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ANDERSON COOPER 360 DEGREES

Report on Gov. Palin's Travel Expenses; Joe Biden Warns that Obama will be Tested as President; The "S" Word; Sarah Palin Up Close

Aired October 21, 2008 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Just two weeks to go, tonight the race is heating up.
Governor Palin blasting Joe Biden and continuing the attacks on Obama repeatedly using the word "socialism," she sat down with CNN's Drew Griffin today. We'll tell you what she had to say later.

But there are a number of developing stories right now. The big political story tonight, a new surge for Barack Obama; in CNN's latest poll of polls Obama is up two points from yesterday, leading McCain by nine points, 51-42 percent, seven percent unsure.

John King is going to be at the magic map and going to break it down for you state by state.

But we begin tonight with "Breaking News." New questions about Sarah Palin's travel expenses -- hello -- the Associated Press reporting tonight that as Governor Palin charged the state of Alaska for her children to travel with her and some of those trips were to events eventually where they were not invited.

The AP also says that Palin later amended her expense reports to specify that they were traveling with her on official business. Now, this story is still developing, it's just breaking, it's not clear what if any impact it may have.

The McCain campaign has been quick to put out a response. And we'll tell you that in a moment.

Right now CNN's Ed Henry joins me on the phone with the "Breaking News." -- Ed.

ED HENRY, CNN CORRESPONDENT: Well Anderson, as you know that Sarah Palin talks a lot about reform and saving tax payers money as governor. But there are new questions on that about her conduct in that office after the AP reviewed these travel records. They show that the Governor charge the state taxpayers over $21,000 for her children to take various commercial flights to attend official events with their mom.

In one case, they joined the Governor to watch their father in a snowmobile race, another time they went to New York in which the governor was at a conference for about five hours in New York. But her daughter, Bristol, stayed at New York City Hotel for five days and four nights on the state taxpayer's dime while her mom was at that conference. It's very important to stress a lever to put this in context; that Alaska law does not specifically address travel for children of any governor and so there's no evidence that either the governor violated a law or an ethical rule.

And as you noted, we do have a statement from Taylor Griffin. I just got off the phone with him; he's McCain/Palin spokesman, he told to CNN quote, "Like spouses and children of governors across the nation, Alaska's First Family make public appearances, attend events, and perform ceremonial duties in their role as the "family of Alaska's Governor. When members of the First Family participate in events, the state provides for travel to and from those events. Governor Palin refuses per diem payments for her children, which the state allowed for and initially provided until she ordered the per diem payments to stop."

So what he's saying that there were no per diem daily cash expenses for the kids but the fact is that their hotel was covered but also their commercial flights. And in the case for example from Alaska to New York, obviously commercial flights cost a lot -- Anderson.

COOPER: Ed, he's saying though when there's an official role for the family for the kids, according to this AP report though and according to a number of people at some of these events, there was no official role for her kids in some of these events, is that correct?

HENRY: Exactly. Like for example, there was that one conference that I mentioned in New York where the Governor had to be there but the children didn't necessarily need to be there. They stayed at the Essex House in New York City in Manhattan.

And so that's obviously where it gets into a gray area about exactly why the children needed to attend. I mean obviously, it normally covering the president, there are a lot of events where children don't necessarily need to be there whether you're president or governor but if you're traveling around the country or around the world you may bring your family and there enters into a little gray area there.

COOPER: And the other issue I guess that people are going to pick on or certainly her critics will pick on is the idea that she or somebody then amended these reports once reporters are asking questions about them, amended them to say it was a family trip or family official business.

HENRY: Absolutely. And that's why more questions are being raised. Taylor Griffin, the McCain-Palin spokesman insist that the amendment was only made to provide more disclosure after these questions were raised that they wanted to provide more information. And they insist that when you look at the full context of the report, that in her first year as Governor in 2007, Sarah Palin spent about $400,000 less than her predecessor as Governor Frank Murkowski spent in 2006.

So they insist that while sure there were expenses with her and her children, that in the grand scheme of things, it was much less than the previous governor, who was a Republican governor, is not a Democratic-Republican thing but the Republican governor spent $400,000 less than the predecessor.

COOPER: Right.

HENRY: So we're going to go back and forth on this. But obviously, they're insisting that in the grand scheme of things, they spent less money -- Anderson.

COOPER: All right, Ed Henry thanks.

Hard to know at this point whether the story has legs or not.

Joining us now CNN's senior political analyst and former presidential adviser David Gergen; Republican strategist and former senior adviser Mitt Romney, Bay Buchanan, who supports McCain; and CNN political contributor and radio host, Roland Martin who supports Obama.

David, what about this? I mean, to those who support Palin, this is much to do about nothing and to those who oppose her it's another mark against her. How big a deal could this be if no law is actually broken?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well Anderson, these reports and these activities are obviously eye-opening. But as I recall, most of this was reported early on when she was first named. There was a big story, as I recall about her charging per diem for the nights that she spent in her home in Wasilla.

And buried within that story toward the end of that story were these accounts about taking the children on state trips and then charging the state for them. And as I recall, I don't remember whether it was reported that she amended anything but I do specifically remember the trip to New York of that sort.

