updated 10/10/2007 11:08:33 AM ET 2007-10-10T15:08:33

Guests: Dick Armey, Richard Wolffe

DAVID SHUSTER, HOST: The Republican presidential field together again.

Hello, everybody.

I‘m David Shuster in for Tucker Carlson.

At this hour in Dearborn, Michigan, the Republican presidential candidates have just finished their latest debate. There were skirmishes over tax policies, the economy and Republican values.

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE: That‘s baloney. Mayor, you‘ve got to check your facts. No taxes increased—I did not increase taxes in Massachusetts, I lowered taxes.

(END VIDEO CLIP)

SHUSTER: Coming up, we will show you a few of the highlights and talk over the developments with our panel.

Plus, in this debate, there were some clear winners and losers. We will go live to Dearborn for the reaction from NBC‘s political director, Chuck Todd.

The debate this afternoon came as the political world was trying to digest some incredibly harsh comments about the Republicans from top Bush adviser, Dan Bartlett. And on the Democratic side, Hillary Clinton is facing sharper jabs from rival John Edwards.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: Democratic voters have a very clear choice between Senator Clinton, with both all of the good and bad that comes with her, and John Edwards, who has actually won in a red state and who could compete every single place in America.

(END VIDEO CLIP)

SHUSTER: Is Clinton as vulnerable as John Edwards says?

Or does the vulnerability, especially in Iowa, now belong to Edwards?

And later, is the White House more concerned about P.R. than protecting intelligence assets in the war on terror?

A private intelligence firm that obtained this tape of Osama bin Laden says the manner in which the Bush administration released the tape ruined the firm‘s spying efforts. We will bring you that story and assess the claim.

But we begin tonight with the Republican presidential debate that just concluded in Dearborn, Michigan. This was Fred Thompson‘s first debate in the presidential campaign. The pressure was on, but Thompson appeared solid.

(BEGIN VIDEO CLIP)

FRED THOMPSON ®, FORMER U.S. SENATOR: As far as the economic prosperity of the future is concerned, I think it‘s a different story. I think if you look at the short-term it‘s rosy. I think if you look at a 10-year projection, it‘s rosy. But we are spending money we do not have. We are on a mandatory spending lockdown that is pushing us in a direction that is unsustainable.

(END VIDEO CLIP)

SHUSTER: Thompson is trying to cut into the lead held in Iowa held by Mitt Romney. And tonight, Romney continued his sparring with Rudy Giuliani.

Watch.

(BEGIN VIDEO CLIP)

ROMNEY: Mayor Giuliani took the line item veto that the president had all the way to the Supreme Court and took it away from the president of the United States. I think that was a mistake.

He also fought to keep the commuter tax, which was a very substantial tax—an almost $400 million tax—on commuters coming into New York.

And when it‘s all said and done, if you‘re a New York taxpayer, a city taxpayer, your state and city tax combined can reach as high as 10 percent.  And in our state, if you‘re a Boston worker, it‘s going to be more like 5.3 percent.

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE: And you‘ve got to control taxes, but I did it. He didn‘t. I controlled taxes...

ROMNEY: (LAUGHTER).

I‘m sorry.

GIULIANI: I brought taxes down by 17 percent. Under him, taxes went up

11 percent per capita. I led, he lagged

ROMNEY: The president, just last year, introduced a line item veto that is—that passes constitutional muster. Elizabeth Dole did the same thing.

I‘m in favor of the line item veto.

GIULIANI: I mean you have to be honest with people. And you can‘t fool all of the people all of the time. The line item veto is unconstitutional.  You don‘t get to believe about it. The Supreme Court has ruled on it. So you can bang your head up against a stone wall all you want.

(END VIDEO CLIP)

SHUSTER: Republican former House major leader Dick Army is now the chairman of the freedomworks.org.

And “Newsweek‘s” senior White House correspondent, Richard Wolffe also joins us here in studio.

And Congressman, your reaction to this debate, especially Giuliani and Romney mixing it up over the line item veto?

DICK ARMEY ®, FORMER HOUSE MAJORITY LEADER: Well, I think the line item veto has been seen as unconstitutional. But there‘s something called enhanced rescission. I can remember when there was a time when I was the only guy, other than the senator from Indiana, that argued this. But it does work and it can pass constitutional muster.

But, you know, the fact still remains, the president can veto any spending bill and enumerate his reasons for doing so.

SHUSTER: But as far as...

ARMEY: ...and they can fix that and spend it back to him.

SHUSTER: But as far as the debate, I mean do you see either Romney or Giuliani scoring any sort of decisive blow by having the argument over taxes and how you handle your budgets?

ARMEY: No, because I don‘t think, you know, who are you going to give the edge to?

When it comes to the revelation of facts by candidates on the stump, the only thing less reliable than what facts they reveal about themselves and their history are the facts they reveal about their opponents and their history.

SHUSTER: Richard...

ARMEY: You know, the fact is, third parties have to measure these things out.

SHUSTER: Richard, your reaction both to the Giuliani-Romney skirmish, but, also, the first time we saw Fred Thompson in a debate was this afternoon.

RICHARD WOLFFE, “NEWSWEEK”: Right.

SHUSTER: How did he do?

WOLFFE: Good and bad. There were some things that I thought he was very solid on. Other ones—when he was asked about the strong or weak dollar, it looked like he been handed a dead chicken. I mean he didn‘t know what to do with the question.

