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Sarah Palin Goes Global; Price of Economic Fear

Aired September 23, 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're in THE SITUATION ROOM.
Happening now: Bailout or bust, that's the dire warning for Congress from the Bush administration's economic team. But the presidential candidates are making fresh demands, saying they want to protect taxpayers.

Sarah Palin goes global. What did the vice presidential nominee get out of her talks with international movers and the shakers today here in New York? And the Iranian president railing against what he calls -- quote -- "bullying powers." Is he taking sides in the race to replace his nemesis, President Bush? We have a CNN exclusive for you. That's coming up.

All that and the best political team in television.

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

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

A disturbing new warning today of economic gloom and doom, if, if Congress fails to approve the biggest financial rescue since the Great Depression. The president's economic chief facing lawmakers worried about moving too fast, spending too much and making matters worse.

The presidential candidates taking pains today to publicize their concerns.

Our Candy Crowley and Dana Bash are standing by with what both the Obama and McCain campaigns are saying today.

But, first, let's go to CNN's Brianna Keilar. She's on Capitol Hill, where she and all of us heard some very blunt and heated testimony today -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Wolf, there are growing questions. Nobody here on Capitol Hill seems to be very happy about this proposal. And Senate Banking Committee Chairman Christopher Dodd is calling the Bush administration proposal unacceptable.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Dire warnings from the two top moneymen in America if Congress doesn't come to Wall Street's rescue. BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract. That the economy will just not be able to recover in a normal, healthy way, no matter what other policies are taken.

KEILAR: Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill selling their $700 billion bailout. But senators aren't ready to buy it.

SEN. JIM BUNNING (R), KENTUCKY: This massive bailout is not a solution. It is a financial socialism. And it's un-American.

KEILAR: Two GOP members, including the Banking Committee's top Republican, condemned the plan.

SEN. RICHARD SHELBY (R), ALABAMA: What do you say to people that ask us, or at least ask me and I'm sure others, how do you rationalize or justify a bailing out of banks and so forth that cause -- are the root cause of a lot of this problem?

HENRY PAULSON, U.S. TREASURY SECRETARY: It may make you angry and it makes me angry when you ask about the taxpayers being on the hook. Guess what? They're already on the hook. They got put on the hook by the system we have. If this system is not stabilized, they're going to bear the costs.

KEILAR: The Democratic chairman of the committee worried about rushing a bill to the president.

SEN. CHRISTOPHER DODD (D), BANKING CHAIRMAN: I understand speed is important. But I'm far more interested in whether or not we get this right. There is no second act to this. There is no alternative idea out there with the resources available if this does not work.

(END VIDEOTAPE)

KEILAR: Secretary Paulson told Congress today they need to push a bill through by the end of the week or they need to delay their planned October recess. The White House says it is unthinkable that Congress would not finish this up by the end of the week.

Meantime, on the House side, Democrats want major changes to the Bush administration proposal and they are demanding that the White House get more Republicans on board -- Wolf.

BLITZER: Brianna Keilar on Capitol Hill, stand by.

Both Barack Obama and John McCain went before the cameras today to lay down their markers for what they say the $700 billion bailout should look like.

Let's go to our senior political correspondent, Candy Crowley. She is covering the Obama campaign for us.

Candy, Obama really scrambled to get his message out today about the bailout. He knows there is huge interest and lots at stake.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely, Wolf.

He came down here to do debate preparation for this Friday, maybe to make a couple of appearances or two, but this was supposed to be downtime, but this simply is a subject a candidate can not ignore.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Candidates can't miss the story of the day, much less the story for the rest of the campaign, so Barack Obama threw on a news conference to talk bailout on Wall Street in populist terms.

First, he said, there can be no big payouts to CEOs being bailed out.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: There has been some talk that some CEOs may refuse to cooperate with this plan if they have to forego multimillion-dollar salaries. I cannot imagine a position that is more selfish and more greedy at a time of national crisis.

CROWLEY: Second, oversight of and accountability for that $700 billion, third, a Wall Street-funded program to act as insurance against another meltdown and a taxpayer dividend if the government makes a profit on the rescue plan, and, finally, a bailout within the bailout.

OBAMA: We can't simply bail out Wall Street without helping the millions of innocent homeowners who are facing foreclosure or, for that matter, are seeing their home values decline.

CROWLEY: Most of the ideas mirror the McCain plan, and, at the moment, Obama is not ready to go the barricades on this, sidestepping the issue of whether he would vote no if the bailout does not include his ideas.

OBAMA: If the plan that emerges does not address the principles that I have discussed, then I will strongly recommend to Secretary Paulson that we go back to the drawing board and find an approach that does address them.

CROWLEY: As for the effort of the bailout, the Democratic candidate says he would press ahead with spending plans for a tax cut, education, and health care, but not no matter what.

OBAMA: It would be irresponsible of me to say I am not going to take into account what things look like, should I take office.

