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JOHN KING, USA

Interview With Utah Congressman Jason Chaffetz; Facebook Holds IPO; John Edwards' Fate in Jury's Hands

Aired May 18, 2012 - 18:00   ET

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


JOHN KING, CNN ANCHOR: Good evening. I'm John King.

Tonight, Facebook falls flat -- what the tepid first-day response from investors tells us about the social networking site some say can do no wrong.

Plus, our campaign report card looks at Governor Romney's tax agenda. He calls it a job creator. The president calls it a gift for the rich.

And John Edwards' fate now in the jury's hands -- what their questions to the judge tell us about the deliberations.

We begin this evening with what you might call the Facebook hangover. After all the hype and buildup ahead of today's initial public offering of stock, trading started late, the price didn't skyrocket and Facebook closed essentially flat, just $0.23 higher than at the opening.

At least Facebook was up. The Dow industrials, Nasdaq, the S&P 500 all closed out their worst week of the year.

A lot the discuss with our business correspondent, Ali Velshi.

Ali, let's start with Facebook. What happened?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Generally you set a price for a stock, $38 in this case, that is supposed to create enough demand that the stock goes up. The early stage investors get to sell that stock. They are happy. The investors are happy because they get the stock at a good price, and we all live happily ever after.

This is not what you expect to happen. As you described, trading started really late. There seemed to be some technical problem at the Nasdaq. More than 500 million shares were traded by the end of the day. Just to give you some perspective, on a normal day, Microsoft will trade 50 million shares, Apple will trade 25 million. This is almost 500 -- almost 600 million shares.

So there was just a logjam. And it just -- everything didn't work out properly. The stock ended up going down almost to where it started, $38. And the only reason it didn't go further, John, is because the syndicate of investment banks that offer these stocks on behalf of the company, that would look really, really bad for them. They need future business. You never want an IPO going lower than the offer price.

You know they were buying late in the day to prop up the stock. Without that, if this wasn't an IPO day, this would have gone a lot lower.

KING: Ali, is it just a flat opening day for Facebook, or is this some sort of a symptom, some sort of sign about the broader market right now?

VELSHI: I think it's a few things. As you mentioned, this the worst week for markets in all of 2012. Never an ideal time to have an IPO. But that's not something Facebook could have controlled.

I think there's been a great deal of scrutiny about Facebook. We have been covering it endlessly. And that has caused people who were excited to get into the stock to sort of take some time and say maybe I don't have to rush into this thing. Let's see how it goes, let's see if in fact the stock can make money.

Now it's a bit of a wait and see. If it doesn't skyrocket on day one, why do I have to rush to get in? I can still invest in it if it's a good investment next week or next month. I don't take this as overwhelming backlash about Facebook. I would say to you if you were an IPO, this is not how you would want your first day to go.

KING: Our chief business correspondent, Ali Velshi -- Ali, thanks.

VELSHI: All right.

KING: Veteran technology reporter David Kirkpatrick has been following Facebook since it burst onto the scene. He's written a book about it, "The Facebook Effect."

David Kirkpatrick is with us now.

David, this is a company that everybody seems to love. Mark Zuckerberg is supposed to be the kid, the golden kid with the Midas touch. Does it matter that they didn't have a great first day?

DAVID KIRKPATRICK, "THE FACEBOOK EFFECT": Yes, I'm afraid it does matter.

And the question is how much is it going to matter? Certainly this was a huge disappointment. The company still made tons of money out of the offering, which was the fundamental purpose of it. It created a liquid market for its employees and investors, et cetera. Those were also major goals.

But as Ali said, there's no question this was intended to go up more than it did. And it really raises the question, did the stock price to high, did they issue too many shares, or did the -- they added a bunch of shares to the offering late in the game from existing shareholders. Maybe they shouldn't have done that.

Also, really, we don't know how much Nasdaq glitches caused additional problems and maybe contributed to the disappointment for Facebook. But it really makes you wonder, you know, is Facebook going to have trouble operating as a public company with this extraordinary valuation which is nosebleed levels?

KING: And so let's look at that from a financial standpoint and what I will call a psychological standpoint, first the financial standpoint.

We can show you top 10 web IPOs over the years. Only Google is an obvious smashing success. If you're Facebook, you thought you had sort of a gold standard like Google. This has to make you a little nervous, right?

KIRKPATRICK: Yes, it certainly outshone Google in terms of the size of the offering and valuation at the IPO.

There's a lot of things about this that are just astonishing. It's by far the most successful Internet IPO in history from a financial point of view for the company. But I think if the stock drops below $38 next week, it could really be a sort of ugly situation. If the stock starts really dropping significantly, it's really going to raise a lot of questions.

I think a lot of people were sort of looking at the Facebook IPO thinking we have got Europe and Greece and all this awful stuff with J.P. Morgan's loss and everything. Maybe Facebook is going to turn the markets towards a little happier attitude, and it really didn't happen.

