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ANDERSON COOPER 360 DEGREES

Obama Gets Tough; Battleground Michigan

Aired September 10, 2008 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight, Barack Obama says enough of what he calls phony outrage about lipstick and pigs and too little real outrage about the economy, even as the McCain forces take new umbrage alleging another smear attempt against Sarah Palin. We will cut through the spin and the cosmetics and look at well -- look as well at the key battleground states now too close to call.
Also, McCain allegations that Barack Obama will raise taxes on tens of millions of Americans. Obama says he won't. One is telling the truth. We're "Keeping Them Honest" with the facts, help you decide -- that and abortion and surprising bit of common ground between Joe Biden and Sarah Palin.

Later, keeping Governor Palin honest. She claims to be a pork buster. Do the facts check out? We will find out as we await her arrival tonight back in Alaska at a homecoming rally. We will take you there when things get under way.

We begin, though, with 55 days to go and a question: Is this turning into an election about nothing -- nothing, that is, but lipstick and pigs and political spin? It sure seemed that way today, as Barack Obama fired back sharply at what a -- he called phony outrage, and John McCain decried all the negativity, while his campaign continued to hit Senator Obama on the lipstick remarks.

The media has fixed on the controversy, no doubt about that. Tonight, we will not. Yes, lipstick will be mentioned. So will pigs, but so will taxes and spending and everything else that voters say they truly care about.

Candy Crowley kicks it off on the trail with the Obama campaign.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Some Democrats fear the bloom is off the rose as Barack Obama's poll numbers stagnate and Republicans pound him on everything from sex education to lipstick on pigs.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I love this country too much to let them take over another election with lies and phony outrage and Swift Boat politics. Enough is enough.

(APPLAUSE)

CROWLEY: He's out of whack, said one nervous Democratic lawmaker. Obama needs to put McCain on defense about the issues. The source added, Republicans and Bush have approval ratings below freezing, the war is unpopular, the economy is in the tank, the race is tied, and we're talking about lipstick on pigs.

A key Obama adviser has predicted Palin will fade from the headlines, the race will return to McCain and Obama, and victory will be in the issues.

OBAMA: So, let's talk about something serious and something real, which is our education system and how our children are going to end up being able to compete in this new global economy.

CROWLEY: But, first, he is going to have to clear away the clutter.

(BEGIN VIDEO CLIP, "THE LATE SHOW WITH DAVID LETTERMAN")

DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": Have you ever actually put lipstick on a pig?

(LAUGHTER)

OBAMA: You know, the answer would be no.

(LAUGHTER)

OBAMA: But I think it might be fun to try.

(LAUGHTER)

(END VIDEO CLIP)

CROWLEY: Obama concedes to David Letterman that Palin is a phenomenon, a familiar word to Obama, who said of his own "TIME" and "Newsweek" cover stories, those were the days.

(END VIDEOTAPE)

COOPER: Do they really believe that the excitement over Palin is going to fade?

CROWLEY: They do.

They think, you know, after all, this still is the number two on the ticket. They believe -- they would like the media to keep on her and to keep doing things about her record, because they believe that will take some of the shine off of it.

But, in the end, they know what everybody else knows, and that is that number two is not what people vote on. They vote on number one.

COOPER: You know, I saw Fred Thompson today saying that the media has just gone after Sarah Palin like nothing ever before. Do you -- is that true?

CROWLEY: Listen, part of the problem that I hear from Republicans is, excuse me, when was this scrutiny given to Joe Biden? And, you know, the media says, well, Joe Biden was a known quantity and this and that.

But they said, look at the polling, because not that many people knew who Joe Biden was. Where was the scrutiny for him? So, they're looking at it as a comparative.

Look, this was the most unknown quantity that I have ever seen in a presidential race. And I think the curiosity about her and about what she is saying is a pretty normal thing.

COOPER: We should also point out we have biographies of both Joe Biden and Sarah Palin on this weekend. We will talk about that a little bit later on.

As we mentioned at the top, Sarah Palin arrives shortly in Fairbanks, where she is expected to address a welcome-home rally. We're going to bring that to you as it happens.

First, a new look at the campaign machinery that is gearing up to support her, and how John McCain is getting along without her, though, as we're just hearing tonight, he might not be on his own for long.

On the trail for us, Dana Bash.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Their final post-convention rally together, and their biggest yet.

AUDIENCE: Sarah! Sarah! Sarah!

BASH: With Sarah Palin, John McCain is well aware he has ignited a surprising fire for his campaign, and he is doing everything he can to stoke it.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: This governor negotiated a $40 billion natural gas pipeline that will bring clean energy to the lower 48.

BASH: But McCain's advisers know Palin's record is not what is making her a sensation. It is her persona. And they are scrambling to protect it, assembling a new team of lawyers, researchers and press aides to try to shape the onslaught of coverage about everything from earmarks she fought for and against, to rampant rumors she banned books.

After their morning rally, McCain parted ways with Palin to campaign alone for the first time since picking her, a small roundtable with women in a Philadelphia diner. What a difference without Palin.

CROWD: Obama! Obama!

BASH: Chanting outside, not for Sarah, but Obama, McCain's statement to reporters drowned out.

MCCAIN: The challenges that face our economy. BASH: He was finally forced to stop talking when his supporters got in the mix.