CROWLEY: Everybody knows the price tag of the bailout, Obama said, but nobody knows the details.

(END VIDEOTAPE) CROWLEY: At this moment, it is unclear when Congress might vote on this and equally unclear whether Senator Obama would go back for it. He said if it is obvious that it will pass or be defeated, he probably won't, but, if it is very close, he would return to Washington -- Wolf.

BLITZER: All right, Candy, thanks very much.

Let's get to John McCain right now. He is doing something he has not done since August 13. That would be answering questions from the traveling press corps.

Let's go the Dana Bash. She is among those traveling press corps.

He formally had a little news conference today, Dana. What was his message?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, it's interesting, Wolf. You heard Candy mention the fact that Barack Obama had a news conference and laid out some principles that mirrored what John McCain has laid out.

His campaign, McCain's campaign, did release a statement just before McCain took the microphones and he said that -- really chiding Obama for following in McCain's footsteps. But when McCain started that press conference, in fact, his entire opening statement, it was the first time as long as I can remember that he didn't mention Obama. Instead, his focus was really on getting across his own approach.

(BEGIN VIDEOTAPE)

BASH (voice-over): At the first press conference in six weeks, John McCain tried to connect with voters by showing he understands the burden of a $700 billion bailout.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: In essence, what this plan requires is a $10,000 contribution per household in America -- $700 billion, for example, could rebuild the crumbling infrastructure in every town, county, and state in this country.

BASH: That populist rhetoric capped a day of images designed to appeal to blue-collar workers he needs to win in Ohio and Michigan, a visit to a construction site, a tour of two factories with the same promise along the way.

MCCAIN: The economy on Main Street, not Wall Street, not Washington, D.C., but Main Street, is the focus of our attention, our efforts.

BASH: McCain repeated principles he had laid out a day early, an oversight board, not the secretary treasury, in charge of the bailout, and a cap on CEO compensation.

MCCAIN: It is wrong to ask teachers and farmers and small business owners to fill the gas tanks of the helicopters of Wall Street tycoons.

BASH: He urged swift action in Congress, yet refused to answer if he would vote for a bailout package that does not include his demands.

MCCAIN: I can't say that at this time, because I think the emphasis should be on the adoption of these principles.

BASH: That non-answer is giving Democratic leaders in Washington heartburn.

SEN. HARRY REID (D-NV), MAJORITY LEADER: We need the Republican nominee for president to let us know where he stands on what we should do.

BASH: Democrats say they worry opposition from McCain could give skittish Republicans political cover to vote no, too, and leave Democrats scrambling to pass the bailout.

(END VIDEOTAPE)

BASH: Now, McCain was asked about that concern. And his response, Wolf, was that the Democrats should just focus right now on getting the best possible bill to solve this crisis.

But the reality is that from the campaign trail to Capitol Hill, everybody is having a hard time finding that balance between what they need to do politically to make sure voters don't get upset with them, but also what they need to do in terms of their jobs and government in making sure this economic crisis doesn't get a whole lot worse if they don't act very quickly -- Wolf.

BLITZER: All right, Dana, thanks very much. Dana is in Ohio, where she is going to be spending a lot of time between now and November 4. It is a key battleground state.

The mortgage crisis, by the way, helped to put the U.S. economy in peril. And now there's new evidence that the housing crunch is hurting Americans in a big way, even those who have not necessarily lost their homes. The federal government reports 19 million people, more than a third of Americans with mortgages, are -- quote -- "financially burdened" by housing costs.

You are considered to be financially burdened if 30 percent or more of your income has to go to the cost of your housing.

Let's go to Jack Cafferty. He's here with "The Cafferty File" -- Jack.

(CROSSTALK)

JACK CAFFERTY, CNN ANCHOR: How did those people get mortgages?

BLITZER: The banks gave them to them, and they shouldn't have.

CAFFERTY: And that is the problem. That is the root of 90 percent of what we're dealing with. People who never should have gotten a mortgage are now in homes with declining values. The payments go up with the escalation of interest rates. They can't make the payments.

BLITZER: But, in fairness, the banks, a lot of them misled these folks.

(CROSSTALK)

BLITZER: "You can afford this, piece of cake, an adjustable-rate mortgage."

CAFFERTY: They were called NINJA loans.

BLITZER: Yes.

CAFFERTY: No income, no job, no assets, NINJA loans.

BLITZER: Don't worry about it.

CAFFERTY: Yes. It will be OK.

The polls are tightening. And that means the stakes for the upcoming presidential debates are getting higher and higher, the first of three debates set for this Friday in Mississippi. Despite all that is already known about John McCain and Barack Obama, and God knows we have heard a bundle, presidential debates are sometimes famous for producing a moment that can change the outcome of an election. So, the pressure is definitely on.

"The Wall Street Journal" reports, Obama's advisers are looking for ways for Barack Obama to provoke McCain's anger or to show that he's out of touch with the average American. McCain's advisers are coaching him to pounce on certain phrases Obama likes to us, things such as, "As I've said before." A McCain aid told "The Journal" Obama uses that phrase on occasions where he's actually changed his mind about something.

