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THE SITUATION ROOM

All Eyes on $700 Billion Cliffhanger; Sarah Palin Under Enormous Pressure for VP Debate; McCain targets Colorado, Obama Talks Jobs in Michigan

Aired October 2, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, many Americans are holding their breath. The House will soon vote on the Wall Street bailout plan. It could decide whether credit again flows freely or remains frozen to businesses and everyday Americans.
One conservative TV and radio talk show host says John McCain's vote for this bill is a game-changer. Wait until you hear what Glenn Beck has to say.

And Americans are counting down to the political showdown in St. Louis. Sarah Palin versus Joe Biden, unscripted, unedited, and under lots of pressure to win.

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

The financial drama gripping America is now a full-blown political cliffhanger. Four hundred thirty-five lawmakers hold the fate of the Wall Street bailout plan in their hands. Members of the House of Representatives will likely vote on the plan tomorrow.

How they vote will likely determine if there's a thaw in a frozen credit market that will allow Americans to start buying cars, homes and, in some cases, keeping their jobs. The Senate approved the $700 billion plan last night, adding some sweeteners though to make it easier to swallow for House lawmakers who voted against it only three days ago.

Meanwhile, President Bush has a message for lawmakers tempted to vote no. The whole country, he says, is watching.

CNN's Jessica Yellin is joining us now from Capitol Hill with a lot more.

All right, Jessica. What are they saying? Is it a done deal? Will this legislation pass tomorrow?

JESSICA YELLIN, CNN CORRESPONDENT: Not at all clear at this moment, Wolf. Right now Democrats seem to feel very confident that they are holding on to their members, maybe even gaining a few extra "yes" votes. But all eyes are on Republican House members.

As you know, they need to pick up extra votes, at least 12. And at this moment there's just no indication that they are there. You call around, talk to people, everyone says they're trying to figure out who is going to switch. In fact, a group of House Republicans just spoke moments ago, saying they're very dissatisfied with what the Senate has done to the bill. They believe some of their members may even change "yes" votes to "no."

Let's listen.

(BEGIN VIDEO CLIP)

REP. STEVEN LATOURETTE (R), OHIO: The number $700 billion continues to be difficult for us, and it's difficult because nobody can seem to explain why the secretary needs $700 billion.

REP. SPENCER BACHUS (R), ALABAMA: It is my belief that we all need to be prudent despite what popular opinion may be.

REP. FRED UPTON (R), MICHIGAN: And some of this junk that should not be part of it will be taken out.

REP. DAVID HOBSON (R), OHIO: I think the Democrats and Republicans are in agreement about are things arriving at midnight and being dumped into bills. That's what we've got here, and that's what I'm outraged about. And that's why I hope other people who voted yes may be reconsidering where they are.

(END VIDEO CLIP)

YELLIN: Now, Wolf, these folks are proposing certain changes to the bill. It's not likely to happen, but it's just a bad sign for the overall progress on all of this. House leaders have said if they don't have the votes going in, if they're not certain, they'll reschedule tomorrow's planned vote -- Wolf.

BLITZER: They're already still tabulating the final results, Jessica, the Dow Jones industrials. But look at it right now, 348 points down. This even before the House votes once again.

I take it though unless they know for sure it's going to pass, the Republican and Democratic leadership, they're not going to let it even come up for a vote. Is that right?

YELLIN: That's correct. And members are yet to come back to town. They should be here around 5:00 tonight. They'll have a better sense then where they stand.

But you're right, no vote tomorrow unless they're certain it will pass.

BLITZER: All right. Jessica Yellin, stand by.

Brian Todd, by the way, is going to have a lot more on this story coming up, including the pork that was inserted in the Senate bill that passed last night. How is that going to impact what the House members do. This cliffhanger will surely hang over another event virtually all Americans will be watching. That would be tonight's vice presidential debate. It's now under only five hours away, and it will pit a governor criticized for not always understanding her running mate's record against a senator criticized for not always agreeing with his running mate's record.

We're covering both sides of this debate between Sarah Palin and Joe Biden. Dana Bash and Suzanne Malveaux are both in St. Louis.

Let's start off with Dana.

All right, Dana, set the stage for us. Sarah Palin is under enormous pressure going into this 90-minute debate tonight.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: She certainly is under enormous pressure, Wolf. And it's actually interesting, as we are just hours away from this debate, we have news from the McCain campaign, and that news is that they have decided to pull their resources out of the state, what had been thought of as the battleground state of Michigan.

Now, Michigan, Wolf, that hasn't gone Republican for two decades, but it has been a state where John McCain has spent a lot of time. And in fact, it is a state where the McCain campaign thought Sarah Palin could help them.

Republicans up in Michigan thought that because she is a hunter, many Michigan voters are hunters, because she appealed to social conservatives up there who are swing voters, that that could help. But what this move shows us on the eve of this debate is that the economy, especially in a state like Michigan, where it has been in trouble for years, the economy right now trumps all.

(BEGIN VIDEOTAPE)

BASH (voice-over): In the battleground Midwest, where undecided voters relate to Sarah Palin's distinctive accent and love for guns, you still hear this...

