updated 7/30/2008 11:12:57 AM ET 2008-07-30T15:12:57

Guest: Richard Wolffe, Jay Carney, Rachel Maddow, Noah Oppenheim

DAVID GREGORY, HOST:  Tonight, is Barack Obama going South?  Barack Obama, is he eyeing the Virginia governor as a running mate as the short list gets even shorter?

And the RACE FOR THE WHITE HOUSE rolls on.

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

Tonight, vetting the veeps.  Virginia Governor Tim Kaine is making headlines today as the “it” number two candidate of the day for Obama.  Who is he and how might he help the Illinois senator? 

In a special “Smart Takes” tonight, why can‘t Obama hit 50 percent in the polls?  Is there a ceiling to his support, and what does he do about it? 

And the mail tonight, your thoughts about veepstakes, who should get the call. 

We‘re also going to bring you the latest on of the indictment of Alaska Senator Ted Stevens. 

The bedrock of the program, as you know, a panel that always comes to play.  And with us tonight, Richard Wolffe, back in America, “Newsweek” senior White House correspondent.  He covers Obama full time.  Richard‘s also an MSNBC political analyst.

Jay Carney is here, Washington bureau chief for “TIME” magazine.  Rachel Maddow, host of “The Rachel Maddow Show” on Air America, and an MSNBC political analyst.  And Noah Oppenheim, co-author of “The Intellectual Devotional” series and former senior producer of the “Today” program on NBC News. 

We begin as we do with every night, with everyone‘s take on the most important political story of the day.  It is “The Headline.”

I‘m going to get us started here tonight.  My headline, “Raising Kaine.”

Our reporting indicates that, indeed, Virginia Governor Tim Kaine is on Obama‘s short list for vice president.  This is how “The Washington Post” reported it this morning. 

To the quote board.

“Kaine has told associates that he has had very serious conversations with Senator Obama about joining the Democratic presidential ticket and has provided documents to the campaign as it combs through his background.”

Here are the facts.  Governor Kaine is 50 years old.  He graduated from University of Missouri and Harvard Law, as did Obama.  He has been loyal to Obama from the very beginning, endorsing him way back in February of ‘07.

Kaine said today of all the attention, “I haven‘t sought it.  I‘m not running for it.”  He also said this...

(BEGIN VIDEO CLIP)

GOV. TIM KAINE (D), VIRGINIA:  It‘s a very personal choice.  And the only person who really knows the answer to that question is Senator Obama.  He has to get briefed on everybody, and he has to make that choice on his own.  He has made wonderful choices during this campaign, and his staff has as well. 

(END VIDEO CLIP)

GREGORY:  Kaine‘s pros: he helps in Virginia, perhaps, could unlock more of the South.  His background dovetails nicely with Obama‘s, as does his message for change. 

He is Catholic, speaks fluent Spanish, dating back to his missionary days in Honduras.  The biggest downsides?  No national security experience, and a relatively low national profile. 

Kaine did, if you remember, deliver the Democratic response to the president‘s 2006 State of the Union Address, sounding themes similar to what we now here from Senator Obama. 

Listen.

(BEGIN VIDEO CLIP)

KAINE:  Our federal government should serve the American people, but that mission is frustrated by this administration‘s poor choices and bad management.  Families in the Gulf Coast see that as they wait to rebuild their lives.  Americans who lose their jobs see that as they look to rebuild their careers.  And our soldiers in Iraq see that as they try to rebuild the nation. 

As Americans, we do great things when we he work together.  Some of our leaders in Washington seem to have forgotten that. 

(END VIDEO CLIP)

GREGORY:  Let‘s bring in the panel here and remind you, in our next segment, more on vetting the veeps.  We will get into more of who is on the short list for Obama and also talk about McCain. 

Richard Wolffe, first to you, why is Kaine the “it” candidate today? 

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Well, Barack Obama has two choices here.  First of all, he can go for someone who is experience, who fills a gap in his resume, or he can go for someone who reinforces the Obama brand. 

And my reporting suggests that they are really leaning towards the latter.  That‘s why Kaine is so important. 

He is younger, he‘s not from Washington.  And he reaches out to these groups, Catholics, Latinos, as you‘ve mentioned before, that are important to Obama. 

On the other side, Barack Obama thinks that he doesn‘t need so much help in filling his own resume.  He showed last week that he could handle foreign policy and national security. 

And remember that Kaine endorsed Barack Obama early, very early out of the gates there.  He has got a lot of trust and good will built up as a result. 

GREGORY:  Right.  Noah, you like all this buzz? 

NOAH OPPENHEIM, CO-AUTHOR, “THE INTELLECTUAL DEVOTIONAL” SERIES:  I mean, I think, you know, Richard makes the case.  And I think there is a good case for Kaine.  You know, I‘m a little wary of having two Harvard law graduates running the country, but maybe other people will be more forgiving of that. 

Look, I mean, the thing with Kaine that I think the downside is, is that here‘s a guy who has got three years in the Virginia State House.  He was the mayor of Richmond before that.  It doesn‘t exactly project a lot of experience. 

He doesn‘t have a lot of policy achievements to point to in the same way that Obama‘s resume is somewhat thin in that regard.  So I think you have got to worry about that. 

