updated 10/3/2008 10:55:15 AM ET 2008-10-03T14:55:15

RACE FOR THE WHITEHOUSE

October 2, 2008

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

Guests: Eugene Robinson, Pat Buchanan, Michelle Bernard, John Harwood, Stephanie Cutter, Lloyd Doggett, Adam Putnam, Nicole Wallace, Kathleen Parker

DAVID GREGORY, HOST: Tonight, show time in the Show-Me state. Perhaps the most anticipated of the campaign debates, Biden versus Palin. Is it the mismatch many are anticipating, or might Governor Palin surprise?

The importance of tonight's debate might be overshadowed by the country's financial meltdown. Will that bailout package survive a second look in the House after the Dow takes another dive, off nearly 350 points?

That and more, as the RACE FOR THE WHITE HOUSE rolls on. Thirty-three days to go in the race for the White House. Welcome to the program. I'm David Gregory, in New York tonight. My headline, "Biden v. Palin: Expect the Unexpected."

Reports tonight say Palin, who has fallen short during recent TV interviews, will go on the offensive tonight against Senator Biden in a match-up that does appear to favor the more experienced Biden. Debates, however, aren't just about what you know, but how you connect with voters; notably, those undecideds and Independents out there watching.

Well, tonight, with the economy crumbling and a war on two fronts, the stakes are high for two candidates running to serve a heartbeat away from the presidency. Both VP candidates have been sequestered all week to prepare for tonight but have taken time to ramp up expectations.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I do look forward to Thursday night and debating Senator Joe Biden.

Well, I've never met him before, but I have been hearing about his Senate speeches since I was in, like, second grade. I have to admit, though, he's a great debater and he looks pretty dog gone confident like he's sure he is going to win.

(END VIDEO CLIP)

SEN. JOE BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: How do you debate a woman? And how do you do this?

Folks, it's 2008. There an awful lot of very, very accomplished women holding high public office that I debate, and we beat up each other every day in the United States Senate.

(END VIDEO CLIP)

GREGORY: According to the latest "Washington Post"/ABC News poll, Palin faces the bigger challenge tonight. Just 35 percent of voters say Palin has the experience to be an effective president, 70 percent say that about Senator Biden.

Among Independent voters, this is important, nearly two-thirds, 63 percent, say they believe that Governor Palin does not have the experience to be president-the experience needed to be president. This is a major shift from the enthusiasm that Palin enjoyed immediately following her selection as McCain's vice presidential candidate. Palin had catapulted to political rock star status, you'll remember, but in the last week that popularity appears to have faded.

Coming to us tonight from the site of tonight's debate at Washington University in St. Louis is John Harwood, CNBC's chief Washington correspondent and political writer, of course for the "New York Times." Also with us; former presidential candidate and MSNBC analyst, Pat Buchanan; and president of the Independent Women's Forum, Michelle Bernard; as well as Gene Robinson, columnist and associate editor for "The Washington Post." Pat, Michelle and Gene, all, of course, MSNBC political analysts.

All right, Pat, I want to start with you. This is what Politico is reporting tonight about the Palin we're going to see tonight.

To the quote board.

"Sarah Palin plans to go on the attack in tonight's debate, hitting Joe Biden for what she calls his foreign policy blunders and penchant for adopting liberal positions on taxes and other issues. 'This is going to finally put her back into a position where we see her like we saw her the first couple of weeks,' a McCain official said.

"'She was herself. She was authentic. And people related to that. Tonight she'll get into a rhythm. You're going to see her in a way that you haven't seen her yet.'"

Pat, which Palin is coming tonight?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: I hope that's the Palin that's coming tonight. I think that is exactly the right thing to do. I think what we have to see is the gal that really electrified the nation for two weeks after she was nominated or chosen by John McCain.

Secondly, David, she has a threshold she has to cross here, something like Obama's. She has to be credible. She has to come off as a credible vice president of the United States and someone who can learn and move up into the office of president of the United States.

Finally, I think the important thing for her to do, realizing just like Reagan didn't have as much information as Carter, she has to come off I think with some good, attractive witty one0liners that on "MORNING JOE" and tomorrow night we're putting on the air.

GREGORY: Michelle, what do you say? What does she do tonight?

MICHELLE BERNARD, MSNBC POLITICAL ANALYST: Well, you know, I think that she's got to do what we just saw Politico talk about. But also, David, I think it is very important coming off a couple of weeks of some pretty horrible interviews that Sarah Palin demonstrates to the American public that she can answer a question and that she can do so not really in small sound bites, but in lengthy sentences.

GREGORY: Right.

BERNARD: She's got to show a very good grasp of domestic and foreign policy. And quite frankly, I think she needs to look more like vice presidential material tonight.

