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Herman Cain Under Fire; Pentagon Brass Warns on Deficit; Super- Committee Feels the Heat; Sexual Harassment Scandal Surrounding Herman Cain Continues to Unfold; New Ads Put out By Republican and Democratic Organizations against Mitt Romney and President Obama; Oklahoma Pollster Confirms He Saw Cain Behavior; Tense Mood at G-20 Summit; Allegations Doom Cain's Campaign?

Aired November 2, 2011 - 16:00   ET


WOLF BLITZER, HOST: Happening now --


HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Excuse me. Excuse me. What part of no don't some people understand?


BLITZER: A flash of temper from front-runner Herman Cain, as the controversy over sexual harassment allegations simply won't go away. Cain says certain factions are trying to destroy him.

But it could get worse. An attorney for one of Cain's accuser says his client now wants to go public.

Meantime, some key Democrats are focusing their attention on Mitt Romney. Paul Begala's group is behind it. Paul is standing by to join us live this hour.

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

As controversy swirls around him, Republican front-runner Herman Cain went behind closed doors with Republican lawmakers on Capitol Hill, just a brief respite from the storm that has blown up over previously undisclosed sexual harassment allegations.

Earlier today, Cain suggested some sort of conspiracy is at work, but he insisted he will prevail.


CAIN: There are factions that are trying to destroy me personally, as well as this campaign. But there is a force greater, there's a force at work here that is much greater than those that would try to destroy me and destroy this campaign and this journey to the White House. And that force is called the voice of the people.


BLITZER: But Cain may face a new round of controversy. One of his accusers apparently wants to go public.

Our Brian Todd has been investigating this part of the story.

Brian, really getting new information. What are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the wheels have been set in motion for that. We're now one step closer to one of Cain's accusers speaking out now that her attorney has made contact with the National Restaurant Association, which Cain once led.


TODD (voice-over): The other shoe may soon drop for Herman Cain. The attorney for a woman who accused Cain of sexual harassment has contacted the National Restaurant Association, which Cain once headed.

The attorney Joel Bennett says his client wants to speak out and set the record straight. Bennett says he would like the association to release her from the confidentiality agreement she signed when she left that group.

JOEL BENNETT, ATTORNEY FOR CAIN ACCUSER: Naturally, she's been very upset about all this since the story broke last Sunday because Mr. Cain has been giving the impression that she's someone who came out and made false allegations, and that's certainly not true.

TODD: Joel Bennett says his unnamed client got a settlement from a sexual harassment complaint against Cain. He describes his client as married, highly intelligent, someone who doesn't go around making false claims. Bennett says she is a career civil servant, but asked whether she's politically active:

BENNETT: I have no knowledge that she is active politically. She's a current employee of the federal government.

TODD: By most indications, Bennett's client is not the same woman who "The New York Times" reports got $35,000, a year's salary, in severance pay after an alleged encounter with Cain. That person could be the woman who Cain has described as someone who worked as a writer in the communications arm of the Restaurant Association in the 1990s.

Of that woman, Cain said all he did was make an observation about her height. And on the claims of sexual harassment:

CAIN: They were ridiculous. I dismissed them out of my mind. I said, if she can make that stick and call that sexual harassment, fine, but it didn't stick.

TODD: Cain has described the other woman as someone who worked in the Restaurant Association's governmental affairs department in the 1990s.

I spoke with employment attorney Deborah Kelly about the request from the one accuser's lawyer, Joel Bennett , to lift the confidentiality agreement.

(on camera): What are the odds of the National Restaurant Association releasing this?

DEBORAH KELLY, ATTORNEY: I can't see a reason in the world why the National Restaurant Association would want to release, because all the stuff they paid to settle and have go away and have not hit the reputational damage of the company would emerge. Then it would get back to the very did it happen, didn't it happen, who saw it, who didn't see it that they paid to avoid.


TODD: For now, the National Restaurant Association has referred the accuser's attorney, Joel Bennett, to the association's outside counsel. Bennett is meeting with his clients tonight and says he will submit his formal request to the association to release her from that confidentiality deal probably tomorrow, Wolf.

BLITZER: Joel Bennett also believes, Brian, that Herman Cain has already broken that confidentiality deal, doesn't he?

TODD: He apparently does.

