think? no. okay. okay. you don't have to tell me. even rick thomas says love you, man. but don't give up your day job to go on tour. i won't. at least not any time soon. and for that, rick, you get a copy -- an autographed copy, i should say, of our book. i will be signing them here in atlanta tomorrow at the cnn headquarters in the lobby. if you want to come along, we will see you. here's wolf blitzer. happening now, president obama hears a is your priging plea from democratic leaders in congress. they watched him in action with voters and now there's something they want him to do to help them win on election day. he has a shot at being the next president of the united states. this hour, republican senator john thune tells me whether he is serious about a white house bid and whether he thinks mr. obama is doing anything right. and mcdonald's serves up a

warning for its employees. the fast food chain says it has tough choices to make about health care coverage as the new reform laws take effect. will its workers get burned? i'm wolf blitzer. you are in "the situation room." the nation's capital may be on the brink of a whole new day with change in the work at the white house and at a midterm election that could change the balance of power. a little more than a month before america votes, president obama is about to lose his right-hand man and one of his closest political adviser. sources tell cnn the white house chief of staff rahm emanuel will officially step down tomorrow to run for mayor of chicago. the president is expected to announce ee manual's exit in the east room of the white house. president also gave something of a sendoff today to democratic congressional leaders. he met with them behind closed doors at the white house as lawmakers head home for the last big campaign push before the

election. let's bring our senior congressional correspondent dana bash. dane a you have been speaking with some folks that were at that closed door meeting with the president. what have you learned? >> democratic congressional leaders used that strategy session at the white house today to press the president to be more aggressive in helping them campaign in the final weeks before november's elections. i'm told that house speaker nancy pelosi spoke up and said the congressional democrats really want to see him do more of the kind of rally he held in wisconsin this week where he amped up the rhetoric for democratic policies and against republicans especially when it comes to the issue of jobs and the economy. i'm told that in this meeting, the president made clear there would be more campaign events coming, more are already actually on the books beyond the three rallies that have been as publicly in neve metro, pennsylvania, ohio. these sources we talked to insist the tone of the meeting was not hostile. however, democratic congressional leaders did want to hear the promise directly from the president's lips he was

going to help them. i can tell you that congressional democratic sources i talked to for some timex pressed real frustration the president out there arguing for his policies they voted for and a collegent case against republicans. they want them out there in a big way on the stump because in the words of one of the sources, we need it. >> the president isn't as popular as he once was and some democrats are openly trying to distance themselves from the president. so why do these democrats want him out there so badly? >> it is true. the answer is because democrats i talked to said they still peel he is their best campaign spokesman for them. he's got the bully pulpit and when he is on, he's on. democratic leaders really wanted him to -- want to hear from him and wanted him to hear that they appreciated that he's -- when he is out there especially laying out the arguments on the economy, warning against what would happen when -- when and if republicans take control. one of the things that we are told the democratic leaders

talked to the president about in today's meeting, wolf, was that they understand that they have a real problem in revving up an unenthused base. let's get to ugly allegations rocking the california's governor's race. republican candidate meg whitman spoke bout the revelation her former housekeeper was in the united states illegally. whitman is denying the allegation that she knew for years or should have known about her status as an undocumented worker. we also heard from gloria allred. they say they have a smoking gun. our national political correspondent jessica yellin is here working the story for us. what exactly is meg whitman saying today to try to strengthen her case? >> well, first, wolf, she emphatically denies all of the charges. whitman denies she mistreated

her and knew she was illegal until last year and also has been answering the question well, why didn't she turn her in when she found out she was illegal? she answered that question repeatedly in a 45-minute press conference today. >> very fond of nikki. i didn't want to make an example of her. it is not -- an obligation of the employer to turn in illegal employees. and i -- you know, just thought i'm knowing go to make an of nikki. >> clearly she is trying to show a compassionate side while maintaining her tough on illegal immigration policy position. but bottom line, this was crisis pr 101. she took every question and has been doing a series of interviews to try to put this behind her. >> gloria allred the lawyer for the housekeeper in question, she says that whitman is not telling the truth. >> that's right. first of all, whitman appeared with her husband by her side claiming that her family never received a letter from the social security administration

telling them that her former housekeeper's social security number was bad. but gloria allred, celebrity attorney, held her own press conference and in a dramatic fashion produced what she said is a letter from the social security administration to the whitmans dated april 2003 and there is a handwritten note on the bottom of that letter that says nikki, please check this out. allred says that's the writing of dr. harsh, whitman's husband. she says this is the smoking gun letter and says that it proves that the family knew that their housekeeper was illegal and did nothing about it. >> illegal immigration has been a big issue in this campaign. >> absolutely. in california illegal immigration might be the biggest issue after jobs. but another major issue in the race is just -- latino outreach. that's because about 18% of the state's likely voters are latinos and meg whitman has been working very hard to woo those voters. it can't help to have video like this video we are showing behind

me from yesterday's press conference. video of this, a former latina employee saying meg whitman wasn't nice to me. just not what a candidate wants the final days after campaign. >> all right. thanks very much. she's trying to do damage control 101. go out there and answer the questions and be blunt. >> that's right. putting hiptd her. >> we will see how that works out for her. thanks very much. pakistan takes drastic action in response to a nato attack and could have a big impact on u.s. and allied troops. also ahead wooshg going to tell you why thousands of americans will be out of work by the end of this day. stay with us. [ male announcer ] the craftsman cordless multi-tool.

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jack cafferty is here. >> all the president's men and some of his women are headed for the exits or at least a lot of them are. white house chief of staff rahm emanuel out the door friday. going back to run for mayor of chicago. and emanuel is not the only one. president obama's inner circle, the chicago mafia, who is leaving or left the administration. senior adviser david axelrod plans to return to chicago after the midterms to start working on the president's re-election campaign. president's economic team also

pretty much history. larry summers, head of the national economic council, going back to harvard. peter orszag, budget director, christina romer, head of the council of economic adviser, they both left. over at the defense department, secretary robert gates also served under george bush. suggesting he plans to step down some time before president obama's first term over. of course, working for any administration, very tough job. the hours long and the pressure intense. it is not unusual to see a lot of turnover in these positions. in president obama's case, approval numbers are sinking and his party faces an uphill battle in the midterm elections. he now has a chance to bring in some new blood and maybe turn things around a little. the replacement selections could be critical depending on who he picks. president obama might be able to deflect criticism his administration is insular and out of touch. or not. here tees question. how important are the people around the president go to cnn.c cnn.c cnn.comcaffertyfile. >> very, very, very important

jack, thanks very much. by the end of the day, thousands of americans around the country will be out of work. that's because a federal program funding those jobs expires in congress did not extend it. let's bring in cnn's mary snow. she has the details for us. all right, mary. what's going on? >> lot of hopes were dashed, wolf, about this program. it is a program that was designed to help low-income americans find work. it was paid for by stimulus money and that money only lasted until today. 57-year-old greg wilkerson working at this nonprofit organization in philadelphia has meant the difference from living in a shelter versus an apartment. after struggling to find work, he was hired in may at $13 an hour do outreach work and help steer the unemployed to services they need. he tells us it is a job he desperately needed. >> i'm a single parent. it helped me take care of my son and pay my bills. we have a roof over our head. that's something we had a

