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The Situation Room

President Obama Speaks at United Nations; Romney Speaks on Foreign Policy; Hopeful Signs for U.S. Economy; The Bill Clinton Effect; Possible Preview Of V.P. Debate; Romney's Three "Legitimate" Aims Of Aid; Building Better Schools; Not So Great Expectations

Aired September 25, 2012 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now: a speech to the world. President Obama at the United Nations goes in depth on the turmoil in the Middle East.

Also, Mitt Romney talking aid, trade and more drilling down on foreign policy. We're going to hear what he's saying.

And the news many homeowners have been waiting for years to hear.

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

A brief break from the verbal sparring in the White House race. President Obama stepped back in the global spotlight in New York today addressing the United Nations assembly. He spoke at length about the turmoil in the Middle East, touting diplomacy and coalition building as the solutions to the crisis in the region that's been vexing his administration.

Our chief White House correspondent, Jessica Yellin, is traveling with the president in New York.

Jessica, give us an update. What did the president say?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, when the president spoke here, he had two major audiences, a global audience and a domestic audience.

Voters listening now to foreign policy issues with a new ear and a new eye after this violence in Libya, and the president addressing it all just six weeks out from the election.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): At the United Nations, President Obama used the world stage to declare:

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The attacks on the civilians in Benghazi were attacks on America. There should be no doubt that we will be relentless in tracking down the killers and bringing them to justice.

YELLIN: His most expansive comments on what he called the crisis in the Middle East. He invoked the memory of one fallen American. OBAMA: We must reaffirm that our future will be determined by people like Chris Stevens, and not by his killers. Today, we must declare that this violence and intolerance has no place among our United Nations.

YELLIN: To the world, he offered a lesson in U.S. values, first denouncing the inciting video.

OBAMA: The crude and disgusting video sparked outrage throughout the Muslim world.

YELLIN: Next, affirming America's embrace of all religions.

OBAMA: We not only respect the freedom of religion. We have laws that protect individuals from being harmed because of how they look or what they believe.

YELLIN: Then a lesson in tolerance and the freedom of expression.

OBAMA: Like me, the majority of Americans are Christian, and yet we do not ban blasphemy against our own most sacred believes. I accept that people are going to call me awful things every day. And I will always defend their right to do so.

YELLIN: Seeing an inflection point after the Arab spring, the president called on the world's leaders to champion the same values.

OBAMA: There is no speech that justifies mindless violence. There are no words that excuse the killing of innocents There's no video that justifies an attack on an embassy.

YELLIN: And President Obama resisted campaign season pressure to intensify his rhetoric against Iran. Instead, he reiterated in stark terms his commitment to diplomacy and consequences if that fails.

OBAMA: A nuclear-armed Iran is not a challenge that can be contained. It would threaten the elimination of Israel. The United States will do what we must to prevent Iran from obtaining a nuclear weapon.

YELLIN: After his remarks, he crossed town to the Clinton Global Initiative where he addressed an issue with potential appeal to evangelical and women voters, human sex trafficking.

OBAMA: That's slavery. It is barbaric and it is evil and it has no place in a civilized world.

(END VIDEOTAPE)

YELLIN: Wolf, on other top foreign policy concerns, he addressed the crisis in Syria. He mentioned the withdrawal of troops from Iraq and the drawdown from Afghanistan and the trouble between Israel and the Palestinians.

But that was all. He essentially was checking the box on all those fronts, and no mention at all of China. In essence, Wolf, this was a speech about the two crises that have consumed foreign policy discussion during the U.S. campaign, the tension between Israel and Iran and now this most recent crisis in Libya, Wolf.

BLITZER: And with six weeks to go until the election, Jessica, tomorrow, I take it, he's right back out there in the swing states out on the campaign trail?

YELLIN: That's right.

He is hitting the campaign once again. He will be in the battleground states. This is campaign season for President Obama from here until Election Day with, of course, the debates coming up, first debate next week.

BLITZER: Yes. Three presidential debates. One vice presidential debate.

Jessica, thanks.

Also in New York City, Mitt Romney speaking at the Clinton Global Initiative just ahead of the president. Romney focused on foreign policy as well, vowing he would link U.S. foreign aid to trade with help going to developing countries that remove barriers to investment and trade.

