updated 7/24/2008 2:03:46 PM ET 2008-07-24T18:03:46

Guests: Andrea Mitchell, Mo Elliethee, Rachel Maddow, Stephen Hayes, Jay Carney

DAVID GREGORY, HOST: Tonight, Obama's Mideast tour: stagecraft versus substance. Is he winning the debate, not just of politics?

The RACE FOR THE WHITE HOUSE rolls on.

Welcome back to THE RACE. I'm David Gregory. Happy to have you here, your stop for the fast-paced, the bottom line and every point of view in the room.

Tonight, Obama in Israel. The question is, how did he arrive?

Critics of the lavish press attention have joked that he might walk to Jerusalem by way of the Mount of Olives, wearing sandals as the Jewish messiah is expected to appear. Well, however he arrives, the whole world will be watching as Obama hopes to turn a tightly choreographed trip into a boost for his foreign policy credentials.

Speaking of the war, in Iraq today, Obama emphasized the magic number, 2010, in a press conference in Amman, Jordan, where he stressed his support from Prime Minister Maliki of Iraq on a timetable for safe troop withdrawal by 2010.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The message we heard from Iraq's leaders is that they are ready to do more and they want to take more responsibility for their country. I welcome the growing consensus in the United States and Iraq for a timeline. My view, based on the advice of military experts, is that we can redeploy safely in 16 months so that our combat brigades are out of Iraq in 2010.

(END VIDEO CLIP)

GREGORY: Senator Obama faced tough questioning on his position regarding the surge, not backing down from his initial stance.

(BEGIN VIDEO CLIP)

OBAMA: With respect to the surge, you know, we don't know what would have happened if the plan that I put forward in January of 2007, to put more pressure on the Iraqis to arrive at a political reconciliation, to begin a phased withdrawal, what would have happened had we pursued that strategy?

(END VIDEO CLIP)

GREGORY: Tonight, the "Face-Off." Who is showing better judgment on Iraq, Obama or McCain? That's coming up.

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

And with us tonight for the first time Democratic consultant and former senior spokesman for Hillary Clinton's campaign, Mo Elliethee;

Rachel Maddow, host of "The Rachel Maddow Show" on Air America and an MSNBC political analyst; Stephen Hayes, senior writer for "The Weekly Standards"; and Jay Carney, Washington bureau chief for "TIME" magazine.

We begin as we do every night, with the most important story of the day. It's "The Headline."

Top of the headline list today, we turn to NBC News Chief Foreign Affairs Correspondent Andrea Mitchell. She is in Amman, Jordan, where she has been traveling with Barack Obama.

Andrea, the headline of the day there as you have been reporting it?

(BEGIN VIDEO CLIP)

OBAMA: And what I emphasized to him was, you know, if I were in his shoes, I'd probably feel the same way. But my job as a candidate for president and a potential commander in chief extends beyond Iraq.

(END VIDEO CLIP)

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT: And that basically tells you my headline, that he says he trusts his own judgment on Iraq more than he trusts the judgment of David Petraeus and other military commanders in the field-David.

GREGORY: Interesting. So, he's responding there to questions about this notion of whether he's still committed to a timeline, even having had the exposure to the top commander on the ground, Andrea.

MITCHELL: And General Petraeus definitely told him, he acknowledged it today, we reported it last night, told him that there are risks associated with that. And he disagrees with hard deadlines, with 16 months, with 2010, however you want to count it. But he said that he trusts his own judgment, he believes he was right about the surge, he was right about this withdrawal, he was right about voting against the surge, and voting against the war in Iraq, or coming out against the war in Iraq, I should say, because he wasn't in the Senate back then.

The confidence that he expressed was really pretty extraordinary. Here you would think that he was debuting on the world stage and would be on a listening tour with the generals. Instead, he was telling them what he thinks-David.

GREGORY: All right, Andrea. Quickly, a look ahead for me here.

He's arrived in Israel. I made reference to the fact that critics of all this press attention think that he's got this kind of, you know, messiah image around him as he comes into the Middle East. The reality is, he's walking into a real political thicket in Middle East politics as he steps foot into Israel.

MITCHELL: Absolutely. And already today and in recent days, his people have tried to modify his statement about Jerusalem, about an undivided Jerusalem, the statement he made to AIPAC, the pro-Israel lobbying group, the day after-the morning after he had won the nomination. They are already modifying that because it is so difficult for the Arab leaders here to accept that, and the Palestinians.

GREGORY: Right.

MITCHELL: Tonight, he had dinner here in Amman with King Abdullah. And the king then got behind the wheel of his Mercedes and drove Obama to the airport. And Senator Obama then got out, took the 25- minute flight to Jerusalem. Tomorrow, he gets into the thicket of Israeli politics, meeting with all factions, and also going to Ramallah and seeing Mahmoud Abbas, the Palestinian leader-David.

