updated 9/8/2008 1:57:39 PM ET 2008-09-08T17:57:39

Guest: Pat Buchanan, John Harwood, Anne Kornblut, Julian Epstein, Susan Molinari, Lawrence O’Donnell

DAVID GREGORY, HOST:  Tonight, the conventions are over.  Whew.  So who has the momentum now, and who is winning this battle over change?

As the RACE FOR THE WHITE HOUSE enters the home stretch.

Welcome back to THE RACE.  I’m David Gregory, back in Washington after two weeks of convention madness.

My headline tonight, “The Fight Over Change.”  The message wars are on as John McCain redefined himself as the true candidate of change last night at the Republican National Convention in St. Paul, delivering a clear rebuttal to Obama’s attacks that a McCain administration is simply more of the same.  Using the word “change” 10 times, “fighter” or a variation of it 25 times, McCain hoped to achieve the goal he set out this week to break the Bush/McCain change.  But the real test of that message is still to come as both campaigns eagerly await post-convention poll numbers.

Some inside scoop here from MSNBC’s “First Read.”  Don’t look at the national head-to-head match-up.  Instead, look for whether the percentage of voters who believe McCain will follow Bush’s policies closely has dropped. 

Let’s bring in Pat Buchanan, former presidential candidate and MSNBC political analyst. 

Last night, McCain built his message of change on his record of reform in Washington.  Listen to this. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, PRESIDENTIAL CANDIDATE:  I fought corruption, and it didn’t matter if the culprits were Democrats or Republicans.  They violated their public trust and they had to be held accountable.  Let me just offer an advance warning to the old, big spending, do-nothing, me first, country second crowd—change is coming. 

(END VIDEO CLIP)

GREGORY:  Pat, is the old John McCain back? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think in a way he is.  What he’s

saying is that, Sarah Palin and I represent outsiders, mavericks, we’re coming to change the city.  Congress and the administration both failed, and we represent change just like Obama does. 

But then he sells himself as the individual.  The whole narrative last night of his life, the man he is, the character he is, his wife, what he’s saying is, it’s the McCains versus the Obamas.  Both of us for change, but take a look at us, too.  We think we are superior candidates, I think. 

And that’s what he is doing.  He did not lay out, however, exactly the roadmap and the kind of change that he’s going to bring. 

GREGORY:  And he shied away from talking about the very issues that would represent somebody who really fights against his own party, his stand on immigration.  His stand on campaign finance reform, and other kinds of reform, climate change position, didn’t talk about that last night in the hall.   

Pat?

BUCHANAN:  Oh, I’m sorry.  No, he did not.  And that’s the one thing that is missing, is really, he does not have the agenda there or he did not lay it out last night. 

GREGORY:  Right.

BUCHANAN:  But again, I think he’s going to try to get this down into a contest not between parties, and not even between agendas, although he feels his tax position, security, are better, but between John McCain and Barack Obama, who was portrayed throughout this convention as really sort of an empty suit that gives a good speech.  And so I think they succeeded in that regard. 

GREGORY:  Right.  Right.  OK.

John Harwood, CNBC’s chief Washington correspondent, political writer for “The New York Times.”

So, Senator McCain has admitted that the economy is not really his strongest suit, but he says he’s learning.  And last night, his strongest statement on the economy was to promise a limit to the government’s reach. 

Did he do enough to win over those voters whose top concern is the economy? 

It’s a question he’s going to face now and throughout the 60 days.

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  No, he didn’t.  And it

looks to me like the economy is not going to be the basis of his attempt to win those voters. 

Look, David, there’s a fundamental incoherence in John McCain’s political persona and in his campaign right now.  He is the maverick who has been in Washington for a long time.  He’s the experienced candidate who picks the inexperienced running mate.

He says now that he’s the candidate of change, but on the fundamental economic policies, on taxes and on health care, on education, he’s fundamentally running on extensions of things that President Bush has tried to do.  That’s a problem for him.  It reflects the political incoherence of trying to rev up his base and reach out to the middle at the same time.

I think the access that he wants this campaign decided on—and I agree with Pat Buchanan—is going to be a very personal thing.  It’s going to be on character.

GREGORY:  Right.

HARWOOD:  The strongest part of his speech was telling his own heroic story, and the negatives at that campaign were sort of portraying Barack Obama as somebody who is a lightweight who hasn’t done anything.  I think that’s where he wants this decided.

The question is, do values, do character, does the persona, does that still work in an election where there are so many Americans who wants stuff from the government?  Remember, Hillary Clinton, David, said in her campaign, I’m going to be the president for people who need a president.  That’s the question mark hanging over John McCain’s campaign. 

GREGORY:  Right.

Well, let’s bring in Democratic strategist Julian Epstein. 

Julian, absent from McCain’s speech were the kind of attacks that Palin leveled against Obama the previous night, but he did take this particular shot at Obama.  Let’s listen. 

(BEGIN VIDEO CLIP)

MCCAIN:  Again and again, I’ve worked with members of both parties to fix problems that need to be fixed.  That’s how I will govern as president.  I will reach out my hand to anyone to help me get this country moving again. 

(APPLAUSE)

My friends, I have that record and the scars to prove it.  Senator Barack Obama does not.