I think that people are thinking, does she have enough experience to be president should that become necessary? And I think because of that, and because of Senator McCain's age, and the fact that some Americans are looking at that, that she absolutely has to give people the impression that she looks presidential and she could, in fact, be president on day one if that ever became necessary.

GREGORY: John Harwood, let's talk about sound bites. This is the one a lot of people are talking about from Palin's interview with Katie Couric on CBS.

(BEGIN VIDEO CLIP)

KATIE COURIC, "CBS EVENING NEWS": What other Supreme Court decisions do you disagree with?

PALIN: Hmm, well, let's see, there's-of course in the great history of America there have been rulings that there's never going to be absolute consensus by every American.

(END VIDEO CLIP)

GREGORY: You know, John, as I look at that, I think there is a lot of political figures who might actually struggle with that question beyond Roe v. Wade, what are some of the major Supreme Court decisions that they disagreed with. Is that an example of what really hurts her or is that an example of a "gotcha" question?

JOHN HARWOOD, CNBC CHIEF WHITE HOUSE CORRESPONDENT: Well, I think, David, in its totality, the series of interviews has shown somebody who is not well versed in national issues, who appears to not have thought very deeply about them. And she's got to try to come back in this debate tonight and show what there is that's special about her that caused her to get elected governor of Alaska, that caused her to get 85 percent approval ratings, that caused a lot of people to be pushing her candidacy and John McCain to pick her, and then light a fire under that Republican convention.

It's hard to say precisely what that is. Part of it is going on the attack. She was very effective on the attack at this convention. But she also does have to show some understanding, and especially in the context, David, of this financial crisis, which now has placed a different coloration on the election, which I think raises the stakes for her having to show that she has got something to offer John McCain and that they together can offer the country something to help us get out of this.

GREGORY: Gene, I just want to point out that in Denver tonight, John McCain is speaking at a rally right now. We'll show you some live pictures of that event as he prepares to watch his choice of running mate face off against Joe Biden tonight.

Here's the question, Gene. What is different tonight in 2008 than '04 or 2000, when there's a lot of focus in these debates not on policy, but about the ability of these candidates to connect, connect on issues, connect on personality? Is it a different voter with a different mindset today?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: No, I don't think so. I think voters always wanted to get that sense of connection from candidates, find out who they are. I think voters always looked at the debates not strictly for the substance of, you know, a candidate's position on this or that, but how they came across and whether they were presidential, whether they were, you know, too partisan or combative, whatever criteria they wanted to use.

The stakes are higher this time I think for Sarah Palin, I mean, you know, because of the Couric interviews, basically. I mean, she's got to give a better answer than she gave on the fiscal crisis.

GREGORY: Right.

ROBINSON: She's got to give an answer that parses, that makes sense.

And she is going to challenge Joe Biden on his foreign policy blunders? That would be fighting on Joe Biden's turf, and I would not advise that for Sarah Palin.

GREGORY: Let's talk about some other polling here as we flip it around and talk about the test for Joe Biden tonight, because there are some real stakes and some real tests for him, as well.

"Washington Post"/ABC polls, "Who understands the complex issues tonight?" Again, advantage Biden, 75-46.

"Who understands problems of people like you?" This is striking.

Even terrain there, 57 -58.

It leads me to how she's used these debates to talk more personally. "The Anchorage Daily News" wrote this: "What will we are be looking and listening for? A Sarah Palin who isn't reading scripted lines, a Sarah Palin who has some command of the answers she's giving, a Sarah Palin who answers the questions she's asked rather than deflecting them. Alaskans particularly will look and listen for the Sarah Palin they know, not the carefully managed national campaigner, but someone closer to the candidate and governor who could hold her own without handlers."

Michelle, how is this debate preparation different for Joe Biden, not just on the question of connection, but also because she is a woman?

BERNARD: Well, Biden's got to be very careful because I think people will remember Rick Lazio's problem when he debated Senator Clinton, and some of the problems that occurred in the Geraldine Ferraro debate a few years ago. He's really got to avoid being condescending, he has to avoid being paternalistic, or in any way just acting-you know, trying to give the impression that Sarah Palin does not belong on the same debating ground as he does.

GREGORY: Right.

BERNARD: I think, you know, the debate tonight, really, David, is Sarah Palin against Sarah Palin. You know, it is hers to win or lose. And I think if Biden can just be gaffe-free and stay out of her space, and really talk about the issues and continue to connect with working class voters, he'll do fine.

GREGORY: Pat, talk about Joe Biden tonight, his test and potential pitfalls.

BUCHANAN: I think what Joe Biden's got to do is behave there as a gentleman, answer his questions straight, keep his answers brief. And if she sticks needles in him, be sure to react in a friendly way when you respond. Don't get angry. Don't get some kind of taped piece there where they can turn around, where the country is cheering her and not you.