He also discussed unrest in the Middle East and said he would have a different approach than President Obama.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: A lot of Americans, including myself, are developed -- excuse me -- are troubled by developments in the Middle East.

Syria has witnessed the killing of tens of thousands of people. The president of Egypt is a member of the Muslim Brotherhood. Our ambassador to Libya was assassinated in a terrorist attack. Iran is moving toward nuclear weapons capability. We somehow feel that we're at the mercy of events, rather than shaping events.

A year from now, I hope to return to this meeting as president having made substantial progress towards achieving the reforms I have outlined. But I also hope to remind the world of the goodness and the bigness of the American heart.

I will never apologize for America. I believe that America has been one of the greatest forces for good the world has ever known. We can hold that knowledge in our hearts with humility and unwavering conviction.

(END VIDEO CLIP)

KING: Let's get more on what's going on with our chief national correspondent, John King, and chief political analyst, Gloria Borger. He keeps saying, his aides keep saying he, Mitt Romney, will never apologize for America, the accusation being that President Obama has repeatedly supposedly apologized for America.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And you hear this from lots of Republicans and you have heard it over the last year so that the president apologizes for America, that he doesn't believe in American exceptionalism.

And it's no surprise to me, Wolf, that we're hearing this now. Look, there's a crisis in the Middle East. The only poll numbers in fact in which the president is going down are in foreign policy by sort of a handful of points. So this is a moment for Mitt Romney to take advantage of that, because in every other poll number, the president seems to be heading in the other direction, i.e., going up.

So he's trying to take advantage of that and to tell people, you know what, things aren't going so well in the Middle East, this is a president who hasn't been as strong as he says he's been, and wants to get some kind of advantage and some traction on that.

BLITZER: And certainly, John, while he was addressing the world at his U.N. General Assembly speech, he was also -- if you listen closely he was responding to some of that criticism from the Romney campaign.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: No question.

The president didn't break any new ground, but he used interesting and tough language when it comes the Iran. Governor Romney has been saying he's undermining Israel and he's throwing Israel under the bus.

The president said the Iran nuclear program is something that cannot be contained. As you know as well as I do, Prime Minister Netanyahu doubts the president somewhat. The president has said all options are on the table, but the Israeli government is not sure President Obama would follow through. The president said the United States will do what it must if necessary, said it cannot be contained. The Israelis will like those words there.

That was the principal there. The bigger question though, Wolf, you covered the White House for a long time. I covered the White House for a long time. There are a lot of people, it's not just the Republicans, a lot of people in the foreign policy community, even Democrats quietly, wondering if the president is making a mistake by not having the bilateral meetings at the U.N. General Assembly.

The new Egyptian leadership is there. The new Libyan leadership is there. The president of Afghanistan is there. You have fires burning around the world if you will right now. He might be president for four more years, he's certainly going to be president for the next couple months. A lot of people are saying is the campaign really that important that he can't spend some time eyeball-to-eyeball with those leaders? BLITZER: Gloria, I want you to weigh in. But the fact is that when George W. Bush was seeking reelection in 2004, he went up six weeks before the election, met with a whole bunch of leaders. When Bill Clinton was seeking reelection in 1996 against Bob Dole, six weeks before the election he was at the U.N. General Assembly meeting with a whole bunch of world leaders.

BORGER: This is kind of a don't rock the boat strategy.

I think there's a sense that no good can come of any controversy right now and that if you have one bilateral meeting and only one bilateral meeting, you're going to get other people angry. If you have a host of bilaterals, there's more of an opportunity to get more people angry.

So if you're in the Obama campaign and you're looking at the next six weeks, you're saying why do we want to cause ourselves any problems? And that's exactly what's behind this.

BLITZER: He's going to go back on the campaign trail, Florida and Ohio. I'm going to show our viewers our poll of polls, the average number of the most recent polls in these two key battleground states.

Let's take a look at Ohio first. Likely voters' choice for president, you see it right there, John, 50 percent for President Obama, 44 percent for Romney. That's a nice lead for Obama in the key battleground state of Ohio.

If you take a look at Florida, you see right now in our poll of polls the average among the most recent polls in Florida, 49 percent for Obama, 45 percent for Romney.

The question to you, John, can Romney win without winning Ohio and Florida?

