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THE SITUATION ROOM

Obama Backer on 'Racist Area' of Pennsylvania; Wall Street Rebounds

Aired October 16, 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: Happening now: the 19-day challenge, how Barack Obama and John McCain will be tested in the run-up to the election, where they need to go, what they need to do, and who they need to impress, and how fast.
Also this hour, a congressman's worst fears about voters in his home state. Democrat John Murtha's remark about racism and whether some Pennsylvanians will support Barack Obama. We are on the scene in that battleground state.

And another who knows how it will end day on Wall Street. What drove up stock prices today after yesterday's freefall?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer at the CNN ELECTION CENTER. You are in THE SITUATION ROOM.

They only have 19 days left, but miles and miles to go and who knows how many speeches to give and hands to shake. John McCain and Barack Obama, right now, they are in the homestretch, the hurdle of their final debate behind them, McCain emerging from that final showdown with a new symbol of sorts.

Dana Bash is working this part of the story for us. We are hearing a lot about a -- quote -- "surprise star" of last night's debate -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That is right. And one of John McCain's advisers told me today that they're going to use the message from that star, and that is the idea that Barack Obama wants to share his wealth and the McCain campaign is going to focus on that message like a laser beam.

(BEGIN VIDEOTAPE)

BASH (voice-over): You'll never guess who is John McCain thinks won the final debate.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The real winner last night was Joe the Plumber.

BASH: Of course, Joe the Plumber.

MCCAIN: He won and small businesses won across America. They won because the American people are not going to let Senator Obama raise their taxes in a tough economy. BASH: McCain won't let go of the new political icon he made famous, hoping he's finally found a way to connect with voters on the issue they care most about.

MCCAIN: You know what Senator Obama had to say to Joe? He wanted to spread his wealth around. He wants government to take Joe's money and give it to somebody else.

BASH: But even in fiscally conservative suburban Philadelphia, where McCain campaigned for the second time this week, warning voters about Obama's economic policies is just part of his struggle. His biggest challenge? Detaching himself from the unpopular president.

MCCAIN: As I mentioned last night to Senator Obama, I'm not George Bush. And if he wanted to run against George Bush, he should have run four years ago.

(APPLAUSE)

BASH: Applause for anti-Bush line at a GOP rally, a stunning illustration of the political climate. McCain launched a new TV ad with the same message.

MCCAIN: The last eight years haven't worked very well, have they?

BASH: For the first time in weeks, an ad talking about his plans, not hitting Obama's.

MCCAIN: Your savings, we'll rebuild them. Your investments, they'll grow again. We've got 19 days to go. We're six points down.

BASH: But given that hard, cold reality, McCain aides say their urgent goal now is convincing supporters to keep at it.

MCCAIN: We never give up. We never quit. We never hide from history. We make history.

(END VIDEOTAPE)

BASH: And McCain advisers insist, their data still shows that support for Obama in key battleground states is soft and things maybe are not as dire as they seem.

But take a look, Wolf, at this. Take a look at this map, McCain's travel schedule for the next several days. It shows he is in a defensive posture. He's going to be in Florida, North Carolina, Virginia and Ohio. Those of course are all states that President Bush won. They have been Republican states. And McCain is trying very, very hard to hold on to those.

BLITZER: Yes, he desperately needs those and a few others as well, not just those.

(CROSSTALK)

BASH: Exactly.

BLITZER: All right, Dana, thank you.

Barack Obama is taking on a potential threat to his presidential hopes, the perception that is out there that he is already well on his way to victory.

CNN's Suzanne Malveaux traveled with Obama to New Hampshire -- Suzanne.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: It is interesting, Wolf, because New Hampshire only has four electoral votes, so, obviously, every vote counts. In the primary, it was a record-breaking number of voters, nearly a half-million, most of them Democrats, but Barack Obama going after the biggest voting bloc. And that is independents.

(voice-over): Despite a strong debate performance and increasing leads in national and key battleground state polls, Barack Obama says he's taking nothing for granted.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We are 19 days away from changing this country. Nineteen days away. But for those who are getting a little cocky, I have got two words for you -- New Hampshire.

MALVEAUX: New Hampshire delivered Obama a stinging and startling defeat in its January 8th primary. Polls predicted Obama would be the clear winner after his victory in Iowa, but New Hampshire chose Hillary Clinton as the favorite.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I listened to you, and in the process, I found my own voice.

MALVEAUX: New Hampshire give Clinton the comeback she needed to revive her campaign, just like her husband's second-place finish here in 1992.

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Thank you very much.

MALVEAUX: The state known for its fiercely independent voters also saved John McCain's campaign in 2000 against George W. Bush, and put him ahead of the Republican pack this primary season.

At an apple orchard in Londonderry, Obama spoke directly to them.