(CHEERING AND APPLAUSE)

(LAUGHTER)

BASH: All he could do was end with a joke.

MCCAIN: Pennsylvania is a battleground state, as we can tell.

(END VIDEOTAPE)

COOPER: Yes, it certainly is. We are going to look at how of a battleground state it is with John McCain shortly.

Dana, obviously, a big difference in feel and energy for McCain without Sarah Palin. How is he going to adjust? And how long is he going to be without her on the trail?

BASH: Well, look, Anderson, the stark difference that was just illustrated there, that is not lost on McCain's advisers. And, frankly, I'm told it's not lost on McCain himself.

What they say is that Sarah Palin, when she comes back from Alaska, she is going to finally have her first solo campaign trip to battleground states. But they also are saying that, after that, don't be surprised if the two of them are together again on the campaign trail, maybe even as soon as next week.

And another interesting note: They are letting us know that the two of them are probably going to be together a lot more between now and November than running mates usually are. It obviously has the benefit of, as you saw, giving McCain a lot more energy in his rallies.

But another benefit, it also keeps her in a bit of a cocoon, Anderson. We have seen all this past week she has stuck to script, and she's really been able to do that in standing next to John McCain, and also giving him something that he never had before. And that is, again, that energy.

COOPER: Has anyone ever been able to ask her a question yet? I'm trying to keep like a running count on days.

(LAUGHTER)

BASH: You know, the very, very first day that she was announced, I was actually out with them on their first trip here in Pennsylvania. And because we were in a store and they didn't have their logistics, I think, together right, I got close enough to ask her the one question I could, which is, what do you say to people who say you are not ready to be president?

And her answer was very short. And she simply said that she has had 13 years of elected -- in elected office, rather. As far as I know, that was the only time that those of us who are following her have gotten a chance to ask her a question. She has done an interview, I believe, with "People" magazine.

COOPER: Right.

BASH: And we know she's doing one in Alaska at the end of the week.

COOPER: With Charlie Gibson.

All right. Well, we will keep hope -- keep hoping for that.

Dana Bash, thanks very much.

One other later -- late bit of campaign news: CNN has learned that Senator Obama and Bill Clinton are going to be campaigning later this month in Florida, one of a handful of states that obviously can make or break a candidate.

Tonight, we have got new polling data showing that, in many of those states, an already close contest is getting even closer.

The "Raw Politics" from John King in one of those battleground states, Michigan.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): Signs of struggle dominate battleground Michigan, a giant but shuttered Ford plant in Wixom, just a few miles away in Pontiac, a barren lot once home to a GM truck assembly plant with jobs around the clock.

The unemployment rate is 8.5 percent, and the housing slump adds insult to injury.

RAY GARDELLA, HOME BUILDER: If I come in and build the houses, somebody else takes care of the land.

KING: Home builder Ray Gardella wants help from the next president, and isn't sold on Barack Obama's promise of change.

GARDELLA: Talk, but, yes, we need more than that, especially in the economy we have. Certainly, a strong candidate, a very easy-to- listen-to candidate, but I don't think he gives us the substance we need.

KING: The combination of a struggling economy and an unpopular Republican president should be a huge Democratic advantage. But new CNN battleground state polling suggests the race for the White House is a competitive as ever, here in Michigan, perhaps a tiny Obama edge, 49 percent to 45 president, likewise, in New Hampshire, where the CNN/"TIME" polling gives Obama a 51 percent to 45 percent lead.

But, in Missouri, it is advantage McCain, 50 percent to 45 percent. And, in Virginia, McCain leads 50 percent to 46 percent. The results are all within the margin of error. So, all four states stay as tossups in the CNN electoral map.

OBAMA: Thank you so much.

UNIDENTIFIED MALE: Keep hitting back hard.

KING: But there are trouble signs for Obama. McCain's pick of Alaska Governor Sarah Palin is boosting the GOP ticket among white voters, men and women, including a 14-point McCain edge among whites here in Michigan.

Gardella started his business here 35 years ago. Back then, he was a McGovern Democrat. But he leans Republican now, and, like many in his generation here, shrugs off Obama's talk that John McCain has been in Washington too long to change it.

GARDELLA: I think he is more of a man of action. He wants to. He has been waiting for 30 years to become a man of action. I think he wants to do that in the executive office.

KING: Some local Democrats complain, Obama is not taking their advice on how to connect with blue-collar workers. And they say he could have locked up the state if he had chosen Hillary Clinton as his running mate.

DENNIS COWAN, CHAIRMAN, OAKLAND COUNTY, MICHIGAN, REPUBLICAN PARTY: We did fear the Obama-Clinton ticket. He kind of made the safe choice for V.P. John McCain made a bold choice for V.P., which has gotten everybody's attention.

KING: Oklahoma County Republican chairman Dennis Cowan says McCain's V.P. has knocked the Democrats off stride.

COWAN: That's definitely happened. There's no question that we have, in essence, stolen the change aspect of the Obama-Biden candidacy. But, primarily, it is because we are emphasizing reform in government, as opposed to just change.

KING: Oakland County is considered the swing battleground within the battleground. It's a diverse mix of more than a million people, a fairly even mix of Democrats, Republicans, and independents, and a blend, too, of sobering economic blight and more upscale developments, where home values are sagging because of the mortgage mess.