KING: In a word, Wolf -- and I took a walk over here to show. In a word, the answer is no.

You just mentioned Ohio and Florida, states the president carried four years ago, states Governor Romney very much needs to win this time. Let's go to the electoral map to show you just why. Here's where we have it heading into the final six weeks, 237 electoral votes either strong or leaning the president's way, 191 for Governor Romney strong or leaning.

You see these are the tossup states, the golden states. Forget the rest of them. If the president can keep that lead and carry Florida, if the president can keep that lead and carry Ohio, the race is to 270, Wolf. That would be, in two words, game over.

BLITZER: Gloria, if you take a look at the strength that the president has in these states, you see something fascinating.

BORGER: It is. I call it the empathy question. If you look at this question that was asked in the new "Washington Post" poll, which candidate is seen as advancing the interests of the middle class, you see the president up by 25 points on that question in Florida, by 19 points in Ohio.

And that is, of course, what people vote on, because everybody says they're middle class. So this is essentially asking, who's the fellow who cares more about my interests? And with Obama up by those considerable double digits, it's very, very difficult for Mitt Romney.

BLITZER: Puts the pressure on Romney in these presidential debates, especially the first one a week from tomorrow, guys.

(CROSSTALK)

BLITZER: October 3.

Thanks very much.

Bill Clinton on Mitt Romney and the 47 percent. The former president talks to CNN's Piers Morgan about the Republican nominee and why the debates could make all the difference.

(COMMERCIAL BREAK)

BLITZER: Former President Bill Clinton praised both President Obama and Mitt Romney before their separate speeches to his gathering of business and political leaders today in New York.

But in a one-on-one interview with CNN's Piers Morgan, the former president got a lot more political about the state of the campaign. Listen to this.

(BEGIN VIDEO CLIP)

PIERS MORGAN, HOST, "PIERS MORGAN TONIGHT": Mitt Romney today came out with this line, which went down very well with the audience, as you expected. If there is one thing we have learned, a few words from Bill Clinton can do someone a lot of good.

What words would you have for Mitt Romney, given the state of the election campaign right now?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Well, I think, you know, the debates are very important for him.

MORGAN: Crucial?

CLINTON: I think so. And I think if he's going to double down on that 47 percent remark, that will cause difficulties because we now know that the overwhelming number of those people work and have children. And the reason they don't pay federal income taxes is the median income is as low as it was in 1995 now. And until the current election season, Republicans and Democrats supported both the child tax credit and the earned income tax credit.

This is a rejection of basically more than three decades of bipartisan policy to support working family. It's not a bunch of free loaders.

(END VIDEO CLIP)

BLITZER: That's only the start. Please be sure to watch the full interview with former President Bill Clinton on CNN's Piers Morgan tonight. That's coming up at 9:00 p.m. Eastern, only here on CNN.

Today also brought some hopeful signs about the U.S. economy. Home prices are on the rise. And so is consumer confidence. CNN's chief business correspondent, Ali Velshi, is joining us from New York right now.

Ali, update us on the latest information coming in.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, two pieces of information that are really key to people's decisions about how they feel about the economy. Consumer confidence is a measure of how people feel about the current situation and what it's going to be in the future. It rose nine points in September. That was after a decline in August. So in august people were feeling like things weren't going in the right direction. Now, the latest reading is that Americans are feeling quite strong. So that's a good bump in consumer confidence.

Now, here's the thing. If there's a cloud, an economic cloud over us right now, the silver lining has been housing. We have seen inventories drop, foreclosures slow down, prices start to stabilize and even rise.

We have a great measure called the Case-Shiller index. It measures 20 urban areas, 20 cities across the United States. And it is now measured the third consecutive rise in home prices now in September. In fact, we saw 1.6 percent rise, Wolf, compared to the previous month. So these are two pieces of good news. Sorry, July. July to August, we saw 1.6 percent increase.

So this is -- you know, these two things make people feel a little more prosperous. They think the job situation is going to improve after 23 months of improvement. And they're seeing home prices get a little better.

These are warming signs for the economy, Wolf.

BLITZER: On the other hand, as you know, some people see the housing numbers going up, they think maybe home prices could be bottoming out right now. What's the assessment on that?