UNIDENTIFIED FEMALE: I just think she's really a breath of fresh air.

BASH: But you also hear this...

UNIDENTIFIED FEMALE: I wish McCain would have picked a better running partner, because I think she's not experienced enough.

BASH: Advisers prepping Palin say their urgent goal for tonight's debate is to restore two things...

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I was just your average hockey mom.

BASH: ... the connection she initially established with key voters and energized the base, and confidence in her ability to lead after several shaky interviews.

KATIE COURIC, "CBS EVENING NEWS": What other Supreme Court decisions do you disagree with?

PALIN: Well, let's see.

BASH: Evidence of camp McCain's concern, on CNN's "AMERICAN MORNING," McCain was never asked about Palin's experience or leadership, but repeatedly brought it up.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Look, the fact is that she'll do fine tonight. She has experience, she has talent. She has leadership. She has great inner strength. She has an ability to lead that's been proven.

BASH: McCain aides admit Palin has spent countless hours since she was picked cramming on subjects she's never dealt with, from North Korea to the Mideast. But while the issues are more vast and the stage much larger, the reality is Palin participated in some two dozen debates in Alaska and held her own.

PALIN: You're referring to those native leaders as the fringe? I think that that's disrespectful to those who are ready to try a new approach, resolving to resolve the issue.

UNIDENTIFIED MALE: Well, I think they've set expectations perfectly. I mean, you guys have all fallen for this trick that she's not capable of putting two sentences together, and I think she's going to prove to people that she is.

(END VIDEOTAPE)

BASH: Now, I'm here in the spin room, Wolf, but there was an actual moment of candor earlier here today. Joe Lieberman, one of John McCain's closets confidantes, admitted that he was quite concerned about Palin, and that is why he said tonight is so important for her.

He also said he met with her earlier this week and told her just to be herself. Advice that she has gotten from a lot of corners. But, you know, what aides say, Wolf, is that they are hoping that tonight voters will see her for 90 minutes unfiltered, and that could change -- they hope it will change the way voters perceive her, especially given the fact that they have really seen her in a high- profile profile way in some of these interviews that haven't gone so well in the past couple of weeks -- Wolf.

BLITZER: Dana Bash is in St. Louis for us, at the debate at Washington University in St. Louis. Dana, thanks. Stand by.

Joe Biden and his wife Jill have just arrived in St. Louis. There they are getting off their plane. He's under a lot of pressure tonight, as well, going into this debate.

Suzanne Malveaux is also in St. Louis watching what's going on. All right, Suzanne. Tell us the amount of pressure that Joe Biden is under.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, he really does need a strong debate performance. Sorry, I'm hearing a little bit of echo in my ear here. But they are confident that they are going to get that kind of performance.

This is something that they say he's very knowledgeable, international affairs, as well as domestic. He spent the day rather relaxed with his family at home before he arrived here in St. Louis. This is something that he has been preparing for.

I talked with the spokeswoman Linda Douglass of the Obama campaign, and essentially the goal here tonight is to set up a contrast between the Obama/Biden camp and that of McCain/Palin.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Joe Biden in top debate form. This zinger to Rudy Giuliani...

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: There's only three things he mentioned in the sentence, a noun and a verb and 9/11. I mean, there's nothing else. There's nothing else.

MALVEAUX: Now he's ready to take on Sarah Palin, but the campaign says he won't go after her on her experience or personal life. The strategy is to link Palin to John McCain, McCain to George Bush.

LINDA DOUGLASS, OBAMA SR. ADVISER: It's John McCain's ticket. She is going to be his partner in this, and they will continue the economic and foreign policies that have failed so badly in the last eight years.

MALVEAUX: Biden is expecting Palin will hit him with sharp, pointed attacks. But his aides have advised him, don't take the bate, stick with the substantive issues.

Already, some Palin supporters have charged Biden with sexism, but aides say he's not worried. He's been sparring in debate prep with Michigan Governor Jennifer Granholm, who played Palin, and he's reached out to Senator Clinton for advice.

DOUGLASS: He's a senator who has debated some of the strongest women senators in the United States Senate -- Dianne Feinstein, Barbara Mikulski, Kay Bailey Hutchison. He debated Hillary Clinton 12 times in the primary. He's very capable and comfortable debating a woman.

MALVEAUX: But Democrats are taking nothing for granted, setting the bar high for Palin in the hopes she'll stumble and make Biden the easy winner.

BIDEN: I have great respect for -- what I hear and watch some of the debating skills of Governor Palin. I think it's going to be a really tough debate. (END VIDEOTAPE)

MALVEAUX: So Joe Biden on his way here. The first thing he's going to do is stop at the hall. He's going to do some checks, a walk-through, if you will, of the room beforehand.

I spoke with Douglass about his propensity for these gaffes, if you will, to misspeak. And she said they're not concerned about that. They say he speaks from the heart, he speaks from the gut, that he's authentic. And she says that is the reason why that he will really reaches out, relates to what they say are average voters. So we'll just have to see, Wolf, whether or not that happens and whether or not that plays well with those groups -- Wolf.

