updated 9/29/2008 5:34:13 PM ET 2008-09-29T21:34:13

Guest: Trent Franks, Linda Douglass, Jon Soltz, David Sirota, Lawrence O'Donnell, Joseph Cirincione

RACHEL MADDOW, HOST: Good evening.

More than a year after Senators Obama and McCain first squared off in debates against rivals in their own parties, tonight they met face to face in beautiful Oxford, Mississippi, for round one of this year's presidential debates.

(BEGIN VIDEOTAPE)

MADDOW (voice-over): The basic strategies were pretty clear, pretty early and pretty often.

SEN. JOHN MCCAIN ®, PRESIDENTIAL CANDIDATE: Senator Obama calls for more troops, but what he doesn't understand...

Senator Obama doesn't seem to understand.

He doesn't understand.

Senator Obama still doesn't quite understand.

MADDOW: Senator McCain thinks Senator Obama doesn't understand things.

Senator Obama understands that John McCain is George W. Bush reincarnated.

Surprise.

So what did we learn?

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: It's been your president who you said you agree with him 90 percent of the time.

And you like to pretend that the war started in 2007.

You were wrong.

You said that we were going to be greeted as liberators. You were wrong. You said that there was no history of violence between Shia and Sunni, and you were wrong.

MADDOW: We learned about when Barack Obama gets aggressive, he's clear and declarative on offense. We also learned that when he's not aggressive, he can leave a lot of easy points on the table.

OBAMA: And I give Senator McCain great credit on the torture issue.

MADDOW: We learned that John McCain doesn't mind saying the same things a lot.

MCCAIN: I didn't win Miss Congeniality.

I have not been elected Miss Congeniality.

A maverick of the Senate and I'm happy to say that I've got a partner that's a good maverick along with me now.

MADDOW: There was actual news made tonight.

JIM LEHRER, MODERATOR: You're going to vote for...

MADDOW: There was also news tonight that was just plain made up.

MCCAIN: ... the veterans. And I love them and I'll take care of them.

MADDOW: Boil it down, John McCain was mad as heck, and he played it a little fast and loose with the facts. Barack Obama was cool and correct and didn't want to get his knuckles bloodied.

Did we need a debate to tell us that?

Time to assess the first presidential debate.

THE RACHEL MADDOW SHOW starts now.

(END VIDEOTAPE)

MADDOW: This was supposed to be the foreign policy debate, but the first 39 minutes were swallowed by the yawning chasm that's opened up in the American economy. There were rhetorical flights and tongue-twisting gaffes that are being re-mixed and celebrated by the partisans as we speak. We will get to those in great detail on tonight's show.

But first, we would be remiss not to mention now that there was some actual news made tonight.

Senator McCain announced quite casually, with an almost throwaway, sure, that he would support the Wall Street bailout plan currently being negotiated in Congress. That is big news, actually, since McCain fake-suspended his campaign this week to go back to Washington to work on the bailout.

He paid a lot of lip service to House Republicans who were trying to scuttle the deal. And then he would not say whether he was for the deal or against it. Now we know he's for it. Sure.

The senior Senator from Arizona also made news tonight by suggesting a spending freeze on everything but defense, veterans' affairs and entitlement programs as a way to deal with the fiscal consequences of the massive bailout plan. Senator Obama said before you freeze everything, how about cutting some of the Bush era corporate giveaways?

On the economy, the differences between Senators McCain and Obama were glaring and at times a little non sequitiry.

(BEGIN VIDEO CLIP)

LEHRER: Are there fundamental differences between your approach and Senator Obama's approach to what you would do as president to lead this country out of the financial crisis?

MCCAIN: Well, the first thing we have to do is get spending under control in Washington. It's completely out of control. It's gone-we have now presided over the largest increase in the size of government since the Great Society.

(END VIDEO CLIP)

MADDOW: Government spending explains the Wall Street crisis? Reducing the federal budget would bring Lehman Brothers back? As a point of fact, it is an utter economic non sequitir. But it was a note McCain hit time and time and time again tonight, as if it were a magic bullet for curing the nation's economic ills. And that bullet would have to be magic.

(BEGIN VIDEO CLIP)

MCCAIN: We have former members of Congress now residing in federal prison because of the evils of this earmarking and pork barrel spending. I want to cut spending. I want to keep taxes low. But no matter what, we've got to cut spending.

You know, we spent $3 million to study the DNA of bears in Montana. I don't know if that was a criminal issue but a paternal issue, but the fact is that it was $3 million of our taxpayers' money. And it has got to be brought under control.

(END VIDEO CLIP)

MADDOW: Senator Obama seized the opportunity handed to him by Senator McCain's economics tangent by providing a little context to explain what McCain was talking about.

(BEGIN VIDEO CLIP)

OBAMA: But let's be clear, earmarks account for $18 billion in last year's budget. Senator McCain is proposing-and this is a fundamental difference between us -- $300 billion in tax cuts to some of the wealthiest corporations and individuals in the country -- $300 billion. Now, $18 billion is important, $300 billion is really important.

