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Pigs & Lipstick; Sex, Oil & Government Scandal

Aired September 10, 2008 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: And, to our, viewers, you are in THE SITUATION ROOM.
Happening now: allegations of sex, illegal drugs and inappropriate gifts. An investigation finds a scandalous relationship between some government officials and the oil industry.

Barack Obama says enough is enough. He's accusing the McCain/Palin campaign of lies and phony outrage. This hour, the best political team on television standing by.

And Sarah Palin's appeal to Hillary Clinton supporters. Is she striking a chord or striking out?

We want to welcome our viewers in the United States and around the world.

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

And let's begin with the race for the White House, Barack Obama today sharpening his tongue and he's sounding fed up. The Democrat bristled at the McCain camp's charge that he used a phrase lipstick on a pig, said that was -- they suggested that was a direct slap at Sarah Palin.

Some Republicans still insist it was a clear and intended insult, even though Barack Obama says that is ridiculous.

Let's go to Suzanne Malveaux. She is working the story for us.

The Obama campaign, they felt they had to respond. And Barack Obama, himself, he came out swinging today, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, absolutely Wolf.

I talked to Obama aides who said that they believed it was necessary to address this flap because they have learned from previous examples, if you allow false statements go unanswered, they become very hard to discredit them later.

Enough is enough.

(BEGIN VIDEOTAPE)

OBAMA: Enough is enough.

(CHEERING AND APPLAUSE)

MALVEAUX (voice-over): Barack Obama has had it with what he says are the lies and distortions coming from the McCain campaign.

OBAMA: They seize on an innocent remark, try to take it out of context, throw up an outrageous ad, because they know that it's catnip for the news media.

MALVEAUX: The remark he's talking about was delivered at a town hall meeting in Virginia the day before, criticizing McCain.

OBAMA: I'm talking about John McCain's economic policies. I say, this is more of the same. You can put lipstick on a pig, but it's still a pig.

(LAUGHTER)

OBAMA: And suddenly, they say, oh, you must be talking about the governor of Alaska.

(LAUGHTER)

MALVEAUX: The McCain campaign put out former Massachusetts Governor Jane Swift to make the charge.

JANE SWIFT, FORMER MASSACHUSETTS GOVERNOR: Well, as far as I know, she's the only one of the four presidential candidates or vice presidential candidates who wears lipstick.

MALVEAUX: A web ad from camp McCain quickly followed.

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

OBAMA: You know, you can put lipstick on a pig.

(END VIDEO CLIP)

MALVEAUX: And then a former supporter of Hillary Clinton now in McCain's camp repeated the accusation at a McCain event, and scolded:

LYNETTE LONG, FORMER CLINTON SUPPORTER: Mr. Obama, calling girls name is something do you in fifth grade.

MALVEAUX: Obama aides called McCain's accusation a pathetic attempt to play the gender card from an increasingly dishonorable campaign and pointed out that McCain himself used the expression to criticize Hillary Clinton's health care plan.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: But the latest proposal I see is putting lipstick on a pig.

MALVEAUX: But when Obama's aides saw the charge catching fire in the media, Obama decided to take the lead in putting it out.

OBAMA: Everybody knows it's cynical. Everybody knows it's insincere. The media knows it. (LAUGHTER)

OBAMA: I mean, this is a game that we play. It's a game. It's a sport.

(END VIDEOTAPE)

MALVEAUX: Now, the McCain camp responded by calling Obama's comments schoolyard insults. It was interesting. Neither McCain nor Palin have commented on the controversy.

In a Web ad that was put up by the McCain ad repeating this lipstick accusation, it has been taken down from YouTube, because CBS objected to it, saying that they used their anchor, Katie Couric, in it. A spokesman for the McCain campaign, however, says that they are going to keep this ad up on their Web site -- Wolf.

BLITZER: Suzanne Malveaux watching the story for us -- thanks, Suzanne, very much.

Like Barack Obama, John McCain and Sarah Palin have seriously been courting voters out in Virginia today. The Republican running mates got quite a welcome, which may help explain why Obama tried to turn up the heat himself.

Let's go to Ed Henry. He is working this story for us.

All right, this back and forth that is going on between these two campaigns, you sensed that the McCain camp is backing down right now, because of Barack Obama's strong assertions earlier this morning? Are they going back on the defense?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: No, not at all. They are trying to stay on offense. They're feeling strong, because, while John McCain, himself, does not want to get in the tit-for-tat if you will about these pig comments -- he is letting his surrogates do it -- he's got the Web ad, as Suzanne mentioned -- but today in Virginia, at the rally I attended, John McCain didn't mention the pig comments at all, letting the others do it instead.

He focused on the issues like the economy. And he feels like he has some momentum. He had Sarah Palin at his side. There were 23,000 people at this rally in a Democratic part of Virginia, Wolf. You have to realize how big a deal that is, when you think just a few weeks ago when I was covering John McCain, you would go to an event in a state like Ohio, there might be a few hundred people.