problem with before. stable living environment for my son. >> reporter: now he's among thousands out of work because the stimulus money used to subsidize those jobs has expired. about $1 billion was used under an emergency fund for the temporary assistance to needy families. the center on budget and policy priorities, group that advocates bell and so middle income families, estimates nearly 250,000 jobs were provided across the country in both the public and private sector with programs in 11 states ending now. illinois an exception. >> i don't wouldn't see 26,000 people lose their jobs. >> reporter: illinois's governor has temporarily extended the program with the state's own funds until congress acts. that's a big if. an effort by senate democrats to extend the program for three months was blocked. republican opponents have been resisting more spending saying that it would add to the ballooning deficit. wilkerson is having a hard time reckoning with billions in bailout money. >> i wish -- oh, we don't have

the money to save large corporations. we don't have money to -- for the auto industry. >> reporter: as wilkerson looks for work, it comes 14 months into a recovery. economists say the economy isn't as strong as it should be and the intent of short-term stimulus programs was to prevent people from being unemployed for too long. >> the hope was that you could keep them reemployed on a short-term basis and wouldn't lose as many of the soft skills they needed in the labor force to get reemployed later on as the economy picked up. the problem is there are -- jobs now to replace the ones that we are losing. >> reporter: as wilkerson faces getting his last paycheck he is struggling to hold on to the stable life of his son he now cherishes. >> will we regress now? tell them i send the probability of a shelter is not too far away. this is a real-life situation. >> heartbreaking. greg wilkerson told me he is applying for more than a dozen

jobs. in the state of pennsylvania where he lives, it is estimated this program created about 12,000 jobs and also included summer jobs. this is one of many states. wolf? >> heartbreaking storin deed. we wish him good luck. thanks, mary, for bringing us that report. some may consider them a political odd couple of sorts. we will tell you why gop lightning rod sarah palin is now teaming up with her party's chairman michael steele. plus, he has a shot at being the next president of the united states, republican senator john thune is isn't shying away from holding his own party accountable. >> plenty of blame to go around. republicans obviously contributed to where we are. (announcer) everything you need to stay balanced on long trips. residence inn.

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fredricka whitfield is monitoring other top stories in "the situation room." >> hello, everyone. u.s. military officials say pakistan has closed one nato supply route into afghanistan following the killing of three pakistani soldiers. pakistan says the troops were killed when three nato helicopters crossed from afghanistan into its air space and attacked a military post. nato says its forces thought they were firing on insurgents.

the u.s. embassy is talking with pakistan to resolve the situation. a mall glimmer of hope for the ailing economy. the commerce department reports that the country's gross domestic product which measures economic activity grew at an annual rate of 1.7% during the second quarter. that's slightly better than economist expected at a report shows consumer and business spending being up but analysts caution that the pace of growth is still quite slow. former alaska governor sarah palin is teaming up with gop chairman michael steele to help raise money for the party. the 2008 vice presidential candidate who has recently been at odds with some republicans will join steele for fund-raising rallies next month. the move is partially viewed as an effort to mend fences. the price tag for a private meeting with palin, as much as $30,400. screen legend tony curtis

has died. the oscar nominated actor starred in more 50 movies, including hits, "the defiant ones," "some like it hot," "spartacus." curtis was married six times, most notably to janet leigh. his daughter, jamie lee curtis, has issued this statement saying, quote, my father leaves behind a legacy of great performances. tony curtis was 85. >> he was really, really something. all of us grew up watching him in movies. >> incredible body of work. >> i know. amazing. our condolences to his family. thanks, fred. sort of like tax cuts 101. does the president's economic adviser have his facts straight, though? james carville and bill bennett are both here and standing by live for our strategy session. republican senator john thune tells me what he would do if he runs for president and wins. >> i think that all areas of the budget have to be scrubbed. clearly the entitlement programs

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you are in "the situation

room." a political confrontation explodes in new york. pitting a republican zbub in a torial hopeful against a reporter. we will have the fallout. he helped bring down one president. just ahead, i will ask the legendary journalist bob woodward what president obama is doing right and wrong. i'm wolf blitzer. you are in "the situation room." stand by for my interview with one of the stars of the republican party. the south dakota senator john thune. check out our guest page to see what makes him so interesting right now. thune could be a top contender for president in 2012. he won office back in 2004 by defeating a major political heavyweight player tom daschle who was then the democratic leader of the senate. right now thune is the number four senate republican. he's running for a second term in the senate without any democratic opposition. thune bills himself as a pro-business and anti-tax and

anti-abortion leader. like the current president, he is a rabid basketball fan and get this, he ranked in the top five of huffington post list of sexiest u.s. senators. we are here with john thune, republican senator from south dakota. thanks very much for coming in. >> nice to be with you. >> are you seriously thinking about running for president in 2012? >> right now i'm seriously trying to help for the midterms. like a lot of people, i'm interested in public service. i want to do as much as i can to change the direction of this country and who will give consideration to that after midterm election zblis know you discussed it with your wife. >> this is true. any time talk about something of this consequence, that's -- she's one of my closest adviser. obviously and somebody i would consult on everything. we have a good amount of encouragement from people in our state as well as others around the country looking for someone to step up and i think there are a lot of folks very interested in changing the direction of the country. that's -- that's what i hope to

do. whether that means me being out there or others, we are certainly going to be involved in that. >> walk me through a little bit. your decisionmaking process. what goes into it, decision like this to run for the republican presidential nomination. >> i think that -- i have now been through the process before. but -- just in terms of -- people talked to me and encouraged me, my colleagues, and as i said, people in my state, people elsewhere around the country. and you want to know, obviously, that there are people out there that think that you are up to doing the job. obviously you have to ask yourself do i want the job? clearly there is a tremendous amount of work that goes in not only to run the campaign but if successful this will be a very hard job. there will be hard decisions ahead in that job. so you have to -- first question you have to answer. secondly, have you on make sure your family is onboard with that. if that was something you were going to entertain doing and i think you have to get down and very practical level saying can i raise the money. is there support out there, do i see pathway to get there? those are all questions i think any candidate has to contend

with ordeal with if they are thinking about that particular race. >> presumably you would make a decision shortly after the midterms early next year? >> early next year more likely. there will be a lot -- huge vacuum after the mid terms and people will be rushing to fill it and you will have a lot of candidates. there could be a very big field. i have not made any decisions about this. my guess is that there will be a lot of folks snapping up personnel in iowa, new hampshire, other places like that and taking very assertive steps in that direction. i think that, you know, sometime next year is plenty early. i think these campaigns are long and people get weary of them. it is probably an advantage not to launch too early. >> would it be a factor if sarah palin announces? in other words, would you want to be challenging her? >> i think that if she were to get into the race it would change the equation for a lot of people. >> explain how that would happen. >> i think she's someone that has a tremendous following out there and particularly in some of the early states. this is -- not a campaign where

you start out and run nationally right away. you have to get through certain states and she has a big following. if i were to decide to do it and -- i would go all out and i'm not sure at that point you can change or make a decision predicated upon who else is in the field. she is a formidable individual and someone that if she got into the race would have a tremendous presence in it. >> would discourage other republicans getting into the race? >> it might discourage some because there's so much space out there. and i think people fill different space on the continuum in republican party politics. so it could be -- she clearly would have an impact. whether or not she would discourage others from running, i don't know. >> what's your biggest problem with president obama right now? >> i think that the problem with president obama -- i like him personally. i came into the senate with him, is his agenda. if you look at what's happened the last 18 months, government has expanded at a greater rate