(END VIDEOTAPE)

COOPER: John, if those four states are still tossups, how does the Electoral College map look tonight? And how recent is the information? I'm told the state polling is a little behind national polling.

KING: That's absolutely the key question, Anderson.

Right now, in our CNN electoral projections, we still show advantage Obama. We have him leading or solidly ahead in states with 243 electoral voters, John McCain ahead or leaning ahead in states with about 189 electoral votes. That leaves Obama only about 27 electoral votes shy of the 270 you need to win.

But many of these state polls were conducted before the conventions, which is why we are doing four or five states a week, and updating it as we go. And, if you look at the trend, especially in Missouri and Virginia, a bit of a lean toward McCain this week, but they are still all so close -- Anderson.

COOPER: All right, fascinating, John King. Thanks, John. Stick around.

We are going to bring back Candy Crowley and also bring in David Gergen right after the break.

As always, we are going to be blogging throughout the air. You can join the conversation at AC360.com. You can also find Erica Hill's live Webcast during commercial breaks. You should go check that out, if you haven't seen it.

Also ahead tonight in the hour, a lot of allegations about each candidate's proposals on taxes. We're going to show you how each man's plan affects your wallet specifically. We're "Keeping Them Honest."

Also, Governor Palin and McCain parting ways, as Dana mentioned. We are waiting for her to land in Alaska. It should be happening shortly. We are going to listen in on her remarks when she arrives.

And Hurricane Ike gathering force, the Texas Gulf Coast getting ready. We have got the latest -- when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We have real problems in this country right now, and the American people are looking to us for answers, not distractions, not diversions, not manipulations.

MCCAIN: We will work for you, and we will put our country first, and that's what this campaign is all about, change and reform -- change and reform.

(CHEERING AND APPLAUSE)

MCCAIN: And I have fought corruption, and it didn't matter if it was Democrats or Republican, and so has Sarah Palin.

(END VIDEO CLIP)

COOPER: The candidates today, with the race tightening in the last few days, perhaps generating a lot more heat than light.

Digging deeper now with John King, Candy Crowley, and CNN senior political analyst and former presidential adviser David Gergen.

David, I don't want to talk about the lipstick story, because, frankly, we addressed it last night. It has been all over TV all day today and even all night tonight.

Mark Whitaker of NBC made the point that the fact that it is still being discussed highlights two things, one, the success of the McCain campaign in what he called hand-to-hand combat and driving the news cycle, and also it highlights the question of how Barack Obama fights back. Is -- is that why it's still worth talking about or interesting?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I think it -- I didn't think we would hit a new low in campaigning after last night, but here we are on lipstick again.

Look, Anderson, for an awful lot of people, I think this has been discouraging. Barack Obama seems disoriented. John McCain seems cynical. And the media seems obsessed with Sarah Palin.

And, as a result of that, you know, it is -- is it mildly interesting that this woman is so exciting? Yes. It's very interesting, but we have completely been sidetracked away from -- this is a sideshow, compared to the big problems facing the country, Lehman Brothers on the ropes. Automobile makers -- automakers are coming to Washington for $25 billion in bailout money, and the government taking over Fannie Mae and Freddie Mac, one of the biggest bailouts ever.

There -- I do think there is a human interest angle to this, but it is trumping everything else. I do think the McCain campaign is -- is gaining from this. It is in their interests. Every day that is spent on Sarah Palin is one less day spent on the issues. It is to their advantage. And they will get at least two more nights out of this, with Sarah Palin giving an interview -- her first interview tomorrow.

COOPER: And, Candy, with 50-some-odd days left, they will try to stretch out the interest in Sarah Palin, in a generic sense, without getting into specifics, as long as possible.

CROWLEY: Absolutely.

But let me tell you that there are Democrats out there I have talked to tonight and e-mailed throughout the day who say, you know, Barack Obama is kind of helping them, in this way.

I said to a Democrat, well, what would you have him do? You know, if he didn't pound back, you would say, well, he is not tough enough.

And they said, all he has to do was get up there and say, you know what? The other side can talk about whatever they want to talk about. I'm talking about issues, because it is about you, because this is a fight for the conversation.

John McCain wants to talk about Barack Obama's inexperience, the implication of sexism, that kind of thing. And what the -- what the Democrats want him to do is talk about issues, because they believe the issues are on their side. So, they are struggling for the conversation, but there have been Democrats who have said to me today, he didn't need to be -- you know, to make this another lead. He could have said, simply, you know what? Let them talk about what they want to talk to. I'm going to talk about what you want me to talk about.

COOPER: John, it is interesting, because I'm hearing from just people on our blog, and people I talk about -- there is this sort of turning off, a sort of a sense of this is no longer what it once was, and it is just kind of a lot of turning people off. Is that -- you're out there. Is that what you are hearing from voters?

KING: Without a doubt, but, Anderson, think of what you just said, turning people off. What does that make? It makes both of them politicians.

What was the charm of Barack Obama at the beginning of the campaign? He was new and different. He wasn't a traditional politician. When you talk to people here in Michigan -- I was in Iowa yesterday -- they are now looking at the McCain/Palin ticket as new and different.

McCain did something bold. Barack Obama seems to be heading -- the same old politics. Democrats in this state, they won't go on camera -- they wouldn't go on camera today -- but they are pulling their hair out. They want Barack Obama to talk about jobs, jobs, jobs, McCain, Bush, McCain, Bush, and nothing else.