Now he has got something like 23,000 people at a rally. It shows you in large part Sarah Palin has in fact added some energy to this ticket, especially on the right. The trick, the key for McCain moving forward though is to try to translate that momentum into support in the middle among independent voters -- Wolf.

BLITZER: What do McCain aides say about the assertion that John McCain earlier in the year used that exact same phrase -- you heard it in Suzanne Malveaux's piece -- putting lipstick on a pig, referring to Hillary Clinton's health care plan? He used that phrase. No one at the time suggested he was calling Hillary Clinton a pig. What are they saying when you press them on that today?

HENRY: Well, they are insisted that as you noted that it was focused on Hillary Clinton's health care plan, not Hillary Clinton, herself, but obviously that opens the door for the Obama people to say, wait a second, when you look at the transcript of what Barack Obama said yesterday, he never mentioned Sarah Palin either.

Instead, he was focusing broadly speaking on Palin and Senator McCain and their reform platform. And so that is why I think, in the end, this is a flap that is going to go back and forth for a few more hours, maybe another day, but in the long run, it is really not going to be a major issue, Wolf.

BLITZER: Thanks, Ed, for that.

Virginia, as Ed mentioned, one of the eight tossup states on CNN's electoral map. We have some new poll numbers from Virginia and three other crucial battlegrounds, Michigan, New Hampshire and Missouri.

In Virginia right now, the CNN/"TIME" magazine/Opponent Research Corporation poll shows McCain leading Obama by four percentage points among registered voters. In Michigan, McCain is ahead by five points. In Michigan, Obama leads by a four-point margin, Obama also ahead in New Hampshire by six percentage points, those numbers coming in from Opinion Research Corporation and our sister publication "TIME" magazine.

Now to some breaking news that we have been allegation, allegations of sex, drugs and cover-ups by some government employees. While you have been struggling with high oil and gas prices, there are shocking new government reports out today. They claim that some government workers were having illicit sex with oil company employees, just one of the scandalous stories laid out by the Interior Department's inspector general.

Illicit drugs are said to be involved in what is called -- and I'm quoting now -- a culture of substance abuse and promiscuity.

Let's go straight to our justice correspondent, Kelli Arena. She is working the story for us.

All right, Kelli, tell us what these allegations and specifically include?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, in a nutshell, the allegations are that government watchdogs were in bed with oil company executives, literally.

The reports say that government officials handling billions of dollars of oil royalties had sex with employees of oil companies that they were dealing with. It says that they rigged contracts and that they received improper gifts. Now, there were more than a dozen Interior Department employees who were allegedly involved in this activity working in both Denver and Washington. And these activities took place between the years 2002 and 2006 inside the office that is responsible for marketing the oil and gas that energy companies barter to the government, instead of paying them cash in order to be allowed to drill on federal land.

Now, Wolf, for our viewers who are trying to make sense of did this activity affect prices at the pump, no, but it does show that there was a very cozy relationship between government watchdogs and oil company execs.

BLITZER: If this alleged activity took place in 2006, Kelli, why are we just learning about it now?

ARENA: Well, the inspector general says one of the reasons that this report took so long is because one oil company, Chevron, refused to cooperate with the investigation. We did ask Chevron for a comment and it says it provided the government what it wanted months ago.

BLITZER: Are what are your sources saying? Are we likely to see criminal charges actually put forward?

ARENA: I don't think so, Wolf. The report says that the Justice Department declined to prosecute two employees that were referred to it. About half of the employees that were involved have already retired.

The others we were told may be subject to administrative action. The report recommends that they either be fired or barred for life from working within that royalty program -- Wolf.

BLITZER: Kelli Arena working the story for us -- thanks, Kelli, very much.

Some political observers wonder this. And they are saying it out loud. Why would Hillary Clinton's fans support Governor Palin when they have virtually nothing in common on so many issues? We are taking a much closer look at the impact that Sarah Palin is having on the female vote.

John McCain hopes his running mate will certainly help him, but some Republicans are counting on her to help them as well stay in office, get reelected to Congress.

And who is really bringing home the bacon? With McCain, Obama and their running mates, who wanted your money the most to pay for their pet projects? Our fact-check may surprise you.

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

(COMMERCIAL BREAK)

BLITZER: John McCain and Sarah Palin are railing against Barack Obama and Joe Biden for going ahead and supporting so-called earmarks of pork barrel spending. What exactly is going on? We asked Brian Todd to do a fact-check for us.

Brian, what are you learning about these two presidential campaigns as far as the pork barrel spending, the earmarks are concerned?

BRIAN TODD, CNN CORRESPONDENT: You won't be shocked to hear this, Wolf, but what we are hearing on the campaign trail needs a little bit more context. All four of these candidates are getting into the back and forth of who can really change things in this town, and we found that these four people really run the gamut, from genuine reform credentials to old-line power politics.

