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Embryonic Stem Cell Research Put on Hold; Obama Administration Touts Iraq Milestone; Fueling Iran's Nuclear Threat; What Happened to Straight Talk; Money Talks in Florida's Hot Primaries; Hostage Crisis on Tourist Bus

Aired August 23, 2010 - 17:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Thanks, Rick. Happening now one of the most significant tests yet of President Obama's promises in Iraq. In the final days of the U.S. combat mission, how does the administration's spin compare with reality?

Also, SeaWorld is slapped with a massive federal fine in connection with the death of a trainer by a killer whale. This hour alleged safety violations are exposed and concerns animal handlers may still be in danger.

And a massive egg recall grows to become the largest in recent history. Now officials are racing to find the source of the salmonella threat, fearing that the entire nation could be exposed.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN Breaking News.

MALVEAUX: First I want to begin with some breaking news this hour. Federal funding for embryonic stem cell research is now on hold. A U.S. district court judge here in Washington issuing a preliminary injunction a short while ago.

In the ruling the judge says the research involves the destruction of human embryos against the will of Congress. Now this comes over a year after President Obama signed an executive order repealing Bush era limits on federal tax dollars to study embryonic stem cells.

Many Americans see that research as key to finding cures for spinal cord injuries, cancer, Parkinson's, other diseases.

I want to bring in our senior legal analyst Jeffrey Toobin who is on the phone to help us explain what this means.

Now, Jeffrey, in covering President Bush for all those years, one of the things he was dead set against was allowing for these federal dollars to be used for embryonic stem cell research.

What he proposed was a compromise saying, look. No more new funding. Just allow the funding for 21 existing lines.

President Obama reversed that and now we have the courts involved in this. What does this mean today?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST (via phone): Well, the bottom line is this is a major setback for stem cell research and for the Obama administration. Because what the judge said was that in 1996 while President Clinton was in office Congress passed a law that said there could not be any use of federal money for research where embryos are destroyed.

Both President Bush and President Obama worked within the framework because the president unilaterally can overturn a law. By expanding the opportunities for federal funding of research, as President Obama did shortly after he was elected, Judge Royce Lamberth, the judge in Washington, today said he -- President Obama -- violated that 1996 law.

He tried to basically say that that law didn't count any more. He -- and presidents can't -- unilaterally overturn an act of Congress and that's why the judge suspended the Obama rule today.

MALVEAUX: So, Jeff, what does this mean in terms of projects that have already been funded? Do they continue or do they stop or does this mean that there's just not additional funding for new projects? How does this work today?

TOOBIN: Well, as usual those questions will mean more work for lawyers. Because the Judge Lamberth's 15-page opinion does not really deal with all the details of how this will play out in the real world.

To be sure, the Obama administration will appeal this ruling to the D.C. Circuit. And it may well be overturned. This case has already been to the Appeals Court once. But if it stands up, it will certainly cut way back on federal funding for the stem cell research and it is not clear from Judge Lamberth's order what happens to those projects that are under way as we speak.

MALVEAUX: And, Jeff, just real quick here, what is the next step in the legal process? Where does this go?

TOOBIN: Well, the Obama administration, I assume, will go to the D.C. Circuit court of appeals and ask for a stay of this ruling while it's appealed but the antiabortion pro life forces who were behind this lawsuit, among others, will certainly oppose that and this is yet another battleground broadly defined of the abortion struggle in America.

Because ultimately that's what stem cell research and the fight over embryos has really come down to.

MALVEAUX: OK, Jeffrey Toobin, thank you so much. Again, another potential wedge issue that may weigh in the midterm elections. This decision coming down today just earlier this afternoon.

Now to a huge and hard fought milestone in the Iraq war. The White House wants to make sure that Americans are paying attention. Even in the slow, hot final days of August. Today Vice President Biden delivered an upbeat assessment of the situation in Iraq. Now this is just eight days before the deadline for U.S. combat mission to end. President Obama now plans to give a big speech about the war sometime after he's wrapping up his vacation on Sunday.

I want to bring in our White House correspondent Dan Lothian, my colleague, who's covering the president's stay in Martha's Vineyard.

Dan, what do we know about how the president is preparing the American people for this real significant transition?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Suzanne, I think what you heard today from the vice president is a preview of what we'll hear from the president.

The major theme obviously is that major combat operation in Iraq coming to an end, that the U.S. forces have done an effective job of training Iraqi forces on the ground there to handle their own security and that, as those 50,000 U.S. troops will remain in Iraq, their role will shift from one of a combat role to a supportive role for those Iraqi forces.

