updated 7/7/2008 11:24:37 AM ET 2008-07-07T15:24:37

Guests: Joe Scarborough, Rachel Maddow, Tony Blankley, Michelle Bernard, Noah Oppenheim

JOE SCARBOROUGH, GUEST HOST:  Tonight, is Barack Obama backtracking and withdrawing troops from Iraq?  He says he‘s going to refine his Iraq policy, but in an impromptu press conference, he couldn‘t exactly define what that meant.

Troops out in 16 months or not?  And the bigger question, will a move to the right on Iraq be the last straw for the left?

THE RACE FOR THE WHITE HOUSE rolls on.

Welcome to THE RACE.

I‘m Joe Scarborough, in for David Gregory.   It‘s great to have you with us.

This is, of course, your stop for the fast-paced, the bottom line and every point of view in the room on the holiday weekend edition.

Obama‘s Iraq problem, and McCain with Bush—Jeb Bush.  And Bush, Jeb Bush, 007 may sound like the president‘s latest poll numbers, but can his brother help deliver Hispanics, Catholics and a little old state called Florida? 

Well, at the half hour, we‘re going to jump in the RV and head deep into the battleground states.  McCain‘s taking the fight to Ohio.  How will they feel about his pro-trade talk in the Buckeye State this week? 

And in “Three Questions,” summer school‘s in session, and it‘s report card time.  How‘s Obama uniting the Democrats, and is Bill Clinton going to flunk the test? 

Now, the bedrock of our program, a panel that always comes to play. 

With us tonight, Tony Blankley, syndicated columnist; Michelle Bernard, president of the Independent Women‘s Voice and an MSNBC political analyst;

Rachel Maddow, host of “The Rachel Maddow Show” on Air America, which can be seen and heard on airamerica.com.  Rachel also is, of course, an MSNBC political analyst.  And Noah Oppenheim, he‘s co-author of the “Intellectual Devotional” series and former senior producer of the “Today” program right here on NBC.

We begin as we do every night with everybody‘s take on the most important political story of the day.  That is, of course, our “Headline.”

Tony Blankley, Obama and Iraq, what‘s your headline tonight? 

TONY BLANKLEY, SYNDICATED COLUMNIST:  My headline is “Obama Begins to Backpedal on Iraq.” 

Here‘s what he said in April. 

Got the tape? 

(BEGIN VIDEO CLIP)

CHARLES GIBSON, ABC NEWS:  Senator Obama, your campaign manager, David Plouffe, said, “When he”—this is talking about you—“When he is elected president, we will be out of Iraq in 16 months at the most.  There should be no confusion about that.”

So you give the same rock-hard pledge, that no matter what the military commanders said, you would give the order to bring them home? 

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Because the commander in chief sets the mission, Charlie.  That‘s not the role of the generals. 

Now, I will always listen to our commanders on the ground with respect to tactics once I‘ve given them a new mission that we are going to proceed deliberately and an orderly fashion out of Iraq.  And we are going to have our combat troops out.  We will not have permanent bases there. 

(END VIDEO CLIP)

BLANKLEY:  And here‘s what he said today. 

(BEGIN VIDEO CLIP)

OBAMA:  As commander in chief, I would always reserve the right to do what‘s best in America‘s national interests.  And if it turned out, for example, that, you know, we had to in certain months slow the pace because of the safety of American troops in terms of getting combat troops out, of course we would take that into account. 

(END VIDEO CLIP)

BLANKLEY:  He‘s trying to give himself as much wiggle room.  He‘s sounding more responsible now that he‘s in a general election campaign. 

The trouble is that he made some pretty firm statements in the past, and combined with so many other statements that he‘s throwing under the bus, he begins to have, I think, a backpedaling problem. 

SCARBOROUGH:  Rachel, let‘s take it to you. 

Of course, a lot on the left are concerned about Barack Obama‘s shift on the FISA issue.  Now, of course, Tony Blankley is talking about Iraq. 

What‘s your headline tonight regarding Iraq and Barack Obama?  Is it a flip-flop? 

RACHEL MADDOW, MSNBC POLITICAL ANALYST:  Well, my headline is probably going to bug you guys.  My headline tonight is, “Flip-Flop, Schmip-Flop.”

I think the only way anybody can see Obama‘s statement on Iraq today is a flip-flop is if they haven‘t really been paying attention to him on Iraq before now.  I don‘t think Tony‘s before statement is actually contradicting anything that he said today. 

During the primary season, Senator Clinton went after Obama for saying exactly what he said today, that he‘d like to be able to withdraw one or two brigades a month, but he said the plan would be subject to conditions at the time.  Obama advisers like Samantha Power and Susan Rice have been articulating that exact position from him at least since March of this year. 

I personally don‘t tend to agree with Obama on this stance.  Like a lot of things, he‘s way more conservative on this issue than I am.  But the idea that he‘s flip-flopping or changing position, sorry, I think it‘s total bullpucky. 

SCARBOROUGH:  So, Rachel, you don‘t think the left will have any problem if President Barack Obama keeps U.S. troops in Iraq for, let‘s say, his entire four-year term? 

