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Who Might Replace Rahm Emanuel?; Should Bush Tax Cuts be Extended?; Clinton Slams Florida Pastor

Aired September 8, 2010 - 17:00   ET


WOLF BLITZER, HOST: Rick, thank you.

Happening now, President Obama goes after Republican John Boehner, the man who might -- repeat, might be the next speaker of the House of Representatives and one of the Democrats' election nightmares.

How will voters respond to the attack and his new tax proposals with the economy in the tank and control of Congress at stake?

I'll talk about that with the economic adviser over at the White House, Austan Goolsbee, and a leading critic, Republican Congressman Ron Paul.

Also, a Florida pastor insists on going ahead with his plan to burn copies of the Koran on September 11. That's this Saturday. He's responding to fears that it will inspire new terror attacks against Americans and charges that he would have blood on his hands.

I'm Wolf Blitzer.


President Obama put on the brass knuckles today for a new attack in Ohio on the man who personifies Democrats' worst fears for the fall election. That would be the minority leader, John Boehner, the man poised to become the new speaker of the House if Republicans win back control of the Congress.

Just a short while ago, Mr. Obama offered a stinging assault on Republican economic policies from President Bush to Congressman Boehner, and he did it in Boehner's home state.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A few weeks ago, the Republican leader of the House came here to Cleveland and offered his party's answer to our economic challenges. Now, it would be one thing if he had admitted his party's mistakes during the eight years that they were in power, if they had gone off for a while and meditated and come back and offered a credible new approach to solving our country's problems.

But that's not what happened. There were no new policies from Mr. Boehner. There were no new ideas.


BLITZER: The president gave voters something more than fiery words. He also argued his case to let the Bush tax cuts expire at the end of this year for the wealthiest Americans -- individuals who earn $200,000 a year or more, couples who earn $250,000 a year or more. That's about 2 or 3 percent of the country.

He wants Congress to extend the Bush tax breaks for everyone else.

The president also is proposing $200 billion in tax cuts for businesses to buy new equipment. Those businesses would be able to write-off 100 percent of their new investments through the end of 2011.

And joining us now from the North Lawn of the White House, Austan Goolsbee, the president's economic adviser.

We're getting in this reaction from John Boehner, the Republican leader in the House. The president was pretty critical of him in his speech in Cleveland.

Here's what Boehner says: "If the president is serious about finally focusing on jobs, a good start would be taking the advice of his recently departed budget director and freezing all tax rates, coupled with cutting federal spending to where it was before all the bailouts, government takeovers and stimulus spending sprees."

He's referring to Peter Orszag, the budget director during the Obama administration, who wrote a piece in "The New York Times" this week: "For the next two years, keep tax rates, including for the wealthy, exactly where they are right now."

AUSTAN GOOLSBEE, COUNCIL OF ECONOMIC ADVISERS: Well, look, I think Representative Boehner is a little confused about what Peter Orszag was suggesting and threw in on that second bid, let's go back to the final Bush budget of 2008, as if that were the -- the gold standard that we wanted to return to, when, in fact, that was the -- the final culmination of exactly the policy that got us into this mess.

BLITZER: Well, he -- he -- I guess, to be precise, Peter Orszag was not recommending the second part of what John Boehner was saying in that statement, only the first part. But -- but here you do have Boehner and Orszag agreeing --


BLITZER: -- keep tax rates where they are for two years --

GOOLSBEE: No. No, hold up --

BLITZER: -- don't increase tax rates during a time of economic crisis on anyone. GOOLSBEE: No, no. Wolf, the -- the Orszag piece was a political piece, it wasn't about economics -- in which said he thought that it would be a compromise that if you had two years, then you could get rid of those -- the tax cuts for the highest income Americans. John Boehner is not for that. This is just an old Republican gimmick of take what you can get then and in then in two years, ask it to be permanent.

Ask Representative Boehner, does he want to make permanent, for $700 billion, the Bush tax cuts for people making more than a quarter million dollars a year?

He does. He's been for it all along. And he's just trying to get a nose under the tent to do that.


GOOLSBEE: We cannot afford $700 billion for that purpose. And every objective analyst that has looked at it has emphasized that tax cuts for millionaires have the lowest bang for the buck of any measures that we could possibly take and we shouldn't extend those.

BLITZER: You're --

GOOLSBEE: And. The president has made that clear.

BLITZER: You're right, John Boehner doesn't want to raise taxes on anyone right now -- rich people, middle class, poor people, anyone.


BLITZER: But -- but I -- I want to be precise. Peter Orszag says at least for two years, keep the tax rates --

GOOLSBEE: No, not --

BLITZER: -- where there are right now.