BLITZER: There are going to be tens and tens of millions of folks watching this debate tonight. Suzanne's already there, getting ready for it as well. Suzanne, thank you.

Jack Cafferty is off today.

We're counting down to tonight's huge vice presidential debate, only a few hours away. Straight ahead, we'll speak with religious broadcaster Pat Robertson. He's here in THE SITUATION ROOM, and you might not believe what he has to say about Sarah Palin.

(BEGIN VIDEO CLIP)

PAT ROBERTSON, RELIGIOUS BROADCASTER: She's got some briefing books she's going to have to bone up on. You know, when you're up in Alaska, you're thinking of different problems.

(END VIDEO CLIP)

BLITZER: Pat Robertson is here to explain what he means by all of that.

And conservative radio TV host Glenn Beck says John McCain will have serious problems after voting for the bailout plan last night. Glenn Beck will be joining us live.

And attorneys for a U.S. senator mired in scandal accuse the other side of dirty tricks. Now, will the corruption case against Senator Ted Stevens be dropped?

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

(COMMERCIAL BREAK)

BLITZER: The fate of the Wall Street bailout plan is uncertain right now. The House of Representatives is set to vote on it after the Senate approved it last night.

John McCain was one of the U.S. senators voting for it. My next guest says that could spell some political problems for Senator McCain.

Glenn Beck is a conservative radio talk show host. He's also part of our CNN family. He's got a show on Headline News.

Glenn, thanks very much for coming in.

GLENN BECK, HEADLINE NEWS: You bet.

BLITZER: All right. What about the decision that John McCain made last night to vote yea in favor of this legislation?

BECK: I think he lost the election. There was a moment here for somebody to rise up as a leader. You have 9-1 calls coming into the Capitol building saying this is outrageous.

This bill was bad last week. This bill that they passed last night is outrageous. The things that they put into this bill, when people really find out, for those who don't know already the things that are in this bill, this is the problem with Washington.

You're asked (ph) and told this is the most important thing that we have voted on. This could mean the collapse of our economy if we don't do it. And they put earmarks on it, and "Captain Earmark" doesn't step to the plate?

BLITZER: He -- let's give you an example. I'll put up on the screen some of the stuff...

BECK: Sure.

BLITZER: ... that was inserted by the Senate. An exemption from excise tax for certain wooden arrows designed for use by children.

BECK: That's important, that one. Yes, I like that one.

BLITZER: We're going to talk about these.

Cost recovery period for motorsports racing track facility. An extension on rebate against excise taxes charged on rum imported from Puerto Rico and the Virgin Islands. An extension and modification of duty suspension on wool products.

BECK: Yes.

BLITZER: Now, it was a three-page piece of legislation when the Bush administration initially introduced it. It became 100 pages when the House rejected it. And now it's 400 pages going from the Senate back to the House of Representatives.

BECK: Can you imagine if we could get it to a 1,000 pages how good it would be?

BLITZER: There would be a lot more stuff.

BECK: Yes.

BLITZER: And what you're upset about is this sound bite from John McCain. I'm going to play it for viewers and then we'll talk. Listen to what he said only a few days ago about the conditions that he wanted to make sure he would vote for this legislation.

BECK: OK.

(BEGIN VIDEO CLIP)

MCCAIN: It's completely unacceptable for any kind of earmarks to be included in this bill. It would be outrageous for legislators and lobbyists to pack this rescue plan with taxpayer money for favored companies. This simply cannot happen.

(END VIDEO CLIP)

BECK: Boy, he's a powerful force now, isn't he? Don't mess with John McCain.

BLITZER: After he picked Sarah Palin, you said you were for that ticket, right?

BECK: Absolutely. I'm for -- you know what? Unleash Sarah Palin.

They have done everything they can to destroy Sarah Palin. And I don't mean the media. I mean the people in the McCain campaign.

Stop -- let her make a mistake. You know what? Joe Biden makes mistakes about every 15 minutes. Let her make a mistake.

If she doesn't know, oh, well. You know, she knows who she is. And what we are looking for is someone genuine, somebody who says what they mean and mean what they say, period. That's what we're looking for. So here's this guy saying, boy, that's unacceptable, yet he votes for it?

BLITZER: And you believe that cost him the election?

BECK: Yes, I do. I do, because I think anybody who was casually watching this bill, you're watching this and you're saying, OK, I'm not sure. I don't think I'm for this bill. I know I'm afraid of this and that and this. But you know what? Maybe if you give it to me cleanly, it would be OK.

But this bill is an absolute outrage to any taxpayer. They proved themselves to be thieves.

BLITZER: Obama voted for it, as well.

BECK: Oh, I know. I would expect that of Obama though. I expect Obama -- Obama's not running as, you know, the guy who's going to clean everything up with earmarks.

BLITZER: What would have happened if McCain would have said no, I'm voting against it?

BECK: I think if he would have said this, if he would have come out on the Capitol steps and said, look, I'm for the bailout bill, it is going to cause us great pain if we don't have it. If we don't do something right now because of what these people in this building and Wall Street have done, if we don't clean this mess up, it's going to cause great pain.