Bennett says for all intents and purposes, Cain has violated that. He wasn't clear about how he believes Cain did that, but in a recent interview, Cain said of one of his accusers -- quote -- "I do recall that her performance had been told to me by her boss had not been up to particular" -- end quote.

Joel Bennett says there is a non-disparagement provision in the confidentiality deal. Deborah Kelly, that employment lawyer, says if Cain spoke negatively about the woman's work performance in public, he might have broken that part of the agreement. Cain has vehemently denied breaking that confidentiality deal.

BLITZER: Because that agreement was between the National Restaurant Association and this woman and Cain at the time was the head of the National Restaurant Association. So automatically, he was part of that confidentiality agreement.

Brian, thanks very much.

For a brief moment, the controversy seemed to get the better of Herman Cain as the candidate showed a flash of irritation.

Jim Acosta was on the scene for us as he often is. He's joining us now live.

Walk us through, Jim, exactly what happened here.

JIM ACOSTA, CNN CORRESPONDENT: Wolf, we certainly saw a change in the public face of Herman Cain. Gone was the casual, easygoing style that reporters are accustomed to Mr. Cain demonstrating and in its place was a much more confrontational style.

He refused to ask -- or answer reporters' questions at an event in Virginia this morning and I tried to get him to answer the question would or not he call on the National Restaurant Association to release those women from those confidentiality agreements that Brian just mentioned and here's what happened next.


CAIN: Let say one thing. I'm here with these doctors and that's what I'm going to talk about. So, don't even bother asking me all of these other questions that you all are curious about, OK? Don't even bother.

QUESTION: But are you concerned about the fact that these women do want to--


CAIN: What I did say?

QUESTION: Are you concerned about--


CAIN: Excuse me. Excuse me.

What part of no don't some people understand?



ACOSTA: Now, if we were to continue showing you that video, Wolf, you would see that there is a confrontation that goes on between Cain's security staff and reporters who are trying to ask him those questions.

I can tell you having been there on the scene myself, Wolf, there was some pushing and shoving. Cain's security staff did elbow members of the working press. There were also innocent bystanders who were just sort of standing in the way. They were also pushed out of the way at one point.

This was a very sort of rough and nasty scene, something we have not seen from the Cain campaign so far. And it marks perhaps a turning point in his campaign given the fact that he's not really talking to reporters about what's happening here and this very confrontational style on the part of his staff -- Wolf.

BLITZER: Were there a lot of reporters and camera crews at this event, Jim?

ACOSTA: There were. There was a fairly large throng of reporters waiting for Mr. Cain to come out of this meeting. He was meeting with a group of conservative doctors.

Also with Mr. Cain I should mention was his chief of staff, Mark Block. He is the smoking campaign manager that you see in that YouTube video that went viral last week. I had a brief moment to catch with up him and I asked him about whether or not calls are going in from the Cain campaign to the National Restaurant Association to release those women from those confidentiality agreements.

He held up a phone to his ear, Wolf, and said this may be the call now. And he turned away. I caught up with him another brief moment and he said -- quote -- "This should be an interesting 48 hours."

My understanding from those comments is that they are anticipating that things will develop in the next day or two that may allow these women to talk.

BLITZER: Jim Acosta, thanks very much.

Let's bring in our chief political correspondent, Candy Crowley. She's the anchor of CNN's "STATE OF THE UNION."

Candy, what do you make of the way Herman Cain handled this sort of Q&A with reporters today?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: I think with Herman Cain, you still see signs of a campaign that is not quite ready for this kind of prime-time drama.

The idea -- I thought he sort of started out well, which is I'm here with these doctors and that's what I'm going to talk about. But you can't ever lose your cool. It makes you look guilty, fair or not fair. I think you can also look at Cain and believe on the bright side for him that the folks who support him, the conservative Republicans who support him, are quite apt to take his side on this in this way.

He says people are out to get me. Certainly, there is no love lost for the media in that part of the Republican Party. And this may well either increase his support or not have it go away. I don't think he's handled it well. I think he still shows signs of a campaign that is not yet up to snuff. He needs to have a consigliore in there saying, stop talking.

He needs to have someone in there for logistics saying, let's bring him this way. They need someone to say to him, you were great. Let's say here are the doctors, and then say I know you all want to talk about things that happened many decades ago, but I want to hear about health care.