OBAMA: New Hampshire, it is time to turn the page on eight years of economic policies that put Wall Street before Main Street, but ended up hurting both.

MALVEAUX: Obama also seized on pivotal moments from his final debate with McCain.

MCCAIN: My old buddy Joe...

... Joe the Plumber ...

... people like Joe the Plumber.

To Joe the Plumber, Joe, you're rich. Congratulations.

MALVEAUX: He poked fun at McCain for repeatedly addressing a plumber Obama met on the campaign trail.

OBAMA: He's trying to suggest that a plumber is the guy he's fighting for.

(APPLAUSE)

OBAMA: How many plumbers do you know making $250,000 a year?

MALVEAUX: And Obama continued to press that McCain would be no different than President Bush.

OBAMA: I'm not running against George Bush. I'm running against all those policies of George Bush that you support, Senator McCain.

MALVEAUX: Obama's campaign launched a new TV ad to back it up.

(BEGIN VIDEO CLIP)

NARRATOR: You may not be George Bush, but...

MCCAIN: I voted with the president over 90 percent of the time.

(END VIDEO CLIP)

MALVEAUX (on camera): Well, Hillary Clinton got the lion's share of the female voters during the primary, but Barack Obama got most of those independents. And they make up a whopping 44 percent of New Hampshire's electorate.

Now, the idea, the hope for Barack Obama, is to simply build on that lead -- Wolf.

(END VIDEOTAPE)

BLITZER: Suzanne, thank you.

Whatever suspense there is out there on the presidential campaign, it can't compete, at least right now, with the daily drama that is affecting Wall Street, the Dow Jones industrials closing up just more than 400 points today, a day after plunging more than 700 points.

Let's go to our senior business correspondent, Ali Velshi.

It started off dropping early this morning, right after the markets opened, almost 400 points, but coming up and then going up 400. What a swing, about 800 points in one day. ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Every time it comes to that time of day that you and I have to talk, something interesting happens in the markets. Let me show you what the final numbers were here, about 104 point higher after a 380-point drop today. That was incredible.

Now, some days, we can't really explain what happened, but today, there's one very big explanation for why this happened in the end of the day, and it is this. Take a look at the price of oil. We saw oil drop $4.69 a barrel today to $69.85. We have not seen that price since August of 2007. In fact, that is a 52 percent drop since the day in July that oil reached $147.

So, the idea here is that, if Americans are spending less money on energy, Wolf, it means there is more money to spend on other things. And while we talk about the stock market like it is this big beast, the stock market is made up of individual companies, and those individual companies rely on Americans spending money.

And the idea is that if people are spending less on oil or heating oil here in the Northeast, they have got more to spend on other things. It is a slim hope, but it is there.

BLITZER: There were factory losses, productivity apparently down. Factory production, the numbers were not good. Numbers were not good for income from Citigroup, Merrill Lynch. I assume all of that has a direct impact on the market.

(CROSSTALK)

VELSHI: And that was all early in the day, and that is why we saw that 380-point loss.

Industrial production, which is a measure of all the stuff that we produce in factories in the United States, had its biggest one- month drop in 34 years. Some of that was because all of those oil facilities were shut down because for Hurricane Ike. But a lot of it was still this ongoing trend in a loss of manufacturing jobs in the United States.

And of course those two banks you talked about, Citigroup and Merrill Lynch, both writing off more of these bad loans. So, that was early day's news. But the oil, the gains -- the drop in the price of oil is what charged this market forward.

BLITZER: Sixty nine dollars, 85 cents per barrel.

VELSHI: Unbelievable.

BLITZER: All right, thanks very much, Ali, for that.

VELSHI: OK.

BLITZER: Eighteen -- excuse me -- 19 days before Election Day, John McCain faces several problems across the electoral map. John King, he will tell us what they are and show us where they are. And a blunt-speaking U.S. congressman igniting a storm of controversy for saying this about his own district -- and I am quoting him now -- "It is racist area" -- John Murtha trying to explain.

And Barack Obama appears to have learned a valuable lesson. And, apparently, he has Hillary Clinton to thank.

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

(COMMERCIAL BREAK)

BLITZER: There's new evidence coming into THE SITUATION ROOM that Barack Obama is gaining momentum in key battlegrounds.

Our new poll of polls shows he has inched up a percentage point in three key states, Florida, Colorado, and Pennsylvania. Take a look at this. When you average all of the latest Florida surveys right now, Obama 49 percent, McCain 45 percent. When you do the same thing in Colorado, Obama 50 percent, McCain 44 percent. And, in Pennsylvania, look at this, 53 percent for Obama, 40 percent for McCain. That is a 13-point spread.

Our chief national correspondent, John King, is looking at the challenges for Senator McCain across the electoral map -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, where you find the candidates on the trail tells you quite a bit about their perceived strengths and weaknesses heading into the final stretch.

