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The Situation Room

Unemployment Rate Drops Sharply; Tainted Medicine

Aired October 05, 2012 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now: The Obama and Romney camps spar over a new jobs report. We are going to hear from Mitt Romney live this hour.

The real story on the jobs report and a charge that the numbers are cooked.

And tainted medicine and deadly meningitis, a startling jump in the number of cases of meningitis. Dr. Sanjay Gupta on how to stay safe.

I'm Wolf Blitzer, and you're in THE SITUATION ROOM.

If there is one issue that could decide the presidential election, it's jobs. And today, new employment numbers are giving the Obama campaign a lift after the president's widely panned debate performance.

The unemployment rate unexpectedly fell to 7.8 percent in September. That's down from 8.1 percent the previous month and that's the lowest level since January 2009, the same month the president took office. A separate survey of employers showed businesses added 114,000 jobs last month.

That's a slowdown from previous months after the July and August figured were revised higher. Turns out 86,000 more jobs were created this summer than previously reported.

Our national political, Jim Acosta, is standing by to give us Mitt Romney's take on these new jobs number.

Let's go over the our chief White House correspondent, Jessica Yellin, to tell us how the Obama camp is reacting to all of this -- Jessica.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, the president is using the numbers to support the case he has been making all along, that his policies have been good for the economy. At the same time, he is careful to make clear that he knows the economy is not out of the woods.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: After losing about 800,000 jobs a month when I took office, our businesses have now added 5.2 million new jobs over the past two-and-a-half years. (CHEERING AND APPLAUSE)

This morning, we found out that the unemployment rate has fallen to its lowest level since I took office. Today's news certainly is not an excuse to try to talk down the economy to score a few political points.

It is a reminder that this country has come too far to turn back now.

(END VIDEO CLIP)

YELLIN: Some more good news in the numbers, look at this. The number of who people who were entering the work force last month increased. It's only a tiny bit, .27 percent, but think about this. It's better than other months, when the unemployment fell only because the number of people who were actually looking for work stopped.

That's good both for the nation, but it's also good political news for the White House.

BLITZER: Once that number, the unemployment rate goes below 8 percent, there are significant political ramifications from that.

YELLIN: There are and it dates back to the days before the president took office.

When his team was first crafting a stimulus plan, back then his top economist came out with a report and this chart. It projected that unemployment would not go above 8 percent if Congress passed the stimulus plan. Of course Congress passed stimulus and unemployment went and stayed above 8 percent.

The president's critics kept hammering him, 8 percent, 8 percent. You always heard it on cable news, on the campaign trail and TV ads arguing that the president didn't make good on what the stimulus was going to do. So the fact that it's now fallen blow 8 percent is symbolically important in politics.

One thing to keep in mind, this election will be won or lost in the battleground states, and at least based on the August figures in these five battleground states, unemployment was higher than the national average. That's bad news for the president.

One other problem for the president, as you well know, just days before the election, he has another jobs report coming out. If that's bad news, it could sway some last-minute undecided voters.

BLITZER: That Friday morning before Tuesday, November 6, we will get that last jobs report before the election.

Jessica, thanks very much.

Let's bring in Jim Acosta right now. He's in Florida, where Mitt Romney is getting ready to speak just a few minutes from now. Set the scene for us. How did this day go, Jim? JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, the news came just as the Romney campaign felt the election was shifting in its direction based on the debate performance on Wednesday night.

But I talked to a Romney adviser that said these numbers don't change their game plan for winning the election. It is still focused on the economy, even if one of their favorite lines of attack is now out of a job.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Campaigning in Virginia coal country, Mitt Romney tried to dig through the latest jobs numbers to make the case President Obama has not hit pay dirt just yet.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: There were fewer new jobs created this month than last month. And the unemployment rate as you noted this year has come down very, very slowly, but it's come down nonetheless.

The reason it's come down this year is primarily due to the fact that more and more people have just stopped looking for work.

ACOSTA: Still, one of Romney's key metrics on the president's handling of the economy went up in smoke when the nation's unemployment rate dipped below 8 percent.

ROMNEY: Eight percent unemployment for over, how many, 43 months? We still have unemployment above 8 percent. He told us he'd get us back to work and hold unemployment below 8 percent. Unemployment above 8 percent month after month after month.

ACOSTA: It's a political bar Romney has repeatedly accused the president of failing to clear for months, a threshold the GOP nominee repeated in his closing statement at the first presidential debate.

ROMNEY: We have had 43 straight months with unemployment above 8 percent. If I'm president, I will create -- help create 12 million new jobs in this country with rising incomes.

ACOSTA: But Romney notes the president has fallen short of estimates set by the administration's own economic advisers, who once predicted the stimulus would lower the jobless rate to below 6 percent.