MADDOW:  I think the left will have tons of problems with it, just like the left is going to have a huge problem if he goes through with this FISA thing.  I think the left may have a problem with the faith-based programs thing.  I think the left might have trouble with him expanding the military, with all these things that he‘s talking about.  But it‘s not a change in position.  It‘s not a flip-flop. 

SCARBOROUGH:  Michelle, Barack Obama actually went to North Dakota to talk to veterans.  That‘s your headline.  Tell me about it. 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  It is, Joe.  My headline tonight is “Obama is Bunting for Votes.”

As you know this week, Barack Obama has really been engaged in a pretty serious offensive campaign to prove his patriot bona fides to the nation.  Now, he started off earlier this week with his American values speech, and he ended up today not quite selling an American flag, at least not yet, but going into the very red, very Republican state of North Dakota, speaking with vets. 

Now, today‘s speech was supposed to be about July 4th, Independence Day, his grandfather‘s service in World War II, grandma‘s Rosie the Riveter.  All of this showing his patriotic bona fides.  Unfortunately, what we have ended up the week with is talking about Iraq and whether or not Senator Obama has done a “flip-flop” on Iraq policy. 

SCARBOROUGH:  Well, I‘ll tell you what, he‘s certainly not sounding like Democrats in the past.  If you look at Barack Obama this week, he‘s been talking about faith.  He‘s been talking about families.  He‘s been talking about vets. 

He‘s been actually encouraging young Americans to get involved in the military.  That‘s not exactly a message that Democrats delivered in the past.  It could actually help him in middle America. 

Noah, the big story for a lot of Americans today in middle America had nothing to do with Baghdad or Basra or Afghanistan.  It had to do with the economy.  What‘s your headline? 

NOAH OPPENHEIM, CO-AUTHOR, “INTELLECTUAL DEVOTIONAL” SERIES:  That‘s right, Joe.  My headline is “Jobs: Help Wanted.”

There was another jobs report out today.  Another 60,000-some more people are now unemployed.  I think for all the talk about Iraq—and Rachel, it is a flip-flop, but we can talk about that later.  The thing that‘s going to matter most to people come November is the economy. 

Out here in California, the wave of foreclosures continues.  You look up at the gas prices, you know, $5 a gallon in some places for premium.  People are now losing their jobs at increasing rates.  I think it‘s all that matters. 

Both McCain and Obama trying to claim the issue as their own.  McCain launching his jobs first tour next week.  Obama talking about it on the tarmac today at an impromptu press availability. 

Both these guys have two challenges.  They‘ve got to demonstrate empathy, they‘ve got to demonstrate they understand the pain that average Americans are feeling.  And they also have to provide policy solutions to the problem.  It‘s not clear who‘s going to come out ahead of that, but whoever does win that fight is going to win the election. 

SCARBOROUGH:  Noah, foreign policy put John McCain over the top in the primaries when that was the key issue.  Now that the economy is trumping all other issues, doesn‘t that put John McCain at a big disadvantage? 

OPPENHEIM:  I think it could, but I think that there‘s a great opportunity here because Barack Obama has, largely because of the primaries, carved out an old school protectionist stance when it comes to trade.  And I don‘t think that—I think McCain can make a very credible case that that is—satisfying as that is, and as much as that‘s a nice applause line in union towns, it is not the solution in terms of America‘s economic future.  So I think that there is enough open field for McCain to run with that he can really—he can make some strides on this issue. 

SCARBOROUGH:  Tony, as a former Republican strategist, what in the world do you say to John McCain when the news keeps getting worse on the economy?  You‘ve had a president in the White House for seven years that‘s gotten just about everything that he‘s wanted.  You‘ve had Republicans running Congress for most of the part, and a Republican recession is staring America in the face. 

How does McCain get around that? 

BLANKLEY:  Well, to start off, he shouldn‘t be campaigning in Colombia and Mexico.  He should be campaigning in Akron, Ohio. 

(LAUGHTER)

BLANKLEY:  I mean, he—Noah‘s exactly right, he has got to at least fake empathy.  He‘s not a guy who shows empathy real well.  I think Obama will win that hands down. 

On the other hand, I don‘t think Obama‘s policies are going to stand up to reason.  Now, reason may not win the day, and I can see that McCain has the problem that, since both he and Bush are generally in favor of free market principles and lower taxes to solve problems, it‘s going to sound like McBush to some extent. 

On the other hand, overwhelmingly, the rational policy now is not to raise taxes and protectionism.  And if McCain can make that case and talk about it consistently, along with oil drilling and fixing the problem on energy over time, he may have a wedge into the public‘s sentiments. 

SCARBOROUGH:  Well, I‘ll tell you what, if you look at the polls that have been out for the past six months for Republicans and Democrats, the only issues where Republicans stay close, the war on terror and foreign policy, especially in Iraq.  If we talk about the economy over the next five months, that is bad news for the GOP.

Coming up next, we‘re cracking open the war chests.  Who‘s got more money? 

Now, the answer to this is going to surprise you.

And later in the show, it‘s of course your turn to play with the panel.  Who wouldn‘t want to play with this panel?  You can do it by calling 212-790-2299, or e-mail us at race08@msnbc.com.

RACE FOR THE WHITE HOUSE is coming right back.