(BEGIN VIDEOTAPE)

TODD (voice-over): The hot debate now, who will really change the way Washington does business? Both campaigns taking aim at an old staple of machine politics, those sometimes wasteful fund requests made by lawmakers, often for their home districts.

John McCain's been a crusader against so-called earmarks. And he says his opponent has asked for almost $1 billion in pork barrel projects for his state in just less than four years in the Senate.

MCCAIN: Nearly a million dollars for every day that he's been in office. And that's change? My friends, don't be fooled. Don't be fooled.

TODD: According to the nonpartisan watchdog group Taxpayers For Common Sense, Barack Obama has asked for nearly a billion dollars in earmarks during his Senate term. But the group gives him credit for disclosing his requests, which most members of Congress don't do.

Obama's made no requests for the next fiscal year. And even when he was asking for earmarks, he was far from the worst offender.

STEVE ELLIS, VICE PRESIDENT OF PROGRAMS, TAXPAYERS FOR COMMON SENSE: Just to put it into perspective, he got $98 million worth of earmarks in fiscal year 2008. Senator Clinton got more than $300 million in earmarks. And Senator Cochran, the Republican ranking member of the Appropriations Committee, got more than $800 million in earmarks.

TODD: Obama's running mate doesn't come close to that, but Joe Biden also has never disclosed what he's asked for, until this year. Biden's office says he's requesting about $300 million.

The Obama campaign points out that, while McCain has never asked for earmarks, his running mate hardly has room to talk.

OBAMA: When you have been taking is all these earmarks when it's convenient and then, suddenly, you're the champion anti-earmark person, that's not change. Come on.

TODD: According to state records and Taxpayers for Common Sense, Sarah Palin has asked for about $450 million in federal money since she became governor. But she also gets some credit.

ELLIS: As governor, she has, by all records, started to reduce the number of earmark requests. So, it's a downward trajectory, by our analysis, but still significant earmark requests.

(END VIDEOTAPE)

TODD: And Sarah Palin got into the earmarking game early, before she even became a governor. According to state records and Taxpayer For Common Sense, she helped get about $27 million, some of which went to the small Alaskan town of Wasilla during her second term as mayor there from 1998 to 2002.

The watchdog group says one of the reasons she was able to get all that money, she hired a lobbying firm run by a former staffer for Senator Ted Stevens, one of Washington's most legendary earmarkers -- Wolf.

BLITZER: The whole notion of what governors try to earmark, what senators try to earmark, what is the difference?

TODD: Well, sometimes, they get unfairly compared. Experts say governors are really focusing on projects done by their state, where senators take funding requests from private companies and other entities, so it's not too to compare the two. But since Palin is a top candidate now and she's taking shots at Obama, she gets drawn into these comparisons.

BLITZER: Thanks very much, Brian, for that. Brian is working the fact-check desk for us. And we're going to continue to do this everyday hopefully between now and November 4.

Barack Obama earlier today was in Norfolk, Virginia. And we heard what he had to say about the McCain campaign's response to the lipstick controversy. He also spoke, though, about the issue of education.

(BEGIN VIDEO CLIP)

OBAMA: We need the make every school in America a school of the future. And that is what I'm going to do when I am president.

We will help schools integrate technology into their curriculum. We will use new technologies to develop better tests, so we can do a better job of measuring how our children are doing. We will make sure more classrooms have computers and more schools have Wi-Fi.

And we will teach our students not only math, science and other core academic subjects, but teamwork, critical thinking and the communication skills that will be so essential to getting a good- paying job in the future.

(APPLAUSE)

OBAMA: Now, I know this sounds like a lot, but I believe we can do it all. We can increase the number of students taking college- level courses. We can expand innovation. We can invest in the schools of the future. We can put a quality teacher in every classroom, all for the cost of just a few days in Iraq. And...

(APPLAUSE)

OBAMA: And we will pay for that cost by carefully winding down the war in Iraq, ending no-bid contracts, eliminating wasteful spending, so we will make these investments, but we will do it without mortgaging our children's future on an even larger amount of debt. In other words, we will do it responsibly.

(END VIDEO CLIP)

BLITZER: Barack Obama speaking earlier today.

Coming up, Sarah Palin, she was out on the campaign trail once again and we are going to play some of what she had to say on some of these sensitive issues.

Also, Sarah Palin's family values, some critics say her words and her actions are not necessarily the same. We sent Jessica Yellin to Alaska to try to find out. Stay tuned. We're going to go to her live.

And a dramatic rescue after a plane crashes near San Francisco's Bay Bridge -- details on that story and a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Sarah Palin spoke out on the situation in Iraq, the war in Iraq. She strongly defends John McCain's stance, the Bush administration's stance.