But another thing, too, that the vice president was also trumpeting and something we'll no doubt hear from the president is that violence has been on the decrease there and that in light of the recent elections in Iraq, quote, "politics not war," has broken out in that country.

The vice president also making that point a promise to the Iraqi people that in 2011 when U.S. troops pull out from Iraq completely that that country will not be forgotten.

(BEGIN VIDEO CLIP)

JOE BIDEN, U.S. VICE PRESIDENT: Drawing down our troops in Iraq does not mean we are disengaging from Iraq. In fact, quite the opposite is true. We're in the process of following President Bush's proposal for a long-term relationship.

(END OF VIDEO CLIP)

LOTHIAN: Now the one challenge that remains in Iraq -- the vice president pointing this out, the president also has been saying this in recent weeks -- is that even though there has been that election in the spring in Iraq there still has been no agreement yet on reaching a good, solid coalition government in Iraq.

The vice president pointing out today that that is a frustrating process but he's confident that they can reach agreement on that -- Suzanne.

MALVEAUX: All right, Dan Lothian at Martha's Vineyard. Thank you so much, Dan.

I also want to talk as well about Iran because Iran is giving its neighbors and some around the world more reason to feel threatened by its military power and its nuclear program.

Now President Mahmoud Ahmadinejad personally presided over the unveiling of a new weapon now reportedly made right there in Iran.

I want to bring in our Pentagon correspondent Barbara Starr to tell us more about this long-range military drone that was presented and rolled out yesterday. Some fanfare around it.

How significant is this piece of equipment, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Suzanne, I think that's exactly what the U.S. intelligence agencies are trying to determine at this point.

If you look at the video that President Ahmadinejad unveiled. This is a very ferocious looking, unmanned drone that the Iranians say can go about 600 miles, carry a number of cruise missiles. Not long enough to attack Israel in terms of its range but certainly could attack shipping in the Persian Gulf.

But the question, Suzanne, is, what is this really? Does it work? Is it just a prototype? How many do they have in any arsenal? Do they have a stockpile of these things? Or is this a one-off brought out with big fanfare? Does it really present a threat?

That's what folks are trying to determine right now -- Suzanne?

MALVEAUX: And this weekend Iran also began fueling a nuclear energy plan in the southern part of the country. Do we know if that was a threat to the United States or to its neighbors?

STARR: Well, this is the Bushehr nuclear power plant that is said to generate electricity, a commercial nuclear power plant, on Iran's southern coast. Now there have been a lot of concerns because certainly it does involve nuclear fuel although not weapons grade fuel.

The Russians have promised to keep an eye on it, be in charge of putting the fuel rods in, taking the fuel rods out so everything is very closely monitored. That's at least what the Obama administration has been promised, but make no mistake a lot of concern that this is another potential, potential step on Iran's road to developing weapons grade material for nuclear weapons.

The Israelis are already calling this plant totally unacceptable -- Suzanne.

MALVEAUX: OK. Barbara Starr, thank you so much.

SeaWorld is defending itself against serious new allegations in the death of a whale trainer. I want you to stand by for the disturbing results of a six-month federal investigation.

Plus, what trapped miners are doing to try to survive below ground. Possibly for months. And health officials warn that the massive egg recall may grow even bigger. What you need to know to make sure that you and your loved ones are safe from salmonella.

(COMMERCIAL BREAK)

MALVEAUX: Jack Cafferty is here with "The Cafferty File".

Hey, Jack. You know Wolf is off this week. You got --

JACK CAFFERTY, CNN ANCHOR: Well, I --

MALVEAUX: You got me.

CAFFERTY: I figured that out when I saw you. What a pleasant change on the eyes that is. Where is Wolf?

MALVEAUX: I think he's vacationing somewhere. And I think --

CAFFERTY: We should find out like his hotel room number and put it on the air so people can, you know, send him little wishes for his vacation.

MALVEAUX: They're telling me -- they're telling me it's Aspen. Maybe we'll send well wishes to Aspen. Somewhere in Aspen.

CAFFERTY: OK. All right.

(LAUGHTER)

CAFFERTY: John McCain became a household name by riding across the country in a bus called the Straight Talk Express. But these days straight talk seems to be about the last way to describe what's coming out of McCain's mouth.

John McCain now holds a comfortable lead over his primary opponent out there in Arizona, J.D. Heyworth, as he makes a run for a fifth term in the U.S. Senate at the age of 73.