VELSHI: Yes. And look, the thing about home prices to remember as you know very well, wolf, it's all local. Nobody necessarily goes out there and says, hey, home prices rose in the summer by 1.6 percent. Either it's time to get in or sell my house. You're going to find out what it's like in the area in which you're in.

So, Arizona saw some big increases. But places like Atlanta are still suffering in terms of housing prices. But all 20 markets are measured by this survey saw an improvement. That's a very, very telling sign. It's a combination both, Wolf, of housing prices possibly bottoming out and these remarkably, remarkably low interest rates. You can get a 30-year fixed mortgage now for little better than 3.5 percent.

So that's helping out the economy much more than anybody telling you what the economy is doing.

BLITZER: Certainly is. The political ramifications of this with six weeks to go until the election, the positive signs in the economy, what does that say at least over these six weeks for President Obama and Governor Romney?

VELSHI: Well, President Obama's got a few things that can go wrong. Some of them are political in terms of foreign policy. Economically his biggest issue is if something goes wrong between Israel or Iran, or Iran ratchets it up, oil prices start to go up, that always makes people feel very bad about the economy even if it's tied to something specific.

There are two jobs reports to come out. One next is Friday and the second is one five days before the election. Those could indicate something the president doesn't like.

Here's the thing, though, bottom line right now the economy is feeling good. As you know it's still polling as the number one election issue. If it keeps on track, the Republicans are going to have to watch their messaging about how this is a bad economy because many Americans are not actually feeling it's worse than it was four years ago.

BLITZER: And early October when jobs numbers, unemployment rate and also in early November before the election, the second one, still got those two jobs reports awaiting all of us. Thanks, Ali, very much.

Meanwhile, a severe breach of royal protocol forces the BBC to apologize to Queen Elizabeth. Details of what one reporter did that's unheard of in British journalism.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester's monitoring some of the other top stories in THE SITUATION ROOM, right now. Lisa, Iran's showing some military muscle in the Strait of Hormuz.

LISA SYLVESTER, CNN CORRESPONDENT: Yes, that's right, Wolf. The Iranian navy successfully fired four missiles designed to hit warships in the Persian Gulf, claiming that they sunk their target in less than a minute. The most recent tests might come as U.S.-led naval groups conduct mine sweeping drills in the Gulf. And as Iran's president, Mahmoud Ahmadinejad, prepares to address the U.N. General Assembly tomorrow.

And Queen Elizabeth's private comments about Muslim cleric Abu Hamza al-Masri now have the BBC issuing an apology. A reporter revealed that the queen was pretty upset that British officials didn't arrest the cleric after his 2006 conviction on terror charges. The court ruled that he can be extradited to the U.S. where he faces a possible life sentence.

In Britain, disclosing private conversations with her majesty is an extreme breach of etiquette.

And back here in the U.S., reading scores on the SAT have reached a new 40-year low, prompting alarm bells from educational leaders who say more than half of students probably won't succeed in college. The organization that gives the SAT says totals among every racial group except Asian students were down from 2006. Experts argue the marks are the result of more kids taking the test and correlation between high scores and income levels.

And from bad to worse. OK. Last night's final play between the Seattle Seahawks and the Green Bay Packers gave the Seahawks a win, even though the NFL admitted today it was wrong. The league said a correct penalty call would have given the Packers a victory. But it couldn't use instant replay to reverse it. Firestorm criticism continues to rage out on replacement refs with Packers guard T.J. Lang tweeting today, "Bleep it NFL, fine me and use the money to pay the regular refs."

Wow, all the regular refs have been locked out because of a paid dispute with the NFL. Some pretty strong language there.

But you know what I think, Wolf, everybody agrees they just want this thing resolved. Reach an agreement already --

BLITZER: I got to tell you, the NFL, the leadership, they are being so ridiculously stupid. It's not that much money in the scheme of things. Pay the refs, let the fans enjoy. Get rid of these ridiculous calls and have real solid referees. It makes me crazy to see what's going on as a football fan, I love the NFL, but this is making me nuts.

SYLVESTER: Yes. I think a lot of people too. You know, President Obama weighed in on this too, tweeting about --

BLITZER: It's not that much money and it's billions of dollars they make. Let them pay these refs a little more and move on.

SYLVESTER: I think a lot of people agree with you, Wolf.

BLITZER: What a blunder that is -- a horrible blunder.