So I thought a very mixed bag for him. He really didn‘t rise to expectations. But the two of those—the two frontrunners, Giuliani and Romney, I thought they went at it well together. They both had good line.  They both landed punches.

Having said that, that‘s kind of fight we like in the media. I don‘t think voters respond a whole lot well to it, because it both looks like they‘re smearing each other.

SHUSTER: It did seem as if Giuliani and Romney were on their A game.  Whether you agreed with them on tax policy or budgets or the line item veto or not, they were both engaged. They seemed to be on their mark. Thompson, however, seemed a little bit sort of imprecise. And yet, does he benefit, because the expectations, Congressman Army were so low, that merely if this guy showed up...

ARMEY: Right.

SHUSTER: ...simply by putting a sentence together, he appeals to conservatives who are looking for a save your life Fred Thompson.

ARMEY: Yes, well, of course, everybody thought he was going to show up and be the shining star. If he shows up and he‘s not the shining star, then there‘s as much an immediate letdown as there can be an uplift.

The fact of the matter is I think the senator—the ex-senator from Tennessee—should have prepared himself to come onto the stage and command the stage to meet the expectations they had of it. I don‘t think he did that. I‘m sure he probably was not able to do that. It would be like some guy walking on the football field in the middle of the season without having played a down and being expected to carry the team. Just, I don‘t think (INAUDIBLE).

SHUSTER: Well, one guy has been playing for several months. John McCain seems to be calling the same play, Richard. And that is there he was again this afternoon criticizing President Bush and Donald Rumsfeld for the way they conducted the war. And yet McCain is the one who‘s most associated with keeping the war going on the Republican side.

WOLFFE: Right. It‘s a tough fight for him. I actually think, hey, look, sometimes McCain comes off as, you know, hyper-caffeinated at the top—the start of these debates. I thought actually he was pretty relaxed and hit his stride very well.

However, this a guy who has been on the Commerce Committee for many, many years. One of his answers I found very troubling. This was an economic debate. He was asked what about these huge profits that the oil companies are getting. He said, well, I would like to think that they would spend their money, some of their profits on nuclear energy.

Why would an oil company spend their money on nuclear energy?

I mean this is—there‘s a sort of basic economic competence level, I think, that many of these Republican candidates didn‘t pass and that‘s a surprise to people who have gotten used to the Republicans being associated with business and entrepreneurial spirit in America.

SHUSTER: Richard Wolffe, senior correspondent, White House correspondent for “Newsweek,” and former House major leader Dick Armey, we‘re going see you later in the show.

But coming up, we will go directly to Dearborn, Michigan for our own rundown on debate winners and losers.

(COMMERCIAL BREAK)

SHUSTER: All of the Republican presidential candidates go head-to-head for the first time, including Fred Thompson.

Who won and who lost—we‘ll head live to Michigan in just a minute.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. RON PAUL ®, ‘08 PRESIDENTIAL HOPEFUL: This idea of going and talking to attorneys totally baffles me.

Why don‘t we just open up the constitution and read it?

You‘re not allowed to go to war without a declaration of war. Now as far as fleeting enemies go, yes, if there is an imminent attack on us.  We‘ve never had that happen in 220 years. The thought that the Iranians could impose an imminent attack on the United States is preposterous.  There‘s no way. This is just...

UNIDENTIFIED MALE: Not an attack, a (INAUDIBLE).

PAUL: This is—this is just war propaganda—continuing war propaganda, preparing this nation to go to war and spread this war not only Iraq, but into Iran—unconstitutionally. It is a road to disaster for us as a nation. And it‘s a road to our financial disaster.

(END VIDEO CLIP)

SHUSTER: Wow!

That was Republican presidential candidate Ron Paul a short time ago, during the Republican presidential debate.

With less than three months to go before the voting begins in the nomination battle, these debates are gaining in importance.

NBC political director Chuck Todd was on the scene today in Dearborn and he joins us live—and, Chuck, a Ron Paul probably energized his supporters again.

But among the frontrunners, who won today and who lost?

CHUCK TODD, NBC POLITICAL DIRECTOR: Well, I think you have to—look, this debate is going to be known for two things. One, Fred Thompson‘s debut, which looked like it was going to be a disaster when it started. His voice was quivering. He had this awkward pause. And you could almost—you almost started to feel sorry for him. I mean here was a guy who very nervous, not ready for the first question.

He got more comfortable. He got steadier and he seemed to at least show by the end that he did belong on stage.

But Rudy and Romney were the two sort of frontrunners going in. Romney is sort of the insider frontrunner, Rudy the national poll frontrunner. And neither one of them hurt themselves here. It‘s a bad moment. I‘ll tell you, you played that sop with Ron Paul where he started screaming about attorneys. Well, it was interesting. I got three different e-mails from three different campaigns attacking Romney for that attorneys question.

It sounded—I almost wonder if a lot of people are going to use that comment as a way of saying you know what?

Romney, Romney is a little inexperienced on national security issues.  Maybe this is their way of trying to go at Romney on this—on this tactic a little bit.

So we‘ll see. I think we‘re going to see that attorneys attack a lot from the frontrunners.

SHUSTER: And, Chuck, just to clarify this, the set up to that answer was a question about what do you do in case you determine that action needs to be taken against Iran.

TODD: Right.