But as "Politico" describes it, it's a costly road that could leave a lasting stain -- an unsightly stain -- on John McCain's legacy. For starters, John McCain, once a champion of campaign finance reform, has spent more than $20 million on the Republican primary in Arizona ahead of tomorrow's election.

There are positions that he's taking that are markedly different from positions he used to take. For example, back in his maverick days, McCain was a sponsor of comprehensive immigration reform with Ted Kennedy. Remember?

No more. Now he's flipped on that issue big time. Now he supports Arizona's tough immigration law and spends more time talking about border security and finishing, quote, "the danged fence". McCain's gone from maverick to panderer.

He's also changed his tune on "Don't Ask Don't Tell". He once said that he supported the repeal of that policy. Now he's promising to filibuster any bill that would do just that.

Climate change? McCain used to be a leader on that issue. Now he is pretty much steering clear of it. Period.

It's kind of sad actually. John McCain used to stand up for what he thought was right. Remember? Now at age 73 he is just another politician willing to sell out his principles for his boat.

See, it's the only way to save his political life and get the support of the conservative Republicans who vote in Arizona's primary. The maverick has become a hypocrite.

Here is the question. Has political ambition ruined John McCain's legacy? Go to CNN.com/CaffertyFile and post a comment on my blog -- Suzanne?

MALVEAUX: Jack, I'm sure there are a lot of people are weighing in on that and it looks like even the polls showing that he might pull out in this race and actually win. So we'll see how he does.

CAFFERTY: Yes. He is expected to win now. Expected to win the primary.

MALVEAUX: OK. All right. Jack, thank you so much.

CAFFERTY: Sure.

MALVEAUX: I want to also point the direction to Florida because it also holds some high-profile, high-stakes primaries tomorrow. And the hottest Democratic contest is for the U.S. Senate.

Now the marquee Republican matchup is for governor and a new poll suggests that both of these contests still are competitive with about one-fourth of likely voters on both sides saying that they're undecided. Now a huge factor in all of this is the money. And we're talking about lots of it.

Our congressional correspondent Brianna Keilar is here.

We're seeing a trend here. And tell us about the money. Where is the money going? Where is it coming from? Because there is a lot involved in this now.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: It's coming from individual people's pockets. And it's not just Florida. It's California, Connecticut, you name it.

Long-time politicians are finding themselves challenged by billionaires and multi-millionaires who can finance their own races. But it's not quite the advantage you might think it is.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): To hear ABBA tell it having money means you're golden but these Swedish pop legends obviously weren't talking about politics. Case in point, Florida where billionaires are putting big bucks into their own races. Businessman Rick Scott is reported to have spent $50 million on his campaign for governor running as an outsider.

(BEGIN VIDEO CLIP)

RICK SCOTT (R), FLORIDA SENATE CANDIDATE: The last thing the insiders want is a governor who owes his job only to the people.

(END OF VIDEO CLIP)

KEILAR: But on the eve of Florida's primaries Scott is falling behind Bill McCollum as they vie for the Republican nomination. In Florida's Senate race --

(BEGIN VIDEO CLIP)

JEFF GREENE (D), FLORIDA SENATE CANDIDATE: I'm not taking a penny of special interest money.

(END OF VIDEO CLIP)

KEILAR: Billionaire real state tycoon Jeff Greene threw $13.4 million into his campaign coffer and touts his independence as a so-called self-funder.

GREENE: I will spend whatever it takes to get my message out and to be competitive against these career politicians who are funded by special interests and lobbyists.

KEILAR: Still, he's trailing Congressman Kendrick Meek, the leading contender for the Democratic nomination. And Meek supporters -- most notably Bill Clinton -- have accused Greene of trying to buy his way into the race.

BILL CLINTON, FORMER U.S. PRESIDENT: Near as I can see that's the difference. One guy has delivered for you. The other guy has more money and runs more ads.

KEILAR: There are a number of high-profile Republicans paying their own way this election cycle. Pro-wrestling mogul Linda McMahon has given herself $22 million in Connecticut Senate race.

In California, $5.5 million from former Hewlett-Packard CEO Carly Fiorina running for the Senate. And in the state's governor's race, Meg Whitman, the former CEO of eBay, has coughed up $104 million and is poised to break the record set by New York City Mayor Michael Bloomberg.

All of them are down in the polls. So maybe ABBA didn't have it right when they said this.