GOOLSBEE: No, Wolf, he did not say at least for two years. He said --

BLITZER: He said for two years.

GOOLSBEE: -- do it for two years --

BLITZER: That is correct.

GOOLSBEE: -- in order to get them to give them up after two years. I disagree with his political calculation. And let's put it a different way. When the -- when the minority leader in the House of Representatives is taking political advice from the economists that have left the Obama administration, I guess I'm a little confused.

BLITZER: Here's what "The Wall Street Journal" wrote in an editorial this -- this week. I want you to respond: "Never before has government spent so much and intervened so directly in credit allocation to spur growth. Yet the results have been mediocre, at best. In return for adding nearly $3 trillion in federal debt in two years, we still have 14.9 million unemployed. What happened?"

That's the question "The Wall Street Journal" asks.

So what happened?

GOOLSBEE: Well, what happened is we went into a recession beginning in December of 2007 that was the worst since 1929. And it is a very deep hole that we have been struggling to get out of. After 22 months of straight job loss, for the last eight months, there has been private sector job creation. What. The president has emphasized repeatedly and outline again today in his remarks in Ohio, is that the only way that our recovery is sustainable is if we get the private sector to stand up.

Let us not forget that when the president took these policies, it wasn't for fun. It was because the economy and the private sector were in freefall, following the policies -- many of which it sounded like Representative Boehner wants us to return to. When we were following those policies, the economy collapsed. And we have been trying to rebuild it. We have come a long way. We're on the right path. But we've got a long way to go.

BLITZER: I can't -- I can't tell you how many business leaders -- big business leaders who were big supporters of President Obama on Wall Street in the banking industry, the financial sector, keep asking -- especially this week, following the president's speech in Milwaukee and then in Cleveland -- why does the president keep demonizing Wall Street?

GOOLSBEE: Well, look, the president outlined today a deliberately pro-market, pro-private sector agenda in which the government is going to be spending money on tax credits to encourage business to locate their research and development investments here in America and giving them full tax write-offs of all of their factory or equipment spending for the next year. So I think if you go ask businesspeople, they will actually find much to like about this policy.

And truth be told, until the last few weeks, most Republicans would have been for that policy. So I am hopeful that there is common ground here, that we can all agree that all patriotic Americans should be for growing jobs, investing in this country in research and development in factories and in equipment. And that's what the president is trying to enable. And just opposing it for the sake of opposing it is not productive.

BLITZER: Austan Goolsbee is the adviser -- the economic adviser to the president.

Thanks, Austan, very much.

GOOLSBEE: Great to see you again, Wolf.

BLITZER: We'll get a very different take on the president's tax and economic policies. That's coming up when I speak to the always outspoken Republican congressman, Ron Paul of Texas. Stand by for that.

Obviously, there are huge economic and political challenges facing the president and his White House team, including the chief of staff, Rahm Emanuel. There could be some big changes on Capitol Hill and in the White House in the new year.

Let's bring in our senior White House correspondent, Ed Henry -- Ed, the president was all fired up talking about John Boehner today. But there seems to be a sense, at least among a lot of the pundits and -- and experts out there, that there could be a big change in the leadership in Congress come November.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Absolutely, Wolf. I thought it was interesting that I noticed that the president today seemed to be reframing this election ever so slightly as a choice between old Republican policies, which he has talked about before, but now against slow progress in terms of his policies. That's different from just a few weeks ago, when they were talking about recovery summer. They realized the American people may not be buying that and they've got to be -- you know, ratchet back expectations.

And the reason is, I've been on the phone all day with senior Democrats outside the White House who are much blunter in private, who are saying that they are planning and expecting that the Democrats are going to at least lose the control of the House, maybe even the Senate. They say that, in private, their best case scenario is holding onto the House and Senate with very slim majorities.

Now, how that plays into what you mentioned with Rahm Emanuel, who now may run for mayor of Chicago and open up the chief of staff job, is just like Rahm Emanuel, very experienced on the Hill. The president has used that to push through the stimulus, health care, Wall Street reform. He's again going to need someone maybe with -- with just as much, or more, Congressional experience dealing in the political back rooms, because it's going to be a whole new dynamic if Republicans take over. They're not going to have those huge Democratic majorities they've had to fall back on.

So let's quickly go through some of the candidates. From my reporting, the two frontrunners to replace Rahm Emanuel if, in fact, he steps aside, Tom Donilon. He's a deputy national security adviser inside the White House. And Ron Klain. He's the chief of staff to Vice President Joe Biden. You know them both well. They both served in the Clinton administration. Both have experience on Capitol Hill.