Because my guess is she is going to have some good lines tonight. And frankly, Joe Biden has been on the left side, whether you go back to Vietnam, you go back to the Reagan era, that she can hit him on which will satisfy conservatives enormously. And if he comes flaring back, I think it might be to her advantage if she's prepared.

GREGORY: John, I want to take about 30 seconds to talk about the political reality and landscape tonight. The economy, polls that are trending in Obama's direction, and word again, reporting from Politico and AP tonight, about a renewed targeted focus on the electoral map of the McCain campaign.

HARWOOD: Look, I talked to a senior Republican member of Congress tonight who said he thinks the election has basically been lost over the last couple of weeks. That Republicans elsewhere in House and Senate races are also dropping. That this is looking to be a very, very unfavorable election for them.

So Sarah Palin can be part of the solution if she can turn that around, stop the bleeding, whatever you want to call it. But they are in a very, very difficult box right now.

GREGORY: All right.

And again, some of the reporting indicating that the McCain camp believes they have got to win a state in the upper Midwest, in the industrial part of the country, Pennsylvania, Minnesota or Wisconsin, if they are going to stay competitive here, alongside reports that there is a pullback, at least, if not a complete pullout, by the McCain campaign from Michigan, a state where they wanted to put Obama on the offensive.

More on that later. We'll come back after a break.

And coming next, I'm going to go one-on-one with an Obama adviser about Joe Biden's strategy for tonight's vice presidential debate.

The showdown coming up in a few hours' time.

The RACE FOR THE WHITE HOUSE returns right after this.

(COMMERCIAL BREAK)

GREGORY: Back now on THE RACE.

Senator Biden has said he is not going to underestimate his opponent, Governor Palin, in tonight's debate.

Joining me now from Washington University in St. Louis, senior adviser to the Obama campaign, Stephanie Cutter.

Stephanie, good to see you.

STEPHANIE CUTTER, SR. ADVISER, OBAMA CAMPAIGN: Hey, David. How are you?

GREGORY: I'm very well, thank you.

There's a lot of concentration on Governor Palin tonight, but with all of that, there are still questions about Senator Biden as well, and the shades of Senator Biden that can appear.

So which Senator Biden appears tonight? What have you advised him to do?

CUTTER: You're going to see the same Senator Biden that you see every day, someone who speaks passionately about the middle class, never forgot where he came from, and is a true partner to Barack Obama, and shares the vision of where we want to take this country. You know, what you see is what you get with Joe Biden, and that's what you're going to see tonight.

GREGORY: Is the focus for him John McCain and not Sarah Palin?

CUTTER: The focus for him is to talk about Barack Obama and Joe Biden and where they want to take the country, and the clear choice in this election between the Obama/Biden ticket and the McCain/Palin ticket. You know, Palin is John McCain's running mate, so we assume that she shares the same philosophies, including the same failed economic philosophies that have led us into the economic crisis.

So to the extent that applies to her, you'll be hearing talk about that, too. But, you know, I think at the end of tonight the choice will become even clearer between these two different teams and where they are going to take the country.

GREGORY: Both candidates can be put on the defensive tonight. And my colleague from "The Atlantic" magazine, Jeffrey Goldberg, posed this question on the op-ed page of "The New York Times" today based on an episode that you might remember having worked for Senator Kerry back in 2004.

This is the question he asked: "Senator Biden, you told me once that shortly before the 2004 election you advised John Kerry to respond harshly to a new Osama bin Laden videotape. It turned out that you did not, in fact, even speak with Senator Kerry until well after he had issued a vigorous denunciation of bin Laden."

"This episode is one in several in which you have appeared to exaggerate your importance. Recently, you spoke of being 'shot at' in Iraq. This, too, turned out to be false. Why should voters trust you after you have made so many provably embroidered assertions?"

How do you answer that?

CUTTER: Well, that doesn't seem to be very factful. You k now, I can't speak to whether Joe Biden and John Kerry spoke before John Kerry made his first statement on that bin Laden tape. I frankly don't remember it.

But I do know that Joe Biden was shot at in Iraq. And you ask this of his fellow senators, including Lindsey Graham.

You know, a rocket landed 300 feet from them. I call that shot at. So, you know, I think that the McCain/Palin strategy is clear. They are going to try to make this about Joe Biden so that it's not about Sarah Palin. They've already forecasted all of these attacks they are going to launch tonight.

You k now, I think that the Sarah Palin that we see tonight is the, you know, "Sarah Barracuda" that we've heard so much about. It's not the Sarah Palin that they have carefully crafted over the past three weeks.

You know, we are fully prepared to take these attacks. But we have a fundamentally different strategy. We're going to talk about where we are going to take the country. So I think that will be clear at the end of the debate.

GREGORY: So the idea that there is a history of exaggeration on the part of Senator Biden you think is unfair?