KING: And so if you're Mark Zuckerberg and his creative team and you have spent most of your career thinking about how to make this better for the user, the visitor to the community, now you have got a different test, too, maybe an equal test of the markets.

It's not just what, does your user think, but what do the markets think? How does that change the psychology of the company?

KIRKPATRICK: Well, he hopes it doesn't change it at all.

And the reality is it probably will change it. And it looks more likely after today than I would have said it was tomorrow. Mark is very focused on product. He doesn't want to have to think about stock stuff every day, he doesn't want to appear on quarterly earnings calls, he is not going to want to think about making the analyst numbers.

But if the stock really underperforms going forward, it's going to increase the pressure on him to do that, which is going to really hurt his ability to keep moving the product forward, which is all that he really cares about.

KING: David Kirkpatrick, appreciate your insights on this important day. We will watch how this one plays out when the markets open Monday.

KIRKPATRICK: Thanks for having me. KING: Thank you.

Now to President Obama's vitally important weekend. He's here at home, but he's operating really on the global stage, heading to Camp David this hour to have dinner with the leaders of the G8. That's the world's largest economic powers.

You're watching live pictures there. That's Marine One carrying the president. This will be the largest collection of world leaders ever to gather at Camp David. That's the presidential retreat not far from Washington here. After his all-day meetings tomorrow, the president then heads to Chicago, an equally important NATO summit.

Our White House correspondent Brianna Keilar outside beautiful Camp David.

Brianna, the president met today with the newly elected French president, President Hollande, lots of smiles, handshakes, but already a disagreement. Right?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: So it would seem, John, because -- and you're talking about Afghanistan, of course. That's because the newly elected President Hollande campaigned on bringing home French combat troops from Afghanistan by the end of this year.

Compare to the U.S. plan, which is bring home their combat troops by the end of 2014. It's quite a difference. But some think there may be a way for Hollande to make good on his promise to French voters and also not upset his allies like the U.S. That's because there are a lot of French combat troops who are in an area of Afghanistan that is already shortly going here to turn over the lead to Afghan troops.

And it's also possible, and we heard Hollande say today that France will support Afghanistan in other ways. It's possible, of course, that French trainers in Afghanistan and there still could be a money commitment, John.

KING: So, questions about Afghanistan. How about the economic crisis? Hollande and Obama see eye to eye on the European crisis which of course has in the past and threatens now to spill over here again to the United States?

KEILAR: Certainly, John. And this is where President Obama may find more of a kindred spirit in Hollande, because while we have seen Europe really tighten its belt, cut government programs, not focus as much on stimulus and deficit spending the way the U.S. did with its financial crisis, growth has stagnated in Europe.

Hollande has talked about more about a balanced approach, looking more at stimulus. And while President Obama clearly shares this view, the U.S. largely is a bystander in this process. Of course, France is not.

It will play a key role as Europe looks to find a solution to this crisis that is now entering its third year. KING: Brianna Keilar outside of Camp David, the presidential retreat in Maryland, as the president begins a very important weekend of diplomacy. Brianna, thanks.

One of the important questions for this weekend's NATO summit is the future of the alliance. In a bit, I will ask Fareed Zakaria whether NATO is still relevant.

But next, a report card on what Mitt Romney's tax policies would mean for you.

(COMMERCIAL BREAK)

KING: Taxes are a little always a litmus test in Republican primaries and tax fairness will be a frequent theme now in the debate between the Obama and Romney campaigns.

The Romney agenda on taxes is part of a plan he promises would jump-start job creation. It begins with a call to cut both corporate and personal income taxes.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Our taxes are higher than any other nation besides Japan. The average of developed nations' tax rate for corporations is 25 percent. Ours is 35 percent. We have got to bring our tax rate down to that same 25 percent level. I will do that on day one.

(END VIDEO CLIP)

KING: Another big contrast with President Obama is Governor Romney's call to make permanent the Bush tax cuts that are due to expire this year.

(BEGIN VIDEO CLIP)

ROMNEY: We fought so hard to make sure the Bush tax cuts weren't taken away by President Obama. I want to keep our taxes down. I don't want to raise any taxes anywhere. Let me tell you, I'm not looking to raise taxes.

(END VIDEO CLIP)

KING: Some critics suggest the governor's tax-cutting zeal now doesn't mesh with his record when he was Massachusetts governor. Back then, Governor Romney acknowledges raising a host of state fees, but he says that beat the alternative.

(BEGIN VIDEO CLIP)

ROMNEY: The expectation was that we'd have to raise taxes, but I refused. I ordered instead a complete review of all state spending, made tough choices, and balanced the budget without raising taxes.

(END VIDEO CLIP) KING: Now, a common critique of the Romney tax agenda is that he calls for tinkering with the existing tax code, instead of a dramatic overhaul. The governor says he's all for that eventually.

(BEGIN VIDEO CLIP)

ROMNEY: Ultimately, I would love to see -- see us come up with a plan that simplifies the code and lowers rates for everybody. But right now, let's get the job done first that has to be done immediately. Let's lower the tax rates on middle-income Americans.