There are ways to handle this. It's a tough situation, but there are ways to handle it. And for that, you need staff who have been there, done that.

BLITZER: Do you think it's going to really have an effect though on his base, the conservative base, the Tea Party supporters who love him right now and have put him atop the national as well as so many of these statewide polls?

CROWLEY: Right now, as I say, we don't know enough. We don't know what happened here between two people in the 1990s. We may hear more tomorrow. I think it depends on what comes out, but, as of right now, this begins to be a Herman Cain vs. the media, you know, the people are after me and I think that only enhances his image among those that support him right now because they do believe that the "lamestream media" or the liberal media or whatever, however they choose to describe it, is against conservative candidates.

BLITZER: You know, but when I heard him say there were some elements out there out to get me personally and out to get my campaign, you could on the one hand say, yes, the liberal news media, maybe he was referring to that, but I sensed he was referring to maybe some of his Republican rivals out there who are afraid of him, don't want him to get the Republican nomination. He was pointing his finger at them, but maybe I misinterpreted what he was saying.

What did you think?

CROWLEY: Or maybe I just took it too personally.

Listen, it could be any of the above, but in either case, people who support Herman Cain now I don't think have seen enough to make them turn away from him. I think that's basically my point when the question is, is he going to lose his base of support? Not yet. We will have to see what happens. But I do think that this is not going to go away without some further explanation because it's not been handled that well.

BLITZER: It certainly hasn't. All right, Candy, thanks very much.

A programming note to our viewers. Watch "STATE OF THE UNION" with Candy every Sunday, 9:00 a.m. and Pacific right here on CNN.

"The Cafferty File" coming up next -- then the Pentagon brass on Capitol Hill with dire warnings about what could happen to the military if the deficit super committee fails in its assignment.

And Herman Cain earlier this week was all smiles, singing to reporters. Today, his frustration began to seep through. Paul Begala and Rich Galen, they're both standing by for our "Strategy Session."


BLITZER: Let's get to Jack Cafferty. He's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, Herman Cain is just the latest politician in a very long line to have a potential sex scandal damage his career. We have a lot of sordidness in our political past, but not all of it has been fatal. Most famously, we got former president Bill Clinton, impeached over the Monica Lewinsky scandal, found not guilty, and then went on to finish his second term and maintain a very high profile after he left office.

But every all politician has survived these things. Think former New York congressman Anthony Weiner, former senator and one-time presidential hopeful John Edwards, former New York governor Eliot Spitzer, and that creep from South Carolina, the former governor, Mark Sanford, who told the world he was hiking naked on the Appalachian Trail, when in fact, he was in Argentina with his lover. There are many more. Some of them are still crawling around the halls of Congress.

The key in Cain's case is we still don't know if he's guilty, although his clumsy handling of this certainly hasn't helped him so far. Cain changed his story multiple times since the news broke Sunday that two women accused him of sexual harassment when he led the National Restaurant Association back in the late 1990s.

It is unclear how much this is going to damage his campaign, if at all. There are no polls that have been taken entirely after the news broke, but polls taken before this story broke showed Herman Cain at the top of the Republican field. The story seems to be rallying his base. Cain's campaign raised more than $400,000 on line on Monday alone. That ain't chump change. And several high-profile conservatives are sticking by Herman Cain. They're blaming the media and racism, which of course, is always convenient when things aren't going your way.

Anyway, here's the question. Should -- not will, but should allegations of sexual harassment more than 12 years ago cost Herman Cain his run for the White House?

Go to, post a comment on my blog or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Whenever, Jack, you have a combination of politics, especially presidential politics, and any inkling of sex, you know that that's going to generate a huge amount of interest in the political community, the journalistic community. This story isn't going to go away for some time as a result of those (INAUDIBLE)

CAFFERTY: You know--

BLITZER: You and I have covered these stories for a long time.

CAFFERTY: Arguably, this is the most interesting thing that's happened since the Republican contest began. I mean, it was a pretty big yawn up until now. However this turns out, at least it's put a little electricity in the deal.

BLITZER: A lot of electricity, I should say that, too much for Herman Cain right now. But the pressure on him is enormous. Jack, thank you.