COOPER: It is hard, though, David. I mean, to Candy's point, kind of damned if you do, damned if you don't. If he didn't address it or come out firmly this morning and say, enough is enough, there would be some Democrats who would say, he doesn't have the stomach for a fight.

GERGEN: Well, that's true.

But where is Joe Biden? And where are some of the surrogates? They ought to be taking on this fight. They ought to be making -- landing these blows. He needs to get back to jobs. That is absolutely right.

And that's why he seems so disoriented and why a growing number of Democrats are asking, has he really got what it takes to win in this -- in what is becoming a very hard-fought race?

Now, I have to tell you, I thought he started turning the corner this morning , when he came out and said, enough is enough. This is phony outrage over this lipstick business. Let's get back to the issues. The country is too important.

But he now has to make the pivot. I thought that was a good statement, and he was moving in the right direction. But he now has to get off -- off Sarah Palin and get on to the issues, and let others deal with the Sarah Palin question. He does not need to be there.

And for John McCain, this is a very clever campaign. I mean, I must tell you, he is outfoxing the other side right now. And you have to sort of say, it may seem cynical, but it's darn smart.

COOPER: It seems to be working right now.

John King, we're going to have to leave it there.

John King, thank you, Candy Crowley, David Gergen as well.

A couple quick program notes. Tomorrow night, CNN, you can see McCain and Obama on stage together for the first time since the Saddleback Church appearance. Coverage of the forum starts at 8:00 Eastern on CNN. We will have special coverage on 360, of course, starting at 10:00.

Then, on Saturday night, two running mates revealed, a CNN documentary, Sarah Palin in-depth, Joe Biden at 10:00.

Just ahead: McCain and Obama -- well, McCain says that Obama is going to raise your taxes, and leaves the impression that he will raise your taxes. Obama says McCain will give big breaks to rich people. Who is telling the truth? We're "Keeping Them Honest." Up next, Joe Johns revealing what each man's plan will mean to your pocketbook.

And, later, the abortion issue and a closer look at where Joe Biden shares some common ground with Sarah Palin, and where they absolutely don't.

Plus, the latest on Hurricane Ike in the Gulf, getting stronger, projected to be a Category 4 storm when it hits. We will tell you where and when -- coming up.

(COMMERCIAL BREAK)

COOPER: The McCain campaign has effectively been hammering the message that Obama is going to raise your taxes, but is that true? We're "Keeping Them Honest." We will look at how both men's plans are going to affect you in a moment.

But, first, Erica Hill joins us with a 360 bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, mandatory evacuations in parts of Texas tonight, ahead of Hurricane Ike. It is now a Category 2 storm. And, if you see these satellite images here we're showing you, they will show you Ike now about 700 miles east of Brownsville. Forecasters say the storm could become a Cat 4 before it makes landfall on Saturday morning along the Texas coast.

One construction worker is dead, up to a dozen others unaccounted for tonight after a partially built two-story building collapsed in a suburb of Richmond, Virginia. Rescue teams are now searching for those other workers who may be trapped. It is not clear what caused the collapse.

And Lawyers for Idaho Senator Larry Craig asked a Minnesota court to void the guilty plea he made after his arrest last year in a sex sting. An undercover cop said Craig solicited sex in the restroom of a Minneapolis airport. Craig did not attend today's hearing, Anderson.

COOPER: All right.

Here is tonight's "Beat 360" photo: John McCain and Sarah Palin reacting to the cheers of supporters in Pennsylvania, a key battleground state.

Here is the caption from our staff winner, Alan: "Pig jokes, huh? I can bring home the bacon and fry it up -- fry Obama up in a pan."

Maybe it would have worked if I hadn't messed it up.

"Pig jokes, huh? I can bring home the bacon and fry Obama up in a pan."

HILL: I got it. Don't worry.

COOPER: Anyway.

All right. Think you can do better? Go to AC360.com. Click on the "Beat 360" link. Send us your entry. And we will announce the winner at the end of the program. The winner gets a "Beat 360" T- shirt.

Coming up, tonight's "Strategy Session" -- James Carville, Bay Buchanan weigh in.

And Barack Obama says he will cut your taxes.

They don't talk that fast, actually.

John McCain says his opponent will raise your taxes. So, who is telling the truth? We're "Keeping Them Honest."

And you are looking at a shot of Fairbanks, Alaska. We're waiting for Sarah Palin's plane to arrive. That is a live shot of folks waiting on her arrival. We will have her remarks live when they happen.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I never throw the first punch, but I always throw the last.

(END VIDEO CLIP)

COOPER: A boxing analogy from Obama today, as he sounded off on what he says is the GOP's manufactured controversy over the pig and lipstick remark.

Obama says Americans wants to talk about real problems, especially the economy. A new CNN poll shows it remains, far and away, the most important issue for the country. And when you're dealing with the economy, we are really talking about taxes. McCain says Obama is going to raise your taxes. Obama says his challenger's tax breaks favor the rich.

Who is telling the truth? And what do their actual plans mean for your tax bill?

Let's clear up the spin and the confusion.

"Keeping Them Honest," CNN's Joe Johns joins us from Washington.