Some people -- private top Democrats think maybe Donilon has a little edge because of his national security experience, dealing with crises, whereas Ron Klain, though, is talked up by a lot of Democrats, pushed through some of the Supreme Court nominations. A lot of experience on the Hill.

The dark horse here to really watch is Phil Schiliro. He's currently the president's liaison to Capitol Hill. And he served so long on the Hill before he was in the White House with Henry Waxman, as you'll remember, who used to do battle in the Clinton administration with Dan Burton, all of those Republican investigations. And what I'm told is that inside the White House, they're preparing for the possibility that if Republicans take over, they're going to need a top aide somewhere inside the White House, dealing with Darrell Issa and some of the Republicans who will have subpoena power.

And then the other names to watch, Valerie Jarrett, of course, very close not just to the president, but what's significant, of course, close, as well, to First Lady Michelle Obama. We should not underestimate her influence with her husband in potentially saying whether Valerie Jarrett could be chief of staff.

And then finally, some other interesting names you know well surfacing now when you talk to senior Democrats -- John Podesta, Leon Panetta, former Clinton White House chief of staff.

So, again, the significance is they served after the '94 "Republican revolution." They dealt with Republicans on the Hill and helped Bill Clinton sort of rebuild his presidency there at the end of the first term into the beginning of the second term. And so their names are now surfacing, that if Donilon and Klain maybe don't get it, they may even be drafted to come back. So a lot of interesting names now in the mix, because inside the White House, they're preparing for, potentially, a whole new dynamic after this election -- Wolf.

BLITZER: Some impressive bench strength over at the White House if -- if Rahm Emanuel decides to run for mayor of Chicago. And everybody assumes he will.

Ed, thanks very much.

Rahm Emanuel is not the only Chicago Democrat, by the way, who is being touted as a possible candidate for mayor. Several dozen prospects are being floated -- a lot of names. It's sort of a who's who of Chicago politics. Among the more famous, Congressman Jesse Jackson, Jr. And -- get this -- his wife Sandi Jackson. Her name also being mentioned. Congressman Luis Gutierrez and Congressman Bobby Rush, although Rush seems to be dismissing the idea. Another big name, by the way, in the rumor mill, Richard Daley's brother, William Daley. He was the former Clinton administration Commerce secretary.

We'll watch Chicago politics and see what happens there.

Just in here in THE SITUATION ROOM, some eye-popping new numbers on the very high profile U.S. Senate races out there.

CNN and "Time Magazine" are teaming up this election season in polling voters in key states each week. And we're releasing our first CNN/"Time" magazine/Opinion Research Corporation polling numbers right now.

First, in California, Democratic Senator Barbara Boxer has a surprisingly slim lead -- just 4 points -- over her Republican opponent, Carly Fiorina, the former Hewlett-Packard chief.

In the Florida Senate race, Republican and Tea Party favorite, Marco Rubio, is just a couple points ahead of the Independent candidate, the current governor, Charlie Crist.

The Democratic candidate, Congressman Kendrick Meek, trails Crist by 10 points.

And look at this. In Kentucky, another darling of the Tea Party, Republican Rand Paul -- he's neck and neck with his Democratic opponent right now, Jack Conway, the state attorney general.

These are really fascinating numbers in these races.

We're going to talk about them at length.

That's coming up in the next couple hours here in THE SITUATION ROOM.

We're going to get more information for you, as well.

The secretary of State, Hillary Clinton, is taking a stand against the pastor who plans to burn copies of the Koran on September 11, this Saturday.

Is it time for President Obama to get directly involved?

And John McCain's daughter, Meghan, reveals the surprising reaction she had when her dad chose Sarah Palin as -- as his running mate.

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


BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: President Obama making it perfectly clear today he wants the Bush tax cuts for the wealthy to expire. By his definition, wealthy translates to couples making more than $250,000 a year, individuals making more than $200,000.

Speaking in Cleveland earlier, the president said the country cannot afford the $70 billion-price tag associated with these tax cuts over the next 10 years. He says the tax rates for the wealthy should go back to what they were under President Clinton.

However, Mr. Obama does want the tax cuts to be made permanent for middle-class Americans or those making less than the $250,000. Of course, given the shaky economy and the president's sagging poll numbers, it's far from clear that he is going to get any of this that he wants. Critics suggest letting the Bush tax cuts expire even only for the wealthy could be a blow to our very fragile economy.