Let's listen to what she said today on the campaign trail in her own words.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Our opponent, he still can't bring himself to acknowledge that coming victory in Iraq. He couldn't just the other day in an interview. He says he's for change, but in Iraq change happened.

And that is a great thing for America, Senator.

So here is how I look at the choices that we face in this election. In politics, there are some candidates who use change to promote their careers. And then there are others, like John McCain, who use their careers to promote change.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: Sarah Palin out on the campaign trail right now. She is getting ready to head back to Alaska tomorrow and Friday. We will be watching her in Alaska as well.

(NEWS BREAK)

BLITZER: Sarah Palin reaching out to women who supported Hillary Clinton, but are female voters welcoming Palin with open arms? We are going to take you inside the strategy and whether there are any signs of success.

And it's a tossup in several crucial battleground states. The best political team on television is standing by, including our own John King. He is on the ground in Michigan right now, where many voters are hurting.

And later, party animals, all the talk of pit bulls and barracudas and pigs, oh, my. Jeanne Moos has had enough.

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

(COMMERCIAL BREAK)

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

Happening now: Barack Obama fed up and fighting back against John McCain, saying, enough is enough. But with the race increasingly close, is Obama being tough enough?

And our new polls showing the race a dead heat in four crucial battleground states. We are keeping our eyes on the electoral map.

Republicans candidates trying to catch a ride on Sarah Palin's wave of popularity, all of this, plus the best political team on television.

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

Sarah Palin is hoping to break a glass ceiling for women in politics, much like Hillary Clinton had wanted to do. Palin is certainly getting a lot of the attention. She is also getting some heat because of her gender, much like Hillary Clinton did as well, but comparisons between the two women and the voters they might attract, that could be stopping right there.

Let's go Mary Snow. She is looking into this story for us.

What is going on, Mary? What are you discovering?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, call it the Hillary Clinton factor. Some Republicans say Barack Obama left an opening by not choosing her as his running mate. The question is, is it drawing women to John McCain?

(BEGIN VIDEOTAPE)

SNOW (voice-over): Fairfax, Virginia, the McCain campaign says its their biggest crowd yet. It estimates 23,000 people showed up for a McCain/Palin rally. And some Republicans supporting McCain say Hillary Clinton is one reason why the race is tightening between John McCain and Barack Obama.

REP. CANDICE MILLER (R), MICHIGAN: I think, if Barack Obama would have chosen Hillary Clinton as his running mate, he would be in a much different position than what he finds himself right now.

SNOW: But Democratic Senator Debbie Stabenow sees it another way. She credits Palin's newness as the reason the Republican vice presidential nominee is drawing attention.

SEN. DEBBIE STABENOW (D), MICHIGAN: I don't think it has anything to do with Senator Hillary Rodham Clinton. I supported Hillary Clinton. My mom did and my daughter did. And all of us are strongly supporting Barack Obama now, because, frankly, it is about the issues.

SNOW: When it comes to issues, Clinton and Palin are far apart. But when it comes to appealing to women, those who study women in politics say Palin has struck a chord.

RUTH MANUEL, EAGLETON INSTITUTE OF POLITICS: I think that one reason Sarah Palin has made such an initial hit is that she is someone who has said I'm one of you, here I am with my family and I'm doing this and I'm proud of it.

SNOW: The question is, will Democrats who supported Hillary Clinton switch to McCain?

CNN's polling director finds no big shift among women voters before Palin was chosen for the Republican ticket and after the pick.

And among Clinton supporters -- KEATING HOLLAND, CNN POLLING DIRECTOR: Before the conventions, we found that about a quarter -- one in four of Democrats who supported Hillary Clinton for their party's nominee said that they would vote for John McCain in November. That's down to one in seven now. So Obama has been picking up Hillary Clinton Democrats.

(END VIDEO TAPE)

SNOW: And CNN's polling director, Keating Holland, says Palin is seeing support among men, particularly on the question of whether Palin is qualified to be president -- Wolf.

BLITZER: This is going to be a fascinating ride between now and November 4th.

Mary, thanks very much.

Mary is going to be with us every step of the way.

Barack Obama today clearly fed up with the McCain campaign. He's taking on a new, more aggressive stance. And he's saying enough is enough.

Let's discuss with our senior political analyst, Gloria Borger; our chief national correspondent, John King; and Steve Hayes, the senior writer for "The Weekly Standard" -- all part of the best political team on television.

I'll play a clip -- and I want you guys to think about this apparent new, more assertive stance from Barack Obama today, because he came out swinging.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: I don't care what they say about me, but 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)

(END VIDEO CLIP)

BLITZER: All right, Gloria, they're clearly telling him he's got to avoid the mistakes of Dukakis, of John Kerry, and he's got to fight back and fight back hard right away, the way that Bill Clinton used to do it.

GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes, they're telling him he has to do that. Lots of Democrats I talk to in Washington I talk to are nervous because, Wolf, they say every minute he's talking about lipstick on a pig, defending his own words, he's not talking about the economy. And the issue set this year so favors the Democrats. We've been saying that for months and months.

He has got to get back on the issue that matters to voters, which is talking about what John McCain would do on health care, what he would do on health care; what John McCain would do on tax cuts for the middle class and what he would do.

So they're saying OK, say you're mad, get angry -- which is just what he did -- and then get over it and get back on offense instead of playing defense.

BLITZER: All right, John, you were -- you've been with voters in two of the most important battleground states, yesterday in Ohio, today in Michigan.

What are you hearing from them?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, you do get a sense, Wolf, when you encounter voters -- and especially Republican activists -- that they think Hillary Clinton would have been a stronger vice presidential pick and maybe we wouldn't be having debates about lipstick and the like.

But to the broader point, voters want to talk about the economy. Here in Michigan, the unemployment rate is approaching 9 percent. We've been driving all day, past all the economic blight here. They want to hear about the economy. They want to hear about jobs. And more and more voters say they like when Barack Obama talks about change, but they don't know what it specifically means for them.

And so the Republicans think any day we're having this discussion is good day for them, even if it is a silly argument from the McCain campaign, because Barack Obama is not talking about big, transformational change, which was the driving force of his campaign.

And, Wolf, even inside his campaign, many of his own people say he needs to stop debating Sarah Palin and worry about John McCain.

BLITZER: And that's normally, Steve, why you have surrogates, why you have aides to do that kind of stuff. The presidential candidate is supposed to be above that, right?

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, it is really unbelievable to me that Barack Obama is engaging Sarah Palin in this. We saw this in 2004. We talked about this last week, how it's very foolish to have the principle, if you will, the presidential candidate, engage the number two.

This is what happened in 2004. Dick Cheney successfully engaged John Kerry again and again and again, and the Bush/Cheney campaign sat back and said I can't believe they're sort of taking our bait.

It looks like the same thing is happening. And I agree with Gloria and John, Barack Obama is better off talking about the issues, because his enthusiasm that he generated came largely because he branded himself as a new kind of politician. He wasn't going to get in the gutter. And every time he has these back and forths, I think it tarnishes that brand and makes him less appealing to the people he's gotten so excited about politics.

BLITZER: All right, guys...

BORGER: Which is...

BLITZER: Go ahead, Gloria.

Finish your thought.

BORGER: Which is why is the McCain campaign is doing this. I mean this is clearly tactical, albeit very cynical. But that's exactly what they want him to do.

BLITZER: Because you heard James Carville say in the last hour, John -- he made a specific protect that, you know what, if he's talking about this kind of stuff, you know, he's not focusing necessarily on the most important issues which he says that the McCain/Palin being more of Bush/Cheney.

BORGER: Absolutely.

KING: That's exactly right, Wolf. And, again, I'm going to talk -- I'm going to talk to you about the ground here in Michigan -- 8.5 percent unemployment. Democrats have carried this state in presidential politics for 20 years. It's a dead heat right now. And among white voters in Oakland County, where I am, in McComb County, where those Reagan Democrats are -- these are your blue collar economic voters. Barack Obama is struggling among white men and the gap among white women, John McCain, especially in the more affluent suburbs, is doing well.

Why?

Because voters are not getting a direct economic message from Barack Obama because we're talking about what Gloria rightly calls, I think, the silly season.

BLITZER: All right, guys, stand by. We're going to take a look at some new polling numbers that we're just getting in. These are the states that certainly could help determine who wins. And our new polls show Barack Obama and John McCain in a statistical tie in four of them.

We're back with the best political team in television.

And she has a skyrocketing career and a blossoming family. We're going to go inside Sarah Palin's delicate balancing act. Jessica Yellin is in Alaska right now. She's prepared a fascinating report.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There are certainly critical battleground states and our brand new poll shows the race in a dead heat, with the potential for a third party candidates to swing the election if it's very close.

We're back with the best political team on television.

John, you're in Michigan right now. And in our brand new poll, our CNN/"Time"/Opinion Research Corporation poll, among registered voters, Obama is at 45, McCain's at 42 -- a statistical tie, if you will, given the margin of error. But look at this -- Ralph Nader gets 6 percent, Bob Barr 2 percent, Cynthia McKinney 1 percent.

In New Hampshire, look at this -- Obama is at 48, McCain is at 43, but Nader gets another 4 percent in New Hampshire, as well.

We spoke to him earlier in THE SITUATION ROOM, together with Ron Paul, the Republican Congressman, who says he's not going to support McCain, he's going to support a third party candidate.

How likely is it that in a close battleground state like Michigan, for example, where you are, Ralph Nader potentially could be a spoiler for Barack Obama?

