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THE SITUATION ROOM

Will Hillary's New Ad Prove Effective?; Who Will Capture the Latino Vote in Texas?; Pastor John Hagee Endorses John McCain

Aired February 29, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, a nightmare scenario in Hillary Clinton's new ad. She's playing to Texas voters' concerns for their kids' safety. Is it fair or is she trying to scare up votes? I'll ask Clinton communications director Howard Wolfson. He'll be joining us live this hour.
Also this hour, Obama's wife defending against the ultimate fear bomb, not the Clinton ad she's talking about, but it is a weapon being used against her husband. We're going to tell you what it is and why it could hurt.

And John McCain looks for new ammunition against the Democrats. And he's getting help from an unlikely supporter, a father whose son was killed in Iraq.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

The anxiety of the presidential campaign trail right now, heading into Tuesday's pivotal round of primaries. The usual back and forth over national security is punctured by a dramatic new Hillary Clinton campaign ad in Texas, and allegations of scare tactics.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's 3:00 a.m. and your children are safe and asleep. But there's a phone in the White House and its ringing. Something is happening in the world. Your vote will decide who answers that call. Whether it's someone who already knows the world's leaders, knows the military, someone tested and ready to lead in a dangerous world.

(END OF VIDEO CLIP)

BLITZER: Standing by right now the best political team on television Dana Bash, Suzanne Malveaux, Jessica Yellin. And in the other primary hot spot in Ohio we have John King, Candy Crowley, Carol Costello.

First to Jessica, she's in Texas right now with more on that eye- popping new Clinton ad. Jessica, what are they saying? The implications from all of this, what are you hearing?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, I'm hearing Barack Obama say that this is a scare tactic designed to scare up voters to support Senator Clinton and he says it's not going to work this time. (BEGIN VIDEOTAPE)

YELLIN (voice-over): A fierce folly from Senator Clinton.

UNIDENTIFIED MALE: It's 3:00 a.m. and your children are safe and asleep. Who do you want answering the phone?

YELLIN: Obama turning the attack on his national security credentials back on his opponent.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The question is not about picking up the phone. The question is what kind of judgment will you exercise when you pick up that phone.

YELLIN: His point time and again Clinton voted for the war with Iraq, he opposed it. The ad is a clear illusion to another emotional wartime commercial.

EVAN TRACEY, CAMPAIGN MEDIA ANALYST: Again, these are the kind of messages you put out at the very end. You try and plant that seed of doubt with undecided or independent voters and you hope it sticks with them through Election Day.

YELLIN: Facing must win primaries Clinton is trying to breakthrough the blitz of Obama advertisements. Change the channel in Texas and Ohio and you see this.

UNIDENTIFIED MALE: Barack Obama opposed this war in Iraq from the start.

OBAMA: Washington's talked about health care reform and reformed nothing.

YELLIN: In the ad war Clinton is being extravagantly outspent. In Ohio she spent $1.5 million on ads, he rang up a million dollars more. In Texas she's poured $3.5 million into ads. He's spent $2 million more.

And it's not just how much, but where. During "American Idol," the nation's most popular show, there were 38 political ads aired in the states that vote this week. Six of them for Clinton, the other 32 all for Obama.

(END VIDEOTAPE)

YELLIN: And Wolf there's more bad news for Senator Clinton on the national security front. Barack Obama has just won the endorsement of Senator Jay Rockefeller, Democrat of West Virginia. He heads the senate intelligence committee. He has his own national security credentials and he says Obama is the Democrat best able to deal with the threat of terrorism.

BLITZER: What are Senator Obama's expectations in Texas? What are they saying, Jessica?

YELLIN: A change in tactics here, Wolf. Senator Obama's campaign is now saying that we should not consider it a win for Senator Clinton even if she wins Ohio and Texas. They're saying that a simple popular vote victory for Senator Clinton doesn't make this a tied race because it's all about delegates. Even if she wins Ohio and Texas, they say she fails miserably on a delegate count. Of course Senator Clinton's campaign sees it quite differently -- Wolf.

BLITZER: All right Jessica, thanks very much. Jessica Yellin reporting.

The Clinton campaign strategist, Mark Penn, was asked today if the senator's new ad is reminiscent of that 1964 infamous daisy ad he responded this way: "This is a positive ad. Very soft images, not at all like that ad. Soft images. And it poses a question to people that they have to answer themselves."

Coming up, I'll be speaking with the Clinton communications director, Howard Wolfson. He's standing by live here in THE SITUATION ROOM.

Also in Texas today, Republican John McCain is putting a new twist of his own on the national security debate. At the same time he's confronting controversy over an evangelical preacher who endorsed him.

Let's go to Dana Bash. She's covering the McCain campaign for us.

Is McCain positioning himself right now for the March 4th contest this coming Tuesday or the bigger battle ahead?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Yes, both Wolf. For sure both. John McCain has been campaigning here in Texas for the past several days because he's hoping Tuesday's primary here plus three others that day give him the mathematical number of delegates that he actually needs to clinch the nomination. But he also knows full well that he has no time to waste drawing distinctions with the Democrats.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Senator John McCain.