Some Republicans want a permanent extension of all the Bush tax cuts. Republican House Minority Leader John Boehner was out today ahead of the president's speech, calling for a two-year freeze on all tax rates.

What do most Americans think about this? A recent CNN/Opinion Research Corporation poll shows 51 percent of those surveyed say the tax cuts should be continued only for families making less than $250,000, 31 percent say they ought to be continued for all of us and 18 percent say the tax cuts should expire for all of us.

Here's the question: In our weakened economy, is it a mistake to raise taxes on the so-called wealthy? Go to and post a comment on my blog.

Those numbers are very arbitrary, Wolf, depending where you live in this country. Two hundred thousand dollars, if you live in Manhattan, ain't all that much money. A couple hundred thousand dollars in Fargo would probably buy you half the town.

BLITZER: Yes, well, you're right. There is a huge discrepancy out there.

All right, Jack. Thanks very much.

Secretary of State Hillary Clinton is slamming a Florida pastor who plans to burn copies of the Koran on the September 11th anniversary this Saturday. Speaking at the Council on Foreign Relations, Secretary Clinton expressed outrage over the exposure this pastor is getting.


HILLARY CLINTON, SECRETARY OF STATE: You know, we're a country of -- what? -- 310 million-plus right now, and it's regrettable that a pastor in Gainesville, Florida with a church of no more than 50 people can make this outrageous and just distressful, disgraceful plan and get, you know, the world's attention, but that is the world we live in right now.


BLITZER: Let's talk about this and more with our senior political analyst, David Gergen.

Secretary of state is speaking out, General Petraeus is speaking out. They are all deeply worried about the ramifications. Should the president of the United States speak out about this?

DAVID GERGEN, SENIOR POLITICAL ANALYST: Hard call, but I don't think so, Wolf. Among other things, he has had his secretary of state, secretary of defense, General Petraeus, you know, his press secretary has spoken on his behalf. For him to wander out now and make a televised statement is only going to bring more attention to this.

I think Hillary Clinton is exactly right. For one pastor with a church of 50 people to get all this attention when he looks like he is a little crazy and very intolerant, you know, an off-the-wall kind of guy, I don't know, I'm just watching the television, but I don't think he deserves this kind of attention.

BLITZER: You can imagine what will be the reaction if on Saturday he has 200 copies of the Koran and he does a bonfire and there's video and it goes out on the web, it goes out on TV, there will be a fiercely angry reaction in the Muslim world, not just by radicals but by a lot of Muslims, even though this is just a tiny, tiny little church as Hillary Clinton says.

GERGEN: I agree it is, but I think that we in the American media really ought to keep it in perspective. When people do who are wild cards, all of us get crazy things in the mail. You know, people write with crayons. I don't read those letters that come in on crayons and, you know, I just don't sort of think we ought to get all that excited about it.

It is going to be picked up by Al Jazeera and others, there's no question about it, but you know people burn the American flag a lot overseas. They spit on the American flag. They do other things and we sort of go on.

I think we should treat this as a real outlier event. It is extremely intolerant. It should be condemned, but I just don't -- I really would urge the president not to go on and make a television statement. If he wants to issue a written statement of some sort through his press secretary, that's fine if that helps to tap it down, but I would not go on television.

BLITZER: It's a sensitive, sensitive issue.

GERGEN: Very sensitive.

BLITZER: Thanks very much.

GERGEN: Thank you.

BLITZER: Eight people missing in the wake of a raging Colorado wildfire, we'll have the latest on the desperate efforts to stifle the blaze.

Plus, the imam behind the controversial proposed Islamic center and mosque near Ground Zero, he is now speaking out.


BLITZER: Kate Bolduan is monitoring some of the other top stories in THE SITUATION ROOM right now.

Kate, what's going on?


Well unfortunately, in Colorado, they're still dealing with some tough conditions. More than 100 buildings and homes have been damaged or destroyed by a wildfire raging near Boulder, Colorado. Authorities now say four people are missing. They do say, though, that the fire is shrinking, spanning a little more than 6,000 acres down from 7,100 acres. The governor declared a state of emergency yesterday. No injuries have been reported yet.

The imam behind that controversial proposed mosque and Islamic center near Ground Zero is speaking out. Feisal Abdul Rauf writes in "The New York Times" that he has been, quote, "awed by how inflamed and emotional the issue has become."

CNN's Soledad O'Brien will have an exclusive interview with him tonight on "LARRY KING LIVE." That's at 9:00 p.m. Eastern, you won't want to miss it.