(MUSIC)

(END VIDEOTAPE) KEILAR: Fun music, of course. But, you know, one of the big issues for voters as you can imagine especially in these tough times is how do you relate to a billionaire? When you're pinching pennies to get by it might be hard to connect on a personal level with someone who can afford to spend tens of millions of dollars in their bid for public office.

MALVEAUX: How did you find that ABBA video, is what I want to know.

KEILAR: It was in my mind because actually one of our producers just saw "Mama Mia" and so it just sort of --

MALVEAUX: Clicked.

KEILAR: Clicked, yes.

MALVEAUX: But obviously, I mean, money does make a difference here and somebody being able to run, right?

KEILAR: It does. I mean, that's why candidates raise so much money. The more money you raise, chances are you're going to do better. The difference here has to do with these self-funders because self-funders just, you know, not looking at the candidates, but by and large they tend to not do so well.

MALVEAUX: And what about the whole notion here of -- do they get any kind of return on their investment? Can you calculate something like that?

KEILAR: Yes. So we broke this down. If you're going to spend this kind of money on your election, what does it mean for your somewhat meager salary in the end?

Well, let's take the extreme example. If you're talking about Meg Whitman, say, she were to become the governor of California. You're looking at a four-year term, a little over $200,000 a year. Her personal investment at least just at this point would be $130 for every dollar that she earns in salary.

MALVEAUX: OK.

(LAUGHTER)

KEILAR: They don't do it for the money. Right?

MALVEAUX: No. I guess they don't.

KEILAR: Obviously not.

MALVEAUX: I guess they don't. All right. Thanks again, Brianna.

KEILAR: You're welcome.

MALVEAUX: Appreciate it.

Well, there's a remarkable tale of survival in Chile. Thirty-three miners lived through a cave-in almost three weeks ago. Now can they survive the four months it could take to get them out?

Also a rape warrant is issued then quickly reversed against the founder of WikiLeaks. The prosecutor who issued it defends the timing of the charges. He is under review.

And Tiger Woods and his wife go their separate ways. The divorce is final.

(COMMERCIAL BREAK)

MALVEAUX: Kate Bolduan is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now.

Hey, Kate. What are you working on?

KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Suzanne.

This is a really amazing story. Tubes filled with black light, water and oxygen have been dropped to 33 miners trapped 2300 feet underground in Chile. Officials discovered from a note attached to a probe yesterday that the miners had survived 18 days in a small shelter after becoming trapped by a cave in.

It could take, though, four months to reach them. Experts say the miners will need to keep a routine and rely on each other to survive.

Also a Swedish prosecutor who issued an arrest warrant that was quickly reversed against WikiLeaks founder Julian Assange has been reported to Sweden's Ombudsman for Justice.

The prosecutor told superiors he issued the rape warrant for fear Assange might leave the country. Within a day the chief prosecutor had struck down the warrant but is still reviewing the case.

Assange denies the allegations. He told Al Jazeera yesterday that he believes that he is a target of a smear campaign.

And the National Hurricane Center says the storm called Danielle is now a category 1 hurricane. Danielle was upgraded within the last half hour, making it the second hurricane of this year's Atlantic hurricane season.

The storm is now packing winds of 75 miles an hour. So far no coastal watches or warnings are in effect. Tracking maps show Danielle well out in the Atlantic Ocean and staying away from land at least through Saturday.

And the agency established to handle emergency claims from the Gulf oil disaster says it's up and running. Last week BP stopped accepting private claims but will continue to handle the claims from government entities.

The oil giant says it's written 127,000 checks totaling $399 million in claims so far. The Gulf Coast claims facility now administers the private claims. The agency controls a $20 billion fund established by BP to compensate for all that damage stemming from April's oil rig explosion -- Suzanne.

MALVEAUX: Thank you, Kate.

A killer whale lived up to its name but what role did SeaWorld play in the gruesome death of a trainer? Federal investigators are citing serious violations.

And tourists gunned down on a bus by a former police officer. A hostage standoff ends in blood shed. But why did it begin in the first place?

(COMMERCIAL BREAK)

MALVEAUX: Now to the Philippines and the bloody end to a hostage standoff onboard a bus full of tourists. Nine people are dead, including the gunman, a disgruntled former police officer who was shot by police.

CNN reports Anna Coren reports from Manila.

(BEGIN VIDEOTAPE)

ANNA COREN, CNN CORRESPONDENT (on camera): A dramatic end to a 10- hour hostage crisis that unfolded here in Manila after the gunman, 55- year-old Rolando Mendoza, was shot in the head by a sniper.