and more dramatic rate literally than any time since the 1960s. i think that he views government as really being the solution and being the answer. >> the national debt doubled during the eight years of the bush administration. >> well, i think republicans can be -- there's plenty of blame to go around. republicans contributed to where we are. the president can't divorce himself from what he has done since he has been in office. the last 18 months, if you look at the massive health care plans, stimulus bill, cap and trade bill, a lot of policies have been put in place or at least proposed i think are very detrimental to job growth and economic growth. right now that's the thing i think most americans are most concerned about. >> you knew him in the senate. did you know him well? >> we worked together on some issues. we did come together. like i said, i think he is a personally -- i like him. i think he has a very different view about how to solve problems and get the economy back on track than i do. so it is clear contrast, i think, in terms of where he

wants to lead the nation and where many republicans who may decide to challenge him in 2012 would lead the nation. >> you believe he is a christian? >> sure. yeah. i believe that. >> do you believe he was born in the united states? >> yes. >> why do so many republican, according to the polls, not believe a, he is a christian or that he was born in hawaii? >> well, that's a really good question. i'm not sure i know the answer to it. i think that most people that i encounter accept that. that's not a -- to me that's not the issue. the issue is -- his policies, what he is doing to take create jobs and grow the economy. and deal with what i think is a major issue and in the minds of most americans and that is the growth of government and the size of government. >> i want to get to that in a moment. do you think republican leaders have a responsibility to be more assertive and dissuading republicans from believing he is not a christian? he was than born in the united states? >> i think one when tissue comes up, my answer certainly is, you know, look, those issues --

those issues are settled. let's talk about his agenda and let's talk about why it is important we set a different direction for the country. that's what we ought to be focused on. >> stand by. we are going to find out if senator thune thinks president obama is doing anything right. more of the interview coming up. inside rahm emanuel's exit as chief of staff at the white house. his possible replacement and how the white house will change. ♪

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members of the u.s. senate are leaving d.c. to hit the campaign trail. there stacksing issue hanging over them. more of my interview with republican senator and possible 2012 presidential hopeful john thune. let's focus on tax cuts for a moment. you adjourned. you didn't extend continued the bush tax cuts for the middle class before leaving for this recess. the president says you are holding that hostage to keeping these tax rates for those making more than $250,000 a year, the rich, the top 2%, 3%, of earners in the united states. does he have a point? >> i think that if they had wanted to do that they could have. the house can pass and it the

house has a rules commity and could have brought a bill to the floor that shielded people under $250,000 in tax increases, passed it through the house and passed it to the senate. we would have had a debate about it because many of us believe we alt to extend the tax relief for all americans. not just that income tax level. you impact so much of the small business income at the higher two top marginal tax rates. but i can't -- i don't think you can blame republicans for that. democrats control congres they have huge majorities in both the house and senate. if they wanted to do that they could have. the reason they didn't is because they are divide order the issue. >> let's continue the bush era tax cuts for those making under $250,000 a year. which i suspect most people of south dakota and will leave aside the 2%, 3% the richer americans. how would you have voted on that? >> i think in the senate, the house is very different, obviously. they are going to have a structured approach. senate is free flowing and would have offered amendments to extend it for everybody. it is a hypothetical to suggest that we -- may have just had a

vote on limiting the tax increases to those that are in that income threshold. i represent a lot of small businesses and even though you say 3%, that's 750,000 small business essay cross the country and it will impact a lot of small business necessary my state. >> you are concerned about the national debt, big budget deficit. what, if anything, are you ireay to deal with social security? >> i think all areas of the budget have to be scrubbed. the entitlement issues have to be reformed. very strong bipartisan cooperation and leadership. and the discretionary side of the budget, i propose going back to 2008 levels, indexing it for inflation. you save half a trillion dollars by doing that. that's a small part of the budget. the big part of the budget now is the entitlement programs and that issue has to be addressed. defense budget, secretary gates said he wants to find $100 billion in savings and scrubbing

that budget. there are things we can do more efficiently, acquisition process that -- i think would need to be very strategic about how we spend military dollars and make sure -- >> most federal spending goes to medicare, social security, and the pentagon. and national security. if you don't deal with those three areas, you are not going to save a lot of money. >> i think that -- if republicans are given the reins of leadership in the house or senate or both, we will have to govern in a way -- at least put forward solutions whether or not the president goes along with them or not. that deal with these long-term challenge. >> what would you do differently than the bush administration over eight years and six of which there were republican majorities in the house and senate? what would you do differently next time around? >> i think that -- clearly the spending issue was something that republicans sort of lost their way on. i think we are going to have to make hard decisions and there are good examples of how that has been done. they have made hard choices in

new jersey. they know it is necessary and people of the country now know if they didn't know before it is necessary because of the huge deficits. >> biggest change you would do would be -- you would be willing to cut spending more than president bush and the republican leadership did then. >> we have to. we have to join the debate on entitlement reform and hopefully we can get bipartisan cooperation on that because it will take that. these issues are too big now, consequences are too great. if we don't get things turned around we are at a tipping point in my view. we have-to-about five years to correct some of the budget issues or debt is just going to overwhelm us. >> the tea party movement, are you with the tea party movement? are you part of the movement? >> i don't know what it means to be a part of it. i certainly agree with most of the things they are for. i think they bring great energy to our party. and to our candidates. and i think that the things they want to see accomplished are things we agree upon. yes, i agree with them on -- maybe not on every policy position but certainly most. >> what, if anything, has president obama done that you

like? >> i think the president has -- done things in a few areas. some of the things he is trying do in education are really good. i think that, you know, calling for accountability and trying to ernie duncan has done a nice job over there. i think in terms of some of the foreign policy issues, a lot of support from republicans with respect to afghanistan. a lot of areas where he has demonstrated weakness on foreign policy. but i think that the president -- certainly areas agree with him. if if you look at it in the totality, big issues facing the country today were jobs and economy, spending and debt. and some of these national security issues that headed in very different direction. >> he is 49 and you are 49. he was the first term senator when he ran. you are a first term senator and up for re-election. you don't have an opponent now. you might be running. a lot of similarities. do you think you are ready to go on a one-on-one debate with the president of the united states? >> i think if i made a decision to do that and i haven't, i would be ready.

absolutely. i think that this is -- politics is a tough business. i describe it as a full contact sport. you have to be prepared to get in there and mix it up. i have been through a couple of hard-hitting bare-knuckle senate campaigns. if i decided to move forward with that i certainly would be prepared important it. >> senator, thanks for coming in. >> nice to be with you. thank you. >> good luck with that decision. >> appreciate that. thank you. an indian holy site at a firestorm right now. why the opposing faiths may soon have to share it. plus, was top white house adviser david axelrod the target of a deadly attack in washington, d.c.? there are details of a new report just coming in to "the situation room." where other hammers can only dream of going,