(END VIDEO CLIP)

GREGORY:  Julian, fair assessment? 

JULIAN EPSTEIN, DEMOCRATIC STRATEGIST:  Well, yes, it’s easy for him to say after he has Romney and Giuliani and Palin taking some pretty low-blow shots after Obama.  It’s easy for him to then take the high road. 

I think, look—I mean, I think that, you know, change without a portfolio is no change at all.  So what McCain has to do is campaign on his biography. 

You know, Andrew Card once said that you don’t roll out a new political product line after Labor Day.  Well, what the McCain campaign is clearly doing as of last week, when they chose Palin, is they are saying that the experience issue is not working for us.  It didn’t work for Hillary.  They don’t want to make the same mistake.  So we have to try to seize this change mantle.

But as John and Pat are pointing out, it’s really kind of empty rhetoric and window dressing, because there’s nothing that John McCain spoke about in the speech last night, which I thought was not a very good speech, by the way.  There’s nothing that he spoke about that departs in any way from the Bush administration.  It makes it very easy for people like me... 

GREGORY:  Well, I don’t know why when he—right.

EPSTEIN:  ... and for Democrats to say...

GREGORY:  Yes, go ahead. 

EPSTEIN:  It’s easy for people like me to say, this isn’t change.  This is just more of the same with rhetorical window dressing.  It’s very easy to push back on that. 

GREGORY:  OK. 

We have a bad delay, by the way, Julian, just to—we have a bad delay between us.  So I apologize to our viewers for that. 

Anne Kornblut, let me bring you in, national reporter for “The Washington Post.”

McCain stumped with his new running mate Sarah Palin in Cedarburg, Wisconsin, today, praising her for a maverick-style approach to reining in government spending.  Listen to this. 

(BEGIN VIDEO CLIP)

MCCAIN:  How many saw her speech?  Wasn’t it fabulous?  You know what I enjoyed the most?  She took the luxury jet that was acquired by her predecessor and sold it on eBay.  And made a profit! 

(END VIDEO CLIP)

GREGORY:  All right.  So this story, Anne, was something that she told in her speech during the convention, that she didn’t think that the governor of Alaska needed a corporate jet, so she was going to auction it off on eBay. 

You’ve done some reporting today with some new information.  What is it? 

ANNE KORNBLUT, “THE WASHINGTON POST”:  It’s actually old information that all you had to do was really Google it to find out that, in fact, the plane was not sold on eBay.  And it was sold at a loss, not a profit. 

She tried to put it up for sale at an auction when she first became governor.  It was something she had run on.  It was something that sounded really good.

The deals that came along weren’t good enough, eventually fell through.  And eventually she did sell it in August of 2007, many months later, to a businessman in Alaska. 

So, technically, she did, of course, sell the plane.  And as a reformer, she can claim that.  But this idea that she sold it on eBay, which we’ve now heard McCain say out loud, that was in the video tribute to Sarah Palin last night, just isn’t true.  So it raises again the question, I think it will probably wind up being filed under, how well does he know this woman? 

GREGORY:  Right.  So she sells it at a loss and to a contributor? 

KORNBLUT:  Our initial reporting—and we’re still reporting this out and waiting for a response from the McCain campaign, but the initial reporting we’ve done shows that the person who eventually bought it had donated to her campaign and to the Republican state house speaker in Alaska who helped make the connection.  So it appears that it’s not some random person on the Internet, not some Democratic sale, but someone who she very well may have known or at least knew people who knew. 

But the idea that she sold it on eBay, she didn’t.  That simply isn’t true. 

GREGORY:  So, Pat Buchanan, this is going to be a subtext of this campaign now.  There are going to be a lot of questions about Sarah Palin.  All the drama of Sarah Palin is going to play out.  And the question is, how much does it hover over the race?

Sixty days left then, two conventions now in the books, the surprise the VP, the dramatic Sarah Palin—what is the state of this race? 

BUCHANAN:  I think the state of the race is, I believe it’s going to be just about even when the full returns sort of, if you will, the polls come in for both conventions about Wednesday or Thursday.  But what is important about Sarah Palin is she has saved John McCain’s candidacy. 

I don’t think McCain, if he took Lieberman or even Pawlenty, would be really in the race.  I think he’d be eight or 10 behind.  And I think Sarah Palin does a number of things.

She brings home rallies, the base, incredibly.  I’ve never seen such enthusiasm in my life.

A lot of folks I know who don’t like McCain at all are now contributing. 

They’re coming home. 

GREGORY:  Right.

BUCHANAN:  Secondly, she’s a sweetheart, I think, of the Reagan Democrats.  Now, she’s not going to do good with some liberal Republicans, but I think she gives John McCain the freedom to run as an independent, a maverick, to go after those folks that he maybe can pull away, while she goes after the Reagan Democrats.  She has brought back this ticket and may bring back this party. 

GREGORY:  OK.

Julian, your response on the state of the race from your point of view? 

EPSTEIN:  Well, I think Palin does for John McCain something very important, which is she does solidify the base.  It’s very late in the game, however, to be solidifying the base.  You really need to be reaching out to the center. 