A fresh drumbeat of alarm for the so-called super-committee of lawmakers charged with helping to clean up America's red ink. The nation's top military officers were up on Capitol Hill today and they warned what could happen if the committee fails to find a way to cut a trillion-and-a-half dollars or so by its upcoming deadline. Automatic cuts would then be triggered.

The Army chief of staff, General Ray Odierno, says that could reduce the defense budget by a trillion dollars. Listen.


GEN. RAY ODIERNO, ARMY CHIEF OF STAFF: Cuts of this magnitude would be catastrophic to the military, and in the case of the Army, would significantly reduce our capability and capacity to assure our partners abroad, respond to crisis and deter our potential adversaries while threatening the readiness and potentially the all-volunteer force.


BLITZER: Let's go live to our congressional correspondent, Kate Bolduan. She's up on Capitol Hill. It's not just the military chiefs that are ratcheting up the pressure on the super-committee, is it, Kate.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: That's absolutely right, Wolf. Yesterday, it was budget experts. Today, it's the country's top military officers, as well as fellow members of Congress, leaning on the super-committee, sounding the alarm, saying that the super-committee must succeed in hitting its target in at least $1.2 trillion in deficit savings over the next 10 years.

Democratic members of Congress joined together today, calling on the super-committee to close oil and gas subsidies as a good starting point, in their mind, of reducing the deficit. But another very big group, 100 members of the House, both Democrat and Republican, coming together, signing on to a letter to urge the super-committee to "go big." In their opinion, the committee should find $4 trillion in deficit savings over the next 10 years, which is really the number that many budget experts say is needed in order to stabilize the country's debt.

Listen here to House Republican Steve Latourette, as well as the number two Democrat in the House, Steny Hoyer.


REP. STEVEN LATOURETTE (R), OHIO: When this big bill (ph) comes out, any member can find 10, 20, 30 reasons to say no. But it's now time for the ostriches to pull their heads out of the sand, the holier- than-thou crowd to get off their horses. The sacred cows need to be made into hamburger. And we need to get this thing done in a big way.

And there's a lot of talk about pledges in this town. People that pledge to do this, not to do that. It's time to put the pledges in a bonfire and reaffirm our conviction to the oath that we all took to defend this nation.

REP. STENY HOYER (D-MD), MINORITY WHIP: What we're saying is don't go small-bore because we'll just have to be at that year after year after year, and we will not create the confidence in two ways, both from the economic standpoint of meeting our deficit challenge, and of the deficit that we have in the competence of America that its Congress can work.


BLITZER: These lawmakers, this group of 100 that signed onto this letter -- they all really acknowledged today that everything needs to be on the table, acknowledging that that needs to include the thorny issues of entitlement reform and increasing revenues, which possibly could mean an increase in taxes.

Wolf, though the letter as well as the members of these -- these House members were deliberately vague on what they would sign onto, saying in the press conference that they were not going to get into specifics, more driving the point home that what Congress faces here and the super-committee faces isn't a policy issue, in their view, it's a political issue. Does Congress have the courage to do what's needed to be done?

The reality that we all face, though, is that there are 12 members on this super-committee. They're the ones making these decisions. They have three weeks left until their Thanksgiving deadline. And so far, this committee does remain deadlocked largely around the issue of taxes. But I will say that this super-committee may have received some very valuable political cover today through this group of 100, Wolf.

BLITZER: I guess it depends if the Republicans are willing to raise taxes, the Democrats are willing to cut entitlements, like Social Security or Medicare and Medicaid, then they'll have a deal. If not, that committee's going to be deadlocked six to six, and then those automatic cuts will begin to unfold.

All right, Kate, thanks very much.

The headquarters of a magazine gutted by fire on the same day it prints a controversial cover. Why officials believe that's no coincidence. And Republican presidential candidate Herman Cain gets testy, shall we say, with reporters after being questioned about past sexual harassment allegations.

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


BLITZER: A magazine with a controversial cover is targeted in an apparent attack. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What's going on, Lisa?


Well, today, a fire ripped through the Paris offices of the French satirical magazine "Charlie Hebdo" just as it was publishing an issue appearing to make fun of Islamic law. The cover features a cartoon figure of the Prophet Mohammed with the quote, "100 lashes if you're not dying of laughter." A director at the magazine says the fire was caused by a Molotov cocktail, but that has not been confirmed.