And what the story also went on to say, her defense was, well look, the last governor actually charged one heck of a lot more and I cut it down. So while eye opening and it cost some of a day in the news when days are precious. I don't think there's much new here.

COOPER: Bay, what about that?

I mean, the AP will say that there's a new level of detail that we hadn't known before on this question of amending the things. But does this matter -- does this amount to anything?

BAY BUCHANAN, REPUBLICAN STRATEGIST: No, it shouldn't, but of course it will because it's Sarah Palin and the national press is obsessed with Sarah and they're going to keep focus on it as much as they can.

But the bottom line is, this is clearly what you do as a first family. And those events were -- they say the kids weren't invited, all she had to do was make a phone call, and say look, you want me there, I'm bringing the family. This is clearly what you do.

In my position as a campaign chairman, I have all three of my boys as a single mom, have traveled on the campaign trail with me and the campaign paid for it. It comes as part of the territory. She is the official -- that is First Family of Alaska, when they travel as family, they do it exactly for that reason.

COOPER: Roland, is this something the Obama campaign will or should jump on?

ROLAND MARTIN, RADIO TALK SHOW HOST: Well, first of all I mean, I think you do jump on it. Because look, here's is what you have here, OK you have somebody who talks about being a maverick, somebody who talks about corruption in Washington D.C., in terms of how we manage our resources.

You can talk all day about what the previous governor charged and how you charged less. The problem comes in, is that when you say, you used taxpayer dollars to take your children to events when your children were not requested.

Now, in the grand scheme of things, is this huge? No, I don't think it's huge, but it does point to credibility of your argument.

David is right, it did come up earlier. But I think the key phrase in this whole AP story is amending or changing to reflect what she wanted. That's the critical statement. As well as the questions will all be posed, why did you change it then? If you thought it was all about your children, why wasn't it done right the first time? Why did you go back and change it, that's a critical phrasing.

BUCHANAN: It was clear clarification, Roland. Let's not introduce any double standards here. All she did was go back and the press asked for it, she reviewed it, she was smart, and she clarified that it was official business and she went with her children.

She's not trying to hide anything, she never tried to hide anything, it was always there, the dollars, the kids. And so this is clear what's happened here. And when you elect a mother of small children, you best expect, if she is a good mother and you hope she is, she'll be traveling with those kids. It's very simple.

COOPER: David you wanted to get in? Then we must move on.

GERGEN: Yes, I just want to say, I think it's inappropriate to use the word "corruption" in describing this and using that on that analogy. I have my problems with Sarah Palin. But on this issue, I do think, A, it's been reported and B, I think a lot depends on state practice and state law and state understandings.

And when it was reported, it was done -- this sounds very strange. I know a lot of other states she was taking per diem staying at home, my God, what are you doing? But within the context of Alaska, there seemed to be a much looser set of standards.

COOPER: OK, we're going to leave it there. A lot more to talk about tonight, David Gergen, Bay Buchanan, Roland Martin. We'll check in with you throughout this hour.

And let us know what you think. Join the conversation online at AC360.com. Check out Erica Hill's live web cast during the break, she just started that.

Just ahead does Palin really think Obama is a socialist? Drew Griffin asks her in an exclusive interview, coming up.

Plus this --

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN SPECIAL UNIT INVESTIGATION: Governor, if in two weeks you're not elected, do you come back at the top of the ticket in 2012?

(END VIDEO CLIP)

COOPER: Hear her answer coming up.

Also, Barack Obama "On the Trail" in Florida punching back on taxes and more. And John King and the magic map, breaking it down state by state where the race now stands.

We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: What I'm trying to do is provide a tax cut for 95 percent of working families. We are going to roll back the Bush tax cuts on the wealthiest Americans, those making more than $250,000 a year.

Now, Senator McCain, I think over the last several days, has been maybe a little confused about my plan. I'll give him the benefit of the doubt. Maybe he just hasn't read it.

(END VIDEO CLIP)

COOPER: In the swing state of Florida, Barack Obama today at an economic event, in Lake Worth. He's taking a shot at Senator McCain there and McCain is firing back as well, Obama continues to outspend McCain big time.

Obama's fund-raising totals have now passed $450 million and for McCain is more that $230 million. Today, both camps were out in force, pushing their platforms while attacking the challengers. It is down to the wire.

Tonight's "Raw Politics" here's Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: His foreign policy resume has become an asterisk to the story of a failing economy. But John McCain sees an opening in Joe Biden's warning that Barack Obama will be tested as JFK was with the Cuban missile crisis. McCain was around at the time.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: I sat on the cockpit on the flight deck of the "USS Enterprise" off of Cuba. I had a target. My friends, you know how close we came to a nuclear war. America will not have a president who needs to be tested. I've been tested, my friends.

CROWLEY: He spent the day in Pennsylvania. The state is a Herculean task for McCain but the electoral map is closing in. He needs the state's 21 electoral votes to make up for interior west states which may be slipping away. His campaign believes the race in Pennsylvania is closer than the current 13 point spread.