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monitoring some of the other top stories in "the situation room" now. fred, what's going on? >> hello, everyone. an indian court is ordering a disputed holy site be divided between competing religious groups. the court ruled that muslims, hindus, and a local sect, will each get part of the land. in 1992 hindu extremists destroyed a muslim mosque on the grounds. triggering some of the worst sectarian violence in the country's history. muslims say they will appeal the decision to the supreme court. an opium production in afghanistan has dropped significantly. a new u.n. report says a plant infection targeting poppy crops in the country's war torn southern region is the primary cause. as a result, the price of the drug is now on the rise. opium is a major source of funding for the taliban insurgency. former president jimmy carter has been released from

the hospital after recovering from a gastric viral infection. mr. carter was admitted tuesday after falling ill during his book tour in cleveland. his office says that he will resume his schedule this week. with a meeting in washington. and the former president turns 86 by the way tomorrow. happy birthday to him. a new reprieve of sorts for the fading space shuttle program. congress just passed a bill authorizing nasa to launch an additional shuttle mission. president obama is expected to sign the $19 billion bill. it would delay the shuttle's retirement day to june of 2011. that's not expected plans to lay off more than 9,000 nasa workers, including over 1,200 due to lose their jobs tomorrow. wolf? >> four-month extension for the shuttle. fred, thanks very much. jack cafferty is asking how important are the people around the president of the united states? jack will be back in a moment. and one of the president's top economic adviser is giving

lessons on the bush tax cuts. james carville and bill bennett are both standing by live. they will grade his work. [ animals calling ] ♪ [ pop ]

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jack is back with the cafferty file. jack? >> question this hour is how important are the people around the president of the united states? pretty darned important if he's planning on making any correct decisions in the mere future. if he keeps surrounding himself with the political hacks and economic geniuses that he chose to start with, he will be toast. or lame duck for his remaining time. i think what we see here is the classic case of rats deserting a sinking ship. who obama replaces him is irrelevant. the democrat kratz had four years to change the course of america and all they succeeded in doing is drivering the bus over the edge of a cliff. they can blame it on whoever they want. they controlled congress the past four years. america is not willing to give them another four. eric writes you always judge by the company you keep. ron in minnesota says the people around the president are the filters that decide who the president sees, what the president sees, and when it is seen and for how long it is

seen. if that doesn't explain the importance of these people, i don't know what does. beth writes they can make or break a president see, just ask jimmy carter. that bunch of idiots cost him a second term. annie in atlanta writes the president's numbers are sinking in part because liberals like me are offended by people like rahm emanuel disparaging the president's base. and summers and geithner that may have had a hand in enriching their wall street buddies at our expense. the people surrounding the president have to be in touch with the mood of the country. that means us. us poor slobs who are obviously good for nothing but eating cake and voting every couple of years. it is really important. remember the presidency is an institution, not a man. and having the proper team makes the difference. paul in hawaii writes -- the s.s. team obama was struck by an iceberg named tea party. the rats are not sticking around waiting for the lifeboats to be lowered. if you want to read more on this, you will find it on my

blog. >> we are getting more information on rahm emanuel and his successor. we will have that at the top of the hour. we are investigating possible health care cuts from mcdonald's employees. you can certainly get aburger and fries. i veteran journalist bob woodward about obama's wars and why he thinks that the president's promise of change has fallen flat. andard ss "than you. "10 airbags... daytime running lamps... "onstar automatic crash response. "in case ya didn't see it, that's probably why "msn autos called the cruze "the class of its class right now. that seems pretty clear, doesn't it?" the all-new chevrolet cruze. starting under $17,000. get used to more. ♪ the power and versatility of six tools

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let's get right to the strategy session and joining us are our two cnn political contributors, democratic strategist james carville and national talk show host james bennett. we had a lengthy interview with john thune, and james, are americans ready for another first-term senator as president? >> well, i don't -- i mean, that guy makes a case. i don't think that is going to be like a real problem. i mean, and if he can get the republican nomination, look, but i thought it was a very good interview and i was kind of vexed as to -- he had to know that you were going to ask him about that, and he sort of, really, i don't know if he didn't deny the sense that he is going to run for president, but eam surpri i'm surprised he did it before election day, but it was a great interview and a i clearly enjoyed it. >> he made it clear that he is seriously thinking abrunning for president, and lot of the republicans think that he would

be an attractive candidate. >> well, i agree with james, it was a good interview, wolf. good interview. struck me, he is more voluble than i thought last time and more forthcoming and says more, and he has been practicing more. he is pretty impressive. look, with barack obama, you can say throw out the rulebook. you know, you needed a lot more experience, and one first-term senator, and maybe that rulebook is gone, but maybe after the experience of barack obama, you want to reinstate the original rule which is that you should have more experience before you get the presidency, but he is impressive. look, anybody can run from any position, and he has as good a shot as anybody. and again, good job. >> what jumped out at me, james, and i want bill to weigh in as well, he said if sarah palin runs, that could be a game-changer for many, because she is so formidable, and strong within the republican party. >> well, he is calculating, and understand that he is from south dakota in that, you know, that he is calculating that he can do

quite well in iowa. i'm surprise ed thd that this t politics as much as he did. he was not afraid to delve into the arcane political strategy of the she runs or maybe other people would not run. i just was, i was, again, i thought it was a good interview, but i was surprised that he would be talking about this, and usually tradition dictates, gee, i have not thought about that and i will deal with that after the election, but he was fortcoming and you had to -- i would be shocked if he didn't run. >> well, i asked him the questions and he answered the questions, and he didn't duck them. >> no, no. >> bill? >> yeah, no, that is right. i think that -- i disagree a little bit. i think that -- i don't think that sarah palin entering scares anybody or runs anybody out. you have to distinguish between sarah palin as celebrity as somebody who comes and charges things up, and sarah palin as, you know, the likely candidate of the republican party. i just don't think she is.

if you look at the polls, you will see nationally for republicans, you know, she is not at the top of the list. she is very popular, and she certainly can draw a crowd, but i don't think that if she got in she would run other people off and not the pawlentys or the romneys or the governors, i don't think. >> well -- james, a quick point? i want to make mine. >> well, the republicans want to go out to raise money and not run for president to kind of go out to kind of be a sort of secondary figure, but i don't think that sarah palin views herself as a secondary figure, and i don't think that she wants to go do that, but we will wait and see. i hope she runs. >> there is great percentage, james, in her not being perceived as being a second-level figure, and you understand that, too, right. >> i think that she wants to be, and run with the big dogs here, but we will see. >> we will see. >> and as i said before, she would do very well in iowa and certainly well in south carolina and maybe not as wem in new hampshire, but we will see with a lot of time to talk about

that. all right. a clip, and austan goolsbee is the new chairman of the president's counsel of economic advisers and he has a sound bite out, and i want to play a little bit of this. >> obama would preserve a couple thousand a year tax cuts for virtually all americans and even for people making a lot, they would get to keep the tax cut on the first $250,000 of their income. under the republican plan, however, people making more than $1 million a year, you are going to be getting a tax cut of more than $100,000. >> all right. what do you say to -- he used to be a professor of economics at the university of chicago, so he is good with that white chalkboard and all of that. do millionaires deserve a $100,000 tax cut, if you extend the bush era tax levels, bill? >> well, they do if you look at all of the facts. there needs to be another chart. if you take more of somebody's

taxes, obviously, you are getting more to come in, and however if you take more of somebody's taxes what is happening to the money that could be, or you could do other things with that money. if you want to give tax breaks to people under $250,000 that is fine, but why not give tax breaks to people who create jobs and hire people? why haven't the democrats brought this bill if they feel so strongly about this, why haven't they brought this bill? one of the reasons is two or three dozen democrats want to extend all of the tax cuts. >> respond, james. >> well, first of all the thing about the bush tax cuts, they manifestly did not work. agree that the rising tide is supposed to live all incomes at the height of the bush recovery. >> they worked. >> they did not work. >> they worked six years. >> and across the board, we can all stipulate -- >> six years growth. no, we can't. six years growth. >> i am sorry, and i am speaking while you are interrupting me, secretary. they did not work. incomes went down from 2002 to