And a U.S. soldier who was part of a military police battalion in Alaska is accused of spying. Specialist William Colton Millay was arrested on Friday following a joint FBI-military investigation. The FBI hasn't revealed any specifics about the case, only saying that Millay was under observation and any potential intelligence leak was stopped. He'll face charges in a military court this week.

And in Washington, it's a surprising social event. Vice President Joe Biden and his wife, Jill -- they are hosting House Majority Leader Eric Cantor and his wife, Diana (ph), for dinner at the vice president's official residence tonight. Biden and Cantor -- they butted heads during the deficit reduction talks back in June, but staffers are saying, you know, despite their political differences, the two have actually developed a strong friendship over the past year, and tonight, Wolf, they will be breaking bread together.

BLITZER: Yes, I noticed that the vice president asked John Biden to -- excuse me, John McCain -- Vice President Biden asked John McCain to go with him on Air Force 2 to pay respects to the Saudis the other day when the crown prince passed away, so Biden making up -- making nicely, apparently, with Cantor right now, also John McCain, inviting him on that trip. It was a short trip, but they did fly over together and pay their respects to the Saudis. All right, thanks very much for that.

SYLVESTER: Yes, I think -- I think, definitely, all this--

BLITZER: Yes, you want to say something?

SYLVESTER: I was going to say I think, definitely, all of this partisan bickering -- I think that there is an attempt, at least, to reach across the aisle to the other side, at least. Maybe we'll see if that brings down the temperature a little bit here in Washington.

BLITZER: We'll see if the president's going to play some golf with John Boehner, too. Maybe that'll help get some of that gridlock off -- get going a little bit better. Thank you very much, Lisa, for that.

Beset by controversy, how does Herman Cain continue to rake in the campaign cash? Paul Begala, Rich Galen -- they're next in our "Strategy Session."


BLITZER: Let's get back to our top story now, the controversy over alleged sexual harassment swirling around the Republican presidential frontrunner Herman Cain.

Earlier this week Cain was all smiles, even singing to reporters. But today, his frustration showed through. Watch this.


CAIN: I'll never know why Jesus came to love me so. He looked beyond all my faults and saw my needs.

Don't even bother asking me all of these other questions that you all are curious about, OK? Don't even bother.

UNIDENTIFIED MALE: Are you concerned about the fact these women do want -- CAIN: What did I say? Excuse me. Excuse me.


BLITZER: He was singing to the press club on Monday. You just saw that little testy exchange from today. Let's discuss what's going on in our strategy session.

Joining us, our CNN political contributors, the Democratic strategist Paul Begala, along with the Republican strategist Rich Galen.

Paul, what happened between singing on Monday and getting testy with reporters today?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Sort of singing a different tune, isn't he, Wolf?


BEGALA: I guess if you can't answer the question, you sing or dance or counter attack. If I remember giving him advice, I would say it's hard to do, but one of the things in this business, you never let them see you sweat. It's hard. I don't think people want to see their potential president lose their temper like that. But he's in a tough spot, and in that sense my heart goes out to any campaign that's in a crisis like this.

RICH GALEN, CNN POLITICAL CONTRIBUTOR: I thought frankly the singing was -- I thought was a little creepier than getting testy. I don't -- he's allowed to get testy. We want people to sort of - "get out of my way."

But this -- this campaign, this shows what happens when you have an inexperienced candidate with an inexperienced staff that gets themselves involved in a major league problem like this. They have everything you could possibly do wrong. And I have no idea what actually happened to start this, but we have a saying here in Washington, it's not the crime, it's the cover up. I have no idea what actually happened, but what the campaign has done starting Sunday night and continuing through today has just dug it deeper and deeper hole for the campaign.

BLITZER: But his numbers statewide in Iowa and New Hampshire, South Carolina, Florida, Paul, they're impressive. And now nationally he's impressive including in this latest Quinnipiac poll among Republicans. This is what he said today. Listen to this.


CAIN: A Quinnipiac poll just came out where they did a head to head between Mitt Romney and I, and I did defeat Mitt Romney by about 10 percentage points in that particular poll.


BLITZER: You got to admit, that's pretty impressive, Paul. You're a long time political strategist. He's doing remarkably well even if he isn't necessarily doing that well right now handling this crisis.