I'm for doing the hard thing. If you're willing to accept the pain, I will be there and I will help guide you through it, but I'm not going to put up with the earmarks.

This mess has got to stop right now. As Nancy Pelosi said, the party is over, period. We have lots of time. We'll take another three days. I want to hear from you, bailout, no bailout, but I'll tell you, I will not sign something this dirty. And I think people would have risen up and joined him in that.

BLITZER: All right. We'll leave it right there.

But you heard it from Glenn Beck. He thinks a game-changing event has occurred over the past 24 hours.

BECK: Yes.

BLITZER: All right. We'll watch, together with you, Glenn. Thanks very much.

BECK: Thanks, Wolf. You bet.

BLITZER: We're counting down to tonight's debate between Joe Biden and Sarah Palin, only less than five hours away. But the top of the tickets aren't keeping out of the spotlight. Barack Obama and John McCain John McCain are hammering each other on the economy and what to do to try to fix it.

And some conservatives have said they don't think Sarah Palin is up to the job of being president. Does Pat Robertson agree? I'll ask him right here in THE SITUATION ROOM.

Lots of news going on.

(NEWSBREAK)

(COMMERCIAL BREAK)

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

Happening now, Warren Buffett says the U.S. has been hit with an economic Pearl Harbor. He plans to put billions of his own money into GE. So does the billionaire investor think that the massive bailout plan is the right line of attack?

We're going to hear from Warren Buffett. That's coming up here in THE SITUATION ROOM.

Amid the financial turmoil, many Americans can only helplessly watch as their retirement savings evaporate. Could your 401(k) plan be next?

And just what's in that $700 billion bailout bill? How about millions and millions of dollars of pet projects.

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

While their running mates prepare for their showdown in St. Louis, Barack Obama and John McCain are tackling Michigan and Colorado on this day.

Let's go to CNN's Ed Henry. He's in Denver watching this story for us unfold.

Colorado's one of those key battleground states, as you know, Ed, as our viewers know. They seem, the two candidates, to be going after each other a little bit more robustly, shall we say, given the state of the economy.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. John McCain will be here in Denver in just a short while for a town hall meeting. And you're right, they were right back at each other's throats today, both of these candidates, after a brief bit of bipartisanship.

You know, after that Monday meltdown in the House over the bailout, both of these candidates did not want to get wrapped up in all the finger-pointing in Washington. That's one sure way to turn off those undecided Independent voters.

So they were singing "Kumbaya." They weren't even mentioning each other's names on the campaign trail.

After that Senate vote last night, getting the bailout through the Senate, almost like a switch went off, and both of them went back on the attack today. Obama in Michigan, McCain on the cable morning talk shows, including "AMERICAN MORNING," where they were basically fighting over who would be a better steward of the economy.

(BEGIN VIDEO CLIP)

MCCAIN: I'm proud of the work that I did, particularly engaging the House Republicans who had been completely shut out of any negotiations. It's now going to be a bipartisan and bicameral result. And Senator Obama said he would phone it in.

That's the difference. I suspended my campaign.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Straight months of job loss, yet just two weeks ago John McCain said the fundamentals of the economy were strong. I don't know what yardstick Senator McCain uses, but where I come from, there's nothing more fundamental than a job.

(END VIDEO CLIP) HENRY: Now, despite all the bickering, there is one thing these two candidates agree on about the bailout, that it's imperfect, but they both felt that it was better than doing nothing right now during this crisis -- Wolf.

BLITZER: We're going to go over to the magic wall, talk to John King in a moment about the Electoral College, what it's shaping up to look like right now.

But how is the race looking in Colorado right now, where you are?

HENRY: Extremely tight. It's one of those battlegrounds, one of many battlegrounds right now, where Barack Obama has been picking up steam.

This month, there was an ARG poll that gave John McCain a very slim three-point lead. The most recent CNN/"TIME"/Opinion Research Corporation poll, though, gave Barack Obama a four-point lead, so both sides fighting very hard for these nine electoral votes -- Wolf.

BLITZER: All right, Ed Henry watching the story for us.

Is the election turning into Barack Obama's race to lose? CNN's new poll of polls shows Obama leading John McCain right now by six points. McCain, meanwhile, may be giving up on winning in Michigan and focusing instead on key states like Pennsylvania, Ohio, and Maine.

Let's walk over to our national correspondent, John King. He's over at the magic wall, watching all of this for us.

Still trying shore up Ohio right now. No Republican, I believe, has ever won the White House without Ohio.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Right. And let's look at the decision. John McCain says he's pulling out of Michigan. OK? We already had that one leaning blue. We will turn that dark blue in the days to come, assuming McCain keeps his word.

This state right here, Wolf, Wisconsin, has voted with Michigan in the last four presidential elections. Let's give that to Barack Obama, for the sake of argument. If we do that, look where we are, 260. He only needs 270. John McCain trails down here.

Now, you just mentioned Ohio. What McCain has to do -- Barack Obama, the gold states are the tossup states. Barack Obama has this menu of opportunity and possibility. John McCain essentially has little room for error, essentially threading a needle. You mentioned Ohio.