2007, and when bill clinton came in with the real economic plan, we had exploding incomes in this country, and so we can all stipulate if people want the tax cut, just because they want the money and put a $700 billion on the deficit. so, we know it works, a clinton-type plan, and we know what doesn't work a bush plan. >> all right. >> and that is what the republicans want to go back to. >> bill, respond. >> well, we can meet on capital reduction gains and other things that clinton did, but if you look at the history of tax cuts, and increases, you will see that 90% of the time when you decrease taxes even on the high earners, you increase the revenue to the federal government and that is about 90% true historically. >> no, that is not true. under reagan, it didn't. if you raise more payroll taxes, you will get more money. but if you have a expanding tax base, the people have gone through this, and if you cut, it is $3.7 trillion these bush tax

cuts are going to cost, and the biggest contributor to the deficit are the wars and the tax cults, and get rid of the tax cuts and the wars and we will get rid of the whole thing. >> why do three dozen democrats stop the tax cults, and even peters or zag, doesn't he know what you know? >> well, for two years, be honest, he said he will get rid of them all. >> two years is fine. >> and james carville, and bill bennett, thank you both very, very much. you are in "the situation room," and happening now the white house on the verge of a new shake-up as the president's chief of staff prepares to step down. we will talk about rahm emanuel looming departure and much more with the award-winning journalist bob woodward. he is here in "the situation room." also, shocking video of the tee party-backed governor in new york in a heated confrontation threatening to quote take out a reporter. and we are digging into a report that tens of thousands of

workers could lose their health insurance if, if mcdonald's doesn't get what it wants from the federal government. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer, and you are in i'm wolf blitzer, and you are in "the situation room." -- captions by vitac -- www.vitac.com just over four weeks before the midterm election the winds of change in the obama administration are ramping up to gail force after a series of high profile departures and among the president's top advisers we are learning that the biggest one yet is announcing tomorrow. sourpss say that chief of staff rahm emanuel will step down to run for mayor of chicago. ed henry is already in chicago and working the story for us. all right. ed, walk us through what we know right now. >> well, wolf, you know that rahm emanuel's legacy is really going to be a series of high profile legislative victories from health care to wall street

reform, and it was fitting on the last day of the job, the president was meeting again with congressional leaders there at the white house and some of the grueling fights really could be practice for what is a brutal battle here for mayor. >> not everyone in washington has liked rahm emanuel's combative style, but voters here say it may be perfect for the bare knuckles' world of politics in chicago. >> if you want to be mayor of the city, you have to be nice and not so nice, so he will be perfect. >> reporter: now, rahm emanuel wants this perch, so he decided to come to farmer's market across the street to get a flavor of what people think. we have a lot of people who think that rahm is too much of a washington insider, but a lot of people believe he brings clout to the job, and his style is brash, but he will bring a lot to the table. >> reporter: what do you think

of rahm emanuel? >> he is very handsome. >> reporter: what about as a politician? >> he has experience and he has the ability, and he is awesome there. he has all of the connections and the night work and the money and the power. he should be fine. >> but friends of emanuel privately acknowledge this is no slam dunk, the field is wide open with ten candidates already running in the february democratic primary. and more than a dozen more mulling it. and critics who charge that daley is more focused on courting the powerful than helping the middle-class believe emanuel will be more of the same. >> we don't need another corporate mayor. we need somebody to understand the citizen. he may bring more of the problem. >> reporter: but others may be swayed by the informal endorsement of the former senator's administration. >> there is not an important thing in this administration that we have accomplished for the american people that has not involved heavily his signature.

>> now, losing someone whose signature son the president's big achievements is a blow for this president, and especially after a series of high profile departures from the inner circle, but there are some democrats back in washington who say, look, losing a high personality like rahm emanuel is okay for the president, and you have a low-key insider like peter rouse going in on an interim basis to steady the ship. but the bottom line, a heck of a lot of democrats across the country saying that when you lose someone of emanuel's stature, that is going to be difficult for this president, and especially since i remember being in the city two years ago basically where then president-elect obama pounced on the chance to have rahm emanuel, because he knew to have someone with congressional experience and stature would be big for him, and it certainly was, wolf. >> ed henry in chicago getting ready for the big announcement at the white house tomorrow. we will get more on this with

our senior political analyst gloria borger and john king who is the host of "john king usa" which begins at the top of the next hour and our chief correspondent candy crowley who is host of "state of the union" which airs sundays at 9:00 a.m. eastern. gloria, a lot of white house departures and looks like a new chief of staff as ed reported. pete rouse, and there is a picture of him sitting with the president that was released by the white house, and that sort of confirmation that he has the job. >> right. yaet, he does have the job, and you know, if rahm emanuel is kind of an outside guy, who did not know h-- who did know how t with congress because he was prominently and go on the sunday shows, et cetera, and pete rouse is a inside guy. he is a consummate insider and he was tom daschle's chief of staff for many years and he is somebody who knows the hill very well and he was barack obama's

chief of staff and then came over to the campaign. he was co-chairman of the transition, and talking to people inside of the white house, they see pete rouse as somebody who can get together, competing egos, and there may be a few of them in the white house. >> i'm shocked! >> and in washington, and get them together, and in a room to get them to deal with each other, and this is something that the president wants. there is a comfort level that the president has with him and little known fact that you may not know is that he was among those staffers who got the grateful dead to come back together during the campaign and again more recently before they went off on their tour. so if he can get the grateful dead together, who knows. >> and the president got a bunch of democrats together behind closed doors in the white house right now. we heard that there were all sorts of ideas and dana bash reporting in the last hour that they want at least some of the democrats the president to go out there aggressively to go out to make the case, and would you based on what you are hearing, john, a sense of panic though

among the democrats looking towards november 2nd? >> they insist pan sick the wrong word, but a profound sense of nervousness, you bet. as they look at the math and some of the strategists tell them that 35 seats are lost, but maybe it is 39 is the magic number for republicans. it is probably 35 guaranteed, but maybe we can fight and scratch and claw and keep the majority and others are saying maybe 55 and some who think it is higher than that and wolf, democrats am talking to. and are they nervous? you bet. it is too late to raise more money, and president has some, but you have the start buying television ads, and rally the base and everyone in the room said that you did a great job at the campus of wisconsin the other night, and that is what we need, however, some said, don't forget about the independents, so there is an inherent conflict of sorts, so if you rally the base with rhetoric, the republicans are evil and get out and vote, you risk offending thement ins who don't like the

polarizing rhetorics, and thement ins made nancy pelosi speaker in 2006 and inflated the margin in 2008 and abandoned the democrats in this campaign. it is risky, but he is our best weapon and we should use it, and see how it works. >> john boehner, the republican leader in the house and maybe the next speak over the house, he was speaking today, and a lot of people are thinking that he is getting ready the be speaker of the house. is that premature? >> well, it is premature, and we have to wait for the elections before he gets the curtains. and the fact is that he is sort of speaking to what john is tacking about here, because boehner today was about, i want to give more power to the rank and file, and i want to have what we do be a little clearer both to the american people and to others. i don't want to pass these things in the mid of the night without getting a democratic and republican. so it is kinder and gentler approach to the speakership that he is out there talking about, which i find interesting.