BEGALA: That's what's so astonishing about this guy's rise. Herman Cain's rise. I saw in one poll he's beating Rick Perry in my beloved state of Texas where Rick Perry has never lost an election. So it is impressive.

You wonder, though, if some of this is not the anybody but Romney problem with the Republicans seem to have. Donald Trump was beating Mitt at first, and then Congresswoman Bachmann was beating Mitt, then Rick Perry, and now Herman Cain is beating Mitt. Mitt chugs along about 25 percent, which is not bad, but that's where he was about $100 million ago, and he doesn't seem to buy a single vote from four years ago.

GALEN: Remember, Paul, in the caucuses four years ago, Senator Obama won with only 34 percent of the vote. So we're talk about the terror of small numbers in a lot of these things.

But getting back to that polling, I saw that poll, and I think it was in the field largely before this began to sink in. So we'll have to see what happens as events move ahead. And we also have to wait and see if there's anything else. There are other reports today.

But one of the things we have to be careful of when a candidate gets into one of these situations is somebody comes up and stops you, Wolf, on the street and says, I saw Herman Cain jaywalking and there was a woman on the other side of the street. I think he was looking at her. You just don't know.

BLITZER: Guys, stand by for a minute. We have more to discuss, including some new political ads just coming out today.

A Democratic group going after Mitt Romney, the Republican National Committee going after President Obama. Both ads are made to look like Hollywood movie trailers. It's all coming up in our strategy session.


BLITZER: We're back with our strategy session. Joining us once again, our CNN political contributor, Democratic strategist Paul Begala along with Republican strategist Rich Galen. A lot of focus among Democrats, including your super PAC right now that you run, Paul, on Mitt Romney. I'm going to play a little clip from this latest ad or video you put out there on the web. Watch this.


MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: Of course they are. Everything corporations earn ultimately goes to the people. Where do you think it goes?

UNIDENTIFIED MALE: Wall Street is with Romney.

ROMNEY: Don't try and stop the foreclosure process. Let it hit the bottom. Let Detroit go bankrupt.

CHRIS WALLACE, FOX NEWS HOST: When you were governor, Massachusetts ranked 47th in job growth.

ROMNEY: I would have favored justices like Scalia and Thomas.

If they invest in things like our stock market, the world's stock market.

There are a lot of reasons not to elect me.

It's not a very pretty picture, is it?


BLITZER: A pretty slick video ad. We should say very dramatic. Paul, are you even considering your super political action committee, you can raise unlimited sums, you don't necessarily have to disclose the donors. Republicans have these similar pacts as well. Are you focusing in on any of the other Republicans other than Mitt Romney?

BEGALA: I think, you know, if I was any of those other candidates, they may have their records scrutinized like that. That PAC will disclose all its donors. It's filed under the federal election clause and it will disclose its donors.

But Mr. Romney, Governor Romney, he's got a record out there and it is one that I think is quite frightening. I do advise that PAC. I love that ad, that video, but this is a guy who says that he wants to deregulate Wall Street, essentially end Medicare. He wants to privatize Social Security. That's his record. That's what he's running on. I think people should focus on that.

GALEN: He was also when he said we should let the foreclosure process go through --


BLITZER: Hold on a second. Hold on one second. Rich, hold on. I want to run a little clip of a Republican National Committee ad going after president Obama. Then we're going to discuss some of these similarities and differences. Listen to this.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The question in the election is not are you better off than you were four years ago. The real question is, will this country be better off four years from now?

UNIDENTIFIED FEMALE: In the three years since he took office, unemployment has gone up nearly 17 percent.

OBAMA: We haven't made enough progress on the economy.

UNIDENTIFIED FEMALE: Here we are four years later, they can't find a job.

OBAMA: If I don't have this done in three years, then it's going to be a one-term proposition. UNIDENTIFIED MALE: Unemployment rate is at 9.1 percent.

UNIDENTIFIED MALE: So many people who simply don't think are better off than they were four years ago.

OBAMA: I don't think they're better off than they were four years ago.

We've lost our ambition, our imagination.

UNIDENTIFIED MALE: Protesting Wall Street, they're also protesting the White House.

The economy saying it can't wait, then why are you waiting?

OBAMA: I'd say change we can believe in tomorrow, change we can believe in next week.