In terms of, you know, the geography, can he help in Virginia?  Sure, he can help in Virginia.  But Obama has already got Jim Webb campaigning for him in Virginia.  And I have seen a lot of arguments amongst observers there that, you know, that Kaine‘s support in the northern Virginia suburbs, he helps Obama in the same places Obama is strong.  He doesn‘t really help him in the rural parts of Virginia that he needs. 

So, you know, I think there is pros and cons.  But I mean, obviously, he should be on the short list. 

GREGORY:  Rachel, if you look at the reality of experience in this campaign, three and a half years ago, in January of 2005, Barack Obama was in the state Senate in Illinois and Tim Kaine was lieutenant governor of Virginia.  And then, in this short amount of time, we are expected to see them as running the country, number one, number two? 

RACHEL MADDOW, MSNBC POLITICAL ANALYST:  If you believe that the country wants to vote for new blood in Washington.  If you believe that the country is really done with the people who have been in Washington all this time, and they want some new blood in there, then Tim Kaine does, I think, bolster that side of Obama‘s message. 

I take one issue with something that Noah said, though.  And that is on the idea that Tim Kaine might not help him in the parts of Virginia where Obama wouldn‘t otherwise be strong. 

I actually think the greatest asset that Kaine would bring to the ticket is that he ran a really good campaign for governor in Virginia.  And he did that thing that a lot of Democrats have trouble with, which is appealing to rural voters and knowing how to talk to people in a way that was not seen as being a city slicker, talking down kind of guy.

GREGORY:  Right.

MADDOW:  He was seen as somebody who really did connect with Virginia voters in a way that Democrats have a lot to learn from. 

GREGORY:  All right.

So, Jay Carney, define this guy as a Democrat, this kind of new centrist Democrat, the Democrats who took power in 2006.  Does he fill that mold?  Is he a Barack Obama Democrat? 

JIM CARNEY, WASHINGTON BUREAU CHIEF, “TIME”:  Well, he certainly fits the sort of new centrist Democrat who can appeal in parts of the country where Democrats have had trouble appealing in recent history.  And to go to Rachel‘s point, he learned from a master in terms of appealing to a Democrat being able to appeal to rural Virginians. 

Mark Warner, his predecessor who is now running for Senate in—from Virginia, did the very same thing and probably I think did it even a little better than Tim Kaine did.  Now, Warner has also been talked about, but I think they would like to fill that Senate seat with Mark Warner.  So that‘s why I think Tim Kaine is a more likely choice if he goes the Virginia route. 

GREGORY:  All right.  Let me take a break here, come back.  And we‘ll talk more about Barack Obama‘s short list. 

We‘re going to look at resumes and two of the top contenders, Evan Bayh, Joe Biden.  That‘s next in “Vetting the Veeps.”

Later on, we want to hear from you on this veepstakes.  You‘re very vocal about it online and on cable here.  We want to hear about it. 

Play with the panel.  E-mail us, race08@msnbc.com; the voicemail, 212-790-2299. 

RACE FOR THE WHITE HOUSE comes right back after this break. 

(COMMERCIAL BREAK)

GREGORY:  Back on THE RACE, and we‘re “Vetting the Veeps” tonight. 

Tim Kaine isn‘t the only one in the spotlight when it comes to veepstakes on the Democratic side.  The lists may be short, but there‘s still lists.  And until the running males are officially named, we will keep “Vetting the Veeps.” 

Back with us, Richard Wolffe, Jay Carney, Rachel Maddow and Noah Oppenheim. 

Again, let‘s talk about Obama‘s short list here—Indiana Senator Evan Bayh.  Bayh began his political early, becoming secretary of state in Indiana at just 30 years old.  Two years later, elected governor, implementing a $1.6 billion tax cut, the largest in Indiana State history. 

Bayh has been senator of Indiana since 1999, and in ‘06, he raised $10.6 million for a possible White House run himself.  He surprised many when he announced that he would not run for president, instead endorsing Senator Clinton back in ‘07. 

Bayh is considered a centrist Democrat differing from Obama on a number of issues, including voting to ban partial-birth abortion. 

Richard, let me start with you again here.  On Bayh—and we‘ll talk about Biden—does that conflict with the big hint that Obama dropped over the weekend on “MEET THE PRESS,” when he said he wants somebody who reinforces the change message? 

WOLFFE:  Yes, they do.  Both of them do. 

On the other hand, they also fill a hole.  Certainly, Biden does in terms of the resume when it comes to foreign policy, if he thinks he needs that. 

Evan Bayh is neither fish nor foul.  He obviously was a governor, and he brings an important stake to the table for Barack Obama.  But he doesn‘t really have enough sort of expertise that would fill any hole, and he is of Washington.  And by the way, he doesn‘t exactly electrify a room. 

GREGORY:  But does he need—but Rachel, is this somebody that Obama can just take off the table?  He doesn‘t need dynamic, he doesn‘t need a lot of charm on the ticket.  He can provide most of that? 

MADDOW:  Yes, but he also doesn‘t need a senator who is the son of a senator who has been a politician his entire life, who was with John McCain in the committee to liberate Iraq.  I mean, Evan Bayh cuts against Obama‘s core message in so many ways. 

GREGORY:  Yes.

MADDOW:  And I think, yes, maybe people want to pair him up with somebody who is seen as being a conservative Democrat, but why pick Evan Bayh?  Is anybody going to vote for an Obama/Bayh ticket who wouldn‘t vote for Obama otherwise?  I just can‘t imagine a single person in America for whom that is true. 