The first debate was supposed to be about domestic issues, but both campaigns agreed that the first one will be about foreign policy. McCain's camp feels foreign policy is his strong suit. Obama's advisers want to hold off on a domestic issues debate, because they think Obama will have the upper hand in that discussion.

Here's the question: What are you going to be looking for when you watch the debates?

Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.

I wonder what kind of an audience these things are going to get.

BLITZER: Millions.

The highest rated debate ever goes back -- like, 80 million Americans were watching. I'm going to check which debate that was, but it's going to be a huge number. Friday night, it's debate night in America. And of course we will have complete coverage here on CNN.

You know that, didn't you?

CAFFERTY: With the best -- what was it?

BLITZER: The best political team on television.

CAFFERTY: Yes, yes...

(CROSSTALK)

CAFFERTY: ... be here.

BLITZER: We will be here.

We will be watching every second of that debate, and millions and millions of Americans will be watching with us. Jack is going to be back shortly.

Thank you.

The Iranian president has said lots of bizarre things over the years, but the latest, Mahmoud Ahmadinejad wants -- get this -- a three-way debate with John McCain and Barack Obama. And he explains in a "LARRY KING LIVE" exclusive interview. We're going to share that with you. Stand by.

Sarah Palin does something she has never done before. She's meeting with foreign leaders. Why does the McCain campaign want her to be seen, but mostly not heard during these meetings?

And Bill Clinton puts to rest the question many of you wonder, how he plans to help Barack Obama win.

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

(COMMERCIAL BREAK)

BLITZER: Blistering words today from Iran's president. Mahmoud Ahmadinejad told the United Nations General Assembly that the American empire in the world is reaching -- and I am quoting now -- "the end of its road." That is a direct quote.

And although he once called President Bush a wicked man, the Iranian leader apparently is refusing to take sides in the race to replace Mr. Bush.

Hours before his appearance over at the United Nations, he spoke with CNN's Larry king. Here is a little excerpt from that exclusive interview.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

LARRY KING, HOST, "LARRY KING LIVE": Do you have a preference among the American candidates? MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT (through translator): No, we do not have a preference of any sort, because we believe that these are issues relating to the domestic affairs of the United States. And decisions pertaining to that must be made by the American people.

And it is not important to us either. What matters essentially is that the president that is chosen by the American people should adopt a path and policy approach and for us to observe that policy approach.

KING: Would you like to meet with Senator McCain or Senator Obama?

AHMADINEJAD (through translator): I have said that, in fact on this very trip currently in New York, that I am ready to speak with presidential candidates before the press, with the presence of the members of the press and the media, and discuss world issues and debate them together.

(END VIDEO CLIP)

BLITZER: By the way, you can see a lot more of that exclusive interview with the Iranian president, Mahmoud Ahmadinejad, tonight on "LARRY KING LIVE." The exclusive airs at 9:00 p.m. Eastern, only here on CNN.

All right. There has been a significant developing on Capitol Hill -- a significant development happening on Capitol Hill. It's just breaking right now. We are told that House Democrats will -- repeat, will -- allow a 25-year-old ban on offshore oil drilling in the Atlantic and the Pacific to expire, to eliminate next week.

Republicans, as you know, had campaigned for lifting the ban when gasoline prices soared above $4 a gallon. The Interior Department estimates that are some 18 billion barrels of oil currently off-limits that could be recovered. But, once again, we are told that House Democrats are now going to allow a lifting of that ban. That is what the Republicans and plenty of Democrats have been pushing for. John McCain has been pushing for it.

And, now, apparently, the Democrats of the House are about to let that ban be lifted. So, presumably, over the coming years, there will be drilling, extensive drilling, off the coast of the -- the East Coast, the West Coast of the United States. It's going to be up to the states to allow that as well. We will watch this they and update you as we get more information.

Meanwhile, John McCain's running mate is here in New York City. She is meeting with various world leaders. Although the McCain campaign wants her to be seen, it appears they don't necessarily want her to be heard. One reporter even writing that the campaign is keeping an even tighter lid on reporter access to Sarah Palin than President Bush does over at the White House.

And speaking of the White House, our White House correspondent Ed Henry is here in New York. He's watching the story. All right. Explain, Ed, what is going on.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, there was a bit of controversy about just whether reporters would be allowed in to see these meetings with international leaders and Sarah Palin, little bit of a controversy. But Sarah Palin at the end of the day said everything went great.

(BEGIN VIDEOTAPE)

HENRY: (voice-over): Sarah Palin feels like she is acing her first big foreign policy test, especially after a sit-down with Henry Kissinger, where she sought his tutelage on last month's crisis in Georgia.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Yes. Yes. Good. Good.

UNIDENTIFIED MALE: OK, guys, thank you.

PALIN: Can you give me more insight on that, also?