SHUSTER: And the response then was well, you first...

TODD: You go to Congress.

SHUSTER: You go to Congress. But Romney, in the course of answering that, said he would consult his attorneys.

TODD: Well, exactly. And what I thought was interesting, I‘ll tell you, among the four frontrunners—McCain, Thompson, Romney and Rudy—

Thompson actually seemed to draw the clearest contrast. He seemed to be the most willing to go to Congress, because he talked about it, and it seemed with a little bit of a distancing from President Bush, saying, you know, you‘re going to have to go to Congress because you have to get the public on your side if you‘re going to do something like this, particularly if this is going to end up part of a long-term military struggle with Iran—if it‘s not just something that‘s quick strike.

So I thought it was interesting the way Thompson sought to create a little more distance on this question from both Romney, Rudy and McCain.

SHUSTER: Chuck, I thought it was very intriguing and a little bit baffling when Fred Thompson, who has been labeled as not being precise or not being sharp, there he was talking about Iraq if Saddam was still in power. He talked about the—Saddam Hussein‘s desire for nuclear weapons and what that might be do for the region.

And watch this.

(BEGIN VIDEO CLIP)

THOMPSON: The whole place would be nuclearized. Saudi Arabia would probably respond to that, and other Sunni nations would respond to it. And you would have an entire nuclearized part of the world that we don‘t have now. That would be extremely problematic for us, from an oil standpoint, as well as a global stability standpoint.

(END VIDEO CLIP)

SHUSTER: An entirely nuclearized region.

To me, Chuck, that gets to one of the problems with Thompson, and that is this sort of imprecision can sometimes get him in trouble.

What‘s your read?

TODD: Well, a little bit. But, you know, what was interesting about that comment is you could easily see him applying it to making the case for going after Iran militarily, that you have to go after Iran and prevent them from becoming a nuclear power because if they become a nuclear power, it becomes—it becomes a slippery slope. And Saudi Arabia becomes a nuclear power, etc.

So, this is an argument that some have been making, particularly those on the right, as far as this issue is concerned. So, you know, I think—I don‘t think that was a slipup as far as Senator Thompson is concerned. I think that‘s exactly what he believes and how he justifies both the Iraq action and probably how he would justify an Iran action, if that‘s where he went.

SHUSTER: One of the slipups that was identified by our colleague, Richard Wolffe, who is going to be back on the panel here momentarily, involved when John McCain, in which John McCain was asked about—he made a statement about oil companies pursuing nuclear energy.

And as Richard pointed out, why would oil companies want to pursue nuclear energy?

I mean you talk about the presentation, I mean that‘s not something they do.

TODD: Right.

SHUSTER: How badly is McCain going to get hurt by comments like that and his perception that there‘s complete free trade right now, when Republicans like Pat Buchanan would say, not, not at all?

TODD: Well, I tell you what, I thought what‘s interesting about McCain‘s performance is that I think it exposed a weakness with McCain. He is never comfortable when the debate is not about national security. And, you know, he turned every—a lot of the questions he got on some specific issues involving the economy—he turned into just rants against spending and pork, which is something, obviously, he feels passionate about. But he didn‘t seem to get into the specifics, as far as the economy was concerned.

So you wonder if just his lack of comfort on this topic is what came through and why he sort of rambled a little bit when it came to that answer about oil companies.

SHUSTER: And, Chuck, what about Mike Huckabee?

We‘re going to be talking about him later in the hour. But he, again, seemed to be on his game as far as his speaking style and his ability to connect in a personal way.

Do you see him getting more of a boost out of this debate than he did, say, out of the last one?

TODD: Well, you know, we‘ll see. I mean I think that, you know, I want to talk about a couple of the candidates here in a minute.

I mean I think that Giuliani, you know, Giuliani had one bad moment, too, by the way, that I think deserves highlighting. And that is how he didn‘t really answer the “how do you police the Internet culturally?”.

And I think that he started talking about it very technocratic like.  And McCain, of course, jumped in and said no, no, no, you go after these pornographers. You go after these predators. And he answered it more personally.

So I thought one of—for Rudy, that was one of the less personable moments.

SHUSTER: All right, NBC political director Chuck Todd.

Chuck, we appreciate your reaction, as always.

And, again...

TODD: You got it.

SHUSTER: You can see—thank you.

And, again, you can see the full debate tonight on MSNBC at 9:00 p.m.

Eastern time.

But coming up, Hillary Clinton now has a clear lead in Iowa, site of the first 2008 nomination battle. John Edwards is ratcheting up his criticism of her.

Is the risk worth the reward?

And why on Earth was the Bush administration so eager to release a tape of Osama bin Laden when the source of that tape, a private spying firm, had warned the administration that mishandling the tape would burn intelligence sources?

We‘ll get into that in a little bit. You‘re watching MSNBC.

(COMMERCIAL BREAK)

SHUSTER: The attacks are now coming fast and furious at Democratic frontrunner, Hillary Clinton. Her rivals, including John Edwards and Barack Obama, are trying to show voters that Clinton is vulnerable in a general election.

Here‘s John Edwards from this weekend‘s “Meet The Press,” arguing that Clinton is too polarizing.

(BEGIN VIDEO CLIP FROM “MEET THE PRESS”)

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: Democratic voters have a very clear choice between Senator Clinton, with both all the good and bad that comes with her, and John Edwards, who has actually won in a red state and who could compete every single place in America.