So, Joe, polls are suggesting most Americans, more than 50 percent, think Barack Obama will raise taxes, even though he says his plan would mean tax cuts for most Americans. So, what is the truth?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, the truth is, McCain has a simple message: I will cut your taxes, period.

Obama's plan, Anderson, is a little more complex. And that makes him open to attack. The charge from McCain and the Republicans is that Obama will raise your taxes. What Obama actually says is that he would give a tax cut to the vast majority of Americans, 80 percent of Americans. But, for that small percentage of couples who make more than $250,000 a year, Obama's plan would allow their taxes to go up.

COOPER: So, what about McCain's plan?

JOHNS: Well, the charge on that side is that the McCain plan just plain helps wealthy Americans and corporations, and not the people who are really suffering, for example.

The truth is that McCain's plan would also cut taxes for people with dependents, children mainly. But, remember, the biggest tax cuts would still go to the top wage-earners. The benefit to the vast majority of Americans would be modest, at best.

COOPER: Let's look at some real-world comparisons. I mean, can you show them side by side, or what it actually means?

JOHNS: Yes. Yes.

Well, it is pretty dramatic. According to the Tax Policy Center here in town, the numbers sort of break down like this.

If you make, for example, between $38,000 and $66,000 a year, the Obama plan will cut your taxes by just over $1,000 or so. McCain would give you just $319.

But now let's go up an income bracket. For those making between $66,000 and $112,000, Obama cuts your taxes by $1,290, McCain by about $1,000. The big switch starts happening in the upper brackets, if you make $227,000-$603,000, the taxes go up $12, you end up paying under Obama's plan. Under the McCain plan, you get a break of $7,871.

And if you are fortunate enough to make it all the way up to that $603,000 level, Obama's whacks you for nearly $116,000. Under McCain, you get a break of just over $45,000 -- Anderson.

COOPER: All right.

We have put up a link on our Web site, Joe, just if people want to get a closer look at the numbers. That's AC360.com. You can just follow the links. Joe, thanks.

Along with setting the record straight on taxes, we have got new polls in four key states, a new attack ad by McCain, and then there's that whole lipstick business, a lot to cover in our "Strategy Session."

Earlier, I talked with CNN political contributor and Democratic strategist James Carville and Republican strategist Bay Buchanan.

(BEGIN VIDEOTAPE)

COOPER: James, Obama today accused the McCain campaign of phony outrage, Swift Boat tactics.

(LAUGHTER)

COOPER: His language has gotten sharper.

JAMES CARVILLE, CNN POLITICAL ANALYST: Right.

COOPER: Is he being as aggressive as he should be?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, a question of aggressiveness is what it is. Understand what's going on here. It's -- the McCain campaign gets up every day and says, "How can we distract people from what's happened to their lives and their country?"

So the new $407 billion budget deficit number hit, somebody was going to think of something to divert people's attention from that. All right?

And so what I think Senator Obama needs to do, and he's starting to do that some, but he needs to do it exclusively, is be angry about what happened to the United States of America and what happened to people under Bush and McCain and the policies McCain has vowed to continue. That's what this election should be about.

Every day that the McCain people get up they're going to say, "What kind of thing can we use to distract people's attention?" And Obama's got to bring it back. That's the key to his success.

COOPER: Bay, is that the McCain strategy?

BAY BUCHANAN, REPUBLICAN STRATEGIST: Well, the McCain strategy was when they saw a huge opportunity that Obama missed to bring somebody on the ticket that will really excite people across this country, somebody new, a fresh face, somebody that really is about change, that would reinforce his message of change in Washington, he did it. McCain was bold, and he did it. And that's what this country is excited about. And that's why Obama is flat, his campaign is still full-stop, because of one Sarah Palin.

CARVILLE: Sarah Palin or no Sarah Palin, I have no idea that she can do anything other than read a teleprompter. But we'll find out in due course.

But the point is, is that McCain has vowed to continue the policies of this administration. He says he and Bush agree on every single big thing. We have a $407 billion budget deficit. There's a story today that I know this is going to shock people, that there's cozy relationship between people in the Interior Department and oil companies.

So tomorrow there will be some other thing to distract people. All Obama needs to do is remind people what happened to their country, what happened to their lives under Republican policy.

BUCHANAN: James, you might want to tell him to do that. But what has he been doing, is he's been focused on Sarah. He has been driving the argument down, responding to Sarah Palin. I welcome that, but that's the -- Obama's problem. You cannot blame that on McCain.

McCain has run a smart, wise campaign. He's energized his base. He's got excitement, huge crowds coming out. America loves Sarah Palin, and they're going to vote for the McCain/Palin ticket because of it.

COOPER: Months ago, I'd ask folks -- I think I asked James. Maybe I asked you. What is this election going to boil down to? And people said it's going to be about Iraq or it's going to be an election about the economy.

In the end, or at least right now, it seems to be just kind of getting mired in a tit-for-tat. Is that what's going to decide this, basically boil down to kind of personality and who likes who and who scores the most points on this tit-for-tat?

BUCHANAN: Well, Anderson, what's happened here is you have momentum was with the Obama campaign, clearly. And that has turned around completely. And so people get very much tense and on edge. And they start saying things and responding, and that's where the nitpicking coming in.