The carefully choreographed photo-ops were largely a substance- free zone, including the one-on-one with Afghan President Hamid Karzai. The only drama, Palin tapping her heart as she learned about the president's baby boy.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: What is his name?

HAMID KARZAI, PRESIDENT OF AFGHANISTAN: Meweis (ph).

PALIN: Meweis (ph).

(CROSSTALK)

PALIN: How nice.

HENRY: Low risk for Palin. Yet, the McCain campaign tried to make it easier, initially refusing to allow reporters to join cameras in the Karzai meeting. But the five U.S. television networks threatened not to use any of the video without the presence of a reporter who might ask Palin questions. So, the McCain camp backed down and allowed a reporter in.

PAUL BEGALA, CNN POLITICAL ANALYST: If your purpose is to show that Governor Palin can hold her own in a meeting with major international figures, then let her hold her own. Don't exclude the press. Don't keep questions from being asked. Don't coddle her.

HENRY: But Republicans say, despite a mountain of media criticism, Palin is coming across as poised with the public.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: The enduring image that the McCain campaign wants left with voters is somebody who can close the stature gap, somebody who is going to stand there with world leaders, and essentially fill in that void in her resume.

(END VIDEOTAPE)

HENRY: Now, Sarah Palin today also got an intelligence briefing from Administration Mike McConnell, the director of national intelligence, pretty much standard operating procedure for candidates on both sides at this stage of the campaign. But it coming now, while she is in New York with these international leaders, just shows this campaign right now wants to really try to beef up her resume.

BLITZER: She is really studying. Her head must be ready to explode pretty soon. She is getting all these briefings from McCain's national security advisers, foreign policy advisers. Now she gets this briefing from the director of national intelligence.

It is rather a different kind of environment for this governor of Alaska.

HENRY: Absolutely is. And it is all aimed at getting her ready for that big vice presidential debate next month. There is only one of them with Joe Biden. He is the chairman of the Senate Foreign Relations Committee. She's got to be ready on the foreign policy front.

BLITZER: Not next month. It's next week, if you think about it.

(LAUGHTER)

HENRY: Yes.

BLITZER: It will October next week.

Thanks very much, Ed, for that.

He was scheduled to be executed just moments from now, but there's a legal twist. The latest on the fate of a Georgia man sitting on death row. We will explain.

And three days from now, the presidential race could change dramatically. Barack Obama and John McCain hope to change things in their favor when they debate Friday night. It is debate night in America.

And Joe Biden is critical of his own campaign, then backtracks. And now some are wondering, is he is a drag on the Democratic ticket?

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

(COMMERCIAL BREAK)

BLITZER: It is a ticking time bomb here in the United States, federal officials warning of deep recession and worse, without a financial bailout in the coming days. The best political team on television is standing by to consider the price of economic fear.

Plus, countdown to the first presidential debate. With three days to go, does John McCain or Barack Obama have an advantage right now?

And the Bill Clinton factor. He is making the TV rounds. Will that help Barack Obama?

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

(COMMERCIAL BREAK)

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

Happening now: slip-ups on the campaign trail. Joe Biden calls his own campaign ad -- and I am quoting now -- "terrible." We are going to tell you about some other comments as well. Could they be hurting more than helping Barack Obama? Stand by.

Dire warnings from the government's top economic officials today, what they say will happen to the American people and the U.S. economy if Congress does not quickly approve that $700 billion bailout plan.

And the first presidential debate. In such a close race, what are the stakes for the first showdown between Barack Obama and John McCain? All of this, plus the best political team on television.

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

Democratic vice presidential nominee, Senator Joe Biden, is well- known for making some off of the cuff comments, some of which are coming back to bite the Obama campaign right now.

Let's go to Brian Todd.

He's working the story for us -- Brian, how big of a problem is this for the Obama camp?

BRIAN TODD, CNN CORRESPONDENT: Well, outwardly, Wolf, they're portraying it as no problem at all. Today, the word we've heard them use several times to describe Joe Biden -- authentic. They are pointedly trying to turn his unguarded remarks to their own advantage.

(BEGIN VIDEOTAPE)

SEN. JOSEPH BIDEN (D), VICE PRESIDENTIAL NOMINEE: But unfortunately...

TODD (voice-over): Joe Biden on message -- broadsiding his opponents on the economy, health care and, for good measure...

BIDEN: We will end this war.

TODD: Just the response the campaign hopes for, because this can be Joe Biden unscripted.

(BEGIN VIDEO CLIP FROM THE "CBS EVENING NEWS," COURTESY CBS)

BIDEN: I thought that was terrible, by the way.

(END VIDEO CLIP)

TODD: Criticizing an ad from his own campaign about John McCain's computer illiteracy in an interview with CBS News. Biden then issued a statement saying: "I was acting about an ad I'd never seen, reacting merely to press reports."

Earlier, Biden said the government shouldn't bailout financial giant AIG. Later, on NBC's "Today Show," his running mate implied Biden had spoken too soon.