GREGORY:  All right.  Let me jump ahead here to Joe Biden.

Biden serving his sixth term as senator from Delaware, sixth longest term among his Senate colleagues.  He offers Obama a wealth of experience on national security, currently serving as chairman of the U.S. Senate Foreign Relations Committee. 

Also a longtime member of the Judiciary Committee, former presidential rival, as we know, when he was running for president earlier this year.  And, of course, he ran back in 1988. 

Noah, where do you stand in terms of Obama‘s feeling—we‘re assuming it is the dominant feeling—that he doesn‘t need to shore up any perceived weaknesses on foreign affairs or national security, and that he should reinforce rather than go for somebody like a resume—the kind of resume that Biden has? 

OPPENHEIM:  You know, I suspect that the people who have doubts about Barack Obama‘s ability to handle foreign policy, those doubts will not be assuaged by him picking Joe Biden.  You know, I think those doubts have to do with, you know, weird prejudices people may have, and I think they have to do with people‘s sense that he is perhaps not hawkish enough, not hard enough, not firm enough to take on tough, bad characters on the world stage. 

You know, Joe Biden has certainly years and years of experience.  I don‘t know that the people who have doubts about Barack Obama are going to look at Joe Biden and say, OK, now I feel better, I can sleep at night. 

GREGORY:  Right.  But...

OPPENHEIM:  So I‘m not sure he helps him in that regard. 

GREGORY:  But Richard and Jay—Jay to you first—we experienced this back in 2000 covering George W. Bush...

CARNEY:  Exactly.

GREGORY:  ... where the choice of Dick Cheney did help him reinforce his credentials, which were thin.  And they sent this message that, OK, I might have some doubts about George W. Bush, but he‘s going to be OK.  He‘s surrounded by a guy with such deep experience. 

Now, look, that was the mindset then.  Critics would later say that his views, Bush‘s views, were appropriated essentially by Cheney, and he had too much influence.  Separate debate.  But that was the same message that was sent successfully in 2000. 

CARNEY:  I think you are right, David.  And similarly, Biden, like Cheney, did not help Bush electorally, being from Wyoming.  Biden certainly wouldn‘t help with Delaware, help he doesn‘t need. 

The difference, however, is that Cheney was I think a better known person having been secretary of defense during the first Gulf War, conveyed that message a little more clearly than Biden does.  And I think Biden—I think it‘s a mistake is to assume that Obama needs no help on the thinness of his resume. 

I think a foreign policy choice is probably a wise choice.  Biden may be the answer.  The downside we haven‘t discussed is that he is incredibly prone to say the wrong thing.  He has done it throughout his career. 

GREGORY:  Right.

CARNEY:  He‘s smart, but he speaks—shoots from the hip and sometimes says just wrong thing at the wrong time. 

WOLFFE:  David, the flip side of this is that Biden is an excellent debater.  And he can skew a John McCain or his veep candidate.  And remember one thing, really the only thing these veep candidates have to do is survive and try and excel in that vice presidential debate. 

GREGORY:  Right.

All right.  Let me talk about the Republicans to tie it here in a little bit of my reporting today.  Two major points. 

One is that I know of some of these top Republicans on McCain‘s short list have not officially been vetted.  In other words, they have not been asked for documents that would be part of the vetting process.  That indicates to some of my sources that, in fact, McCain will wait until later in August, perhaps right before his convention, right out of the Democratic convention, to make these selections.  And it‘s also an indication that perhaps the McCain team wants to see not only who Obama chooses, but the themes that are laid out in the Democratic convention before making the choice. 

First off, Noah, when you look the those criteria, is that a risky game for McCain to try and wait and game it out that much? 

OPPENHEIM:  I think one of the strongest knocks you could make against John McCain so far is that his campaign has been totally defensive in response to Obama.  Obama has been dominating the media coverage and dominating the narrative.  So if McCain is going to make his vice presidential choice similarly, purely reactive, I think that‘s probably not a great message to be out there. 

I think John McCain needs to be more proactive, take control of this, say this is what my campaign theme is going to be, and here‘s why this choice reinforces that.  And let the chips fall where they may. 

GREGORY:  All right.  Well, let‘s talk about a couple of individuals on the short list.

Republican Governor of Minnesota Tim Pawlenty, we‘ve talked about him before.  He won re-election in ‘06.  That‘s important.  A tough Republican year.

And as the chairman of the National Governors Association, strong advocate of environment reform, that dovetails nicely with McCain—clean energy.  A strong opponent of amnesty for illegal immigrants, as critics would describe it.  That could hurt McCain, perhaps, among some of the Latino voters that he‘s courting.

He is an Evangelical Christian.  It could help him with the base.  So you go back and forth on these two things. 

Rachel, how do you size him up? 

MADDOW:   There is an unfortunate geographic association with him, which is that the Republican convention is going to be in Minnesota. 

GREGORY:  Right.

MADDOW:  We are today at the one-year anniversary of the Minneapolis bridge collapse.  And while infrastructure has not been a huge issue in the campaign thus far, it is a sleeper.  And it is the kind of issue that Democrats, when they look at domestic issues, are thinking about going back to again and again and again, trying to define the Republican Party as the party of the response or lack thereof to Katrina, the party that doesn‘t want to invest in infrastructure because they see that as part of big government. 