(END VIDEO CLIP)

KING: Let's dig deeper on the impact of the Romney tax agenda with the former Clinton Labor Secretary Robert Reich and Republican Congressman and Romney supporter Jason Chaffetz.

Congressman, to you first as the Romney backer. Answer the Democratic argument that what you would get here is a third term of George W. Bush in terms of tax policy and their argument that it didn't create jobs then, why would they expect it to now?

REP. JASON CHAFFETZ (R), UTAH: What Governor Romney is proposing is something that will create consistency in the marketplace.

I think what you have seen under President Obama is this volatility and uncertainty as it relates to taxes. Consequently, capital is resistant to making investment. Certainly, as you look at the corporate income tax, we have got to be able to compete on the world stage.

We have the highest single corporate income tax in the world. What we're also looking for is the middle-class tax breaks, and what he has said, with adjusted gross income of $200,000 and less, he wants to get rid of taxes on interests and capital gains and dividends, those type of things that will make a real difference for middle-class families.

KING: Mr. Secretary, anything in the Romney tax agenda that you say, OK, I will give you that one, that one would work, it would help create jobs?

ROBERT REICH, FORMER U.S. LABOR SECRETARY: Well, John, I have searched it very carefully. It's hard to come up with anything that is going to create jobs or generate fairness.

In fact, don't take my word for it. The independent nonpartisan Tax Policy Center in Washington has analyzed this plan and found that people in the top 1 percent -- if you have incomes over $800,000 a year, you're going to get a tax cut under Romney of $150,000. And people in the top one-tenth of 1 percent -- that's in Romney land -- those are the multi-multimillionaires -- they're going to a tax cut under the Romney plan of $750,000 a year.

But if you're in the bottom 20 percent of Americans, according, again, to this bipartisan and independent nonpartisan Tax Policy Center, you are going to see your taxes increase by about $153 a year. That may not sound much, but that's still a tax increase.

And, meanwhile, the governor has not specified how he's going to deal with a gigantic budget deficit.

KING: Well, Congressman, come in on that point. Let's deal with the budget deficit first. Then will get to the fairness argument.

The secretary -- there are a number of analyses that say it's about $3.7 trillion actually over 10 years just making Bush tax cuts permanent. That doesn't take into account other proposed tax cuts there. Has Governor Romney, in your view, put forward a reasonable plan to not have that blow a hole in the budget? And what would he have to cut?

CHAFFETZ: Oh, look, what Republicans have always argued and what Governor Romney has said we have got to broaden the base and lower the rate.

To hear Democrats talk about it, we're just one good tax increase away from prosperity in this country, and nothing could be further from the truth. In fact, businesses are resistant to making investments because they don't know what the tax cut is going to be. So, again, we need stability. We want to lower the rates, broaden the base, not grow government.

And that's the fundamental difference, John, is that Democrats want to raise the rates, they want to raise taxes so they can expand and grow government. And Governor Romney is saying, no, we have got to live within our means and cut spending. We have a spending problem in this country, something that President Obama has never addressed.

KING: Mr. Secretary, we're talking mostly about the Romney agenda here, but one of the critiques I put forward was that he wants to tinker with the current tax code, not do anything new and bold or different. Can the same be said of President Obama?

REICH: Well, President Obama has put forward a tax plan that would increase taxes on the very top income earners, would set a minimum alternative tax for the millionaires and the few billionaires around, and would actually allow for many people to have a larger what's called a earned income tax credit.

That's what they have now, but he would enlarge that. That's a tax rebate essentially for people in the bottom part of the income distribution. So, instead of it being a reverse Robin Hood kind of tax plan -- and that's what Romney has -- you take from the middle class and the poor and you give to the rich and you create a huge budget deficit -- what the president is proposing is basically a tax plan that is fair to everyone, particularly acknowledging that we have now the most skewed distribution of income we have had in this country in over a century.

KING: Congressman, take your chance.

CHAFFETZ: What President Obama is doing is clearly not working. and what president -- hopefully President Romney is advocating is he wants to cut taxes on capital gains, in interest, and dividends for those making $200,000 or less.

That's a pretty specific proposal. He's talking about bringing down the corporate income tax. That's how you grow jobs in this economy. Nothing will do more to drive revenue to the Treasury than creating stability, growing jobs and allowing businesses to thrive so they can actually pay the taxes. He's not going to raise taxes on anybody.

He doesn't want to raise taxes on anybody. So to suggest that he's going to actually raise taxes on the poor, totally disingenuous and false.

KING: Gentlemen, we are going to end the conversation there. But as you can see, this is a feisty debate. We will bring both of you back and I'm sure the two candidates will be duking it out over not only tax policy, but tax fairness in the 172 days left. Congressman and Mr. Secretary, thank so much.

CHAFFETZ: Thanks, John.

REICH: Thanks, John.

KING: Today's "Truth," well, it depends on where you live. The presidential candidates won't leave some of you alone between now and Election Day, but others, well, you are going to be ignored.