BLITZER: All right, you got the point. These are pretty dramatic Republican ads as well. I noticed the similarity between those and movie trailers, if you will. Are we seeing a new genre coming out here, Rich?

GALEN: Let me just say this, that these are negative ads, and everybody says, oh, I hate negative ads. But the fact is that human beings are hard wired to love gossip and negative ads are nothing but highly distilled gossip. Yes, this is the game, the video game era of TV ads. You can't have any scene that's longer than about a millisecond. You've got to have a booming music.

And I think, Paul, to a great degree, this is pretty early in the go, so a great deal of this is video direct mail to raise more money so you can run more ads as everything gets closer.

BLITZER: And we're going to continue to scrutinize these ads in the coming days and weeks. Guys, thanks very much. I want to pause because we're getting new information just coming in.

A Republican political consultant in Oklahoma says he actually witnessed the alleged inappropriate conduct by Herman Cain more than a decade ago. Our chief political analyst Gloria Borger has been doing some serious reporting on the subject. Gloria, what's going on?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, Oklahoma Republican political consultant Chris Wilson confirmed to me this afternoon that he did witness Herman Cain demonstrate inappropriate behavior towards a female employee of the National Restaurant Association.

What he confirmed was the authenticity of an interview he gave earlier today to an Oklahoma radio station and let me read to you a little bit of what he said during that interview, Wolf.

He said, quote, "It was only a matter of time because so many people were aware of what took place. So many people were aware of her situation. The fact she left. Everybody knew what the campaign that this would eventually come up."

So Wolf, this is the description he gave. He would not elaborate beyond that, but also made it clear he had been the pollster for the National Restaurant Association at the time and he also said this.

Let me quote. He said, he had been the pollster and quote, "I was around a couple of times when this happened and anyone who was involved with the NRA at the time knew that this was going to come up."

So, Wolf, it seems like somebody corroborating the story of one of these women at least. There is a question here though. And let me raise this because he raised it right up front, which is he is somebody who is supporting Rick Perry.

He is working for or with the Super Pac that supports the Perry campaign. But to me, Wolf, he dismissed the notion that he was doing this for any kind of political reason. Let me read you a quote from him because, of course, you'll have to ask that question.

We've had lots of conversations about whether this entire matter has been politically motivated. He said, quote, "I had nothing to do with leaking this in any way and I've never discussed or shared this story with any of my clients, period." -- Wolf.

BLITZER: Did he explain, Gloria, why he's decided to go on a radio show today and speak publicly about this, basically confirming these allegations that these two women leveled against Herman Cain back in the '90s?

BORGER: Right. You know, Wolf, he really refused to elaborate on this. I think he seemed quite shaken by the attention this was getting and as he said in the radio interview, I think he expected that this would have come out before.

So you know, we will continue to dig, Wolf, on why these stories are coming out now, but again, when asked about his political affiliation with Rick Perry, he was you know, quick to say look, this has nothing to do with Rick Perry. This has to do with my witnessing an event when I was a consultant to the restaurant association.

BLITZER: And he insists he was not the original source for "Politico," which broke this story Sunday night.

BORGER: He does. He insists he was not the leaker and that much he would say on the record -- Wolf.

BORGER: All right. Gloria, we'll continue to follow up on this part of the story. Take as lot of twist. More is going to come out I have no doubt.

Other news we're following, just two hours or so, the president leaves for a critical world economic meeting in France. So when he arrives at the G-20 Summit, the mood is expected to be tense. We'll tell you what's going on. That and a lot more news coming up right here on THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: World leaders are now gathering in France for the G-20 Economic Summit, but here, key European leaders are already in full crisis mode after the stunning move by Greece's prime minister, which puts the rescue package for his country indeed for the Europeans at risk.

CNN's Ali Velshi is now joining us from Cannes with more. These are critical talks. I know the president of the United States will be heading out tonight. What's the latest, Ali?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, he'll be arriving in just a few hours, Wolf. You've covered events like this and you know that often they're boring, they're technical. They don't have much drama attached to them.

But that all changed when George Papandreou, the prime minister of Greece announced that he's not just going to accept this deal, this euro deal that was worked out to bail Greece out. He's going to put it to the people of Greece.