(END VIDEO CLIP)

SHUSTER: Edwards may run the risk of repeating what happened to Dick Gephardt four years ago. The 2004 presidential candidate, three months before the Iowa caucuses, decided to go after frontrunner Howard Dean.  Gephardt took down Dean, but too himself out, as well, as voters punished Gephardt for going negative. Gephardt finished fourth, Dean third, John Kerry and John Edwards finished Iowa in first and second.

Joining us again are the chairman of freedomworks.org and former House majority leader, Dick Armey, and “Newsweek‘s” senior White House correspondent, Richard Wolffe.

Richard, at what point does John Edwards start to face some sort of blowback for being too hard on Hillary?

And has he reached that point yet?

WOLFFE: No, I don‘t think he has. And he‘s got nowhere to go. He has to make his stand in Iowa. He has to land punches at this stage. He has to get attention, because he has the two superstars in the race, between Clinton n Obama.

How he‘s doing it is more aggressive. He says he doesn‘t want to say anything bad about Hillary Clinton and then proceeds to do so. Obama is taking a much more subtle approach, maybe less effective in some ways. But, for instance, he gave an energy speech just this week and pointed out that, well, Hillary Clinton, without naming her, had not supported ethanol, a big deal, obviously, in Iowa.

So there are more subtle ways to do it than Edwards has been doing.  But on the other hand, he‘s in third position nationally. His money is in trouble. He needs the attention, all the attention he can get.

SHUSTER: And Dick Armey, Republicans must love the position that you‘re in now of watching the Democrats try to gauge how tough to be with Hillary, knowing that, perhaps, if they soften her up, that makes her even softer for a general election if she‘s the nominee.

ARMEY: Well, it‘s pretty hard to tell. John Edwards has not gotten some of the endorsements he had expected to get. You look at John Edwards, I look at him and I always see there‘s no “there” there. I think that ad backfires on him.

He says are you going to chose Hillary, where there‘s something there, something good and something bad. But there‘s a “there” there. Or me?

SHUSTER: But isn‘t that the elephant in the room?

I mean everybody...

ARMEY: No. I think John Edwards, frankly, needs to understand his race is over.

Now, I mean...

SHUSTER: You think his race is over?

ARMEY: Oh, yes. I think he...

SHUSTER: Why?

ARMEY: Well, because he—there‘s no “there” there. I mean I look at John Edwards, he was in the Senate.

What did he do?

SHUSTER: Except he‘s got a more stringent...

ARMEY: Did he have a serious proposal all the time he—I don‘t remember the man as a senator. I can tell you one thing—you cannot ignore the fact that Hillary Clinton is in the race and she‘s got something she wants to do in the White House. She‘s got a policy objective. You can like it or not, but there‘s a real substantive reason for her wanting to be in the White House.

SHUSTER: Do you, then, disagree with John Edwards and believe that Hillary Clinton is a lot more formidable a national candidate in a general election than John Edwards is trying to make Democrats think?

ARMEY: Absolutely. John Edwards needs to understand there are two things about Hillary Clinton that he must know. One, she‘s smarter than he is. And, two, she‘s tougher than he is. And if he hasn‘t figured that out, it‘s going to a painful end instead of just an end.

WOLFFE: And the Hillary folks are right to point out, by the way, that look at the national polls, look at the nominal match-ups between Hillary and all the Republicans across the country. She does as well, if not better, than the other Democratic candidates. So the argument doesn‘t really stack up so much. He‘s projecting at some point in the future—you just can‘t predict like how a general election will play out like that.

SHUSTER: Richard, you mentioned Barack Obama is taking a more sort of nuanced, subtle approach, as far as getting in his digs at Hillary. At a certain point, does he need to sort of ratchet up things if he‘s going to have a chance at essentially defeating Hillary Clinton in Iowa?

Or does he decide, you know what, perhaps she‘s the inevitable frontrunner, I‘m not going to cause that sort of damage?

WOLFFE: I don‘t think that‘s what he‘s doing at all. He thinks he has a—he‘s really got a good ground game in Iowa, that it‘s a three way race and an upset in Iowa will change this whole race completely. And I think that‘s probably true.

Having said that, he does need to improve his game on TV. I think his attitude toward TV is that it‘s somewhere—whether it‘s a TV interview or a TV debate—it‘s somehow more trivial, more glib than his speeches, which are sort of literary exercises. That‘s fine in one sense. It‘s very intellectual and noble. But TV is the medium here. He has to play by the rules of the game. And that means using some of these lines that are in his beautifully crafted speeches and using them on the debates. He doesn‘t use the zingers that he crafts himself.

Why not?

I just haven‘t ever gotten a good answer out of the Obama campaign on that one.

SHUSTER: Dick Armey, what do you think about Barack Obama?

ARMEY: Well, I...

SHUSTER: I mean he‘s got to be an intriguing candidate to you on several levels.

ARMEY: The one thing that I‘ll give him over Edwards, Edwards just cracks me up. I mean Obama at least understands that you ought to try to pretend—project that you have some policy objectives in mind. And he‘s made sort of itty bitty suggestions. He does talk like a sociologist running for president of the faculty senate, and he‘ll never get over that.  And that, in the final analysis, will be his undoing, because he just can‘t compete with a realistic able, serious-minded, policy-oriented candidate like Hillary Clinton.