(COMMERCIAL BREAK)

SCARBOROUGH:  Hey, welcome back to THE RACE.  It‘s “Strategy Session” time as we go deep inside the dark war rooms of the ‘08 campaigns and we talk tactics—what will work, what won‘t.

Back with us, Tony Blankley, Michelle Bernard, Rachel Maddow and Noah Oppenheim.

First up, hot off the presses, the McCain campaign just hit Obama on his Iraq comments.  This is what they said: “Since announcing his campaign in 2007, the central premise of Barack Obama‘s candidacy was his commitment to begin withdrawing American troops from Iraq immediately.  Today, Barack Obama reversed that position, proving once again his words do not matter.  He has now adopted John McCain‘s position.

Now, viewers, let‘s recap.  Here‘s what Obama said at an impromptu press conference just about an hour ago. 

(BEGIN VIDEO CLIP)

OBAMA:  We‘re going to try this again.  Apparently, I wasn‘t clear enough this morning on my position with respect to the war in Iraq. 

I have said throughout this campaign that this war was ill-conceived, that it was a strategic blunder, and that it needs to come to an end.  I‘ve also said that I would be deliberate and careful in how we got out, that I would bring our troops home. 

(END VIDEO CLIP)

SCARBOROUGH:  Noah, is this a flip-flop? 

OPPENHEIM:  I think it absolutely is.  I mean, to say that we‘re going to bring—we all want to bring the war to an end, so Barack Obama does also.  Congratulations.  And he‘s going to do it at a pace that‘s consistent with conditions on the ground. 

I don‘t know how that position is any different from John McCain‘s, or for that matter, any different than any other reasonable, responsible person looking at the situation.  We all want out of Iraq, but we want to do so in a way that doesn‘t threaten our national interests. 

And so, for Barack Obama to now say this, when during the primary he was very clearly selling to the Democratic base that he was the guy who was going to get us out of there quickly, no matter what, is an obvious slip.  I don‘t know how else you could frame it.  He was the guy who was out under any circumstances. 

MADDOW:  I realize that it‘s...

(CROSSTALK)

SCARBOROUGH:  Hold on a second. 

Rachel, I want to ask you this, Rachel.  You had Barack Obama and the rest of the Democratic candidates in one memorable debate saying, we may not be able to get troops out of Iraq by January 2013.  There was a backlash from the left.  Then Barack Obama started talking about this 16-month timeline.  Now it seems much more fluid than that. 

If this is not a flip-flop, what is that 16-month timeline mean when he said to Charlie Gibson, yes, I will be commander in chief, they will be out in 16 months? 

MADDOW:  He said the commander in chief will set the mission, and I want—

I want to get troops out within 16 months.  And I think the way to do that, in talking to commanders on the ground, is one to two brigades a month. 

Now, can I just inject a little fact here?  Susan Rice, foreign policy adviser to Senator Barack Obama, told reporters a short time ago that it is striking if Hillary Clinton‘s troop withdrawal plan would not be subject to some judgment about conditions at the time.  “Obama,” Rice said, “is committed to withdrawing one to two brigades a month, but also to going slower if that pace would threaten the safety of U.S. personnel.”

That‘s dated March 17th, 2008.  That‘s been the policy from the beginning. 

SCARBOROUGH:  OK.  You keep talking about Susan Rice, Rachel.  OK, but I‘m a lot more concerned about what Barack Obama has been saying. 

MADDOW:  That‘s her saying what his policy is. 

SCARBOROUGH:  And you seem to be the only person here that saw the Charlie Gibson tape, which I‘d like to rerun, if we can re-rack that and run it. 

MADDOW:  Please.  Please.

SCARBOROUGH:  The Charlie Gibson tape where Charlie Gibson clearly asks him whether they can get out in 16 months or not, and he said, I‘m going to be the commander in chief, and then he says, in effect, that he‘s going to get the troops out in 16 months. 

So did that 16-month timeline mean anything or not?  If you‘re going to say, well, we‘ll bring it out when the generals tell us to bring it out, that‘s the opposite of what he said. 

MADDOW:  Well, the key point in your setup here is “in effect.” You guys are reading into what he said, a commitment that he will pull out one to two brigades a month and have them all out within 16 months.  It‘s just not what he ever said. 

SCARBOROUGH:  Well, actually, I‘m not reading into anything.  Actually, what I‘m doing is I‘m listening to English.  I‘m listening to Charlie Gibson. 

MADDOW:  Let‘s hear that tape again.

SCARBOROUGH:  Let‘s run that tape again and then we will go to Tony Blankley and get his response. 

Roll the tape.

(BEGIN VIDEO CLIP)

CHARLES GIBSON, ABC NEWS:  Senator Obama, your campaign manager, David Plouffe, said, “When he”—this is talking about you—“When he is elected president, we will be out of Iraq in 16 months at the most.  There should be no confusion about that.”

So you give the same rock-hard pledge, that no matter what the military commanders said, you would give the order to bring them home? 

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Because the commander in chief sets the mission, Charlie.  That‘s not the role of the generals. 

Now, I will always listen to our commanders on the ground with respect to tactics once I‘ve given them a new mission that we are going to proceed deliberately and an orderly fashion out of Iraq.  And we are going to have our combat troops out.  We will not have permanent bases there. 