(BEGIN VIDEO CLIP FROM "TODAY," COURTESY NBC)

SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: I think that in that situation, I think Joe should have waited, as well.

(END VIDEO CLIP)

TODD: Campaign aides say Biden later got on the same page with Obama, saying he wants more facts before taking a position on AIG.

But these episodes shows that the folksy, plain-spoken Joe Biden, seen as refreshing on the stump, has a flip side -- the propensity to blurt out comments that get him into trouble and have prompted the Republicans to create a Biden gaffe clock.

Will the campaign make the esteemed senator stick to script?

Biden didn't speak to us at this event. But aides say he's done more than 80 interviews since being selected as Obama's running mate and they're not about to repackage Joe Biden.

STEPHANIE CUTTER, OBAMA CAMPAIGN SENIOR ADVISER: This is a guy who stands by who he is and will say what's on his mind. He is authentic and he is real and he is honest.

TODD: And they say he's connecting with the audience they need to reach -- working class voters who had supported Hillary Clinton.

But given his gaffes and the rock star perception of Sarah Palin, is Joe Biden bringing down the Democratic ticket?

WALTER SHAPIRO, SALON.COM: I don't think he is becoming a drag. To a large extent, vice presidential candidates only matter at the margins. Even Sarah Palin, when the dust settles, will probably be most important about bringing home the Republican base to John McCain, not changing the allegiance of persuadable voters in the center.

(END VIDEO TAPE)

TODD: Focusing on the base, not worrying so much about the press traveling with them -- a tactic used by both vice presidential teams now, apparently.

Sarah Palin has never given a news conference since she was selected. Biden hasn't given one in two weeks.

In Biden's case, we're told that's because he's preparing for his debate with Palin -- Wolf.

BLITZER: Brian Todd with that story.

Thank you.

Let's get back to our top story right now. The Treasury secretary and the Federal Reserve chairman on Capitol Hill today, strongly appealing to skeptical lawmakers to quickly approve a massive Wall Street bailout.

Let's discuss explore that and more with the senior political analyst, Gloria Borger; Michael Gerson, he's a senior fellow at the Council On Foreign Relations, a former speechwriter for President Bush and he's a syndicated columnist; and our chief national correspondent, John King.

Gloria, I want you and everyone to listen to Ben Bernanke, the chairman of the Federal Reserve. He's warning of a recession and maybe even worse if Congress fails to act right away.

Listen to this.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I believe that if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover in a normal, healthy way, no matter what other policies are taken.

(END VIDEO CLIP)

BLITZER: All right. Gloria, this kind of warning from the Federal Reserve chairman, the Treasury secretary, the president of the United States -- it seems to be coming up with some serious resistance not only from Democrats, but plenty of Republicans, as well.

GLORIA BORGER, SENIOR POLITICAL ANALYST: Nobody in Congress wants to vote for a bailout bill this size, Wolf. Whether you're a Democrat or you're a Republican, it's not easy to spend this kind of money. They certainly don't want to give a blank check to the Treasury or to anyone, for that matter. But I think in the end -- and, you know, there have been a lot of tough meetings today. The vice president had a very tough meeting with House Republicans, who are balking at this.

But I think in the end, given the tenor from the presidential candidates we heard today, they're probably going to hold their noses and vote for it.

BLITZER: I guess, John, a lot of Democrats and plenty of Republicans will be looking to Barack Obama and John McCain for a cue, because these two guys, as well as Joe Biden -- they're all senators -- they, in the end, are going to have to vote yea or nay.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And both of them, Barack Obama and John McCain, have essentially given the green light to Democrats and to some Republicans in Congress who are being skeptical of the original administration proposal, saying you need restrictions on CEO pay, no golden, you need other -- more oversight.

Senator McCain came out early saying he doesn't trust the Treasury secretary. He said it's not personal, he just doesn't trust one person in charge of such a big program.

And, Wolf, I can tell you, out here in the states, you're seeing the domino effect of this. And remember, it's not just a presidential election year, it's a Congressional election year, too.

I've been in Indiana, Ohio, Michigan, now here in Colorado. Pick up the local news newspaper every time, not only is this front page news, but the ramifications for state budgets -- they say all these states are going to have shortfalls because of the struggling economy, and that means either fewer services or higher taxes.

BLITZER: Michael, you've watched these kinds of situations unfold, albeit maybe not with the enormous ramifications economically of this one.

What do you think is going to happen?

MICHAEL GERSON, COLUMNIST FOR "THE WASHINGTON POST," SENIOR FELLOW AT THE COUNCIL ON FOREIGN RELATIONS: Well, I think the Congress is going to express its skepticism. It's going to demand some changes. And then it's going to be forced to approve it. I mean this is a case where -- you know, the testimony today described a financial precipice that could, you know, bring down many institutions -- not just banks, but many of our largest companies.

And it...