GREGORY: All right. Andrea Mitchell on the ground for us in Amman, Jordan, tonight.

Andrea, thanks very much.

Let me do a quick whip-around and get the panel's take on the biggest headline coming out of the trip today.

Rachel, you're up first. What grabs you?

RACHEL MADDOW, MSNBC POLITICAL ANALYST: I think the biggest headline is actually exactly what Andrea was just highlighting there, which was those comments about David Petraeus.

GREGORY: Right.

MADDOW: Barack Obama, once again, running as if Iraq and national security is his strong suit, taking a strong, different take from President Bush and saying, yes, we listened to the commanders on the ground, but the commander in chief gives them their orders, gives them their direction. He is defining Democratic national security and Iraq policy as the centerpiece of his campaign in a way I don't think anybody would have predicted a year ago.

GREGORY: Stephen, your take?

STEPHEN HAYES, SR. WRITER, "THE WEEKLY STANDARD": Well, I think it's very dangerous for him to do what he's doing. You know, Andrea put it I think very diplomatically, because she's a professional. She said the confidence that he's showing is extraordinary.

I think for Barack Obama, this really risks becoming the arrogance tour. He had one of the people on his staff today talking as if he had already been elected president. You've got Barack Obama acting as if he had already been elected president.

And look, think about what would have happened if George W. Bush had rejected the advice of his generals in such a way, as we know he did. He was criticized roundly for it. Now Barack Obama is doing the same thing.

GREGORY: All right.

Jay, your initial thoughts?

JAY CARNEY, WASHINGTON BUREAU CHIEF, "TIME": Well, I think to play off what Stephen was saying, you know, the history of commanders in chief listening or not listening to their commanding generals is rich with different twists and turns. I mean, Barack Obama is right, the civilian leader, the civilian commander in chief, would be mistaken only to listen to his commanders on the ground because he has a much broader list of priorities than the generals.

But Stephen's also right that there's a risk here, a small risk, because I think Obama has had an immensely successful trip that has been helped tremendously by President Bush...

GREGORY: Right.

CARNEY: ... and by al-Maliki, the prime minister of Iraq. But I think there is a risk of getting himself into an argument with David Petraeus, and we'll have to see if Petraeus is available or makes any comments in the coming days about his meeting with Barack Obama, because you don't really want to get into that argument.

GREGORY: Right. Not right now.

Mo, welcome to the program for the first time. Your quick take on what's emerging out of this trip so far?

MO ELLIETHEE, FMR. CLINTON SR. SPOKESMAN: Happy to be here.

Look, I think what Barack Obama is doing is exactly right, and reminding people. You know, what's been missing a little bit in this debate over the past 24 hours is that it is a civilian commander in chief who sets the policy. It is the president of the United States who sets the military policy.

And he's made it very clear that his policy, as commander in chief, is going to be to redeploy our troops out of Iraq and get them to Afghanistan, and take care of our other priorities. He's always said that he'll work with the generals on the ground to figure out the best tactical way to do that, but that's the policy. He has got the right as commander in chief to set that policy.

GREGORY: All right. We're going to take a break here.

A lot more coming, including our "Face-Off." Up next, Stephen versus Rachel. And the central question of this trip, who has got the better judgment when it comes to Iraq? Is it McCain or is it Obama?

We are in the thick of that debate. We'll have the "Face-Off" when we come back.

A little bit later on, your play date with the panel. Call us, 212-790-2299, or e-mail at race08@msnbc.com.

THE RACE will be right back.

(COMMERCIAL BREAK)

GREGORY: Back now on THE RACE. I'm David Gregory.

Time now for the "Face-Off" about who's winning on Iraq.

Today, Obama said there was no doubt the troop surge has led to the improved conditions on the ground, but last night he told ABC's "Nightline" the surge was coincidental with the Sunnis breaking with al Qaeda and Shiite militias voluntarily putting down their guns, and says he stands by his original decision to oppose the surge.

(BEGIN VIDEO CLIP)

OBAMA: What you had was a combination of political factors inside Iraq that then came right at the same time as terrific work by our troops. Had those political factors not occurred, I think my assessment would have been correct.

TERRY MORAN, ABC NEWS: If you had to do it over again, knowing what you know now, would you support the surge?

OBAMA: No, because keep in mind that...

MORAN: You wouldn't?

OBAMA: Well, these kinds of hypotheticals are very difficult. You know, hindsight is 20/20. But I think that what I am absolutely convinced of is that, at that time, we had to change the political debate because the view of the Bush administration at that time was one that I just disagreed with, and continue to disagree with, which is to look narrowly on Iraq and not focus on these broader issues.

(END VIDEO CLIP)

GREGORY: Here at home today, at a town hall in New Hampshire, McCain slammed Obama, suggesting he's in denial about the surge's success.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: He still fails to acknowledge that the surge succeeded, a remarkable...

(END VIDEO CLIP)

GREGORY: So, our "Face-Off" question tonight: Who is showing better judgment on Iraq?