(END VIDEO CLIP)

MADDOW:  Where‘s the, “I‘m pulling them out within 16 months”? 

SCARBOROUGH:  Well, the exact quote here, Rachel—and, again, Rachel, you are obviously the only person here that did not hear this quote from the campaign manager.  “We will be out of Iraq at 16 months at the most.”

And then he went ahead and said, yes, because I‘m the commander in chief.  But I will still listen to generals when it comes to tactics.And it would strike me as funny too if I had no response to that. 

MADDOW:  Where are you hearing him say yes? 

BLANKLEY:  Joe, let me...

MADDOW:  He didn‘t actually say the word “yes.” 

BLANKLEY:  The “yes” was there.  It was taken out in the edit. 

SCARBOROUGH:  You know what/  I guess we don‘t know what the meaning of “is” is. 

Tony, what‘s your point. 

BLANKLEY:  Let me make a point.  Look, there‘s always a little fudge in anything that politicians say, but it was clear what he was saying in the past and it‘s clear that he‘s moving away from it now.

And to quote a famous man, he‘s going to be as careful getting out of his policy as he was reckless getting into it.  And he recognizes he‘s got a problem.  Iraq is turning better. 

He can‘t go to Iraq, listen to the generals and say, my feet are in stone, I pay no attention, if they say we can win this thing.  So he‘s positioning himself conditionally to backpedaling away from his old commitment to get out in 16 months or so. 

SCARBOROUGH:  Michelle, were I running Barack Obama‘s campaign, I would tell him to do this because I think this actually reassures Americans, OK, this guy said what he needed to say to win the far left in the primary, and now as he moves to the general election, he‘s getting more responsible on FISA, he‘s getting more responsible on troop withdrawal. 

Doesn‘t this make middle Americans in Ohio and West Virginia and Pennsylvania like Barack Obama more? 

BERNARD:  Absolutely.  One of the things that Tony said earlier that I agree with is that he‘s acting more responsibly on Iraq. 

Now, we have always known since day one that regardless of the rhetoric that we were hearing from Senator Clinton and Senator Obama on Iraq policy, that this day would come regardless of who the Democratic nominee was.  And what it tells me is that Barack Obama is playing to win, and if he‘s going to win this election, he‘s got to move to the center.  And that‘s what he‘s been doing on every policy that we have seen him talk about all of this week. 

SCARBOROUGH:  Right.

BERNARD:  He‘s going after Reagan Democrats.  He‘s going after Republicans.  He‘s going after people in the center and people who have, you know, very serious foreign policy and national security concerns. 

And as we have heard people say before, this man is not Bambi.  He is running to win this election.  And he could not stay where he was before on Iraq policy and have a chance to win in November. 

SCARBOROUGH:  Yes.

MADDOW:  I totally agree that his policy on Iraq is conservative. 

SCARBOROUGH:  Let me give Rachel the final word. 

Rachel, hold on a second.  Let me give you the final word here, Rachel, on this segment. 

But seriously, on Iraq, he‘s got to move to the center, and he appears to be doing it.  He‘s going to do it on FISA.  We certainly know he‘s going to do it on trade.  He‘s not going to deep-six NAFTA.

There are a lot of positions that he took in the primary campaign that he‘s going to abandon as he runs to the center.  That‘s not necessarily a bad thing. 

OPPENHEIM:  And what‘s left of him?  What‘s left of Barack Obama, then? 

(CROSSTALK)

MADDOW:  I think the important thing to recognize here is there‘s a difference between taking a centrist position because it‘s good for the general election and changing his position.  What I‘m saying about this Iraq stuff is not that Barack Obama secretly has a lefty position on Iraq that nobody else recognizes.  I‘m saying that his position on Iraq is very centrist and has been all along, and it‘s not changing. 

This is the position that his campaign was taking through the primaries, and we have ascribed a much more liberal policy to him.  But when you go back and you look at the tape, and when you go back and look at the statements from his campaign, all the way back to the spring, all the way back when they were attacking Hillary Clinton for having a plan for withdrawal that wasn‘t subject to conditions on ground, it shows you that this is where he‘s been all along.  You can call it centrist, but it‘s still consistent. 

SCARBOROUGH:  All right.  A show of hands.  We‘ve got to go to break, but show of hands.  We did this last night.  We‘re going to do it tonight. 

How many agree with Rachel that Barack Obama was not saying we‘re going to get out of Iraq in 16 months to Charlie Gibson?  Raise your hand if you agree with Rachel. 

OK. 

Rachel, you‘re looking at it in a different way. 

MADDOW:  The next time it‘s one against four...

SCARBOROUGH:  For those of you listening on Air America...

MADDOW:  Yes.  The next time it‘s one against four, or me with four conservatives, I won‘t expect to win the next vote either. 

SCARBOROUGH:  Well, you know...

OPPENHEIM:  I‘m a centrist. 

SCARBOROUGH:  ... I don‘t know that this has anything to do with conservatives or liberals, it has to do with the English language, and is certainly sounded clear enough to me. 