And, next, what happened when Florida gambled on raising standards on its reading tests?

(COMMERCIAL BREAK)

KING: Welcome back

(NEWS BREAK)

KING: The jurors in the John Edwards corruption case got to work today. They also asked to see some very specific evidence. Next, we will tell you what it is and what it might mean.

Plus, is the military alliance formed to contain the Soviet Union still relevant?

(COMMERCIAL BREAK)

KING: In this half-hour of JOHN KING, USA: The John Edwards jury begins deliberating and asks for a closer look at some of the evidence. We will try to decipher what their request might mean.

More than 20 years after the collapse of the Soviet Union, the military alliance formed to contain it looks for new reasons to justify the big expense of staying together.

And depending on where you live, you will be getting plenty of attention from the presidential candidates or none at all.

It will be at least Monday before John Edwards learns his fate. The eight men and four women on the jury deliberating, they deliberated about five-and-a-half-hours today, but they failed to reach a verdict. Edwards is the former U.S. senator and presidential candidate accused now of knowingly using campaign money to cover up an affair with a campaign worker, Rielle Hunter.

Joining us now is Kieran Shanahan. He's a former federal prosecutor who has been in the courtroom since the trial began.

And, Kieran, it's often risky to read a jury during deliberations. But the jury came in and met with the judge today. The judge asked the jury if they had any questions about the law. One juror raised his hand and asked what's the definition of -- quote -- "for purposes of influencing an election"?

Tell our viewers why that question is so important.

KIERAN SHANAHAN, FORMER FEDERAL PROSECUTOR: It was an amazingly insightful question by a juror, because that's exactly what the defense is contending the whole case is about.

Was the money from Bunny Mellon and Fred Baron actually a contribution and was the contribution -- or this money that went to the purpose of supporting the mistress actually designed to influence the outcome of an election? So, great question, and strikes at the very heart of this case.

KING: And so when you have a jury, they're in deliberations, they come back out and talk to the judge, some people look for quick verdicts. Obviously, it will be at least until Monday. Do you read anything at all into that given your experience in trials?

SHANAHAN: Well, sometimes jurors go in. They may take a quick canvass. And if they think they are going to arrive quickly at a verdict, they take a vote and go forward.

I think these jurors have decided that they're going to meticulously, thoroughly review the evidence. Most of the evidence they asked to see, the exhibits, deal with what we call the Bunny Mellon money, which happened to be the first two counts the judge charged them on.

So I think they're going to sequentially walk through the counts. They will probably come back and ask for a group of documents associated with each count, and that portends at least another day, maybe a couple of days of testimony.

KING: And the late Bunny Mellon was a big benefactor of John Edwards, a personal friend and as someone who financed him, a very wealthy woman who gave a lot of money that ended up being funneled to the cover-up, essentially, to -- for Rielle Hunter.

One of the pieces of evidence the jury has is a letter she wrote to Andrew Young, who was the star witness for the prosecution, at one time a very close aide to John Edwards. And she wrote, quote, "It is a way to help our friends without government restrictions." Now, why might the jury be influenced by that? SHANAHAN: Well, Anderson, that letter was actually written to John Edwards from Bunny Mellon after she learned about the infamous $400 haircut.

Part of the instructions from the judge in this case, for the jury should consider the intent of the donor when she, in this case Bunny Mellon, gave the $725,000. That letter and another one where she makes reference to doing this to save America seemed to suggest that she, at least, intended to help John Edwards become president of the United States when she gave this $725,000.

KING: John Edwards is a very experienced and accomplished trial lawyer. What was his reaction watching this play out, the jury coming in, asking questions of the judge? He's been through this many times in his own life. How is he trying to read it?

SHANAHAN: You know, he certainly looks attentive while they're there. But from a juror's perspective, this trial has worn on him, emotionally.

Physically, he looks worn down and he looks tired. He, like everyone else, is trying to glean any little bit of insight you can from these jurors. But they didn't look fatigued. They looked more serious than they have, perhaps, so far. But their work is just beginning in earnest. And they've signaled by their actions so far that they're going to be deliberative and take the time that is necessary to render a verdict in this case.

How persuasive do you think here and based on your trial experience, in his closing argument, Abbe Lowell, John Edwards' defense attorney, a very accomplished attorney in his own right, pointed to two separate tables, a law book on one, a Bible on the other, saying essentially, these two, they're on separate tables for a reason?

Will the jury make that distinction between the law and what it might have its own personal views about Edwards' morality?

SHANAHAN: I think Abbe Lowell's opening, to distinguish between the law and the morality by pointing to the Bible and the statute was brilliant. He embraced the sin. He acknowledged the bad things that John Edwards has done in his personal life but then quickly refocused the attention of this juror to say, "But that's not what he's charged with. And as jurors you have a duty to consider these charges" and then quickly turned to the campaign finance law. We heard more from the defense about the campaign finance law than we did from the government.

So I think they -- they took and occupied the ground they have here, which is strongest for them. Is it really, if someone is paying expenses for a mistress, are they really campaign contributions, and are they really designed to affect the outcome of the election? So I thought they did a stellar job.