Barack Obama spending time today up here in the state of New Hampshire. It leans Democrat at the moment. He is down here where the people are in southern New Hampshire. Most of the population is right down here in this state.

It's a message aimed not only at New Hampshire, but at Independent voters across the country, as well. There are more undeclared or Independent voters in New Hampshire than there are Democrats or Republicans.

John McCain facing a stiff wind in his face here in a critical area in American and Pennsylvania politics, and that is the suburbs. You find McCain today campaigning in Chester County. You see that as red from four years ago -- George Bush won narrowly -- but there has been a dramatic shift in this area. It is critical to winning statewide in Pennsylvania.

Four years ago, there were more registered Republicans in Montgomery County, now more registered Democrats, four years ago, more registered Republicans in neighboring Bucks County, now more registered Democrats -- John McCain trying somehow to take Pennsylvania away from the Democrats, but facing a tide in registration here, and also a significant deficit in the polls at the moment.

Let's look at the bigger map to get a sense of the challenge for McCain coming out of the final debate. The gold states are the tossup states. Barack Obama, under our projection, already has enough to clinch the presidency if the election were held today. So, John McCain has a huge challenge ahead of him.

Let's just say he wins all the tossup states. That would be Florida, North Carolina, Ohio, Missouri, come out to Colorado, and then over to, finally, in the West. Even then, John McCain would still trail Barack Obama. So, the challenge for the McCain -- and the Republicans, find something blue on this map, and find a way to turn it red.

Virginia, its 13 electoral votes are one target, Pennsylvania, of course, where we found the senator today. But, Increasingly, Wolf, Republicans are looking at this map, trying to decide where to spend their money and resources, and they are very frustrated, and finding a very hard time finding one of these blue states that they think they have a good chance to turn red -- Wolf.

BLITZER: All right. John, thank you.

We have all certainly heard the jokes about how Joe the plumber won the final presidential debate, but what about the guys who were actually on the stage? It was their last, best shot at appealing to a national TV audience less than three weeks before the Election Day.

Here is our senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The first debate was September 26. Who won? We asked viewers. They said Obama by 13 points. At the second debate, on October 7, the candidates took questions from voters. Who won? Obama, by 24 points. In the third debate, October 15, the candidates were seated face to face. Who won? Obama, by 27 points.

CBS News interviewed only uncommitted voters who watched each debate. The number who thought Obama won went from 39 percent in the first debate, to 40 percent in the second debate, to 53 percent in the third.

McCain showed a lot of fight in the last debate.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: What you want to do to Joe the plumber and millions more like him is have their taxes increased and not be able to realize the American dream.

SCHNEIDER: Eighty percent named McCain as the candidate who spent more time attacking his opponent. They didn't seem to like it. By better than 3-1, viewers said Obama was more likable.

Negative tactics have been known to work. They worked in 1988, when then Vice President George Bush demolished Michael Dukakis with a harsh negative campaign. But Americans were fairly happy in October 1988, when President Ronald Reagan had a 54 percent job approval rating.

President Bush's rating is now 24 percent. Negative sentiments are directed at him.

MCCAIN: Senator Obama, I'm not President Bush.

OBAMA: On the core economic issues that matter to the American people, on tax policy, on energy policy, on spending priorities, you have been a vigorous supporter of President Bush.

SCHNEIDER (on camera): Viewers were asked, would you like to see more debates? Two-thirds said, no, we have seen enough. We are ready to vote now.

And, in 18 states, they already are voting.

Bill Schneider, CNN, New York.

(END VIDEOTAPE)

BLITZER: And we are standing by for some analysis from the best political team on television.

Meanwhile, federal officials now say there is a new technology that could have prevented last month's deadly train crash in Southern California. So, will it be provided to railroad operators across the country?

And there's still 19 days until the election, but a major Irish oddsmaker says the race is over. We are going to tell you who is cashing in.

Stick around. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Nineteen days until the Election Day, but one online betting site say, guess what, it is over. Irish bookmaker Paddy Power is paying all bets on Obama winning the election. As they say, they are certain that that will be the case.

What is going on? Well, let's bring in our Abbi Tatton. She is watching the situation online. Why are they doing this so early, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Well, Paddy Power today paid out $1.3 million to the people that had placed bets on Obama winning the election, saying their markets had already declared that he was the winner because of the sheer volume of support for Barack Obama.

That is about 10,000 bets that were placed mainly by Irish and U.K. citizens, some of them placed as far back as 2005, when Obama was at 50-1 odds. Now a spokesman for the site saying, the odds are so short, it is really hardly worth betting.

Now, they say it make the same prediction before in primaries, paying out early that he would win the nomination for the Democratic Party. That one came true. That worked out for them. But they have been wrong before. In 2002, Paddy Power predicting that Manchester United, a soccer team in England, would win the Premiership. They lost.