KING: It is a reminder that we need to watch until the very end. We've talked before about we thought Bob Barr would maybe have an influence in his home state in Georgia and potentially hurt the Republicans. Those poll numbers suggest that if Ralph Nader is playing here in a place like Michigan, one thing it suggests is you have to watch it to the end. Most of that vote would likely go back to where it belongs.

But another thing it tells you, Wolf, is if for some reason Obama or McCain -- they're not breaking through on the economic message. You have Ralph Nader, sort of the anti-Washington, populist, I'm on your side kind of message. If he's getting up at 5 or 6 percent, that's a testament to him, but it also means it's a weakness on somebody -- somebody else's part. And it's something we have to watch.

If Ralph Nader is getting 6 or 7 percent here in the State of Michigan, then Barack Obama is in trouble.

BLITZER: In deep trouble. And all of our viewers, Steve, remember Florida in 2000. Ralph Nader got more than 90,000 votes and Bush beat Gore by about 535 votes. And most of those Ralph Nader. Votes -- I think almost everyone agrees -- probably were votes taken away from Al Gore, not George W. Bush.

How do you read this?

HAYES: Well, yes, exactly. It is a reminder, as John says, that you can't sort of dismiss these third party candidates and the impact they can have on a race.

All that being said, if you look back at 2004, you know, Ralph Nader was polling much higher in the polls leading up to the election than he eventually got when he ran. So I think it's good to be skeptical that he's going to have any kind of a decisive impact on this year's vote.

BLITZER: Except for one factor that comes into play this year, and that would be Ron Paul. He raised $35 million during the Republican primaries. He's got a lot of support out there, especially on the Internet. And if he tells his supporters to go vote for either Ralph Nader or Bob Barr or Cynthia McKinney or any of these third party candidates, Gloria, that potentially could have an impact.

BORGER: Yes, he could have an impact, largely because he's got the money, as you just said. I mean if you consider a state like Montana, which is very Libertarian, which -- in which there were -- there was a lot of support for someone like Ron Paul, and now it's considered a battleground state -- that could make the difference in that state if somebody -- if somebody like Paul is putting a lot of money in the state for Bob Barr.

So I think you have to take it on a state by state basis.

BLITZER: Although he did tell us, Ron Paul -- we spoke with him and Ralph Nader jointly here in THE SITUATION ROOM earlier. And Ron Paul says he's not going to go raise money for the third party candidates. He wants to raise money for his own initiatives, obviously.

(LAUGHTER)

BLITZER: But it could be a wild card and I think we should be paying attention to it, as we clearly are. Look at this -- and, Steve, I want you to weigh in on this. Jay Love is running for Congress in Alabama. He's got a new ad that's basically using Sarah Palin. He wants to get on those Sarah Palin coattails.

How likely is it that other Republicans are now going to use Sarah Palin, not John McCain, not George Bush or Dick Cheney, but Sarah Palin, to try to help them get elected?

HAYES: I'd say it's a certainly. She is incredibly popular. It's one of the things that I think has been most fascinating to watch over the past week-and-a-half, as this all has unfolded.

Sarah Palin, we -- we're all focused on her gender and the fact that she's different that way. But I think she's different in another way. And she mentioned it in her speech. She comes from sort of -- from blue collar roots and she can speak to blue collar voters, who I think we all agree will be very important, if not decisive, in this election.

And she had a line in her speech that I thought was really important. She said, "I grew up with them. These are Americans who love their country in good times and in bad. I grew up with them."

I think that's the exactly the kind of message that Republicans across the country are trying to communicate now. And I think we'll see a lot of her in their ads.

BLITZER: What a wildcard that has been, the decision by John McCain to pick Sarah Palin.

All right. We'll watch this story unfold, guys.

Thanks very much for joining us.

This now -- we want to set the record straight on something that came up earlier today here in THE SITUATION ROOM during our Strategy Session.

Hillary Rosen, the Democratic strategist, suggested that Sarah Palin had cut funds for children with special needs as the governor of Alaska. Rosen now acknowledges she may have gotten her facts wrong. And, in fact, as our own Joe Johns reported last night here on CNN, funding for special needs children in Alaska actually is increasing on Sarah Palin's watch. We just wanted to correct the record on that front.

Supporters of the vice presidential nominee, Sarah Palin, they tout her abilities to manage both her political career and her family.

Jessica Yellin is in Anchorage.

We sent her there to learn more about this delicate balancing act -- Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Wolf, as Governor Palin returns to Alaska later today, once again she'll be juggling motherhood and politics.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Governor Palin starts sending e-mails at 4:30 in the morning.

MEG STAPLETON, PALIN CAMPAIGN ADVISER: We used to joke around that it's as though she has an I.V. of caffeine running through her, because we could never keep up with her and it would be constant.

YELLIN: According to a childhood friend, juggling five kids doesn't faze her.

KRISTIAN COLE, CHILDHOOD FRIEND: When she was mayor or just when she was a citizen, you usually saw one child on her hip.