So McCain looks for any wedge. Even the World Series is fair game, so to speak.

MCCAIN: When he's campaigning in Philadelphia, he roots for the Phillies. And when he's campaigning in Tampa Bay, he shows love to the Rays. It's kind of like the way he campaigns on tax cuts.

CROWLEY: Actually, Obama has moved on from the Tampa Bay Rays to Miami and Joe the Plumber.

OBAMA: I've got nothing but love for Joe the Plumber. That's why I want to give him a tax cut.

CROWLEY: This is Obama's second day in Florida, a toss up state he'd like to win but could do without. McCain can't afford to lose it. So Obama is pressing hard; revving up a crowd of 30,000 plus in a Miami Park.

OBAMA: After eight years of Bush-McCain economics, the pie is shrinking. And what's left of the pie has been eaten by millionaires and billionaires. Everybody here wants some pie. We want to grow the pie and then we want a slice of the pie.

CROWLEY: He took the same message to a low energy panel discussing economic solutions and his opponents, known in Obama land as Bush-McCain.

OBAMA: They've offered a little more than willful ignorance, wishful thinking, outdated ideology.

CROWLEY: Fourteen days left and the rhythm of the campaign is set. Barack Obama is looking for the finish line, John McCain searches for an opening.

(END VIDEOTAPE)

COOPER: Candy, you said McCain's chances are long in Pennsylvania. What's the status quo in Florida?

CROWLEY: A tossup, Anderson. About a three point edge for Obama. McCain was up until the economy imploded. And I can tell you that the Obama campaign and certainly supporters here in the state think that the long lines for early voting, we had one anecdotal report of a voting place where it took almost three hours to get in to vote.

And that's with voters being able to sort of pick and choose where they want to go and cast their ballot. So the Obama campaign thinks that what looks like heavy early voting definitely favors him because people who are eager to vote, and we've always seen that the enthusiasm has been mostly on the Democratic side, so the Obama campaign believes that people who are eager to vote, that is their voters are the ones going to the polls and really crowding these polls.

COOPER: All right, Candy thanks for that. We told you the 2 point surge in the poll of polls today for Obama. But what matters of course is what Candy said, state by state, the electoral map.

CNN's John King is at the magic map to see where the race stands now and what could happen in the days ahead, could change everything.

And CNN's one-on-one with Republican Vice-Presidential Candidate Sarah Palin and her thoughts on the experience question and claims that Joe Biden is getting a free pass from the media.

Plus a report about how much the RNC spent on new clothes for Palin when she hit the national stage. Can you guess how much they've been paying? Find out tonight.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON, (D) NEW YORK: I want you to think how you will feel if we wake up on Wednesday, November the 5th, the day after the election, and John McCain and Barack Obama are tied. Ooh. Well, your vote could make the difference in Nebraska and Nebraska could make the difference in this election.

(END VIDEO CLIP)

COOPER: Senator Clinton at an Obama a rally in Omaha, Nebraska today. With five electoral votes, Nebraska is a red state right now. Good news certainly for John McCain but in the big picture Senator Obama has the lead both in the latest CNN poll of polls and on the political map.

Of course anything could happen in the next two weeks. Let's look across the board. John King is at the magic map with the latest numbers from some key battleground states.

So John, the McCain campaign is spending a lot of time in Pennsylvania. Why? What's the situation?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Why Anderson? For the very reason you see Senator Clinton in Republican territory like Nebraska. McCain is back because he is on defense; three stops in Pennsylvania today because they have come to the conclusion in the McCain campaign they have to win Pennsylvania to win the White House.

And let me show you just why they feel that way. Let's start here we have Obama projected now to already win 277 electoral votes. You only need 270. So what does John McCain have to do?

Well, he has to get Florida, and its 27 to turn those Republican red, North Carolina, where I was earlier today 15, turn those, Ohio, 20 electoral votes, turn those. Has to absolutely positively also win Missouri as well; there's 11. Out here in Nevada, it's a must win state for McCain, and people that's 5.

This one's interesting Anderson, they say they're not giving up on Colorado. So we'll turn it red for now. Even if it does, well look what happens. We've run out of states based on our projections, John McCain still doesn't win and guess what most of his senior advisers think he cannot win Colorado now.

So let's make that blue -- what do you get Obama 286, John McCain 252.

In the McCain campaign, they believe this is the only solution, it is a state that is not voted Republican since 1988, in 20 years; 21 electoral votes. If John McCain can switch it red, look what it does, McCain is your winner and Obama falls just short, if he can switch it.

Why Pennsylvania?

Because they look at this state and this is what they see. They see obviously a lot of red. George W. Bush lost this state by three points last time. It's very conservative out in here, very Democratic, you see the blue over here and you see the blue over here in Pittsburgh. But remember in the Democratic primaries, this is where Barack Obama struggled. He is the light blue, Hillary Clinton, the dark blue, Barack Obama.

Senator Obama struggled in the blue color areas here and struggled in the blue color areas there, so John McCain is hoping Anderson, to make it up. But this is why Pennsylvania is so tough. Our poll of polls at the moment has a 13 point Obama advantage.