But a spokesman for Paddy Power saying that, if they get it wrong, they promise they won't be asking for the money back and they will honor all those bets on Senator McCain -- Wolf.

BLITZER: All right, Abbi, thank you.

New information just coming into THE SITUATION ROOM right now about a series of automated calls going out in some battleground states slamming Barack Obama. Stand by for that.

And only 19 days before the election, John McCain and Barack Obama have different campaign missions, but there's one thing they both need to convince voters.

Hillary Clinton taught Barack Obama a valuable lesson that he can't afford to forget. The best political team on television is standing by.

And a top Obama supporter now trying to clean up a mess in his own backyard -- Congressman John Murtha now apologizing for calling part of his home state of Pennsylvania racist.

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

(COMMERCIAL BREAK)

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

Happening now: Nineteen days and counting. They have faced off now for the final time. The presidential candidates are trying to prove to voters that it is still a race until all the ballots are cast.

Barack Obama says he learned from Hillary Clinton that he needs to finish strong, or else he will get spanked. Can he avoid getting too confident?

Plus, a congressman who backs Barack Obama now scrambling to explain why he said part of his home state is racist -- all of this, plus the best political team on television.

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

Nineteen days and counting until Election Day, the final face-off behind them, the presidential candidates now in the homestretch, the finish line in sight -- Barack Obama trying hard not to treat this as a runaway race, John McCain trying very hard to hold on to his turf.

Our senior political correspondent, Candy Crowley, is here, looking at all of this. And, Candy, a key question to you is, what is next?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, what is next is, both of these men trying, for different reasons, to keep the race going.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): With time running out, they have the same mission: convincing voters it is not over.

OBAMA: We are 19 days away from changing this country.

CROWLEY: Barack Obama began his day in New Hampshire, the nation's first primary state, the first one he lost.

OBAMA: But for those who are getting a little cocky, I have got two words for you: New Hampshire.

(APPLAUSE)

OBAMA: I learned right here, with the help of my great friend and supporter Hillary Clinton, that you cannot let up.

CROWLEY: This may take practice, because, earlier, at a $30,000- per-person fund-raiser in New York, Obama all but solicited resumes.

OBAMA: Once we're done, there's extraordinary expertise in this room, and we're going to need good advice.

CROWLEY: Not to mention Joe Biden, who joked with Ohio campaign workers about his post-debate call to Barack Obama.

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL NOMINEE: I called Barack Obama last night and congratulated him, told him I am going home to work to polish my golf game.

(LAUGHTER)

CROWLEY: There is a fine line between hubris and confidence. Hubris could turn off the persuadables and the undecideds. Confidence is presidential.

And there is good reason for it. It is a story told in Obama's itinerary. From New Hampshire, he works his way through a string of red states, Virginia, Missouri, North Carolina, and Florida, George Bush states in 2004.

MCCAIN: The real winner last night was Joe the plumber.

(LAUGHTER)

(APPLAUSE)

MCCAIN: Joe's the man.

CROWLEY: John McCain is in search of some Joe mo. If Obama can't afford to look as though he's already won, McCain can't seem as though he's already lost. It could depress the turnout of his Republican base and tempt undecideds to go with the flow of the polls.

McCain's first post-debate stop -- Pennsylvania, where he is down by 13 points.

MCCAIN: The State of Pennsylvania again will decide who's the next president of the United States. I need your vote. We've got to carry Pennsylvania. We will carry Pennsylvania.

CROWLEY: McCain's upcoming travel tells the rest of the story. Pennsylvania, which hasn't voted for a Republican president since 1988, is the exception.

McCain, like Obama, is beginning his own red state tour -- Florida, North Carolina, Virginia and Ohio. The difference is McCain is on defense.

(END VIDEOTAPE)

CROWLEY: McCain is not alone, of course, in his effort. I am told by a source inside the Republican National Committee that they currently have $77 million on hand. They are about to spend $70 million of that on a turnout the vote effort.

BLITZER: All right, guys. I want Candy to stand by.

Steve Hayes is here from "The Weekly Standard." Gloria Borger is here, as well.

Candy, there's a new robo-call -- an automated phone call that's going out that the McCain-Palin campaign and the RNC are sending out phone call messages to thousands -- maybe hundreds of thousands of folks. I don't know how many.

But we've got a little clip that was posted just a little while ago on HuffingtonPost.com.

I'm going to play a little bit of it and then all of us will discuss.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Hello. I'm calling for John McCain and the RNC because you need to know that Barack Obama has worked closely with domestic terrorist Bill Ayers, whose organization bombed the U.S. Capitol, the Pentagon, a judge's home and killed Americans. And Democrats...

(END AUDIO CLIP)

BLITZER: All right. That's just part of the message. It goes on to say Democrats will enact an extreme leftist agenda.