Facing off tonight, on the left, Rachel Maddow, host of "The Rachel Maddow Show" on Air America, an MSNBC political analyst. And on the right, Stephen Hayes, senior writer for "The Weekly Standard."

Who is getting it right?

Stephen, open it up. Your case for McCain?

HAYES: Well, I don't think there's any question. I mean, I don't even really think there's much of a debate to be had here.

Clearly, John McCain has shown better judgment on Iraq. You go back to 2003, John McCain was before the surge when there was even-before there was even a discussion of the surge.

He was arguing for an increase in troops and changing rules of engagement all the way back to the fall of 2003, dating to a trip that he took to Iraq where he talked to the generals, learned from them, and implemented-and changed his views to come up with new policies. So I think there's very little doubt that John McCain was right on the surge, and I find it extraordinary that Barack Obama, knowing what we know now, 80 percent reduction in troop deaths, would still say that he would vote against the surge.

GREGORY: Rachel, your opening salvo here?

MADDOW: Stephen, I would just say, I mean, I'm glad to hear you go back to 2003 and talk about McCain on Iraq. I feel like frequently what we're hearing from the McCain campaign is about his judgment on Iraq as if it only started in 2007.

I mean, when I look back at McCain's statements in 2002 and 2003 about how we would be greeted as liberators, about how this was going to be an easy fight, about how we didn't think this would take very long, I look at that and I think, wow, he was really, really wrong about Iraq looking ahead. When it came to the surge, he was in favor of it, Barack Obama was against it. And now we're faced with a situation where the surge is over, and there are still 140,000 troops in Iraq, 10,000 more than when the surge began.

And the question remains, what should we do with them? What Obama proposes is that we bring them home. What McCain proposes is that we leave them there indefinitely. And I think that's the judgment call on which Americans are going to be thinking-that's the judgment call Americans are going to be thinking about when they go into the voting booth. And I think most of them are going to side with Barack Obama.

HAYES: Well, I think that's a judgment call Barack Obama would like to have Americans think about when they go into the voting booth, but I'm not-it's far from clear that that's the case.

I think one thing American voters will punish, even if they're skeptical about Iraq, they believe that the surge has succeeded by small margins today. I think the consensus elsewhere, particularly among commanders, is that the surge has succeeded overwhelmingly.

But one thing I think the American public won't do is reward people playing politics with issues like the surge. And it seems clear to me that Barack Obama is playing politics with the surge.

How is it possible...

MADDOW: How is he playing politics?

HAYES: ... to talk about-how is it possible-well, he said it in his interview with Terry Moran. He said, look, I had a different political view than the Bush administration did, and it was important for me to make my arguments.

MADDOW: Yes.

HAYES: That's playing politics.

MADDOW: Well, what he was saying is, listen, back in January, 2007, the Democratic Congress had just been elected, in large part because people wanted them to end the war. As they were being sworn in, Bush went into the library in the White House and gave that speech and said, I started this new tactic. Bush politically changed the subject from ending the war, which is what the November '06 election was all about, to the surge, to whether or not people would support this escalation tactic.

HAYES: He didn't politically change the subject.

MADDOW: Sure he did.

HAYES: No. He changed the strategy in Iraq.

MADDOW: Right.

HAYES: And it's been remarkably successful. Barack Obama has a hard time saying it's been successful.

MADDOW: And he did it for political reasons. He did it to change the political debate in this country from ending the war, to whether or not this tactic of his would succeed. And that's what Bush did in January of 2007.

HAYES: No-well, OK.

MADDOW: Democrats resisted. They lost the political fight. That's how we got the surge. But you can't say that wasn't a political discussion at the time. It was essentially while Pelosi was being sworn in.

HAYES: There may have been political considerations when he made the decision, although I would say that what he really wanted to do was actually win the war. And the problem with Barack Obama's position on this is that he seems to, especially given what we know now about the success of the surge, the fact that he would go back to a point at which, you know, NBC was reporting that we were involved in a civil war, Democrats were wringing their hands about troop deaths, the rest of the country was wringing our hands about troop deaths, and he would go back to that point and take his chances with the withdrawal? That is crazy talk.

MADDOW: I don't know that anybody has ever wrung their hands about troop deaths. I'm not sure that that's the sort of impotence we feel about it. I think people get mad when they think about troop deaths.

And I think that the reason people get mad about it and the reason they've been mad about it ever since Saddam fell is because nobody has known what the military mission is in Iraq since Saddam fell. They said, we need to go in there and topple Saddam. We toppled Saddam.

Now we need to stay in order to have a sovereign Iraqi government. Well, the sovereign Iraqi government wants us to leave now, and they're still telling us to stay.

So I don't wring my hands when I hear about troops dying for that sort of a non-military mission. I get angry.