(END VIDEO CLIP)

MADDOW: Senator Obama also sounding a familiar theme tonight, arguing that it was Senator McCain's party and its leader, President Bush, who allowed for that out-of-control spending.

(voice-over):

OBAMA: John, it's been your president who you said you agreed with 90 percent of the time who presided over this increase in spending, this orgy of spending, and enormous deficits. And you voted for almost all of his budgets. So to stand here after eight years and say that you're going to lead on controlling spending and, you know, balancing our tax cuts so that they help middle class families, when over the last eight years that hasn't happened, I think just is kind of hard to swallow.

(END VIDEO CLIP)

MADDOW: We will tally the punches landed and opportunities missed on the foreign policy front in just a moment. But first, let's get some reaction from both sides.

Joining us now is Congressman Trent Franks, Republican of Arizona. He is a John McCain supporter.

Congressman Franks, thank you so much for joining us tonight.

REP. TRENT FRANKS ®, ARIZONA: Thank you for coming-letting me come on with you, Rachel.

MADDOW: I was struck by-as you probably heard in the intro there-by how Senator McCain trumpeted spending cuts as his proposed solution for fixing the current financial crisis. Do you think that's what would stave off the credit crisis and the Wall Street meltdown right now?

FRANKS: Well, I think it's at the core of a lot of the problems in government. And it shows that we have this sort of a lackadaisical attitude in general. And people see government overspending, doing deficit spending, and it creates sort of a general attitude that we can repeal the laws of mathematics when it comes to economics.

And it certainly would cure a lot of the government challenges. And there's probably very few people in the United States Senate that have more credibility than John McCain on trying to rein in spending. And I absolutely think he made a prescient point, and it was important.

MADDOW: I hear you when you say that it would set a good example in terms of commonsense math. But my sense, from most people I feel are responsible, who've talked about the financial crisis, think that this has been a crisis of there not being any referees in the football game. And the football game, therefore, turning into a prison brawl.

FRANKS: No, I...

MADDOW: That this has been an issue of deregulation and of Wall Street sort of run amok because there weren't good rules, and the rules that were there weren't enforced.

FRANKS: Well, I think you make some good points. But if you go back and listen to the comments that John McCain has made on the floor, I would just encourage you to play some of those for the people, because they were almost prophetic.

He seemed to understand that the government involvement in some of these GSEs and Freddie Mac and Fannie Mae were going to lead to disaster. And he said as much a long, long time before it happened. If we had just listened to him, I think we'd be a lot better off today.

MADDOW: Do you think that John McCain will be hurt by his association with Phil Gramm, who is the great deregulator of banking, by his support for Gramm's deregulation of the financial industry, for him having said as recently as last week that the fundamentals of the economy still seem strong to him? Do you think that McCain is making up ground on any of those things, or do you think he has a plan to turn those into assets?

FRANKS: Well, I think if anyone knows John McCain-I've known him for 25 years-he is an independent soul. He tries to do what he believes is right regardless of other indications. And I don't think that his friendship with anyone is going to take that much away.

Now, I may be losing the feed here, Rachel.

MADDOW: Oh. I'm sorry.

FRANKS: Rachel?

MADDOW: Are you losing me hear? Congressman Franks, are we back?

FRANKS: I'm unable to hear you.

MADDOW: Oh. I'm very, very, very, very sorry for that.

Congressman Trent Franks of Arizona, thank you for joining us. I appreciate it. I'm sorry about the technical difficulties.

Now I'm all bottled up with the questions that I wanted to ask him. All right.

Well, joining us now-we're going to switch gears-from Oxford, Mississippi, where the debate was held tonight, is Linda Douglass, who is a senior adviser for the Obama campaign.

Ms. Douglass, it is only fair that you also experience technical difficulties, so we'll ask you to cause some on your side in the middle of this discussion, OK?

LINDA DOUGLASS, SR. ADVISER, OBAMA CAMPAIGN: I can hear you, Rachel.

Sorry.

MADDOW: All right. Well, I'll try to mumble.

Senator Obama uttered some variation of the phrase "Senator McCain is right" at least 13 times tonight. I cannot imagine that was part of a strategy.

Can you tell me if it was? And can you tell me how the Obama campaign will respond now that the McCain campaign has recut all of those into a new ad?

DOUGLASS: What's extraordinary is much is that is being made in a critical way of Senator Obama being a leader who will point out when there are areas of common ground with somebody with whom he disagrees fundamentally on every fundamental issue. I mean, this is exactly what's wrong with Washington, is that somebody who can find-seeks to acknowledge that there are areas of agreement, areas where we can work together, areas of common ground, with somebody who there are enormous contrasts, is criticized for not disagreeing just in a knee-jerk way on every single thing.

I mean, look, he laid out fundamental areas of disagreement. John McCain, as you said, wants to give-cut taxes for the wealthiest Americans and corporations, $300 billion worth. Senator Obama would give $1,000 tax cut to middle class families, would make college more affordable, would provide affordable, accessible health care, would create a new energy economy that would create new jobs. There are profound disagreements. But he also is one of those leaders in the bipartisan climate that you need to get things done who can acknowledge where there are areas of agreement.