BASH (voice-over): Call this rebooting for the fall campaign. John McCain used an appearance at Dell Computer in Texas to chastise Democratic candidates for wanting to renegotiate NAFTA, saying it could imperil military support from Canada.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: How do you think the Canadian people are going to react to that? Who we are having now their enormous and invaluable assistance in Afghanistan.

BASH: About 2500 Canadian troops serve on the front lines in Afghanistan, assisting the U.S. effort against the Taliban. McCain noted the controversy inside Canada about their deployment as he lobbed his latest question about Barack Obama and Hillary Clinton's readiness to be commander in chief. MCCAIN: I think the Canadians would view that as a betrayal.

BASH: But even as he focused on Democrats, controversy is brewing over McCain's attempt this week to appeal to skeptical conservatives in his own party.

PASTOR JOHN HAGEE, EVANGELICAL LEADER: John McCain is the right choice to lead America.

BASH: An endorsement from Texas evangelical pastor John Hagee. The president of the Catholic League Bill Donahue says Hagee regularly impugns the Catholic Church, calling it the, "Great whore and a false cult system." Donahue wants McCain to retract his embrace of Hagee. He refused.

MCCAIN: When he endorses me, it does not mean that I embrace everything that he stands for and believes in.

BASH: Meanwhile as McCain pivots towards the general election, fresh evidence of his huge financial challenge. In February Hillary Clinton raised $35 million. Barack Obama's campaign says he raised more. But sources tell CNN McCain raised just a third of that, $12 million.

MCCAIN: We have a ways to go to catch up. I think we've been doing better, but I must admit I give great credit to both Senator Obama and Senator Clinton for doing a very find job at fundraising.

(END VIDEOTAPE)

BASH: Now, to make up for that money disadvantage John McCain went from his campaign event here right to a fundraiser. In fact, Wolf, he's been doing that pretty much every day for the past couple of weeks. McCain advisers know that this money deficit is just one indicator and illustration of a broader problem and that is the enthusiasm that is there for Democrats just is not there right now for Republicans -- Wolf.

BLITZER: All right Dana. Dana is in Texas for us. Thank you.

As our viewers know, both Dana and Jessica are part of the Emmy award winning best political team on television. Remember for the latest political news any time check out our political ticker at CNNpolitics.com. The ticker is now the number one political news blog on the web. It's also where you can read my latest blog post.

Let's check in with Jack. He's got "The Cafferty File" on another day -- Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Down to the wire in Texas and Ohio. Hillary Clinton and Barack Obama could potentially face each other for the very last time next week. Both candidates spending a lot of time, a lot of money, in the two delegate-rich states that will vote Tuesday, along with Vermont and Rhode Island.

At this point the momentum seems to be all in Obama's favor. He's won the last 11 contests in a row. He continues to improve his standing in the polls in these two key states as well as nationally. In Texas CNN's poll of polls shows Barack Obama now up by four points, leading Clinton 48 to 44 percent.

In Ohio our poll of polls shows Obama has narrowed what was once a much larger gap. He now trails Hillary Clinton by seven points, 47 to 40. There's one poll in Ohio that shows him behind by only two points, a statistical tie. The stakes are huge, Hillary Clinton has got to win big next Tuesday. Not only to keep her campaign alive and move on to Pennsylvania, but to stop another troubling sign for her.

She is beginning now to lose her advantage among the super delegates. In the last few days at least nine superdelegates have declared their support for Barack Obama. One survey shows that Clinton's lead among the super delegates was cut in half during the month of February.

So here's the question: With four days to go before the Texas Ohio primaries, what will decide the outcome of the Democratic race in these two states?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: Jack thank you for that.

For many voters Iraq is a major issue of the presidential election.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It seems like we've shown a lot of progress. I don't think it's the time to quit and run.

(END VIDEO CLIP)

BLITZER: His son died in the war and he's channeling his anger into the presidential campaign. You're going to hear which candidate he supports. It's not who you might think.

Reaction is flooding into that provocative new Hillary Clinton campaign ad, the one you just saw. Coming up I'll ask Clinton communications director Howard Wolfson if the campaign is trying to scare voters.

Barack Obama's wife is taking direct aim at opponents who try to use her husband's name against him. Coming up as well, Michelle Obama and the fear bomb as its being called.

Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: John McCain makes no bones about the fact that Iraq will be a critical issue for his campaign and could in fact decide whether he wins or loses the White House. McCain's strong support for the military surge, as it's called, is winning him some unusual support.

Let's go to our chief national correspondent John King. He's watching all of this unfold in Cincinnati.

What's going on, John?

JOHN KING, CNN CHIEF NATIONAL CORRESONDENT: Wolf, without a doubt the economy is the number one issue in Ohio and across the country. Democrats and Republicans increasingly say they're worried about jobs, the price of gas, the price of groceries. But make no mistake, the Iraq war is still a very important issue and for some it's intensely personal.