Let's say, for the sake of argument, he keeps Ohio red. That would start him on the trail back. He also -- that's not enough. He has to also keep Missouri, a very close state right now, has to keep that red, has to keep the 27 electoral votes of Florida.

John McCain has to keep that red. Even if he does all that, Wolf, looks what -- look what happens. He's still behind Barack Obama. Then you have Virginia, New Hampshire, Colorado and Nevada to fight this out in the end. Virginia is a battleground right now. Let's give that, just for the sake of argument, to John McCain here. That would tie the race.

And you just talked to Ed Henry in Colorado. Nevada and New Hampshire could be the battlegrounds. But John McCain is at a huge disadvantage right now. This map lopsidedly at this moment in time -- a lot can change, but at this moment, lopsided in favor of Barack Obama.

BLITZER: What about Missouri? How is that state looking right now?

KING: Well, it's amazingly close right now.

And this is one of the places -- you know, I have been on the road a lot in the past few weeks. I'm going to turn Missouri back. We will make that a swing state again and turn it back to a tossup, as we have it right now. It is 11 electoral votes. It has voted right, meaning it has picked the wiper in every presidential election since 1900, except for one, in 1956.

It is a true bellwether state. You have the Bible Belt down here. If we can come to another map, we can show you Missouri in a better way and bring it out here, show the county level here. You have Saint Louis here. You have all this here. It's an amazing state, the Bible Belt down in the south, big city in Saint Louis, the suburbs.

Here, where the debate is today, right in this area right here, Wolf, this is the key to winning the state of Missouri. It's very tight right now. If Barack Obama can take this out of John McCain's basket, many would say election over, so, A critical battleground to watch for any number of reasons.

Again, at this moment in time, there's time for McCain to catch up here. But, politically, this map, nationally, you see all the red here. That's the last time around. Right now, this map is trending blue.

BLITZER: And all us remember he barely carried Missouri against Hillary Clinton in the Democratic primary. It was very, very close there.

KING: It's a very tough state for Barack Obama, but, at the moment, he has John McCain back on his heels. McCain is defending so much traditional Republican territory, it allows Obama -- he has more money. He has more field people. They're registering new voters. Again, McCain has time, but very little room for error.

BLITZER: We will be talking to you throughout the night. John, thank you.

Attorneys in Senator Ted Stevens' corruption case accuse the other side of sabotage. Could the charges actually be dropped? Stevens figures prominently in Democratic hopes of getting a bigger majority in the Senate. The V.P. debate, as you know, only about four-and-a-half-hours away. How can Joe Biden and Sarah Palin win?

And former CNN anchor Bernard Shaw spent many years covering politics. He knows what it's like to moderate a vice presidential debate. Bernie Shaw will be here live. We will talk about what he expects to see tonight.

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

(COMMERCIAL BREAK)

BLITZER: Senator Ted Stevens is mired in a corruption case. His attorneys want the charges to be dropped. The defense says the prosecutors are playing dirty tricks, alleging the prosecution withheld evidence that is favorable to Senator Stevens until last night.

Now the judge could dismiss the indictment on corruption charges against Stevens. Stevens is currently seeking reelection. What happens with him certainly plays into a Democratic hope of gaining 60 seats in the next U.S. Senate. And that would certainly give Democrats a filibuster -- a filibuster-proof majority. Right now, Democrats control the Senate by a very, very slim margin.

Thirty-five seats, by the way, are up for reelection in November. You see them highlighted here. Ten of them are considered competitive. They're highlighted here in the gold.

So, what in the Alaska Senate race is so important?

CNN's Abbie Boudreau of the Special Investigations Unit talked to voters.

(BEGIN VIDEOTAPE)

ABBIE BOUDREAU, CNN CORRESPONDENT: Ted Stevens has been a U.S. senator for nearly 40 years. And, despite his criminal indictment, many Alaskans are still showing their support.

(voice-over): Many Alaskans seem to think, Ted Stevens can do no wrong.

UNIDENTIFIED FEMALE: I know Alaska loves him. I know that Stevens to Alaska is what Kennedy is to Massachusetts.

PAULINE MARTENS, TED STEVENS SUPPORTER: I like Ted Stevens. I like him as a person, and I like him as a politician.

BOUDREAU: At a news conference before his trial, Stevens asked Alaskans not to leap to judgment.

SEN. TED STEVENS (R), ALASKA: I asked for a speedy trial because I wanted one. I'm glad that they're having sense to have one, because I have entered my plea and said that I'm innocent of the charges. I have urged Alaskans not to make a judgment about this situation until all -- all the evidence is in.

Nice to see you all.

BOUDREAU: Despite the trial and possible conviction, Stevens is running for Senate again.

Independent pollster Ivan Moore.

IVAN MOORE, ALASKA POLLSTER: He's brought an enormous amount of good to Alaska. And people have a lot of respect for the man. And I think there's a very strong tendency probably for people not to draw judgment on him until the trial happens.

BOUDREAU: Anchorage Democratic Mayor Mark Begich is running against Stevens, promising -- you guessed it -- change.