ROMNEY: What's happened is this has been the slowest recovery since the Great Depression. As a matter of fact, he said right now we would be at 5.4 percent unemployment.

NARRATOR: President Obama says he's creating jobs, but he's really creating debt.

ACOSTA: And Romney has a new ad out arguing that the president's job creation efforts have only added to the deficit.

ROMNEY: A couple nights ago, we had a debate. You may have gotten the chance to see that.

(CHEERING AND APPLAUSE)

ACOSTA: Before the new jobs numbers, Romney had been riding a wave of momentum after this week's debate. He even got a pass from the president, who never mentioned Romney's comments on the 47 percent of Americans who don't pay federal income taxes.

ROMNEY: There are 47 percent of the people who will vote for the president no matter what.

ACOSTA: With an Obama campaign ad still repeating those remarks, Romney tried to put an end to the controversy once and for all on FOX.

ROMNEY: Clearly in a campaign with hundreds, if not thousands of speeches and question and answer sessions, now and then you're going to say something that doesn't come out right. In this case, I said something that's just completely wrong.

ACOSTA: Democrats maintain that tone deafness extends from Main Street to Sesame Street. So Obama aides send a protester in a Big Bird outfit to Romney's event in Virginia to mock his call to end funding for PBS.

(END VIDEOTAPE)

ACOSTA: Now, Romney will spend part of this weekend in debate pre, the other part hitting the president on the economy, and that message could resonate down here in Florida, where the state unemployment rate, while it has gone down in recent months, is still well above the national average.

And, Wolf, as I heard from one senior Romney adviser earlier today, they still feel like this message of the economy will still win in the end. As the adviser put it to me earlier today, Wolf, a weak job growth picture should not be the new normal.

BLITZER: Thanks very much. We will go back to St. Petersburg once Mitt Romney starts speaking.

I'm anxious to hear a little bit of what he has to say today.

Meanwhile, President Obama's critics are suggesting there is something fishy about a significant drop in the unemployment rate coming so close to the November election.

The former General Electric CEO Jack Welch suggesting the numbers were cooked, cooked to help the president.

(BEGIN VIDEO CLIP)

JACK WELCH, FORMER CHAIRMAN & CEO, GENERAL ELECTRIC: Look, this number has got a lot room in it. And it came out very favorably just one-tenth of a point below when the president took office.

Now, I was born in Salem, Massachusetts, and I don't know all the ways that the fancy folks in Washington do it, but this is a funny thing to have happen.

(END VIDEO CLIP)

BLITZER: Economic experts are dismissing all those conspiracy theories about the jobs numbers.

Ali Velshi is joining us right now.

Ali, you had to speak with the labor secretary, Hilda Solis. What did she tell you about how these numbers are calculated? Because you're hearing all these suggestions from some Republicans out there and others that the Democrats cooked the numbers in order to help the president politically.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, first of all, the way the numbers are calculated have not changed in years.

She was quite surprised. You know Hilda Solis. She is a generally very even-tempered person. She said she is sort of offended and disgusted that somebody would sort of cast those aspersions on the Bureau of Labor Statistics.

It's part of the Labor Department. It's sort of populated by analysts, bureaucrats, nonpartisans, who do two things. They conduct two surveys. One is they phone people at their homes and figure out whether they're working, what area they're working in, whether they're self-employed.

And that gives them a sense of -- they extrapolate that and it becomes the unemployment number, and then they have the number of jobs created or lost every month based on payroll data, which obviously the government gets because everybody pays a payroll tax.

The two numbers are entirely different. The surveys are completely different, and as a result, one doesn't have anything do with each other. The logic here is that just because the unemployment goes up or down doesn't have actually to do with the payroll data. There are two surveys and they are conducted differently.

And they have not been changed. There's been any no doubt cast on their legitimacy. She reinforced the idea that she does not see them until Friday morning. We do understand that the president's chief advisers often will usually them on Thursday night, because if there is something very serious that happens, if these numbers are very serious to the degree that they will move markets, they need to discuss with the president the idea of calling in the treasury secretary and the chairman of the Federal Reserve.

But short of that, no one has access to these numbers who is a partisan at all. And that's the allegation. She assured me again nobody touches the numbers, nobody sees them, and there is nothing partisan.

BLITZER: I know some of these people who work at the Bureau of Labor Statistics. These are highly qualified professionals, they're civil servants, they're not political appointees, and they do the job as excellently as they possibly can.

The confusion, though, and you have mentioned it, you're touching on it, is the unemployment goes down from 8.1 percent to 7.8, but there's only modest of jobs, relatively modest, 114,000. So how does that number drop 0.3 points? That's why some of these conspiratorial theories are arising.