(BEGIN VIDEOTAPE)

KING (voice-over): Two-and-a-half years now since the knock on John Dyer's door. The pain is constant. But some things have changed.

JOHN DYER, SON KILLED IN IRAQ: I do think in hindsight going into Iraq as we did was a huge mistake. I thought it sounded like it was necessary at the time.

KING: Lance corporal Christopher Dyer was 19. A father's grief shaped by his son's last call from the war zone.

DYER: They were worn out and there weren't enough of them.

KING: Yet in Tuesday's Ohio primary and again in November, Dyer plans to vote for the candidate who insists things are improving in Iraq, and who insists the troops must stay.

DYER: It seems like we've shown a lot of progress and I don't think it's the time to quit and run. I think if we hadn't shown some progress it would be time to have called it a day.

KING: Americans do see some progress -- 46 percent say things are going well in Iraq, up from just 34 percent in November. But in that same CNN poll only 34 percent of Americans support the war, 63 percent oppose it.

DYER: I think I'm in a minority view. My friends and people who know me are obviously very guarded about talking to me about this for obvious reasons. But what I sense is people are just dog tired of this situation.

KING: For McCain Ohio is a critical proving ground. No Republican has ever won the White House without carrying this state. Pollster Eric Rademacher says the unpopular war is a big factor in recent Democratic gains.

ERIC RADEMACHER, UNIV. OF CINCINNATI SURVEY CENTER: In 2006 independents moved over to the Democratic Party in Ohio and if there is a concern for the Republican candidate that's it.

KING: Visiting an Ohio company that makes armored vehicles for the troops was part of McCain's sales pitch.

MCCAIN: But we will never ever surrender and they will.

KING: Dyer was already convinced but says checking the Obama and Clinton campaign Web sites recently made him more adamant.

DYER: I don't understand their position at all. I think we're already talking about bringing combat troops home. We're really talking about a difference in the pace at which we do that.

KING: Do you ever worry that because you did pay a price and a very painful personal price that your judgment is clouded?

DYER: Yes, yes. I could almost guarantee you my judgment is impacted by that. I try as hard as I can to separate my personal loss, and I know it's not really possible.

(END VIDEOTAPE)

KING: Now John Dyer calls himself an extreme moderate. He voted twice for Jimmy Carter. For Ross Perot back in 1992 and for George W. Bush four years ago. Wolf, he's one of those classic swing voters who are so important in close presidential elections and a man whose choice this time is shaped by a very controversial war and what you might call the politics of pain -- Wolf.

BLITZER: An extremely painful. It doesn't get more painful than that. John, thanks very much for that report.

Let's take a closer look now at where things stand between Barack Obama and Hillary Clinton in some of the most recent surveys. We're looking at what we call our average of separate polls for the two big states voting on Tuesday.

First in Texas, our so-called poll of polls shows Obama ahead among likely Democratic primary voters by four points. So let's talk about these numbers with our senior political analyst, Bill Schneider.

Until very recently, Bill, Texas seemed to be an excellent, excellent state for Hillary Clinton.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Until recently. What happened, Wolf, was the big mo, momentum. Obama gained momentum over the last month and the polling over the last month in Ohio show Obama making steady gains, catching up to Hillary Clinton's lead in Texas.

Until the most recent polling over the last week or so shows Obama slightly overtaking it. Now that lead 48 to 44 is still very, very close. So you know you can't predict anybody is going to win either one of the candidates is going to win this race but you do see Obama picking up in the last month.

BLITZER: And there are still a few days left for people to make -- change their minds or for the undecided to make up their minds. In Ohio, let's take a look at this, our poll of polls right now has Senator Clinton ahead by seven points, 47 to 40, 13 percent still saying they're unsure. What do you see happening in the state?

SCHNEIDER: Well, basically the same thing. The polling over the last month in Ohio also shows Obama picking up support making this race close. But in this case Hillary Clinton has a slight lead, just seven points.

And the reason for the difference is that she has a much stronger partisan Democratic base in Ohio than she does in Texas. So she's slightly ahead in Ohio. He's slightly ahead in Texas. But both of these races are really down to the wire -- Wolf.

BLITZER: What are the biggest differences between Democrats in Ohio and Texas?

SCHNEIDER: Well, we took a look at the 2004 Democratic presidential primary exit polls four years ago to see how Ohio looks different from Texas. Now take a look at this. It's kind of interesting. Union households, there are more than twice the proportion of union households in Ohio than in Texas. That tends to favor Hillary Clinton, who has a lot of union support.

Although remember, some important unions in Ohio, service workers, food and commercial workers, the teamsters, are working for Obama. But their membership doesn't always vote the same way the leadership endorses. Look at white voters. She does better among whites than minorities generally.

White voters are much more prevalent in Ohio -- 81 percent of Democrats there four years ago were white, only 52 percent in Texas. Texas has more African-Americans. And African-Americans, of course, are Obama's base. But Texas also has more Latinos than Ohio, 21 percent, about 24 percent rather, about the same as the proportion of African-Americans.