BLITZER: And it's fair to say, Michael, I think you'll agree that when you hear it from Ben Bernanke and from Henry Paulson, they have a lot of credibility with a lot of members. If it were just President Bush or even Vice President Cheney, for that matter, it would not necessarily have that credibility, given the current environment is that right?

GERSON: No, I think that's exactly right. I think, in the end, up or down vote, Congress has to vote for something active and large.

BLITZER: Guys, stand by. We're going to take a quick break but we have a lot more to discuss, including Bill Clinton -- to what extent does Bill Clinton plan to campaign for Barack Obama in these final six weeks?

The election six weeks from today. The former president speaks to CNN's Larry King. We'll have a clip of that.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: We're going to have to make this election about something real -- who's on your side, who's for your future, who would be best for America and for the world, who's going to bring back the American dream and define it in 21st century terms so that it's really achievable for people and who's going to restore our standing in the world.

LARRY KING, HOST: And you're going to vigorously campaign?

Is that a correct word, vigorously?

B. CLINTON: Yes, I think that's fair.

(END VIDEO CLIP)

BLITZER: All right, Bill Clinton speaking with our own Larry King. They taped that interview today. It will run tomorrow night on LARRY KING LIVE.

Tonight, Larry has an exclusive with Mahmoud Ahmadinejad. Larry King clearly getting the big, big gets.

John King, what do you think -- how much of a role, how much of an impact can the former president, Bill Clinton, have in trying to help Barack Obama in these final six weeks?

KING: Well, Wolf, we for weeks now have heard Bill Clinton and Barack Obama talk about that he will get out there and campaign. The question is when.

His big global initiative conference is the next week -- this week and next week in New York, I believe. And then he says he will get out.

I know from traveling, again, in Southeast Ohio, down in the state of Florida, there are many places where Democrats and the Obama campaign specifically say Bill Clinton will be coming and can be of help.

I think where he can be of most help might be in that economic language you just heard. Both John McCain and Barack Obama are creatures of the United States -- Obama less so because of his less experience there. But governors win presidential elections for a reason. They are closer to voters and they talk about the economy in a way that makes more of a connection than either of these candidates have made in this election so far.

I think Obama could learn a little bit from Bill Clinton in 1992 and now.

BLITZER: Hew knew how to tell the Americans he feels their pain, Gloria. He's a unique politician in that sense and he could certainly help Barack Obama a great deal in some of these battleground states, if it comes down to his readiness to do so. BORGER: Sure. He's also a reminder of the prosperity of the '90s. And, you know, it was hard to miss the symbolism when Barack Obama rolled out his economic team the other day and they were all folks from the Clinton administration -- Bob Rubin, Larry Summers, former Treasury secretary.

So it's clear that when Bill Clinton goes out there, he can talk about the economy in a way that nobody else can, because he's a lot of credibility on it, because people remember that they we were doing better in the '90s.

BLITZER: And look at these poll numbers, Michael. It's about as close in these battleground states as it can get six weeks out. In Pennsylvania right now, 47 Obama, 45 McCain, 8 percent unsure.

Let's take a look at Florida right now. In Florida, 46, 46, 8 percent unsure.

And in Colorado, which is a clearly a battleground state right now, and John King is there, 49 percent for Obama, 45 percent for McCain, 6 percent unsure.

All right, John, pick up the thread that we're trying to underscore right now. This is so close, but a lot of people are saying you know what, it may even be closer in some of these states because of this hidden racial factor -- people are reluctant to say they're not going to vote for an African-American candidate.

Are you seeing that?

Are you feeling it out there, because you've been on the road now for days?

KING: You do sense it, particularly among older Americans, a hesitance. They've never voted for an African-American for city council, for mayor, for governor, in many of these very white communities we visited -- small rural communities especially, but also some blue collar communities. We will study that intensely over the final month. I think that is a key question in the campaign.

But as you mention all these states, Wolf, what it tells you how competitive it is. And what we're noticing is the advertising is intensifying, the negativity is intensifying. But, also, when you go to headquarters, the phone banking, the canvassing, the radio ads and the direct mail -- the intensity of this campaign...

BLITZER: All right...

KING: ...so many states are in play late, it puts a premium on resources. And Barack Obama has more than John McCain.

BLITZER: What do you think about these final six weeks, Michael?

GERSON: Well, I think there may be a racial element out in Colorado in particular, and other states, but it's not being an African-American. It's whether the Republicans are losing ground among Hispanics. And McCain is doing less well in Colorado, which is about 12 percent Hispanic, than Bush did in 2004. That could be important.

I would also say that the first debate is going to be essential. Traditionally, the first debate can move numbers 4 points or more -- the winner often gets in these circumstances because -- and it sets a narrative moving forward.

So I -- you know, I think the stakes will be high in this first debate, as well.

BLITZER: Guys, we've got to leave it there.

Thanks very much.

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

What are you working on -- Lou?

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

We are also working on a preview of the upcoming debate. The Bush administration today trying to convince members of Congress to push through the biggest government bailout in history. And don't look, please, but even Republican members of Congress are calling the plan un-American.