MADDOW: On the issue of contrast and agreement, I know as I was watching the debate, I felt like Senator Obama essentially let Senator McCain get away with mischaracterizing his own record, or massaging the facts a little bit about the issue of torture, about the issue of alternative energy, about even the issue of veterans issues. Those were all issues on which John McCain asserted that he had a record to be proud of, in which there is much to criticize when you lock at his real record.

Do you think there were missed opportunities to go after Senator McCain on some of those important issues?

DOUGLASS: Well, you know, in a very short period of time, a candidate has got to make a decision about whether you spend that time, for example, pointing out that John McCain is one who voted against the new G.I. bill for the veterans who would come back to the United States and try to get some kind of an education the way that the G.I. bill worked in World War II, and certainly has a long record of voting against many forms of alternative energy: wind, solar, biofuel. All of those things are-you're absolutely right, those are areas where Senator McCain may have mischaracterized his own record. But Senator Obama chose to take that time and talk about what he would do for the American people, how he would bring a new energy economy, and he has a long record of fighting for veterans.

What he decided to do at this time is explain to the American people why he's going to be a president that's going to move us into the future and not use the solutions of the past.

MADDOW: Forgive me for departing from those matters of substance which you summarized so clearly to get to some of the fuzzier issues slightly. I think one of the important things that happens in a debate is that voters who haven't been paying very much attention thus far form their impressions of what type of person the candidates are.

There's been a lot of discussion tonight, since the debate, that John McCain couldn't look Barack Obama in the eye, that Senator Obama, while he seemed aggressive, particularly at the top of the debate, he seemed to be enjoying himself, whereas Senator McCain seemed exasperated and angry at times. Are those personal issues important at this point in the campaign?

DOUGLASS: Well, as you well know from having watched many presidential campaigns, certainly it matters to voters if they feel comfortable with the candidate. I'm not going to talk about Senator McCain's demeanor. I mean, there's been much certainly talked about on your cable tonight and other channels about how he seemed to be a little tense and unsmiling.

But Senator Obama was relaxed. He was comfortable. He was in command.

And, you know, it seemed pretty clear by the end of the evening that he won the debate. If you look at all the polling that was done, the CNN polling, the CBS polling of undecided voters, all the dial groups, Senator Obama won because he presented a very strong case for moving us out of the eight miserable years of the Bush administration into a period of better domestic and foreign policy for the 21st century.

MADDOW: One last quick question, and it is on political defense. We heard a phrase repeated ad nauseam tonight from Senator McCain, which was that Senator Obama didn't understand, that he didn't grasp the issues.

What's the rejoinder to that from the Obama side?

DOUGLASS: Well, I would just say that Senator McCain doesn't get it. I mean, he's demonstrated in every way that he's completely out of touch.

He is somebody, you know, who is giving tax cuts to the wealthy, when it's the middle class who need the tax cuts. He is somebody who doesn't understand that Americans need to be free of their dependence on foreign oil. He's talking about just, drill, baby, drill.

He demonstrated in so many ways-he thought the fundamentals of the economy were strong. Just last week, you know, he thought the fundamentals of the economy were strong.

So he doesn't get it. That's what he has demonstrated. And he's out of touch.

And when you try to use sort of insulting language, as you did tonight, it doesn't really appeal to voters who are really looking for a positive solution to their own lives and the struggles that they're going through. And if you looked at the polling tonight, the voters didn't like that.

MADDOW: Linda Douglass, senior adviser to the Obama campaign.

Thank you very much for staying up late and joining us tonight. I really appreciate it.

DOUGLASS: Thanks for having me, Rachel.

MADDOW: Joining us again, now that he can hear us, if we're lucky, is Congressman Trent Franks, Republican of Arizona.

Congressman Franks, we're so happy to have you back. Thanks for joining us.

FRANKS: Glad to be back. It's that left wing conspiracy, I'm sure.

(LAUGHTER)

MADDOW: Yes, we control electronics. That's a little known fact.

Let me just ask you about some news that Senator McCain made tonight. He answered with one word, "Sure," when Jim Lehrer asked tonight if he would support the bailout proposal. That was news, and exciting news for Americans who are worried about what the response is going to be from our government to the financial crisis.

Will your fellow House Republicans and will you go along with John McCain on supporting the bailout?

FRANKS: Well, I can tell you that John McCain's trip to Washington transformed this thing in ways a lot of people are not aware of. When he told the president his basic prerequisites for supporting the plan, and when he said that he thought that House Republicans were going in the right direction, that empowered us in a profound way.

And the result is that the end product that's going to be put out here is going to be a far, far better product. It's not going to be the Paulson plan that relied essentially on taxpayers alone to bail out Wall Street. This is going to be something that will rescue Main Street, and it's going to, I believe, bring a lot of private capital into the equation.

It's going to protect taxpayers in a much stronger way than ever would have been done apart from John McCain's influence. And I can say that as a House Republican. Now, you know, he met with the House Republicans today, and he really did empower us. And it was a pretty amazing display of leadership, in my judgment.