JULIE HASQUET, MARK BEGICH CAMPAIGN SPOKESWOMAN: We believe that Senator Stevens is not the same man that Alaskans sent to the Senate 40 years ago. He has stopped serving Alaska's families. And Mark Begich represents that ethical, independent leadership that's going to propel us into the next 20, 30 years.

UNIDENTIFIED FEMALE: I probably won't decide until the very end. I will be interested in the trial. And I know Mark Begich. I think highly of him. I just have to weigh.

MOORE: If he's acquitted, it's anyone's race. I can't help but think, though, if he's found guilty on any of the counts, that it's going to be very, very difficult for him to win.

BOUDREAU: But many people we talked to say, change isn't necessarily what they need. Stevens has brought a lot of money to the state. More of the same is exactly what some Alaskans say they want.

UNIDENTIFIED MALE: Ted Stevens has worked his butt off, and got -- got this state a lot of money from the government. And I think they're just barking up the wrong tree.

BOUDREAU (on camera): There are some Alaskans who say, no matter what happens at the trial, they will always back Senator Stevens.

Abbie Boudreau, CNN, Anchorage, Alaska.

(END VIDEOTAPE)

BLITZER: Meanwhile, there's obviously another Alaskan politician dominating the news. So, what does a prominent religious broadcaster think of Governor Sarah Palin?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Virginia Beach, Virginia, Pat Robertson needs no introduction to our viewers.

Pat Robertson, thanks very much for coming in.

ROBERTSON: Thanks, Wolf. It's my pleasure. BLITZER: President Bush's former speechwriter David Frum, a conservative, writes this in "The New York Times." He says: "I think she has pretty thoroughly, and probably irretrievably, proven that she is not up to the job of being president of the United States," referring to Sarah Palin.

What do you think?

ROBERTSON: Wolf, this woman has got more administrative experience than any other candidate, including the head of her own ticket.

You know, being a senator doesn't -- doesn't make you a chief executive. She ran a state with a $12 billion budget, about 19,000 employees, did a $44 billion oil pipeline. I think she's got plenty of experience.

BLITZER: Does it concern you that she had trouble thinking of one United States Supreme Court decision with which she disagrees, as -- in addition to Roe vs. Wade?

ROBERTSON: I think she's got some briefing books she's going to have to bone up on.

You know, when you're up in Alaska, you're thinking of different problems than the stuff that we here in the beltway that I'm familiar with and others of us. I think it's going to take a while. But she's a quick study. And I think she will come up to speed pretty fast.

BLITZER: You're a longtime conservative. If I were to say to you, Pat Robertson, give me two or three Supreme Court decisions with which you have disagreed, you wouldn't have any trouble with that at all.

ROBERTSON: None whatsoever.

Of course, I'm -- you know, I have the -- I'm head of the American Center for Law and Justice. We litigate before the Supreme Court.

BLITZER: So, that doesn't bother you, that some of the decisions that have really irritated the conservatives over the years by the Supreme Court, she -- she didn't have any knowledge of those decisions?

ROBERTSON: Well, I just think that...

BLITZER: We're talking about decisions not only involving abortion, but gay rights or prayer in schools, things like that.

ROBERTSON: Well, she's got some studying to do. She -- she hasn't thought about those things.

But she has been an administrator. And I think that's important. To be a governor of a state is a big deal. And she had a superb record. She cut expenses, cut the capital budget of the state of Alaska, and had an 80 percent approval rating. So, I -- I think she's done a very good job.

But, no, there are some areas in her resume she needs to brush up on. But I'm not going to fault her for that.

BLITZER: The Vatican just now says that greed was the cause of the economic crisis in the United States, the Vatican secretary of state saying: "The tragic outcome of all the political ideologies demonstrates that, when humans only seek short-term profit, it is virtually identified as good in itself, and ends up wiping out the profit. The current financial crisis also confirms this statement."

What do you think is behind this current financial crisis, the meltdown in the United States?

ROBERTSON: Well, Wolf, you know, there's not any question it's greed.

But, you know, it starts, like, people -- the government said, we want more homeownership. And, so, everybody went scurrying around to get more people into homes. And that meant mortgages. So, mortgage brokers were getting a fee. They would go to these people, who were basically impecunious, and say, do you have any money? And they would say, oh, yes.

They had what was called liars loans or no-doc loans, no documentation. Then, they were passed up the line to the rating agencies. The rating agencies -- I mean, at least they were bundled together by the investment companies. They took a big cut of it. The rating agencies were working for the investment companies. And they...

BLITZER: So, was it a mistake to eliminate a lot of that federal regulation of the -- the whole banking industry over the years?

ROBERTSON: Well, we have had Sarbanes-Oxley. We have had all kinds of regulations. And I -- I don't think it's made a great deal of difference.

I think you're going to have greed. The people in Wall Street were making obscene profits. You know, there were guys getting, at least on some of these hedge funds, making $1 billion a year. It's literally obscene.

BLITZER: In Virginia, where you are right now -- it's your home state -- in our most recent CNN/"TIME"/Opinion Research Corporation poll, we have Obama at 53 percent, McCain at 44 percent.