CUTTER: Well, I'm not sure what exaggeration you are talking about. The Goldberg column that you are talking about today is just factually not sure.

You know, he was shot at in Iraq. And I can't speak to whether or not he called John Kerry, but, you know, offering a candidate advice happens all the time.

GREGORY: Right.

CUTTER: And whenever that advice came in, that's hardly an exaggeration that is going to impact the lives of the American people. You know, if you want to talk about a gaffe, I think the gaffe that people really care about is John McCain and Sarah Palin declaring that the fundamentals of this economy are strong. You know, I don't know much about the economy, but I know that that's not true just looking at the stock market over the past two weeks and its impact on Main Street America.

GREGORY: There's been a lot of attention, obviously, Stephanie, to comments that Governor Palin has made in the course of interviews, and those have been parsed. This is what Senator Biden said on CBS recently about the financial crisis.

Listen.

(BEGIN VIDEO CLIP)

BIDEN: When the stock market crashed, Franklin Roosevelt got on television and didn't just talk about the-you know, the princes of greed. He said, look, here's what happened.

(END VIDEO CLIP)

GREGORY: That was just wrong. A gaffe, and in a couple of places.

CUTTER: So he made a mistake so when Franklin Roosevelt spoke to the nation. Does anybody counter that Franklin Roosevelt didn't speak to the nation about the great pressures they were under?

You know, the focus on these little nitpicky statements, it's not what the American people want to hear. I think when you see Joe Biden tonight, you're going to hear a bigger vision of where he wants to take this country.

What you see is what you get with Joe Biden. You know, he has never forgotten where he's come from. He speaks passionately about the middle class. It's because he's from the middle class, and that makes a big difference.

GREGORY: Stephanie, how has his preparation been different given that Palin is a woman?

CUTTER: You know, David, I don't think it's been any different. You know and I know that he's debated women throughout his entire career, women in the United States Senate, on the Senate floor.

GREGORY: Right.

CUTTER: He's debated Hillary Clinton dozens of times just in this primary campaign. So I don't know, speaking as a woman, how you prepare differently when you are debating the opposite sex.

GREGORY: Well, but wait a minute.

CUTTER: What you want to talk about is where you stand.

GREGORY: Wait a second. You just did it. And we played this earlier in the program.

When asked this question, he is the one who seemed to distinguish between men and women, saying, look, I've debated lots of women in the United States. He is the one who seemed to say that there was some distinguishing characteristic in terms of how he would prepare. Are you saying that there has been no advice given to him?

CUTTER: Did you notice any difference in behavior...

GREGORY: I'm sorry. Let me just ask my question, Stephanie. Excuse me. Let me just ask the question.

CUTTER: Sure.

GREGORY: Are you saying that there has been no advice given to him by members of the Senate, as has been reported, women in the Senate about how to handle Palin?

CUTTER: I'm not going to get into what advice he has been given on this debate. I don't think it would be wise for me to do that. I don't think the other side is speaking freely about the advice given to their candidate.

But I will tell you this, when you see him standing on the stage with Hillary Clinton or Barack Obama or anybody else competing in the Democratic primary, I don't think you would see any difference in how he is treating any of his opponents in that primary race, or any of his colleagues on the Senate floor.

You know, I think-this is the vice presidency of the United States, a heartbeat away from the presidency. That means you have to be prepared to lead. If you can't stand up in a debate and debate your opponent, then what are we talking about?

GREGORY: Tonight will be a success for Senator Biden if what happens?

CUTTER: If the American people have a clearer picture about the choice in this election, the choice between a team that feels passionately about the middle class and wants to strengthen our economy and make sure the middle class is taken care of after eight years of these failed economic policies. A team that has a plan to responsibly get our troops out of Iraq so that we can invest that $10 billion here at home. A team that will take the war on terror to the place where it actually exits, in Afghanistan and Pakistan, and understand what it takes to reverse some of these failed policies that have put us at risk.

We want to have a substantive discussion about where this country is going. We know that she is going to show up tonight and launch these attacks that we've been reading about...

GREGORY: Right.

CUTTER: ... and have been forecasted all day today. You know, but we want something a little bigger, and I think the American people want something bigger.

GREGORY: All right. Stephanie Cutter.

Always good to talk to you, Stephanie. Thanks for coming on tonight.

CUTTER: Thank you, David. Take care.

GREGORY: We'll be watching.

You are looking live, by the way, at John McCain holding a town hall in Denver right now. Obama and McCain are taking a back seat to the number twos today. We'll tell you what Obama was up to. It's on THE RACE's radar, coming right up.

(COMMERCIAL BREAK)

GREGORY: Back now with a look at what else is on THE RACE's radar tonight.

The attention is on the VP candidates today, of course, but Senators McCain and Obama both hit the campaign trail today. Right now, McCain holding a town hall in Denver, Colorado. It's going to be a hard-fought state, a state that Bush won, of course, in 2004.