GREGORY:  Right.

MADDOW:  And even if none of that is his fault, there is an association there that may actually be troubling, depending on which way the issues go. 

GREGORY:  Finally, you get to Mitt Romney.  Some say McCain‘s former rival is in fact his favorite. 

On the short list, Romney is a former CEO, as we know, a self-made millionaire many times over, a Mormon.  In the wake of his presidential bid he became a Republican household name.  Yes, there are some Evangelicals who were saying that they would oppose a Romney/McCain ticket. 

But this is about two things, Jay Carney, when you look at Mitt Romney.  It‘s about the economy.  And the guy looks like he could be president.  A lot of voters would sort of close heir eyes and say, yes, I can imagine that? 

CARNEY:  Right, he looks and sounds the part.  There is no question. 

I think he is the safest choice.  It‘s a surprising choice given the contempt with which McCain and his aides held—or in which they held Romney during the primaries. 

GREGORY:  Right.

CARNEY:  I mean, if you would have told me three months ago that Romney was the top of the list, I would have laughed.  But I think it‘s clear, and I think he is probably the odds-on favorite, unless McCain decides to shake things up and go elsewhere. 

GREGORY:  Well, that‘s the question, Noah.  I mean, if you are John McCain, you have to make the choice based on one particular criteria, and is it either about shoring up weakness on the economy, or do you go for geography? 

CARNEY:  I don‘t see a lot of geographic...

GREGORY:  Go ahead, Noah.

OPPENHEIM:  Well, I think Mitt Romney—I think Mitt Romney does three things.  I think he gives—I think he helps a lot in Michigan, maybe wins Michigan for you.  I think he is obviously a successful businessman who does address a critical issue in McCain‘s resume, which is an inability to help turn this economy around. 

And I also do think that while Mitt Romney is not exactly a spring chicken, he does inject a certain youthful, good-looking energy into the whole McCain operation.  I mean, Mitt Romney does have a certain charm and charisma that I think will help. 

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

Coming up next, other news out of the Capitol today that was heard around the Capitol and beyond.  The Senate‘s longest-serving Republican, Ted Stevens, indicted today on charges of corruption.  What is the impact on the Republican brand?  Could there be a ripple effect come November?

When THE RACE returns. 

(COMMERCIAL BREAK)

GREGORY:  Back tonight with some other news out of Washington.

Today, Alaska Senator Ted Stevens, the longest-serving Republican in the Senate, was indicted today on seven counts in a corruption probe, accused of accepting gifts that he did not report, concealing more than $250,000worth of goods and services that he allegedly received from an Alaskan oil company. 

In accordance with party rules, Stevens stepped down from his leadership positions on the Transportation and Appropriations committees.  The senator maintains, however, that he is innocent. 

The question with all this, of course, what does it do to the Republican brand?  Is this something that comes up as an issue in November? 

Back with us, Richard, Jay, Rachel and Noah.  Jay, start us off here.  Ripple effect? 

CARNEY:  Well, it continues a theme that was prevalent in 2006, David, which was corruption and its link with Republicans.  It certainly doesn‘t help the Republicans put that behind them. 

You know, more specifically to the point of Ted Stevens, it just the reminds Americans of how sort of tawdry and pathetic some of these issues of corruption are.  I mean, $250,000 is not an insignificant sum, but to destroy an entire political career over in your ‘80s, it‘s sad and pathetic.  It reminds me of Dan Rostenkowski in the ‘90s ending his august political career in a sad and pathetic corruption case. 

GREGORY:  Rachel, do you see it going somewhere? 

MADDOW:  Well, I do think there is an issue now with Larry Craig having had his issues, with David Vitter having had his issues, with Ted Stevens having had his issues.  And all of those guys hanging on the Republican side of the Senate.  None of them apparently leaving or planning to leave during the term, and sort of saddling their party with these guys being dragged around on their brand. 

I mean, Senator Stevens, what he is involved in here is a huge mess in Alaska.  I mean, the Alaska Republican Party may feel the brunt of this when they elect a Democratic senator in November for the first time since 1974. 

GREGORY:  Noah, the issue is whether Obama or whether the party, by extension of Obama, makes an issue of this is a Republican brand problem, everything he is sort of running against. 

OPPENHEIM:  Well, I agree with Rachel about one thing.  It is a huge mess in Alaska.  But I‘m not sure about the broader national repercussions. 

I mean, Ted Stevens wasn‘t exactly like a poster man for good government.  I mean, this was the guy who brought us the Bridge to Nowhere. 

And the good news for John McCain is that John McCain has been on the forefront of criticizing this kind of—you know, the earmark projects, pet projects that waste taxpayer money.  So I think John McCain has a certain immunity when it comes to this sort of thing. 

And I also think that, you know, the good news for Republicans is that the Democratic-controlled House and Senate have approval ratings in, like, the 20s.  So, people don‘t really have high regard of Congress for either party.  So...

MADDOW:  I don‘t know.  Seven felonies still factors in there somehow, Noah. 

GREGORY:  All right.  I‘m going to take a break here. 

Coming up, “Inside the War Room.”  Obama focusing on the economy.  We will get into it after this. 