And I think her speech on Wednesday night, particularly the sarcasm and kind of the low blows on Obama, I think turned off a lot of Reagan Democrats.  I don’t really know that it’s going to hit Independents very strong. 

And she is a wildcard.  I mean, the point that Anne just made about her having this gaffe on the fact that she didn’t sell it on eBay, I mean, how many other mistakes is she going to make on the campaign trail?  And if she makes them, she becomes a distraction, and that is a net negative at the end of the day.

GREGORY:  All right.  Got to take a break here. 

Coming next, how was the Palin—how is it that she’s changed the race?  We’ve got some hard numbers tonight.  The first polls showing just how much impact McCain’s surprise VP is having on the voters.  We’ll get into that when THE RACE returns, after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN:  Again, I want to tell you how honored I am to have Governor Sarah Palin as my running mate, who has done so much already to lift the spirits and morale of people all over this country, because change is coming.  Change is coming. 

(END VIDEO CLIP)

GREGORY:  That was John McCain reiterating his support for Governor Palin today before a throng of supporters in Cedarburg, Wisconsin.  He went to Wisconsin and to Michigan, two blue states he wants to turn red here this fall. 

What does the Alaska governor mean to the ticket in important swing states like Wisconsin? 

Joining me now to dissect the Palin factor, former New York congresswoman and Republican strategist Susan Molinari and MSNBC political analyst Lawrence O’Donnell. 

Welcome both. 

SUSAN MOLINARI, REPUBLICAN STRATEGIST:  Thank you. 

GREGORY:  Susan, let me start with you.  The first poll gauging Palin’s power is out today, and an ABC News poll taken yesterday asked voters whether Palin on the ticket gave them a little bit more confidence in McCain. 

Among all voters, 43 percent said yes, Palin makes them more confident in McCain, 38 percent said they are less confidence in him.  But look at this.  Among Republicans, a whopping 80 percent say they are more confident in McCain now, and just 9 percent say they are less confident. 

We know what the story is coming out of this convention, don’t we, Susan? 

MOLINARI:  We sure do.  This was a big move for John McCain in terms of solidifying his base, in terms of exciting the Republican Party.  They raised $10 million in one day after the announcement of Sarah Palin, and as she got brought to the attention of the American people. 

But it also does another thing.  It shows the character of John McCain in a way that has been introduced, you know, to not many people, where he saw this incredible woman who was a terrific leader, who has a family that resembles all of our families.  And he said, you know what?  This sends an important message to people throughout the United States that we can lead and also take care of our families and take care of our homes.  And I think that’s just an incredible message. 

GREGORY:  But—OK.

Lawrence, here’s the thing.  Coming out of Denver, I thought that Barack Obama did something that was clear, which said this is an election about change, if you don’t like what’s going on right now, vote for me.  That’s change. 

What McCain seems to be doing is a little bit more convoluted, though certainly powerful.  He’s revved up the base with Palin.  He’s positioned himself and her as reformers.  He’s got that record to back it up over time.  She appears to, as well, what we know about her record.

And yet, he’s running against Washington as if he wasn’t part of the party that was in power.  It’s a little difficult to put it all together. 

LAWRENCE O’DONNELL, MSNBC POLITICAL ANALYST:  But, you see that Sarah Palin

is the lynchpin, David, to that strategy. 

GREGORY:  Yes.

O’DONNELL:  You couldn’t have even attempted it with anyone else.  It had to be someone so fresh, from out of nowhere politically, that makes people think, wow, this really is change.  And she is change.  She definitely personifies change. 

It does, however, put an unprecedented burden on the vice president candidate on a ticket.  I mean, I can’t think of a situation in which a vice president has been, in effect now, carrying a ticket in its basic concept that it’s trying to advance, which is change.  And, you know, on the issue that Anne Kornblut was just talking about, the whole question of, how accurate are these Sarah Palin stories, the folklore of putting the airplane on eBay to sell it, well, she put it on eBay, but she didn’t actually sell it on eBay didn’t work.

The Bridge to Nowhere, David, I think is one of the most tricky areas for her to continue to refer to.  It is—the implication, the very clear message on the Bridge to Nowhere, when she says, “I said thanks but no thanks” on the Bridge to Nowhere...

GREGORY:  Right?

O’DONNELL:  ... the clear sensation of that is, you know, they offered me $300 million for a bridge and I said no.  Well, the truth of the story is, she, first of all, was in favor of the bridge when she was campaigning for governor, and there are some people who are very bitter about her reversal on that in Alaska. 

She then took the money—Alaska took all of the money, and Alaska is building the access road now on the island to a bridge that does not exist.  So, there is—in John McCain’s definition of wasteful government spending, it all actually did happen in that story, and they have to be careful of that story. 

GREGORY:  Susan, let me get to this point that Lawrence makes about her carrying the ticket, in effect, right now.  I think it’s so important, because there has got to be a concern in the McCain camp that her initial appearance, as dazzling as it was, might represent a high watermark. 

Senator Biden is going to appear on “MEET THE PRESS” Sunday with Tom Brokaw, but McCain’s campaign manager, Rick Davis, was on “MORNING JOE” with Joe Scarborough this morning and said there’s no plans yet for her to do any interviews.  Listen to this.