MADDOW: Congressman Trent Franks, Republican of Arizona, thank you so much for your time tonight. Sorry about the difficulties earlier.

FRANKS: Thank you.

MADDOW: One big question marked settled tonight with John McCain saying he will support the bailout. We're hearing from Congressman Franks that House Republicans will as well.

Tonight's debate addressed military and veterans issues, as well as economics issue. Military and veterans issues are supposedly John McCain's strongest subject.

Next we'll be joined by Jon Soltz from votevets.org to talk about the two candidates' sharply different views on Iraq, the soldiers coming home from Iraq, and how vets are treated once they're home. What Jon Soltz has to say about McCain's record on veterans may surprise you.

(COMMERCIAL BREAK)

MADDOW: When you're a country in year six of one war, and about to start year eight of another, your presidential foreign policy debate is going to have a lot of war talk in it. At least it ought to. And tonight's did not disappoint.

John McCain, an early and enthusiastic supporter of the Iraq war, tried to press his advantage on the subject by talking a lot about General Petraeus.

(BEGIN VIDEO CLIP)

MCCAIN: We came up with a great general and a strategy that has succeeded. This strategy has succeeded. And we are winning in Iraq. And thanks to this great general, David Petraeus, and the troops who serve under him, they have succeeded, and we are winning in Iraq and we will come home.

(END VIDEO CLIP)

MADDOW: Just two weeks ago, of course, General Petraeus himself cautioned in an interview with the BBC that he wouldn't use words like "victory" to describe Iraq. But that's war and this is politics.

Senator Obama, an early and enthusiastic critic of the idea of going to war with Iraq, turned the debate around on perhaps his most effective attack of the night, telling Senator McCain, "John, you like to pretend like the war started in 2007. You talk about the surge..." And then he said this...

(BEGIN VIDEO CLIP)

OBAMA: When the war started, you said it was going to be quick and easy. You said we knew where the weapons of mass destruction were. You were young. You said that we were going to be greeted as liberators. You were wrong. You said that there was no history of violence between Shia and Sunni, and you were wrong.

(END VIDEO CLIP)

MADDOW: McCain's rejoinder was that Senator Obama refused to say what General Petraeus also will not say, which is that McCain believes we are winning in Iraq. Obama said that's not true, that's not true, but the debate moved on, hitting Afghanistan, Russia, Pakistan, Iran, before at the close McCain gave essentially an unanswered soliloquy on his support for veterans.

(BEGIN VIDEO CLIP)

MCCAIN: I know the veterans. I know them well. And I know that they know that I'll take care of them.

And I've been proud of their support and their recognition of my service to the veterans. And I love them, and I'll take care of them. And they know that I'll take care of them. And that's going to be my job.

(END VIDEO CLIP)

MADDOW: Perhaps because he is not a veteran, Senator Obama decided to let

this go. But, you know, McCain was the opposition on the recent landmark

G.I. bill. He opposed it early on, and he did not bother to show up to vote for it in the end.

On his legislative record, Iraq and Afghanistan Veterans of America give John McCain a grade of D, as in doh, compared to Obama's B, as in better. Disabled American Veterans gave McCain a 20 out of 100, compared with Obama's score of 80.

Joining us now is Iraq war veteran Jon Soltz, who co-founded and chairs votevets.org.

Jon, it's nice to see you. Thanks for being here.

JON SOLTZ, CO-FOUNDER & CHAIR, VOTEVETS.ORG: Yes, it's great to be on the show.

MADDOW: Senator McCain repeatedly spoke tonight about veterans, how much he literally loves them. He used that word, how he will care for them.

As the chairman of a veterans organization, what was your reaction?

SOLTZ: Look, it's a joke at this point. When I was in Iraq in 2003, we were literally taking plates that we found, Iraqi plates, and putting them into the vests of American-you know, we didn't have our own body arm plates.

And Senator McCain voted twice in 2003 against a billion-dollar appropriations for National Guard and Reserve units that would have put these plates in there, the Landrieu Amendment in May of that year, then again in the Dodd Amendment in 2003.

The dwell time issue in 2006 last year was a huge issue. If you spend 12 months in Iraq, you get 12 months at home. John McCain led the opposition to that.

In 2003, because the military was going to be overextended for this war, he opposed increase in the size of the military.

And then the G.I. bill vote. I mean, it's the signature piece of legislation this year for veterans. It would have given these kids the same advantages their grandparents had. And he carried the water for the White House on this issue. And when it came down to the point it was going to pass, he hung out with the owner of the San Diego Chargers at a political fund-raiser with his lobbyist friends.

So, it's a joke. And if Senator Obama is not going to hold him accountable, no problem, because votevets.org will.

MADDOW: When you say Senator Obama will not hold him accountable, were you surprised to see Senator Obama let him make those proclamations without hitting him back? Do you think it would have been a hard thing for Obama to do politically?

SOLTZ: Look, Senator Obama has his own style. He's going to talk about what he wants to do.

Senator Obama is not a veteran. That's fine. Look, you know, that's why there are groups out there like Disabled American Veterans, like votevets.org.