And guess who's intimately involved in the crafting of that bailout plan?

Oh, it's our good friends, the corporate lobbyists, who are representing the very banks that helped create this crisis and who need the bailout.

And a common sense program that actually works to help enforce immigration laws and to secure this country.

So what is what's Washington's response?

Well, the Democratic leadership of this Congress wants to kill it. We'll have that special report.

And among my guests here tonight, Professor Peter Morici of the University of Maryland and Martin Eakes of the Center for Responsible Lending. They have some strong views on this bailout attempt.

And three of the most popular radio talk show hosts in the country join me to tell us what their listeners think of this bailout, the candidates' response and, of course, the liberal media's attacks on Governor Sarah Palin, among other things.

Join us for all of that at the top of the hour right here on CNN; for all the day's news, as well, with an Independent perspective -- Wolf, back to you.

BLITZER: See you in a few moments, Lou.

Thank you.

Coming up, hanging around upside down for two days.

Take a listen.

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN CORRESPONDENT: Your eyes are definitely bloodshot.

UNIDENTIFIED MALE: I think they're a little nasty if you look at them.

MOOS: Yes.

(END VIDEO CLIP)

BLITZER: Our own Jeanne Moos -- she's hanging out with David Blaine, as he attempts a dizzying, dizzying new feat.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Ten people were killed today when a gunman opened fire at a college in Southwestern Finland. Authorities say the gunman left a trail of videos on YouTube.

Our Internet reporter, Abbi Tatton, is joining us.

She's got more on this devastating story.

What do these videos show -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it was just yesterday that Finnish police had questioned the suspected gunman about these -- videos that he had posted on YouTube. They appear to show the gunman himself, Matti Juhani Saari. He's shown in the videos shooting a gun at a shooting range. Other videos that are too disturbing to show, show him pointing the gun at the camera, shooting as he says, "You will die next."

And looking at his YouTube page, he lists some of his favorite videos. Amongst them, a video showing the Columbine shooting.

Now, authorities questioned shim yesterday, but released him. And it seems that today we walked into a technical college and killed 10 people before shooting himself.

These videos have now been removed by YouTube. We looked at them. No hint of a motive in there. But that account now suspended -- Wolf.

BLITZER: Sick, sick, sick.

All right, Abbi.

Thank you.

Let's check back with Jack for the Cafferty File -- Jack.

CAFFERTY: A big night Friday, Wolf. The question this hour is -- what are you going to look for when you sit down to watch the debates on CNN?

Anne writes in Seattle: "I'm looking for a revealing engagement that may encourage voters to take off their blinders. After all, this isn't a game show or a soap opera, but rather a significant glimpse into America's future."

Pam writes: "I'll be watching to see how much aggression versus diplomacy I hear from John McCain and how much actual knowledge Barack Obama has."

Tom in Pasadena, California: "I want Obama to bring up the fact that John McCain remains the only presidential candidate to have ever been formally reprimanded by the Senate Ethics Committee for exercising poor judgment. If this happened to Obama, the Republicans would be beating him over the head with it."

Gene writes: "If Obama gives even one intelligent answer, I'm going to start looking for the teleprompter."

Brian says: "The Obama/McCain debate -- boring. But Sarah Palin/Joe Biden -- I can hardly wait. What a train wreck that will be. I'm already laughing."

Russ in Johnstown, Iowa: "I'll be looking for millions of voters to wise up and realize that both Republicans and Democrats have gotten us into the situation we're in. They're really not that much that -- not that much different and it's time to vote for anyone other than a donkey or an elephant."

J.D. in North Carolina says: "I'm going to look for a little radio unit underneath John McCain's coat."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there, among hundreds of others.

Wasn't there a suspicious lump under George Bush's jacket during one of the debates?

BLITZER: Yes. And they thought that there were some wires secretly implanted and leading up to his ear, giving him coaching and stuff like that. Just a wrinkled -- a wrinkled jacket.

CAFFERTY: Yes. Yes, sure.

BLITZER: All right, Jack.

Stand by. We'll see you back here tomorrow. On our Political Ticker, the son of the late televangelist Jerry Falwell is trying to keep Virginia a red state. Liberty University Chancellor Jerry Falwell, Jr. , is trying to get more than 10,000 students at the Christian college to register to vote. Falwell says if the students -- the students would be more likely to vote if they're registered in Lynchburg, where they go to school. And presumably they'd vote for Falwell's candidate. That would be John McCain.

Remember, for the latest political news any time, check out CNNPolitics.com. The Ticker is now the number one political news blog out there on the Web.

David Blaine is leaving us hanging. Jeanne Moos has a Moost Unusual look at what the magician is up to right now.

And gentlemen, start your mowers. We'll have a look at our Hot Shots.

That's coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the Hot Shots coming in from our friends at the Associated Press -- pictures likely to be in your hometown newspapers tomorrow.