GREGORY: Let me get in here. I'm actually fascinated by your exchanges on this, but I want to get Mo and Jay in on this, because this is how I'm sort of struggling with this in terms of how voters are viewing it, which is, are they going to give McCain credit for what they might conclude was good judgment in pushing for more troops initially and then backing the surge? And they might actually penalize Obama for that?

Or-and Jay, I'll start with you-do they look at the management of the war going forward? Who do we trust to manage the withdrawal out of Iraq, whether we leave or whether we sort of, you know, surrender out of Iraq? It depends on your point of view. Do they give that benefit of the doubt to Obama at a time when he's calling for a troop withdrawal which comports with the views of the Iraqi leader at the moment, Jay?

CARNEY: Well, David, I would guess that voters would look forward, and their interest, still, even though they by a small margin believe the surge is successful, as Stephen pointed out, they still want this war to end overwhelmingly. They still think it was a bad idea to go in. And so I think that redounds to Obama's benefit.

But what I see here is a case of both candidates having a severe case of George W. Bushitis, which is the refusal ever to admit you were wrong about anything. I mean, as Rachel points out, John McCain made some, in retrospect, very foolish statements about going into Iraq and how easy it was going to be.

Now, a lot sooner than a lot of people in Washington, and certainly a lot sooner than anybody in the Bush administration, he saw problems and he came up with ideas of how to fix it by a surge in troops. Now, Barack Obama, clearly, when he said back when the surge was on the table that, you know, the surge might actually have the reverse effect, not reduce violence, but increase violence, he was wrong. He was wrong. And he should say-I mean, he could say-we would reward him at least in the media for saying he was wrong and he looks back and now thinks differently.

GREGORY: Right.

CARNEY: But everybody is afraid when you're president or running for president of admitting a mistake.

GREGORY: All right. I've actually got to get to a break here. We're going to come back, switch topics a little bit in "Smart Takes."

Is Barack Obama controlling his message a little bit too much, choosing when and where the press will be with him on his trip throughout the Middle East?

"Smart Takes" coming up next. Don't go away.

(COMMERCIAL BREAK)

GREGORY: Back now on THE RACE, bringing you today's "Smart Takes," the most thoughtful, the most interesting and provocative thinking about the '08 race.

And here again, Mo, Rachel, Stephen and Jay.

The question now about media management. Is Obama controlling the message a little too much on his Mideast tour?

On "HARDBALL" last night, our own Andrea Mitchell, who is, as you know, traveling with Obama overseas, raised concerns that reporters are not getting the full story over there.

Watch.

(BEGIN VIDEO CLIP)

MITCHELL: But let me just say something about the message management. He didn't have reporters with him, he didn't have a press pool, he didn't do a press conference while he was on the ground in either Afghanistan or Iraq. What you are seeing is not reporters brought in. You are seeing selected pictures taken by the military, questions by the military, and what some would call fake interviews, because they're not interviews from a journalist.

So, there's a real press issue here. Politically, it's smart as can be. But we have not seen a presidential candidate do this, in my recollection, ever before.

(END VIDEO CLIP)

GREGORY: All right, Mo. You know something about press management in situations like this. Have they gone too far?

ELLIETHEE: Yes. I always find this line of discussion interesting.

You know, first of all, this isn't cakewalk for him. He's doing all of the network anchors over the next couple of nights. Those are, you know, far from being highly choreographed photo-ops. He, you know, took questions from the press today, so I think he is interacting with journalists.

But this is something I hate to break to all of my very good friends in the media. Sometimes it just isn't about you. He's out there talking to troops, he's out there talking to the commanders on the ground. He's out there talking to foreign leaders on this trip. And it's really what the trip is all about.

GREGORY: Right.

Jay, I mean, there's this tension here in our relationship with the likes of Mo and others who are on the stagecraft part of it, and we can respect that. But it's not so much making it about us, it's a question about are-if we are the conduit for reporting on this trip and showing images of the trip, are we being had and are the American people being had in some way if they're not getting a real look at what's going on and an ability to sort of question him in the moment?

CARNEY: Well, what interests me, David, is that while obviously Barack Obama opposes most things that George W. Bush did as president, has done as president, he certainly doesn't oppose...

GREGORY: Right.

CARNEY: ... the kind of press control that the Bush operation instituted once they were in office, and even when they were running in 2000. So I think the risk here only, as in terms of a strategic risk, is that, clearly, Obama, through good fortune and good planning and good stagecraft, has had a lot of good media coverage as a presidential candidate.

GREGORY: Right.

CARNEY: If he overdoes it in controlling the press, and alienates the media, that could begin to backfire. So, I would say, I'm not a political strategist, but I'd be curious to hear from those who are if there isn't a risk in that.

GREGORY: All right. Let me just quickly show these images.

Stephen, I've got about 10 seconds for you to react.

The front page of today's "Boston Globe" shows the real-the contrast here. Look at the pictures there. You've got McCain and George W. Bush beneath the picture of Obama and Petraeus in Iraq.