YELLIN: She regularly takes daughter Piper to work.

COLE: Gosh, I would say the first six months she was born, she was underneath Sara's desk at the mayor's office.

YELLIN: While the older kids help clean and run errands, her husband does his share.

STAPLETON: When Sarah is really busy, Todd will be the one to make their breakfast, put the ponytails in.

YELLIN: But sometimes no one really does the cooking.

COLE: And she's joked around about that, that, oh, they can throw a sandwich together.

YELLIN: These days, the crib in the offer is infant son Trig's. Friends say Palin has come to terms with the new challenge, telling them...

COLE: You know, I looked at my other four children and I said they're not perfect. And she said it allowed me to see that I'm going to love Trig just as much as I love the other four, because they're not perfect and he's not perfect either, but I love them. And I'm going to love him, too.

YELLIN: Palin's supporters insist her experience as a working mother means she'll represent American women. But some women's groups are critical. The nonpartisan National Partnership for Women and Families gives Alaska a D minus when it comes to the parental leave policy. For example, there's no guarantee of paid leave for new parents.

DR. VICKI LOVELL, INSTITUTE FOR WOMEN'S POLICY RESEARCH: I think there's a contradiction there between Governor Palin's professed values about supporting families and then what we actually see in the State of Alaska, where there aren't adequate supports for families who are welcoming new infants.

(END VIDEO TAPE) YELLIN: Palin's defenders say that during her time as governor, she has pursued other priorities, including the natural gas pipeline and seeing to it that Alaskans get money back from a tax on oil companies -- Wolf.

BLITZER: Jessica.

Jessica Yellin in Anchorage, Alaska for us.

Let's check in with Lou to see what's coming up right at the top of the hour.

We know you've got a big show coming up -- Lou.

Give a preview.

Tell us where you are.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you very much.

I'm over at the Phoenix Park Hotel in this town, Washington, D.C. , the nation's capital.

Coming up at 7:00 p.m. Eastern tonight, we're here with 47 other radio talk show hosts, all of them here to bring attention to the fact that neither Barack Obama or John McCain is standing up for the American people, standing up for border security, risking our national sovereignty and the future of the country.

We're also holding their feet to fire as fair (ph). And these other 48 talk show hosts and I have said to remind these Congressmen and this president that, yes, there is a responsibility that goes with the job for something besides special interest money and ideological reasons to avoid serving the common good in the national interests.

We'll be talking about all of that. We'll be talking about a presidential race.

Are we getting just a little too politically correct in this political presidential year for our own good?

You know, what is the big deal about lipstick on a pig and all of this other nonsense?

Let's get rid of political correctness. We'll be talking about why we need to get rid of it and start talking straight -- maybe even address a few real issues important to the American people.

That, Wolf, is coming up at 7:00 Eastern, for our Independent convention -- an Independent perspective, as always -- Wolf, back to you.

BLITZER: As always, Lou will tell us what he really thinks.

Lou, we'll be watching.

Thanks very much.

DOBBS: You got it.

BLITZER: Joe Biden's secret weapon as he prepares for his debate with Sarah Palin -- who does he have standing in for his rival?

Plus, a building collapsed. As many as a dozen people missing. We'll have the latest on the search for survivors.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is on assignment.

Fredricka Whitfield is monitoring other important stories incoming into THE SITUATION ROOM. What's going on -- Fred?

WHITFIELD: Well, Wolf, crews in Virginia have found the body of one worker inside a building that collapsed in a Richmond suburb today. They're continuing the search. It was originally feared that up to a dozen workers may have been inside when a 60-foot section of the retail and residential building under construction came crashing down -- all this happening at lunch time. The cause of the collapse is still unknown.

And deaths on U.S. oil and gas fields are rapidly rising. The Associated Press found that about 600 workers died on the job in the last five years. Since 2002, the number of annual deaths rose around 70 percent. There are several reasons to blame, including increased drilling, inexperience and drug and alcohol use.

And two Russian bombers landed in Venezuela a short time ago, according to Russia's defense ministry. Russian officials say they will take part in military training maneuvers. They're refusing to say how long the planes will be in Venezuela or whether they are armed. Washington has long been at odds with Venezuelan President Hugo Chavez and relations with Moscow have been increasingly strained since Russia's military action in Georgia last month -- Wolf.

BLITZER: Fred, thanks very much.

Let's check our Political Ticker today.

Michigan Governor Jennifer Granholm is being cast in the role of Sarah Palin to help Joe Biden get ready to debate his Republican rival. Granholm will spend four days working with Biden before the October 2nd vice presidential debate. Biden told supporters yesterday he expects Palin will try to make their face-off as personal as she can, but he contends he'll try to stay focused on the most important issues.

Remember, for all the latest political news at any time, check out CNNPolitics.com. Animal magnetism in the presidential race.