(BEGIN VIDEO CLIP)

JOE SCARBOROUGH, HOST, “MORNING JOE”:  Can we expect Sarah Palin on “MEET

THE PRESS” and other one-on-one interviews throughout the course of this campaign? 

RICK DAVIS, MCCAIN CAMPAIGN MANAGER:  We’re going to do whatever we think

is the best to win.  We have 60 days left, and if we think it’s a good idea to go out there and do those shows, we’ll do them. 

SCARBOROUGH:  Can you avoid it?  Can you avoid “MEET THE PRESS?”  Can you avoid time?

DAVIS:  We can afford anything we want to do.

GREGORY:  Well, but this is the question, Susan—can they really?  You have got 60 days.  She’s going to have a learning curve, that’s clear as she gets ready for these debates.  How important is it for her to establish her bona fides in these kinds of interviews and the national stage? 

MOLINARI:  Well, first of all, to say that she’s carrying the McCain campaign now sort of dismisses the fact that before both conventions started, Senator McCain and Barack Obama were tied.  So, just one on one, John McCain was doing fine on his own. 

What Governor Palin has done is really just giving an added oomph to bringing in a whole other complexion of people who may not have voted for John McCain, including women who were disenfranchised by the way the Democrats dealt with their selection of the vice president.  So, I mean, I think she’s adding to it, but she’s certainly not carrying the ticket. 

I think anybody who watched her speech on Wednesday night, listen, I have tremendous confidence.  I’ve talked to people who come from Alaska. 

GREGORY:  Right.

MOLINARI:  This was not her first appearance.  It was her first appearance of an amazing national magnitude, but she’s got a pretty good reputation for being a straight shooter, a good talker, and a very smart individual in Alaska.  So I think they will bring her out there, and I think she’ll continue to be an asset to a ticket that’s going to win anyway. 

GREGORY:  OK.  Got to take a break here.  Thanks to you both.

Coming next, how did McCain’s speech stack up to Obama’s stadium event?  You’re not going to believe this, the ratings are in.  And wait until you find out what they are.  It’s on THE RACE’s radar right after this break.

(COMMERCIAL BREAK)

GREGORY:  And we are back now with a look at what else is on THE RACE’s radar for today. 

Always on THE RACE’s radar, the ratings.  Obama’s acceptance speech at INVESCO Field in Denver was watched by 38.3 million people.  But last night, McCain broke the record -- 38.9 million viewers tuning in, making it the most-watched speech in convention history. 

“The Hollywood Reporter” notes that McCain likely got a boost from Super Bowl champion Eli Manning.  The Giants/Redskins game ended literally moments before the network’s convention broadcast.  The Giants beat the Redskins. 

My question, McCain had the nation’s attention, so how affective was he? 

John Harwood, it is striking that there was that much tune-in for him?  What do you think drove that?  Yes, he may have gotten a good lead-in, but there’s tremendous interest in this race. 

HARWOOD:  I think there’s tremendous interest in the race, I think Palin drove some of that interest.  And I do think the football game, which did not turn out the way I wanted it to...

GREGORY:  I hear you.  What happened to the Skins?

HARWOOD:  ... helped John McCain as well.  You know what?  They just didn’t have it on offense. 

But I think John McCain had powerful parts to that speech.  I think the parts about his POW experience—and he laid out a case for how experience could help him be superior on national security.  The big question is whether or not in a year when so many people are anxious about the economy, he did enough on that issue, as we talked about before.

GREGORY:  Right.

And Anne, you cannot forget, as veterans of these conventions will tell you, this is when a mass audience is tuning in.  I talked to Democrats today who made a specific point of tuning in to watch to see what McCain had to say.  So he’s getting undecided voters, Independent swing voters who are tuning in.  And we certainly see it in the ratings last night. 

KORNBLUT:  Oh, sure, and a lot of people—oh sorry. 

(CROSSTALK)

HARWOOD:  Go ahead, Michelle (sic).

GREGORY:  Go ahead, Anne. 

Anne—it’s Anne.

HARWOOD:  Anne, sorry.

KORNBLUT:  This is, of course, for a lot of people when the campaign is just beginning.  The people who aren’t the junkie like the rest of here, who didn’t start paying attention until after Labor Day, who want to see, especially now that there’s somebody they don’t really know on the ticket, Sarah Palin, they want to tune in and see, you know, what is this all about?  But I will say, you talk to Obama advisors today, and they said, all of them, you know, we wish he talked longer.  We wish he would give a speech every night because he didn’t talk about the things that are important to us and the things we’re talking about. 

GREGORY:  All right.  We’ve got to take a break here.

What will Obama or McCain do for you, if elected?  We’re going to take you inside the promises on issues like gas prices, jobs, and your security, when THE RACE returns after this break. 

(COMMERCIAL BREAK)

GREGORY:  A spike in job losses put pocket book issues front and center on the campaign trail today.  But if it’s the economy stupid, have Obama or McCain spelled out the solutions?  THE RACE becomes a sprint in the final 60 days. 