That's a real contrast in this trip.

HAYES: Yes. And if images were all that voters were going to cast their ballots on, that would be important to Obama. But, you know, Petraeus and his disagreement, that's not going to help.

GREGORY: All right.

We're back after this. Don't go away.

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY: Back now on RACE FOR THE WHITE HOUSE. I'm David Gregory. Time to bring you the back half. Happy to have you with us. We're tackling the biggest questions in the '08 race today. Still with us, for the first time, Democratic consultant and former senior spokesman for Hillary Clinton's campaign, Mo Elleithee, Rachel Maddow, host of the "Rachel Maddow Show" on Air America and an MSNBC political analyst, Stephen Hayes, senior writer with the "Weekly Standard," and Jay Carney, Washington bureau chief for "Time Magazine."

First up, what's love got to do with it? The McCain campaign is trying to cash in on what it says is the media's, quote, love affair with Barack Obama. Today, as Obama was being trailed by an international press entourage in Jordan, the McCain campaign sent out this fund raising email, saying, quote, it's pretty obvious that the media has a bizarre fascination with Barack Obama. Some may even say it's a love affair. The media is in love with Obama. If it wasn't so serious, it would be funny."

The email encourages supporters to go to McCain's website to view the footage of alleged media bias and to contribute to the McCain campaign. First question, is attacking the media at this point smart politics for McCain? Steve, take it on.

HAYES: There are elements of this being a smart policy, because I think it appeals to conservatives, and it's likely to be the kind of appeal that will get conservatives to take out their wallets. The downside, of course, is that you can appear like Bob Dole in 1996, where you seem whiny. You're whiny that you're not getting the attention as the next guy, and you're whiny that the people aren't paying more attention to you and that you're not getting the same treatment, the star treatment.

Coming from McCain, it's a little bit rich, because, of course, the press previously had a love a affair with John McCain.

GREGORY: I understand this tactically. You can talk about Dole. You talk about George Bush's father, George W. Bush's father, talking about blaming the media back in 1992. Jay, it's ironic that for team McCain, which had the ride they had in 2000, where you and others were on the Vietnam trip he made after he got out of the race, which was, in effect, a presidential trip to Vietnam, would try to capitalize in this way. What do you make of it?

CARNEY: He knows of what he speaks when he talks about the affect that media love affair can have on a politician's standing and the attention he gets. You're absolutely right. McCain has experienced this. In some ways, you could argue for a far more sustained period of time. I think there was a debate early on, when it looked like these two men would be the nominees, where media affection would lie. I think that what's been proven again and again, in cycle after cycle, David, as you know, is that the new guy tends to get a better media, better press than the guy who's been around.

GREGORY: Mo, you have a perspective on this, having been with the Hillary Clinton campaign, where this was also an issue. What's your take on it?

ELLEITHEE: Look, I'm not going to pretend the media is always even handed or that they don't find Barack Obama to be a compelling individual. They do. That's very clear. As someone who did work on the Hillary Clinton campaign, I can certainly appreciate that. I'm not sure that complaining about that or talking about that really moved the needle much for us during the primaries. What I think John McCain's problem here is that in 2000 he was that guy. I think so many people are disappointed to see that the John McCain of today is not the John McCain of 2000.

Where is the maverick? Where is the guy willing to take on the establishment? He has embraced it more than any other candidate has in recent history. He's a guy who is running as a continuation of the Bush-Iraq policy, a guy who has flip-flopped on a bunch of issues. That's not going to endear him to people when the former maverick is now just another politician.

GREGORY: Let me go next up. Rachel, you can comment on this, but I want to get to question number two as well. Obama is in Jerusalem tonight. He has a packed itinerary tomorrow, including a visit to the often targeted town of Sderot and the Western Wall in Jerusalem, of course. He's also going to Yad Vashem, the Holocaust Museum. Obama got an unexpected boost in Iraq when Prime Minister Maliki voiced support for a timetable. In Israel, Obama is stepping on a potential political trip wire. Likely to face questions about the Palestinian territories, Hamas and Iran, with Jewish voters here at home paying close attention.

Second question then, Obama and Israel, is it all downhill from here, Rachel? This trip, all the great headlines, the statesmanship, getting the backing from Maliki; does it get more complicated for him now?

MADDOW: It's interesting, when Obama started this trip, one of the very first things he said was, listen, I'm traveling abroad as the United States senator. America has only one president at a time. We've seen that undercut visually by the fact that he's essentially being treated as a visiting head of state. Maliki literally rolled out a big red carpet on the occasion of his visit. I think the trip to Israel may see a return to that sort of humility and that reticence to talk to the press right away that we saw at the very beginning of the trip.