So the McCain campaign says Pennsylvania is a must win. There is your steep hill, going into the last two weeks.

COOPER: Wow, yes, steep indeed. The new CNN poll of polls has other -- some numbers from other key battleground states. What's the latest?

KING: Let's look at some those states right now. We'll look at two of those states. And we'll go back to the '04 analysis here.

One is Ohio. We said it so many times, America should know it now by now. No Republican has ever won the White House without winning Ohio. And yet look at this Barack Obama, 48, John McCain, 45 on the poll of polls. That's essentially a tossup. But a slight edge at the moment for Obama.

We'll get rid of this and look at the state very quick. John McCain will be right here tomorrow Cincinnati, that is the huge part of the Republican base, he must turn that out and he must do very well across the rural part here.

And one more state very quickly Anderson, the key state of Florida, Candy just talked about it. She was dead-on in her report. The poll of polls has it as a three point gap.

Obama, advantage Obama now in the state that George W. Bush won twice, key to his victory there. And the biggest part of this state is right here the I-4 Corridor, Orlando, Tampa. Most of the Independents in Florida, a lot of the population right there, a lot of TV ads, and those markets Orlando, Tampa, over to St. Pete, the Daytona beach, key areas we watch, two weeks to go.

COOPER: All right John we'll check in with you again tomorrow night.

Much more from Drew's interview with Governor Palin ahead including what her role would be if the McCain ticket won the White House.

(END VIDEO CLIP)

PALIN: It's going to be government reform because that is what I've been able to do as mayor and as governor. You take on the special interests and the self-dealings and you ruffle feathers and you have the scars to prove it afterwards.

(END VIDEO CLIP)

COOPER: And later tonight, fat cats getting fatter after the collapse. The shocking story about how one Merrill Lynch executive is raking in millions while the company sinks. You won't believe this. Coming up.

(COMMERCIAL BREAK)

COOPER: We have an update on our breaking story about Sarah Palin's traveling expenses. As we said the Associated Press is reporting Palin charged the state of Alaska for her kids travel to events they weren't invited to.

We've just received from the McCain campaign the e-mail from Newsweek magazine inviting Bristol Palin to one of those events in question, a leadership conference in New York and the AP said she was not invited. The McCain campaign also said the kids had official duties at another one of those events.

There is a breaking story no doubt, we're going to hear more details about it tomorrow.

CNN's Drew Griffin talked with the Alaska Governor "On the Trail" today in Nevada. She's been drawing huge crowds there and hitting the Obama/Biden ticket hard. She began the week with new ammunitions responding to these remarks Senator Joe Biden made on Sunday.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D) VICE PRESIDENTIAL CANDIDATE: Mark my words it will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking.

We're about to elect a brilliant 47-year-old president of the United States of America, remember I said it standing there if you don't remember anything else I said. Watch, we're going to have an international crisis, a generated crisis, to test the mettle of this guy.

I can give you at least four or five scenarios from where it might originate and he's going to need help and the kind of help he's going to need is, he's going to need you - not financially to help him -- we're going to need you to use your influence you influence in the community to stand with him. Because it's not going to be apparent initially it's not going to be apparent that we're right."

(END VIDEO CLIP)

COOPER: We talked about those remarks last night with our panel. But in her wide ranging interview with Drew Griffin today, Palin had a lot more to say about Biden's warnings.

Here's Palin "Up Close."

(BEGIN VIDEOTAPE)

PALIN: A revelation occurred with Joe Biden's comment the other night, that he is telling his Democrat financial donors saying, that he said "mark my word, there's going to be economic or international crisis, he said, if Barack Obama is elected because he will be tested and he said there are four or five scenarios that will result in an international crisis with this untested presidential candidate in Barack Obama."

And first, I think we need to thank Joe for the warning there. But Joe's words there, I think, can shed some light, too, in terms of the contrast you have on the tickets.

John McCain is a tested leader. He has gone through great adversity. He has the scars to prove it, he has shown this true leadership, it hasn't just been all talk.

And Joe Biden's comments there about an untested, as he had said in the primary, unprepared candidate to be president, I think was very telling.

GRIFFIN: Have you guys been briefed on any scenario like this?

PALIN: On the four or five scenarios?

GRIFFIN: Yes. PALIN: Well, who knows what Joe Biden was talking about? All you have to do though, is look back at Obama's foreign policy agenda and you can assume what some of those scenarios may be as he considers sitting down and talking to Ahmadinejad or Fidel Castro or Kim Jong-Il some of these dictators, without preconditions being met, essentially validating some of what those dictators have been engaged in. That could be one of the scenarios, that Joe Biden is talking about, is as a result of that, that proclamation that he would meet without preconditions being met first, that could be a scenario that results in a testing of our country.

And the four or five other scenarios that he's talking about, I don't know, I hope that Joe Biden will explain it.

GRIFFIN: Does Joe Biden get a pass?

PALIN: Drew, you need to ask your colleagues and I guess your bosses or whoever is --whoever is in charge of all this, why does Joe Biden get a pass on such a thing? Can you imagine if I would have said such a thing?