And here is something interesting in Texas, it's roughly equal proportions of African Americans and Latinos. But Hillary Clinton only gets about 12 percent of the African-American vote right now in Texas. Obama is getting about 32 percent of the Latino vote. He's doing better among Latinos who are otherwise for Hillary Clinton than she's doing among black voters who are very strongly for Obama.

And one final group at the bottom there, white that is non- Hispanic Catholics. They are far more prevalent in Ohio. They're 28 percent of the vote in Ohio, only 11 percent in Texas. Interestingly in all the primaries so far, Catholic voters have been much more for Hillary Clinton than non-Catholic voters in state after state. That's another reason why she's doing well in Ohio.

BLITZER: Two critical states. Two very different set of demographics in these states for the Democrats. Thanks very much Bill Schneider for that excellent analysis.

They're being called the worst offenders when it comes to drug sales and productions. There's a new list giving countries that notorious distinction. You're going to find out which nations are on it. And it's how the west might be won. What Barack Obama and Hillary Clinton's Internet strategy to win Texas is all about. Our Internet reporter Abbi Tatton talks about that. And a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is on assignment in Ohio for us. Fredricka Whitfield is monitoring some other important stories, incoming to THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you Wolf.

Wall Street gets slammed, the Dow loses more than 315 points. Stocks tanked after word of a record less from insurance giant AIG. That added to fears about the financial sector and weak economic news heightened fears of a recession. If you think the economy is rough right now, just wait.

That's what two officials with the Federal Reserve warn. They believe the mortgage mess could hurt the economy even more than it already has in the near future if some things are not done to prevent that. Officials warn falling home prices could sink consumer spending, create more foreclosures and generally create financial instability.

It's something you realize every time you go to buy milk, bread, gas, any of the other essentials. Prices are rising. So you keep spending. Well now a new government report says consumer spending was slightly up last month, but the survey says that's mostly due to inflation.

It's a disturbing look at drug sales and production around the world. A state department report says that poppy production in Afghanistan is seeing record levels, threatening its government and security. The survey labeled 20 nations as major drug producers or drug transporters. Burma and Venezuela are singled out as the worst of those offenders. Even Canada is mentioned for sophisticated marijuana industry -- Wolf.

BLITZER: Fred thanks very much. Fred will be back shortly.

Coming up also, Geraldo Rivera he's offering a provocative argument. His brand new book says Americans fear Hispanics in the United States. Geraldo will be here in THE SITUATION ROOM. We're going to be talking about that, politics and a lot more.

Also, do you know Barack Obama's middle name? If you do, his wife says there's a sinister reason for that. Why does Michelle Obama think using her husband's middle name is "the ultimate fear bomb"?

And is Hillary Clinton's new TV ad fair or is she trying to scare you into voting for her as Barack Obama claims? I'll ask the Clinton communications director Howard Wolfson, he's standing by live, here in THE SITUATION ROOM.

We'll be back in 90 seconds.

(COMMERCIAL BREAK)

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

Happening now, some people want John McCain to turn on one of his supporters. That supporter is a popular pastor in Texas. He's written some very controversial words about Catholics and Adolph Hitler. How might McCain respond to calls to repudiate the pastor? We're watching this story.

Also, it's one of the ugliest things you could use against an African-American. So why are some blacks being called that slur for supporting Hillary Clinton? Some are even being threatened.

And the book is called "His-Panic." Geraldo Rivera believes Americans fear Hispanics in the United States. I'll speak with the award-winning journalist for his unique arguments in this raging immigration debate.

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

John McCain's middle name is Sydney. Hillary Clinton's middle name is Diane. Surely both nice names that you might not necessarily know, but you likely have heard about Barack Obama's middle name. The question is this: why?

Let's turn to CNN's Mary Snow. She's watching the story for us in New York.

His wife, Michelle, seems to suggest she knows why we all know what his middle name is.

MARY SNOW, CNN CORRESPONDENT: She does Wolf. And you know his political opponents on the right step up the use of Senator Obama's full name. His wife, Michelle, says they're doing it to play on fears.

(BEGIN VIDEOTAPE)

SNOW (voice-over): His middle name, Hussein, has never been a secret. But twice this week alone Senator Barack Obama's full name has been used in two attacks drawing scrutiny. Obama's wife Michelle says it's a fear tactic she witnessed in past campaigns.

MICHELLE OBAMA, WIFE OF BARACK OBAMA: They threw in the obvious ultimate fear bomb that we're even hearing now. They said his name. They said look out for his name. When all else fails, be afraid of his name and what that could stand for because it's different. And let me play on your fear of difference.

SNOW: Reporters who covered Obama's 2004 Senate race say a Web site went up with Obama's name, along with a picture of Osama bin Laden. It eventually disappeared. In this election, conservative radio talk show host Bill Cunningham, for one, is emphasizing Obama's middle name, Hussein. It was part of a broader attack on Obama. And Republican presidential candidate Senator John McCain publicly apologized for Cunningham's attacks, since they happened at a McCain event, but Cunningham remains defiant.