And CNN is welcoming a new member to the family, Piers Morgan, to take over Larry King's primetime hour. Starting in January, the British TV personality will host the 9:00 p.m. Eastern hour with what's being called a candid, in depth, newsmaker interview program. Morgan is best known in the U.S. as a judge on the television show "America's Got Talent" and recently he hosted the U.K. program, "Piers Morgan's Life Stories."

Welcome to the family.

BLITZER: We welcome him and wish him success.

BOLDUAN: Exactly.

BLITZER: That's at 9:00 p.m. Eastern his new show starts, as you say, in January. We'll be watching.

Thanks very much for that.

Republican Ron Paul is no fan of the president's economic policies, but did he like anything, anything at all that the president had to say about taxes and economic growth? Congressman Ron Paul, he's standing by.

And rain, flooding and democratic rescues in Texas, the scary aftermath of a powerful storm.


BLITZER: President Obama is taking another shot today at connecting with voters who are scraping by in this bad economy and who might -- who might just vote his party out of power in Congress 55 days from now. We heard the president once again blast the House minority leader, John Boehner, during his remarks today in Ohio. And he accused Republicans of holding middle class tax cuts hostage by insisting that Bush era tax breaks be extended for wealthier Americans.

Joining us now is a Republican who comes to this debate with his always unique and outspoken point of view, Congressman Ron Paul of Texas.

Congressman, thanks very much for coming in.

REP. RON PAUL (R), TEXAS: Thank you, Wolf.

BLITZER: When it comes to the president's economic policies, his tax policies, is there anything in there you like?

PAUL: Well, I understand there will be some tax credits and that means there will be lower taxes for businesspeople and encourage investment, although they're short-term and we don't know what would happen after a couple of years.

No, anything that will cut taxes I'm for. The idea -- the fact that he'll be raising spending, but also because he hasn't and he doesn't plan to raise taxes on the lower income people, under $200,000 or $250,000, I think that's good.

I mean it would be horrible if he did raise the taxes the first year on all those. So I'd have to say that is, you know, a little bit of relief to know that those taxes won't go up.

BLITZER: Because you're a deficit hawk. You hate this huge national debt, the annual budget deficit. The White House says if you reduce the -- if you eliminate the tax breaks for the wealthier Americans, those families making more than $250,000 a year, about 3 percent -- 2 -- 2 or 3 percent of all Americans out there -- you're going to save $700 billion over the next 10 years -- $700 billion.

That would be good to have that -- a reduction in the national debt, wouldn't it?

PAUL: Well, it would be, but that would be a horrible way of doing it. That means taxes are going up $700 billion. You know, I could think of a much better thing to do and that would be to read that article by Stiglitz this morning. He said he made an error last year when he did that report, that he said the Iraq War is going to cost us over $3 trillion -- or $3 trillion. He says it's going to be much higher than $3 trillion.

Why don't we stay out of these wars and save this money?

That's what we need to do. We need to cut the spending and we don't have to tax people and we could solve this problem. But nobody wants to give an inch on these overseas expenditures. The Republicans don't want to cut overseas expenditures in war. Neither does Obama. So -- but the American people -- the ones I talk to, at least, are all for it.

BLITZER: I know you --

PAUL: So that's where it should go and we should cut the spending overseas.

BLITZER: We had you on recently with Congressman Barney Frank. You guys have some ideas to save hundreds of billions of dollars in defense related spending. We discussed that.

The president also went after some Republicans for wanting to privatize Social Security.

Listen to what he said.


OBAMA: As long as I am president, no one is going to take the retirement savings of a generation of Americans and had it over to Wall Street. Not on my watch.


BLITZER: Do you agree with the president on that?

PAUL: Well, I have to know what he is thinking about on privatizing and what others think about privatizing, because (INAUDIBLE) --

BLITZER: He doesn't want to privatize it. He wants to keep it --

PAUL: -- you would think --

BLITZER: -- the way it is now.

PAUL: Well, yes, but I want to know what privatize means. If we could turn this money over and give the individual the money, like an investment retirement fund that they manage, there's a little bit different. But I think most people, what they think about privatizing -- and I'm not for this type of privatizing -- that's when the government manages accounts and gets involved in the stock market.

I -- if that's what he's thinking about, I don't want any part of that. But I want to privatize the retirement funds and put the responsibility on the individual. That, to me, is a lot different type of privatization. But for government bureaucrats to get involved in the stock market, I -- I don't like that.

Besides, if you're -- if you truly have privatization, you can make and pi -- in your own -- make your own choices. But it's when the -- the way we have it now, you only can buy government debt. That's really not a very good investment.