Welcome back to RACE FOR THE WHITE HOUSE.  I’m David Gregory.  Tonight, new numbers might give a sneak peek at the McCain bounce.  Taken this week, but before his speech last night, the latest CBS News poll shows John McCain tied with Obama at 42 percent.  With the rhetoric of the conventions wrapped up, and the business of campaigning going full throttle, bread and butter issues may now be grabbing voters attention.  News today that the unemployment is at a five year high, 84,000 jobs lost last month, which begs the question, which candidate has the real plan to fix the economy. 

Still with us, MSNBC political analyst Pat Buchanan, CNBC’s chief Washington correspondent John Harwood, Anne Kornblut, national political reporter for the “Washington Post,” and Democratic strategist Julian Epstein. 

Julian, let me start with you.  Where is the beef here on the economy issue from either side? 

EPSTEIN:  Well, the segue from the last segment is with record numbers tuning in to see the convention speeches, and 80 percent of the public thinking we are on the wrong track economically and in our international affairs, that’s a bad deal for the incumbent party.  Now, John McCain said nothing.  You would have to struggle to find one thing that John McCain said in his speech that differs from the policies of George Bush.  Barack Obama needs to be much more specific about kitchen table issues, but has started to do that very clearly this week on the campaign trail. 

The two things he’s been talking about is one, tax relief, progressive tax relief that will benefit 90 percent of voters, whereas the McCain plan really benefits, by in large, the top ten percent.  A health care plan that really works.  The McCain plan does nothing about uninsured Americans.  Obama is very, very, very specific about how his plan will ensure the 40 to 50 uninsured and underinsured Americans. 

GREGORY:  On the campaign trail today, Senator Biden focused on the economy, saying Democrats are the only ones talking about these kitchen table issues, like gas prices and how to pay for college tuition. 

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE:  That’s what people

talk about.  That’s what middle class people talk about.  That’s where I come from.  That’s where you come from.  I don’t care what you are doing.  Look, John is talking about how we are going to raise taxes.  Give me a break. 

(END VIDEO CLIP)

GREGORY:  Pat, does he have something here? 

BUCHANAN:  Yes, he’s showing the vulnerability of Barack Obama.  No question, if the issue is going to be the macro-economy, how is it doing, do you like it, should it continue on this course, McCain and Palin will be wiped out.  But what McCain is doing is bringing the economic issue down to specifics such as energy.  You have a wimp who won’t drill out here and we’re drilling and he’s winning on that.  Secondly, at the convention, they within the after him on he’s going to tax this, tax that, tax that.  The very fact that Biden is saying give me a break indicates that that issue is striking home. 

On the specifics, on the economic thing, McCain can hammer him, but I agree, when it comes to the larger issue, McCain is a globalist, frankly, and that’s the problem. 

GREGORY:  John Harwood? 

HARWOOD:  Look, if you look at what Barack Obama has proposed, he’s talking about a tax cut for a majority of working families.  He’s talking about a health care plan to increase access.  And he’s talking about more subsidies for people—tuition subsidies for people to go to college if they serve. 

John McCain’s prescription is extending the tax cuts.  He does have a proposal on health care.  He’s talking about shifting from employer based health care to the individual marketplace.  His theory is that if you expand the individual marketplace, prices will come down and more people will be able to get insurance.  He has some wage insurance proposals for people who lose their jobs and have to take worse paying jobs. 

The questions, are his proposals enough?  People—he was fundamentally last night making a process argument, saying I’m going to fight for you.  I’m going to reform Washington.  Beyond the proposals that I just mentioned, there wasn’t a lot of stuff that he was going to put in people’s pockets.  How is he going to help people more directly? 

GREGORY:  Let’s talk about another issue, and that is the tie to President Bush.  McCain acknowledged his support for President Bush last night, although he only mentioned him once and not by name.  This is what he said. 

(BEGIN VIDEO CLIP)

MCCAIN:  I’m grateful to the president of the United States for leading us in these dark days, following the worst attack on American history. 

(END VIDEO CLIP)

GREGORY:  Former Bush speech writer David Frum is writing in “Foreign Policy,” the journal, about the gains made in the war on terror during this presidency; quote, “since 2003, former states sponsors of terrorism have behaved much more cautiously.  The Madrid bombing was less sophisticated than 9/11.  The London subway bombings in 2005 were less sophisticated than Madrid.  The US homeland has enjoyed almost complete immunity from acts of international terrorism, and the plots that have come to light have been reassuringly amateurish in their conception and attempted execution.”

Anne Kornblut, I spoke to Rick Davis in St. Paul this morning.  I said, will this be an issue that you push in the final 60 days.  He said, make no mistake, we had to knock wood when we talk about it, but Republicans have kept the country secure. 

KORNBLUT:  Right, of course, and John McCain has said that he will go after Osama bin Laden.  That’s actually one way he is able to distinguish himself from the president, is to say I will pick up where he left off and do something he failed to do, which is actually get Osama bin Laden.  What the Democrats are hoping is that these issues can be decoupled and that you can separate the issue of terrorism from the issue of Iraq, and that they can convince the country—and we have seen increasingly over time that people do not believe that Iraq and terrorism are connected.  That’s their best hope, that they can separate those two and talk about them as distinct issues. 

GREGORY:  That’s the point, because I think there are a lot of swing voters, independent voters, who will look at the issue of terrorism as distinct from the war in Iraq, and give some credit to the Bush administration for the fact that America has not been hit again. 