No, I think that we would be hounded and held accountable, for what in the world did you mean by that VP presidential candidate? Why would you say that, that mark my words this nation will undergo international crisis if you elect Barack Obama.

If I would have said that, you guys would have clobbered me.

(END VIDEOTAPE)

COOPER: Well, our panel weighs in on Palin's remarks. Did Joe Biden give his opponents some valuable ammunition in these final weeks?

Also ahead, it takes money to look glamorous "On the Trail," a lot of money; a new report tells us how much the RNC has spent on clothes and make-up for Sarah Palin and her family.

Plus a bruising day on Wall Street the DOW erasing much of yesterday's gains, what drove it down? That's ahead on "360."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D) VICE PRESIDENTIAL NOMINEE: My friend, John McCain -- and he is my friend -- and Governor Palin love to call themselves mavericks, it must be every 20th word a maverick.

(END VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR: Senator Joe Biden, taking a little shot at his opponents. As we said, the race is heating up, there's not much time left to nail down votes. It's hard to tell tonight if this breaking news about Sarah Palin's travel expenses really make much of a difference. Joining me again are CNN senior political analyst and former presidential adviser, David Gergen; also CNN political contributor, Bay Buchanan who's a Republican strategist and McCain supporter and CNN contributor and talk radio host, Roland Martin who supports Obama.

So Bay, Palin has been hammering Biden for these comments he made about Obama being tested his first six months in office. Joe Lieberman did say kind of the same thing on CBS a while ago. I just want to play this.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN, MCCAIN SUPPORTER: Because our enemies will test the new president early. Remember that the truck bombing of the World Trade Center happened in the first year of the Clinton administration. 9/11 happened in the first year of the Bush administration.

(END VIDEO CLIP)

COOPER: so was Lieberman off base there? Was Biden off base for what he said?

BAY BUCHANAN, REPUBLICAN STRATEGIST: I think what Biden said was first of all so stupid as a candidate to suggest because he is the same fellow that just about a year ago said Barack Obama doesn't have the experience to be president.

So here he is, he suggests this, it's a message to, I think, our enemy, that this fellow is weak and you're probably going to come after him. It's an outrageous remark for Biden to have made not only as a candidate but as a leader.

COOPER: Roland, obviously do you disagree? The Obama campaign defended the remarks saying that Biden is speaking the truth. Do you find anything odd about his extensive scenarios and asking people for support for hypothetical situations months and months from now?

ROLAND MARTIN, OBAMA SUPPORTER: Well, of course. And I agree with Bay, it is a stupid comment for a candidate to make because also it takes you off message as opposed to what you wanted to focus on. That makes no sense.

It is correct though. Look, we face international crisis every six months. Russia and Georgia blew up during this political campaign. There is no doubt whoever the president, as Joe Lieberman, is going to face some international crisis.

If you were Biden, you don't invite more into your campaign, you want to push those things away. So, Joe, tighten up.

COOPER: David, what about -- is your advice similar? Interesting, he went on to say, it's not that we need your support because it's not going to be apparent that we're right. He sort of got lost in this, whatever he was talking about. DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Anderson, from my perspective, this is much ado about very little coming from the other side. During much of the Cold War, the Soviets would regularly test a new president, test their mettle, their courage, can you stand the heat? Can we roll over you?

Just as your political rivals will test you in this new age of terrorism, the terrorists, as Roland just pointed and -- Joe Lieberman pointed out. They tested Bill Clinton and they tested George W. Bush.

The next -- whoever the next president is, our rivals internationally will test him in the first months in office. We ought to brace ourselves. Hold on.

COOPER: Let him finish.

GERGEN: Thanks goodness -- Joe Biden didn't say Barack Obama will be tested but John McCain won't. What he was saying was whoever the next president is -- this is in essence what he saying -- whoever the next president is, is going to be tested.

Isn't it time somebody told us the truth about what's coming? Buckle your seat belts, it's coming.

BUCHANAN: David, he followed up and he said, how we respond you're not going to like very much so I hope you'll stick with us. What did he mean by that? What is it that Biden thinks Obama will do that the American people are going to be opposed to?

COOPER: David, beyond -- beyond arguing this on the merits, which seems like we pretty much exhausted it.

David, do you think -- do you think that fact that this is being latched onto, that these are the things, you know, the McCain campaign is talking about, that Sarah Palin is talking about in this interview, these kind of things, what does that tell you about where the race is now? I mean, is this a mistake for them to be talking about these little -- these details, these things? Or should they be going big picture?

GERGEN: I think they have -- they lack a coherent, consistent message from day-to-day. Everyday it's something else coming from them, you know, whether it's socialism or, you know, redistribution. Then now it's this. You know, if they had a more consistent message, the polls wouldn't be widening on them.

The big story tonight is, Anderson, after two or three days in a row talking about tightening polls, that they're now widening, and that is big news coming 14 days before the election.

COOPER: Bay, is that big news?

BUCHANAN: Well, there's no question that's unnerving. You know, you don't want them to be widening. They have to keep closing, and they have to close a lot faster than they've been closing if we're going to win this thing. I think it's very tough out there, the landscape is. But I think, you know, when the other side makes mistakes, you don't know what's going to work, so you have to throw it out because you have to hope that something catches on.