(BEGIN VIDEO CLIP)

OBAMA: You can put lipstick on a pig.

MCCAIN: Putting lipstick on a pig.

PALIN: The difference between a hockey mom and a pit bull -- lipstick.

(END VIDEO CLIP)

BLITZER: All right. The campaigns are going hog wild. We'll take you into the belly of that political beast and a special edition of Hot Shots.

That's coming up.

(COMMERCIAL BREAK)

BLITZER: Here's a look at today's political Hot Shots.

In Virginia, students in a high school leadership class talk with Senator Barack Obama.

In Philadelphia, Senator John McCain and his wife Cindy participate in a roundtable discussion at the Down Home Diner.

On Capitol Hill, the House speaker, Nancy Pelosi, greets Senator Hillary Clinton.

Also in Washington, third party candidates gather for a news conference at the National Press Club.

Some of this hour's Hot Shots -- pictures worth a thousand words.

There are plenty of political animals out there, but animals in politics -- now that's Moost Unusual, but surprisingly common in this presidential campaign.

Here to explain, CNN's Jeanne Moos.

(BEGIN VIDEO TAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Can't they just leave the animals alone?

MCCAIN: Pit bulls for Palin.

UNIDENTIFIED FEMALE: How'd she get the name Barracuda Sarah?

OBAMA: You can put lipstick on a pig...

MCCAIN: But it's still a pig.

(BEGIN VIDEO CLIP FROM "THE VIEW," COURTESY ABC)

WHOOPI GOLDBERG, CO-HOST: Poor pig.

(END VIDEO CLIP)

MOOS: If you think you're tired of hearing this joke...

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: The difference between a hockey mom and a pit bull -- lipstick.

MOOS: ...imagine how he feels.

(VIDEO CLIP)

MOOS (on camera): Now as someone with the last name Moos, way too often mispronounced moose, I think I have a right to speak for the animals.

(voice-over): They should call this Campaign Moose Hunt '08. There are moose ornaments and moose t-shirts. Bullwinkle, beware.

(BEGIN VIDEO CLIP, COURTESY BUENA VISTA TELEVISION)

UNIDENTIFIED MALE: Hey, Bullwinkle why you crying?

(END VIDEO CLIP)

MOOS: You'd cry, too, if you saw pictures like this of Sarah Palin on the Web.

FRED THOMPSON (R), FORMER PRESIDENTIAL CANDIDATE: She's the only nominee in the history of either party who knows how to properly field dress a moose.

(BEGIN VIDEO CLIP, COURTESY RNC)

UNIDENTIFIED MALE: Mother, moose hunter, maverick.

(END VIDEO CLIP)

OBAMA: Mother, governor, moose shooter.

(BEGIN VIDEO CLIP, COURTESY RNC)

UNIDENTIFIED MALE: She loves integrity, frugality and moose stew.

(BEGIN VIDEO CLIP, COURTESY BUENA VISTA TELEVISION)

UNIDENTIFIED MALE: Uh-oh.

(END VIDEO CLIP)

MOOS: Uh-oh is right -- moose, run for your life. Even goats are being scapegoated.

SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL NOMINEE: The staffer in the blue-striped shirt, I'm going to make you the goat. You pick out somebody to ask me the question.

MOOS (on camera): And look at this -- the Obama lama being sold by a supporter of Barack Obama. Sure, it makes Obama seem all soft and cuddly.

But what's in it for the lamas?

(voice-over): And even when Conan sends a canine correspondent to the Republican convention, Triumph (ph) the insult dog is loaded for bear.

(BEGIN VIDEO CLIP FROM "LATE NIGHT WITH CONAN O'BRIEN," COURTESY NBC)

UNIDENTIFIED MALE: There's a breath of freshness in the air. Her name is Sarah and she once killed a bear.

(END VIDEO CLIP)

MOOS: Maybe that's it draped over the couch in Sarah Palin's office. But holy sow! It's the pig that's really getting verbally abused.

MCCAIN: I'm going to veto every single pork barrel big spending bill.

UNIDENTIFIED MALE: Roll the barrel. Roll the barrel.

MOOS: From the pig's point of view, it serves McCain right that he bumped his head doing a photo-op with a giant boar at the Iowa State Fair.

MCCAIN: Putting lipstick on a pig.

OBAMA: It's still a pig.

MOOS: But at least it's a glamorous pig.

Jeanne Moos, CNN, New York. (END VIDEO TAPE)

BLITZER: Check out our SITUATION ROOM screen saver, by the way, and stay up to date on all the latest political news. You can download it at CNN.com/situationroom.

That's it for us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

And welcome to day three of the first televised Independent convention.

Tonight we're at the Hold Their Feet to the Fire Rally here in Washington, D.C. . Almost 50 radio talk show hosts are here in Washington, D.C. focusing on the federal government's outright failure to secure our borders and enforce our immigration laws.