But I think this is -- these are academic arguments, because, you know, talking about five or 10 years from now, we're -- we're facing such a serious crisis with our dollar and our financial situation. The next two or three years, this is going to resolve -- be resolved because we're going to have a financial crisis based on a dollar devaluation. And that, to me, is going to change all the rules in the game. And talking about the tax code for a year or two out --

BLITZER: All right --

PAUL: -- won't have a whole lot of meaning.

BLITZER: I'm curious what your reaction is to this pastor in Florida who wants to burn copies of the Koran on Saturday.

PAUL: Well, I put a little statement out about that, because it -- everybody was talking about it. It's a shame he's getting this much attention. And Petraeus made the statement that I agreed with. He said, you know, this could endanger our troops and I agree with that.

But I also went on to add the point, as much danger as burning the Koran might be, what about our invasion, our bombing, collateral damage, arrests and -- and secret prisons and pictures of torture, drone attacks?

Do you think that isn't, you know, a -- an incitement to violence overseas?

I mean they already have so much. Yes, we -- we should recognize that this is not good for us. It's a bad image. Of course, nobody is challenging, you know, his right to do this thing. I mean we don't -- we're even allowed to burn flags in this country. So that isn't the issue, as much, for me it was the issue of --

BLITZER: All right --

PAUL: -- of saying what kind of a reaction would this be?

And I say our foreign policy has a much, much more negative reaction than burning a Koran would.

BLITZER: Very quickly, because we got this new CNN/"Time" magazine poll in on the race for the Senate in Kentucky. Your son, Rand Paul, is running right now. And we have it as a dead heat among registered voters -- Rand Paul, 46 percent; Jack Conway, the attorney general there, 46 percent.

Are you surprised by this poll, how close it is?

PAUL: No, I think that's pure fiction. That's the biggest surprise of my life. If that happened, it happened within the last 12 hours. I think we'd better check that one out.

But no. The race will be hard fought and hard won and he will run as if it's tied. But there's quite -- those aren't quite the accurate statistics that I've been hearing about.

BLITZER: Yes, I've heard other polls that had your son way ahead. But this is among registered voters, a CNN/"Time"/Opinion Research Corporation poll.

We'll stay on top of this race and all the other races.

Always good to have you in THE SITUATION ROOM.

Congressman, thanks for coming in.

PAUL: Thank you, Wolf.

BLITZER: There is much more to explore by the way in our new CNN/"Time" magazine polling. Stand by. Gloria Borger has the new numbers on the Florida Senate race and whether the tea party movement's influence is fading or increasing. And Detroit in flames. How dozens of fires broke out in the city.


BLITZER: We unveiled really interesting poll number is a little while ago here in THE SITUATION ROOM on some critical U.S. Senate races. Let's talk a little more about them with our senior political analyst Gloria Borger with the CNN Election Express in Covington, Kentucky right now. Speaking about Covington, Kentucky we just heard Congressman Ron Paul say he was shocked by these numbers involving his son Rand Paul, a 46-46 tie in this new poll among registered voters against Jack Conway. I was surprised when I saw how close the race is right now as well.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yeah. I was too. What tells us is general elections aren't the same as primaries, particularly at this point in time. You know, Rand Paul had a bruising primary. That may have hurt him. But the conservative Republican base came out to support him. Now he is said to take a turn and talk to the general electorate. And after he was nominated, he made a couple bloopers. You'll remember that talking about how perhaps he didn't support the civil rights act of 1964, that it shouldn't apply to private businesses, talk about so-called privatizing social security, etcetera. And those independent voters who are the swing voters in that state started giving him a second look so this, you know, raises the question about whether these candidates who succeeded in their Republican primaries, are going to be able to do well in a general election. If you look at the internal poll numbers here, his opponent, the attorney general, Jack Conway, is beating Rand Paul with one very important group of voters that always turns out to vote and that is senior citizens. So he's got to be careful about that.

BLITZER: And in two other races, state races, it is very close. We'll put the numbers up. In Florida Marco Rubio, 36. Charlie Crist the independent 34. Kendrick Meek the Democratic candidate 24 percent. And in California, talking about both of these, very close between Barbara Boxer and Carly Fiorina, 48 percent for Boxer, 44 percent for Carly Fiorina. It looks like a lot of these races are going to be tight.