The Obama people have made two or three mistakes here. And hopefully, if they keep this up, maybe we will be able to close those polls.

MARTIN: Anderson, I've said plenty of times, and David is rights. We do like the truth. Some politicians have to be smart when to actually speak the truth. When your side is attacking your opponent for experience, you don't invite the additional questions.

COOPER: All right. Roland, Bay, David Gergen, stay with us. We're going to talk more ahead.

Just ahead, more from Sarah Palin's interview. She's been tossing around the "S" word, "socialism," calling Obama's tax plan socialism. You can be the judge. We're taking an up close look at her comments.

Also tonight, a cop goes too far, tasering a teenager at a party; the consequences are severe, when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL NOMINEE: Apparently, what they consider socialistic is my plan to roll back the Bush tax cuts on the very wealthiest Americans, tax cuts that John McCain himself said in 2000 were irresponsible and prevented middle-class tax relief. That's what he said then. He was right then. I'm right now.

(END VIDEO CLIP)

COOPER: Barack Obama throwing a counterpunch on the trail.

John McCain and Sarah Palin have been hammering Obama's tax plan hard ever since the last presidential debate, when Joe the Plumber took center stage. Palin now uses the "S" word, "socialism," in almost every speech.

Drew Griffin asked her about that today. Once again, Governor Palin, up close.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT: Joe the Plumber?

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

GRIFFIN: Socialism, it's come up on the campaign trail now.

PALIN: Sure. GRIFFIN: Governor, is Barack Obama a socialist?

PALIN: I'm not going to call him a socialist. But, as Joe the Plumber has suggested -- in fact, he came right out and said it -- it sounds like socialism to him. And he speaks for so many Americans who are quite concerned now after hearing, finally, what Barack Obama's true intentions are with his tax and economic plan.

And that is to take more from small business, more from our families and then redistribute that according to his priorities. That is -- that is not good for the entrepreneurial spirit that has built this great country. That is not good for our economy.

Certainly, it's not good for the opportunities that our small businesses should have, to keep more of what they produce in order to hire more people, create more jobs. That's what gets the economy going.

So finally, Joe the Plumber, and as we talked about today in the speech, too, he representing, you know, Jane the engineer and Molly the dental hygienist and Chuck the teacher, and all these good hard- working Americans who are finally, we're able to hear in very plain talk the other night what Barack Obama's intentions were, to redistribute wealth.

GRIFFIN: Do you think his intentions are, if not a socialist, is to move away from capitalism, true capitalism?

PALIN: Well, anyone who would want to increase taxes at a time like this, especially with economic woes that are adversely affecting all of us. Anybody who would want to do that, to take more from businesses and our families and then dole those dollars out according to their priorities, that is not a principle of capitalism.

GRIFFIN: Some are saying we're already moving towards socialism with the bailout, the banking industry investment that this government has made, that John McCain and Barack Obama have signed on for. What is your views on that and yet another possible supplement to the income of Americans?

PALIN: We cannot start moving closer and closer to socialism. That will destroy the entrepreneurial spirit in America. That will punish hard work and productivity and the work ethic that we try to instill in our children so that they will know that they can be rewarded for their productivity, for their hard work.

We cannot move in that direction, that it should be so concerning for any American voter to consider, that perhaps there are some who would like us to go there.

Now, as for the economic bailout provisions and the measures that have already been taken, it is a time of crisis, and government did have to step in, playing an appropriate role to shore up the housing market, to make sure that we're thawing out some of the potentially frozen credit lines and credit markets. Government did have to step in there. But now that we're hearing that the Democrats want an additional stimulus package or bailout package for, what, hundred of billions of dollars more, this is not a time to use the economic crisis as an excuse for reckless spending and for greater, bigger government and to move the private sector to the back burner and let government be -- assume to be the be-all, end-all solution to the economic challenges that we have.

That's what's scaring me now about hearing that the Democrats have a plan for an even greater economic bailout package. But we don't know all the details of it yet, and we'll certainly pay close attention to it.

GRIFFIN: On its face are you against that?

PALIN: On its face, I want to make sure that this is not being used by the Democrats as a time for bigger government, more dollars being taken from taxpayers to bail out any -- anybody, any entity that's been engaged in corruption, in self-dealing, in greed, there on Wall Street or in D.C. that has adversely affected Main Street.

So on its face we're going to need to know more about what the Democrats have in mind for this additional bailout.

GRIFFIN: As -- you're a fiscal conservative...

PALIN: Yes.

GRIFFIN: As a fiscal conservative, I'm looking at the McCain proposals, and all of them seem to involve heavy amounts of government money or government involvement, whether it be home mortgages or propping up the banking industry. Are you square with that?

PALIN: I beg to differ with that. Because what McCain has talked about with shoring up the home mortgage market, also to make sure that we're going to have a level playing field here.