Meanwhile, Senator Obama had two campaign stops in Michigan today, a day when the Politico and the AP reported that McCain's campaign is pulling back from Michigan. Our political unit confirms that, indeed, McCain is pulling back, but is not out of the race entirely in Michigan. And in fact, McCain launched some new radio ads there today.

Check back with the panel.

Pat Buchanan, take this one on in Michigan. That was a state where McCain probably wanted to put Obama on the defense. Is he no longer able to do it?

BUCHANAN: Well, it sounds like he is no longer able to do it and that he's written that one off temporarily. And he's probably putting all his eggs in the Pennsylvania basket as a breakthrough state. He of course has to have Ohio, has to have Florida, and I think has to have Colorado, or he's got to pick up Wisconsin. So I think he's basically retrenching, drawing internal lines a little bit shorter than they were.

GREGORY: All right. We've got to take another break here, come back.

Coming next, the battle over the bailout. I'm going to talk to congressmen from both sides of the aisle about the revised bill and what happens if it doesn't pass this second go-around.

Plus, more on tonight's VP debate. I'm going to take to McCain senior adviser Nicole Wallace about Governor Sarah Palin's strategy.

That's coming up in a few minutes. A live picture from Washington University St. Louis.

THE RACE comes right back.

(COMMERCIAL BREAK)

GREGORY: The bailout bill is back in the hands of the House, with tomorrow's vote on the 700 billion dollar rescue plan for Wall Street, which passed in the Senate late last night. Now that the Dow Jones has plunged again, dropping nearly 350 points this afternoon, will that change any nays to yeas?

Welcome back to RACE FOR THE WHITE HOUSE. I'm David Gregory. The back half now. Last night, the Senate passed the bailout bill, but it faces the next big test before the House tomorrow. House Speaker Nancy Pelosi said today that she would not bring it to the floor if she didn't have the votes, but that she is optimistic at this point that she has them.

Joining me from Capital Hill now, Democratic Congressman from Texas, Lloyd Doggett. Representative Doggett is a member of the House Budget and Joint Economic Committees. Congressman, welcome.

REP. LLOYD DOGGETT (D), TEXAS: Good to be with you, David?

GREGORY: Are you ready to sign on?

DOGGETT: Not me. I think the Senate took a bill that was unsatisfactory and made it a little worse. So I moved from no to no way.

GREGORY: Right, you told the "Dallas Morning News" no to heck no.

Why not? What has been added there that you like?

DOGGETT: It's about 105 billion dollars worse in terms of the money. The Senate simply charged on the national credit card not only the original 700 billion, but another 105 billion of sweeteners and tax breaks that are not paid for either. Some of those tax breaks are to help dirty coal to liquid plants that won't be a benefit to our environment or our economy.

But my basic concern is with the original bill. It does not have the type of safeguards that taxpayers deserve.

GREGORY: But, Congressman, are you ready to feel some of the consequences of doing nothing, of not voting for this bill? You look at what happened on the Dow today? Or is this one of those situations where you would like it to pass, but you don't want to vote yes for it?

DOGGETT: There is no doubt we need to act. The problem is we have been given, as usual with President Bush, it's my way or the highway. There were other alternatives that should have been considered and could have been considered along the way, but we had a hitting of the panic button and telling everyone they would be without retirement or the ability to use an ATM card.

GREGORY: You don't buy that? In other words, you don't think there is any reason to panic? Is that your position?

DOGGETT: My position is there is reason to take deliberate action. You know, I applaud Warren Buffett today, for example. He has now put in eight billion dollars into Goldman Sachs and General Electric. You know, he didn't buy toxic securities. He got preferred stock. Why should the taxpayer get the stuff that no one wants?

GREGORY: Congressman, you want to bring up Warren Buffett. He also said, in an interview on cNBC yesterday, this was a great deal for taxpayers. He would love to have one percent of the action of the Treasury secretary's ability to buy those kinds of assets. He thinks that will be a handsome return. He said people are going to make money off this deal.

DOGGETT: David, there's no doubt it is going to be a good deal for Warren Buffett. He invested it at the right time. He has preferred stock. We have the worst, toxic, can't value, nobody wants securities, is what is proposed for appropriation. I want some safeguards in there so that the taxpayers of America don't bail out the bank of China along with all the folks on Wall Street.

I'm very aware of the concerns of neighbors in my community about their retirement, their home, their business. There is a way to do this that has some protection like Warren Buffett got that the taxpayers are not getting in this bill.

GREGORY: Bottom line, despite your opposition, do you think this is going to pass?

DOGGETT: I do. I don't think it will be by quite the margin it passed in the Senate. But with all the mobilization of effort, all the hitting of the panic button, it will pass. One of the reasons that I'm voting no is with reference to the precedent. This is not the last time they will come with a top hat out ready for us to fill it with taxpayer money. We need to be sure we're laying some of the controls there that will protect taxpayers.