VELSHI: Yes.

By the way, these folks have been around for every other jobs report and they have never draw attention to this. But I will tell you I have said for many, many years, for the purposes of most people, they should ignore the percentage rate. It's kind of red herring because it measures different things.

In theory, you should not see the unemployment rate drop unless you have job creation well above 150,000 a month. We have got 114,000. Usually, you need to be much higher to actually move the needle down, but again people are coming in and out of the work force. In a bad or recovering environment, you will see a disconnect between these two numbers, which I think in a bad and recovering environment that we're in, you should ignore the unemployment rate and concentrate on the one thing that you can prove and disprove, the number of jobs created or lost in a month.

That's the trend you see. You can put that up and we can see we lost a lot of jobs in 2009. Started to regain them at the end, and then in 2010, 2011, lost a few more, and all of 2012, we have been gaining jobs.

But, yes, I would have said at this point don't worry so much about the unemployment rate. The problem is it's become politicized. There is this refrain that nobody gets reelected with unemployment above 8 percent. While unemployment was above 8 percent, nobody cared to question the methodology. It dropped below 8 percent, and all of a sudden everyone is wondering whether the books are cooked.

BLITZER: Yes. Let's not forget in addition to the 1140,000 jobs created last night, they revised the numbers for July and August. Another 80,000 jobs were created in those two months.

(CROSSTALK)

VELSHI: That's a big revision.

Normally you see a bit of a revision. We got 86,000 more jobs in July and August than we thought we had. But again, that's the best place to focus one's attentions. You can then argue that 114,000 jobs in September, as Mitt Romney does, that is just not good enough, or you can argue that it's a lot better than it was four years ago.

But it's a good economical argument and it's a good political argument, but most folks are living in the world of let's accept that these are the actual numbers and then debate whether or not more can be done to improve on.

BLITZER: It's better than losing 700,000 a month. All right, Ali, thanks very much.

VELSHI: Absolutely. My pleasure, Wolf.

BLITZER: This programming note: Later tonight, Anderson Cooper will interview the man who started this latest controversy, this political conspiracy theory, the former GE CEO, Jack Welch. He will be a guest on "A.C. 360" here on CNN 8:00 p.m. Eastern.

Coming up next, we're standing by to hear from Mitt Romney. He's at campaign event St. Petersburg, Florida. Want to hear what he has to say. We will take some of it live.

And our own Dr. Sanjay Gupta on the startling jump in the rare infections linked to tainted medicine.

(COMMERCIAL BREAK)

BLITZER: You're looking at live pictures from the Mitt Romney event that's taking place now in St. Petersburg Florida. Folks are introducing the Republican presidential nominee.

We will go there once we see Mitt Romney. We want to hear what he has to say. But stand by.

Another huge story we're following right now, a big jump in the number of people here in the United States with a rare and deadly infection linked to tainted medicine, 47 cases now, up from 35 the day before. There are now seven states reporting meningitis cases tied to tainted steroid injections for back pain.

The death toll still stands at five. It's a fungal injection, so it's not, repeat, not contagious, but health officials are winning it's likely to keep on spreading.

Let's bring in our chief medical correspondent, Dr. Sanjay Gupta.

Sanjay, they traced to source of this infection to a bad batch of steroids distributed at the New England Compounding Center.

What exactly are these so-called compounded pharmaceuticals?

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Yes, what happens let's say a manufacturing facility is giving out a large batch of a certain medication, in this case steroids, it's in large amounts or in certain doses, but hospitals or clinics want it in smaller amounts or different doses.

That's where a compounding facility comes in. So let's say you have a 20 CC vial of steroids, but the hospital wants 10 2 CC vials. A compounding faculty may come in and actually divvy up those doses, they can sometimes concentrate it, but they're not manufacturing the medications themselves.

They are simply taking existing medicines and sort of tinkering with them a little bit, and that's where they believe in this particular situation -- that's when they believe the contamination occurred, Wolf.

BLITZER: And the FDA, correct me if I'm wrong, they don't regulate these compounding centers? How is that possible?

GUPTA: Yes, I know. And this is something that's surprising to a lot of people. We talked to the FDA today, and they say, look, we have been trying to actually have some authority over these centers for 20 years now, since early 1990s.

What the argument is, Wolf, is that, look, these facilities are not in fact manufacturing the drugs. They're simply taking the drugs, changing the doses, divvying them up into smaller amounts, all the things that I mentioned. Their argument is it doesn't come under the purview of the FDA, but it comes under the state pharmacy boards.

But as you know, Wolf, as you pointed out, this particular facility distributed medications to several different states, not just Massachusetts, and that's why the FDA says they should be involved. It will be an ongoing debate and we're going to keep an eye on that.