But the key issue here that, what McCain decided is to focus his campaign on one or two issues. And the big issue is change. And he wanted to reinforce, say, "I'm serious. I've been in Washington a long time. I've done some shaking up. I'm going to do more. And I'm going to prove it by bringing in Sarah," who has an incredible record, in spite of what James says, of really having accomplished an enormous amount in two years, far more than Obama has ever accomplished in his entire career.

She has a record of change. And all he is, is words, words, and words. And that's what it's coming down to, a key issue in this country. Who will make a difference in Washington?

COOPER: If you were advising the McCain campaign, would you allow ever Sarah Palin to talk to Americans, I mean, in an open forum?

BUCHANAN: Sure.

COOPER: Or to talk to reporters? Because it is remarkable the extent to which, I mean, I don't know of any campaign where a vice- presidential candidate had yet to talk to a reporter.

BUCHANAN: Well, she's going to talk to one this weekend. I understand it's very intense of an interview. I think she's going to spend two days talking to him for a full in-depth.

COOPER: She's going to talk to Charlie Gibson. But she's not taking any questions from American citizens at any campaign stops.

BUCHANAN: She'll have -- she'll have her debate, as well. But you know, this is -- this is the key, Anderson. The campaign, the McCain campaign, is really doing extraordinary. OK.

COOPER: No doubt about it.

BUCHANAN: Voters, independents. Everyone's -- so why would you change your strategy that's working? You don't change it.

Now, I agree she's going to have to start talking, and she will. She'll do it this weekend, which gives her a little time. She'll do some others down the road.

But as long as we're picking up votes every day with what we're doing, we're not going to listen to the Obama campaign or the media and change our strategy.

CARVILLE: You know, I like that, because McCain keeps insisting that the fundamentals in the economy are fine, so why change? Again...

BUCHANAN: No. He hasn't said that in months.

CARVILLE: I'll tell you, he says -- he said the fundamentals are fine. Yes, ten months...

BUCHANAN: Months ago.

CARVILLE: He said the fundamentals are fine a month ago. And he hasn't proposed a single things that he would do different. He said he and George W. Bush agree on every big thing. That's really what this election is about. America, do you want change or do you want more of the same?

COOPER: James Carville, Bay Buchanan, thank you very much.

BUCHANAN: Sure.

COOPER: Up next, more on the issues, where the candidates and their running mates stand on abortion. Palin's anti-choice position has infused enthusiasm for the ticket among the Republican base. We'll show you how her position compares with Joe Biden's. The answers may actually kind of surprise you.

Plus, Sarah Palin is attacking Obama for requesting earmarks. But what exactly is her record on earmarks, as mayor and as governor? The facts ahead. "Keeping Them Honest."

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COOPER: the political Web site Politico.com says South Carolina's Democratic chairwoman -- Carol Fowler is her name -- accused John McCain of picking Sarah Palin because she, quote, "hasn't had an abortion." Jut the mention of that word stirs up intense emotions for a lot of voters. Abortion's without a doubt a wedge issue in this presidential race.

But exactly where do the candidates stand on the subject? Let's get the facts from tonight's "Nation Divided" segment. Here's Gary Tuchman.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): In the days before Sarah Palin became John McCain's running mate, she did indeed take questions from reporters. And during one of those times in a gubernatorial debate in 2006, she was asked this.

UNIDENTIFIED MALE: If the woman had been raped and didn't want the child, would you allow her to have the abortion?

GOV. SARAH PALIN (R-AK), VICE-PRESIDENTIAL CANDIDATE: With my respect for the sanctity of life, and my belief in the potential of life, I know that this aspect of the abortion issue is very sensitive. It's a very private matter. But personally, I would choose life.

TUCHMAN: The reporter followed up by asking a hypothetical question that's no longer so hypothetical.

UNIDENTIFIED MALE: If your daughter were pregnant or your son was involved in a pregnancy, what would your reaction be -- I mean, if it was before marriage, like that. What would be your reaction and advice to him or her?

PALIN: Again, I would choose life.

TUCHMAN: Sarah Palin is considered fervently anti-abortion, which makes the words of her vice-presidential opponent especially notable.

SEN. JOE BIDEN (D-DE), VICE-PRESIDENTIAL NOMINEE: I'm prepared as a matter of faith to accept that life begins at the moment of conception.

TUCHMAN: On NBC's "Meet the Press" this past Sunday, Joe Biden declared that, as a Roman Catholic, he accepts the teachings of the church.

BIDEN: But that is my judgment. For me to impose that judgment on everyone else who is equally and maybe even more devout than I am, seems to me is inappropriate in a pluralistic society.

TUCHMAN: So Biden may agree with Palin that life begins at conception, but their paths diverged from there. Biden and Obama both favor abortion rights. Palin and McCain are both anti-abortion.

Outside Chicago's Holy Name Cathedral, some of the Roman Catholics leaving mass see it Joe Biden's way.

UNIDENTIFIED FEMALE: I am pro-choice, as well, but I believe that life begins at conception.

TUCHMAN: Others most certainly do not.

UNIDENTIFIED FEMALE: Life is precious, and it should not be destroyed.

UNIDENTIFIED MALE: If your daughter had been raped, would that be something you would feel?

PALIN: Again, I would choose life.