KORNBLUT:  That’s exactly right.  Of course, traditionally, the Bush administration has hoped that the two would be connected, so they would be able to say we are bombing Baghdad so we don’t get bombed in Boston.  At this point, they are working at keeping them separate.  McCain is working at keeping them separate so he can talk about them distinctly, and say there’s still more work to do, and that what we have done in Iraq is successful, but that we have to go back at Afghanistan and do it the same way. 

GREGORY:  Let me turn to McCain supporter and former Republican governor of Maryland, Bob Ehrlich, to go one on one on the issues.  We’re talking about the economy.  Governor Ehrlich, good to have you here. 

BOB EHRLICH, FMR. GOVERNOR OF MARYLAND:  My pleasure. 

GREGORY:  Has Senator McCain done enough to both demonstrate some mastery on the issue of economy?  And is it enough to break it down, to simply talk about taxes and energy issues? 

EHRLICH:  It’s taxes.  It’s regulation.  It’s energy.  It’s immigration.  He really touched upon these issues in the context of the speech.  These issues obviously will play out.  The theme of this convention, obviously, was change, Conservatives change, a life of service, and by the way, if you try to paint me with the existing administration, you know better.  You know I’ve been a maverick.  You know I’ve been independent.  Look at my choice for vice president of the United States.  That’s not going to work.  So clearly, this will play out. 

GREGORY:  We know that Barack Obama and Joe Biden are going to come at the ticket with the idea that they are out of touch, particularly John McCain.  Whether they use his answer on how many homes he has or his past comments about not having complete mastery over the economy.  Isn’t part of what Bill Clinton did effectively in the ‘92 campaign was demonstrate an energy and an empathy on the economy?  And has McCain demonstrated those two? 

EHRLICH:  Demonstrating and empathy and energy is fine, but there also has to be a record.  Bill Clinton had some bone fides attached to his moderate label.  He said he was a moderate.  He was a southern governor.  He governed as a moderate and he was going to governor as president of the United States as a moderate.  Now you have the most liberal senator in the United States Senate.  You have a 30 year veteran, very liberal, respected, but very liberal, regulator, tax increases, the whole nine yards, everything that goes with it, in Joe Biden.  It’s going to be a much harder play for this ticket to make that sell to the American public. 

This is Dukakis.  It’s McGovern.  It’s a pretty hard left ticket by any ideological litmus test here.  So—and now, you see—they realize that they have taken the polls.  The race is tied.  It really shouldn’t be tied, given what we see in the Congressional races.  Now they’re going to, again—I hate this phrase, but they are, quote unquote, moving to the middle.  They have to be very careful, because now they have to define what change is.  If change is really—and nobody is buying 90 percent of the American public is going to get a tax break when you have a massive increase.  You have to really define your terms and that’s going to be very difficult for this team. 

GREGORY:  Let me switch to the issue of national security.  You’ve been a govern.  You’ve been responsible for first responders in a state at the local community level, big city level, dealing, preparing for a terrorist attack.  The issue for John McCain is how hard he hits the issue of national security and Iraq, as distinct from the fact that there’s not been another attack on the United States since September 11. 

EHRLICH:  This is one of the few issues out there where the Republicans have maintained an advantage, even in 2006 and 2007, years that have been, by any measure, very strong Democratic years.  He obviously has that generic advantage.  Then he has the fact that, whether you like President Bush or not, the fact that since 9/11 we haven’t had a domestic incident.  Then you add his credibility as not just a United States senator, but as a hawkish United States senator who was right on the surge, who is very popular with the troops, was a fighter pilot. 

I thought, last night, it was a pretty pedestrian speech until the end, which got really America, to begin—even me, and I know him—I know the man—to understand what makes him tick.  He wanted to show what really makes him the maverick, the independent he is, and why he thinks the way he does, which is why, in the end, I felt it was a pretty effective speech. 

GREGORY:  The Palin factor, something we’ve been talking a lot about, governor.  As strong as she was and energizing as she is to the base, there’s a fundamental problem, a disadvantage that the McCain-Palin ticket has.  That is they are arguing for change when they are in the Republican party, which has been in power in Washington for much of the last eight years.  It’s tough to get over that.   

EHRLICH:  Here’s the deal, David.  Throw the rule book out.  Throw the traditional wisdom out.  If Barack Obama, a few years removed from the Illinois state Senate, Governor Palin on the ticket, John McCain left for dead a year ago—the traditional rules do not apply here.  Let me go back to a point I made earlier.  Change is easy.  Everybody is for change.  If you’re not the incumbent, you’re for change.  You have to define your terms.  And now we have Barack Obama basically being for more, quote unquote, liberal change, more change from the left, more progressive—whatever term you want to use, MoveOn.org. 

You have now John McCain taking the same label, but now again defining

yes, we’re for change.  We want to drill.  We want to make the tax cuts permanent, because it’s best for the economy.  We get it on immigration.  You have to secure the borders first.  So it’s change, but it’s change with respect to the existing Republican agenda, and what we did when we were in power.  He said the other night, we screwed up and we did, and we paid the price. 

So it’s change from a different direction.  It’s fascinating sort of political direction here.  If you look at the polls, it looks like it’s working. 