I mean, we're going to come after Senator McCain on this issue. The G.I. bill issue is not going to go away. The fact that he doesn't support full mandatory funding for the Veterans Administration, these issues are not going to go away.

The guy talked in the first part of the debate about how cheap he is. Look, he's too cheap for the vets. We know it. He was too cheap to pay for the G.I. bill. And we're going to hammer him on it.

MADDOW: When you look at John McCain's record on veterans issues and on support for the active duty military, Guard and Reserves, do you feel like there's a pattern there of him supporting efforts that are Republican in origin and opposing those that are Democratic in origin regardless of the objective value of the bills, or do you feel that he's voting consistently against any additional funding for the military and for veterans regardless of whose idea they are?

SOLTZ: He votes with the Republicans. The only issue he wasn't voting with the Republicans on was this issue of the torture. He was very much against torture until he got the Republican nomination, where he flipped his stance on it.

The waterboarding issue. The waterboarding issue, it's against the Geneva Convention, it's against and the Army field manual. And he could not hold that moderate stance that he was holding and-to appease his Republican base, so he switched on that.

But the rest of the issues with the G.I. bill, with the Webb/Hagel dwell time bill, which would have given troops just as much time at home as in Iraq, he votes just like George Bush. On the war in Iraq, the policy of retreat against al Qaeda in Afghanistan and waving the white flag of surrender at bin Laden, he's been supporting that policy by keeping 90 percent of our Army in Iraq.

His foreign policy proposals don't add up. You can't increase the size of the Army. Send more troops to Afghanistan and stay in Iraq 100 years. So he looks very much like George Bush, except for his flip-flop on torture.

MADDOW: Jon Soltz, Iraq war veteran, co-founder and chairman of votevets.org.

It's great to see you, Jon. Thanks for coming in.

SOLTZ: Yes. Thanks for having me.

MADDOW: Both Barack Obama and John McCain pronounced a lot of very hard foreign words tonight at the debate. They did a better job on some of the big words than others. But for the big important issues in foreign policy, we're next going to be joined by foreign policy expert Joseph Cirincione to talk about how well the candidates understand some of the scariest things in the world.

(COMMERCIAL BREAK)

MADDOW: Before the onslaught of complete economic meltdown last week, foreign policy and national security were to be the sole focus of this evening's debate. As it happened we got to the foreign during the last 50 of the 90 minutes that were allotted. Senator Obama has long maintained the war in Afghanistan should be the central focus of our military abroad right now. And he criticized Senator McCain's focus on Iraq.

(BEGIN VIDEO CLIP)

OBAMA: It is not true that you have consistently been concerned about what happened in Afghanistan. I mean, at one point, while you were focused on Iraq you said, well, we can "muddle through" Afghanistan. You don't muddle through the central front on terror and you don't muddle through going after bin Laden.

(END VIDEO CLIP)

MADDOW: Senator McCain responded with a comment about intermarriage and the Taliban and al Qaeda which I did not understand and then he pronounced a profound inaccuracy about Pakistan's pre-Pervez Musharraf government.

(BEGIN VIDEO CLIP)

MCCAIN: We are going to have to help the Pakistanis go into these areas and obtain the allegiance of the people. It's going to be tough. They've intermarried with al Qaeda and the Taliban.

I don't think that Senator Obama understands there was a failed state in Pakistan when Musharraf came to power. Everybody who was around then and had been there and knew about it knew that it was a failed state.

(END VIDEO CLIP)

MADDOW: A failed state? If by failed state you mean democratically elected government that was removed by Musharraf's military coup, then OK. But otherwise.

This was a part of a recurring theme about the night. Senator Obama speaking with certainly about world affairs, Senator McCain questioning Obama's bona fides saying he had not been there, he didn't understand. And then roughing out the edges of some facts to prove his point. At least that's how I saw it. We're joined now by Joe Cirincione, president of the Ploughshares Fund, a global security foundation, to find out how he saw it.

Hi, Joe, nice to see you.

JOE CIRINCIONE, PLOUHSHARES FUND: Thanks for having me on, Rachel.

MADDOW: I'm going to ask you a very difficult question that I could not answer if anybody asked it of me. And that is this: What is John McCain's policy on Afghanistan?

CIRINCIONE: Huh. Well, he sees Afghanistan as the secondary issue in the region. He is focused as you pointed out on Iraq and wants to commit most of our troops there. It's not that he ignores the war on Afghanistan but sees it as something we will take care of after victory in Iraq. For Barack Obama it's exactly the opposite. He thinks that Iraq is the war we never should have waged and Afghanistan is the war we cannot afford to lose. Afghanistan is where the real front against al Qaeda is being waged in the Afghan/Pakistan border region. That's where Obama wants to take the fight.

MADDOW: On the issue of the connection between Iraq and Afghanistan and the priority between them, it is my sense that if we keep a large number of troops in Iraq indefinitely, of course, John McCain has infamously used the term 100 years, 1,000 years, 10,000 years to talk about the opportunity to keep troops there in large numbers for a very long time. Doesn't that preclude any large infusion of new American troop strength into Afghanistan even if we agreed that was the right thing to do?