Now, Mendoza, a police officer of 30 years, boarded this bus just after 10:00 a.m. local time dressed in his uniform and carrying an M- 16 rifle. Well, this was a tourist bus with 25 people onboard, 21 of those Hong Kong nationals.

Well, a short time later, he took the bus hostage, demanding he be reinstated after being sacked from his job last year following an extortion and robbery investigation. Mendoza claims he was innocent and negotiations began. Police said that Mendoza was cooperating and released nine of the hostages.

But then the situation deteriorated dramatically. Mendoza's brother, also a police officer, came to the bus. He threw himself on the ground and asked his brother to surrender. When police surrounded him, that is when Mendoza began firing.

Well, SWAT teams and special forces surrounded the bus and you can see the sort of damage that took place. They used sledge hammers and tried to break in. The bus driver managed to escape during one of the exchanges of gun fire that lasted sporadically for over two hours.

Well, eventually, Mendoza was shot in the head just after 9:00 p.m. Eight other hostages were killed. The remaining seven survived and were taken to hospital.

An investigation, which will be overseen by the president, who visited the scene after the crisis was resolved, will look into how this was handled and whether more lives could have been saved.

Anna Coren, CNN, Manila. (END VIDEOTAPE)

MALVEAUX: We heard Vice President Biden declare today that al Qaeda's attempts to inflame tensions in Iraq have -- quoting now -- utterly failed. Violence has eased as United States prepares to wrap up its combat mission. But al Qaeda's presence is being felt in other ways. Our CNN's Arwa Damon takes us into the streets of Mosul.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT: Mosul, Iraq's third largest city, and until recently better known as al Qaeda's urban stronghold. We're out with the U.S. military and the Iraqi federal police they are advising. This is one of the main roads leading into Mosul and it was called the highway of death. The police were just telling us that bodies would pile up on the sides of the road. We can still see battle damage on most of the buildings, this one here being the most severe.

That's from the fighting back in 2005. Well the U.S. military says at least now the Iraqi forces are holding their ground and the situation has improved to a certain degree. It's still not safe. This part of the city remains the most dangerous. In fact, our police escort commander only allowed us five minutes at each checkpoint. He said he was worried about a grenade attack or fire fight. Still, both the Americans and the Iraqis point to small successes.

Before we came in they were threatened. The shop owners used to have to pay al Qaeda monthly to open their shops. This police officer tells us as we stand at the edge of one of western Mosul's markets.

LT. COL. MICHAEL MARTI, U.S. ARMY: It's what we would describe as al Qaeda and Iraq's base of financing operations. Now, it's where we see them not only at the kind of lower level attempting to extort funds out of, you know, out of sort of mom and pop shop type operations but also where we see them attempting to extort from companies like the factory and organizations like that and our funds for their operations.

DAMON: The U.S. estimates that al Qaeda extorts around $500 million monthly just from Mosul. And the city remains awash with weapons caches although many of them are old. Since the Iraqi forces proved that they will fight rather than flee, more residents have been coming forward with tips. In a two-week time frame 11 caches were found in and around Mosul. While the U.S. military believes al Qaeda has been degraded and is incapable of regenerating, there are other insurgent groups still very active including Sunni militants who are former Saddam loyalists.

MARTI: I would think that the Iraqi police are a little bit more vulnerable in Mosul to have a group like a Sunni nationalist group trying to weave its way into the fabric of Iraqi police.

DAMON: It's a city that will truly test Iraqi capabilities especially as the U.S. changes its mission and gradually leaves the Iraqis to stand alone.

Arwa Damon, CNN, Mosul, Iraq.

(END VIDEOTAPE)

MALVEAUX: More than a thousand people are sick and hundreds of millions of eggs recalled. What does such a massive recall say about the safety of our country's food supply? And what can you do once that food is in your kitchen?

And they were golf's golden couple. After months of scandal Tiger Woods and wife Elin bring an end to their marriage.

(COMMERCIAL BREAK)

MALVEAUX: Kate Bolduan is monitoring some of the other top stories coming into THE SITUATION ROOM right now. What are you working on?

KATE BOLDUAN, CNN CORRESPONDENT: Hey, Suzanne. It's official. The divorce is final. Tiger Woods and Elin Nordegren have finalized their divorce agreement in Florida. In a joint statement issued by their attorneys the couple wished each other well and asked for privacy as their two children adjust to the new situation. The divorce comes nine months after allegations and eventual acknowledgment of infidelities by the golf champion came to light.