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY:  Back now on RACE FOR THE WHITE HOUSE.  I‘m David Gregory, happy to have you here for the back half.  We are going to go inside the war rooms of the ‘08 race, talk strategy, tactics, decide what is working for these candidates and what is not.  Back with us tonight, Richard Wolffe, “Newsweek‘s” senior White House correspondent.  He covers Obama full time now.  Richard is also an MSNBC political analyst.  Jay Carney is here, Washington bureau chief for “Time Magazine.”  Rachel Maddow, host of the “Rachel Maddow Show” on Air America, also an MSNBC political analyst.  And Noah Oppenheim, co-author of the “Intellectual Devotional Series” and Former senior producer of the “Today” program on NBC News. 

First up, some are already criticizing Obama, saying he is acting like he is already president when it comes to the economy.  Did he strike that tone again today by meeting with Federal Reserve Chairman Ben Bernanke to talk about the state of the economy?  Before that meeting, he spoke by phone with treasury chief Henry Paulson to talk about the mortgage crisis. 

Richard, the other way of looking at this is, is Obama finding a voice on owning this issue of the economic malaise?  Interesting juxtaposition of images, yesterday, meeting with top economic minds and then today meeting with these leaders.  What‘s the thinking behind it? 

WOLFFE:  Well, certainly the economy is the top of voters agendas.  I agree with this line that this is pseudo-presidential.  It‘s not quite presidential.  It‘s almost like a transition phase, talking to the Fed chairman, treasury secretary, Paul O‘Neill yesterday, and Bill Donaldson, two Bush appointees.  This is obviously to boost his stature, not just fill the gaps for voters.  In that sense, it‘s a mirror image of what we saw last week on foreign policy.  This is smart campaigning.  It‘s above the fray. 

GREGORY:  Is that smart campaigning, Rachel?  Or do you see that he is missing an opportunity to get out there and talk to real people about what the economy is actually doing to them? 

MADDOW:  I think this is a dumb move.  I think he is missing two different types of opportunities.  On the one hand, as you just said, he is missing the chance to talk to real people on a down to Earth level in his shirt sleeves about what‘s going on in the economy, showing that he really feels American‘s pain and that he is committed to making the issue right as best he can as president.  That‘s one opportunity. 

The other opportunity is to make himself look like he would be a clean break from the Bush administration on economic issues.  It‘s hard to make that case when you‘re sort of looking like you are playing president, meeting with these guys who are part of the existing administration.  Yesterday‘s photo op made sense, saying these are the sorts of wise people that I would meet with on the economy.  Today, meeting with these guys who are in the Bush administration, no, I don‘t think it makes sense. 

GREGORY:  Let‘s talk about ad-wars.  Obama‘s comeback, his response to a McCain attack ad which blamed Obama for rising gas prices.  Look at Obama‘s response ad.  It‘s now running in battle ground state Michigan. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Have you seen John McCain‘s TV ad? 

UNIDENTIFIED FEMALE:  Who can you thank for rising prices at the pump? 

UNIDENTIFIED MALE:  John McCain is blaming Barack Obama for gas praises, the same old politics.  Barack Obama thinks high gas prices deserve serious answers and a serious plan.  Crack down on oil speculators, raise mileage standard and fast-track alternatives fuels. 

OBAMA:  I‘m Barack Obama and I approve this message. 

(END VIDEO CLIP)

GREGORY:  Noah, I would say two things.  One is that Obama had to respond to the fact that McCain has been a rather activist on energy policies in a way that could actually be helping hip, McCain.  It also points out how much money Obama has got, that he can run biographical ads and also deal and counter punch to all these issues coming up in the battle grounds that McCain is raising. 

OPPENHEIM:  I think he has got to counter punch on this one.  There is nothing that hits voters more in the gut than gas prices.  I think he has to make the case that not only is John McCain‘s allegation ridiculous, but also that he has a concrete plan to tackle it.  I think it‘s a smart ad.  I like the ad a lot.  Once again, the devil is in the details.  Fast-track alternative energy.  What the heck does fast-track mean?  We all want alternative energy as quickly as possible.  Barack Obama has proposed 150 billion dollars of spending on it.  I would like to more about know how that is going to work and where that money is going to come from. 

I think it‘s a good step for Obama to start taking this issue by the horns and show that he is on top of it as much as John McCain is. 

GREGORY:  Let me move on to the war room, talk about Obama‘s mind set right now.  At a fund-raiser in Virginia last night, sounding pretty confident heading into November.  Listen to this. 

(BEGIN VIDEO CLIP)

OBAMA:  People are responding all across the country.  We are now in a position where the odds of us winning are very good.  But it is still going to be difficult. 

(END VIDEO CLIP)

GREGORY:  Jay, does he want that one back? 

CARNEY:  I bet he does, at least he should.  You don‘t want to appear to be presumptuous.  Coupled with the baffo foreign trip and meeting with the Fed chairman—you don‘t want to make it sound like or seem to voters like it‘s in the bag.  After all, the voters decide.  Barack Obama doesn‘t decide.  National reporters don‘t decide.  The polls, taken today, don‘t decide.  I worry that he is reading those little in-trade figures that say the odds are now that he is going to win, 62 percent.  It‘s a long time until November.  He would be wise not to say that kind of thing. 

GREGORY:  Richard, is this overblown or something that they are sensitive to inside the campaign, the idea of over-confidence being a problem? 

WOLFFE:  It‘s a problem for them, no question about it.  It‘s one of the more unflattering traits for the candidate.  I have to say, if you are going to go ask for money, over-confidence is probably better than under-confidence. 

