Part 1 here

And so the question is not a game of Battleship, where we're counting ships. It's what are our capabilities. And so when I sit down with the Secretary of the Navy and the Joint Chiefs of Staff, we determine how are we going to be best able to meet all of our defense needs in a way that also keeps faith with our troops, that also makes sure that our veterans have the kind of support that they need when they come home.And that is not reflected in the kind of budget that you're putting forward because it just doesn't work.

SCHIEFFER: All right.

OBAMA: And, you know, we visited the website quite a bit and it still doesn't work.

SCHIEFFER: A lot to cover. I'd like -- I'd like to move to the next segment: red lines, Israel and Iran.

Would either of you -- and you'll have two minutes -- and, President Obama, you have the first go at this one -- would either of you be willing to declare that an attack on Israel is an attack on the United States, which, of course, is the same promise that we give to our close allies like Japan.

And if you made such a declaration, would not that deter Iran? It's certainly deterred the Soviet Union for a long, long time when we made that -- we made -- we made that promise to our allies.

Mr. President?

OBAMA: First of all, Israel is a true friend. It is our greatest ally in the region. And if Israel is attacked, America will stand with Israel. I've made that clear throughout my presidency. And...

SCHIEFFER: So you're -- you're saying we've already made that declaration.

OBAMA: I will stand with Israel if they are attacked. And this is the reason why, working with Israel, we have created the strongest military and intelligence cooperation between our two countries in history.

In fact, this week we'll be carrying out the largest military exercise with Israel in history, this very week. But to the issue of Iran, as long as I'm president of the United States Iran will not get a nuclear weapon. I made that clear when I came into office.

OBAMA: We then organized the strongest coalition and the strongest sanctions against Iran in history, and it is crippling their economy. Their currency has dropped 80 percent. Their oil production has plunged to the lowest level since they were fighting a war with Iraq 20 years ago. So their economy is in a shambles.

And the reason we did this is because a nuclear Iran is a threat to our national security, and it is a threat to Israel's national security. We cannot afford to have a nuclear arms race in the most volatile region of the world.

Iran is a state sponsor of terrorism. And for them to be able to provide nuclear technology to non-state actors, that's unacceptable. And they have said that they want to see Israel wiped off the map.

So the work that we've done with respect to sanctions now offers Iran a choice. They can take the diplomatic route and end their nuclear program or they will have to face a united world and a United States president, me, who said we're not going to take any options off the table.

The disagreement I have with Governor Romney is that, during the course of this campaign, he's often talked as if we should take premature military action. I think that would be a mistake, because when I've sent young men and women into harm's way, I always understand that that is the last resort, not the first resort.

SCHIEFFER: Two minutes.

ROMNEY: Well, first of all, I want to underscore the same point the president mad,e which is that if I'm President of the United States, when I'm President of the United States, we will stand with Israel.

And if Israel is attacked, we have their back, not just diplomatically, not just culturally, but militarily. That's number one.

Number two, with regards to Iran and the threat of Iran, there's no question but that a nuclear Iran, a nuclear-capable Iran is unacceptable to America. It presents a threat not only to our friends but ultimately a threat to us to have Iran have nuclear material, nuclear weapons that could be used against us or used to be threatening to us.

It is also essential for us to understand what our mission is in Iran, and that is to dissuade Iran from having a nuclear weapon through peaceful and diplomatic means. And crippling sanctions are something I called for five years ago, when I was in Israel, speaking at the Herzliya Conference. I laid out seven steps, crippling sanctions were number one. And they do work. You're seeing it right now in the economy. It's absolutely the right thing to do, to have crippling sanctions. I would have put them in place earlier. But it's good that we have them.

Number two, something I would add today is I would tighten those sanctions. I would say that ships that carry Iranian oil, can't come into our ports. I imagine the E.U. would agree with us as well. Not only ships couldn't, but I'd say companies that are moving their oil can't, people who are trading in their oil can't. I would tighten those sanctions further. Secondly, I'd take on diplomatic isolation efforts. I'd make sure that Ahmadinejad is indicted under the Genocide Convention. His words amount to genocide incitation. I would indict him for it. I would also make sure that their diplomats are treated like the pariah they are around the world. The same way we treated the apartheid diplomats of South Africa.

We need to increase pressure time, and time again on Iran because anything other than a -- a -- a solution to this, which says -- which stops this -- this nuclear folly of theirs, is unacceptable to America. And of course, a military action is the last resort. It is something one would only - only consider if all of the other avenues had been -- had been tried to their full extent.

