directly with our American middle class working men and women. We'll have that report.

And the Dow Jones Industrials -- if you want some good news on the economy, the Dow Jones Industrials today surged by nearly 900 points. Three of the best economic thinkers in the country join us.

Please be with us at the top of the hour here on CNN for all of that, all the day's news and more, from an Independent perspective -- Wolf, back to you.

BLITZER: We'll see you in a few moments, Lou.

Thank you.

DOBBS: You've got it.

BLITZER: Candidates and Cabbage Patch dolls -- with election day only a week away, CNN's Jeanne Moos has a Moost Unusual look at the latest campaign follies. I think you're going to want to see this.

And we're also on the campaign trail with "Joe the Plumber."

(BEGIN VIDEO CLIP, COURTESY WBNS)

JOE WURZELBACHER, PLUMBER: Get out there and vote. I'd love to see 50 and 75 percent of Americans actually vote. You know, but I'd also disenfranchise (INAUDIBLE), you know, that my vote actually counts.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: We're getting two poll of polls average numbers in two key battleground states just coming into THE SITUATION ROOM right now.

First in Florida. In Florida right now -- actually you're looking at Ohio right there. Ohio, Obama is at 50 percent; McCain, 44 percent. That's a 6 point advantage in Ohio for Barack Obama.

In Florida, the poll of polls, we have a 4 point advantage right now for Barack Obama -- 49 percent to 45 percent in Florida.

Let's go to Ohio -- Cleveland.

Mary Snow is working the story for us.

It's a critically important state for both of the candidates right now.

What's going on this date -- Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, heavy turnout in early voting. We're in Cleveland. An official here is saying that she's seen an up tick in the recent days, with about 3,500 people a day coming in to cast their ballots early.

As the voting effort intensifies, so does the race, underscoring just how crucial this state is for John McCain. He's coming back to this state for two days.

And he enlisted the help today of "Joe the Plumber" -- Joe Wurzelbacher. Joe endorsed Senator John McCain.

But already, the campaign is saying that it doesn't agree with everything that Joe is saying out there on the campaign trail, including today while he was campaigning in a number of cities, he agreed with, a McCain supporter who said that a vote for Obama would mean death To Israel.

Also, Joe Wurzelbacher taking aim at Obama's tax plans, saying that if he's elected, it would become a socialist nation.

Here's what he had to say.

(BEGIN VIDEO CLIP, COURTESY WBNS)

WURZELBACHER: There are men and women in the military services who fought for our country and died for our country, because this is a democracy, not a socialist -- you know, not a socialist country.

That bothers me. I really don't want to -- well, it scares me. And it's the whole big reason I came out here. You know, I'm really scared for our country.

Please find out the facts. I'm not going to sit here and tell you which way to vote.

(END VIDEO CLIP)

SNOW: That's Joe Wurzelbacher. The Barack Obama campaign saying that this is clear that John McCain is out of touch, out of ideas, calling this a desperate act -- Wolf.

BLITZER: One of our battleground reporters.

Mary Snow in Cleveland for us.

Mary, thanks.

Jack is here with The Cafferty File -- Jack.

CAFFERTY: You know, if I was having trouble making up my mind, that's the guy I'd go to for my advice. I'd want him to help me make my decision.

That's -- by the way, those numbers in Florida and Ohio...

BLITZER: Yes?

CAFFERTY: That's tough work for McCain...

BLITZER: Yes.

CAFFERTY: ...with five or six days to do.

The question this hour -- what does the record early turnout mean for next Tuesday's election, following up on what Mary was just talking about?

Marge in New Port Richey, Florida writes: "It's a sign that shows how crucial this election is. A lot of normally apathetic citizens who take everything for granted are now hurting and are paying attention. Too bad things have to get so bad before people take notice."

Matt writes: "I think it means Americans have realized it's time for a progressive change in America. We haven't had a social one since the '60s and an economic one since FDR."

T.J. writes: "It means McCain is toast. The polls on McCain are not factoring in the hidden dynamics of this race -- first time voters, the youth and left out citizens who are determined not to be left out this time. They're going early to avoid the lines and any flimflam that happens at election sites on election day. This thing might be over before it starts."

Ron in Oregon: "Having already voted in the nation's only all mail-in balloting, it's clear that people are serious and want their vote to count. Why doesn't everyone just go to the mail-in ballot? It is so much more convenient, people have more time to do it, there has never been an accusation of voter fraud in Oregon related to the mail- in balloting. Come on people in, oh, say, Florida or Ohio, get with the program." John writes: "It means people are tired of this election cycle and more eager than ever to get it over with."

I would be one of those.

Sandra in Texas: "I voted early, came home and took a bath. Now I can ignore all the B.S. from the McCain campaign and go on about my business. Maybe everybody else feels about the same. They just want this over."

And Steve in Illinois: "It means bye-bye to grumpy old white men being in charge."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others.

Some of you are downright clever.

BLITZER: Very clever.

CAFFERTY: They are.