All right. Our strategy session is about to look at how standing next to Bill Clinton actually helps both presidential candidates and how much it occasionally tends to overshadow them as well.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer in THE SITUATION ROOM.

Here are some stories we're working on right now:

Both presidential candidates had some face time with former President Bill Clinton today. Who did he help the most?

We're also looking at the biggest gain in politics right now lowering expectations for the presidential debates. Stand by. You're in THE SITUATION ROOM.

Let's get right to our "Strategy Session.' Joining us our CNN contributors, the Democratic strategist Donna Brazile, and Erick Erickson, he is the editor-in-chief of the conservative political blog redstate.com.

Erick, let me start with you and play a sound bite from Romney. He was speaking at the Clinton Global Initiative and he smiled at the beginning of his remarks. Listen to this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: If there's one thing we've learned in this election season by the way, it is that a few words from Bill Clinton can do a man a lot of good. All I got to do now is wait a couple days for that bounce to happen.

(END VIDEO CLIP)

BLITZER: A cute moment indeed. The former President Bill Clinton had said some really nice things about Mitt Romney in introducing him. Even though that was sort of light hearted, there's an important substantive serious point that could be made as well, Erick.

ERICK ERICKSON, CNN CONTRIBUTOR: Yes, I think so. They did a very good job there. Mitt Romney stayed away from really going after the president today. It really does show you how Bill Clinton has shined after being outside of the office.

And it also does raise a point that the crowd there recognized that a lot of the bounce that Barack Obama got out of his convention was really Bill Clinton's bounce. But I don't think he'll dispute it.

But I think he'll take it and Mitt Romney hasn't had that bounce. Everything seems to be faded now and we're back to the neck and neck race in this country particularly the swing states. I guess, this leads us to the debates. Are they really going to matter? You bet.

BLITZER: Donna, Clinton had a little fun introducing the president at the Clinton Global Initiative. Listen to this.

(BEGIN VIDEO CLIP)

FORMER U.S. PRESIDENT BILL CLINTON: If you're an American citizen and you introduce the president, you're supposed to say the president of the United States and shut up. That's it. I just want to make one comment about this. I'm going to finish that speech I started in Charlotte.

(END VIDEO CLIP)

BLITZER: He had a little fun at that as well. He spoke about 45 minutes in Charlotte at that convention. How much does Bill Clinton with six weeks to go, Donna, in this election campaign help President Obama?

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: You know, President Clinton has the mightiest touch. He understands this political theatre I think better than most former politicians. He is someone in touch with the values of everyday working Americans.

One of the most admired politicians in the country. There's no question that Bill Clinton is going to be helpful not just to President Obama, but Democrats up and down the ticket. He is in demand from all quarters of the country.

And I just hope and pray that Bill Clinton will not only get out there every day over the next 40 some odd days, but he's there to help President Obama and Vice President Biden with the debate preps. Because I agree with Erick, the debates are going to be crucial this election season.

BLITZER: All right, out on the campaign trail, Erick, Paul Ryan, the Republican vice presidential nominee, he's making some serious accusations against Joe Biden, but Joe Biden is responding. Listen to what Joe Biden said today.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: For the previous eight years all the policies that Congressman Ryan voted for and Governor Romney said he supported, all those policies in a mere eight years, they doubled the national debt. They doubled the national debt from what they inherited in 2001.

(END VIDEO CLIP)

BLITZER: All right, he's right on that because the debt was about $5 trillion when President Bush took office, more than $10 trillion when he left office. I think he's referring to the two tax cuts that weren't paid for, the prescription drug benefits that weren't paid for, two wars, Iraq and Afghanistan that weren't paid for that caused so much, at least 80 percent or 90 percent of that debt.

ERICKSON: Well, you know, I actually don't think the wars caused added as much, but a lot of stuff did. Here's a fact as well, yes, President Bush left office with a double national debt.

Here's another fact the Democrats don't like. President Obama has added more to the national debt than all other presidents from George Washington to George W. Bush combined. That too is a fact.

And also when George Bush was president, Joe Biden actually voted for some of those things. And remember in 2006 the Democrats took back Congress and Joe Biden kept on spinning along with the rest of them.