You know the state of Virginia. Why is Obama, at least this snapshot, showing him way ahead?

ROBERTSON: Well, Wolf, if -- if you want my prediction, I think that McCain's going to win Virginia. I think Virginia's a relatively conservative state since the days of Dwight Eisenhower.

But we have had a very, very popular Democrat senator, Mark Warner. And, then, we have -- his successor as governor is -- you know, Tim Kaine, is very popular. So, there's been a tending toward the Democrat Party.

But I really believe that, when it's all down, push comes to shove, I think the McCain/Palin ticket is going to take Virginia. At least, that's my...

(CROSSTALK)

BLITZER: What about the next president?

ROBERTSON: Excuse me.

BLITZER: Who's going to be elected president of the United States?

(LAUGHTER)

BLITZER: I know what you hope, but who do you give -- tell me who you think will win.

ROBERTSON: I don't have a clue.

But what I would say, it does seem like Obama is running a tremendous campaign. But, you know, he's -- he's an untried person. He doesn't have experience. They talk about Palin not having experience. Obama has no experience, in terms of any major legislation, major issues.

And he's very much to the left of center. So, I think, coming into the polling booths, the voters may say, well, I think we had better go with the man who has got the proven track record and will keep us safe, in terms of foreign policy problems.

BLITZER: Pat Robertson, thanks for joining us.

ROBERTSON: Thanks, Wolf. It's good to be with you.

(END VIDEOTAPE)

BLITZER: In the "Strategy Session": Biden vs. Palin.

(BEGIN VIDEO CLIP)

PALIN: Again, I would choose life. And, certainly, I'm quite confident here that you're going to be asking my opponents those same scenarios.

BIDEN: And I knew the right political vote, but I will tell you what. Some things are worth losing elections over.

(END VIDEO CLIP)

BLITZER: So, what have their past performances in debates told us about tonight's showdown?

And we're less than four-and-a-half-hours away from tonight's all-important vice presidential debate. Tonight, CNN viewers have a truly interactive opportunity to watch the debate. Our Alex Wellen is standing by to show you how to do it.

Stay with us -- four hours and 12 minutes to go.

(COMMERCIAL BREAK)

BLITZER: Let's get right to today's "Strategy Session."

Joining us, our political contributor and Democratic strategist Donna Brazile, and CNN political contributor and Republican strategist Leslie Sanchez.

Donna, if you were advising Sarah Palin tonight in this debate against Joe Biden, a man you know quite well, what -- what one single piece of advice would you offer her?

DONNA BRAZILE, CNN POLITICAL ANALYST: first of all, Wolf, the polls -- the polls indicate that six in 10 Americans are uncomfortable with her as president.

So, I think she needs to reassure voters that she is qualified to serve as vice president. And I also think that she needs to move away from the sound bites, the zingers, the -- the attacks, and to reassure voters that she understands the problems of everyday Americans.

BLITZER: That she has a grasp of the issues, though, that is what you're talking about.

BRAZILE: Absolutely. You don't have to read the newspaper, to know everything, but maybe you need to listen to the radio and watch this show.

BLITZER: All right, what advice would you give Joe Biden going into this debate?

LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: I would agree to the extent that this is not about political theater or pity sound bites. It's very much about almost following A, B, C. He has to promote a progressive liberal agenda. He has to follow the lines, not really a spirited debate, not an attack debate.

But I think a lot of folks in the media think that Sarah Palin will impale Palin -- impale herself, basically, by her responses. There's such low expectations, in terms of how he should perform -- she's going to perform. So, I think it's almost him standing back.

BLITZER: Is she overprepared right now, you think, Donna? Did -- have they just given her too much information to try and absorb, and it's sort of making her a little uncomfortable?

BRAZILE: I think people forget that she's a governor. We have eight female governors in this country. She has won every debate that she ever participated in, in Alaska. She ran against a Republican governor. She defeated him, a two-time -- two-term Democratic govern. So, she is well-prepared in these settings to not only deliver the attack lines, but really come across as an everyday person.

So, I think they should just leave her alone and let Sarah Palin be herself.

BLITZER: Because that's the advice a lot of people give her. You know what? Just let her Sarah Palin be Sarah Palin, and she will do just fine. Is that smart advice?

SANCHEZ: I think absolutely. She needs to be comfortable. She needs to talk about integrity, talk about her personal experience, show that she has a command of the issues. People are really watching this debate to watch Sarah Palin. They know who Joe Biden is.

BLITZER: Will the bailout legislation pass the House of Representatives, Donna, tomorrow?

BRAZILE: I just want to say, people don't know Joe Biden. Democrats know him, but swing voters, who are really going to determine this election, don't know him.

If Nancy Pelosi can get the votes, she will put it on the floor.

BLITZER: So, it's all up to the Democrats?

BRAZILE: Well, look, Democrats deliver -- 141 Democrats supported this bill. We need Republican votes. And they put a lot of sweetness. So, if the Republicans like the sweetness in the bill, we will have the votes, and the bill will pass.

SANCHEZ: No, no. I think...