On the other hand a government came in at closing and told a story, to be unencumbered by a lot of the details, but woven into the story by showing how John Edwards had to be the mastermind behind this. They played John Edwards' voice from voice mails. They brought up tape recordings. They brought in actual documents that they used by flashing them on the screen.

So the government was also very effective in laying out its broad story, whereas the defense was going very specifically at the elements of the offense, and so much more technical kind of presentation.

And yet at the end I thought Abbe Lowell did a wonderful job of bringing some emotion in, talking about John Edwards' commitment to poverty, and that he had done many good things, was a good father. And so he tried to strike a good balance.

So listen, the jury has got a tough case. It's novel. The issue itself under the campaign finance law not well-known to any of these jurors, not within their ordinary experience. And so I think the jury has their hand full. And I would not be surprised if it takes them yet another couple of days to reach a verdict.

KING: And those deliberations resume on Monday. Kiernan Shanahan, appreciate your insights tonight.

SHANAHAN: Nice to be with you.

(BEGIN VIDEOTAPE)

KING: This year's NATO summit is in Chicago. And topping the official agenda is the transition in Afghanistan, but there are other giant issues for the 34 heads of state attending, from the financial crisis in Europe to the more fundamental question of whether an alliance built for the Cold War is relevant anymore.

Joining me now, Fareed Zakaria, the host of CNN's "FAREED ZAKARIA GPS" and editor at large for "TIME" magazine.

Fareed, in my eight and a half years covering the White House we would head off to the NATO summit or the G-8 summit essentially knowing that whatever was on the official agenda would not dominate. Something always comes up. Will that be the case here?

FAREED ZAKARIA, CNN ANCHOR: I think almost certainly. And as you said, they're probably as likely to talk about the impending economic crisis.

But the truth is NATO was a defensive alliance. It was designed for, really, to protect against Russia, against the Soviet Union during the Cold War. And ever since 1990 when all that ended, it's been flailing around looking for something to do.

But it is a very useful time when all these heads of state, heads of government get together, and there's always something or the other on the agenda that's pretty crucial.

I would suspect that a lot of them would spend some time talking about Greece and Europe and the world economy, even though it's actually meant to be a security alliance. KING: And when it comes to Afghanistan, which is important business at this summit, is it mission accomplished or is it mission exhausted, "let's get out"?

ZAKARIA: That's a great way of putting it. I've never heard it. I might steal that, "mission exhausted." I think I would put it, it's really -- it's more than there's a consensus that the Obama strategy, which is to double down on the counter-terrorism -- special ops, the drones -- but gradually withdraw from the vast nation-building project and therefore withdraw the troops, is broadly shared by other European countries. By European countries. So he's not going to get any pushback.

These summits become somewhat dramatic if there are two points of view. You think about the United States and France over the Iraq war. In this case, mostly everyone agrees with the Obama administration. And as we drawdown, they are drawing down, as well.

KING: Let's come back to the relevance question. Because as you noted, this is a defensive alliance. It was built when it was the west confronting, then, the Soviet menace. One of our world's great thinkers on these issues the other day told some students this.

(BEGIN VIDEO CLIP)

ZAKARIA: The world you are entering into is, first of all, at peace. Profoundly at peace. This is historically a very rare phenomenon. You don't have major wars, proxy wars, arms races among the richest countries of the world.

(END VIDEO CLIP)

KING: Sound advice to those young students from, as I said, one of the world's great thinkers on these issues. So if you are the leaders of the NATO alliance, what lesson do you have to learn from this very different world?

ZAKARIA: I think that, you know, political stability is a little bit like oxygen. When you have it, you take it for granted. We don't notice there's oxygen in this room: in my room and in yours. When you don't have it, you really notice.

So really preserve it. Do everything you can to prevent the return of, you know, Cold War-like hostilities between the United States and China, Cold War-like hostilities between the United States and Russia, rivalries between India and China.

All these things are, of course, low probability events. But if they were to happen, then all the stuff we're talking about -- this single global economy, the technological progress, the trade, globalization -- all that goes out window. Because now you're in a struggle for survival. And now politics and military affairs dominate everything.

So, you know, it is really true that we have the luxury of worrying about some of the kinds of things we worry about, which are real problems, but nothing like the problems of nuclear war during the Cold War, World War II, World War I and, you know, hundreds of years before that.

KING: Fareed Zakaria, as always, thank you, my friend.

ZAKARIA: A pleasure.

KING: Coming up, Mitt Romney launches his first general election TV ad. But I bet most of you haven't seen it. The "Truth" about presidential campaigns and their selective advertising next.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

KING: This weekend, more of a September feel than mid-May, so at least to me, in terms of the back and forth between the Romney and presidential campaigns. Team Romney ended the week by launching its first general election TV ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What would a Romney presidency be like? Day one, President Romney immediately approves the Keystone Pipeline, creating thousands of jobs that Obama blocked. President Romney introduces tax cuts and reforms that reward job creators, not punish them.