GREGORY:  It is better to say I don‘t know if you should give because I don‘t like my chances so much.  Next step, Rachel, you‘re on deck for this.  The RNC is using Obama‘s Internet popularity against him, at least it hopes, launching this website.  It‘s called BarackBook.com, a parity of the social networking site Facebook.  The website shows Obama has friends, including convicted Chicago businessmen Tony Rezko, former Weatherman Underground member William Ayers.  Do you see where they are going with this, Rachel.  Does it have any resonance? 

MADDOW:  Maybe.  It does two things.  It perceives on this allegations that he has people that you should worry about who are vaguely associated with him.  It perceives that substantive way.  But stylistically, it is trying to say, we are the Internet savvy McCain campaign.  Just the fact that our candidate said he watches the Drudge Report and uses the Google shouldn‘t make you think we are not real savvy about this new media stuff. 

I give them props for trying to undo that impression that McCain wouldn‘t know the Internet if it slapped him.  They maybe should have waited longer after McCain had said all those awkward things about not understanding what the Internet really is. 

GREGORY:  All right, I also wanted to button up this issue that came up last week on his trip about visiting or not visiting troops in Germany.  Fact checking Obama‘s canceled visit Landstuhl, the McCain campaign, you remember, pummeling Obama in the ad for canceling a visit to wounded American soldiers at a German camp.  So how accurate is the ad?  According to the “New York Times” today, to the quote board, “McCain‘s television commercial, which asserts that Mr. Obama chose to go to the gymnasium over visiting troops, is not entirely accurate.  Instead of going to Landstuhl on Friday morning, Mr. Obama also conducted an interview with CNN in his hotel in Berlin.  But the “Times” reports assertions in early news reports that the Pentagon had told Mr. Obama he could not visit the medical center were incorrect, said Geoff Morell, a spokesman at the Pentagon.  He said the military personal in Germany had made arrangements for Mr. Obama‘s visit and were surprised when it was called off.” 

Richard, what‘s heads, what‘s tails here? 

WOLFFE:  You‘ve got to love the “New York Times,” not entirely accurate.  Look, it‘s not at all accurate to say it was a choice between going to the gym and visiting the troops.  So the core message of the ad doesn‘t stack up.  This guy can go to the gym and conduct a very full schedule on his campaign day.  What there was was a serious dispute between the Pentagon officials and the campaign over what constituted a political trip.  Was it the people around the candidate, never mind the press, what kind of aides, was it the candidate himself, what kind of transport.  They should have worked that out before they went there.  The fact that they didn‘t was a mistake.  But it didn‘t actually come down to did he want to see the troops or not.  He clearly wanted to see the troops. 

CARNEY:  If I may, it‘s Carney—it‘s Jay.  I think the Obama campaign has mishandled this.  I think you don‘t want to get in a fight with the Pentagon.  I bet if they had to do it over again, they would have just said, let the plane land.  Obama by himself visits troops and not get into this tussle with the Pentagon.  The Pentagon has these rules.  Maybe McCain‘s ad I think is not good, reprehensible, in fact.  It‘s silly and an absurd charge about the gym.  On the Internet and in Republican circles, there is a viral aspect to this that could come back to haunt the Obama campaign, if they don‘t deal with it. 

GREGORY:  Comment here, Noah? 

OPPENHEIM:  Yes.  I think the reason why this matters is not the specifics of what happened at that base.  I think the reason why this sort of resonated with people, regardless of the facts of this particular incident, is that there is a perception out there that there is not a lot of substance behind Barack Obama‘s presentation.  There is a concern among some people that, yes, he gives a speech saying he opposes the war in Iraq in 2002, but then doesn‘t do much subsequently to back that up.  Yes, now he‘s all of a sudden engaged in all of these issues, but that he doesn‘t have the policy achievement track record to back up the big speeches and the lofty rhetoric. 

I think that‘s why this incident matters.  It‘s because it plays into some of the skepticism and fears about Obama that‘s held amongst people who aren‘t behind him. 

MADDOW:  I was just going to say, I don‘t envy the Obama campaign trying to respond in that environment.  If we all agree that the facts don‘t matter and the fact that he didn‘t actually do what he is accused of in this mad, doesn‘t matter, people have a bad impression anyway; it may be that that‘s real politics.  How do you strategize against that.  How do you actually put something forward that‘s going to make a difference on those grounds if the facts don‘t matter? 

GREGORY:  We are going to take a break here.  Coming up, more on Obama we‘re going to take a break here.  Does Obama lack that magic touch with the Average Joe?  We are going to go inside smart takes tonight.  Maybe he could take a cue from fellow Democrat FDR.  Might he have a role in this campaign, the legacy.  Smart takes, coming up next. 

(COMMERCIAL BREAK)

GREGORY:  Back on RACE FOR THE WHITE HOUSE.  Smart takes, the provocative, the insightful, the debatable, the thoughts on the ‘08 race.  Here again, Richard, Jay, Rachel and Noah.  The theme of this is Obama and where are his weaknesses?  First smart take tonight, Bob Herbert wants to know when Obama is going to start playing offense against McCain on the economy.  To the quote board: “For all the tedious talk about timelines and what the surge in Iraq has or has not accomplished, the top three issues in this campaign are still the economy,” he writes.  “The economy, the economy.  This anxiety is pervasive.  It was clearly evident a little more than two weeks ago when Phil Gramm, then John McCain‘s key economic adviser, callously remarked that we were suffering from a mental recession and that the U.S. had become a nation of whiners.  The Obama crowd should have instantly seen the Gramm gaffe for what it was, a gift from the political gods, but the Obama folks let the matter drop and instead of an endless loop of mental recession, what we have heard incessantly over the past couple of weeks is Mr. McCain pounding on Mr. Obama and the surge.” 