BLITZER: A patient out there got some back pains, gets these compounded drugs, would that patient even know that he or she were getting a compounded drug, vs. a drug that actually is specifically approved by the FDA?

GUPTA: The patient wouldn't know, and I would take that even a step further.

The patient may not know. I take it a step further and say that most doctors, a lot of clinics and hospitals they may not know for sure either. Wolf, this type of procedure that we're talking about, injecting some steroid medication into the lower back of somebody for back pain is something I do as well.

Let's say, for example, I would like a 2 CC vial of this particular medication and it only comes in 20 CC vials. I order the 2 CC vials. I get those, but what may always be told to me is that it didn't come straight from the manufacturer, but went to a compounding facility in between.

It's not clear-cut, and again the argument is they say we're not manufacturing the medications, we're just sort of redistributing them.

BLITZER: The symptoms I take it often appear only weeks after getting the infections. It takes awhile to get them, and I know many state health departments are now trying to individuals who received these steroids for back pain. What symptoms should that they be on the lookout for right now?

GUPTA: With fungal meningitis, this is a much rarer form than bacterial or viral, the fungus which is a type of mold can get into the small vessels around the injection site, can cause swelling there.

Someone could develop mild stroke-like symptoms, some numbness or weakness on one side of the body or the other. But ultimately it's symptoms that are consistent with an inflammation around the brain and spinal cord, so they can get neck pain, terrible neck pain, they can develop a real aversion to light. People just become very lethargic.

As you know, as you pointed out, Wolf, people can die from this as well. But it's that interval that you point out, up to 28 days that made this investigation even more challenging because people they had symptoms many days after. Sometimes, they didn't always link it back to that injections that they received. So the goals are to prevent obviously any more of these injections, to identify the patients who did receive the injections, and to treat patients who are developing any symptoms and treat them early.

BLITZER: Yes. I feel bad for all those patients that did receive an injection and have not gotten any symptoms or anything like that, but they're probably really worried right now what could happen. That's not a good feeling to have for these folks and their families.

(CROSSTALK)

GUPTA: That's right. And we put up the Web site, as you know, Wolf, the specific lot numbers that the medications came from.

Obviously, hospitals, doctors, and clinics they are all keeping on top of that, but you're absolutely right. There are a lot of patients out there who have received the injections, don't have symptoms as of yet. They need to be paying attention to this and probably calling their clinics and seeing if they potentially received a contaminated injection.

BLITZER: Sanjay, thanks very much. Good advice.

An all-time high for gas prices close to being shattered after an overnight spike at the pump in California. Stand by.

(COMMERCIAL BREAK)

BLITZER: The unemployment rate drops below 8 percent just a month before the election. The president's critics are asking if the numbers can be believed. The president's allies say, of course, they can. Listen to this.

(BEGIN VIDEO CLIP)

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: This is fairly solid data coming in. And I think over a longer period, we have seen moderate progress that's consistent with modest growth.

(END VIDEO CLIP)

BLITZER: We're joined now by Stephen Moore, a senior economics writer for "The Wall Street Journal" and also one of founders of the conservative group the Club for Growth. That's moved on and on after you left there. Thanks, Steve, very much for coming in.

You agree with Austan Goolsbee that this is solid data?

(CROSSTALK) STEPHEN MOORE, SENIOR ECONOMIC WRITER, "THE WALL STREET JOURNAL": I do.

Well, maybe I would not go that far, but I do agree. It's indicative of a kind of slow-growth economy. We have been growing at 1.5 or 2 percent. I think that Republicans still should make jobs issue number one in this campaign, because even with a decent number -- and, by the way, this does probably take away a sound bite for the Republicans that it's been three-and-a-half years since we have had a rate less than 8 percent.

That can no longer be said. But it's still a real tough, lousy jobs market for people out there for people who don't have jobs. And if you look at the numbers in this report, what we call the broad unemployment rate, that includes people who can't find a full-time job or people who have just given up working, that's 14.6 percent, 23 million workers. That's a lot.

BLITZER: But in terms of cooking the books a month before the election for political purposes, Jack Welch, the former GE CEO, you saw that tweet. You see what he is saying. There are others out there as well saying this is too politically convenient for the president. They obviously don't know what the Bureau of Labor Statistics is all about.

But you can say to them what?

(CROSSTALK)

MOORE: I don't think there is a conspiracy here.

I think it's almost certain that there isn't. But what jumped out at people, Wolf, in these numbers -- I don't want to get too much in the weeds, but is there are two surveys they do, one of businesses and one of households, and the household survey found 875,000 new people working last month.