(END VIDEO CLIP)

KING: Important to note, there's a Spanish-language version.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (SPEAKING SPANISH)

(END VIDEO CLIP)

KING: Not to be outdone, a brand-new Obama campaign ad began airing today in Florida and Nevada, focusing on college costs and ending with a first: Sasha and Malia Obama making their TV ad debut.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: So he doubled funding for college grants, capped federal student loan payments, passed the largest college tax credit ever. For their future and ours.

(END VIDEO CLIP)

KING: What's fascinating is the "can't waste a day" sense you get when you talk to top strategists in both campaigns.

Truth is, though, many of you, for better or worse, be left out of this urgency. Both campaigns see eight to twelve battleground states deciding the election. Let me give you a sense of the map.

Now, blue states are either solid Democrat, red states solid Republican or leaning Republican. I view it this way right now. We start with President Obama, 237 electoral votes. Some Republicans would object. They think Pennsylvania should be in play. I say prove it. I'm going to leave Pennsylvania blue for now. They might change a few others.

I look at it about this way right now, which tells you what? President Obama only has to get to 270. So he only has to win a few here. The big ones would help. Governor Romney has to win most of them.

Because of that, you're going to see both the advertising and the candidate travel heavily concentrated right here in the battlegrounds. Take a look at this map I'll put on the screen for you.

Nine states, there are ads right now by pro-Obama and pro-Romney forces. And you see Michigan there colored in red. That's because there are Republican super PACs airing ads there, trying to soften it up.

It's a 50-state country, but at the moment, a 10- to 12-state election.

Here to talk truth tonight, the "New Yorker" Washington correspondent, Ryan Lizza; our senior congressional correspondent Dana Bash; and just reporting in one of those battlegrounds and now just to the south in Columbia, South Carolina, to be exact, our political reporter, Peter Hamby.

Mr. Hamby, South Carolina not expected to be a battleground, but you did some reporting in North Carolina. Let's get to that in just a moment.

Dana, Governor Romney is in New Hampshire today, and he decided to stand in front of a bridge that got a whole lot of stimulus money but that cars can't drive on, and he said this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: This bridge that sits behind us, you know all the story of this bridge. This is part of the president's stimulus plan. He went out and borrowed $780 billion and said that if we were allowing -- if Congress allowed him to borrow that kind of money, that he would hold unemployment below 8 percent and it hasn't been below 8 percent since.

(END VIDEO CLIP)

KING: Democrats are rushing to note that a lot of Republicans in New Hampshire, including Romney supporters, backed that money, that there's a park around it. It's not meant -- it's meant to be a tribute to the state's history.

However, do they think this works in a tiny state? I make this case all the time. Iowa or New Hampshire could decide the election.

DANA BASH, CNN CORRESPONDENT: Absolutely. And look, in this particular scenario, it cost $150,000 taxpayer dollars for, as you said, this 19th Century bridge, this part doesn't go -- it doesn't even go across the river. It was campaign imagery that you just couldn't resist.

An Obama official admitted to me today that they have various scenarios, as you just showed up there, for a path to victory. It is very hard for them to get to victory without winning the state of New Hampshire. That's why that kind of trip is something that we're going to see over and over again from Mitt Romney.

KING: And so Mr. Hamby, you just did some great reporting in North Carolina. And as you were there, you've moved down to North Carolina. But there's a state senator -- a state representative in North Carolina that had to apologize today because she said this. She said this first.

"From what I understand about the Mormon faith you can have multiple wives. That's sort of a contradiction. There are questions about who Romney is and what he believes in in terms of that particular issue."

She was commenting about the same-sex marriage initiative and trying to draw Governor Romney into it.

She apologized today: "I want to apologize in no uncertain terms for my comments on Mitt Romney and the Mormon faith. I recognize there's no place in our public or political discourse for such comments. I regret making them and am sorry for any hurt or misunderstanding it may have caused."

Peter, did she decide to apologize on her own or was she pushed?

PETER HAMBY, CNN CORRESPONDENT: That's a very good question. I strongly suspect and have heard that the Democratic National Committee and the Obama campaign quickly wanted to get this out of the way, get her to apologize.

You know, I received a couple phone calls from Democrats today saying, "I wish you'd given us a heads up about this." Because this is something that neither campaign wants to touch.

You saw yesterday the race was consumed with issues of race talking about that Jeremiah Wright, that potential Jeremiah Wright ad. And neither campaign wanted to really touch that. But the Obama campaign thought they could score points linking Mitt Romney to extremists.

But today, you know, the Romney campaign wanted nothing to do with this at all. They don't want this Mormonism discussion out there. You do see some Democrats raising it. Brian Schweitzer, the governor of Montana, brought it up and then had to walk it back, as well. So Democrats and Republicans are both sort of squeamish about how to deal with this issue. Because frankly, John, it hasn't really come up in a major way yet in this general election. There hasn't been a ton of media coverage exploring what is Mormonism. And Mitt Romney himself doesn't talk about his faith unless it's brought up at a town-hall meeting.