He's not asking for an additional hundreds of billions of dollars. He's saying, OK, with the $700 billion that his colleagues and he there in Congress have already approved, let's make sure that the priority is we're going to help the homeowners who have been kind of sucked into the wrong mortgage. And that was via predatory lenders taking advantage, unfortunately, and exploiting too many Americans.

He's saying, let's take the dollars that are already there, and let's best use them. Let's -- he's not saying more, more, government intervention and more dollars. He's saying let's best use the dollars that have already been approved.

(END VIDEOTAPE)

COOPER: Sarah Palin tonight.

Another story that broke tonight that her critics will no doubt latch onto; the Republican Party reportedly spent big bucks, into the six figures, on new clothes and accessories for the governor, her husband and children. We'll have the numbers.

And part of the Wall Street bailout was supposed to be limiting big golden parachute pay packages. So why is Merrill Lynch big shot -- or a Merrill Lynch big shot getting up to $25 million just to walk out the door? That's ahead on 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL NOMINEE: Senator Biden referred to how Jack Kennedy was tested in the Cuban missile crisis.

My friends, I have a little personal experience in that. I was on board the USS Enterprise. I sat in the cockpit of the flight deck of the USS Enterprise off of Cuba. I had a target. My friends, you know how close we came to a nuclear war.

America will not have a president who needs to be tested. I've been tested, my friends, and Senator Obama hasn't.

(END VIDEO CLIP)

COOPER: On the trail in Harrisburg, Pennsylvania, today, Senator McCain running with Senator Biden's comments that Senator Obama will probably face an international crisis if elected.

The big story tonight, as we said before: Barack Obama's new surge. In CNN latest poll of polls, Obama is up two points from just yesterday, leading John McCain by nine points, 51-42 percent, 7 percent unsure.

Let's talk strategy. Back again, CNN political analyst and former presidential adviser, David Gergen; CNN political contributor and Republican strategist, Bay Buchanan, who supports McCain; and CNN political contributor and radio host, Roland Martin, who supports Obama.

So David, we've seen -- we've seen a level of such dissatisfaction only three times before: during Watergate, the Iranian hostage crisis, and the recession back in '92. In each of these examples, there was a change in government.

Obama also has a nine-point lead in the poll of polls, the largest margin so far. At this point how, if possible, do McCain and Palin overcome it?

GERGEN: I'm not sure they can anymore, Anderson, especially with the lead widening and not narrowing. The NBC/"Wall Street Journal" poll out tomorrow morning, 10 point lead. That's a very, very reliable poll, and it's one of the best that's taken.

So in this case, what we've seen, Anderson, after an awful lot of volatility, hairpin curves all the way through this election campaign, Barack Obama now has had a lead for about four weeks. The race has stabilized to a significant degree over the last four weeks. And he's held -- he's held the lead anywhere from about 5 to 8 points or so.

For John McCain to turn it around, he has to get beyond the questions of calling Barack Obama a socialist or raising all of these kind of side issues. Either they have to go big and can make -- be convincing that he can do something about the economy or I do not -- unless Obama makes a huge mistake or there's a big international incident, I don't see how he turns it around.

This is -- time is really of the essence now. And Obama seems to be settling into this four-week period of stability.

COOPER: Bay, a new CNN poll today showed 75 percent of Americans think things in the U.S. are going badly. Four in 10 predict another Great Depression will hit within the next year.

Is bringing up socialism going to do it for the McCain-Palin ticket?

BUCHANAN: Well, you know, Anderson, the key here is that the environment in which McCain is running is enormously difficult. No matter who it was as a Republican, it's going to be difficult.

And so what you have to do, you've got to be hopeful. You've got to try different things, different strategies. And what he's trying to do is make the American people know that -- that Barack Obama's answer, this socialism, this redistribution of wealth, is not something that Americans will favor.

And there's no question he has that socialist instinct. He votes to the left of an avowed socialist in the Senate. And so -- and also, he went and sought after the socialist endorsement -- the endorsement of the Socialist Party of Illinois.

COOPER: All right.

BUCHANAN: So you take these things and you move them as best you can. But it's very, very difficult out there.

COOPER: You just moved it about four times there, using the word "socialist," Bay.

BUCHANAN: You know, Roland laughs. But just a segment ago, what did he say? It's time to be honest. OK, let's be honest. Barack Obama is a socialist. It's that simple.

COOPER: OK.

MARTIN: Come on.

COOPER: Even Palin would not -- even Palin would not say that.

BUCHANAN: That doesn't matter; I'm being honest.

COOPER: Roland, what are your thoughts?

MARTIN: Well, of course, I can imagine having lunch with Bay and Pat Buchanan, where everyone is a socialist or a Marxist.

Look, the reality is you have candidates, both Obama and McCain, who have voted for a bailout package, who are bailing out various companies, OK? The so-called "free market" votes, they were against that. The bottom line is, McCain's doing the exact same thing. You step in, and you deal with the economy.

Look, if you're Obama, you adopt the Noland Richardson philosophy: 40 minutes of hell. You press, you press, you press. You don't allow your supporters to even think for a second that you have this thing in the bag. You stay on top of them. You want to drive the margins up. And so you press even harder. That's what they have to do.