because the president has sort of been going after, if there is a face of the other party, it is john boehner, although i'm not convinced that a lot people know whoa is or could pick him out of a lineup, but at least using him as the punching bag, so while the president is out there going, they are going to take you back to where they went, boehner is saying, here is what we are going to do, and i will be much more inclusive. >> a lot of americans didn't know who newt gingrich was either until he became speaker of the house. >> well, speaker is different. >> and newt ro promipromised to different, and not so much, and pelosi promised to be different, and some say obama promised to be different. >> well, that says a lot about washington. >> yes, it says a lot about washington. >> we will have more this hour from bob woodward who is coming in, and stand by for that. and jack is up next with the cafferty file. and bob woodward with unrivaled access to what goes on behind

closed doors at the white house. h he is here this hour and will share what he knows. and mcdonald's is telling us that it may have to drop health insurance for ten ogsf thousandsf workers. a warning or threat? and plus, a new york candidate for governor caught on tape threatening a reporter. >>ly take you out, buddy. >> how are you going to do that. >> >> watch! it's work through the grime and the muck, month. tow and pull without getting stuck month. sweat every day to make an honest buck...month. and if you're gonna try and do this in anything other than a chevy... well, good luck...month. great deals on the complete family of chevy trucks all backed for a hundred thousand miles. it's truck month. now, during truck month, get 0% apr financing on all trucks and full-size suvs like this 2011 silverado.

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and jack is here with the cafferty file. >> not breaking news that the american people are fed up with washington and the politicians who make their living on our tax dollars and their inability to act on issues that matter to all of us. 3 in 10 americans say that things are going well in the country today. 30% according the a new cnn opinion research poll. in these disillusioned voters cast their ball lots in november, they will have a lot of things weighing on their minds when they pull those levers. the same poll shows 49% of those surveyed show that the economy is the top problem facing the country which is followed by 11% who say the deficit, and 10% saying education and 9% saying health care and the wars and other issues lower down on the list include things like illegal immigration, and terrorism and energy. when asked what the most important economic problem is, people overwhelmingly say jobs an unemployment.

no surprise. the national unemployment rate hovering below 10%. other economic issues include taxes, housing, the stock market, and inflation. these midterm elections are shaping up into interesting contests, aren't they now? with the anti-incumbent mood at record levels people are looking for something, anything different. which is translating into big victories for the tea party. many americans are unhappy with president obama's policies which could mean big losses for the democrats at the polls. you don't have to look any farther than the president's signature issue of health care reform. fewer than 1 in 5 americans say that the new health care reform law will help them personally, fewer than 20%, and half of the country wants congress to repeal most of the provisions of that legislation. here is the question, what issue is most important to you in these midterm elections in go to cnn .com/caffertyfile, and post a comment. >> jack, thank you. it's not often that we spee a

political candidate nearly come to blows with one of the journalists covering his campaign, but republican gubernatorial hopeful carl pal dino did just that yesterday, and we have the video that you are about to see. mary snow is working the story for us. i assume that there is some considerable fallout from the confrontation, mary? >> yeah, and wolf, it is only turning up the heat in a race that has turned very ugly. it is republican carl paladino against andrew cuomo. pala d paladino is a tea parrier, an businessman known for brashness. he vowed to take a baseball bat to albany when he won the republican nomination. and yesterday he suggested that and drew cuomo had an extramarital affair, but offered no evidence. enter the "post" reporter fred dickerson. he asked for evidence of the affair, and things got heated with him bringing up a "new york post" story about his daughter.

take a listen. >> i will take you out, buddy. >> how are you going to do that? >> watch. >> what you are -- >> wait, wait. you are out of line. you are out of line. >> you could hear paladino saying i will take you out, and here is the back story. the "new york post" ran a story about his 10-year-old daughter born out of wedlock, and pala dino said in a statement na he is angry about a photographer who tried to take photos through a window. now the "new york post" is insisting that it is not their photographer. wolf. >> wow. what a story. all right. mary, thank you very much for that. a white house insider is targeted by a gunman today, and a stunning new report about a deadly washington shooting last year, and the real target may, repeat, may have been one of the president's closest advisers. >> and he has had unparalleled

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fredricka whitfield is monitoring the other top stories in "the situation room" right now. fred, what is going on? >> hello, again, wolf. a lot of white supremists who fatally shot a guard at the holocaust museum last year reportedly was gunning for a top white house aide. "time" magazine says that the secret service learned that james von brunn's actual target was presidential adviser david axelrod. the 88-year-old von brunn had a history of violence and railed against jews on the website. a secret service detail was later assigned to axelrod. von brunn died in january before he could be tried. on wall street, the dow jones industrial average fell 47 points today, but blue chip stocks posted the strongest percentage gain for any september since 1939, the dow jumped 733 points this month, and that is a 7.7% gain. and the standard and poor 500

posted the best gain in september in 71 years, rising 8.7% on the month. and the nasdaq was up 12%. panasonic and whirlpool subsidiary in north america are facing a fine of more than $140 million for price fixing. a justice department statement says that both companies pleaded guilty of charges to manipulating prices for refrigerator compresses between 2004 and 2007, and the department says that these are the first charges in an ongoing investigation into the refrigerant compressor market, and both company's stocks are largely unchanged. and he performed an act of skill and heroism, and wrote a book about it as well. and now former united airways captain chesley sully is about to take flight again in the form of a movie. it is reported that flashlight films has picked up the rights to his book, and in january of

2009, sullenberger successfully land adieu nied a land adieu nied united airways on the hudson, and all of the crew and passengers survived. it will be a wonderful movie. >> ly wai will want to see that. thank you, fred. mcdonalds is telling us that they may have to drop tens of thousands of health insurance for its employees. and walking into "the situation room" is award-winning journalist bob woodward. >> thanks.

bob woodward is here in "the situation room", and we are going to be speaking in a moment, but here are five things that you should know about bob woodedward. one word, watergate. woodward was half of the reporting team that exposed the biggest white house scandal in u.s. history and brought down the nixon presidency. >> the justice department has confirmed -- >> reporter: if you weren't old enough to see watergate play out

live, maybe you caught the movie version. after two pulitzers, he is still at the washington post as associate editor, but now he makes the biggest impact on journalism, and politics and government through his books. he has written over a dozen best sellers including fly on the wall accounts of the administrations of bill clinton and george bush and now barack obama. >> this is first unvarnished view of obama. >> reporter: he is criticized for use of unused sources. >> who are you meeting with today? >> reporter: and usual style of story telling. for better or worse, the president's top aides keep opening up to woodward. his new book "obama's wars" describes a team deeply divided over the war in afghanistan. bob is here in "the situation room," and thank you for coming in, and congratulations on the

excellent new book. when president obama was elected in 2008, he was adored by so many people, so what went wrong? >> well, the economy has not been fixed. he's learned that he is not the commander in chief of the economy. there is an unsettled state everywhere. i find that in focusing the war in afghanistan, the war on terror, the secret war in pakistan which is really, you know, pakistan is going to be remembered in the history books because of what might happen during this period. >> like what? what do you mean? >> like, i mean, there are terrorist attacks being planned now against our country that are being hatched in pakistan by all kinds of groups, and not just al qaeda. and, the people who know, including the president, are alarmed is about as alarmed as you can be. >> well, speaking of that, you interviewed the president of the united states for your book, "obama's wars" and there is audio tape of one clip that is