I mean this is pretty tough stuff out there. What are you hearing about this automated phone call?

CROWLEY: Well, first of all, that there are other phone calls, one of them dealing with the abortion issue, and various sort of hot button topics. They're going into six states. You know, it includes Virginia, it includes North Carolina, it includes Ohio. And they make no bones about it and say, yes, these are our robo-calls and we're putting them out there. They really believe that despite all the talk that nobody is interested in that, that it is beginning to kind of take root and causing people to take a second look. Now, how they know that, I don't know. But that's what they believe.

BLITZER: It's -- it very often happens in the final days of any campaign that you get these automated phone calls. You know, we've all received them on our home phones from time to time.

But what do you think about this?

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": It's pretty striking, I think. You know, I'm a little bit surprised because I thought that after this debate, there was a sense, in my discussions with the McCain campaign, that they sort of wanted to get beyond the Bill Ayers. They weren't upset that they had used it or they didn't have regrets about using it. But I didn't think that they were going to sort of thump it all the way home.

It sounds like they're going to. It will be interesting to see if they do the same thing in public appearances, if Sarah Palin continues to mention it, if it's in other ads.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: But this is what...

CROWLEY: See, I doubt that.

BORGER: Yes.

CROWLEY: I mean I think this is in lieu of...

BORGER: Exactly.

CROWLEY: ...John McCain or Sarah Palin.

BORGER: Exactly. This is what...

CROWLEY: It doesn't count if they're not saying it, you know, that's...

BORGER: That's right.

CROWLEY: ...that's how they look at it.

BORGER: This is what happens this close to an election. You have a high road campaign and then you have the sort of subterranean low road campaign. And so John McCain may not be talking about it -- and he will say he's not talking about it and they can say they're not talking about it, but they can't control what the Republican National Committee is doing.

HAYES: Right. And he's talked about it. He's talked about it mostly...

CROWLEY: But this is from them, as well.

BORGER: Right. Right.

BLITZER: This is the...

CROWLEY: Right. Right. Right.

BLITZER: It says at the end of the call.

BORGER: But that's what they're going to do.

(CROSSTALK)

BLITZER: Gloria, it says at the end of the call, this call was paid for by McCain-Palin 2008.

CROWLEY: Right.

BLITZER: ...and the Republican National Committee.

BORGER: OK. OK. Right. But, you know, this is, again, they can get a little bit of distance from it is...

HAYES: Well, and he's talked about -- John McCain, when he's talked about it, it's usually been in response to questions that he's gotten from reporters, as in his interview the other day with Dana Bash. He brought it up. But he made, I thought, some very aggressive comments about it, saying Bill Ayers wanted to destroy America and continues to want to destroy America.

BLITZER: It's part, Candy, of what they call the ground game, only days before people go out there. And the Republicans usually -- at least in 2004, they had a great ground game in Ohio and elsewhere. And I guess they're trying to revive that at this stage.

CROWLEY: Well, it's their -- they had this 72-hour get out the vote machine that really was birthed by Karl Rove, actually. This is, obviously, the money to kind of feed that and try to, you know, drum up support and getting some passion in there.

I mean so what they need is door knockers and envelope stuffers.

BLITZER: And today, when he was out on the stump, he echoed a line that he delivered last night. I'm going to play a clip. Steve, listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: I'm not George Bush. And if he wanted to run against George Bush, he should have run four years ago.

(APPLAUSE)

MCCAIN: I'll take us in a new direction.

(END VIDEO CLIP)

BLITZER: And he's got a new ad out that takes a pretty direct swipe at the eight years of the Bush administration.

Is it too little, too late, though?

HAYES: Well, I think this has actually been a message that they've been driving for quite a while.

BLITZER: Not as bluntly as he did last night.

HAYES: Not -- this was the most directly that he said it, but...

BORGER: But why did it take so long?

HAYES: I don't think it did.

BORGER: It's not that hard to say I'm not George Bush.

HAYES: I don't think -- look, when he kicked off his -- the general election campaign in Kenner, Louisiana on June 3rd, he gave a speech that was basically designed to distance himself from George W. Bush. And he said Barack Obama and his campaign will say repeatedly in their ads and their press releases, etc. that I am running for a third Bush term. Why will he say it repeatedly -- because it's false.

So he's been pushing this and it came after -- and that speech came after a fight inside the McCain campaign headquarters about whether he would be wiser to run against Washington or run against Bush.

CROWLEY: And also, but let's remember where he was. This is definitely the toughest and the biggest separation...

BORGER: Sure.

CROWLEY: ...for McCain and Bush.

BLITZER: It's a real slap at the president.

CROWLEY: It's a total slap at him. But let's remember that he almost didn't need it up until right at -- those numbers began to go down.