In Iraq, a woman carries a box with humanitarian aid given by the Iraqi Red Crescent.

In Russia, the president, Dmitry Medvedev, stands next to an excited citizen as he tours a deer farm.

In Virginia, David Balderson test drives one of his racing lawn mowers in preparation for a race.

And in India, a white tiger takes a dip in the water over at the zoo.

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

The daredevil magician, David Blaine, is enjoying a Moost Unusual view of New York's Central Park. And Jeanne Moos tells us all about it.

(BEGIN VIDEOTAPE)

MOOS (voice-over): David Blaine has survived water, ice, burial and now, hanging around upside down?

(on camera): This is your view of the world now.

(voice-over): OK, it may not look like much, but you try hanging upside down for two-and-a-half days.

UNIDENTIFIED MALE: Five stories high. MOOS: Actually, it was usually closer to five feet. To pass the time dangling above Central Park, Blaine poses with fans. He signs autographs.

Is he reading a newspaper?

UNIDENTIFIED FEMALE: When I saw him reading the paper I said that this guy is crazy.

MOOS: Actually, that was just a photo-op for the paper he was holding. Blaine is constantly giving interviews upside down. Kelly Ripa had the most unusual one.

(BEGIN VIDEO CLIP FROM "LIVE WITH REGIS AND KELLY," COURTESY ABC)

KELLY RIPA, CO-HOST: How are you?

Hello.

(END VIDEO CLIP)

MOOS: And when they threw it back to Regis in the studio...

(BEGIN VIDEO CLIP FROM "LIVE WITH REGIS AND KELLY," COURTESY ABC)

REGIS PHILBIN, CO-HOST: Incidentally, David, check me out. This is -- this is a piece of cake.

What's the problem?

(END VIDEO CLIP)

BLITZER: The problem, say doctors, could be stroke or blindness.

(on camera): Your eyes are definitely bloodshot.

BLAINE: I think they're a little nasty.

MOOS (voice-over): So don't try this at home, like a Pittsburgh radio D.J. known as Bubba did.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM/894 RADIO)

UNIDENTIFIED MALE: Are you an illusionist or a magician, Bubba?

BUBBA: I'm an idiot.

(END VIDEO CLIP)

MOOS: Within minutes, Bubba turned red, felt dizzy and soon couldn't take it anymore.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM/894 RADIO)

UNIDENTIFIED FEMALE: Lie down on the floor. He's done. He's out.

UNIDENTIFIED MALE: He's out.

How long did he last?

UNIDENTIFIED FEMALE: Sixteen.

(END VIDEO CLIP)

MOOS: A mere 16 minutes. Now imagine two-and-a-half days -- though Blaine does get to be upright for bathroom breaks to attend to his catheter. He stopped eating solids 10 days ago to eliminate elimination. There he hangs night and day, still sharp enough to try and steal my watch as he held my arm to stay steady.

(on camera): You've just undone my watch.

You're trying to steal it, aren't you?

BLAINE: I need to make a living somehow.

MOOS: Yes.

(voice-over): He does crunches to lift his head upright and moves his legs around to help work circulation. Houdini sometimes worked upside down, but was trying to get out of a straightjacket as fast as possible. Watching a guy dangle for hours -- not quite so riveting. At least we can ask incisive questions.

UNIDENTIFIED FEMALE: How is it hanging?

UNIDENTIFIED MALE: How is it hanging?

UNIDENTIFIED MALE: How are they hanging?

MOOS (on camera): No, no, no, no. That's not right. No.

(LAUGHTER)

MOOS: No, no, I didn't mean they. I meant -- no, no.

UNIDENTIFIED MALE: What's your name?

MOOS (voice-over): It's Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: That is a Moost Unusual story. We can testify to that.

Thank you, Jeanne, for that.

We want you to check out our political pod cast. This is what you do. To get the best political team to go anytime, anyplace, you can subscribe at CNN.com/situation room. That's what you need to do.

Remember, these programming notes. Tomorrow here in THE SITUATION ROOM, I'll be speaking with Al Franken, by the way, the Democratic Senatorial candidate in the state of Minnesota. That interview tomorrow with Al Franken.

Later tonight, Ahmadinejad -- Mahmoud Ahmadinejad, that is -- the president of Iran, he'll be among Larry King's exclusive guests this week.

Tomorrow night, Larry has a good guest, as well, the former president of the United States, Bill Clinton.

Ahmadinejad tonight, Bill Clinton tomorrow night, 9:00 p.m. Eastern on LARRY KING LIVE.

Until then, thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

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

DOBBS: Wolf, tonight the Bush administration is trying to persuade members of Congress to rapidly push through the biggest government bailout in history -- three pages worth. But even Republican members of Congress are calling the plan simply un- American.

And tonight, guess who's intimately involved in crafting that bailout plan?

The very same people we've been warning you about now for years -- the powerful corporate lobbyists who represent the very banks that helped create this crisis and who, of course, would be receiving much of the money, are trying to shape the legislation.