So there's a lot of people in states like this that are kind of -- in states like North Carolina, excuse me, around the margins who are sort of unsure what to do about this issue, John.

KING: And so that's what you get, Ryan. Is you have maybe this is a campaign within a campaign. In North Carolina, they're going to talk about Mormonism. In New Hampshire Mitt Romney is going to talk about that particular bridge.

You have a bunch of campaigns within the campaigns. But in about 40 states or 38 states people are never going to see the campaign, essentially. The vice president might drop by. Whoever Governor Romney picks might drop by. But for the most part, as we show that map, that's where you're going to see the candidates. That's where you're going to see the ads.

Good for the country or bad for the country?

RYAN LIZZA, "NEW YORK TIMES" WASHINGTON CORRESPONDENT: May narrow to seven or nine by the time we get to the fall, right? Well, in some ways bad for the country, because this is going to be a big important election with two really distinct ideologies. And once this election is over, these guys are going to be in the middle of some major fiscal tax -- you know, what is the role of government issues right after election day. And, you know, it's important that the whole country participates in the election.

KING: And it would be nice.

BASH: But to be fair, I think -- I mean, you spent so many times on campaigns. So did I over the years. How many days did we spend in Ohio, in -- you know, a lot of these battleground states? This is how it works.

KING: They used to pretend -- they used to pretend for a while longer that it was a 50-state campaign. Not any more. Now we go straight to the battlegrounds.

LIZZA: Well, probably a lot of people in those other states say, "Thank God."

KING: When it comes to the advertising, a lot of people are grateful they're not going to get those.

Everybody stand by.

"ERIN BURNETT OUTFRONT" coming up at the top of the hour. T

Erin, the president met with his new French counterpart, Francois Holland, at the White House today. G-8 summit up for this weekend. What's at stake for the president? ERIN BURNETT, CNN ANCHOR: A lot is at stake. I mean, I have to say, everyone says, "Oh, G-8, you know, they just get together and do their thing and, you know, have wine over dinner." That's true. But I mean, there's going to be some real passionate disagreement. And President Obama is right in the middle of it.

Really, in a sense, John, the whole future of our country is at stake, whether he decides to stake his presidency on saying, "Let's borrow a whole lot more money" or goes ahead with continuing to cut. It's a serious question, with a little fun with it. I think it sort of might be like the incident where Evander Holyfield lost his ear. We'll explain, top of the hour.

KING: I'm looking forward to that explanation. You've got to connect those dots for me, Erin. We'll see you in just a few minutes.

When we come back, if everything goes as planned, the U.S. space program rockets into a new and very profitable era tomorrow. That's coming up, as well as today's "Moments You Missed": Bono and the senator he refers to as a Deadhead.

(COMMERCIAL BREAK)

KING: We continue our conversation. Ryan Lizza, Dana Bash here with me in Washington. Peter Hamby in Columbia, South Carolina, today.

Governor Romney, we just played a little bit of his Spanish language ad, the Spanish-language version of his new general election ad. He's also going to address the Latino coalition annual economics summit here in Washington next week. He had a statement on Cuban independence day.

But this is not a fight at the moment, Ryan. Right now, it's 69 for the president, 20-something for Governor Romney among Latino voters. But to change the election math, Governor Romney has to do something, right?

LIZZA: Yes. He went pretty far right during the primaries on immigration.

And one thing that the Obama campaign says that they're preparing for -- I picked this up today -- they think at some point in this election, a super PAC is actually going to attack the Romney -- excuse me, the Obama administration from the left on immigration. Come out with ads that say, Obama has been too tough on border security and deportations, which they have. They've been tough. And, you know, ads maybe with heart-wrenching stories about Hispanics that were deported under the Obama administration.

BASH: They're probably saying, bring it on.

LIZZA: So watch for that. One of these, you know, outside Republican groups could actually attack Obama from the left.

KING: Try to (UNINTELLIGIBLE) Latino support. LIZZA: Yes.

KING: Because Latino, much as they don't love Republicans right now, the president did promise first year to do immigration reform. They're mad about the deportations.

Some of this comes down, though, Dana, to money right now. And we're watching the fundraising game play out. You did some reporting today that shows the Romneys were essentially personally investing to try to convince others to follow suit?

BASH: That's exactly right. You know, it was only a matter of time before Mitt Romney, who's never had a shortage of cash, was going to give to his own campaign and his wife, as well, and learned that they gave a total of $150,000. For Ann Romney, $75,000 is the legal max. For him, legally, he can give as much to his own campaign and presumably, he'll give a lot more.

But the fact that they signaled that today, I think you're exactly right. That they're trying to get other people to follow suit.

KING: Listen up, listen up. The president's starting to raise money. There's going to be a lot of money spent.

Peter Hamby, you did a fascinating piece on CNN.com on the math of North Carolina. How different it is this time around. The president won it in a huge Democratic way (ph) last time, just by 14,000 votes.