CIRINCIONE: Yes. It does. Exactly. The commitment of troops to Iraq over such a long period of time has strained our military to the breaking point. And it has restricted the number of troops who can actually shift to Afghanistan. So you heard Senator McCain talk about the troop levels in Afghanistan that have risen, which is true, as being enough, as being adequate for the moment.

I don't know really many people who believe that. And the commanders in Afghanistan have repeatedly over the last several years called for more troops to the battle. And Barack Obama wants to add those troops but he also has a comprehensive view of the situation. He understands it's not just a military victory that can be won in Afghanistan. We're going to have to have economic aid. We're going to have to have political reform and we're going to have to be dealing with Pakistan at the same time. He offers a comprehensive approach to the region.

MADDOW: Joe, I know that you are a real expert on public policy issue, foreign policy issue that does keep me up at night. That is the issue of loose nukes, about terrorists potentially getting their hands on a nuclear weapon or nuclear materials sufficient to create some sort of radioactive, a dirty bomb. Did you hear anything tonight, new on that subject? Either that broke new policy ground or shed new light on either candidate's record on that subject?

CIRINCIONE: Well, there were a couple of minor mistakes that Senator McCain made. He incorrectly identified the Nunn-Lugar which he did help support in the early 1990s as dealing waste and nuclear fuel, that's not true. It's designed to control nuclear weapons and secure and eliminate nuclear material for weapons. But I was surprised that Senator McCain didn't go into the nuclear proliferation effort. This is actually one of the most progressive parts of his national security portfolio where he has actually got some very good positions. By not going into it, he left the field open for Barack Obama and Obama knocked it out of the park on this issue. You got to see, I think, some of the best answers from the night on Obama were on the issue of Iran. On the issue of the number one threat to the national security of the United States. It's not Iraq. It's not Iran. It's not North Korea. It's the threat of a nuclear terrorist attack on the United States.

And Obama's got a comprehensive plan, again, here on how to address this on a number of levels simultaneously. It's one of the reasons he's so focused on Afghanistan. Where is Osama bin Laden? Osama bin Laden is in Pakistan right now. Pakistan's an unstable country with strong Islamic fundamentalist influences and oh, by the way, enough material for 50 to 100 nuclear weapons. Osama bin Laden is closer to a nuclear bomb now than he ever has been. The threat has grown over the last five to eight years.

That is why Barack Obama wants to shift the focus over there, to catch Osama bin Laden, to secure those nuclear materials before it's too late.

MADDOW: That is the issue on which policy dorks who support Barack Obama started supported him before it was clear that he was going to run for president. If that's the thing, if you ask wonks, that why wonks like him. Joe Cirincione, president of the Ploughshares Fund, thank you. Looking forward to having you back sometime soon at a more reasonable hour.

CIRINCIONE: Thank you, Rachel.

MADDOW: If you played a drinking game with your friends, consuming some intoxicants at various keywords during the debate, well you're probably asleep or just hours away from a hangover at this point. The candidates knew which phrases they wanted to say then they sure said them. I heard "Senator Obama doesn't understand" delivered with dizzying frequency. Which messages stuck and which ones didn't? We're into the battle for stage craft supremacy, when we come back.

(COMMERCIAL BREAK)

MADDOW: As has been the case with every televised debate since the modern era began in 1960, both candidates John McCain and Barack Obama declared victory before Jim Lehrer said good night tonight. Senator McCain actually said it this morning via an Internet ad before John McCain had even confirmed that he would take part in the debates. Oops.

So that means I think you can ignore the campaign spin. It's left to the country to decide. How is a debate won these days anyway? And who won that one? To answer that question, we do get to get into the cringey stuff where they get all confrontational. The stuff everyone remembers and acts out with finger puppets and kittens on YouTube tomorrow.

The candidates, for example, repeatedly trade punches on Iran and on whether the president of the United States should sit down with Iranian leaders. Obama had the facts on his side when he said that former Secretary of State Henry Kissinger recently argued for talks with Iran without preconditions.

Kissinger has issued a statement denying that but there does seem to be awkward news reporting and transcripts floating around implying he said something quite different just a couple of weeks ago. Even though he had the facts on his side, Obama seemed to let McCain get away with this little bit of nonsense.

(BEGIN VIDEO CLIP)

MCCAIN: So let me get this right. We sit down with Ahmadinejad and he says we're going to wipe Israel off the face of the earth. And we say, no, we're not? Oh please. By the way, my friend Henry Kissinger who has been my friend for 35 would be interested in hearing this conversation. And Senator Obama's depiction of his opinions on the issues. I've known him for 35 years and I guarantee .

OBAMA: We'll take a look.

MCCAIN: He would not say that presidential top level. Of course he encourages and other people encourage contacts and negotiations and all other things. We do that all the time.

(END VIDEO CLIP)

MADDOW: You can hear Obama saying we will take a look. We will take a look. You have to win the debate at the podium. You can't win it in the fact check or online later. But before the candidates even got to the subject of whether we should meet with Iranian leaders, John McCain did have trouble pronouncing one of them.