And everybody is scratching their head on both sides saying, where did that number come from? So we're trying to dissect this data, because the other report only showed 110,000 jobs.

BLITZER: These are two different surveys done two different ways. But some of those people working could be part-time working, freelance working. They're not necessarily full-time employees.

(CROSSTALK)

MOORE: Yes, and this is one of the points that kind of weakness in the report.

Yes, there was a lot of new jobs created, but guess what, two out of three of them, Wolf, were part-time workers. So those are people who are working 20 to 25 hours a week. It's hard to pay your mortgage, pay your electricity bills, and pay your groceries if you're only working part-time.

BLITZER: All right, listen to what Mitt Romney said at the debate Wednesday night, because I want you to react to this.

MOORE: OK.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm not looking for a $5 trillion tax cut. What I have said is I won't put in place a tax cut that adds to the deficit. That's part one. So there's no economist that can say Mitt Romney's tax plan adds $5 trillion if I say I will not add to the deficit with my tax plan.

(END VIDEO CLIP)

BLITZER: First of all, is his tax plan, his across-the-board cuts that he's recommending, the rates going down 20 percent, will that cost $5 trillion, assuming there's no offsets?

MOORE: If he does it the way he says he's going to do it, then it's not going to cost money.

BLITZER: But he's not explaining how he would eliminate the deductions or the loopholes or the tax credits. He's not telling us that.

MOORE: Well, I think he is being a little unfairly criticized on that, because actually just week he said, well, one thing you could do is you could have just a standard deduction that everybody, you, me, everybody watching this show, every household, of say $17,000, $20,000, $25,000.

BLITZER: Does that pay for $5 trillion in tax cuts?

MOORE: It does, because when you're talking about wealthy people, they're taking hundreds and thousands, if not millions of dollars of deductions.

So in fact this is a progressive way to do it. But here is the problem, Wolf. And, in fact, this is why having someone who is used to being involved in the campaigns, I'll tell you this.

If Mitt Romney said, "Well, we're getting rid of the home- mortgage deduction, and charitable deduction and this and that," you all in the media and everybody -- I'm in the media -- we would be, you know, attacking him for...

BLITZER: People are so attached to that home mortgage interest rate deduction. If he says he's going to eliminate that, he's going to get a lot of political grief.

MOORE: Exactly. What he's going to say, I think, and I don't know all of the details of the plan either, but I talked to some of the economists. They say, look, if you're in a $5 mansion, should you really get a $5 million write-off?

BLITZER: What about the charitable organizations? If you eliminate deductions, if millionaires and billionaires can't deduct their charitable contributions, what happens to all these charities?

MOORE: Well, they'll have a lower tax rate. And I would make the case, look, if you make the economy grow faster -- and I'm one of these people who do think that a lower tax rate helps the economy -- people will have more income, and people at the high end of the income scale, they're charitable. They're going to give money even if they don't get a charitable write-off, in my opinion, if they've got the disposable income and if they've got the growth ability.

BLITZER: You think that if he did, under his plan, because right now the economy, as you say, is growing at 1.3 percent in the last quarter, under his plan, what do you think realistically the economy could grow at and how much new revenue would be brought into the government as a result of taxes?

MOORE: Well, not just from his tax plan, but he has a plan to increase energy production. We were just talking about all-time high gasoline prices. We need to do something about dramatically increasing our domestic drilling, and if you do all those things, I do believe you can get to 12 million jobs in the next four years. In fact, by the way, that's not such a stretch. We had that pace of job creation under a Republican president, Ronald Reagan, and we had that level of job creation under a Democratic president, Bill Clinton.

BLITZER: And a Democratic president where the taxes were a lot -- tax rates were a lot higher.

MOORE: Right, and you had a Republican Congress, welfare reform. You had trade deals.

BLITZER: The highest rate was 39.6 percent as opposed to 35 percent. And the tax -- and the GDP was going up.

MOORE: Look what happened to the size of the government under Bill Clinton. I mean, there was very -- he was a very fiscally conservative president, unlike Barack Obama, where the budget has gone through the roof. I think that's a key distinction between those two.

BLITZER: "The era of big government is over."

MOORE: I'd like to think so.

BLITZER: Listen to Eric Fehrnstrom, the senior advisor to Mitt Romney, what he told me here in THE SITUATION ROOM yesterday.

(BEGIN VIDEO CLIP)

ERIC FEHRNSTROM, SENIOR ADVISOR TO MITT ROMNEY: The governor believes that those who have continuous coverage should not be dropped if they change plans and have a pre-existing condition. But states are well-situated to manage these issues. We did it in Massachusetts, and they can do it in other states, as well.