(LAUGHTER)

SCARBOROUGH:  You can keep laughing all you want, but here‘s the exact quote again as we go to break.  “We will be out of Iraq in 16 months at the most.” That‘s his campaign manager. 

And again, I would say most Americans of most ideological stripes would say that‘s exactly what he meant in that answer. 

MADDOW:  You‘re so wrong.  I cannot even hold it together.  You‘re so wrong. 

SCARBOROUGH:  That‘s actually—you‘ve got the—you might support Obama, but you‘ve got the Clinton cackle down, Rachel.  I‘m proud of you. 

Coming up next, John McCain‘s running mate.  What‘s he looking for?  Is he considering an Independent like Joe Lieberman for his number two? 

THE RACE returns right after this break. 

(COMMERCIAL BREAK)

(NEWS BREAK)

SCARBOROUGH:  Hey, welcome back to RACE FOR THE WHITE HOUSE.  It‘s great to have you with us.  You know, once just wasn‘t enough, so we‘re heading inside the war room for a second time tonight, and this time we‘re going to look at the economy in the battle ground states.  Back with us, Tony Blankley, syndicated columnist, Michelle Bernard, president of Independent Woman‘s Voice and an MSNBC political analyst, Rachel Maddow, host of “The Rachel Maddow Show” on Air America, which can be seen and heard on Air America.com.  Rachel is also an MSNBC political analyst.  And Noah Oppenheim, co-author of “The Intellectual Devotional Series” and a former senior producer of “The Today” program right here on NBC. 

First up, the national headline today, 62,000 jobs lost since May. 

Both candidates weighing in today on the trail.  Here‘s Senator Obama. 

(BEGIN VIDEO CLIP)

OBAMA:  No issue demonstrates more clearly why the American people need change, because on issue after issue John McCain has fully embraced the Bush economic agenda. 

(END VIDEO CLIP)

SCARBOROUGH:  And following the jobs report this morning, McCain released this statement, quote, “at a time when our small businesses need support from Washington, we cannot raise taxes, increase regulation, and isolate ourselves from foreign markets.  These are the same old siren songs that have failed the American people time and time again.”

Tony Blankley, is this seen as a Republican recession?  Is there any way McCain can avoid being destroyed by the coming recession? 

BLANKLEY:  I think the public tends to blame the party that has the president for the economic conditions, whether it‘s fair or not.  And it is an albatross around his neck.  I think in Ohio, if it‘s just a straight issue on the economy, he‘s going to lose it.  On the other hand, if he talks about oil drilling and energy prices, if he talks about, frankly, cultural values, where there‘s a lot of conservative values in Ohio, and then relies a little bit on the Democratic corruption that is currently in that state, he has a chance of holding on. 

He can‘t duck the issues he believes in.  He believes in free trade.  That‘s not popular there.  He‘s got to play the straight shooter express and hope at least they admire him as a man, even if they disagree with him. 

SCARBOROUGH:  I‘ll tell you what, though, Tony, when it comes to corruption in Ohio politics, Republicans have Democrats beaten by a mile.  Speaking of battle ground Ohio—I mean, you talk about screwing up a state government, nobody did it worse than the Republicans. 

BLANKLEY:  But the Democrats have the attorney general, who‘s also—

SCARBOROUGH:  OK, we‘ll throw a Democrat in there.  There‘s a poll right now in Ohio that shows Obama leading 48 percent to 42 percent.  Team Obama is going to be holding a Declare Your Independence voter‘s drive across the state this weekend.  After promoting free trade in Colombia this week, McCain is going to be heading to Ohio Wednesday to lay out his jobs first economic program. 

Noah Oppenheim, if the key to winning in 2008 is Ohio, Ohio, Ohio, How big of an advantage does Barack Obama have with these leaders on his side and with the economy going south? 

OPPENHEIM:  I think Barack Obama has an enormous advantage.  The problem is that, if you look at the statements that both these guys made today, Barack Obama saying this is why people want change, they want something different than George W. Bush; that‘s a very easy thing to relate to.  People who are frustrated, people who are suffering, people who can‘t make ends meet, they‘re going to say, yes, of course I want change. 

The challenge that John McCain has is to try to present a competing narrative that‘s far more complicated and far more difficult to get people to connect with.  He‘s got to come out and say, look, the reason the economy is suffering is not because of George Bush, necessarily.  It‘s because this is a fossil fuel economy, and the price of oil is 146 dollars a barrel, and it just doesn‘t work.  The math doesn‘t add up. 

For John McCain to explain that big picture and to explain how free trade can actually help people in Ohio is much more difficult than Barack Obama just sort of saying, hey, I‘m selling change, do you want it?  That‘s a much easier sell. 

SCARBOROUGH:  And especially this year, where you have so many Americans thinking, Michelle, that America is headed on the wrong track.  When you look at the economy going as bad as the economy is going, when you look at the wars in Afghanistan and Iraq, up and down and up and down, but more down than up over the past four years, change just may be enough for Barack Obama to make that sell, right? 