He surprised us. I may be wrong about that, but I expect to hear less from him there. I thought it was very interesting to see some of the "New York Times" reporting today, sort man on the street interviews with Palestinians, essentially making the point that Obama may be exciting the world and may be greeted very excitedly by people in all these countries he's visiting, but Palestinians are not that psyched about it. Palestinians are looking at Obama saying, he's going to be another American president who supports Israel. We don't have much hope for change.

GREGORY: It's interesting, Steve Hayes, when I saw McCain go to Sderot, which is in the firing line for Khassam rockets that come out of Gaza, I hadn't seen an American politician go there before. Now, Obama is making a point to go there as well to stand shoulder to shoulder with Israelis in the hour of need in that part of the country, as well as make the stops to the Western Wall, to Yad Vashem. That's not going to ameliorate Jewish voters who have questions about him in terms of how you would approach the peace process. He wants the United States to be more of an honest broker, which is loaded language, as well as his potential relationship with Iran.

HAYES: I think the big problem he faces now with Jewish voters-I happened to speak with a prominent Jewish Republican today who said, in analyzing Obama, he's saying two different things. He goes to AIPAC, as I think you pointed out earlier-he went to AIPAC earlier this spring and he said, we want an undivided Jerusalem. Then he clarifies it the next day in front of a different audience. I think there's concern among Jewish voters that he's talking out of both sides of his mouth. That causes them great concern.

GREGORY: Jay, there's a-the level of political engagement. He may be going over there as a senator, but we've seen already in Iraq and Jordan, him taking on the commanders on the ground, sticking to his principles-to his position on the surge. If he gets a little too deep here into Mideast politics, it could all be downhill for him from the ride he's had so far.

CARNEY: I think that's right. I think, as you pointed out, David, this is, in some ways, a much more complicated dynamic in terms of the relationship with Israel, the peace process dynamic. He's got to be much more careful. Iraq is clear to the horizon in terms of what his policy is and what he wants to articulate. He's not been that clear about his Middle East intentions. My guess he'll be much more circumspect in what he says there. The potential for a mistake that undoes all the good work he's done in these few days is big.

GREGORY: Finally here, the challenge for McCain as Obama is out globe trotting. How does McCain respond to this juggernaut over seas, Rachel? If he wants to put together something that would look like this, he's already been to Iraq. He decided to do that and do a big exclusive interview there, instead of bring the press along in large numbers. How does he respond message-wise to try to keep pace?

MADDOW: I was astounded that the message today from the McCain campaign is Barack Obama's media coverage is too good. I know we're talking about this earlier, and with due respect to Mo, who was so involved in the Clinton campaign, sometimes it feels like McCain's campaign is a scratchy pirated version of a movie about the Clinton campaign. It's complaining about the media coverage. It's complaining about him being inspirational, which, by extension, makes the candidate doing the complaining kind of a no hope candidate. It's complaining about his lack of experience when Americans clearly want a change and they don't want the same people who have been in Washington.

The sort-I would have expected a more substantive day from the McCain campaign, in terms of going after Obama on policy issues. They decided to go after the media today. It seems like something that didn't work for Senator Clinton.

GREGORY: But Mo, what I think always made sense from the Clinton camp's point of view was ultimately making it a referendum on Obama; do you trust Obama? I always thought analytically that former President Clinton's point about a roll of the dice with Obama was substantively a very important political charge to make to raise doubt. I think McCain has followed suit with that. McCain is in the unfortunate position where he can't make it about his biography. A lot of people know that biography. He's got to assert some of that. Ultimately, he's got to take on Obama and raise doubts about him, don't you think?

ELLEITHEE: I'm not sure I agree with that completely. Look, I think right now, there's no question the American people are looking for something different. They're looking for change. They want someone who can turn this country around. John McCain standing up every day, saying that Barack Obama is a bad guy because he's going to change things doesn't necessarily help him advance the ball down the field. He has to figure out a way to get out there and try to connect with the American people. The problem is, on the two things they care the most about right now, foreign policy, the war in Iraq, and the economy, John McCain has shown time and time again, he know how to connect with the American people. Until he can figure out how to do that, he's not going to be able to effectively breakthrough.

GREGORY: Stephen Hayes, I've mentioned this before that I'm reading "The Nightingale Song." My head is really in McCain's time at the Naval Academy and his time as a POW. It seems to me that biographically, that is still such a compelling story. That's the key to understanding him as a leader and a man. It's to understand those experiences. That might be an opportunity for him to get back to the biography.

HAYES: I think we'll hear a lot more about his biography at the convention. I think the convention is going to be largely a celebration of the kind of life that John McCain has led. You see this in his emerging campaign theme about choosing the country over self-interest. So, I think this is a theme that's reverberating throughout the McCain campaign.

Let me just take exception to something that Rachel said. I don't think the McCain campaign made targeting the media the message of the day. They were putting out e-mail after e-mail, criticizing Obama really substantively on the things he said in Iraq. I think they wanted to have that debate. I think they had a fund raising letter that talked about the media. They had this video yesterday. I certainly had a different interpretation of what they were trying to accomplish with their message today.