BILL CUNNINGHAM, RADIO TALK SHOW HOST: Hussein is a great Muslim name. I meant no offense. And none was taken.

SNOW: The Tennessee Republican Party issued a press release captured by some newspapers titled "Anti-Semites for Obama" that included his full name. The Republican National Committee denounced it, and it's been retracted.

While McCain has vowed to run a respectful campaign, some observers say they expect the attacks to continue if Obama becomes the Democratic nominee.

JIM WARREN, DEPUTY MANAGING EDITOR, "THE CHICAGO TRIBUNE": There's a whole world out there in the blogosphere, in conservative talk radio that will not be beholden to what Senator McCain wants to do and what might be considered general notions of propriety.

(END VIDEOTAPE)

SNOW: Now, Michelle Obama told a crowd in Ohio Thursday that, despite political opponents trying to raise fear about Obama in 2004, she says he prevailed in what she called a climate of negativity and doubt -- Wolf.

BLITZER: Mary Snow watching the story for us -- thanks, Mary, very much.

Early voting ends today in Texas. Now Barack Obama and Hillary Clinton are gearing up online for the state's primary and caucuses on Tuesday.

Let's go to our Internet reporter, Abbi Tatton. She's watching the story for us.

How are they preparing, Abbi, for this rather complicated process?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, with around 8,000 precincts on Tuesday, it's all about the volunteers there in Texas. Barack Obama supporters have signed up to be precinct captains, they have been attending these training sessions and also accessing this database, which is specific to Texas for the Barack Obama campaign of voters rolls, phone numbers, and addresses, so they can all walk the neighborhoods to make sure they're turning out support for their candidate on Tuesday.

Local volunteer groups, some of them that got set up almost a year ago on the Barack Obama Web site through special tools that they added there, are now going into high-gear this weekend, organizing last-minute events to get out the vote and the caucus, this one in a taco restaurant in Austin.

The Hillary Clinton campaign has got a video explaining how this complex system works. They're not just recruiting their precinct captains, but, also, look at this. They want people to be a legal volunteer on Tuesday to help protect the vote in Texas, people who are willing to sign up and be trained by a member of the Hillary Clinton legal team just in case anything goes wrong in their precincts -- Wolf.

BLITZER: Abbi, thanks for that. Thanks very much.

And we're just getting this story into THE SITUATION ROOM. Over at the White House right now, there's a new dustup, a senior official admitting to plagiarism.

Let's go to Kathleen Koch. She's over at the White House watching this story.

Give us the details, Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, just an amazing story.

This is a senior White House official, special assistant to the president, Tim Goeglein. And he's admitted copying large portions of an essay on education that he wrote for a local newspaper in Fort Wayne, Indiana.

Now, a blogger and a former columnist for the paper made the discovery. And she found that he had copied verbatim about half of the article from a 1998 essay that was written in "The Dartmouth Review" by an author named Jeffrey Hart.

Now, Goeglein has admitted it. He has apologized to the paper, sending them an e-mail saying, "It is true. I'm entirely at fault. It was wrong of me. There are no excuses."

The paper says it will no longer carry Goeglein's essays. And, in a letter to the readers that the editor has put on the newspaper's Web site, he says that they have found in two other previous columns information, material from other authors that were used without attribution. So, there could be more to this.

The White House, for their part, they say they only learned of this, this morning. A White House spokesperson, Emily Lawrimore, is saying, "It's not acceptable. We're disappointed in Tim's actions."

And, Wolf, she would not predict whether or not this would impact his job.

BLITZER: We will watch the story with you, Kathleen. Thanks very much for that.

KOCH: You got it.

BLITZER: Bill Clinton said it himself. His wife needs to win both Ohio and Texas to clinch the nomination. But what if she doesn't? What will she do next. We're going to ask Clinton's campaign communications director, Howard Wolfson.

He's standing by live here in THE SITUATION ROOM.

Plus, the GOP going after Barack Obama, is it a peek at their plan for taking on the Democrats in the general election? We're going to talk about that and more in our "Strategy Session."

And later, Geraldo Rivera here in THE SITUATION ROOM to talk about illegal immigration, the campaign, and why the Hispanic vote might be split this election -- lots more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Barack Obama is accusing Hillary Clinton of trying to scare up votes in a provocative new campaign ad that is now airing in Texas. It plays to voters' fears for their children's safety and to questions of which candidate has the most experience.

Let's talk about that now with the Clinton communications director, Howard Wolfson. He's here in THE SITUATION ROOM.

Howard, thanks for coming in.

HOWARD WOLFSON, CLINTON CAMPAIGN COMMUNICATIONS DIRECTOR: Good to be with you.

BLITZER: We have showed the ad to our viewers already. Here's what Barack Obama had to say when he heard about it. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: We have seen these ads before. They're usually the kind that play upon people's fears and try to scare up votes. I don't think these ads will work this time, because the question is not about picking up the phone. The question is, what kind of judgment will you exercise when you pick up that phone?

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: All right, first of all, tell us about this ad, because it does seem to suggest, you know, a dire scenario out there, and the implication, the upshot being Hillary Clinton would be good to have on that phone call, but Barack Obama would not be good.