And the man accused in California's so-called grim sleeper serial killings has pleaded not guilty to ten counts of murder. Lonnie Franklin Jr. was arraigned in Los Angeles today. He's accused of killing at least ten women in south Los Angeles between 1985 and 2007. The killings occurred in two clusters of time separated by 12 years, hence the name, grim sleeper.

Fresh charges are being filed against two captured Arizona prison escapees and an accomplice. A U.S. attorney in New Mexico announced today that murder warrants have been issued for John Charles McCluskey and Tracy Alan Province and Casslyn Mae Welch accused of carjacking and killing an Oklahoma couple. All three are currently held on a million dollars bail each.

And a new report is sounding a loud warning about Grand Canyon National Park. Scientists and park staff working on what's called the state of the parks report say several man made threats are contributing to the deterioration of the popular scenic destination. They say the park is declining from factors that include mining, aircraft flyovers, upriver management of the Colorado River, and climate change. The report recommends increased federal financial support to maintain the park experience and to plan for the park's future. Suzanne?

MALVEAUX: Okay. Thank you, Kate.

The clock is ticking toward November's mid term elections and President Obama will be campaigning hard. What he needs to do in the final weeks to keep the Democrats in control of Congress. That in our strategy session.

(COMMERCIAL BREAK) MALVEAUX: Ten weeks and counting to the mid term election. CNN.com has come up with a list of the top ten things President Obama needs to do to keep the Democrats in the driver's seat in Congress. Now we're going to take a look at some of those in our strategy session. Joining me for today's strategy session is CNN's contributor and Democratic strategist Donna Brazile and former Republican Congressman Tom Davis. Thank you so much for being here this afternoon with us. Want to start off here with a couple highlights here, the top ten. One I want to pick out is simplify the message. During the campaign, you know, we had the yes we can. People understood that the president, the candidate was for change. What does the president need to say and do now to hone in his message so it's not so nuanced and confusing? Donna?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I really do believe the message should be very simple and concrete. Help is on the way. Look, the Democrats are continuing to work to create jobs and opportunities so that we can get ourselves out of this recession. The Republicans are only focused on winning elections. I think the president and the Democrats must campaign hard on what they have accomplished in terms of steering this economy off the cliff, back down the road to fiscal growth. We're not there yet but we're at least not where we were back in January of 2009 when we were losing almost 22,000 jobs a day.

MALVEAUX: Congressman, I want to pick another one here. Propagandize the truth you see as number three. We saw a poll recently that a fifth of the population believes the president is Muslim and the white house scrambling to try to answer these questions the fact that he is a Christian. How does he get out ahead? How does he put forth the truth here?

FORMER REP. TOM DAVIS (R), VIRGINIA: First of all, I think he needs to stay on message. Last week he was talking about the mosque. He was talking about campaign finance. He needs to get his base aroused at this point, not worry about the Republicans. They're already angry. Independent voters they're losing. But right now these surge voters that elected him are asleep and he has to talk about what he has done and plans to do in the future and why he needs the Democratic Congress.

MALVEAUX: Donna, is he putting up a fight number five? Democrats and Republicans alike they say don't believe he is out there in front of the issues.

BRAZILE: I think you have to pick your fights these days, Suzanne. He is getting attacked from about every corner and I agree with Congressman Davis the most important thing is that you get a message, stick with it, go back to those surge voters. Go back to the base. Energize them and turn them out on Election Day.

MALVEAUX: One of the things in traveling with President Obama last week, he was trying to point out the fact that, you know, jobs are coming back, that people are doing better, that you have the auto industry that's turning around. But some people aren't hearing that message and particularly those independents who he seems to be losing week by week. How does he get them back? DAVIS: Well, Suzanne, I think --

BRAZILE: He needs to talk directly to them. Go ahead, Tom. I'm sorry.

DAVIS: You have to stay the course because the unemployment rate is still high. This is a very uneven recovery. He doesn't know what the statistics are going to be the next couple months and yet the economy is the elephant in the living room. Unemployment, that is driving everything else. When you take a look at public dissatisfaction it is driven by high unemployment numbers at this point. And he is going to have to come up with some narrative and so far it's been pretty inconsistent to show that help is on the way.