MADDOW: I think that when they put out web videos and fund raising e-mails that direct people to them, I think it ends up being the message that they drive people to. Maybe they were trying to do too many messages at once. Today, certainly, the papers were full of their complaints about Obama's press coverage.

GREGORY: I have to get another break in here. Could America's mayor be America's next vice president. More on my conversation with Rudy Giuliani when THE RACE returns and Veepstakes as we get closer to the selections. We'll be right back.

(COMMERCIAL BREAK)

GREGORY: Inside the war room now here on THE RACE. We're talking about Veepstakes war room style. What do both candidates need in a VP? Back with us, Mo, Rachel, Steven, and Jay.

First up, this morning on "The Today Show," I sat down former presidential candidate and former mayor of New York Rudy Giuliani to talk Veepstakes. Here's what he said.

(BEGIN VIDEO CLIP)

GREGORY: What kind of vice president-what does Senator McCain need in a vice president?

GIULIANI: He needs the same thing any presidential candidate needs. He needs someone who can be president of the United States, particularly in the times we live in, threat of terrorism, the significant problems we face in foreign policy, domestic policy. You need someone who can step right in.

GREGORY: Would you like to be on that short list?

GIULIANI: I'm not on the short list. I don't want to be on the short list. I think Senator McCain has some excellent choices.

(END VIDEO CLIP)

GREGORY: Another major contender picking up more headlines today. Mitt Romney and McCain's friend in college, Senator Lindsay Graham, told "The Hill" today that Romney is very much a contender for the job, and that he and McCain have a good relationship. Also, the timing behind a VP pick, some speculating McCain will pick a running mate this week to grab headlines from Obama. Is that a wise move? Mark Murray of MSNBC's "First Read" doesn't think so, writing this morning, "if you look at McCain's schedule this week, it's unlikely he pulls the trigger with his Veep pick. Why? Tomorrow, he's in New Hampshire. Wednesday it's Pennsylvania, with that later trip to Louisiana with Jindal. Perhaps something could go down Thursday in Ohio. Remember that Thursday is also the day of Obama's speech in Berlin. Would McCain want his VP story to share time with Obama? On Friday, McCain heads to California, an unlikely state and day of the week to make such a choice."

Jay Carney, how do you think the timing is breaking down here, in terms of the impact ultimately that McCain wants?

CARNEY: I think John McCain will not announce his running mate this week. But I think it's entirely possible that he will do it sooner, rather than later. As we've seen this week, he desperately needs to change the narrative here in the media, which has been so focussed on Obama. So focussed not just on the media coverage of Obama and his foreign trip, but so many things breaking Obama's way, whether it's Maliki in Iraq or the Bush administration agreeing setting up an interest section in Iran. Things are not going McCain's way. He needs to change the dynamic. A VP pick is the best way to do it.

GREGORY: Steve, doesn't he want to step on Obama coming out of the Democratic convention?

HAYES: Yes, I think there are huge risks to doing it this early. I think it would be a bad idea if he did it this early, precisely for that reason. Think about what the convention is going to look like in Denver. It's going to be insane. He's going to give a speech in front of 75,000 people. It's going to be Beatle mania all over again. One thing that McCain has going into the Republican convention is the natural excitement of the selection of his own running mate. I think they are much morel likely to leave it to that point. I think the McCain thinking is people pay attention during the final two months. Our convention basically takes place in that time period. Let's use this as a spring board going forward.

GREGORY: Moving on; Obama's timing for a VP pick. He's dominated headlines for the past two weeks, the over seas trip. Now, back home, speculation about his potential running mate swirls. He's traveling with two potential picks, Senators Jack Reed and Chuck Hagel, Hagel being a Republican. MSNBC's "First Reid" anticipates a third straight week of Obama headlining the news cycle after his over seas trip this week. The blog writes, "what happens if Obama decides to make his VP pick the week of July 28 or August 4? That would mean two or three straight weeks of Obama dominating the news before the Olympics, which begins on August 8th. After the Olympics comes the Democratic convention."

From a timing point of view, it looks like Mo, we're right on this thing when he wants to announce a decision.

ELLEITHEE: The dirty little secret here is that there's really only two people out there that know when these candidates are going to name their vice presidential picks. That's John McCain and Barack Obama. We'll sew what they choose to do. This is the first presidential decision the candidates are going to make. They are going to do it right. I have to believe that both of them are more focussed on picking the right person for their ticket and the right person for their country than they are in trying to figure out the best way to muck up the other guy's media cycle.

I think we're all going to have to take a deep breath and see when it happens. You're right. We are coming up on the conventions in the not too distant future. There's obviously going to be movement soon.

GREGORY: Rachel, I think there's this question here about what Obama actually needs in a VP? What are his priorities when it comes to vetting a VP? Is it national security? Does he want to own that issue? Is it to help him shore up the economy as an issue? Or does it come down to his own comfort level, him imagining how he leads with this person?