Thank you, David.

GREGORY: Thank you very much for being here. We're going to hear from the other side of the aisle in just a moment. Back with me now with their take of what tomorrow will hold and the politics of the policy, Pat Buchanan, Gene Robinson and John Harwood. John, first to you down at Wash U for this debate, how is this thing rolling out?

HARWOOD: Well, I think people like Congressman Doggett who vote against the bill, that's probably the politically smart vote for a lot of members in the Congress. I was talking to Tom Cole, who is the chair of the Republican Campaign Committee. He has a lot of members voting against this bill. But he said, when you look at that 800-point drop in the Dow the other day, that dramatized the stakes. Members who vote against this, if it fails, are going to have to live with the consequences of potentially credit freeze up, stock market drop.

If they vote against it and it passes, they are home free.

GREGORY: Yes, right, which is what Congressman Doggett was talking about. He thinks it is going to pass. Gene, leadership test for both these candidates, McCain and Obama. They have been in the position now of telling their parties, we have to act. We have to support this.

ROBINSON: They are both on board now and both invested in the passage of this bill. I think it probably will get through the House tomorrow, although I thought it was going to get through on Monday, too. So who knows what's going to happen. Is this a test of the leadership of the two of them? I think one thing this whole two weeks shows is that it is very difficult to lead something complicated and necessary and urgent like this from a presidential campaign. When presidential politics gets involved, it tends to gum up the works rather than clarify the issues and make things go faster.

GREGORY: Pat, last night on the program, Tom Delay said that Americans are not hearing useful information from either one of these candidate when it comes to the economy. He wasn't very complimentary of the standard bearer of his party, John McCain, saying the economy is not his strong suit. But he did say that McCain tried to make this a better bill. But conservatives who don't like this bill are going to look to McCain and say this is the guy who came to town and said, we have to do this.

BUCHANAN: McCain came to town. I do think that when McCain held it up a bit that it was dramatically improved from the transfer of 700 billion dollars to Paulson to buy garbage anywhere he wanted in the world. I think there's a lot of good things in the bill. But I agree with Doggett and the conservative Republicans that they ought to vote against this.

I will say this, McCain has a hellish problem. He is an establishment Republican. The Republican establishment is going with this. The conservatives are up in arms over it. The sooner he gets the whole issue behind him, the better and I think it will pass.

GREGORY: Let's turn now-

HARWOOD: -- keeps all his money in cash.

GREGORY: I want to get to the Republican from the House who is supportive of the bailout bill. Joining me from Capital Hill is Congressman Adam Putnam of Florida. Representative Putnam sits on the House Financial Services Committee. He has been involved in all of this. Congressman, good to see you.

REP. ADAM PUTNAM ®, FLORIDA: Good to be with you. Thank you.

GREGORY: What is different, where you have yourself in a much better position to get this bill passed.

PUTNAM: Well, I don't want to over sell our vote count at all. But reading the public statements of a number of members who have gone home and heard from retirees and people living on fixed income and watching the value of their nest egg shrink, it does appear that a number of people have rethought their position on the bill and will be supporting it tomorrow.

GREGORY: You are not quite there yet, saying you have passage?

PUTNAM: We continue to work on our side of the aisle. And I understand that they're still working on the other side of the aisle to meet with their members, try and sort through their challenges and help people understand what is and what is not a part of this bill that the Senate has sent us.

GREGORY: What is that conversation like with some of your colleagues? Are you saying, look at what the Dow is doing? Look at the economic consequences of our inaction from a few days ago? We may get caught up in our own philosophical ideological debates about this, but we don't have the luxury of doing that. Has that been your position?

PUTNAM: That is part of it. The Dow is such an erratic barometer. It's up. It's down. It's responding to job numbers. It's responding to a lot of things, not just Congressional inaction. The more important market to watch, frankly, is this credit market that is absolutely frozen. That is spilling into small businesses. That's spilling into car dealership. It's spilling restaurant franchises.

It is so far beyond just being a handful of rich guys on Wall Street. That credit market, we don't have the luxury of watching the ups and downs every day and understanding it as well as we do the Dow. It is a more accurate barometer of the challenge, the fundamental economic challenge we face out there.

GREGORY: How bad is the economy hurting the Republican party? And do you think it's a serious, if perhaps fatal, blow against McCain in November?

PUTNAM: We've certainly seen the polls indicate that a state like Florida, where McCain had a healthy lead, they have now tightened up or gone upside down for McCain by a couple of points since these economic issues have come to the forefront. This is an issue that is in everyone's best interest.