GREGORY:  It’s interesting.  It’s about defining the terms and providing a real contrast and real choice for the voters, all of which will get sharper once we get into all of these debates, which we’ll have one right after the other. 

Governor Ehrlich, thanks very much for coming on.  Appreciate it. 

EHRLICH:  It’s my pleasure. 

GREGORY:  Coming next, message wars.  McCain talks of change in his acceptance speech, while Obama shows he’s not afraid of a fight.  Who’s message will breakthrough to swing voters?  THE RACE goes inside the war room when we come back after this break.

(COMMERCIAL BREAK)

GREGORY:  Back now.  Going inside the war room with our panel, looking at the action plan for the final 60 days before election day.  Obama and McCain have spent the past two weeks respectively revving up the base.  Now the challenge is to close the deal with voters.  How will McCain and Obama win the independents and those undecided voters?  Obama showed that he can be a fighter last night, sparring with Bill O’Reilly on Fox News, who pushed Obama an his opposition to the Iraq troop surge.  Watch. 

(BEGIN VIDEO CLIP)

BILL O’REILLY, FOX NEWS ANCHOR:  But it worked. 

OBAMA:  Well, look—

O’REILLY:  Come on. 

OBAMA:  Bill, what I said is—I’ve already said it’s succeeded beyond our wildest dreams. 

O’REILLY:  Why can’t you say I was right in the beginning and I was wrong about the surge? 

OBAMA:  Because there’s an underlying problem with what we did.  We have reduced the violence, but the Iraqis still haven’t taken responsibility. 

(END VIDEO CLIP)

GREGORY:  All of that just a warm up, of course, for when Senator Obama sits down with Keith Olbermann on COUNTDOWN.  That’s Monday night.  Think about it all weekend.  But let’s go to the answer, Pat, with Bill O’Reilly.  Do you buy that, what Obama is saying? 

BUCHANAN:  No.  Look, Obama basically—I saw that as him admitting the surge worked, and I think that helps McCain.  There’s no doubt about it.  Obama knows his weakness is he’s not a fighter.  So he is now coming out as a fighter.  He was a fighter in his acceptance speech.  McCain knows that Obama’s issue of change is working.  So McCain is a change candidate.  This is how these campaigns interact.  When one guy gets a good idea and moves well, like on drilling or something like that, and McCain moved and you see Obama moving toward it. 

I think this is just the process unfolding in a general election. 

GREGORY:  Julian, why is it that Obama can’t give any quarter on this issue of the surge, which has demonstrated some real progress? 

EPSTEIN:  I disagree with that.  I think he said before that the surge has worked, but the implosion of al Qaeda inside of Iraq and the Sunni awakening have also been major factors as well.  What he said on O’Reilly last night was no different from what he said as far as a month ago.  I think Pat is right.  The two thing that Obama has to do to close the deal right is to  -- one is to fight back.  He’s going to be attacked personally.  I think all the old Reverend Wright stuff is going to come back out.  He has got to fight back.  People want a fighter. 

The second thing he has to do is he has to spell out even more specifically what he means by change, specifically on kitchen table issues.  He owns the brand of change.  Senator McCain, as the leader of the incumbent party, who has voted with President Bush 90 percent of the time, has a real uphill battle.  You know, Democrats can say about incumbency—and we can paraphrase Palin.  You know, a pig with lipstick on is still a pig.  Incumbency trying to argue for change really doesn’t fly. 

GREGORY:  Today at a glass factory in northeast Pennsylvania, Obama accused the McCain campaign of trying to make the campaign about nothing more than personality.  Watch. 

(BEGIN VIDEO CLIP)

OBAMA:  This is not about personalities.  If you want it to be about personalities, we’ll go out for a beer some time and we’ll talk.  You don’t have time.  You’d rather spend it with your family.  What you do want to know is you’re going to have somebody who is fighting for you. 

(END VIDEO CLIP)

GREGORY:  This is interesting, Anne.  You and I covered George Bush in 2000, where there was a lot of focus on personality, a lot of focus with comfort level.  I remember Gore and Bush in the debates and Gore walking up on Bush.  All of that inter-play went to the idea of do you feel comfortable with these guys.  What McCain has done is this speech last night is say look, there’s an egomaniac on one side and me, who puts country first.  It’s a very direct attack about who these people are, kind of personal integrity and character, which is the real outreach to swing voters. 

KORNBLUT:  Absolutely, there’s no mistaking what country first really means.  I think thought that they recognize that Obama spent the last year and a half on the campaign trail getting people to know his personality.  The people who flocked to him so far have found something in his personality or persona, whatever you want to call it, that they really like.  McCain has always had a strong personality brand.  Although, he seemed to have lost it some at earlier points in the campaign.  Even now, he hasn’t had it really shine for him.  He certainly didn’t in his speech last night.

So they are trying to pit this as a personality contest that will really let McCain go out, do town hall meetings, seem more down to Earth than he has, and certainly more than they think Obama has been over the last six to eight months. 

GREGORY:  Response, Pat? 