MADDOW: I think that after Al Gore, to a certain extent, and Dick Cheney, to a great extent, made the vice president's office something much more that the place from which you plan the next funeral you will travel to abroad-after they made the vice presidential office such an important part of governing, both of them, particularly with Cheney, I really think they have to be looking into who they want to run the country with.

The vice presidency is not just for the election, it's for the long haul. If either of the candidates really thinks they have a shot at winning, they have to be thinking about who they want in that now dramatically more powerful office. I think there's good things and bad things you can say about picking a senator, picking somebody who seems to compensates for you, or to reinforce your narrative. The biggest picture has to be not just an under-study, but co-author of power in this country.

GREGORY: This is the question in my mind and then I'll take a break, which is: the critics of Obama would say, if arrogance really sets in with him, he will conclude, I really don't need to shore up many weaknesses here. It will be a comfort level thing. I can handle the foreign affairs. I can certainly handle the economy. I just want somebody I can trust.

(COMMERCIAL BREAK)

GREGORY: Final moments on THE RACE. Your play date with the panel. Back with us, Mo, Rachel, Steven and Jay. First up, Brian from Ohio writes this: "contrary to what critics are saying that Barack Obama should be attacking John McCain on the economy right now, from my arm chair, I feel Obama is doing it the right way. In war, you knock out your opponents' strongest positions first, missile defense, air force, et cetera. That allows you to control the skies and exploit your strengths. Obama is about to knock out McCain's strong points, national security and Iraq. Instead of fighting those battles from the convention to election day, he's now close to being in a position to carpet bomb McCain on the real issue of the day. That's the economy from now until election day, when more people start to pay attention."

I think that's a pretty interesting point, Steven. What's interesting too is that even in the Obama camp, you can make the accusation that they are too self-confident. Maybe they're even arrogant on some of these positions. They are a little more humble when they say behind the scenes, he's not going to out-do McCain on a commander in chief. But he has to try to get a little bit closer on that and try to win-pass a threshold test and then win on another issue like the economy.

HAYES: I think that's right. I don't buy the entire analogy in the e-mail. But it makes a very good point. I think Obama is smart because what he's done-and he's also lucky. But what he's done is he's really framed the issue. He's framed the way that the Iraq discussion and the broader Mideast discussion has taken place. That's why I was a little surprised that John McCain didn't make more of this right at the beginning of the general election, talk about Barack Obama's weaknesses on those issues and inexperience on those issues, so that he could frame Obama as a risky choice.

GREGORY: It's interesting, Rachel-this is only loosely related to that. I was reading a quote from Ronald Reagan in 1984, during his reelection, where he said America is back and standing stall. He seemed to have captured a sense of national purpose about the country. In a way, you could argue that Obama has tapped into that sense of malaise, the sense of the country being off on the wrong track. He's capturing change as a national message, a national feeling. I don't know that McCain has yet articulated that sense of national purpose yet, when it's clearly something he's thought so much about and certainly could express in a clear way.

MADDOW: I think McCain speaks so movingly when he talks about service for the country, when he talks about sacrificing for the country, about believing in the nation. What Obama has done, again by focusing on foreign policy and our role in the world in a way that nobody expected a Democrat to do, is by talking about America as a beacon to the world, America as something that not only is good for Americans, but is kind of a beacon of light for the world internationally, a something that we can be proud of the way our country leads the world again.

That sort of grandiose mission for America about believe in America, believe in what we mean to the world is a very big vision. It can be criticized as arrogant, but it can also be very, very moving.

GREGORY: Jay, what do you think McCain would say as that over-arching them for not only why he's running, but the state of America as he sees it, where it is and where he can lead it to, if you woke him up in the middle of the night? What would he say?

CARNEY: I think he would say the message is service to a cause greater than your own self-interest. That's a phrase we've heard from McCain and is very close to the essential nature of the books he's written with Mark Salter, his top aide. I think it's very meaningful to him. As Rachel says, it's very powerful when he talks about it. The problem with McCain is that his identity has been blurred, not just by the changes he's made in his positions and his embrace, literally, of Bush in 2004, but even the Iraq war and the aftermath of that have changed the McCain-the image of McCain that we got in 2000, which was this anti-establishment reformer. That has sort of taken a backseat. That's a disadvantage to him.

GREGORY: Comment, Mo?

ELLEITHEE: That's right. Again, John McCain's problem is while he is a true American hero, who can speak very compellingly about a national service, what he seems to be missing is a central thing to unite the American people behind. On issues like the economy and issues like the war in Iraq, he's just on the wrong side. He just doesn't connect with people's concerns. Until he does that, he'll have a problem.

GREGORY: I'm going to leave it there. Thanks very much for the panel. That's THE RACE for tonight. We're back tomorrow. Stay where you are, "HARDBALL" is up next.

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

END

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