Rachel, the Obama team did make a choice to focus on national security and not capitalize on this economic message. 

MADDOW:  I agree with Herbert that he is missing an opportunity on the economy.  I am not sure that he had the chance to walk away from the national security issue.  I think maybe he has to do both at once.  I think that there has got to be a way for Barack Obama to say, you know what, I represent a clean break with this bad Republican economy or bad Bush/McCain economy, however he is going to characterize it.  He has to be able to say, I represent something different.  Phil Gramm was a way to do that, talking about McCain‘s oil company tax cuts, whatever he decides to focus on.  He needs to come up with something that people can remember and repeat. 

GREGORY:  Richard, I know that the Obama campaign advisers, based on my reporter, are hearing this message from other outsiders, that they have to get in there and win this debate about the economy and win it hands down.  How do they then plan to make the pivot? 

WOLFFE:  Well, they are trying to do it right now.  Although, as I said before, it keeps the candidate above the fray when you have a meeting with a Fed chairman and former Fed chairman.  Remember that when the Phil Gram comments came out, the candidates made some jokes about there being only one Dr. Phil.  They tried to do this.  I think this exposes what he needs in a Veep.  He needs someone to go out there and hammer home the message on the economy or directly and personally about McCain, but in the candidates mouth, neither the candidate nor the campaign is very comfortable with him doing this all the time. 

GREGORY:  All right, second smart take tonight. Jay Coss on RealClearPolitics.com.  He lists what Obama needs to do to connect with voters.  To the quote board, “strong Democratic candidates like FDR, Truman, Johnson and Clinton made, quote, unquote, average folks feel like they were one of then.  Each connected with average people in his own way but each connected.  Obama doesn‘t have a typical background but neither did Roosevelt.  And yet FDR could talk with average people better than everybody.  The common touch is not a trifling quality.  Most voters are not policy experts.  It makes sense for swing voters to vote for the guy with whom they can relate.  That‘s a candidate who can be trusted to do what the voters would want him to do.  The Obama campaign should hire a speech writer,” he goes on his piece to write, “who appreciates Obama‘s rhetorical style but is not left breathless by him and knows what Democrats should say to swing voters.  Obama is a good speaker but his material needs to be crafted so as not to leave the impression that he thinks this is all about him.” 

Noah, is this writer on to something? 

OPPENHEIM:  Yes.  I think it‘s absolutely a valid criticism.  I think you‘ve seen people starting to go back to that speech Obama gave when he locked up the nomination and talked about, this is the moment when we begin to heal our planet and the oceans cease to rise.  It is sort of Messianic language.  I think that people are starting to look at that kind of rhetoric and ask themselves, wait a second, first of all, how high is this guy‘s opinion of himself?  Second of all, what is their beneath all of that lofty rhetoric that relates to me and my everyday life? 

That being said, I am a little bit of a skeptic when it comes to this argument that presidents need to be awe shucks, everyday guys?  That was sort of the argument about George Bush, that he was the guy people wanted to have a beer with.  I do think after the last eight years, as reflected in the polls, most of the country is no longer interested in having a beer necessarily, and they‘re more interested in intellect and the ability to solve our problems.  So I think Obama doesn‘t need to go too much in the direction of saddling up to the bar.  I do think he does need to start talking about more practical things and less about the second coming. 

GREGORY:  Jay, my premise on this is, it‘s true that he is obviously connecting with a great many people.  But for people who are on the fence, independent voters, if there is a distrust of Obama, if there is a lack of, you know, what makes this guy tick, some of what may make him in accessible, his smarts, his aloofness, what some might call confidence, what others might call arrogance, how does he pierce through that? 

CARNEY:  I think what Rachel said earlier, that he needs to get down and meet with real people and talk to them and have those kind of events is absolutely true.  I think what was said also about him needing a speech writer who can talk in the language that appeals to people who have these concerns is true too.  He only needs to look as far as whoever was writing Hillary Clinton‘s speeches at the end of her campaign.  She went from giving awful speeches, frankly, to very good ones that were focused very much on the hardships and the lives of people she was meeting on the campaign trail.  It‘s an old trick, but boy does it work when it is delivered well.  We know Obama can deliver a speech. 

GREGORY:  Let me get to the final smart take tonight from Roger Cohen of the “Washington Post.”  He looks at Obama‘s leadership record and finds there isn‘t much to judge him on.  To the quote board, “Obama argued that he stuck to the biggest gun of all, opposition to the bar.  He took that position when the war was enormously popular.  The president who initiated it was even more popular and critics of both were slandered as unpatriotic.  But at the time, Obama was a mere Illinois state senator, representing the very liberal Hyde Park area of Chicago.  He either voiced his conscience or his district‘s leanings or a lucky fellow, both.  We will never know.  We will never know either how Obama might have conducted himself had he served in Congress as long as McCain has.  Possibly he would have earned a reputation for furious, maybe even sanctimonious, integrity.  The record now, while tissue thin, is troubling.  I know that Barack Obama is a near perfect political package.  I‘m still not sure, though, what‘s in it.” 