I mean there is so much substance to Hillary—mind you, from my point of view, all misguided substance. But there is so much substance to Hillary Clinton that these two guys, they just basically look like a couple of sophomores hoping they can make the A Team next year.

SHUSTER: I must say, I never imagined that I would see the sort of ringing endorsement from Dick Armey that we have heard in the last five minutes, although it‘s not really an endorsement of her policies, as you suggest.

But in any case, Dick Armey and Richard Wolffe are staying with us.

And just ahead, a firestorm is raging over some comments by President Bush‘s adviser, Dan Bartlett. He called Fred Thompson a big dud, said Romney can‘t win because he‘s a Mormon and said the best candidate is the GOP field is former Arkansas Governor Mike Huckabee, but said Huckabee‘s last name is too hick. We‘ll talk about Bartlett‘s blunt views and examine Huckabee‘s surging campaign, coming up.

(COMMERCIAL BREAK)

SHUSTER:  Still to come, Mike Huckabee pulls off a surprise surge in Iowa.  He has jumped ahead of Rudy Giuliani for third in the polls, but can he keep up the momentum on the national scale.  We‘ll get to that in just a moment, but first, here‘s a look at your headlines.

(NEWSBREAK)

SHUSTER:  When the “Des Moines Register” released their latest Iowa poll of Republican voters, you could almost hear the roar in Little Rock, Arkansas.  Former Governor Mike Huckabee who has little money and a limited campaign organization was nonetheless the preferred candidate of 12 percent of the Iowa Republican caucus goers.  That now puts Huckabee in third place in Iowa and ahead of New York mayor and national front-runner Rudy Giuliani.  Huckabee has become something of a darling among social conservatives and he is a gifted speaker as he demonstrated yet again at today‘s debate.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE, ® PRESIDENTIAL CANDIDATE:  That for many people on this stage the economy is doing terrifically well.  But for a lot of Americans, it‘s not doing so well.  The people who handle the bags and make the beds at our hotels and serve the food, many of them are having to work two jobs and that‘s barely paying the rent and you know what else?  They don‘t think that they can afford for their kids to go to college.  They‘re pretty sure they‘re not going to be able to afford health insurance.  And so I hope in the course of this we can talk about how a fair tax really lifts up everybody including those at the bottom of the economic spectrum.

(END VIDEO CLIP)

SHUSTER:  Can Huckabee shock the Republican field as his supporters insist?  And will Iowa be enough of a slingshot to propel Mike Huckabee into serious contention for the GOP nomination?  Back with their insights, the chairman of freedomworks.org and former House majority leader Dick Armey and “Newsweek‘s” senior White House correspondent Richard Wolffe.  Congressman Armey, what‘s your reaction to a guy like Mike Huckabee?

ARMEY:  I think Huckabee is really in touch with the base.  When he said fair tax, I‘m sure—I believe he‘s talking about national sales tax.  People who support national sales tax are not guilty of much deep thinking but it has a great appeal.  I say it‘s one of the great demagoguery coefficients in all of public policy discourse.

Well, and then he is able, I think in Iowa, he‘s probably able to marshal a good deal of organization and in Iowa, organization matters probably more than money.  And so I think he‘ll probably shine a little in Iowa, but my own view is while he presents him and people tell me he‘s an able person, he‘s a person that‘s demonstrated to me already that he‘s willing to pick up a bogus idea with a high demagoguery coefficient for a political purpose.  That‘s not my idea of a statesman.  And so I worry about that.

SHUSTER:  I have a feeling that Congressman Armey‘s depiction of Mike Huckabee as a demagogue is not really the picture that people are getting in Iowa.  And I think social conservatives love this guy.

WOLFFE:  And he has a great folksy style of talking and he performed well in these debates.  Let‘s not get too excited.  Don‘t break out champagne in Little Rock just yet, he‘s moved to 12 points, he is still six points behind Thompson who only just rolled into this race.  So he‘s got some ways to go.  But of course perception of the winner isn‘t the same as actually winning in Iowa and he could just have a very strong performance, a strong second, even a strong third and still be in a good position.

SHUSTER:  It would seem one of the reasons that a Mike Huckabee perhaps is at 12 percent and that Fred Thompson without being in the race is at 18 percent in Iowa is because that a lot of Republicans are looking for somebody other than the front-runners.

And I want to talk about Dan Bartlett, the president‘s former adviser, top adviser in the White House who gave a speech recently to the U.S.  Chamber of Commerce that unbeknownst to him was caught on videotape.  And unbeknownst to him there was a reporter there and he had some really strange things to say about the entire Republican field.  Here‘s what he said about Mike Huckabee.

(BEGIN VIDEO CLIP)

DAN BARTLETT, FORMER WHITE HOUSE COUNSEL:  Quite frankly, having the last name Huckabee, I hate to be so light about it, but it is, it is an issue.  Politics can be fickle like that.  I mean you‘re trying to get somebody‘s attention for the first time, you‘re trying to become president, Huckabee?  You got to be kidding.  Hope, Arkansas, here we go again.

(END VIDEO CLIP)

SHUSTER:  Huckabee, as if the name is a problem.  I mean Dan Bartlett went on to called Fred Thompson the biggest dud in this race.  He said that Mitt Romney‘s religion, Mormonism, is going to be a problem and that people will excuse it by saying he‘s a flip-flopper and that McCain is the biggest wild card and the issue is money, he doesn‘t have it.  Some unvarnished truth from the White House in this?