(END VIDEO CLIP)

BLITZER: Going to be (AUDIO GAP) because Mitt Romney says he wants to make sure that people can get insurance even if they have pre-existing conditions, but if he gives the states the opportunity to come up with their own plans, there's no guarantee they will do that.

MOORE: This is a politically popular thing, and then now that we've actually passed Obama's health-care plan, that's probably something that any plan that's devised by a Republican or a Democrat will provide, provisions.

BLITZER: Forcing states to maintain that you'd have to give insurance to individuals...

MOORE: I have some problems with that, but I'm not running for office. And that problem is, well, gee, that makes it easier for people to not buy insurance until they actually get sick or have an accident.

BLITZER: The point, if he gives the states the flexibility, there's no guarantee Utah, Wyoming or some other conservative states will go along with what Massachusetts did.

MOORE: Yes, but you know, the states, also -- I mean, I talked to a lot of these governors. I talked to, you know, the governor Rick Scott in Florida, and John Kasich in Ohio, Rick Perry in Texas, and you know what they're saying? Just let us control the health-care system. Get Washington out of the way. We can control these budgets. And don't forget, if you look at these state budgets, the No. 1 driver of their budgets is Medicaid. So they're looking at a system where it's bankrupting not just the federal government but the states.

BLITZER: Steve Moore, thanks for coming in.

MOORE: Thank you, Wolf. Go Nationals.

BLITZER: I'm with you, #Natitude.

As the presidential election gets closer, could there be an October surprise from Iran? There are new signals coming in in the nuclear stand-off with the United States.

(COMMERCIAL BREAK)

BLITZER: Could one of America's most threatening adversaries be ready to blink perhaps? Would Iran be open to suspending its disputed nuclear program if -- if it got something major in return?

Let's bring in our foreign affairs correspondent, Jill Dougherty, who's working the story for us. What's going on here, Jill?

JILL DOUGHERTY, CNN CORRESPONDENT: Well, Wolf, you know, the Europeans -- and we've been speaking with them -- are ready to impose new sanctions, but it's unclear whether that pressure can actually force Iran to stop its nuclear program, and it's also unclear just what the leadership of Iran thinks about all of this. After all, as you know, Wolf, the real leader and the man in charge is not President Ahmadinejad; it is the supreme leader, the Ayatollah Khamenei.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Unrest on the streets of Tehran. International sanctions are crushing Iran's economy. Its currency is collapsing, angering Iranians facing skyrocketing costs for basic goods. Their president, Mahmoud Ahmadinejad, brushes off the sanctions as psychological warfare by Iran's enemies.

MAHMOUD AHMADINEJAD, PRESIDENT OF IRAN (through translator): Iran's economy can live on its own.

DOUGHERTY: Iran also is under threat of a potential military strike by Israel. But European officials say there are conflicting signals from Iran on whether it's taking that threat seriously.

So far, Iran seems to be sticking with a proposal it first raised in July. It even included a Power Point presentation first published by Iran expert Barbara Sladen (ph).

As the first step, Iran demands the international community officially recognize the nuclear rights of Iran, particularly its enrichment activities and openly announce it as well as terminate all unilateral and multilateral sanctions. If that, plus other demands are met, Iran say it will suspend enrichment of uranium, which could be used as fuel for a nuclear bomb.

The only problem is, that's the complete reverse of what the Obama administration and its allies want. First, Iran must stop enrichment and come clean on its nuclear program. Then sanctions will be lifted.

So it seems like a nonstarter, but Secretary of State Hillary Clinton said this week there is a simple solution.

HILLARY CLINTON, SECRETARY OF STATE: The sanctions have had an impact, as well, but those could be remedied in short order if the Iranian government were willing to work with the P5 plus one and the rest of the international community in a sincere manner.

(END VIDEOTAPE)

DOUGHERTY: Yes, a big "if," and European and U.S. officials tell CNN that that see no sign of any softening by Tehran and certainly not enough to schedule any new talks. In fact, one official told us that they are more concerned than ever -- Wolf.

BLITZER: Jill Dougherty, watching the story for us. Thanks very, very much.

The vice president of the United States, Joe Biden, made some interesting remarks out on the campaign trail once again. One that reminded me of another former vice president of the United States. I'll talk about that with our chief political analyst, Gloria Borger.

(COMMERCIAL BREAK)

BLITZER: A surprising new development in that Arizona border shooting case. Lisa is back. She's got some more of that and the other top stories.

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, well, the shooting of a U.S. Border Patrol agent in Arizona may have actually been a case of friendly fire. The FBI is investigating.

One agent died and another was injured Tuesday when they came under fire after responding to a border sensor. A law enforcement official says investigators are waiting for the results of tests on shell casings which may have been fire by Border Patrol agents.