Whether you're a Republican or Democrat, we want a healthy economy. Congress needs to have the right policy in place and let this private capital come in once we've unlocked these credit markets. Let's have a presidential debate that's not about a crisis. Let's have a presidential debate about the future of health care, the future of entitlement reforms and those kind of things. I would like us to get to that point. We are not there right now.

GREGORY: Congressman Adam Putnam from Florida, thank you for your time.

PUTNAM: Thank you.

GREGORY: Coming next, tonight's the night for Obama and McCain's number twos. We are just hours away from the first and the only vice presidential debate. What can we expect from Governor Sarah Palin. Up next, one-on-one with senior McCain campaign adviser Nicole Wallace. She's been on the inside, giving the advice. She'll be here just moments from now.

(COMMERCIAL BREAK)

GREGORY: Looking live now at the stage at Wash U in St. Louis. It's the site of the one and only vice presidential debate. Joining me now to preview Governor Palin's performance tonight in the debate, senior McCain campaign adviser Nicole Wallace. Hi Nicole, good to see you.

NICOLE WALLACE, MCCAIN CAMPAIGN ADVISER: Hi, David.

GREGORY: Here's the backdrop tonight. Governor Palin has been criticized in these recent interviews for not having command of issues, appearing not to understand complex issues. Then there's the polling. Six in ten voters see her lacking the experience to be an effective president and a third are now less likely to vote for McCain because of her. What happened?

WALLACE: Well there's polls and there's pundit and then there's the people, David. Tonight, you'll see someone who speaks right to the heart of the American people's angst about everything that has gone wrong in this economy. This is not someone who that isn't going to speak as someone who has had a front row seat to the policy debates in Washington for the last 30 years. This is going to be someone who speaks as someone who has been affected by those debates.

Tax hikes don't just go up and down, not things she uses to score political points. They affect her family's bank account. Health insurance, another issue that she doesn't debate in the halls of the Senate. She knows what it's like to not have health insurance. So I think Governor Palin will be viewed as the threat that she is to Barack Obama and Joe Biden. I think she will make clear that their positions are so far out of the mainstream, and that their ideas are, frankly, terrible for America's economy and America's working families.

GREGORY: Do you concede that she has stumbled in the past couple of weeks?

WALLACE: I don't concede anything. I think pundits have their views and I think they're entitled to their views. They get paid to pontificate. I think voters get to have their say on election day. I think we all do our best to guess and figure out what they are going to do. They are the only ones who have a real vote or a real say in all this. I understand that reviews come and go, and sometimes you are up in the polls, sometimes you're down. But she is a fighter. She is feisty. She is tough.

I just saw her before I came over here. I think she's going to have a great night. She will not-she will not stand there as someone who has participated in the policy debates in the Senate for 30 years.

GREGORY: Nicole, is she going to go on the offensive tonight? There's been reporting this afternoon that she plans to go on the attack, specifically on foreign policy and on positions on taxes that Biden has taken. Is that the strategy to take that fight directly to him?

WALLACE: The strategy is to make perfectly clear, abundantly clear that the ideas that Barack Obama has for this country's economy would wreck it. The tax increases and turning over our health care decisions to bureaucrats would move this country backward, would install government as a big unwelcomed force in American people's lives. I think she will stick to the issues.

GREGORY: Let me ask you another question about experience. This was Senator McCain back in October of 2007 in a Republican debate. Watch this.

(BEGIN VIDEO CLIP)

MCCAIN: I am prepared. I am prepared. I need no on the job training. I wasn't a mayor for a short period of time. I wasn't a governor for a short period of time. For 20 some years, including leading the largest squadron in the United States Navy, I led. I didn't manage for profit. I led for patriotism.

(END VIDEO CLIP)

GREGORY: Nicole, when he was talking about a mayor and governor, he wasn't talking about Governor Palin. But the reality is he could have been. How does he square that view with his recent defense of Governor Palin, comparing her to Governor Clinton and Ronald Reagan in experience?

WALLACE: Well, first of all, in that clip you just played, he also talked about leading. I think we saw John McCain do just that over the last week. He has really led at a moment of crisis for our nation's economy. So I love a whole lot of things about that clip.

On your question, it is not debatable that she brings the same executive experience to the ticket that Ronald Reagan and Bill Clinton brought. It is not debatable that they too were underestimated. So I don't think there is much to debate about whether her experience is in line with that of Ronald Reagan and Bill Clinton. They were governors.

GREGORY: He criticized his Republican opponents because they had been a governor for a short period of time and a mayor for a short period of time, and said what he had was real experience. He could have been talking about Governor Palin.

WALLACE: Well, look, lots of things are said in a primary. I think that Joe Biden attacked Barack Obama more viciously than anyone else on the Democratic side. So we are going to spend as much time talking about how Barack Obama was attacked by Joe Biden for voting against funds for our troops. That's fine. We can dissect everything John McCain said in the primary.