WOLFSON: Well, you know, Wolf, every president faces a national security test during his or her tenure. You get a phone call at 3:00 a.m. You have a split-second. You need to respond. Lives are on the line. Americans know that. This is not about playing towards fears. Americans aren't so fearful. But Americans also know that we're going to elect the most important person for the most important job in the world. And we need that person to be ready for whatever comes their way, 3:00 a.m. phone call, lives on the line. Who do you want picking up the phone with the judgment and the strength and the experience to deal with that situation? You know, 25 flag officers have endorsed Hillary Clinton. There was some talk at the beginning of a campaign, would a woman be able to pass the national security test?

Well, Hillary Clinton has passed that test with flying colors. She's got support from generals and admirals, people who have served in the military, people who know...

BLITZER: All right.

WOLFSON: ... that we need a president when lives are on the line and the situation matters.

BLITZER: Because he is -- his argument -- and he's made it many times -- is that, when it came to judgment, he had the right judgment back in October 2002 to oppose the authorization to go to war in Iraq.

WOLFSON: Well...

BLITZER: And she had the bad judgment to vote -- that is what he says -- to vote for that authorization.

WOLFSON: It is true that, when it came time to give a speech, he gave a speech. He consulted with consultants. He consulted with his friends and associates.

That's not the kind of situation that you have at 3:00 a.m. in the Oval Office when you have a split-second to make a decision when lives are on the line. And the reason why 25 different flag officers are supporting Hillary Clinton is because they know that she has the strength and the judgment to make the decision that we would need in that situation.

BLITZER: The chairman of the Senate Intelligence Committee, Jay Rockefeller of West Virginia, issued a statement endorsing Barack Obama, among other things, saying: "What matters most is sound judgment and decisive action. It's about getting it right on crucial national security questions the first time and every time" -- a ringing endorsement for Barack Obama.

How disappointed is Senator Clinton that her colleague from West Virginia went with Barack Obama?

WOLFSON: Well, Senator Obama has strong endorsers in the Senate. We have got great endorsers in the Senate. We're particularly proud today, as I have said, that 25 different flag officers are supporting us, because they know that the person who is going to protect this country needs to be ready to do so on day one with judgment, with wisdom, experience, and strength.

BLITZER: Is Barack Obama not ready on day one?

WOLFSON: We think Hillary Clinton is ready. Voters will make a judgment about Barack Obama. I can go to sleep at night knowing that Hillary Clinton is ready if that phone call comes.

BLITZER: And you couldn't go to sleep knowing Barack Obama would be receiving that phone call?

WOLFSON: I'm more comfortable with Hillary Clinton.

BLITZER: Because you're not answering specifically whether you would be comfortable with Barack Obama as well.

WOLFSON: Well, I'm here -- I'm here to make a powerful case for Hillary Clinton. I'm here to make a case based on 35 years of judgment, and experience, and wisdom, and strength, backed up by the endorsement of 35 different flag officers, who say, you know what, when lives are on the line and the phone calls come in, whatever it is -- and there's going to be one -- there's always one in every presidency -- we want Hillary Clinton answering that phone.

BLITZER: The former President Bill Clinton says, if she wins Texas and Ohio, she will go on and capture the nomination. But what if she only wins one of those states, let's say Ohio, and loses Texas? What do you do then?

WOLFSON: We're very optimistic. We think we're going to have a very successful Tuesday in Ohio and Texas. And that's despite the fact that we are being massively outspent by the Obama campaign and its allies in both of those states. You know, Senator Obama has more or less declared the race is over. He's acting like the presumptive nominee.

Each week, his campaign says that there's no way we can catch up. The truth is that, if he doesn't win these races, it -- what it will show is that Democrats want this contest to continue. They want to see a vigorous debate between these two, and we may be seeing a little bit of buyer's remorse setting in.

BLITZER: Why do you say buyer's remorse?

WOLFSON: Well, look, right now, Senator Obama, in fairness, has had a very good post-February 5th. He's had a good month. Now we have got Texas and Ohio, two big states, two critical states for deciding the presidency. He's throwing all of his resources into it.

He's doing everything he can to win. And, if he doesn't come out and win, I think it says something very important about voters taking a look at these two and deciding maybe Hillary Clinton is maybe the right person.

BLITZER: Howard Wolfson, thanks for coming in.

WOLFSON: Good to be with you.

BLITZER: There's new word of progress in efforts to pass new legislation giving the government more leeway to eavesdrop on terrorist suspects. A temporary extension of the bill expired two weeks ago. Just yesterday, President Bush urged the House of Representatives to break the stalemate and agree to provide immunity to telecommunications firms that help conduct warrantless wiretaps.

Just a little while ago, I spoke with the chairman of the House Intelligence Committee, Congressman Silvestre Reyes.

(BEGIN VIDEO CLIP)

BLITZER: So, it sounds like you're getting close to letting this legislation come up for a vote in the House and to try to work out a deal that's acceptable to the Senate and to the president. Is that a fair assessment?