WOLFFE:  Let‘s just say that there are many other people in the White House who share that perspective.  I‘ve heard so—and I don‘t think it‘s confined to the White House.  But it‘s nice to hear Dan Bartlett speak in a liberated way in front of a camera.  But those are pretty common sentiments.  So yeah it‘s strange to hear it, but they are I think he‘s sort of nailing the conventional wisdom within the party.

SHUSTER:  Dick Armey, what about the issue of Mitt Romney being a Mormon?  Will that be a reason for people to say, I‘m not going to support him and they may publicly they‘ll say because he‘s a flip-flopper but really because he‘s a Mormon?

ARMEY:  We kind of went through this with Kennedy with the Catholic thing years ago.  My own view is it will not, it should not make a difference.  There was some sage advice given to Mitt Romney very early where somebody said don‘t ever say, “I‘m a Christian,” because if you do every evangelical preacher in America is going to have to give a sermon next Sunday to explain how being a Mormon is not being a Christian.

There is a strain between the Mormon Church and a lot of the evangelicals and the evangelicals make a big part of our base as Huckabee knows and demonstrates.  So he‘s got a tough route getting the nomination.  Once he got past the nomination, I think then it would wash out and go away.

SHUSTER:  But the message from all of this seems to be this is a White House that is very disappointed with the Republican field and it‘s fearful that there‘s not going to be a Republican who is going to be a sure shot at the election in carrying on the president‘s legacy or repairing the president‘s legacy.  Richard?

WOLFFE:  Well, I‘ve said for some time, I think the president thinks that Hillary Clinton, at least when it comes to Iraq is the best person to carry on his legacy.  But look, some of this is natural for a White House.  I remember Bill Clinton leaking and Clinton‘s aides leaking to the press all sorts of bad stories about Al Gore.

There‘s a frustration when you can‘t run again and you think you‘re in the best position and the best asset for the party as the president has portrayed himself.  When you look at the field and say, well, nobody is up to me.  Nobody can do as well as me and there‘s some of that being played out right now, but is the field as weak as Dan Bartlett suggests?  Well the polls show that Republicans are not happy with any of them.  So maybe there is some justification for looking skeptically at some of these candidates.

ARMEY:  Let me—I had a great conversation over lunch a few weeks ago with one of my favorite Democrat friends.  And he gave me a reason why every one of their candidates could lose and could give me no reason why any of them could win.  I gave them a reason why .

SHUSTER:  Who‘s the Democrat?

ARMEY:  I‘m not telling.  Let him speak for himself.  But I gave him a reason why every Republican could lose and could give no reason why one could win.  Now the difference between the two of us, I could give you a reason why one of the Democrats could win, but he couldn‘t for one of the Republicans so he did have a leg up on me there.

But the fact of the matter is it is very easy to be disappointed with the candidates in the field from your own party.  Somebody said Fred Thompson was a dud.  Well, I‘ve been saying there‘s a couple of duds on the other side of the race as well.  Sooner or later all the duds will kind of fade away and you‘ll have two last people standing.  And there will be a good contest, I believe, between two good people.

SHUSTER:  One of the people who is definitely not a dud at least according to national polls is Rudy Giuliani, and yet a lot of social conservatives can‘t get over his pro-choice position, supports gay rights, supports gun control.  Rudy Giuliani has now agreed to appear at the Family Research Council Action Value Voter Summit.  Will something like that make a difference, is it just a matter of getting some face time with social conservatives?

ARMEY:  I believe that‘s James Dobson.  And Rudy Giuliani.

SHUSTER:  I believe it‘s Tony Perkins.

ARMEY:  I don‘t know Tony Perkins, but I know Jim Dobson.  If Rudy Giuliani believes he can say or do anything to make James Dobson happy, he‘s just in for a horrible disappointment because that can‘t be done.

SHUSTER:  In the latest e-mail, the latest letter or maybe a quote, James Dobson said that Rudy‘s nomination would destroy the pro-life movement.  So it does sound, Richard, like .

ARMEY:  He‘s been crying wolf ever since Moby Dick was a minnow.

SHUSTER:  Talking about James Dobson.

ARMEY:  He said before president bush was sworn in, he said this president was going to destroy the pro-life movement.  He‘s had it on record.  He‘s going to betray us.  So this guy is the most chronic malcontent I‘ve ever seen.  You know what cracks me up about him is he‘s sitting right there in Colorado, there‘s a great opportunity for him as a citizen of Colorado to step up to the plate, run for the Senate.  If he‘s got so much superior ability and knowledge about what should happen in this great government then let him run for the Senate.

But he won‘t run for the Senate, but he will in fact abuse every candidate out there.  Now, I‘m not a big fan of Rudy Giuliani necessarily, but I‘ve seen this White House make the mistake and I saw the Republican majority make the mistake.  Of painting themselves in a corner with the electorate at large by trying to find some way to make Jim Dobson happy.  And you can‘t make that man happy but you can lose a lot of friends in the effort.

SHUSTER:  James Dobson according to Dick Armey, nothing could make you happy, if you would like to respond, we would be happy to have you on tomorrow night, but in the meantime, Richard Wolffe, this division, though, among social conservatives, is it real division or as some Republicans suggest 9/11, 9/11, 9/11, that will overcome any problems Rudy might have with getting out evangelicals in a general election?