SCHIEFFER: Let me ask both of you, there -- as you know, there are reports that Iran and the United States a part of an international group, have agreed in principle to talks about Iran's nuclear program. What is the deal, if there are such talks? What is the deal that you would accept, Mr. President?

OBAMA: Well, first of all those are reports in the newspaper. They are not true. But our goal is to get Iran to recognize it needs to give up its nuclear program and abide by the U.N. resolutions that have been in place. Because they have the opportunity to reenter the community of nations, and we would welcome that.

There -- there are people in Iran who have the same aspirations as people all around the world for a better life. And we hope that their leadership takes the right decision, but the deal we'll accept is they end their nuclear program. It's very straightforward. And I'm glad that Governor Romney agrees with the steps that we're taking. You know, there have been times, Governor, frankly, during the course of this campaign, where it sounded like you thought that you'd do the same things we did, but you'd say them louder and somehow that -- that would make a difference.

And it turns out that the work involved in setting up these crippling sanctions is painstaking. It's meticulous. We started from the day we got into office. And the reason is was so important -- and this is a testament to how we've restored American credibility and strength around the world -- is we had to make sure that all the countries participated, even countries like Russia and China. Because if it's just us that are imposing sanctions -- we've had sanctions in place a long time. It's because we got everybody to agree that Iran is seeing so much pressure. And we've got to maintain that pressure.

There is a deal to be had, and that is that they abide by the rules that have already been established. They convince the international community they are not pursuing a nuclear program. There are inspections that are very intrusive. But over time, what they can do is regain credibility. In the meantime, though, we're not going to let up the pressure until we have clear evidence that that takes place.

And one last thing -- just -- just to make this point. The clock is ticking. We're not going to allow Iran to perpetually engage in negotiations that lead nowhere. And I've been very clear to them. You know, because of the intelligence coordination that we do with a range of countries, including Israel, we have a sense of when they would get breakout capacity, which means that we would not be able to intervene in time to stop their nuclear program.

And that clock is ticking. And we're going to make sure that if they do not meet the demands of the international community, then we are going to take all options necessary to make sure they don't have a nuclear weapon.

SCHIEFFER: Governor?

Despite a debate performance that disappointed many Democrats, President Obama got some positive strokes from his vice president late Wednesday. Joe Biden told supporters he is "proud of President Obama" and glad that voters heard Republican challenger Mitt Romney admit he would turn Medicare into a voucher system.

"If you finished watching the debate like I did, I am sure you are as proud of President Obama as I am," Biden told supporters by video.

"The president did a good job in laying out his concrete plan for restoring the middle class, from ending tax breaks for companies that ship jobs overseas, to giving tax credits to companies that bring jobs home, to preparing 100,000 new math and science teachers, and training two million workers at our community colleges so we can continue to have the best and most productive work force in the world," Biden said.

Romney, by contrast, "laid out a fundamentally different philosophy. He called for a tax plan that would mean massive cuts for the wealthy, but he refused to say how he would possibly pay for them without raising taxes on middle class families."

Biden said that he was gratified that Romney admitted during the debate that "he would turn Medicare into a voucher," something Biden has said repeatedly at campaign events.

(CBS News) FT. COLLINS, Colo.-- At a town hall here Wednesday, at least one person was anxious enough about the upcoming presidential debate to ask vice presidential nominee Paul Ryan about how Republican nominee Mitt Romney would perform?

Would he pack a punch and take it to Obama?

"Absolutely," Ryan said, responding to a woman who said she was concerned after watching GOP presidential nominee John McCain debate Obama in 2008. "One little difference between then and now, President Obama has a record and President Obama has a record and a string of broken promises."

Ryan said that the Republican ticket owes the electorate alternatives to the policies of the last four years. Recent polls have shown Romney trailing Obama is several key swing states, sparking criticism that the campaign has not offered sufficient details of its alternative vision.

"We are not simply asking you to fire Barack Obama because he's not worth re-hiring," Ryan said. "We're asking you to fire Barack Obama because we are worth hiring because we have better ideas."

(CBS News) Air Force One on Wednesday aborted a landing attempt into a Toledo, Ohio airport due to weather conditions, while carrying President Obama to a campaign event.

The aircraft pilot "made the decision to circle the airfield and landed uneventfully a few moments later when the weather had lifted," according to a statement from the Air Force. A Federal Aviation Administration official called the blip a "routine missed approach" due to cloudy conditions.

"Just did a pass because weather was right on top of airport," White House Press Secretary Jay Carney told reporters in an email. "Just landed. No problem."