TUCHMAN: Palin does support abortion to save the life of a mother. John McCain believes the same but has also favored exceptions for rape or incest victims. As a matter of fact, during a 2000 Republican presidential debate, he challenged George W. Bush about why the GOP platform advocated no exceptions.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Your position is that you believe there's an exemption for rape, incest and life of the mother, but you want the platform that you're supposed to be leading to have no exceptions?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I will -- I will. The platform talks about -- it doesn't talk about what specifically should be in the constitutional amendment. Does it? No.

MCCAIN: It doesn't have the exemption.

BUSH: John, let me finish.

TUCHMAN: Although McCain still feels the same way, the 2008 Republican platform does not mention exceptions in the case of rape, incest or to save the life of the mother.

Gary Tuchman, CNN, Chicago.

(END VIDEOTAPE)

COOPER: Coming up next on 360, earmark reality check. Sarah Palin says she stood up against government waste in Alaska. Was that always the case? We're "Keeping Them Honest," ahead. And later, evacuations begin on the Gulf Coast as Ike tracks aim at Texas. We're tracking the hurricane. A live update on when it could hit, coming up.

(COMMERCIAL BREAK)

COOPER: We continue to stand by at Fairbanks International Airport. That's a live shot there, folks waiting out on the tarmac, expecting Sarah Palin and her family: her husband and her kids. They're expected to arise -- arrive momentarily. Governor Palin is expected to speak at a rally at the airport. So is her husband, who's going to introduce her, we're told. We're going to bring you some of that live.

Palin has only given a handful of speeches since being nominated as vice president. And in those speeches, she insists she's fought hard against pork barrel projects, basically telling America she'll stand up to government earmarks. That's her promise. But does her promise now reflect her past record?

CNN's Randi Kaye tonight, "Keeping Them Honest."

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): Three little words, a clue as to where Sarah Palin once stood on earmarks, scrawled in the margin of this memo to Wasilla City Council, back when Palin was mayor: "We did well." It was June 14, 1999, when Palin wrote, "This does not include our nearly $1 million from the feds for our airport paving project." Then added those three words: "We did well."

LARRY PERSILY, WORKED FOR PALIN: She was hungry for funding from the federal government that could help her community.

KAYE: Longtime journalist Larry Persily worked for the governor for several months but doesn't believe she has the judgment or qualifications to be vice president. As to earmarks, he says...

PERSILY: When she was mayor of Wasilla from 1996 to 2002, she was in there, looking for federal earmarks from Congress just as much as anyone.

KAYE (on camera): As Mayor Palin hired a lobbyist to help funnel federal dollars to her hometown, and not just any lobbyist but the former chief of staff for Alaska Senator Ted Stevens, who at the time was chairman of the powerful Senate Appropriations Committee, which doles out federal cash.

(voice-over) The lobbyist helped Palin secure $600,000 for a new bus facility, $1.75 million for dispatch center technology, $2.4 million to upgrade water and sewer facilities.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: Wasilla did pretty well, once they got into the earmark game.

KAYE: In the last four years Palin was mayor, the city of Wasilla, with a population of just about 5,000, scored $27 million in earmarks, says the nonpartisan Taxpayers for Common Sense.

The state was doing pretty well, too. Perhaps Alaska's most egregious earmark? The Bridge to Nowhere, the target of Senator John McCain.

In 2006 Palin ran for governor, promising to support the now infamous Bridge to Nowhere, but after being elected governor, she rejected it. McCain and watchdog groups were already targeting the Bridge to Nowhere by then. Palin said the price tag had become too high and the money could be better used for other projects.

GOV. SARAH PALIN (R-AK), VICE-PRESIDENTIAL NOMINEE: I told the Congress thanks but no thanks on that Bridge to Nowhere.

PERSILY: She is telling only half the story as far as the earmarks.

KAYE: In fact, Palin was securing earmarks just as John McCain was fighting to slash them. Years ago, he even identified some of her projects. But that was then.

Since becoming governor, Palin has cut the earmarks the state asks for. But this year, Alaska had more earmark requests per person than any other state.

Alaska's lieutenant governor, Sean Parnell, defends Palin's record.

LT. GOV. SEAN PARNELL, ALASKA: She's a fiscal hawk. I'd say that she has worked to reduce the number of earmarks.

KAYE: Palin asked for $256 million in earmarks her first year in office; $187 million her second year. Why the apparent change of heart?

PERSILY: She turned against earmarks when she saw the nation turning against earmarks.

KAYE (on camera): Did the governor change her tone on earmarks because they became unpopular?

PARNELL: I don't think so. I think she saw them for what they were. As you're in office longer, you begin to see the cumulative effect of earmarks, from Wasilla to Pensacola to, you know, all across America, the thousands of earmarks and to see the corruption that can come from those.

KAYE (voice-over): For 2008 and 2009, her office has asked for nearly $8 million federal dollars to upgrade a remote airport after it was handed over by the Navy. The FAA says it handles only eight scheduled flights a month.

Also, $4 million to research sea crab stocks.

(on camera) Why is studying sea crab and rock fish worth more than $5 million? PARNELL: Well, because they're found in federal waters and state waters, and they impact federal commercial fishing interests, as well as state.

(END VIDEOTAPE)

KAYE: Now, one more note about that Bridge to Nowhere. Alaska has already received $174 million towards that bridge next year, because the appropriation goes through 2009. The state will get another $48 million.