MALVEAUX: Now, there is one point here, channel Ronald Reagan. It brings up a great op-ed from "The Washington Post" on Sunday. He talks about the similarities between the Obama administration, the Reagan administration. Basically where Reagan was about the time that Obama is now. These two very similar in some ways. You had both of them with these big, bold plans, that massive tax cuts for President Reagan with Obama it's been the stimulus package, health care reform. Both of them feeling that the recession, the bad economy. But what Reagan had going for him was the fact that things did turn around in '83 and '84, gross domestic product at one point reaching more than 9 percent, to help voters come along here. Here is how Dan put it. He said, "Starting next year Obama doesn't need growth rates of Reaganesque proportions but he could be in serious trouble if the economy is not growing steadily and at a rate of somewhere between 3 percent and 4 percent by early 2012." The fact is most people don't think it's going to get to those numbers, so what other big issue besides the economy could the Obama administration point to, turn to, and say, this is going to be important moving forward for mid-term elections?

BRAZILE: I think the president has to stay focused on the economy. Most Americans are still feeling the impact of the recession. They want to know that this president is creating a condition so that small businesses and large corporations will go back out there and hire ordinary people. If the president sticks with that message and keeps us safe and strong and secure, I think we'll have a good day come Tuesday, November 2nd.

MALVEAUX: Congressman, what if he doesn't get that, if he doesn't have those numbers?

DAVIS: I don't think he is going to get it and Ronald Reagan didn't get it in 1982. His party, he lost 26 seats in the house and they didn't have a majority at that point. They didn't have as many seats to lose. But they took their lumps but he did talk about staying the course. He talked about staying with it. At least it rallied his bases and limited the laws. The president's problem right now is he at least has to get his base out and voting and he's going to have to rely on individual candidates to go after independent swing voters in some of these races. I don't know that the president can do it for him. MALVEAUX: If the president doesn't have those numbers to turn unemployment around because obviously it is going to take a lot of growth in the economy to do that, what does he run on? What does he say? What does he offer to the American people to say that things are getting better?

BRAZILE: I still believe that this president has a great deal of accomplishments. Look. We passed health care. We've done a great deal of work on creating the conditions for a new investment in green energy, green technology. I think this president has a tremendous record and the Democrats across the board. While the Republicans have been basically sitting on their hands the Democrats and the president have rolled up their sleeves to get this economy rolling again.

DAVIS: Donna, the problem with that is in two years unemployment is higher than when he took office. If it doesn't improve in the next two years he's going to be looking around for a job. But two years is a long time. He has time to still turn it around and he's got to focus on jobs.

MALVEAUX: Congressman Davis --

BRAZILE: I agree with you. 22,000 jobs we're losing when he took office a day. We're not creating as many jobs as we need but at least we're not losing as many as when he took office.

DAVIS: The unemployment rate is two points higher.

MALVEAUX: We'll have to leave it there. Donna Brazile, Congressman Davis, thank you so much for joining us here.

Jack Cafferty is asking, has political ambition ruined John McCain's legacy? He'll be back in a moment with the Cafferty file.

And the founder of Wikileaks says that he is the victim of a smear campaign after he published thousands of secret Afghan war documents.

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MALVEAUX: Here's a look at "Hot Shots." In Pakistan, a man and boy wade through floodwaters as 20 million people suffer through one of the worst natural disasters in history. In Afghanistan, children try to catch fish in the polluted Kabul River. In Taiwan, fireworks fill the sky in anticipation of ghost day, a religious holiday. And in Australia, a panda enjoys her cake as she celebrates her first anniversary of being in that country. Hot Shots, pictures worth a thousand words.

Jack joins us again with the Cafferty file. Hey, Jack.

JACK CAFFERTY, CNN CORRESPONDENT: I love the panda picture. I approach dessert the same way at a restaurant. Question this hour, has political ambition ruined John McCain's legacy?

Ender writes, "I completely agree. The only political donation I ever made, the only political t-shirt I ever wore was for John McCain and his straight talk in the 2000 election. The principle maverick I supported sold those principles one by one. In 2004, 2008 and now and what's left is just another say what I need to say politician. What he was once above, he is now a poster child for."

James in Pennsylvania says, "Are you seriously asking this now? It's a couple of years too late. Your answer lies in his selection of a running mate in 2008."

Rob in Washington, "I worked for Senator McCain over a decade ago. And I'm greatly saddened to say I barely recognize this version of the man. I miss the guy who went after problems regardless of the polling and in close partnership with anybody who was willing to tackle the tough stuff, regardless of which side of the aisle they were on."

Laura writes from Arizona, "As an Arizona voter, I found it painful to watch John McCain change his position on issues of national importance. However, I've seen too many good candidates get trounced by crazy right wing voters in my state and I'm willing to forgive McCain almost anything as long as he beats Hayworth in the Republican primary. Perhaps that makes me jaded, but the thought of Hayworth representing me in Congress is repulsive."