HAYES: I totally agree.

BORGER: Yes.

HAYES: I totally agree.

CROWLEY: He had the M maverick after his name.

BORGER: Right.

CROWLEY: So he didn't need to be this hard. He's got to be this hard now.

BLITZER: He's got to do everything he can.

BORGER: For those Independent voters, because Republican voters like George W. Bush.

BLITZER: Stand by, guys.

BORGER: He's not as unpopular -- as unpopular.

BLITZER: Barack Obama right now, he's saying he's now drawing an important lesson he learned from Hillary Clinton. We'll explain. The best political team on television is standing by to assess what is going on with Obama's strategy

Plus, Barack Obama is working to protect his lead in Pennsylvania and a top supporter may not necessarily have necessarily have helped his cause. We're looking into claims from a prominent Pennsylvania Democrat that parts of his home state are racist.

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

(COMMERCIAL BREAK)

BLITZER: Barack Obama says he learned a key lesson from Hillary Clinton. Let's discuss. And we have audiotape of what he said. And I'll play it for you guys very quickly.

Listen to this.

(BEGIN AUDIO CLIP)

OBAMA: For those of you who are feeling giddy or cocky or thinking, you know, this is all set, I just say one word -- I guess it's two words -- for you -- New Hampshire. You know I've been in these positions before where we were favored and the press starts getting carried away and we end up getting spanked. And so that's another good lesson that Hillary Clinton taught me.

(END AUDIO CLIP)

BLITZER: I think it's a pretty important lesson. He says he doesn't want to get overly giddy or cocky, otherwise, he's going to get spanked, like he was in New Hampshire when Hillary Clinton beat him in New Hampshire in the Democratic primary.

BORGER: Well, you know...

BLITZER: Pretty good advice.

BORGER: It is. As Candy said in her piece, neither of these guys wants to say it's over, because Barack Obama does not want to discourage voters -- his voters from going to the polls because they think, oh, he's going to win anyway, you know, no big deal. I mean and so he's been out there doing so many more events than John McCain, quite frankly. I think it was, what, 95 compared to 55...

HAYES: Ninety-five to 55, I think.

BORGER: ...in the last month. So he has been out there. And he's going to go right to the finish line and, you know, there's no coasting.

BLITZER: And, you know, there's a history, Steve, of these presidential races, as lopsided as it might look 19 days out, they can narrow. They can tighten in those final few days.

HAYES: Yes. I mean there's almost always a natural tightening. Some people -- and you talk to Republicans today, they'll say that we're seeing one, actually. If you look at the daily tracking polls and you look at the Gallup poll of likely voters, you're seeing a little bit of a coming together.

And I thought the most interesting thing he said in that little -- in that little piece was that the press was getting carried away. It's almost like he's complaining that he's getting too much good coverage from the media.

BLITZER: Yes.

CROWLEY: Yes, I'm not sure it's the press that always gets carried away.

BORGER: I hate when that happens.

CROWLEY: You know, I mean, look, it's important not to seem cocky. It's important not to seem as though you think you already have it. But honestly, inside that campaign, they're looking at the same things we are. And I think they're going to tell you, oh, no, we're not, but they're feeling pretty darned good.

BLITZER: But didn't you think John Kerry thought he was going to win on election day four years ago?

CROWLEY: No.

BORGER: Well, after the first set of exit polls he probably did...

HAYES: Bob Shrum told him that.

BORGER: ...but they were wrong.

(CROSSTALK)

CROWLEY: Yes.

BORGER: Right.

CROWLEY: Well, that day. I'm not sure -- I don't think leading up to it.

BLITZER: Because, I mean even in those last few weeks, he had a few extra million dollars he could have pumped into Ohio, but for some reason he didn't.

CROWLEY: But he didn't.

BLITZER: And some have suggested maybe he was overly, in the words of Barack Obama, giddy or cocky going into Ohio.

CROWLEY: No giddy. No giddy in the Oval Office...

(CROSSTALK)

CROWLEY: I've never seen John Kerry giddy, I will say that.

BLITZER: We're getting word in -- Gloria, you'll be especially interested in this -- that Letterman and McCain apparently have made up.

BORGER: I'm so happy.

BLITZER: They taped their little performance tonight.

BORGER: I can sleep tonight.

BLITZER: Yes, you remember this. Here's a little picture, some video of McCain walking into the Letterman studios just a little while ago. We got a pool report saying that McCain basically said -- and I'm quoting him now -- "I screwed up" when he canceled his appearance on Letterman. And all of us remember what Letterman did as a result.

BORGER: Well, you know, it's always a good idea to admit you were wrong when you're talking to a comedian.

HAYES: Yes, right. You don't want to get into a fight with a comedian.

BORGER: No, you don't.