(BEGIN VIDEO CLIP)

MCCAIN: Here is Ahmenadinejad - Ahmadinejad. Who is-Ahmadinejad .

(END VIDEO CLIP)

MADDOW: Yeah, got it. As for other hard to pronounce foreign leaders, Barack Obama managed to lob off a zinger on McCain's apparent reluctance to meet with the Spanish prime minister, Jose Luis Rodriguez Zapatero.

(BEGIN VIDEO CLIP)

OBAMA: He even said the other day that he would not meet potentially with the prime minister of Spain because he wasn't sure whether they were aligned with us. I mean, Spain? Spain is a NATO ally. If we can't meet with our friends I don't know how we're going to lead the world in terms of dealing with critical issues like terrorism.

(END VIDEO CLIP)

MADDOW: Barack Obama won points on that one. It was as much for what he said, as it was the style with which he said it, the facial expressions, the hand gestures and the overall body language.

Interestingly, though, it was John McCain who repeatedly brought up his own age as an issue.

(BEGIN VIDEO CLIP)

LEHRER: Say it directly to him.

OBAMA: The-John, 10 days ago you said the fundamentals of the economy were sound.

MCCAIN: Were you afraid I couldn't hear him?

(END VIDEO CLIP)

MADDOW: We're joined now by MSNBC political analyst Lawrence O'Donnell.

Lawrence, thanks very much for joining us.

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Good to be with you, Rachel.

MADDOW: I have to ask you the big question first, 90 minutes of very serious debate without interruption. Was there a clear winner?

O'DONNELL: I don't think there was a clear winner. What the conventional wisdom says to that, to which I subscribe, when there's a leader in the polls which there is now with Barack Obama and nothing really changes the shape of things in the debate, then the leader in the polls is the winner. This was supposed to be about foreign policy. Everyone knows that John McCain polls well ahead of Barack Obama on the internals of the poll that ask about being an effective commander in chief. But one of the not noticed details of a lot of these polls is that they're virtually tied on the question of which one will be more effective in managing the war in Iraq.

So Obama is basically tied with McCain on that question. And there was nothing I think that happened tonight that allowed McCain to really open up a bigger gap there between the two of them. I think Obama's most effective moment was when he hammered McCain on what McCain was wrong about in Iraq, starting with weapons of mass destruction and it being an easy war to win and so forth.

MADDOW: We saw a shift in temperament over the course of the 90 minutes from Senator Obama. He was very aggressive, even interrupting at times at the start of the debate. By the end of the debate he was his more familiar, cooler self. In terms of Senator McCain's temperament, we saw some exasperation, certainly and we also saw Senator McCain, I think-my sense was that he didn't enjoy being on stage with Obama. He didn't look like he was having a good time. Does that matter at this point in time? Do personality issues like that matter?

O'DONNELL: A little bit. The swing voters at this point use odd little things in their final decision here. Certainly John Kennedy proved that your manner on the stage matters a lot. Obviously McCain is much stiffer in this situation than Obama was. And Jim Lehrer was desperately, especially at the beginning, was trying to get them to loosen up, mix it up and loosen it up and to address each other.

This by the way was inspired directly by the debate we did in the "West Wing" in the final season and I actually asked Jim Lehrer to moderate that debate and he could do it for two reasons. One is PBS has a rule against their news personnel appearing in fictional contexts and number two, Jim Lehrer wrote that rule.

But we did run a debate where we loosened the format up a great deal. I actually talked to Jim Lehrer afterwards. And he really liked it. I know the debate commissioners looked at those tapes of the West Wing debate. That's what they were trying to get, is the loose thing where they would go at each other. And Jim was going to be happy to sit back and let them ask the questions of one another. Neither one could fully engage on that, especially McCain who really couldn't even turn to look at Obama, couldn't really acknowledge his presence. He's just not comfortable with that.

MADDOW: I think that was awkward and I think that's what probably drove the change in temperament from Senator Obama. You can't keep looking at somebody and physically turning yourself toward them and being aggressive toward them if they will not look back at you if you are not by nature a bully. We don't get the sense he's a bully. I think that may have explained why his demeanor changed, I think not to his advantage in the debate.

One last question, Lawrence. And again, these are very broad-stroked pictures. If john McCain is seen as being a foreign policy expert, if he's seen as being the guy who has war credibility in some way or not-some way or another, the fact that he didn't blow Barack Obama out of the water here at this debate, is that not in effect a loss by virtue of the fact that it wasn't a big win?

O'DONNELL: In effect, yes. This was his chance to pull away, this was his chance to create a real gap between him and Obama in terms of this issue, this territory. And he didn't do it. And I also think that he introduced at least to my ear, he introduced a big kind of-he dragged a ghost up on the screen there, the ghost of Sarah Palin. For me, the more he hammered Obama on how many times you've been to Iraq and all of these places around the world and all of that fluency that you have to have and experience on the ground around the world, it seemed-the question seemed to loom larger and larger, why did you choose this person to be your vice president?