BLITZER: What do you think? Will it pass? Will it pass tomorrow?

SANCHEZ: I don't -- they're not -- they shouldn't put it on the floor unless they have the votes...

(CROSSTALK)

BLITZER: Well, they're not -- I don't think they -- otherwise...

SANCHEZ: Well, we saw that disaster earlier in the week. And I think...

(CROSSTALK)

BLITZER: ... 777 points Monday, when it failed.

SANCHEZ: They can't do it again.

BLITZER: You can only imagine, if there were another roll call, and it was defeated, what would happen to the markets.

(CROSSTALK)

SANCHEZ: Well, there's a lot of people that believe the haves are benefiting, but the have-nots have yet to feel warm love here, that this is the right bill at the right time. There's still, I believe, some work to be done, in that sense. And, with respect to the Biden comment, I have to say, Biden can't say anything that's going to eclipse Barack Obama, whatever that message is, and his platform is already there. People want to see if Sarah Palin has the command to be president.

BLITZER: You agree with Glenn Beck, the conservative commentator, who was here in THE SITUATION ROOM this hour, who said, it's over for McCain, because he voted for the bailout, even though it included all these pork-barrel spending projects?

SANCHEZ: I think -- I don't think it's over. I think this economic issue has definitely been a downward turn, a very difficult effort for the campaign. And you have a lot of independent voters, speaking to Donna's point, who want to punish the incumbent party. And I think this is all kind of part of that.

As long as the economic issue is on the front burner, it's going to be difficult...

(CROSSTALK)

BRAZILE: Six hundred thousand Americans have lost their jobs. Tomorrow, we will have another jobs report. This is a very important piece of legislation. It's just the beginning. And I think lawmakers need to take time out to explain to Main Street why this is important. But this is a necessary first step.

BLITZER: The Congressional Black Caucus, Donna -- and correct me if I'm wrong -- all Democrats, right...

BRAZILE: That's correct.

BLITZER: -- in the House of Representatives -- they were pretty evenly split on Monday, when the -- the bill went down to defeat.

What do you expect tomorrow?

BRAZILE: They are very concerned that we're not doing enough to help those to -- to stay in their homes. They're worried, like members of the Hispanic Caucus and other progressives, that we're bailing out Wall Street, but not helping people on Main Street, especially those who are still stuck with these subprime predatory loans. They want help for those people as well.

SANCHEZ: I think -- and there's a lot of conservatives out there who are looking at this like this is Christmas come in October, because of all of the additional special interest efforts that have made their way into this bill. That's the part that people are most frustrated by.

BLITZER: The rum industry in the Virgin Islands and Puerto Rico pretty happy about this bill.

SANCHEZ: One hundred and forty-five million dollars.

BLITZER: I'm not sure exactly what that has to do with the -- the bailout.

But we will talk about that later.

(LAUGHTER)

BLITZER: Guys, thanks very much.

Donna and Leslie are going to be with us throughout the night.

It's been talked about for weeks. We're counting down to the debate between Joe Biden and Sarah Palin, only a little bit more than four hours away.

And bailing out the $700 billion bailout plan. It just passed the Senate last night. And now will its pet projects turn off House Republicans? We are going to be taking a closer look at that.

And retirement dreams turning into a nightmare instead.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If I'm going to continue this, I also have to accept the fact that I'm probably going to be working until I'm in my mid-70s.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker" right now: You can watch the debate tonight with your laptop and follow along online at CNNPolitics.com.

Alex Wellen, our deputy political director for CNNPolitics.com, is here. And he can give us a little experience, an interactive experience, what folks out there can do, watch the debate, but, at the same time, get involved.

ALEX WELLEN, CNN SENIOR INTERNET PRODUCER & CYBER CRIME ANALYST: Wolf, when we talk about it being interactive, watch with your laptop, we really mean it tonight. It's going to be a superior experience.

I want to show our viewers CNNPolitics.com. We just added this. Look at this. It's actually a ticker flipping through all the stories that are happening right now. And that is really where the action is going to be.

So, I want to show you. We have the "Political Ticker" up. This will be with all of our different best political team members, Bill Schneider, Candy Crowley. We're going to have Roland Martin. Everyone will be there.

And, also, I want to show you right here, you can see fact checks that are going on. We will be constantly going through the entire debate, looking at what Governor Palin is saying, looking at what Senator Biden is saying, and looking at that information and making sure that we're keeping them honest.

I also want to show you here -- this is really interesting. We will wipe these out of the way. This is what you saw on TV. It's going to be a little different tonight. We are going to looking at male and female. And we're going to also be looking at these numbers.

And I want -- what was very interesting for our viewers was seeing these pluses and minuses, missed opportunities, and things where they made good points. You're going to get all that information -- we just did this -- this is great -- at CNNPolitics.com.

One last thing for you, Wolf. The "Political Ticker," on Friday, broke its entire record, 4.7 million page views on just Friday alone.

So, that's where you are going to want to be tonight.

BLITZER: Amazing. A good idea to watch the debate with your laptop, while you watch us on television at the same time. Alex, thanks very much.

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