Now, that's a big problem, Wolf, because this is a deal that really takes things away from the people of Greece. It claws back government spending. It makes them work more days in the year. It extends retirement ages.

So if he does that, there's a good chance that the bill doesn't pass and that puts this whole euro deal in jeopardy. Now what has happened is they've summoned him to this meeting, so there's an emergency meeting underway right now in this building with Papandreou of Greece, Sarkozy of France and Merkel of Germany and I would love to be a fly on the wall in that meeting.

We're not invited in, but I can imagine that the leaders of France and Germany are looking at him saying what are you up to? You are jeopardizing the economic growth and security of Europe.

Later on, the president will be coming in, about middle of the night your time and we don't know what role he's going to play in adding pressure to Papandreou, but right now, everything that was supposed to happen over the next couple of days is on the back burner.

It's a side show to what is happening with Greece. That is something all eyes around the world are on right now -- Wolf.

BLITZER: Is it a simple notion given what happened here in the United States back in 2008, Ali, that for the Europeans, indeed for the U.S. and for the world, Greece is simply too big to fail?

VELSHI: Yes. There absolutely is that concern. This is bigger than Lehman Brothers in terms of what will happen if Greece were not to accept the deal that has been some say imposed upon them, some say created, to help them.

The bottom line is a strategic default is probably the next likely thing. That again brings us back to those days after Lehman Brothers where governments wouldn't lend to governments and central banks had trouble getting money to companies. Banks wouldn't lend to banks.

It has this trickledown effect of all the way to consumers who are trying to get small business loans or home loans. There's a real fear that there will be a credit crisis if Greece defaults. So this is something everybody is looking at.

You saw the results in the stock market today. There seems to be some hope that something will emerge from this, something positive. But yesterday, massive losses in the stock markets because of this concern that Greece could scuttle a deal that is crucial to Europe.

And Europe is crucial to the recovery of rest of the world. So, yes, what you bring up is top of mind for a lot of people. This could be another 2008 if Greece doesn't play this correctly.

BLITZER: We'll stay in touch with you in France. Ali, thanks very much. Our own Ali Velshi on the scene at the G-20 Summit in Cannes.

Jack Cafferty is next with "The Cafferty File," then at the top of the hour, Syria vows to end its bloody crackdown on anti-government demonstrators. We'll have a live report. That's coming up and a lot more news right here in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Jack's back with "The Cafferty File" -- Jack.

CAFFERTY: Question this hour is should allegations of sexual harassment more than 12 years ago cost Herman Cain his run for the White House?

Bob in New York writes, "The allegation by itself should not ruin Cain's candidacy, but how he handles it gives us some insight into his ability to how handle pressure and deal with unforeseen developments. If he can't effectively navigate through something like this, then how can he possibly handle the pressure of being president?"

Meredith from Seattle says, "Of course not, Jack. What should end his run is his blatant lack of political experience and inability to clearly communicate his beliefs, policies and plans for the country. If I were on his team, I'd be shaking in my boots every time he was in front of a microphone."

Nathan of North Carolina, "Racism, didn't Cain himself mention something about affirmative action? Anyway, Obama is a source of pride for African-Americans. Mostly because of his oratorical skills, his character, and his clean track record of sex scandals.

This current sexual harassment charge means nothing to Cain's candidacy, but instead, what matters is the way he's dealing with it. That's because now he's demonstrating he has none of the above traits. Somebody will vote for him, but not nearly as many African-Americans will."

Tom in Atlanta says, "In this information age, I swear even Mickey Mouse couldn't get elected without having to defend his steam boat Willie days. Regardless, if Cain quickly clears the air and puts it all out there for the people to see and if he's clean, he has plenty of time to move on. If he's dirty, he's not the guy for the job."

Rusty on Facebook, "Only if it's true or he continues to respond to questions about it with conflicting, shifting answers."

And Jimmy in North Carolina writes, "Heck no. Look at what sex did for Bill Clinton and Teddy Kennedy. Bill's still a popular guy even after the Monica affair. When Ted Kennedy died, he was proclaimed the lion of the Senate.

I can't see where the sex stuff will hurt Cain at all. I'm even waiting for John Edwards to storm back on to the scene. With all the bad news coming out of Washington these days, the sex charges are a welcome relief."

You want to read more on this, go to my blog or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: All right, Jack. Thank you.