WOLFFE:  I think there‘s a certain amount of looking at Giuliani saying he looks like a winner, he can win therefore let‘s go for him.  The real question isn‘t just about Jim Dobson, though, it‘s about whether social conservatives are disappointed even with this administrative and if they are, are they going to stay at home in large numbers?  Will they be motivated?  In fact, do they care more about things like national security and winning than the social issues that we like to caricature them as caring about?

And I think right now, Giuliani is benefiting from the doubts in that he looks in a strong position.

SHUSTER:  Richard Wolffe, senior White House correspondent for “Newsweek” and Dick Armey, former House Republican majority leader and now chair of freedomworks.org.  Thank you both for coming in, we appreciate it.

A private intelligence firm blasts the White House for ruing their spying efforts on al Qaeda.  They claim the administration jumped the gun by going public with a new tape of Osama bin Laden even after they were warned it could expose critical top secret sources.

And Al Gore says he‘s not running for president but could a nod from Nobel change his mind?  You‘re watching MSNBC, the place for politics.

(COMMERCIAL BREAK)

SHUSTER:  Did the American government‘s handling of Osama bin Laden‘s most recent message hinder intelligence gathering operations against al Qaeda?

Today‘s “Washington Post” quotes the founder of the site‘s intelligence group who claims that Site (ph), a private intel firm provide a copy of bin Laden‘s videotape message to the White House before al Qaeda released it to the world.  According to Site, the White House gave it to the government‘s intelligence apparatus.  Somewhere along the line the tape‘s existence was leaked to the media and Site said al Qaeda reacted by identifying its own leak, changing its tactics and rendering years of Site‘s intel work obsolete in a single day.

The administration has referred the matter to the director of national intelligence to investigate the truth of the story and its importance, as murky as the world of intelligence itself from which this story emerges.  But here with his assessment is Evan Kohlmann, MSNBC terrorism analyst and founder globalterroralert.com.

Evan, it sounds like whatever happened here prompted al Qaeda to essentially change its locks on its Internet system.  Is that an accurate description?

EVAN KOHLMANN, NBC NEWS TERRORISM ANALYST:  Yeah, almost immediately.  It‘s actually amazing.  As soon as news got out that there was an advanced copy of the bin Laden tape in the hands of U.S. official, basically all of the Web sites that form the network that supports al Qaeda‘s propaganda arm, all of the sudden, almost simultaneously all went offline and it clearly was the result of a deliberate action.  It looked like they were trying to plug the leak.  And at least according to the Site Institute now, it seems like at least part of their advantage, their niche that they had been getting these videos through was unfortunately lost.

Now I should emphasize that there have been a number of these loopholes that have surfaced over the past year that have been used by myself and others like Site Institute to grab these videos before they‘re officially released.  So this was very important loophole, it‘s a sad thing it‘s gone.  It‘s not entirely irreplaceable, there will be other opportunities in the future but it certainly was questionable judgment to expose this kind of a loophole in this way.

SHUSTER:  Evan, in defending the Bush administration, a spokesperson for the Bush administration‘s office of the director national intelligence says that U.S. agencies have their own sophisticated means of watching al Qaeda and that there are individuals in the right place.  If that‘s true, then how come private organization are able to get these tapes before the U.S. government gets them?

KOHLMANN:  If that‘s true, how is it that CENTCOM is advertising bin Laden videos that never actually are released because they don‘t exist.  And that‘s exactly what CENTCOM has done in the last year.  The U.S.  government does not have access to these message forums, these Web sites because in many cases these Web sites have been around, password protected and locked for longer than anybody in the U.S. government is paying attention.

It happens that there‘s only a small collection of people in the private sector who have been doing this long enough that they‘ve gained this kind of access.  And it is not easy.  It‘s taken us years to do this.  And this is very frustrating, I can tell you from personal experience, that it‘s very frustrating when you get something like this that‘s an exclusive and you hand it over to a U.S. government agency thinking that you‘re doing the right thing, that you‘re helping out the war on terrorism only to turn around have that leaked on you to the media, that‘s very frustrating, it‘s something that should not happen and it‘s a great way of burning private terrorism investigators and scaring them from helping the U.S. government.

SHUSTER:  So in other words, these private firms such as yours who have been doing it for longer than the Bush administration, they‘re the ones getting this information despite the Bush administration saying, oh, no, we‘ve got it covered, we can keep track of these Internet sites as well.

KOHLMANN:  Well, I wish I could be reassured that they have the same access we do.  Everything I‘ve seen tends to indicate opposite.  I mean, one of the articles about this particular leak referred to al Qaeda‘s information system as something called Obelisk.  No one has heard this term before in private terrorism matters.  There‘s a real name that al Qaeda uses to refer to this system, it‘s called the al Fajr Media Center.  There‘s no need to make up other names for it.  That‘s a public name. 

Everybody knows that name.

So again, there‘s a lot of questions.  If the U.S. government is so on top of this and they don‘t need the assistance of private investigators, then why are they hiring us and why are they hiring us in a consistent way?  And again, I just think it just stands to reason that if you have someone coming to you and doing you a favor and giving you a piece of intelligence that‘s valuable, you don‘t want to burn that source because in the future they‘re not going to be so readily available to come to you.  And I think that‘s exactly what‘s happened here.