chilling of the president speaking to you. you raise the subject and let me play the clip. >> certainly. >> a potential game-changer would be a nuclear weapon in the hands of terrorists, blowing up a major american city or a weapon of mass destruction in a major american city. and so, when i go down the list of things that i have to worry about all of the time, the, that is at the top, because that's one area where you can't afford any mistakes, so right away coming in, we said, how are we going to start ramping up and putting that at the center of a lot of our national security discussion? making sure that, that occurrence even if remote, never happens. >> did you get a sense though that he was really on top of this? that he knew the nature of the

threat, that he appreciated it, and all over it, or sort of a reluctant warrior? >> no n is exactly the right question. intellectually and totally engaged and considering the options and the consequences and so forth, but it, what he said there is one of the things that i have to think about all of the time. if you know, the phone rings, t at 3:00 a.m. or at noon or something like that, is this the moment that something like that can happen? it puts the president on edge, and he set up a system and process, and it is laid out in detail here. there are some glitches, and some things that they did a secret exercise hypothetically, a nuke going off in indianapolis, indiana, and that to see how the government responds, and it was all the government. it was kept secret, and they didn't let the media in or congress in, and they didn't let

the public in, and well, if something like that happens in this country, it's going to be chaos. >> sure looks like that exercise was a little dysfunction, is that what you are saying? >> yeah. and the people who were there said, this is off in disneyland and this is not connected enough now. you know, how do you actually have a real simulated exercise with something like that -- >> that is a war game, but not really realistic is what you are saying? >> yes. it is a giant problem, but you know, you asked at the beginning, what has happened to this beloved man or this -- he's sincere and engaged and he is doing so many things. what i found out in the wars is he is smart. he gets all of the intel, and he gets all of the assessments and he realizes that his war, afghanistan, not a lot of good news coming out. in fact, he comes out a couple of months ago one of the secret

meetings where they are getting an update, and he literally says to his aides, said, given that description of the problem, how do we design a solution? so, his mind is there. he's commander in chief, and he has got to be leader. got to be the man who's kind of yes, we can. but, you know, he doesn't use the word victory, and he does not use the word win. he wants to be successful. there is the question, does he have that will to win? >> because if you read the book, it sounds like he is a reluctant warrior? >> yeah, he is. >> very different from president bush? >> yes, sure. absolutely. now that here is the question, he has designed his own strategy in afghanistan and 30,000 more troops, and we begin withdrawal in july of next year, nine months from now, and it is very vague what that means. if it turns out to work, you know, he is going to go in the

geostrategic hall of fame as somebody who figured it out, because what his, what he did is what he designed. there was no general, no cia director, and no chief of staff saying this is the way to do it. he is the man. >> that is why you call it "obama's wars." this is chilling to me, and let me read a line from the book, because it says a lot of what is and is not happening right now. rahm emanuel was astounded that the intelligence on bin laden was not better. what do you mean you don't know where he is, the chief of staff asked, some $50 billion a year spent on intelligence and you don't have a clue where the most wanted man the history of the world is? it is pretty shocking when you think that that they -- is that true, they don't have a clue where bin laden is? >> that is what they say, but maybe they have a secret project where nay d, bthey do, but ever talked to turns the cards face

up, and we just don't know. there are things that bin laden is able to do, and he is not just a psychological force, but he communicates with some of his troops, and they are plotting, and they are recruiting -- it is very dangerous time. >> and you paint a picture of the white house chief of staff rahm emanuel being involved in the issues, and he is leaving, as you know, and what impact is that going to have? >> who is his replacement going to be? >> pete rouse. might be permanent. >> well, na low shg, that lowerl figure significantly. >> because he is so different from rahm emanuel. >> yes, because he calls leon panetta pa net ta regularly saying, who have we killed today? and he shows that the people who are doing the drone attacks realize it won't change the conditions on the ground. it is not going to win the war.

it's, you have to get panetta is quoted in the book as saying, you need boots on the ground. pakistani boots or our boots, because we have to do something with the safe havens, a touchdown president, himself, s -- and the president, himself, says at the secret meetings that pakistan is the cancer. >> stay tuned for more of this conversation with bob woodward as he shares more information on the obama white house. we will have more of the interview. and the fast food giant mcdonalds is considering important choices about health coverage for tens of thousands of workers. stay with us here in "the situation room." driving home nails quickly and easily in the tightest spaces. more innovation, more great values. craftsman. trust. in your hands. this chicken tortilla soup has such a wonderful zesty quality. that's the chipotle and cilantro. it's one of our new mexican soups. it reminds me of guadalajara. a special man.

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we are back with bob woodward, the journalist and his new book entitled "obama's wars" and the relationship that the president has with the military and the intelligence community for that matter. let me read from the book. dennis blair who was the intelligence chief saw a faultline in the administration. rahm emanuel's us meant obama and his team of political advisers at the white house, and the military leaders and former four-stars such as general

jones, the national security adviser and himself were outsiders. talk a little bit about this us versus them mentality. >> look, any white house is political, and this is no different, and they measure the political impact of everything. and somebody like general jones or retired admiral blair who was in charge of all of the intelligence for about 15 or 16 months, you know, they didn't think that politically. at one point, blair sends in the top secret presidential daily brief, and it has a warning about al qaeda people are being trained to come to north america and the united states, and rahm calls blair in afterwards and says, why did you put that in? are you trying to say it is our fault if something happens? and blair went ballistic and said, looks it is my job to tell the president to warn the president, and that is maybe one of the problems in the past before 9/11, and so, he is going

to be in there doing it, but rahm is looking at the political impact, and if you remember in the very famous pdb, before 9/11 -- >> presidential daily brief. >> yes, in which it said that bin laden determined to strike in u.s., and much criticism of bush that you got this warning, and why didn't you stop it. >> so, let me get back to it, and that worst case fear that the president has terrorists coming to the united states with nuclear device, and you have checked with all of the source and intelligence community and elsewhere and is that realistic or a fear that viewers out there should have? >> well, it is a long shot, and it would be hard, but look, you know, these people who want to kill and want to wreak havoc in this country know that if they did something like that, you know, it would be a ten on the richter scale. you know, there is evidence that

some people are working on it. we have massive efforts made to disrupt and stop these things, but look at the time square bomber. last may, may day, and came in with the suv and it didn't go up. it didn't blow off. and it could have, and leon panetta went to pakistan and said it could have killed hundreds or thousands of people. the u.s. intelligence, pakistani intelligence, didn't know, didn't track that guy, didn't see it coming. they went to the pakistanis, the united states officials, and said for practical purposes we have to consider this a success, because it evaded the screening that we have in our country. >> the book is entitled "obama's wars" and it is his 16th book. i am sure it is going to be a huge best seller. bob woodward, thank you for writing it. appreciate your coming in. mcdonalds is seeking a

waiver from the federal government right now, and says if it does not get it, tens of thousands of the employees may lose their health insurance. we are digging into the story. and turning down to volume of tv commercials and details of what congress is doing which could change your viewing experience. hey, lawrence, my parents want to talk to you. oh. about what? uh, they don't really think you're an exchange student. what? they think you're a businessman, using our house to meet new clients in china. for reals, player? [ woman speaks chinese ] they overheard a phone call. [ speaks chinese ] something about shipping with fedex to shanghai. and then you opened a bottle of champagne. that was for a science project. [ man and woman speaking chinese ]

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mcdonald's may be considering some big changes that could at their worst mean a end to health kocare coverage f a large bloc of the workforce. brian todd is looking at a warning from the fast food giant. brian? >> well, tens of thousands of hourly employees at mcdonald's

restaurants like this one may be facing an uncertain future at least regarding their health care. the management came out saying they have to make tough choices to keep them covered at the current levels. so mcdonald's is telling the government they need a waiver from the mandate or else. they say if the company does not get an exemption, the hourly employees will lose the minimal benefits that i have. the company is talking about a rule expected to take effect to tell insurance companies 80% of the money they take in to pay for treatment and not salaries. it would deny our people this current benefit that positively impacts their lives and protecting their health. mcdonald's workers don't belong to unions, but i asked damon silvers of the afl cio what he thought about the mcdonald's warning.