Richard, take that on. 

WOLFFE:  Well, uncertainty is a thing that hangs over Barack Obama.  His aides know it.  They actually expect the polls to be tight pretty much until the last couple of weeks when they think this election is going to break. 

GREGORY:  That‘s the Reagan model, right?

WOLFFE:  In a sense, he is on to something here.  As to what he disagrees with, I‘m not sure he really makes a convincing argument. 

GREGORY:  Yes, of course, Obama had the good fortune to not be in Congress at a time when a lot of people who were in Congress, in many ways, felt trapped by Bush and the politics of the White House that they had to cast a vote.  Maybe that was John Kerry‘s biggest problem in 2004, that he had to cast a vote.  Take a break.  Come back, your play date with the panel. 

(COMMERCIAL BREAK)

GREGORY:  Back, final moments here.  Playing with the panel.  And still thinking about Veepstakes here.  The panel back with us, Richard, Jay, Rachel and Noah.  Rachel, we talked about Hillary Clinton last night, over the last few nights really.  Here again, the “New York Times” reporting today that she appears to be fading from consideration, that they are not taking the steps to actually vet her.  The question is, what kind of discussion Obama is going to have with her about who is on the short list and what role she plays going forward? 

MADDOW:  Will she have a role in the selection process, even if she is not going to be select the?  I would think that she is such an important power broker in the Democratic party, she has to be consulted.  That said, I would also look with a grain of salt at the idea that she is not being actively vetted.  If there is one person in American politics who the whole country knows a lot about, it‘s Hillary Clinton.  She probably—and actually Joe Biden, as well, are people who have been around for so long and have run for president themselves, received enough serious attention that the vetting probably may not be as important a process as it is for somebody who is less well-known. 

GREGORY:  Richard, I spoke to some Democrats today who indicated that this meeting of these two camps is coming together in a more concerted way, a more organized way, and it‘s actually getting to the point where it is going to start happening at the highest levels, that Bill Clinton looks like he is going to have a role campaigning coming up rather soon.  The key meetings between former President Clinton and Barack Obama has yet to really happen.  And again the issue of Hillary Clinton connecting with Obama at a high level. 

WOLFFE:  Right.  I don‘t think we are far off this.  It does take some time to heal wounds.  Clearly, there are egos involved, big egos involved.  I think it is more to do with Obama sort of paying deference to the Clintons more than the debt that we‘ve all been focused on.  As long as he squares this away for the post-convention campaigning, he should be OK. 

GREGORY:  All right.  An e-mail came in today.  Everybody has something to say when it comes to Veepstakes.  Francis Sue in Oklahoma writes this, “considering Senator McCain‘s health, I certainly hope he chooses a vice president who can take over the helm with no problems.”  Jay, we‘ve actually had health headlines from both campaigns.  Obama had a strained muscle, an old basketball injury.  And another mole was removed from John McCain‘s cheek, always raises questions, given his history with melanoma.   

CARNEY:  Whose health news would you rather have, the one that reminds you that Obama is an athlete and the one that reminds you that McCain had skin cancer?  It‘s a big issue with McCain.  It‘s why there was that rumbling during the primary season that he might not—he might vow only to serve one term,  And he will be the oldest—if he wins, the oldest person ever to be sworn into office for a first term as president.  It has got to be part of their consideration, someone who can be president on a moment‘s notice. 

GREGORY:  Boyd writes this; “I prefer Barack Obama‘s judgment over John McCain‘s experience.  Look at what experience has gotten us.  Bush 41 and read my lips, Bush 43 and the Iraq debacle, Bill Clinton and I did not have sexual relations with that woman.  My bet is that most Americans prefer good judgment over experience?”  Noah?

OPPENHEIM:  I would agree.  I think most Americans do prefer good judgment, if they had to make that kind of binary choice between the two.  I think a lot more Americans would prefer both experience and judgment.  It also begs the question, how do you evaluate somebody‘s judgment?  You evaluate it by a track record of past decisions that they have made, you know, under tough circumstances.  So, you know, I think it‘s a fair point to say that judgment matters quite a bit, but I don‘t think it‘s an either/or.  And I think when it comes to Barack Obama, there is certainly evidence that he has good judgment.  I also think there are a lot of big question marks in that he has not had to face too many very difficult choices in his time. 

GREGORY:  Real quick, Rachel, how does McCain try to win the judgment versus experience argument against Obama in a way that Hillary Clinton could not? 

MADDOW:  I think he has to make it about something other than Iraq.  He needs to take issues from his Senate career, take issues on which he has actually parted from his party, redefine himself in the way he was defined in 2000, and make himself seem like he has made good hard calls as a politician, not just as a character, the way his campaign is making him out to be right now. 

GREGORY:  We are going to leave it there.  You can play with the panel every weeknight here on MSNBC.  E-mail us, RACE08@MSNBC.com, or call us at the number on your screen.  That‘s going to do it for RACE TO THE WHITE HOUSE for tonight.  Be back here at 6:00 p.m. Eastern time tomorrow.  Have a good night.  Stay where you are, up next, “HARDBALL.”

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

END   

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