BLITZER: And just to remind some of our viewers, he canceled his appearance on "Letterman" but did an appearance with Katie Couric with basically the same CBS operation and that irritated, shall we say, David Letterman.

HAYES: Well, I hope David Letterman goes -- changes back from -- to a comedian from being what he's been lately, which is sort of a curmudgeon. I mean he's spent every night smashing John McCain. It's better if he gets funny again.

BLITZER: I think they made up, though, tonight. And we'll see. He's a very funny guy. All right, guys, thanks very much. We'll continue this conversation.

So here's another question for all of you -- will race matter in race for the White House? Congressman John Murtha says yes, it will be a factor. But now he's backtracking somewhat. The controversy over his comments, though, is not going away.

And she's 106 years old and she's doing something she wants all of us to do. And that would be vote. Why she says this election is especially meaningful to her.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs is getting ready for his show that begins right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, CNN ANCHOR: Wolf, thank you.

Much more tonight on the final push for the presidential candidates in what could be a tightening race. Senators Obama and McCain back on the campaign trail after their final presidential debate. Both still talking about that fellow "Joe the Plumber". We'll tell you why plumber Joe Wurzelbacher could have a big impact on this campaign.

Also, the FBI launching an investigation into possible election fraud by the left-wing activist group ACORN, with links to Senator Obama.

Was ACORN involved in a coordinated election fraud across the entire country?

We'll be reporting on a sharp difference of opinion between top Bush officials over that massive bailout of Wall Street. One top official saying now, the federal government isn't doing enough to help middle class Americans in danger of losing their homes.

That story and a great deal more. Please join us for all of that and all of the day's news from an Independent perspective -- Wolf, back to you.

BLITZER: See you at the top of the hour, Lou. Thank you.

It's the ugly elephant in the room -- some people may not support Barack Obama simply because he's African-American. Although a great deal of Americans do not feel that way, there are some who do. And now a Pennsylvania Congressman has ignited a firestorm for how he brought that topic out into the open.

Brian Todd is working this story for us. Brian's in Western Pennsylvania, in Johnstown, Pennsylvania -- Brian, what are you picking up?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, Congressman John Murtha is certainly no stranger to controversy. And now he is really besieged over remarks that he made about his own constituents.

(BEGIN VIDEOTAPE)

TODD (voice-over): A lot of folks in this hard-bitten town will tell you John Murtha has brought jobs and plenty of pride to Western Pennsylvania in his 35 years in Congress. He's also now brought controversy over remarks to the "Pittsburgh Post Gazette" on why he thinks Barack Obama will have a tough time winning in his district.

REP. JOHN MURTHA (D), PENNSYLVANIA: There's no question that Pennsylvania Western Pennsylvania is a racist area. And when I say racist area, I mean, well, the older people are hesitant. You know, they're slow in seeing change -- real change.

TODD: Murtha wouldn't do an interview with us, but apologized in a statement, saying: "While we cannot deny that race is a factor in this election, I believe we've been able to look beyond race these past few months."

In Johnstown, at the heart of his district, we asked Murtha's constituents if they thought the area is racist. In some cases, it depended on who you spoke with.

UNIDENTIFIED MALE: The older generation, possibly. It's the way they were raised, the era they were raised in. The younger folks, no.

UNIDENTIFIED MALE: I do agree it's racist.

TODD (on camera): Why? How so?

UNIDENTIFIED MALE: I notice it just job wise, me trying to get a job out here.

TODD: Pennsylvania's 12th District, decimated by the loss of steel and coal mining jobs, is predominantly white, with a heavy senior citizen population. It went overwhelmingly for Hillary Clinton in the primaries.

An aide to Murtha says his remarks reflected the fact that some of those constituents indicated to him they might vote along racial lines.

But Jim White, a Johnstown official, says he doesn't believe this area is more racist than any other.

JIM WHITE, JOHNSTOWN CITY OFFICIAL: In my 30 years here, I've sensed that any more than maybe three or four times where I can look at the person and know and feel from growing up in the South that that person was just a racist.

TODD: The Murtha remarks even more sensitive after a Sarah Palin rally in Johnstown just days earlier, when someone held up a stuffed monkey labeled "Obama." Local newspaper editor Chip Minemyer says that upset many in the community.

CHIP MINEMYER, "JOHNSTOWN TRIBUNE-DEMOCRAT": That's not what they want to be associated with. That's not the kind of a mentality they want people to think exists here, you know, in any kind of a predominant fashion.

(END VIDEOTAPE)

TODD: But Minemyer and other here still say they think Barack Obama will have a tough time beating John McCain in this pro-gun, anti-abortion rights district. Still, Jim White, that African-American city official we spoke to, says he thinks people here are going to vote more with their wallets than anyone else -- Wolf. BLITZER: Brian, has Congressman Murtha received a lot of local backlash?