McCain, he has to have a consistent message. You're right. You never know what -- what tomorrow is going to bring with the McCain camp. They're just throwing this mud on the wall and see what sticks.

COOPER: I just want to end the conversation, David, on kind of a lighter note.

According to Politico.com, the Republican National Committee appears to have spent about $150,000 on clothes and accessories for Governor Palin and her husband and kids. The article says it includes $49,000 at Saks Fifth Avenue and another $75,000 at Neiman Marcus, $4,700 on hair and makeup.

In terms of -- for candidates, is this par for the course? I mean, I know a lot of people on the Democratic side, I'm sure on a lot of the liberal blogs, tomorrow this is going to be a headline saying it's outrageous. Where is -- I mean, is this normal?

GERGEN: Anderson, I've never heard of it before. I've never heard of a clothing allowance, $150,000 for any candidate. I never heard of a clothing allowance of $5,000 for a candidate. So I don't know where this comes from.

Hey, she looks -- she's wearing great clothes. But why a political party is doing that beats the heck out of me.

MARTIN: Hey, Anderson, you know, I -- Anderson, I do take pride in my dressing. RNC, give me a call. I can get a cheaper deal. Trust me. I know how to shop.

BUCHANAN: Anderson, she looks like a million dollars.

COOPER: So it's well worth the money, you say, Bay? All right.

David Gergen, Bay Buchanan, Roland Martin, thank you. Appreciate your comments. Thanks.

We're going to come back to you.

Lots more coming up tonight.

Something to put a smile on your face, our "Shot." Our "Shot" tonight, a chimp on a Segway. You can't do much better than that. But first -- there it is.

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

HILL: We might need a shot of bargain shopping with Roland Martin, coming up.

Meantime, though, not a lot of shopping on Wall Street, in fact a lot of selling. A sharp pull back today, the Dow losing 231 points. That's 2.5 percent. The NASDAQ fell 73. The S&P sank 30. Fueling that sell-off, concerns about third-quarter earning reports.

Parting, not exactly sweet sorrow when you could be taking millions with you. According to news reports, the head of Merrill Lynch's global strategy, Peter Kraus, isn't bound by the part of the bailout that limits executive compensation. This means he can take a parting paycheck, which is worth somewhere between, oh, $10 million and $25 million.

The FBI is investigating a suspicious white powder found in 30 letters mailed to Chase Banks in nine different cities. That powder appears to be harmless calcium. A source close to the investigation says the letters are believed to have come from a single source in Texas.

And a cop at a party with alcohol and underage drinking; already maybe not a good scene for the guy, right? So when a 15-year-old volunteers to be tasered at the same Florida party and that rookie cop actually shoots the teen in the back, well, that's when you really wonder what he was thinking. No surprise, the officer, Anderson, was fired.

COOPER: Not a good idea.

HILL: Not so much.

COOPER: Up next, "The Shot." Something to put a smile on your face before you go to bed. A wild ride for a chimp, a chimp on a Segway. I mean, how can you do better than that? And it's on, I believe, a Japanese television show. We'll show you how it all ended.

(COMMERCIAL BREAK)

COOPER: On the radar tonight, our ten most wanted culprits of the collapse. We started with Joe Cassano from AIG, then Richard Fuld with Lehman Brothers, Chris Cox of the SEC, Phil Gramm of Texas, Former chairman of the Federal Reserve, Alan Greenspan, Ian McCarthy, CEO and president of Beazer Homes USA and Angelo Mozilo, the founder of Countrywide Financial and James Cayne former CEO of Bear Stearns.

We have two more names still to go.

Stacy writes on the blog: "Although my guess tat the majority of the American people will not like to comment I am about to make, I believe that we as consumers share part of the blame for the mortgage meltdown. Over the past several years, we have been spending beyond our means, including buying houses we can't afford. A person earning $50,000 a year has no purchasing a $300,000 home.

Angel says, "I think Culprits of the Collapse is one of the most important stories CNN has ever done. Putting faces on our deterioration helps. It brings me much joy to have faces to despise and curse."

While Gene in Vermont says, "These folks are pure and simple traitors to our country. They add nothing, they only take away."

Share your thoughts. Read the other comments by going to ac360.com. We name another name tomorrow night.

Time now for "The Shot." It's dramatic. It's an animal video. It's dramatic animal video.

HILL: ... the Shot.

COOPER: There you go. It's a chimp on a Segway on a Japanese game show. I don't even -- I don't know what more I need to say. Just watch and enjoy.

This is why they created TV in the first place, if you ask me.

HILL: You may be right. It almost has, like, sinister music there underneath.

COOPER: Edward R. Murrow said it's just lights in a box. There you go. And a crash.

HILL: The chimp is safe, though. That's the important thing.

COOPER: How smart of the chimp to get off the Segway before.

HILL: They are super smart.

COOPER: All right. As any long-time "360" viewer knows, we love this kind of stuff. We can't do without it. And it's not as good as our seamanship video, which we haven't shown for quite a while on this show.

HILL: No.

COOPER: Here you go.

HILL: Yes! You know, in tough times.

COOPER: Got to love Japanese TV. That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts right now.