SHUSTER:  And Evan, I think what has also happened is the idea that our government has to rely on these private firms in order to get this intelligence suggests that perhaps our efforts on war on terror are even more challenging than we realize.  But in any case, Evan Kohlmann, NBC terrorism analyst, Evan, thanks very much.  We appreciate it.

KOHLMANN:  Thanks very much.

SHUSTER:  Should Hillary Clinton be more like Paris Hilton?  That‘s the advice she got on the campaign trail in Iowa today.  Willie Geist tells us who offered that bit of campaign sabotage and what on Earth he meant by it.  We‘re coming right back.

(COMMERCIAL BREAK)

SHUSTER:  And now to the segment you‘ve all been waiting for and the man who‘s Web site is always accessible, especially to the U.S. government.  Willie Geist.

WILLIE GEIST, MSNBC CORRESPONDENT:  David, you know what struck me about that interview with Evan, he basic will he told us that he knows more than the CIA.  Which is a little—Isn‘t that a little bit scary?

SHUSTER:  Frightening.  Very frightening.

GEIST:  Smart guy though.  I‘ve got some amazing video to show you here, David.  It‘s not every day you see road kill in a professional car race.  We almost got some in Australia and it was no possum.  A kangaroo got loose and hopped around a racetrack.  Look at this.  As stock cars flew around a curve at speeds of 150 miles an hour.

The skilled drivers managed to swerve way of the kangaroo and the hopping animal somehow cheated death to make it across the track unscathed.  Look at that.  Ran back into the wild, jumped over the wall and none of the drivers were hurt.  One of the cars did wreck but somehow, David, everybody was OK.  That could have been really, really ugly.

SHUSTER:  Willie, I once saw a rabbit at the Indianapolis 500 on a broadcast and it just got pulverized.

GEIST:  In Australia, they do it differently.  I‘m not saying anything but you know how much they like their lager down there.  Foster‘s in Australia.  They actually have bars, we have video of it, where they allow kangaroos to come in and drink beer.  Maybe this was a dare from some drunken kangaroos, I‘m just saying.  We don‘t know, but I‘m just saying.

Well, most corporate conventions are depressing for reasons having to do with boredom, but the National Funeral Director‘s convention is depressing for reasons having to do with death.  The group is getting together in Las Vegas this week to discuss the very latest in urns, body moving machines and sports themed funerals.

The biggest draw this year, though, is the shiny new state-of-the-art embalming machine.  Just in case the whole thing wasn‘t creepy enough, they laid out a mannequin to show off the new embalming table.  I guess it‘s kind of like the Gap, you have to see it on the mannequin before you make the purchase, David.

SHUSTER:  Eww.

GEIST:  That seems like a little bit of a morbid group to be hanging out in Las Vegas.  If you‘re a bachelorette party and you see that liquored up crowd of morticians rolling up on you, you probably want to turn and walk the other way.  That‘s not .

SHUSTER:  I‘m sort of surprised Las Vegas would even want that kind of conference.  Maybe they‘re hard up for money.

GEIST:  You know what, though?  Vegas loves a freak show.  That‘s one thing we know, David.

A little politics for you, now.  Al Gore has already won an Emmy and an Oscar this year for his work in educating people about the dangers of climate change.  Well, on Friday he hopes at a Nobel Peace Prize but could the Nobel ceremony also be a platform to launch his surprise presidential campaign.  Several grassroots groups are certainly hoping so.  “Newsweek” magazine reports that groups like draftgore.com are pushing the former vice president to take one more run at the White House.  One Gore supporter said, quote, “If he wins the Nobel Prize then he can‘t not run for president.  He‘s got to do it.”

Gore, for his part, had no comment at all.  David, that‘s a pretty good year, if you get the Oscar, Emmy Award and the Nobel Peace Prize in one year, you‘re doing OK.  You know D.C. better than anybody, do you think there‘s any chance Al Gore comes back and runs for president?

SHUSTER:  No, because I‘ve had the theory he has had a great year, why screw it up with a presidential campaign?

GEIST:  Right.  And he‘s been through this, does he need to did it again, I don‘t know.  I don‘t think he‘ll do it.  But we‘ll see.

Well, if Gore does jump into the race, he‘ll be chasing Hillary Clinton.  Senator Clinton got some unsolicited beauty advice on the campaign trail today while parading around Iowa on the subtly named Middle Class Express.  NBC‘s producers on the ground report that a man in Dakota City, Iowa, told Clinton she ought be more like guess who?  Paris Hilton.  Shouldn‘t we all, really, though?

The 84-year-old man actually brought photos of Paris‘ different hairstyles and said Hillary ought to specifically copy Hilton‘s up-do seen her.  He said having her hair all hanging down like she just got out of bed quote, “just won‘t work if she really wants to be president.”

David, confirming what I‘ve been saying all along, if we were all just a little bit more like Paris Hilton, the world would be a better place.

SHUSTER:  Brilliant, Willie, as always.

GEIST:  Thank you, David.

SHUSTER:  And for more of Willie check out his Zeitgeist video blog at zeitgeist.msnbc.com.  That does it for us.  Thanks for watching.  TUCKER will be back tomorrow.  Up next, a live edition of HARDBALL WITH CHRIS MATTHEWS.

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

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