BERNARD:  It could be, but I got to tell you, I keep thinking about all of the demographics that we looked at throughout the Democratic primary process, and I think that states like Ohio are going to continue to be very difficult for Barack Obama.  He‘s going to have to put a lot of money into advertising in that state, and really getting people to understand him.  Senator Clinton was their, quote, unquote, gal in Ohio, and a lot of other states.  And I think that it‘s not going to be—a lot of people feel that this is—Ohio and some of the other battleground states are Barack Obama‘s to lose because of the unpopularity of President Bush and the ability of his campaign to tie Senator McCain to President Bush.  But I think it‘s going to be an uphill battle.  It‘s going to be difficult.  It‘s very close between the two candidates, and I think he‘s got a lot of work to do there. 

The populist message that he sells is an easy message.  We also have to look at the demographics and the people who did not like Barack Obama.  He has to figure out, if he‘s going to win Ohio and if he‘s going to win Florida, how he gets those people to trust him and vote for him. 

SCARBOROUGH:  Let‘s go from Ohio to Florida, Rachel.  McCain got a new sidekick in South America today.  I don‘t know why he‘s still in South America.  He teamed up with Florida Governor Jeb Bush in Mexico City.  Will this help him back home in battleground Florida?  Let‘s look ahead to the latest head to head battle, with McCain winning 47 percent to McCain‘s (sic) 43 percent. 

Rachel, is—you know, George W. Bush is like kryptonite to Republicans this year, but is Jeb Bush the good Bush to be standing next to in 2008? 

MADDOW:  Well, Floridians like Jeb Bush, and it seems like John McCain likes Jeb Bush.  I mean, everything you hear—I don‘t know either of the candidates personally.  I‘m not the insider person who is getting the sort of information.  But the people who are close to the candidates, when they talk about who John McCain personally likes, who he has good chemistry with, they talk about Jeb Bush.  I think, when you hear McCain sort of bring up Jeb Bush unprompted in conversation, when you see Jeb Bush make this detour in Mexico City to go see McCain today, I think they‘re testing just how important Jeb Bush‘s last name is, because if he had a different last name, I think there‘s no question that he‘d be right at the top of the list for John McCain. 

SCARBOROUGH:  Oh, yes.  If he had a different name, he‘d be the Republican nominee this year.  But, Rachel, you‘re not saying that McCain could possibly pick Jeb Bush as his vice president, are you? 

MADDOW:  If I had to bet—and I don‘t bet.  But if I had to bet today, I would bet on Jeb Bush.  I honestly would. 

SCARBOROUGH:  Would you? 

(CROSS TALK) 

OPPENHEIM:  I‘ll take the other side of that action. 

MADDOW:  If you believe that the candidate drives this decision and not the campaign.  Obviously, the campaign wouldn‘t pick him, but the campaign wouldn‘t have sent him to south America in the first place.  John McCain is making decisions on his own. 

SCARBOROUGH:  He‘s still in South America.  He is still in South America.  Exactly.  It‘s like that “Saturday Night Live”—

BERNARD:  Maybe that‘s his way of appealing to Hispanic voters. 

MADDOW:  He read the memo wrong. 

SCARBOROUGH:  We‘ll see.  I think it might actually be better to be in south Florida than Mexico, I don‘t know.  We shall see.  Maybe he‘s right.  But I‘ll tell you, anybody that has worked with Jeb Bush, campaigned with Jeb Bush, been around Jeb Bush will tell you he‘s one of the brightest, most talented straight shooters in recent American politics.  But this year he‘s got the wrong last name. 

Coming up, they promised party unity—by the way, Noah Oppenheim did not tell you that he didn‘t bet.  There‘s a good reason.  So just how are Hillary Clinton and Barack Obama doing on the delivery of their promise to unify?  We‘ll talk about that when RACE FOR THE WHITE HOUSE returns.

(COMMERCIAL BREAK)

SCARBOROUGH:  Hey, RACE is back.  It‘s now time for today‘s three biggest questions in the ‘08 race.  Still with us, Tony Blankley, Michelle Bernard, Rachel Maddow, and Noah Oppenheim.  First up, the most closely watched D.C. power couple, Barack Obama and Hillary Clinton together.  They‘re vowing to unite the Democratic party after a very divisive primary season, but is it possible?  If Hillary‘s love fest for Obama can evolve like this, we‘ll see. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK:  Lifting whole passages from someone else‘s speeches is not change you can believe in; it‘s change you can see Xerox. 

So I‘ve had a front row seat to his candidacy, and I‘ve seen his strength and determination, his grace and his grit.  And the answer for me here in Unity, New Hampshire, is to pledge my support, and my hard work, and my effort to the next president of the United States, Barack Obama. 

(END VIDEO CLIP)

SCARBOROUGH:  Tony Blankley, from change you can Xerox to grace and grit, quite a change.  But how are they doing in uniting this Democratic party? 

BLANKLEY:  I think they‘re doing fine.  I never thought there was any doubt.  The Democrats sense victory, and at the leadership level, they‘re not going to let anything get in the way of what they think, and may well be a victory.  You‘re going to see a good coordination.  Hillary‘s not going to give up her future in the Democratic party by being seen to be obstructionist.  She‘s going to campaign.  Bill Clinton is going to campaign for him.  I don‘t have any doubts about that. 