REP. SILVESTRE REYES (D-TX), HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: That's a fair assessment. We -- we think we're very close. Probably within the next week, we will be able to hopefully bring it to a vote.

(END VIDEO CLIP)

BLITZER: Sylvester speaking with me just a little while ago. You can see the entire interview with the chairman of the Intelligence Committee Sunday on "LATE EDITION." We also spoke -- speak about what's going to happen in Texas.

"LATE EDITION" airs 11:00 a.m. Eastern, 8:00 a.m. Pacific. "LATE EDITION" is the last word in Sunday talk.

In our "Strategy Session" that is coming up: While Obama and Clinton argue the race is about judgment or experience, John McCain hits them on the issues. But is McCain using his time to solidify his standing with the general election voters?

And the politics of fear -- Michelle and Barack Obama say their opponents are using fear tactics. Is that a sign of things to come?

A lot more coming up -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: I want to go right to the Pentagon and our senior correspondent, Jamie McIntyre.

He has got information on a new huge multibillion-dollar deal that Boeing is not going to be happy about -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: That's right, Wolf.

The Air Force will announce this in just a few minutes, but we can tell you now that this monster $40 billion contract has gone to a partnership between Northrop Grumman and the European maker of Airbus, EADS, $40 billion to buy 160 some aerial refueling tankers.

And it's not just the initial $40 billion, but there will be follow-on contracts, could be worth up to $100 billion, a big blow for Boeing, which was really counting on this. And it's announced, of course, after the stock market closes, because Boeing stock is really expected to take a hit.

Not just about money. It's about jobs. And this will create about 2,000 American jobs in Mobile, Alabama. And I can tell you they were cheering over today on Capitol Hill in the office of Senator Richard Shelby, a big backer of the Northrop Grumman-EADS proposal.

(CROSSTALK)

MCINTYRE: Wolf, that will be announced here just shortly.

BLITZER: It's going to create a lot of jobs in Europe as well. What did they say when -- when they hear the complaints that the Air Force is now outsourcing a huge contract like this, not only to an American company, but to a European partner, when those jobs presumably could have gone to Boeing?

MCINTYRE: Well, of course, the Air Force is going to say they're -- they needed to buy the best plane they could get for the money. And, of course, the whole point of having that U.S. partnership is that the jobs and the planes would be put together here in the U.S.

BLITZER: All right. Jamie, we will more information on this deal. Thanks for that report.

Other news we're following; have you heard Barack Obama's middle name? If -- if you have, his wife says there's a reason you have. Let's talk about that in our "Strategy Session."

Joining us now, Democratic strategist Peter Fenn and Republican strategist Rich Galen.

Guys, thanks very much for coming in.

I will play this little clip. Listen to this, and then we will talk.

(BEGIN VIDEO CLIP)

M. OBAMA: They threw in the obvious, ultimate fear bomb that we're even hearing now. They said his name. They said, look out for his name. When all else fails, be afraid of his name.

B. OBAMA: We have seen these ads before. They're usually the kind that play upon people's fears and try to scare up votes.

(END VIDEO CLIP)

BLITZER: All right, what do you think about this, the use of his middle name, Hussein, that some Republicans, his critics, are throwing out?

PETER FENN, DEMOCRATIC STRATEGIST: I will tell you, Wolf, I think this is the dumbest things that Republicans could do. They started it about -- about six months ago and -- and then following on with Cunningham, Bill Cunningham, the right-wing talk show host from Cincinnati, then the Tennessee Republican Party.

I mean, I would say, bring it on. Keep doing this, because it's just going to backfire on the Republicans. People don't like it. It's -- it's -- and -- and it -- and even the voice that Cunningham used, Hussein, it was like, is this Saddam Hussein he's talking about? It was just -- it was kind of over the top and much too negative.

RICH GALEN, REPUBLICAN STRATEGIST: Oh, that's nonsense. It's his name. I mean, the really odd -- stop a second. The really odd thing for me is the reaction of the Democrats. And it seems to me Michelle Obama protests a bit too much. We didn't -- nobody picked the name out of the air and said, we're going to call him Hussein. That happens to be his name.

If I were them, what I would have been doing is it straight through, so that people got tired of it and, ah, said stop already.

FENN: Well, that's -- I mean, people know what his name is. The implication...

(CROSSTALK)

FENN: No, no, no, but the implication early on, on this, Rich, was that he's a Muslim. He's not a Muslim. He's never been a Muslim.

GALEN: All right.

FENN: He's a card-carrying Christian.

(CROSSTALK)

GALEN: I think that people should be really angry about the use of Rodham. That's what I think.

(LAUGHTER)

FENN: No, I just think it's -- I just think it's dumb politics, I mean, for the Republicans. I honestly think it's dumb politics.

GALEN: Well, well, see. I mean, listen, it hasn't -- it get -- what it does do is, it gets it into the public conversation. And for those people who --

(CROSSTALK)

FENN: So, why do you want to get it into the public conversation?