BLITZER: What about that, Donna? You want to respond because the national debt has gone in the nearly four years of the Obama administration from more than $10 trillion to now more than $16 trillion, an increase of $6 trillion.

BRAZILE: Well, first of all, Wolf, let me just say this. The two wars have cost us an enormous amount of money and the loss of our brave servicemen and women as well. So that added to the national deficit.

And one other thing that we should talk about in terms of the national deficit, part of it is that we're not bringing in as much revenue as we should be bringing in to pay for all the things, the services and programs that the American people continue to desire.

There's no question under this president that we've seen, you know, the most significant budget cuts also in the history of country. Discretionary spending is at its lowest in 60 years. Taxes are also at their lowest.

But the one thing that the Democrats have not done, we haven't walked away from the table. We haven't pointed fingers and said it's their fault. We're all in this together.

It's time Republicans roll up their sleeves and come to the table so we can fix this problem and solve our many other great challenges before the end of the year and the American people can get back to work. That's what they desire us to do.

BLITZER: I think both of these presidential candidates are gearing up for their one presidential debate in October as well. I'm looking forward to that like all of you are as well. Stand by.

Don't go away. We have more to discuss. Mitt Romney and Paul Ryan, they did team up together in Ohio today. And I want to get our strategists' take on whether they're more effective together or out there solo on the campaign trail.

(COMMERCIAL BREAK)

BLITZER: We're back with our CNN political contributor, the Democratic strategist Donna Brazile and our CNN contributor, Erick Erickson, the editor-in-chief of the conservative, political blog, redstate.com.

It was interesting when Mitt Romney spoke at the Clinton Global Initiative today, Erick, he made it clear he wants some changes, some reforms in U.S. foreign aid. But he supports foreign aid. Listen to what he said.

(BEGIN VIDEO CLIP)

ROMNEY: For American foreign aid to become more effective, it's got to embrace the principles that you see in these global initiatives, the power of partnerships, access to the transformative nature of free enterprise, and the leverage of the abundant resources that can come from the private sector.

(END VIDEO CLIP)

BLITZER: I listened closely to Romney's speech. He's made it clear to me he's an internationalist. He's not an isolationist. John McCain, for example, the other day was here in THE SITUATION ROOM, complaining about Senator Rand Paul of Kentucky calling him isolationist because he wants to end U.S. government foreign aid.

Romney today made it clear he supports the establishment in going forward with a better more improved foreign aid, but supports government foreign aid. What do you make of that?

ERICKSON: Well, I think he's stating what has been Republican policy for a long time. Ronald Reagan supported foreign aid, George H.W. Bush and George W. Bush did as well.

Look, I grew up in Dubai. I understand the power of American dollars overseas whether it comes from U.S. foreign aid or from private business.

But what I do disagree with and what I think the governor will also disagree with is we do need to probably stop funding countries that clearly aren't working in our interests.

BLITZER: Give me a name or two.

ERICKSON: Well, I think if you look at the present course being run in Egypt or even in Pakistan, I think we need to put some restrictions on our dollars being spent there.

BLITZER: Because the U.S. does give more than $1 billion a year to each of these countries, almost $2 billion to Pakistan. Donna, is that money well spent or money thrown away?

BRAZILE: No. I think it's important we do leverage our foreign dollars, whether we're giving them $1 billion or less than that. It's an important leverage to use in our diplomatic tool box.

But at a time when most Americans are feeling the pressure of this recession or still feeling the pressure, there's no question that they're going to ask our leaders not to spend so much.

But as you all know, Wolf, and Erick, it's less than 2 percent of our federal budget. I thought Mitt Romney gave a very good, smart speech. He's evolved a lot since the Republican primary.

But it's important when it comes to foreign aid, international relations, we'd be on the same -- I think both parties should be on the same page because we're living in some difficult days.

BLITZER: Erick, you saw Mitt Romney leave New York, fly right out to the battleground state of Ohio out on the campaign stump out there with Paul Ryan. Is he a better candidate out there when he's together with Paul Ryan or when they're individually campaigning?

ERICKSON: I think that's the biggest problem Mitt Romney has on the trail right now is that he's much better with Paul Ryan. He feeds off Ryan's energy. I actually think Paul Ryan does a very good job on the trail by himself.