And gas prices are soaring to shocking levels in California. A number of filling stations have even been forced to shut down. They sold out of their gas and are waiting to reopen once they can buy it at cheaper prices. AAA says the average price for a gallon of gas has hit $4.48. The price spike is blamed on a recent refinery fire and pipeline outages, which sent wholesale prices to all-time highs.

And scientists are studying an amazing find from the Russian tundra. Yes, a woolly mammoth, complete with bones, skin and layers of fat, preserved in ice for tens of thousands of years.

It was actually an 11-year-old boy who found the animal's limbs sticking out of the frozen mud. Scientists labored for five days to dig it out, and the mammoth is being named after the boy who discovered it, which is really cool.

It's -- apparently, it's global warming. So what it's done is some areas in the Russian tundra that used to be covered in ice, but because of global warming, it's now thawing out. Now they're finding these amazing things like this woolly mammoth.

BLITZER: Woolly mammoth, and they're going to be, I'm sure, studying it.

SYLVESTER: Yes, 30,000 years old is what it's estimated to be. That's pretty amazing stuff, Wolf.

BLITZER: Lisa, thank you.

The United States military is preparing for some possible trouble with Iran if the economic sanctions don't work. Tom Foreman is sitting in tonight for Erin Burnett. Tom, tell us what's going on.

TOM FOREMAN, CNN CORRESPONDENT: Today, Wolf, there is a big stand-off going on right now, and the military is getting ready to see what happens as the economic sanctions continue over the nukes over there.

We're also going to take a look at this enormous play on the numbers by both the Democrats and the Republicans when you look at jobs.

And -- and a great story about a man from Detroit who became a musical star on the other side of the world, and he didn't even know it -- Wolf.

BLITZER: Amazing, we'll be watching at the top of the hour. Thanks so much, Tom. Tom Foreman filling in for Erin.

The empty chair is back, and this time it's not Clint Eastwood who's poking fun at the president.

(COMMERCIAL BREAK)

BLITZER: A funny and rather biting new spoof of the president's debate performance. Take a look at this. This is the cover of the brand-new edition of "The New Yorker" magazine. That's it, right there. There is the cover of the magazine. The president of the United States depicted as an empty chair, alluding to Clint Eastwood's controversial speech over at the Republican convention.

Let's bring in our chief political analyst, Gloria Borger.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: That was -- that's fast.

BLITZER: David Remnick, the editor of "The New Yorker" magazine, that's a pretty biting cover. You have an empty chair instead of the president debating Mitt Romney.

BORGER: And I think the president actually reads "The New Yorker," and looks at "The New Yorker," so I think it's not going to be pleasing to him.

BLITZER: But it further underscores, you know, the fallout.

BORGER: Right.

BLITZER: The "New Yorker" magazine making fun of the president like this, it underscores that, even a lot of liberals and the president's supporters were so disillusioned by the way he performed.

BORGER: Well, funny thing about elections and presidencies. People think you have to fight for the job. They want to see you fighting for the job. Don't forget, this is a president who is out there e-mailing people, saying, "Please fight for us. Send us your $5, your $10 contributions. This is the most important election in our lifetime," blah, blah. And then sad fact is "The New Yorker" cover says he didn't show up.

BLITZER: He was MIA.

BORGER: And that's a problem.

BLITZER: All right, Joe Biden, he's causing a little wave out there with another comment that he made. I'll play the clip, and then I'll play another of what it reminded me of.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), VICE PRESIDENT OF THE UNITED STATES: We're going to ask the wealthy to pay more. My heart breaks. Come on, man.

You know the phrase they always use? "Obama and Biden want to raise taxes by $8 trillion." Guess what? Yes, we do in one regard. We want to let that trillion-dollar tax cut expire so the middle class doesn't have to bear the burden of all that money going to the super wealthy.

(END VIDEO CLIP)

BLITZER: So, he says they are going to raise taxes by $1 trillion.

BORGER: One trillion.

BLITZER: But it will affect the super wealthy. He says it sort of reminded me, to a certain degree, of this clip, another former vice president of the United States. This one, Walter Mondale -- not that Joe Biden is a former vice president; he's still the vice president. Listen to Walter Mondale in 1980.

(BEGIN VIDEO CLIP)

WALTER MONDALE (D), FORMER VICE PRESIDENT OF THE UNITED STATES: Let's tell the truth. That must be done, it must be done. Mr. Reagan will raise taxes. And so will I. He won't tell you. I just did.

(END VIDEO CLIP)

BLITZER: Mondale was then challenging Ronald Reagan, who was the incumbent president. And that hurt him badly, that comment.