There was no delay to the president's schedule, which included remarks at Bowling Green State University.

On Friday, a charter plane carrying GOP nominee Mitt Romney's wife Ann made an emergency landing after the cabin filled with smoke, reportedly due to an electrical fire. No one was hurt.

(CBS News) Mitt Romney's tough talk on U.S.-Chinese relations is "just not credible," President Obama told a crowd of supporters at a rally at Ohio's Bowling Green State University Wednesday.

"He says he's going to take the fight to them," Mr. Obama said of his Republican rival. "That message is better than what he's actually done about this thing... When you hear this newfound outrage, it feels a lot more like the fox saying we need more secure chicken coops."

Both Mr. Obama and Romney took their campaigns on Wednesday to the critical swing state of Ohio, where the state of the once-robust manufacturing sector makes the debate over outsourcing and trade with China especially resonant.

In Westerville, Ohio, earlier in the day, Romney said, "We're going to crack down on China.... They've stolen our jobs; that's gotta stop."

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(CBS News) WESTERVILLE, Ohio - With a spate of recent polls showing him falling further behind the president in key swing states, Republican presidential candidate Mitt Romney on Wednesday focused his pitch to voters on paying down the national debt - one of the few areas where he continues to hold an advantage over President Obama.

"That clock up there shows our national debt," Romney said at a campaign rally, pointing to a debt clock set up by his campaign in a high school gymnasium in this Columbus suburb. "When I began this campaign it started with 15 trillion. ... Now there's over $16 trillion in debt. If (Obama) were reelected, I can assure you, it will be almost $20 trillion in debt."

Recent polls show that while Romney trails the president on issues including taxes, international affairs, and the handling of entitlement programs, the one area where he continues to have an edge is on addressing budget deficits and the national debt. Romney seized on the topic Wednesday, calling the current debt "an unthinkable amount" and arguing that the Federal Reserve has compounded the problem by keeping interest rates low.

"What's going to happen when those interest rates go up?" he asked a crowd 1,000 that gathered at the first of three stops in Ohio Wednesday. "That bill's going to get bigger and bigger. It is crushing. That's the course this president has put us on."

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(CBS News) As President Obama and Mitt Romney campaign in the crucial battleground state of Ohio Wednesday, both are attacking each other over China - a consistent theme for both as they traverse the important battleground state.

"[T]he President will talk about his record of holding China accountable so that American workers can compete globally while Mitt Romney has continued to profit from companies that ship jobs to China," an Obama campaign official told reporters, previewing the president's two afternoon campaign rallies in the Buckeye State.

Romney, meanwhile, also advanced his line of attack, saying Wednesday morning in Westerville, Ohio, "We're going to crack down on China.... They've stolen our jobs; that's gotta stop."

Vowing to label China a currency manipulator, Romney said, during another stop on his Ohio bus tour Tuesday, "We cannot compete with people who don't play fair and I won't let that go on." He added, "I will stop it in its tracks."

Romney and Mr. Obama have lobbed numerous attacks over China, each attempting to sound tougher than the other. Both campaigns have released TV ads targeting the issue and have taken the argument to the campaign trail in the state once reliant on the manufacturing sector, but forced to adapt to a declining number of factory jobs.

"It is not clear that most voters truly understand the economic significance of China but playing the fear card doesn't necessarily require that tutorial by either campaign," Republican strategist Trey Hardin told CBSNews.com in a recent interview. "Therefore, both candidates incorporate China in their messaging by highlighting potentially scary economic confrontations with this rival nation."

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(CBS News) With the deadline officially passed for Republican Todd Akin to drop his Missouri Senate bid, incumbent Democrat Claire McCaskill is out with a new ad targeting the candidate for his controversial comments about "legitimate rape" and other hot-button topics, asking voters what they think he might say "next"?

The 30-second-spot, entitled "Calendar," flips through some of the more contentious comments that Akin has uttered in recent memory - including statements about Social Security, Medicare, minimum wage, student loans, as well as his now-notorious "legitimate rape" comment.

"What will he say next?" the narrator asks.

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(CBS News) Madonna has clarified that when she referred to President Obama as a Muslim during a performance Monday night, it was just part of her act.

At a concert in Washington, D.C. on Monday, the pop star told her audience, "Y'all better vote for f******g Obama, OK? For better or for worse, we have a black Muslim in the White House. That's some amazing s**t. It means there is hope in this country."