Mitt Romney's improved on the trail being with Paul Ryan and that's a problem. He's got to skirt off to a bunch of fundraisers as well. One of the things it does help them with particularly in a place like Ohio is they get a lot more free advertising, free coverage from the media they don't have to spend when they're together on the campaign trail.

BLITZER: Erick Erickson and Donna Brazile, guys, thanks very much.

Much more new coming up here in THE SITUATION ROOM including building better schools. President Obama and Mitt Romney both want to do it, but they have very different ideas about how it should be done. We're going inside their education plans.

(COMMERCIAL BREAK)

BLITZER: They see the same problems, but like on so many other issues, President Obama and Mitt Romney sharply disagree on how to improve America's education system.

We asked CNN's Lisa Sylvester to go in-depth on what each of these two men wants to do. And you've taken a close look, Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Yes, that's right, Wolf. You know, President Obama and Governor Romney, they do share some things in common when it comes to education.

Both men, for example, support charter schools. There are a few major differences between the two candidates. And that could have a direct impact on students and their parents.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): At this elementary school in Potomac, Maryland, first graders are learning their math language in Chinese, part of a language emersion program.

But at the same time other schools across the country from Washington, D.C. to Texas are so strapped they've been forced to consider letting go of librarians, cutting bus routes and eliminating field trips.

It's something parents all know where you live can determine the quality of your child's education. But the nation's education system as a whole is lagging when compared to other developed countries.

The U.S. ranks 14th in reading, 17th in science and 25th in math. How to fix the education system was front and center in Chicago this month as teachers walked off the job over issues of longer school days, merit pay and teacher evaluations.

Education reform is an issue in the presidential campaign. President Obama and his Republican challenger, Mitt Romney, both favors expanding charter schools, support standardized tests and want more accountability from teachers and principals. But the two men have significant disagreements.

UNIDENTIFIED FEMALE: I think some of the main differences between Governor Romney and President Obama when it comes to education come in the area of school choice. Governor Romney sees a really robust rule for school choice and school improvement whereas President Obama like a lot of Democrats has been skeptical of vouchers.

SYLVESTER: Romney supports taking federal dollars for educating special needs and low income families, known as Title I funds and giving them directly to parents in the form of vouchers although Romney avoids using that word.

ROMNEY: For the first time in history, federal education funds will be linked to the student so that parents can send their child to any public or charter school of their choice.

SYLVESTER: The Obama administration is staunchly opposed.

(on camera): Why not expand vouchers? Why not give parents more choices?

ARNE DUNCAN, EDUCATION SECRETARY: The goal can't be to remove one child from the system and let the other 500 drown. We have to make every single school a great, great school. I think all of our time and energy and resources should go to making public schools, schools of choice.

SYLVESTER: Education Secretary Arne Duncan is using federal dollars as an incentive for states to raise academic standards in a program called "Race to the Top."

He wants school districts to adopt a common set of standards. So what a child learns in Topeka, Kansas, is the same in Toledo, Ohio.

(voice-over): The Obama administration has given states billions in stimulus dollars to reform schools. That brings us to another difference between Obama and Romney, funding. Here's how Duncan views it.

DUNCAN: When you think of education as an investment, they look at education as an expense. And Congressman Ryan's budget, which Governor Romney supports would see 200,000 less programs go to head start programs, huge cutbacks in programs for children with special needs.

SYLVESTER: It's unclear if Romney would follow through on the cuts proposed by his running mate. We reached out to the Romney campaign, but did not make anyone available for comment.

But fiscal conservative groups like the Heritage Foundation say spending needs to be reigned in.

LINDSEY BURKE, HERITAGE FOUNDATION: We've seen this tremendous increase in spending and yet we have nothing to show for it in terms of results. And I think it really does come back to the idea that it's not about more spending, it's about empowering parents with control over how we spend those dollars.

SYLVESTER: A no child left behind, both candidates say the law needs to be fixed. Romney emphasizes transparency and requiring that states release public report cards on all schools.

The Obama administration has granted waivers to 33 states and the District of Columbia to develop new standards and ways to measure progress. Both men agree the nation can't afford to fail its students.

(END VIDEOTAPE)

SYLVESTER: Now, "No Child Left Behind" is long overdue for re- authorization in Congress. Democrats and Republicans though both have issues with the law. But they can't agree on what should be the proper fix.