BORGER: Yes, but I think the difference is that when Mondale said what he said, it was kind of a revelation. We didn't know that he was going to say that and that he was going to pledge, OK, we've got to raise taxes.

We know as a fact of this campaign what the president said and what Joe Biden said is that they're going to let the Bush tax cuts for the wealthy expire. They've promised they're going to do that. They're going to do that, and that is what I think Joe Biden was referring to.

BLITZER: It's one thing to say it like that. It's another thing to say it the way he said it, that we're going raise taxes...

BORGER: Raise taxes.

BLITZER: ... by a trillion dollar, and then he explains what he meant. But using the phrase, raise taxes by a trillion dollars.

BORGER: Right. Well, letting tax cuts expire is raising taxes.

BLITZER: That's correct. That's correct. It's just the way he formulated it that's going to cause some heartburn there for some of his supporters.

BORGER: Right.

BLITZER: Gloria, thanks very much. All right. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: In the critically important state of Florida, the voter registration deadline for the presidential election is just around the corner. CNN's John Zarrella caught up with some people working to sign up potential voters, and they're finding a discouraging amount of apathy.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Jessinia Fernandez and Karen Garcia go door to door. The question they ask is simple but one of democracy's most important.

UNIDENTIFIED FEMALE: Are you registered to vote?

ZARRELLA: In Florida, the deadline is Tuesday. If you're not registered by then, you can't vote in the presidential election.

JESSINIA FERNANDEZ, VOLUNTEER: Sometimes, I get sad because people tell me, you know, "I don't want to vote. I don't like voting." And you know, it's kind of like frustrating sometimes that they do have the right and they can vote; they just don't want to vote.

ZARRELLA: Jessinia and Karen work with a Florida immigrant coalition, one of a plethora of organizations, some partisan, some not, engaged in a last-minute swing-state-signing race to register voters.

Since the state's August primary, more than 133,000 people have registered. At Nova Southeastern University Law School in Broward, County.

UNIDENTIFIED FEMALE: Are you registered to vote?

ZARRELLA: At Florida Atlantic University in Boca Raton.

UNIDENTIFIED FEMALE: Hey, are you registered to vote this year?

ZARRELLA: Outside the courthouse in Plantation (ph), there is no mistaking which candidate Allen Irwa (ph) supports, but he says...

UNIDENTIFIED MALE: We register anyone that comes along that wants to register.

ZARRELLA (on camera): But you would prefer they register Democrat.

UNIDENTIFIED MALE: Of course. I represent the Obama campaign.

ZARRELLA (voice-over): Twenty-year-old Jonathan Colon registered. JONATHAN COLON, REGISTERED VOTER: I'm looking in the future, like ten year, whatever they can do to make their four years count is what I really want.

ZARRELLA: With so much at stake in Florida, there can be a darker side to voter registration. Palm Beach County supervisor of elections, Susan Bucher, discovered discrepancies, signatures that look the same. Addresses that didn't appear right on more than 100 voter registration forms.

SUSAN BUCHER, SUPERVISOR OF ELECTIONS, PALM BEACH COUNTY: We just haven't ever experienced this kind of issue with the registration forms, so that's got us a little disconcerted.

ZARRELLA: The company at the center of what is now a statewide investigation, Strategic Allied Consulting, hired by the Republican Party to register voters, was fired. Strategic insists the problem was with one individual and that it maintains rigorous quality control measures.

Back in Ft. Lauderdale, not a good day for Jessinia and Karen. Only a handful of new registers. That hurts, they say. You see, neither one is a U.S. citizen. Both are part of the group called Dreamers, whose parents brought them here illegally when they were children. And here they are, trying to encourage people to exercise a right they only wish they had.

UNIDENTIFIED FEMALE: Have a nice day.

ZARRELLA: John Zarrella, CNN, Ft. Lauderdale.

(END VIDEOTAPE)

BLITZER: Meanwhile, an important ruling today. A court allowed early in-person voting in Ohio during the final three days before the presidential election. The case was brought by Democrats and the Obama campaign. And the Obama campaign won in that one.

Here's a look at this hour's "Hot Shots."

In Cambodia, a woman lights a prayer candle inside a pagoda.

In Japan, fans are seen following practice for the Japanese Formula One Grand Prix.

In France, a man looks at artwork at a festival.

And in Turkey, check this out. A shepherd rides his horse amongst his sheep and goats near the Turkish-Syria border.

Those are some of our "Hot Shots," coming in from around the world.

And remember, you can always follow what's going on here in THE SITUATION ROOM. I'm on Twitter, @WolfBlitzer. Follow me, and I will tweet what's going on here. Thanks very much for joining us. That's all the time we have today. "ERIN BURNETT OUTFRONT" starts right now.