So Anderson, just to be clear, even though Sarah Palin killed the Bridge to Nowhere project. The state actually kept the federal dollars. The lieutenant governor telling me today that most of that money has gone into the general budget and is being used for bridges and repairs of highways.

We asked the McCain campaign what they have to say, what John McCain has to say about Sarah Palin's earmarks, especially those dating back to her days as mayor in Wasilla. The campaign would only say tonight that the governor has routinely used her veto pen to root out wasteful spending -- Anderson.

COOPER: Randi Kaye, "Keeping Them Honest." Thanks, Randi.

Ahead on 360, the other Alaska lawmaker in the news, U.S. Senator Ted Stevens, heads to court after losing a bid to have corruption charges dismissed. Details ahead.

And Ike takes aim at Texas. Building strength again, the deadly storm, now Cat 2, is going to, they say, get up to a Cat 4. We'll tell you where and when and how bad it could get, coming up.

(COMMERCIAL BREAK)

COOPER: Some of the first pictures out of Haiti days after Hurricane Ike swept across it. It now appears that Ike is on a collision course with Texas. Evacuations already underway. Today it strengthened into a Cat 2 hurricane, winds nearly 100 miles per hour.

Now there are fears that the storm is only going to grow more powerful, maybe a Cat 4 as it nears land. That could happen as early as Saturday. Let's get the latest from senior weather expert Chad Myers -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Well, at least briefly there may be some decent news, Anderson. We don't get to a Cat 4 now, at least at the forecast point. And I'll tell you what that means in a second. They happen every 12 hours at the beginning, and the forecast points go out every 24 hours after that.

The pressure is still dropping, which means this storm is getting stronger, even though the winds from today have not really gone up. They've been holding steady at 100 miles per hour. But the aircraft is now in it, and I can actually prove that to you, because there's the flight plan of this hurricane hunter plane, going round and round in circles, back through the eye a number of times, trying to find these big-time winds, these Category 2 winds. So far they're finding Category 1 winds of about 85 to 90 miles per hour. But they're keeping it at 100, because they know that this storm is going to increase in intensity.

It's a very big storm. It was raining in Florida today, raining in Cancun today. It's almost filling up the Gulf of Mexico right now. And it is headed to the west.

And here's what I'm talking about these forecast points. Think about how this never changes to a 4. Well, we're not -- we don't know what it might be right there, because there's not a forecast point there. It could be a category 4 at landfall.

The problem with this new track tonight, Anderson, is that it is too close to Houston for comfort. There may be some evacuations getting closer to Houston tomorrow. Basically today was down -- down Aransas (ph) Pass, north of Corpus Christi. And now this storm has definitely, definitely taken a turn toward Houston, and a huge population density there compared to Aransas (ph) Pass.

COOPER: Bad news indeed, Chad. We'll keep watching it closely. We're going to keep a close eye on Ike now until Saturday.

Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, a legal setback for Republican Senator Ted Stevens of Alaska, a federal judge today refusing to dismiss the corruption charges against him. Stevens, who is up for re-election, is charged with failing to report more than $250,000 in gifts from an oil services company in Alaska.

Jury selection for his trial begins September 22.

Oil prices fell to just under $103 a barrel. That is a five- month low, despite OPEC's decision. That is to cut its oil output by half a million barrels a day, which normally pushes prices higher.

And talk about a happy reunion for a British couple and their cat, who disappeared nine years ago. Dixie's owners thought she'd been killed by a car. In fact, though, Dixie was found less than half a mile from home. She was thin and disheveled. Apparently, though, the motor still works, because Dixie hasn't stopped purring since she was reunited.

COOPER: Nine years?

HILL: Nine years. I heard that about dogs, but not cats.

COOPER: So what has the cat been doing for nine years?

HILL: I don't know if she's talking yet. We'll see who she grants the first interview to.

COOPER: Well, we'll hope. HILL: Maybe it's "People" magazine.

COOPER: Maybe Charlie Gibson. Yes. Maybe we'll get it, if we're lucky.

Tonight's "Beat 360" winner, we're live also in Fairbanks, Alaska, awaiting Governor Sarah Palin's plane to arrive. That's a live shot inside the terminal where she's going to speak. So it's her husband. We're going to bring that to you as soon as it happens.

You're watching 360. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Our "Beat 360" winner, our daily challenge to viewers to come up with a caption better than one someone on our staff can come up with. Here's the photo: John McCain, Sarah Palin campaigning in a key battleground state, Pennsylvania.

Our staff winner tonight, Alan. His caption: "Pig jokes, huh? I can bring home the bacon and fry up Obama in a pan."

The viewer winner is Sylvia from Sedona, Arizona. Her caption: "I'm telling you, it's a lipstick jungle out there."

HILL: Oh, how very topical.

COOPER: There you go. Your "Beat 360" T-shirt, Sylvia, is on the way. Congratulations. You can also check out all the entries on our blog and play along tomorrow, by going to AC360.com.

Coming up at the top of the hour, we are expecting Sarah Palin to arrive any moment in Alaska. The plane is expected to touch down literally just a few minutes from now. We'll bring you -- her husband is supposed to introduce her. We'll bring you his comments and bring you hers. If she starts going to a stump speech, we probably won't give you the whole speech, because frankly, it's the speech she says every day. We've heard it before. But we'll bring you the comments for a while, next on 360. We're live, continuing into the next hour.

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