BLITZER: The question...

GALEN: If you guys wouldn't have made a big deal about it, it would have stopped.

FENN: Oh. BLITZER: Could it backfire, as he says, on the Republicans?

GALEN: I don't think so. People know what his middle name is. They're not going to vote for him or against him because of that. I think what it does do is, it gets the -- it gets the...

(LAUGHTER)

GALEN: ... the Hussein campaign -- I'm sorry -- the Obama campaign out of its game, because everybody is talking about this.

FENN: No, no, no. Look, people want to talk about the issues, the problems that face Americans, that face average people.

(CROSSTALK)

GALEN: Michelle was the one talking about it.

FENN: No, no, no. She's responding to the Tennessee Republican Party.

(CROSSTALK)

GALEN: My point exactly.

(CROSSTALK)

BLITZER: Did you the story, Adam Nagourney's story in "The New York Times" today, saying that, whatever criticism Barack Obama has faced so far is nothing compared to what he can expect if he gets the Democratic nomination? What was your reaction to that?

FENN: You know, I think a lot of us have been talking about that, Wolf. You know, folks have said, boy, this has been a tough campaign. This is patty-cake compared to what the Republicans are going to throw at Barack Obama.

(CROSSTALK)

BLITZER: Can he withstand that?

FENN: Yes, I think he can.

BLITZER: Do you think he can?

FENN: He is really, really good...

(CROSSTALK)

GALEN: Well, let's see. One of the things -- well, he has been so far. That is true. What we are seeing now is the Clinton campaign swinging from the hip, trying to land one on the -- on the -- on his chin to see if they can knock him down. The Republicans are staking careful note to see what works and what doesn't work.

BLITZER: Rich Galen, Peter Fenn, guys, thanks for coming in. GALEN: You bet.

FENN: Thanks.

BLITZER: We're just a few days away from what could be that decisive primary. They're calling it Super Tuesday II, and the candidates aren't wasting a moment this weekend. We're going to take a closer look at where they're planning to woo voters in the coming days.

And another shot fired in the endorsement war -- why Catholic groups are asking Senator McCain to formally reject the support of a prominent preacher.

And later on, in this race, it all comes down to numbers -- a closer look at the delegate count and what it will take for Hillary Clinton to take back the lead.

Lots of news happening -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker: the Democratic candidates planning a big weekend push in Texas before Tuesday's primary. Take a look at all the cities Hillary Clinton and Barack Obama plan to swing through today through Sunday.

Obama also will take a detour to Ohio and Rhode Island, which also hold primaries on Tuesday, March 4th. Republicans John McCain and Mike Huckabee have a less frenetic schedule of stops in Texas. But McCain actually plans to head home to Arizona.

Let's go back to Jack. He's got "The Cafferty File" in New York -- Jack.

CAFFERTY: The question this hour: With four days to go before the Texas and Ohio primaries, what will decide the outcome of the Democratic race in those two states? The stakes, of course, are huge.

Jayne in Indiana: "Young people will determine the nomination. I am the mother of three children, ages 23, 21 and 17 -- soon to be 18, eligible to vote. I have never seen young people getting so involved and interested in an election. When I announced my decision to vote for Obama -- after being a Hillary fan -- my kids all said, good choice, mom."

Uche in Brooklyn writes: "How do you stop a fast-moving Obama- track train, Jack? Hillary's latest ad will help decide this race. With a few days to polls, she just shot herself in the foot by trying to instigate fear. Americans won't fall for that again."

Kate writes: "If the media had not elected Obama months ago, this race would have been different. I still don't hear him, Obama, speak to what his plans are for all the change he promises. That worries me. I like him personally very much. Hillary is showing her strength and endurance just completing this race in the style she has. I admire her stamina and her capability."

David in Illinois writes: "In the past few days, there has been a debate between experience and judgment. Notwithstanding my little experience in politics, it appears to me judgment is carrying a whole lot of momentum in this race. In four days, voters in Texas and Ohio will have to decide which of the two works best for them."

Steph in Pennsylvania: "America needs to wake up and smell the recession. The real issues facing America -- economy, national security, health care -- will be deciding factors in Ohio and Texas, not empty speeches about how one would have voted against the war."

And Phyllis in Dallas writes: "The race was decided after Wisconsin. Ohio and Texas will just be the icing on the cake for Senator Obama. If Hillary wins one of these two states, it will only be by a small margin, not enough to count for anything. He has the popular vote, more importantly, the lead in pledged delegates. The inevitability factor has moved to Obama. Hillary needs to pack her bags" -- Wolf.

BLITZER: Jack, thanks very much.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: She's trailing Barack Obama in wins and in delegates. Now, with her campaign on the line, Hillary Clinton puts out a new ad playing to one of the country's top concerns.

Also, the endorsement that could cost John McCain as many votes as it potentially would bring in. You're going to find out why one group is calling on him to formally repudiate a well-known evangelical minister.

Plus, how Hispanic voters could determine the outcome of the election, we're going to talk about that and a lot more with Geraldo Rivera. He's right here.

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