Obviously, we watch African-American turnout. We'll watch younger voters. We'll watch evangelicals.

Do the Latino population -- it's not huge in North Carolina, but in a very close race, does it matter?

HAMBY: Absolutely matters. Romney -- or excuse me, Obama won North Carolina last time by just 14,000 votes. Any tiny shift in turnout for any demographic could really swing the election.

And just in the last four years some of these big populous counties in North Carolina -- Wake County, Mecklenburg County around Raleigh and Charlotte really have blown up, and the Hispanic vote has actually doubled in North Carolina if you -- if you look at voter registration data since the last election.

And now it's only about, you know, 900,000 votes, but, again, you know, if the Obama campaign can get just a sliver of those Hispanics, that growing Hispanic population out to the polls, it means they only have to win less of the white vote. They only won 35 percent of the white vote in North Carolina last time.

So the changing -- the changing electorate, this is the stuff that the Obama campaign loves, and they're out there organizing pretty hard in North Carolina, John.

KING: Well, we'll study each of the battlegrounds county by county, voter by voter if we have to.

Peter Hamby, Ryan Lizza, Dana Bash, thanks so much. See you all on Monday. Have a great weekend.

Kate Bolduan is back with the latest news you need to know right now.

Hey, Kate.

KATE BOLDUAN, CNN CORRESPONDENT: Hey, there, John.

Syrian opposition forces report large anti-government demonstrations and a bomb targeting security forces today in Aleppo. That's Syria's most populous city and until now has been considered a stronghold of President Bashar al-Assad. Opposition forces also report at least 22 deaths across Syria today.

And salvage crews will begin refloating and removing the capsized Costa Concordia cruise liner from the Italian coast in the next few days. This is really unprecedented and difficult and a difficult operation that will take up to a year and will involve lifting the submerged ship from the sea bed in one piece.

Thirty-two people died in January when the ship slammed into a coastal reef off Tuscany.

And tomorrow could mark an important turning point in space exploration. A private company called Space X plans to launch a supply ship from Cape Canaveral to the International Space Station. It would be a first, and NASA is offering big bucks to private companies that supply the space station.

But there's a catch. Space X only cashes in if its mission is successful. Good luck with that one.

And get ready for a ring of fire. Sunday, the moon will slide in front of most of the sun, creating a fiery solar eclipse, really beautiful from those pictures. And you may be able to see it from your house.

It's the first solar eclipse in 18 years that's visible in the continental U.S. You can catch the partial eclipse at sunset in the western part of the country. So keep an eye out.

And martial arts star Jackie Chan may have thrown his last punch and done his last back flip on the big screen. He told reporters today at the Cannes Film Festival that he's retiring from the genre after his latest action movie, "Chinese Zodiac." Chan, who does his own stunts, says he's not young anymore and that he's quitting action roles for those that let him be, quote, "a true actor."

I don't know. Do you see him as a romantic comedy type guy, John?

KING: Shakespeare in the park?

BOLDUAN: We'll have to see.

KING: You don't think so?

BOLDUAN: Maybe. You know what? I'd love to see it.

KING: All right. Let's stay in the "ahts" -- arts genre -- a little Boston accent there -- for today's "Moment You May Have Missed." Rock legend Bono is in Washington today, speaking at a G-8 summit on curbing worldwide hunger. And the lead singer of U-2 seemed awfully fond of the man who introduced him, the Democratic senator, Patrick Leahy.

(BEGIN VIDEO CLIP)

BONO, SINGER/ACTIVIST: Senator Pat Leahy, and I would say prize fighter for the world's poor. A -- one of sort of righteous voice, louder -- louder than any rock band, actually, that big voice. He's been to a few U-2 shows, but I think at heart he's a Deadhead.

(END VIDEO CLIP)

KING: A Deadhead, huh? Leahy and Bono had met before. Here they are last year with Maryland Senator Ben Cardin, talking about what else? Foreign aid.

And in related Bono news -- we know you want this -- rumors circulating on the blogs that he's become the world's richest musician, even richer than the living Beatles because of his share of Facebook. That turned out not to be true. And as Bono explains in an interview, no one trumps the Beatles.

(BEGIN VIDEO CLIP)

BONO: This boy is not a billionaire, and -- or going to be richer than any Beatle. And not just in the sense of money, by the way. The Beatles are untouchable. That's just a joke.

(END VIDEO CLIP)

KING: I still -- I still think he did OK in the Facebook deal, though.

BOLDUAN: Yes. I think when we're talking about, am I a billionaire or am I just a multi-millionaire? I mean, I think -- I think he's going to be OK. And I think he's acknowledged. He's saying, "OK, people. I think I'm fine, regardless."

KING: Multi-millionaire, billionaire, whatever it is.

BOLDUAN: We can wish on a Friday.

KING: Yes, we can. Kate, you have a great weekend.

All of you out there watching, have a great and safe weekend, as well.

That's all for us. We'll see you Monday. "ERIN BURNETT OUTFRONT" starts right now.