BORGER: They are going to be tight. What you see running through all of these races is a strong anti-Washington, anti-incumbent sentiment. Charlie Crist, it's kind of interesting, Wolf, I remember when he decided not to run as a Republican and switched as an independent every Republican I spoke to about it said, forget it. It's done. It's over. He didn't want to challenge Marco Rubio you'll recall because he knew he was going to lose. Now they're in a very tight race and the person trailing behind in the state of Florida, always a very important swing state, is the incumbent Congressman Kendrick Meek. Despite the fact that somebody who is very popular in Florida, Bill Clinton, has been to the state a number of times to support Congressman meek. So again, it's this anti-Washington fervor we see, Barbara Boxer in California has always won re-election by double digit margins. Suddenly, she is in the race of her life, only ahead by four points, when the Democrat is only ahead by four points in California, something is going on, Wolf.

BLITZER: Sampling error 3.5 percent. Thanks very much Gloria for that.

The daughter of the former presidential candidate John McCain now saying she was, quote, panicked by her father's choice of Sarah Palin as his running mate. Plus the FBI calls it the largest case of modern day slavery it's ever seen.


BLITZER: Let's go back to Kate Bolduan. She's monitoring some of the other top stories in THE SITUATION ROOM right now. What do you have?

KATE BOLDUAN, CNN CORRESPONDENT: We were talking about fires in Colorado and now, unfortunately, in Michigan. The mayor of Detroit is calling 85 fires that erupted in the span of just four hours a, quote, natural disaster. He's also defending the fire department against what some have called a slow response to the fire as many of the fires which broke out last night were fueled by high winds and downed power lines.

And to Texas, what was once tropical storm Hermine is soaking parts of the state. The storm, which has been downgraded to a tropical depression, is flooding the area with heavy rains prompting some rescues. Meanwhile, forecasters are now monitoring tropical storm Igor which is threatening the Cape Verde islands. Keeps coming and coming.

And the daughter of former Republican presidential candidate John McCain says she was, quote, panicked by her father's choice of Sarah Palin to be his running mate. Meghan McCain reveals the surprising feelings about the 2008 campaign in an interview with Jay Leno.

MEGHAN MCCAIN, DAUGHTER OF SEN. JOHN MCCAIN: I found out an hour before I went onstage with her. I think they were scared I would say something or whatever and, you know, like the rest of the country I had no idea who she was. I was actually like crying on the bus on the way to the rally. I found out who she was and I remember being on stage and distinctly remember thinking god let her not have any skeletons in the closet please god.

BOLDUAN: Very candid comments. We should also note she is currently promoting her new book.

BLITZER: Doing a good job of promoting it as well.

BOLDUAN: She is.

BLITZER: Thank you.

You could say the house minority leader John Boehner is tanned, rested, and ready to become speaker of the house. Could President Obama's stinging attacks actually help Boehner?

What does it take to provoke a 400-pound lion to turn on his trainer?


BLITZER: Let's get to the strategy session and joining us now are our CNN political contributor the Democratic strategist Paul Begala and contributor David Frum. He's a former speech writer for President George W. Bush. The RNC, Paul, today released a little we ad. I'll play a clip.

OBAMA: If I say the sky is blue, they say no.

UNIDENTIFIED MALE: I have had to say no far more than I have said yes.

UNIDENTIFIED FEMALE: Why I voted against all of the bailouts.

UNIDENTIFIED MALE: Why I voted against the $3 trillion budget.

UNIDENTIFIED FEMALE: You saw he voted against health care.

UNIDENTIFIED FEMALE: And voted against Nancy Pelosi's energy tax.

BLITZER: Those are all Democratic commercials and Democrats distancing themselves from the president and the Democratic leadership, very cute Republican ad.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Very cute and very smart ad, and good for the Republicans. I'm serious. It's a good ad. It points out the -- I don't want to be sounding mean, but lunacy of running away from Barack Obama. He's our country's president but he's our party's leader. If you are in his party, you have him, and this politics of differentiation it never works. Republicans tried to run away from George W. Bush in 2006, it didn't work. Democrats can try to run away from Barack Obama, it won't work. Far better, if I were advising Democrats, I guess I am, rather than distancing yourself from Obama, distance yourself from Lloyd Blankfein. The CEO of Sachs or some of the special interest groups in Washington.

BLITZER: They are fighting for their political lives right now and many of the districts went for John McCain in 2008 as opposed to Barack Obama.

DAVID FRUM, BUSH SPEECHWRITER: And Paul is choosing to go down with the ship, and that's very gallant and they will have beautiful funerals and lovely epitaphs for the loyalty. This is a moment where everyone who can saves themselves. When they elect a lot of people from districts, they will have to look for the expedience, and one thing about running against Lloyd Blankfein is hard to do when this administration in face was not hard on the Wall Street companies. There wasn't a mortgage cram and a lot of things expected did not happen. Wall Street and this administration are quite close really.