Whether they pick up some of the conservative cultural elements in the rank and file of the Democratic party, that‘s a question of how the election plays out, how McCain defines Obama.  That‘s yet to be determined.  But the party itself, the professionals and the activists, they‘re uniting, and they‘ll be well united. 

SCARBOROUGH:  Noah Oppenheim, a united Democratic party is going to be extraordinarily hard for the Republicans to beat this year, isn‘t it? 

OPPENHEIM:  It absolutely is.  I agree with Tony completely.  Both the Clintons have enough self-interest in this, in terms of protecting their own status and legacy, to get behind Obama.  If you look at any of the Democratic voters who people were concerned wouldn‘t rally behind him, if you‘re active in women‘s organizations and you‘re looking at the choice you have ahead of you, you might be upset Hillary‘s not your nominee, but you‘re not going to vote for a presidential candidate who‘s going to nominate Supreme Court justices who might overturn Roe v. Wade. 

I think people‘s own self interest always trumps.  I think Democrats this year can win, and there‘s not enough reasons not to vote for Barack Obama.  I think they‘ll be fully behind him.  I think it is an uphill battle for McCain against that. 

MADDOW:  Joe, just a quick point.  I think it‘s important to note that there hasn‘t been any anonymous leaking in the—among Democrats, among supposed supporters of the Democrats, who are saying nasty things about Obama.  That‘s the sort of thing that can be the first fissure, the first crack that you notice in unity.  We‘re not getting anybody sort of saying nasty things off the record about Obama, the way we‘re getting a little bit of on the Republican side.  I just don‘t see any defections from the Obama camp at all, and I would have expected to see some by now. 

SCARBOROUGH:  Rachel, think about it, compare what‘s happened over the past two weeks, where the Democrats have been unified when it comes to leaks and keeping a consistent front; on the Republican side, though, so many Republican strategists quietly going off the record to talk about their disgust with the McCain campaign, saying, this campaign‘s going nowhere fast.  Ed Rollins even came on our show last week and kicked the McCain campaign around, saying everybody he talks to is saying how horribly it‘s doing.  So I think you‘re exactly right.  Great point, Rachel.  The Democrats, very united.  Republicans seem to be going after each other with a long knife. 

Michelle, next up, John McCain tries to define his opponent.  Here‘s what McCain said about Obama in an interview with NBC News‘ Kelly O‘Donnell today. 

(BEGIN VIDEO CLIP)

MCCAIN:  He promised and pledged that he would sit down with me on campaign financing, and he also pledged to take public financing in writing and verbally many times.  Well, if someone reverses on a position like that, then obviously -  then the question, when the next thing comes up, can you trust their word? 

(END VIDEO CLIP)

SCARBOROUGH:  Second question, how is McCain doing defining Obama, and what‘s his biggest challenge going forward?  Michelle, let me bring you in here.  I somehow don‘t think—That ain‘t too good, I mean, talking about campaign finance reform when Americans are losing their jobs and we‘re in two wars over seas. 

BERNARD:  I got to tell you, Senator McCain is seriously lacking a wow factor.  Whether he‘s giving a speech or doing that interview with Kelly O‘Donnell, he‘s putting the American public to sleep.  And quite frankly, given the issues that you just talked about, food prices and gasoline prices, there are so many other ways that he could define Senator Obama.  But talking about him going back on a pledge regarding campaign finance reform and whether or not he was going to take public dollars, most of the American public doesn‘t care about that issue at all.  On this, I‘d have to say Senator McCain, he‘s lucky if he gets a C-minus if we were actually going to give him a grade.  He‘s got to do a much better job of defining Obama, and he‘s not doing it yet. 

SCARBOROUGH:  No doubt about it.  He‘s talking about campaign finance reform.  He‘s talking about flip-flopping on trade, issues that aren‘t—it ain‘t the Contract with America, Tony Blankley.  And finally, Obama seems keen on one particular strategy when it comes to him sizing up John McCain to voters, those two words, President Bush.  Our third question, how is Obama doing defining McCain?  Tony Blankley, you talked about the albatross before.  How is he doing wrapping the political albatross of George W. Bush around McCain‘s neck? 

BLANKLEY:  I don‘t think Obama is doing a powerful job, but I think his advocates and his supporters around the country and in the media are doing a good job, particularly focusing on the age issue.  Those are repetitions that we just hear repeatedly.  That‘s going to take its measure. 

But I don‘t think yet Obama has been going for the jugular enough.  And by the way, I‘ve got to say that McCain has utterly failed so far to start defining Obama as beyond the zone that Americans feel comfortable with.  If he doesn‘t personally do that, then this election is over. 

SCARBOROUGH:  I‘ll tell you what, there is such a problem with definition in the McCain campaign.  Perhaps Steve Schmidt can change all of that.  Rachel Maddow, let me ask you; in this case, if this election were, let‘s say, a trial being held in court, wouldn‘t the burden of proof really be on John McCain to prove that he‘s separate and distinct from George W.  Bush, instead of the burden being on Barack Obama to make that case, Since they‘re the same party, McCain‘s been seen hugging him in public, and he hasn‘t really distanced himself from Bush over the past four years? 