>> mcdonald's is saying we want to leverage the government by not enforcing the law and threatening to cut off health care to low-wage workers who paid for it with their own money. >> reporter: contacted by cnn, neither mcdonald's for the administration officials deny that a memo was sent, but mcdonald's in a statement to cnn said that no decision has been made and media reports saying that we plan to drop coverage for our employees are completely false. these reports are purely speculative and misleading and regardless of how the regulations evolve over the next few months, mcdonald's is committed to providing competitive pay and benefits and the strongest employment opportunities possible. how do the workers feel about this? i got a cheeseburger and fries but what i don't have is any employees of mcdonald's to talk to us about their health care benefits or how they feel about potentially losing them. this is the fifth mcdonald's in the d.c. area where we wanted to get comment from any of the hourly employees about that

prospect, and each time they tell us that we can not film inside, and the managers can not talk to us, and cannot talk without regional or corporation permission managing the facilities and they say either no or we will get back to you and so far, none of them have. another company with hourly employees offer the same kinds of plans as mcdonald's, but officials tell cnn that the rules that mcdonald's have been asking about have not been finalized about, and if mcdonald's requests a waiver, they are committed to finding a solution. one group at the center of all of this is the insurer that mcdonald's uses to cover the employees. we called that group, bcs in illinois and they would not comment on any of this. >> thank you, brian todd. we go become to fredricka whitfield who is monitoring other top stories in "the situation room." hi, fred. >> hello, wolf. bmw of north america says it is preparing to recall 198,000

beamers and rolls royces because of a leak developing in the power brake system. the recall involved several bmw models from a range of years from 2002 to 2010 depending on the model and 2002 to 2010 roelz royce phantoms, and the rolls says that the leak can cause a reduction in power braking assistance. a newly released study has found direct evidence that hyperattention deficit disorder or adhd could be inherited. researchers found genetic abnormalities that could lead to the development of the condition, but they say that the genetic markers only mark a susceptible to adhd and they do not rule out environmental factors, and they hope to one day develop a test, but they say it is unlikely to be any time soon. and former president jimmy carter is out of the hospital and on the mend. carter left metro health medical center in cleveland, ohio, after

two days of treatment for a viral infection, and the carter center said he would resume his schedule in washington this week. carter got sick on a flight to cleveland to promote his new book "white house diary" and he turning 86 tomorrow. happy birthday to him. congress is taking steps to stop those tv ads that blast you that are louder than the program that you are watching. before leaving town, the senate unanimously approved a measure to turn down overly loud commercials. the house passed a similar bill last year and final action is expected after congress returns after the november election. wolf, it is one of the things that drives people bat ti. >> it is annoying and one level for us and then al of the sudden the commercials start and it goes to a higher level and you turn it down and then you have to turn it back up, and it is a little bit annoying. >> they get your attention, and that is the strategy, right? >> yes, they want people to pay attention to the commercials. thank you very much for that, fred. what issue is most important

to you in the midterm elections? jack cafferty is standing by with your e-mail. and look at this, the naked cowboy. guess what, he is running for president of the united states. cnn's jeanne moos takes a most unusual look. >> get the back. come on, honey, i work hard on it for you. ♪

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jack is back with the cafferty file. jack? >> what issue is most important to you in the midterm elections? paul in new mexico writes, tipping the balance in congress and ensuring that obama's agenda is stopped cold. mario in phoenix, it's imperative in the next ten years we deliver the alternative green infrastructures that enable us to effectively manage the employment and growth deficits we face today. if we don't make that commitment we are doomed to repeat history

as the greek romans, spaniard and soviet empires were decimated by wars, the forever wars in the middle east and the thirst for oil will claim us too. mike in new hampshire writes getting a republican majority, even if a few nut cases from the tea party are needed to do it. frank in indiana, running the republicans who created this mess out of office. they've blocked bills, they do nothing. they don't care about the u.s., only money for the rich. ron in maryland, most important to me in the midterms, electing money-savvy congresspersons. if the government can rein in uncontrolled spending, stop borrowing from asia at all with the killer death service costs and start investing in business and projects that employ people, our economy will grow healthy again. joe writes, taxing the wealthy, tax breaks for the wealthy is like building a dam up stream. the rancher up stream gets more than enough water while the rest have to make due with what water

leaks through the dam. time to blow up the dam and let the water flow. there's plenty for us all. carl in illinois, the economy and illegal immigrant say no to amnesty of any kind, come to the front door legally or don't come at all. john writes reversing the path to socialism and national bankruptcy. tom in maine says, sanity. i agree with jon stewart. i don't want a mediocre bunch of politicians replaced with a bunch of hysterical flakes. what the hell is in that tea anyway? you want to read more on this, go to my blog, cnn.com/caffertyfile. >> i always do, jack. thanks very much. appreciate it. see you back here in "the situation room." a rise at anti-government extremism and militia activity right here in the united states. it's all detailed in a brand new article in "time" magazine. john king speaks with the journalist who wrote it on cnn's "john king usa" coming up at the top of the hour. we first came to know him as the naked cowboy. now he wants to be president

naked cowboy. cnn's jeanne moos checks out his white house aspirations here in "the situation room." the power and versatility of six tools packed into one. more innovation. more great values. craftsman.

entertaining new yorkers and tourists in times square as the naked cowboy has his eye on the white house. jeanne moos checked out his most unusual candidacy for president. >> reporter: instead of running around in his underwear he's running for president. ♪ i'm the naked cowboy

>> reporter: if you don't think he's serious, check out his new presidential look. >> i got to be honest, you are the naked cowboy, still, right? >> hey, how are you doing? >> reporter: hard to believe that's the half naked tourist magnet of times square. >> going for president? >> absolutely. obama's going down. >> reporter: don't let the underwear puns fool you. >> i like to keep things brief. >> reporter: he has a defrgree from -- >> if i can literally build a global brand with a pair of underwear and boots and hat, think what i can do for the city of new york. >> reporter: what he did was drop out of the race, fed up with the red tape and a $250 fine he had to pay for failing to file a required form. except in his attire, he's a

conservative. >> unapologetic commitment to our borders, our language, and our culture. wow. >> reporter: confirmation that he's running came on celebrity chasing tmz. he scheduled a press conference but when almost no one showed up it was rescheduled. only they got the month wrong on the naked cowboy's website and had to correct it. back in the '08 campaign, there were designer obama underwear. no one's actually run for president in their underwear, and his campaign manager says the naked cowboy will not be campaigning in his undies. at least know one will have to ask the naked cowboy this question. >> boxers or briefs? >> usually briefs. i can't believe she did that. >> reporter: now the guy who used to walk into a parking garage to change in his car and come out dressed in his tighty whiteys is hanging up his briefs, at least while campaigning. vote for the nad