So it's been caught up in gridlock. In the meantime, we've seen the Obama administration going around Congress by giving these states their waivers and therefore more flexibility -- Wolf.

BLITZER: And a lot of debate over whether or not these teachers spend way too much time just getting these kids ready for standardized tests as opposed to teaching them math and reading and science and whatever.

SYLVESTER: That's a big issue. If you've been following education, you hear teachers complaining about this. You hear parents complaining about this, the so-called teaching to the test.

But actually both Romney and Obama they both support standardized tests and having some measures, some accountability. But the question is how do you keep and maintain that accountability.

But still have where you're not spending all your classroom and instruction time merely practicing and rehearsing for these tests and not giving students the broad education and that's sort of the real rub here -- Wolf.

BLITZER: It's a great subject. Glad you're investigating, thanks very much.

The presidential candidates have been attacking one another for months, but guess what? Both sides all of a sudden are praising the other man's debating skills. Our own John Berman's very suspicious about what's going on.

(COMMERCIAL BREAK)

BLITZER: Here's a look at this hour's "Hot Shots." In South Korea, honor guards carry flags for armed forces day. In Vietnam, customers look at lanterns in a toy market.

In France, yacht teams compete during the 34th edition of Royal Rigata. In Indonesia, look at this, a mother tiger watches over her cubs at a cage in a zoo. "Hot Shots," pictures coming in from around the world.

The first presidential debate is one week from tomorrow night, which means both campaigns have just over a week to convince us it will be a miracle if their man wins.

CNN's John Berman is following the race to lower expectations -- John.

JOHN BERMAN, ANCHOR, CNN'S "EARLY START": You know, Wolf, we always complain about all the negative attacks in campaigns, but it turns out there's nothing more devious, nothing more cynical than when these guys are actually nice to each other.

You know, if you want something to hate about politics, it's this, kindness.

(BEGIN VIDEOTAPE)

BERMAN (voice-over): The Obama campaign has spent months and millions trying to convince voters that Mitt Romney is unethical.

UNIDENTIFIED MALE: He won't release his tax returns before 2010.

BERMAN: Unprepared.

PRESIDENT OBAMA: My opponent and his running mate are new to foreign policy.

BERMAN: Unattached to reality.

PRESIDENT OBAMA: My thinking is maybe you haven't gotten around a lot.

BERMAN: With all those alleged problems, surely he has no chance of prevailing against President Obama in the debates, right? Well, not according to the Obama campaign.

ROBERT GIBBS, OBAMA CAMPAIGN SENIOR ADVISER: Mitt Romney I think has an advantage because he's been through 20 of these debates in the primaries over the last year.

BERMAN: The Romney team says President Obama is weak on foreign policy.

REPRESENTATIVE PAUL RYAN (R), VICE PRESIDENTIAL NOMINEE: What we do not see is steady consistent American leadership.

BERMAN: Weak on the economy.

ROMNEY: He's over his head and he's swimming in the wrong direction. BERMAN: And just plain weak overall.

ROMNEY: The president today threw in the white flag of surrender again.

BERMAN: With all those weaknesses, surely he would be easy to beat in a debate, right? No, not according to Mitt Romney.

ROMNEY: He's the president of the United States. He's a very effective speaker.

BERMAN: So follow this, Team Obama suggests Romney is a sure thing to win the debates. Team Romney says it's Obama. It's like that famous bizarre world episode of "Seinfeld".

UNIDENTIFIED MALE: Up is down, down is up, says hello when he leaves, good-bye when he arrives.

BERMAN: But bizarre Seinfeld was funny, bizarre campaign, a cynical farce. Each side trying to set the expectations so high for the opponent they can't possibly be met.

So low for the home team merely speaking in a complete sentence would be a victory. It is a long held tradition. An advisor to George W. Bush once called John Kerry, the best debater since Cicero, but it is a troubling tradition no matter what they say about each other.

GIBBS: Having been through this much more recently than President Obama, I think he starts with an advantage.

BERMAN: Elections are not graded on curves. Not even bizarre elections.

(END VIDEOTAPE)

BERMAN: So here's still more proof this whole thing is a farce. Here's my guarantee. No matter what they're saying now about who will win, after the debates are over both sides will claim victory no matter what -- Wolf.

BLITZER: John Berman, thank you.