Through her spokeswoman, Madonna released a statement explaining her remarks: "I was being ironic on stage. Yes I know Obama is not a Muslim (though I know that plenty of people in this country think he is.) And what if he were? The point I was making is that a good man is a good man no matter who he prays to. I don't care what religion Obama is - nor should anyone else in America"

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(CBS News) In his first direct-to-camera ad of the campaign season, Mitt Romney appeals directly to jobless voters, suggesting that he, not President Obama, will deliver new jobs to struggling Americans.

"Too many Americans are struggling to find work in today's economy. Too many of those who are working are living paycheck to paycheck, trying to make falling incomes meet rising prices for food and gas," Romney says in the spot, released Wednesday. "More Americans are living in poverty than when President Obama took office and 15 million more are on food stamps."

The ad, in which Romney addresses the camera head-on for a full 60 seconds, casts Mr. Obama as a decent man but a failed leader.

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(CBS News) VANDALIA, Ohio - Trailing President Obama in some polls by as much as 8 percentage points in this pivotal battleground state, Republican presidential nominee Mitt Romney and running mate Paul Ryan are pulling out all the stops on a two-day, five-city bus tour in hopes of making up important political ground.

Romney flew to western Ohio after spending the morning talking foreign policy and education in New York City. There, he was joined by Ryan, who had begun the day with a morning stop in Cincinnati. Both projected confidence to a crowd of more than 3,500 people who waited at the Dayton airport for hours to see the candidates.

"We are going to win Ohio," Ryan told the crowd.

"If I'm president of the United States," Romney started to say, and then corrected himself as the crowd yelled in protest: "When I'm president of the United States ..."

Romney, who has called for across-the-board cuts in the federal income tax, said President Obama will spend a second term raising taxes. "He's got one new, one new idea," Romney said. "I admit this, he has one thing he did not do in his first four years (that) he said he's going to do in the next four years, which is to raise taxes."

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(CBS News) Two Congressional Republicans who led the Fast and Furious investigation are asking the Justice Department Inspector General (IG) to open a probe into the murder of Immigration and Customs Enforcement (ICE) Agent Jaime Zapata on Feb. 15, 2011. Sen. Charles Grassley (R-Iowa) and Rep. Darrell Issa (R-CA) issued a letter to Inspector General Michael Horowitz today. The IG's office says it's reviewing the request.

According to the letter, ATF may have had probable cause to arrest two firearms dealers before they bought and trafficked a weapon used to murder Zapata, who was on assignment in Mexico. "Only after Agent Zapata was murdered...and one of the weapons was traced back" to suspect Otilio Osorio "did ATF finally arrest Otilio, his brother and a third suspect for their gun trafficking activity," reads the letter.

Congressional investigators say ATF had earlier witnessed the Osorio brothers in a Walmart parking lot providing 40 weapons with obliterated serial numbers to be trafficked to Mexico. It was what's known as a "controlled delivery," meaning law enforcement officials were monitoring the sale. In this case it was part of a joint investigation with the Drug Enforcement Administration (DEA). But "ATF failed to confront the two individuals" leaving them to continue to allegedly traffic weapons, including one used in Zapata's killing, according to the letter.

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Updated: 4:45 p.m. ET

(CBS News) In a new campaign ad, the Obama campaign is continuing its attacks on Mitt Romney over comments he made about the "47 percent" of Americans he said think of themselves as "victims," as well as over Romney's own effective tax rate.

The ad, called "Fair Share," will air in the battleground states of New Hampshire, Virginia, North Carolina, Florida, Ohio, Iowa, Colorado, and Nevada starting Tuesday.

In it, the president's re-election campaign accuses Romney of "attacking folks who work for a living" while pointing out that "Romney paid just 14 percent in taxes last year on over 13 million in income - almost all from investments."

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(CBS News) With just 42 days until Election Day, Republican nominee Mitt Romney heads to Ohio today to kick off a middle-class bus tour - a move aimed at building support in a state many believe is crucial for him to win this November.

It's a task, however, that has taken on increased prominence in recent days. A handful of new polls show President Obama leading Romney in the state. Most notably, perhaps, is a new Washington Post poll out of Ohio, which shows Mr. Obama leading Romney 52 percent to 44 percent - an eight-point advantage.

That's a greater spread than most other polls have shown, but it's demonstrative of a trend that appears to be emerging in several other surveys as well: Polls released in the last two weeks by the Ohio Newspaper Organization, Fox News, and NBC News/Wall Street Journal/Marist College all show Mr. Obama with between a 4- and 7-point edge.

Has Obama done enough to win over Ohio?
Has Obama declared a "war on coal?"
Working-class voters in Ohio key to presidential election Continue »