Kevin writes, "Jack, you say he's a hypocrite and a flip flopper. Some think there's another possibility that John McCain has flat-out lost his mind. After all, he did try to convince Americans that a winking leather pants suit should be a heart beat away from the presidency. I'm 51. I lose my keys and my glasses. McCain at 73 seems to have lost his principles."

And Annie writes, "All I know is that I'm so old I remember when I respected John McCain."

You want to read more on this, go to my blog CNN.com/CaffertyFile.

MALVEAUX: Boy, they weren't shy about that one. All right.

CAFFERTY: I love this.

MALVEAUX: That's you, Jack. I'm going to catch a picture of you eating in a restaurant like that.

CAFFERTY: I look just like that. All you see is ears.

MALVEAUX: The sight of it. I can't imagine. Thank you, Jack.

Well, a massive egg recall and the hidden dangers in America's food supply. The safety violations that are making us sick.

Almost five years after hurricane Katrina, the rebuilding of New Orleans could be a model for building up all of America.

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MALVEAUX: It's been almost five years since hurricane Katrina became one of the deadliest and costliest natural disasters in U.S. history. New Orleans in particular was especially hard hit. The city was catastrophically flooded when the levees broke. Now New Orleans is building back up, some say bigger and better than ever. Our CNN's Tom Foreman is there.

TOM FOREMAN, CNN CORRESPONDENT: Hey Suzanne. Right after Katrina, everybody in New Orleans particularly in tourist areas like this knew they had two battles to fight. One, they had to repair all the actual damage from the storm to get back all the things they lost. And two they had to repair the confidence of tourists from all over this country that they could and they should come back.

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FOREMAN: It may be hard to believe, but New Orleans has 300 more restaurants than it did before Katrina, 1,100 overall. And Commander's Palace chef McPhail is not complaining. That's more competition for folks like you, but you don't mind?

TORY MCPHAIL, CHEF, COMMANDER'S PALACE: I embrace it. They open you would neighborhood funky spots. And I tell you, it's a really, really exciting time to live here in the city.

FOREMAN: Because it brings the place back to life.

MCPHAIL: That's right. And the food is fantastic.

FOREMAN: Ever since the storm, this city has been aggressively rebuilding its tourism business, which the year before brought a record 10 million visitors and almost $5 billion to town. For the superdome, that's meant a $250 million makeover, $93 million for improvements at the convention center, and $400 million have been put up for repairing hotels all over town. And the return on that investment has been enormous. 85,000 people worked in the tourist trade before the hurricane and 70,000 of those jobs have been recovered, despite the recession.

What do you want tourists to know about New Orleans?

UNIDENTIFIED FEMALE: Keep coming.

WILLIE PICKETT, TOURISM WORKER: We love them and we want them to keep coming back. Everything about New Orleans is just like it was before Katrina.

FOREMAN: Beyond the tourist attractions, stubborn troubles remain in many neighborhoods, but Kelly Schulz of the convention and tourism bureau says for this key industry --

KELLY SCHULZ, NEW ORLEANS CONVENTION & VISITORS BUREAU: Everything in New Orleans that was broken during Katrina is being fixed now, but not only back to where it was before, but even better.

FOREMAN: That's not just a tourism sales pitch.

SCHULZ: No that's not a tourism sales pitch. That's speaking about the entire city. FOREMAN: There are still challenges, like convincing tourists that gulf seafood is safe following the oil spill, but in this town that has already built up from so much, there's a sense that five years after Katrina, the future is much brighter than the past ever was.

(END VIDEOTAPE)

FOREMAN: Like I said Suzanne, they know they have many other issues in the city that still have to be settled, but on tourism, they've had a real success story here and they're crossing their fingers in the next few years they may, in fact, surpass those record levels of tourism they saw before the storm came. Suzanne?

MALVEAUX: Thank you, Tom.

You're in THE SITUATION ROOM. Happening now, more than 1,000 people sickened by salmonella, 500 million eggs now recalled. What is behind the latest food scare and you can do to feel safe. I'll talk to the author of the book "Fast Food Nation."

And a rape charge raised against the founder of Wikileaks and then suddenly dropped. Is he being smeared for publishing secret war documents?

And GOP anger in Arizona on the eve of a crucial primary. Senator John McCain's opponent predicts he'll "lurch to the left."