BLITZER: We've got a lot of smart viewers out there.

CAFFERTY: And all the months we've been doing this stuff and every day, they come with the goods.

BLITZER: They do.

CAFFERTY: They deliver the mail every day.

BLITZER: They always deliver, just like you.

CAFFERTY: Yes.

BLITZER: Jack, see you tomorrow.

CAFFERTY: Goodbye.

(LAUGHTER)

BLITZER: With the candidates working really hard in the battleground states, there's room for talk about -- decorating?

We're going to show you the discussion of the Oval Office drapes with our own Jeanne Moos.

(BEGIN VIDEO CLIP)

MCCAIN: Senator Obama is measuring the drapes and he's planned his first address to the nation for before the election.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) MCCAIN: He's measuring the drapes.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: He's measuring the drapes.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker, I'm going to be going one-on- one with Senator Barack Obama this coming Friday and you can play a part in the interview. Submit your video questions at iReport.com/Obama. We're going to try to use some of the best questions in the interview and try to get some answers from Senator Obama.

For the past three hours here in THE SITUATION ROOM, we've been meticulously bringing you the candidates' speeches, their platforms, all the analysis. We certainly analyzed all the numbers. Now it's time to chuckle a little bit at their foibles.

CNN's Jeanne Moos is back in her Moost Unusual way with more campaign follies.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Cuddly candidates...

UNIDENTIFIED FEMALE: There he is.

MOOS: ...cold candidates. In jacket and jeans, Senator Obama addressed supporters in a monsoon that left Obama fans shivering.

UNIDENTIFIED SUPPORTERS: We want change!

MOOS: Change of temperature -- change of drapes?

MCCAIN: Senator Obama is measuring the drapes.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: They've got him measuring the drapes.

UNIDENTIFIED MALE: We're not measuring any drapes.

MCCAIN: He is measuring the drapes.

MOOS (on camera): Did you actually measure the drapes?

KAKI HOCKERSMITH, CLINTON INTERIOR DESIGNER: Yes, I did, on January 2nd.

MOOS (voice-over): Interior designer Kaki Hockersmith changed the Oval Office drapes to gold after Bill Clinton was elected; changed them from the blue drapes favored by George Bush, Sr.

(on camera): Do they have to change the drapes for every president?

HOCKERSMITH: Most presidents do change the Oval Office.

MOOS: Currently, the drapes are gold again. Even "Saturday Night Live" may have to change its drapes.

(BEGIN VIDEO CLIP FROM "SATURDAY NIGHT LIVE," COURTESY NBC)

UNIDENTIFIED MALE: Thumbs up, everybody.

(LAUGHTER)

(END VIDEO CLIP)

MOOS: Just imagine the drapes Paris Hilton would install.

(VIDEO CLIP)

MOOS: This is her new Paris for President video.

Others political videos are capitalizing on the false story told by that McCain supporter, who claimed an Obama supporter carved a B on her cheek. Here come the parodies.

UNIDENTIFIED MALE: You're going to be a John McCain supporter.

MOOS: And on "The Daily Show," faith/business correspondent Samantha Bee claimed Alan Greenspan disfigured her...

(BEGIN VIDEO CLIP FROM "THE DAILY SHOW WITH JON STEWART," COURTESY COMEDY CENTRAL)

JON STEWART, HOST: The G on your cheek is -- is backward.

SAMANTHA BEE: I know. He must have done it from inside my mouth somehow.

(END VIDEO CLIP)

MOOS: And speaking of initials, there's the "N" word controversy that wasn't. Someone screamed something about Barack Obama at a Sarah Palin rally.

(VIDEO CLIP)

MOOS: Left-wing blogs thought the N word had been hurled. But soon, right-wing blogs were analyzing the sound bite.

(VIDEO CLIP)

MOOS: Most listeners concluded the woman yelled, "He's a redistributor!," referring to redistribution of whether. The mike was even slowed down for analysis. (VIDEO CLIP)

MOOS: With all this hostility, maybe it's time for a hug.

(on camera): So let's get them in the right order here.

(voice-over): Cabbage Patch candidates -- Obama and Biden, McCain and Palin.

UNIDENTIFIED MALE: If I buy that and bring it home, my mother will kill me.

MOOS: Actually, these are one of a kind to be auctioned off on eBay to mark the 25th anniversary of the Cabbage Patch Kids, with proceeds going to charity.

UNIDENTIFIED FEMALE: They're...

UNIDENTIFIED MALE: It's sad. I don't know. But this is cute. I like her.

MOOS: At least no one's asking her where the outfit is from.

Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: Thank you, Jeanne.

We want you to check out our political pod cast, by the way. To get the best political team to go, subscribe at CNN.com/situationroom.

That's it for us.

Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

We'll see you back here tomorrow.

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

DOBBS: Thank you, Wolf.

Tonight, one week to election day. Some polls suggest this race is tightening. We'll tell you what's happening on the front lines of this presidential campaign.