And I think we're going to hear something about that in the vice presidential debate. We didn't get to it tonight. But it just-it seemed to me that the way McCain was framing this, it raised more doubts about the wisdom of choosing Sarah Palin than anything Obama's ever said about it.

MADDOW: I think of the Obama campaign itself is very aggressive, we'll hear something about them about that same issue, from them within a couple of hours. Thank you, MSNBC analyst Lawrence O'Donnell. Always nice to see you.

O'DONNELL: Thanks, Rachel.

MADDOW: One thing we learned for sure is that John McCain really, really, really hates the earmarks, condemning specifically a $3 million study on the DNA of bears in Montana. We have to wonder if he's equally hostile to a $3.2 million study on the genetics of seals promoted by the governor of Alaska, what's her name again? Oh, yeah, Sarah Palin.

Coming up, we'll fact check the debate. And there's plenty to get to.

(COMMERCIAL BREAK)

MADDOW: The economy took up almost half of tonight's supposed foreign policy debate for obvious reasons. After Senator McCain declared earmarks, government spending and higher taxes and declared his fitness to lead on the economy, Senator Obama took one of his squarest shots of the evening.

(BEGIN VIDEO CLIP)

OBAMA: John, it's been your president who you said you agreed with 90 percent of the time, who presided over this increase in spending.

(END VIDEO CLIP)

MADDOW: Here was John McCain's response to that.

(BEGIN VIDEO CLIP)

MCCAIN: It's well known that I have not been elected Miss Congeniality in the United States Senate nor with the administration. I have .

(END VIDEO CLIP)

MADDOW: Maybe, maybe not, Mr. Super Uncongenial. But what does that have to do with the economy again? Joining us now for a little fact checking is syndicated columnist David Sirota. David, thanks very much for joining us.

DAVID SIROTA, SYNDICATED COLUMNIST: Thanks for having me, Rachel.

MADDOW: Looking at the first part of the debate, on the economy, it was the first 40 minutes of a 90-minute debate. Any big fact McCain or Obama was off on?

SIROTA: I thought the biggest one was John McCain saying America has the second highest corporate tax rate in the world when in fact the Bush administration's Treasury Department says that as a percentage of our GDP we have the second lowest and just a couple weeks after the GAO said that most corporations in the United States pay no income taxes at all. If John McCain wants to make an argument that corporations are oppressed and the government isn't doing enough by giving 700 billion ads way to Wall Street for corporations, if that's going to be his economic argument, I say that's great for Obama.

MADDOW: What about the big argument that McCain made over and over and over again that he is incredibly getting credit from tonight in some quarters for having said the reason we're in a financial crisis is because we need to cut the budget. Because there's too much government spending. That seemed like a complete economic non sequitur to me and I don't even get economics so well.

SIROTA: It is a total economic non sequitur. You are absolutely right. This financial crisis has nothing to do with nondefense discretionary spending.

The most amazing thing was McCain says first he is concerned about defense cost overruns and then he says when asked about the budget, I want to freeze all spending except for defense spending. When in fact nondefense spending is at its lowest level as a percentage of our budget since the 1960s and headed down to the Hoover levels of the 1920s.

MADDOW: David, McCain also brought up the old Republican scare tactic that Barack Obama and the democrats want to turn over health care to the federal government so families and doctors won't be allowed to make decisions anymore. It will just be Barack Obama deciding whether you get that mole removed. What about that?

SIROTA: Right. Again, because Medicare is so unpopular. Not. Medicare is like the most popular program in American history. The fact is, polls have shown consistently, consistently, that Americans, both Republicans and Democrats support the concept of a government sponsored universal health care program. Again, if this is McCain's economic argument, I think it's terrific for Obama.

MADDOW: Last question. That's on the big news made tonight. John McCain in sort of a throw-away line announced that he was supporting the bailout plan for Wall Street. You have been one of the leading populist voices on this issue. What do you think the political implications are of that move?

SIROTA: I think because Obama is supporting it, I think that they-it's not going to be as politicized an issue. I think the thing that's disturbing about the whole thing, McCain is saying, look, because Republicans and Democrats got together, this bailout must be good. Let's not forget, the Republicans and Democrats in Washington got together to authorize the Iraq War, to authorize the PATRIOT Act. I think this bailout bill is a nightmare. I think it's bad for Obama to support, I think it's bad for McCain to support. I think it is going to fuel that anti-Washington climate. I'm not sure who it's going to help if they both support it.

MADDOW: I think you're right. There is going to be populist flak left right and center for everybody supporting this to take. Nobody has come up with a coherent response to it yet. Syndicated columnist David Sirota, thank you for staying up late and joining us tonight.

SIROTA: Thanks for having me, Rachel.

MADDOW: We will be back in just one moment.

(COMMERCIAL BREAK)

MADDOW: So that's it for debate number one. Next up, Biden and Palin from Washington University in St. Louis on Thursday. I'm so looking forward to that. Thank you for staying with us. We'll see you here Monday night at our regular time. 9:00 Eastern with all the news we have time for. Until then, have a great, great weekend.

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

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