BUCHANAN:  I think Obama is dead on.  Look, when we get down here—

You notice the polls.  He was at 50 percent about eight ahead, now he’s back down to 42.  Doubts have been raised about Obama.  Ultimately, David, what it’s going to come down to in this campaign for Republicans, they have to convince the nation that wants change that you cannot take the risk here.  You can’t roll the dice with this light weight and this guy who has no accomplishments, no record, the big talker.  That’s what it’s all about, in the final analysis. 

People are going to say, I want change.  I just can’t go with that guy.  Obama has to do the Reagan thing.  He has to say, at the end of the race, people are going to say the guy is our guy, let’s take a chance. 

GREGORY:  John Harwood, before we go to the break, the issue with Hillary Clinton.  We’re inside the war room now.  She put out a statement after McCain’s speech last night saying “Senator Obama and Senator Biden offered the new ideas and positive change for America that America needs and deserves after eight years of failed Republican leadership.  Senator McCain and Governor Palin do not.  So to slightly amend my comments from Denver, no way, no how, no McCain/Palin.”

She looks like she’s ready to get up off the sidelines and play an active role with Palin in the race. 

HARWOOD:  Yes, that will be very useful.  A lot of these down scale, swing voters, particularly Wal-Mart women, as one of the campaign people referred to them to me, are people who are listening to Hillary Clinton.  They may have been for her in the primaries.  Again, you have multiple considerations.  Cultural politics work.  Value works.  The worse the economy is, the more they are going to look to other cues for their vote.  On this question that Pat mentioned, the more people who are upset with the way things are, the more likely they are to take a flier at the different guy, the new guy.  The more satisfied they are, the more likely they will stick with what they know.  That’s one of the fundamental dynamics in favor of Barack Obama in this election.  

GREGORY:  OK.  Coming up, after the break, the best moments of the conventions.  Plus, what our panel is watching for as we get into the final 60 days, after this. 

(COMMERCIAL BREAK)

GREGORY:  Welcome back to RACE FOR THE WHITE HOUSE.  Probably, the

highlight of the convention was the emergence of Governor Palin.  Take a listen to Sarah Palin’s rock star welcome at the Republican Convention in St. Paul Wednesday night. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Ladies and gentlemen, the governor of Alaska, and the next vice president of the United States, Sarah Palin. 

(END VIDEO CLIP)

GREGORY:  You know, you hear that, having been in the hall—I’m back with Pat, John, Anne and Julian.  It was unlike anything else you heard in the course of the convention, Pat.  She has so changed the dynamic of this Republican ticket, the race generally.  Here is somebody who is completely new on the national political scene.  Her emergence into the race caught everybody by surprise.  Now, there’s a real question of whether she overshadows John McCain, and what the pluses and minuses are of her sucking so much oxygen out of the room. 

BUCHANAN:  Listen, the reason that reaction happened is look, Sarah Palin that night was carrying this ticket on her shoulders when she walked into that hall.  If she had failed, I think the game would be over.  It’s now a real game again.  This was one hell of a blind date for John McCain, I’ll tell you, and the Republican party.  I think, going down the road, I don’t have a problem if she’s the candidate, if she performs like that and takes him into the White House, and neither would he. 

GREGORY:  John Harwood, is the only downside here that there’s some focus that’s been taken off Obama.  McCain did well when he had the focus just on Obama, was making it a referendum on him. 

HARWOOD:  Yes, I think that’s the axis of the campaign at the end for the McCain campaign.  It’s about going after Barack Obama, making people feel uncomfortable voting for him.  I think the Sarah Palin thing is remarkable.  I have never been to a Republican convention where I found so many delegates who were openly expressing their ambivalence about their nominee, but their enthusiasm for the running mate choice.  Republican political professional, after this speech, are talking about her speech at that convention as like Ronald Reagan’s speech near the end of the 1964 campaign, which put him on the map as the leader of the conservative movement. 

I think one of the dynamics to watch is, if we get deeper into the fall and it looks like John McCain is falling behind, you’re going to see a lot of momentum and increased focus on Sarah Palin as the future of the Republican party. 

GREGORY:  That just it.  Isn’t it ironic, Anne, if it falls to John McCain, who has never been beloved within the Republican party, who can give it its greatest gift, which is a political future, which gives the candidacy, the campaign a lot more lift, as compared to say Bob Dole in 1996. 

KORNBLUT:  I think there’s no question.  We’re going to look back at this moment, this past week, and the emergence of Sarah Palin as a seminal moment, not just in this race, but in politics in general.  We’ll have to wait and see whether it succeeds or fails.  But there’s no question, it’s change the party.  It’s also changed how the party talks about and to women.  I think that’s huge. 

GREGORY:  Quick thoughts—

EPSTEIN:  Watch out for pack journalism.  The first three days of this week, you were all saying that this was a big mistake.  There was the Trooper-gate scandal.  They couldn’t get out from bad media.  Now that she gives a good speech, the press is in front of her.  The real test for her will come when she has to go in front of the media and she’s really tested on the real important issues. 

GREGORY:  We’ll see how see how steep the learning curve is.  That does it for RACE FOR THE WHITE HOUSE.  I’m David Gregory.  It’s been a long week, but it’s really getting exciting.  Thanks to a great panel.  We’ll be back here Monday at the same time.  “HARDBALL” with Chris Matthews up next.  Have a good weekend.

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