MADDOW:  It seems like when he has tried to distance himself from Bush, there have been these false starts.  Remember the day that was supposed to be his message day on global warming and climate change, the big day—that‘s one of the big issues in which he can say, you know what, I‘m really different from George Bush on that.  His campaign chose to send him to Houston to speak to oil executives that day about drilling our way out of the problem.  Whether or not you‘re in favor of the drilling thing, that wasn‘t a great way to distinguish him from George W. Bush, if that was supposed to be the message of the day. 

Even when they‘ve got the policy issues to run with, they seem to be executing poorly. 

SCARBOROUGH:  No doubt about it.  They‘re not executing the way they need to execute if that‘s their goal. 

Coming up next, John McCain‘s running mate.  Is he considering an independent like Joe Lieberman for his number two?  THE RACE returns right after this.

(COMMERCIAL BREAK)

SCARBOROUGH:  Hey, we‘re back with THE RACE.  We‘re going to kick off your Fourth of July weekend with a little Veep Stakes.  Back with us, Tony, Michelle, Rachel and Noah.  John McCain is talking about his number two.  NBC‘s own Kelly O‘Donnell caught up with the Senator in South America today and asked him what he‘s looking for in a VP.  Here‘s his answer. 

(BEGIN VIDEO CLIP)

MCCAIN:  I think the criteria has got to be really, solely that that person shares your values, your principles, and your goals, and is most prepared to take your place.  I‘ve always believed that.  And I think studying history sometimes, people have tried to be a little too manipulative with the process and probably made a mistake.  If you stick to principles, values, goals, priorities, I don‘t think you can go wrong. 

KELLY O‘DONNELL, MSNBC CORRESPONDENT:  Would you rule out choosing someone who is an independent or a moderate Democrat? 

MCCAIN:  I can‘t talk about that.  I really can‘t talk about it. 

(END VIDEO CLIP)

SCARBOROUGH:  All right.  Noah, who should he pick? 

OPPENHEIM:  Well, I‘m going to take his advice and not try to be too manipulative.  I‘m just going to go with a basic choice, and that‘s Mitt Romney.  I think Mitt Romney is a good choice because he‘s young, but he‘s not so young that the contrast with McCain reflects poorly on him.  I think he puts Michigan into play.  If you look at some of the polling in the so-called battleground states, Michigan is one of those states where it‘s close enough that, I think, if McCain picks someone like Romney, that he might have a real shot of winning there. 

And I also think, again, getting back to my first point tonight, it‘s all about the economy.  While Romney was kind of a weak primary candidate, I do think his experience in the private sector is a compelling case, and it will make people feel like perhaps a McCain-Romney administration will be able to turn this economy around. 

SCARBOROUGH:  Yes, I agree with you.  I think that would be a great pick.  Michelle, who do you think John McCain should select? 

BERNARD:  This is so difficult because I‘m looking for that wow factor, but I‘m also looking for someone who‘s not—who is untraditional and can help him in some of these battleground states.  I think right now what I would say today is Tom Ridge.  He‘s the first vet elected to the House of Representatives, former governor, very well respected in Pennsylvania, first secretary of Homeland Security.  He‘s a good speaker.  He‘s younger than John McCain.  He sort of brings some vim and vigor to the campaign.  He‘s non-traditional. 

And I think also that his stance on reproductive rights, although it is anathema to some of the people in the base and to John McCain, it‘s going to help John McCain when he‘s out wooing some of Hillary Clinton‘s disaffected women voters. 

SCARBOROUGH:  Tony Blankley, who‘s your pick? 

BLANKLEY:  I‘m going to be appallingly honest.  I don‘t think he has a good person to pick, because he‘s inherently inconsistent.  To appeal to the base, he‘s got to get a good solid conservative who will alienate the independents he also absolutely needs.  So who would do the least harm?  Maybe someone like Governor Pawlenty, who‘s got good conservative credentials, but doesn‘t come off like he‘s got shining eyes.  Someone in that zone might work. 

SCARBOROUGH:  I really don‘t appreciate the personal insults.  Anyway, Rachel, you had said Jeb Bush, but in the little time we have left, what about somebody like Carly Fiorina?  What does she bring McCain?   

MADDOW:  I think that if he picks a woman or if he picks a person of color, it would give the wow factor that Michelle has been talking about.  I think that‘s really smart.  It would bring a lot of fresh attention.  It would bring energy to the campaign and make people take a double take at what they assume they already know about John McCain.  I think that would help.

If he‘s going to pick a woman, is Carly Fiorina the best to choose?  I don‘t know.  When people say that Obama ought to pick somebody who‘s been in uniform, I feel like it reinforces this idea that Obama has a weakness in that regard.  If McCain picks somebody who‘s been a CEO, maybe it reinforces the idea that he‘s weak on the economy.  I agree with Tony.  I think it‘s a tough choice for both candidates. 

SCARBOROUGH:  Really tough.  Thank you all so much.  Greatly appreciate you coming in tonight.  That does it for RACE FOR THE WHITE HOUSE.  We want to thank our all-star panel and thank you for watching.  I‘m Joe Scarborough.  David Gregory is going to be back here Monday, same time, 6:00 p.m. on MSNBC.  I hope you and your family have a great July 4th weekend.  Good night.

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

END   

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