BLITZER: Paul, you have studied this for a long time, and I'm curious, you think more Democrats who are fearing they are going to lose are abandoning the president and the Democratic leadership than Republicans in their time would do as far as Bush and the Republican leadership? I don't remember a whole lot of Republicans running away from Bush and the Republican leadership?

BEGALA: Well, in 2006 and I was helping some campaigns in 2006 and all of the Democrats had to do was to say, Bush, Bush, Bush.

BLITZER: Were some running away?


BLITZER: And like the Democrats now?

BEGALA: Sure. Yes. In '82, they were running away from Reagan and it didn't work. It never works and you look like a coward.

FRUM: Well, in 2006, it was a powerful money-raising engine and you could not run away from the president because then he would not come to your district and raise the money that you needed. And George Bush worked very hard to. And the fact is that he didn't want any lonely victories, but if Barack Obama survives, he is going to be lonely.

BLITZER: Look at this CNN Opinion Research Corporation poll on from John Boehner, the man that the president attacked Monday and today in Cleveland, opinion of John Boehner 22 percent favorable and 23 percent unfavorable and 55 percent unsure because they don't know much about John Boehner, but they will if the president keeps going after him.

BEGALA: Absolutely. This is brilliant. This is exactly what the president needs to do. Why not say he is an evil doer or bad person or something, but put a face on the opposition. When FDR was president and as former speechwriters we know some great FDR speechwriters came up with Martin and Barton and Fish. Nobody knew who Martin, Barton and Fish were but they were three Republicans who opposed the new deal and it allowed FDR to put a face on the opposition, and by the way, he attacked Boehner in Boehner's home state of Ohio. I saw a poll in Ohio. They asked Ohio voters do they want John Boehner to be the speaker? Only 28 percent said yes, and he is right to put a human face on the opposition.

FRUM: What percent?

BEGALA: 28 percent said yes, and that is low.

FRUM: OK. Well, even in his home state, they don't know who he is. So if they don't know who he is in his home state, and you're going to get people agitated. What they say about the newspaper writing, a lot of the newspaper is explaining that Mr. X is dead and people didn't even know that Mr. X was alive. With 60 days to go, with the unemployment number situation as bad as it is and home foreclosures where they are and you are saying, that America, your biggest problem is this man you have never heard of before.

BLITZER: And people will be hearing more of John Boehner in the weeks to come.

BEGALA: Let's raise the visibility as high as the tan. FRUM: And the website there.

BEGALA: That is a Boehner tie there.

FRUM: Yes.

BLITZER: Thanks very much. Jack Cafferty is coming up next. A former pastor says whether or not he will accept blame if his plan to burn copies of the Koran on 9/11 this Saturday backfires.


BLITZER: Jack is joining with the Cafferty file. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour in our weakened economy is it a mistake to raise taxes on the so-called wealthy?

Terry in North Dakota, "I didn't know that 9.6 million people fit into that $250,000 category. I'm one of them. My wife does not work and we have six kids and I run two businesses. I've not laid off any of the staff and in fact, I have hired a couple more and given out raises in the last two years. So do you want to penalize me because I have this income? I don't live high on the hog and my house is 25 years old and I don't own any toys, but I still have to look after myself and my bills. Let's freeze it for two years and see what happens."

Joe in Virginia writes, "Like it or not the wealthy create jobs and reduce their buying and investing power and the economy will suffer. It is popular to talk about soaking the fat cats, but the reality is that $250,000 a year while very nice is not rich. Wait a while, and let the economy improve and then balance up the tax situation."

Vick writes from New Jersey, "I work on Wall Street and I live in New Jersey. I can tell you all about the salary excesses of those executives. Out in the suburbs of New Jersey our former farms taken up by mansions of those guys and streets laden with Porches and Ferraris and the more pedestrian Mercedes and BMWs and do I think they need a tax break? Hell no."

Earl says, "I believe that now is not the time to increase taxes on anyone but I do believe it is time to stop the runaway spending."

Julie in Virginia says, "I don't think of it as raising taxes on the wealthy, but readjusting to make it fair. Letting the Bush tax cuts expire for the wealthy seems like a good way to do this."

Larry in Ohio writes, Jack, it's a bad idea to raise taxes on anyone with an economy as weak as it is right now. It is only a ploy to appease and to purchase votes.

And Lisa says it would be a mistake not to raise taxes on the wealthy. They're the only ones that have anything left. If you want to read more on this, you'll find it on my blog, It's very in address for all the elite meet to read e-mails. Right, Wolf?

BLITZER: That's correct, Jack. Thank you.