TODD: He seems to have. We were in his office a short time ago and one of his constituents was calling in. He was on a speaker phone and he was really lambasting Murtha, saying how could you call us racist?

We were told by a Murtha aide, though, that a conservative political action committee was putting out kind of a blast voicemail campaign, telling people here to call Murtha and complain. So that might have played into it, as well.

BLITZER: Brian Todd is in Johnstown, Pennsylvania for us. Thank you, Brian.

On our Political Ticker today, Ohio sending a message to the U.S. Supreme Court -- help. Ohio's elections chief secretary of state in that state wants the court to step into a dispute. It involves whether or not Ohio must do more to help counties verify eligible -- voter eligibility.

A federal appeals court has already sided with Ohio's Republican Party, ordering that the secretary of state set up a verification system. But the elections chief says fears of massive voter fraud are unsubstantiated.

Barack Obama acknowledging he's made some mistakes out there on the campaign trail, but he says one of them was worst than the rest. That would be Obama's controversial remark that some small town Americans are "bitter and cling to their guns and religion." In an interview with "New York Times" that will be published Sunday, Obama calls those comments -- and I'm quoting him now -- "his biggest boneheaded move."

And she says she never imagined this day would come. A woman who's 106 years old voting for the first African-American presidential candidate of a major party. Ann Cooper lives in Atlanta. At her age, as you can imagine, she's voted in several presidential elections. But she says her vote for Barack Obama is especially sweet and she's urging all of us to vote regardless of who that vote is for.

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

When they weren't debating, they were smiling -- even at maybe even the oddest of times.

Our Jeanne Moos goes behind the grins at the final presidential debate between Barack Obama and John McCain.

And some people are beating the election day rush -- early voting is underway in Georgia. And in the Peach State, you get to take a memento home with you.

"Hot Shots" and more, next.

(COMMERCIAL BREAK)

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

In New York, traders react as they work on the floor of the New York Stock Exchange.

In Atlanta, a poll worker hands out stickers to early voters. More than 540,000 ballots have already been cast in Georgia.

In Iraq, an American soldier talks to Iraqi children in Baghdad. Troops visited a school to donate supplies.

And in Jerusalem, check it out -- ultra-Orthodox Jews participate in a special prayer at the Western Wall.

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

You heard the candidates' words at last night's debate. Now our Jeanne Moos takes a "Moost Unusual" look at what they were saying with their expressions.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Bless the split screen.

OBAMA: You won't pay a fine because...

MCCAIN: Zero?

OBAMA: Zero.

MOOS: ...for letting us see...

OBAMA: Here are the facts...

MOOS: ...the cornucopia of expressions.

OBAMA: And what I have said.

MOOS: If you think of their faces as battlegrounds, the weapon of choice was the smile -- flashed like a sword by Senator Obama.

MCCAIN: ...will be back on track to raise taxes without precondition has to be safe.

MOOS: But Obama showed his teeth and McCain kept his sheath.

OBAMA: This is your plan, John.

And I make no apology for that. And under Senator McCain's plan, those rules would be stripped away.

MOOS: The experts say the seated format was an improvement over the last debate for Senator McCain.

UNIDENTIFIED MALE: You didn't see the sort of awkward lumbering around.

MOOS: Strolling that got skewered by impersonators on "Saturday Night Live" by adding imaginary musings by Senator McCain on "The Daily Show."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What's going on over here?

How you folks doing?

Has anybody seen my dog?

Mr. Puddles.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST: So much to talk about tonight. We have a live -- Senator.

(END VIDEO CLIP)

MOOS: Safely seated at Wednesday's debate, Senator McCain kept saying about Americans...

MCCAIN: And they're angry. And they're angry. And they're angry.

MOOS: But in that split screen, it was McCain seemed like a volcano ready to erupt.

OBAMA: A culture in Washington that's been taking place for too long.

MOOS (on camera): And though he never did explode, it reminded us of our favorite Chilean performance artist.

(voice-over): A little person by the name of La Pecana (ph) doing an impression of Hillary Clinton turning into The Hulk after losing to Obama.

(VIDEO CLIP)

MOOS: No growling from Senator Obama -- playing it placid smile after smile.

MCCAIN: Eight hundred and sixty sought.

MOOS: And when the debate ended and the candidate might feel he could relax, Senator McCain, jockeying to get to the moderator, made a funny face. And there it was on every blog -- Senator McCain holding his tongue out.

The moral of the story...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (SINGING): Smile though your heart is aching smile, even though it's breaking.

(END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: I love Nat King Cole. I could listen to a little bit more of that.

We want to remind our viewers, you can always check out our political pod cast. To get the best political team to go, this is what you need to do. Subscribe at CNN.com/situationroom. I think you'll like it.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM. Up next, "LOU DOBBS TONIGHT" -- Lou.