But The truth is she has experience. She has executive experience. Everyone likes to talk about doing something to put this country on the path towards energy independence. Sarah Palin is actually from an energy producing state. I travel all over this country, David. People care a lot about moving this country toward energy independence. Sarah Palin has done it and she will do it as vice president.

GREGORY: Again, talking about leadership here and not being part of Washington. God forbid if America was attacked again, as it was on 9/11, and President McCain were outside the White House and Vice President Palin were inside the White House, as Dick Cheney was. Based on what should Americans feel comfortable with her in a role similar to what Dick Cheney had managing 9/11?

WALLACE: Well, look, let me make sure I understand your question. How do we guarantee people she will be someone they are comfortable with as with they are comfortable with Dick Cheney?

GREGORY: The question is, Cheney was in a position where he had to do a lot of management of that crisis on 9/11 and had a lot of experience to do that. Based on what, I'm asking, should Americans feel confident that she could play a similar role if, god forbid, something should happen again?

WALLACE: Sure, I was at the White House that day too. I know you covered the White House on that day. You know that was really a day that nobody, not you, not me, not anybody is ever prepared for. But it is a day when instincts matter and you must see-and clarity matters. This is a woman who sees the world as John McCain sees it, understands the threats we face as an nation. She has said, she will not blink. She has-she is from a military family herself, so she understands the sacrifices being made to protect America. She will do nothing, nothing-she will not hesitate or blink to protect this country. I think people can be assured she is ready to lead and that she sees the world as John McCain does.

GREGORY: What has been unfair in the treatment of her, do you think?

WALLACE: You know, I think that the interviews she's done, the questions have certainly been above board. I think she has spoken to some of the most respected figures in American journalism. It's what happened afterwards. It's what happened when-no offense, present company excluded-but when the maniacs on cable news got ahold of it. They ripped this woman to shreds like I have never seen anyone dig their teeth into a politician, alive or dead.

Voters take that into account. We don't have time to waste. We're 33 days out from the election. We'll let the chips fall where they may. I think voters have taken notice that no woman, no candidate has been treated the way this woman and her children-her 17-year-old daughter has been ripped apart by the American media. There are a lot of things to be embarrassed about for all of us in politics and in media, and especially in cable news.

This is a woman who has the heart of a reformer. She has spunk. She's feisty. She's been the chief executive of a state that does a whole lot of good when it comes to producing energy and moving America towards energy independence.

GREGORY: Finally, Nicole, in Al Gore and in Dick Cheney, we have seen the power of the vice president on the assent. What will Governor Palin say tonight about the kind of influence she would expect to have in a McCain White House?

WALLACE: Listen, we don't have our own seal yet, but Senator McCain and Governor Palin have already talked about how they would divide responsibilities in a McCain/Palin White House. They are both very excited about it, should they be honored enough to serve. She would take on this issue of energy independence. She would work on the reform agenda that she's run up in Alaska. She has taken on entrenched special interests. She has cut spending. She slashed her budget.

Where she has led in Alaska, she will replicate some of those things on a national stage. And then she'll work to serve as an advocates for families with special needs kids. It's obvious an issue near and dear to her heart. I think she already has a pretty clear plate and full plate for a McCain/Palin administration.

GREGORY: Nicole Wallace, always good to talk to you. Thank you for coming on.

WALLACE: Thanks, David.

GREGORY: Coming next, a conservative columnist who has called for Governor Palin to bow out of the race. I'm going to go one-on-one with Kathleen Parker when THE RACE returns.

(COMMERCIAL BREAK)

GREGORY: Back now on RACE FOR THE WHITE HOUSE. Just about two hours away now from tonight's vice presidential debate between Senator Biden and Governor Palin. Joining me now, syndicated columnist for the "Washington Post," Kathleen Parker. As we look live at Wash U., at the stage. They are set for both candidates to appear.

Ms. Parker, welcome.

KATHLEEN PARKER, "THE WASHINGTON POST": Thank you, David. Nice to see you.

GREGORY: Good to see you. This is what you wrote this week for the "National Review" online: "Palin filibusters. She repeats words, filling space with dead wood. Cut the verbiage and there is not much content there. If BS were currency, Palin would bail out Wall Street herself. If Palin were a man, we would all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she is a woman, and the first ever on a Republican presidential ticket, we are reluctant to say what is painfully true."

You took some heat for laying all that out. You heard Nicole Wallace just a few minutes ago excoriate the pundits like yourself with those kinds of views.

PARKER: Yes, those elite media people.

GREGORY: Where does it come from, your views?

PARKER: You mean this intense reaction I've gotten?

GREGORY: Yes.

PARKER: I think there are a couple of reasons for it. Number one, a lot of people have over-identified with Sarah Palin as one of them. I think it is very painful for them to feel her criticized. It sort of feels like they are being criticized. Also, they feel betrayed specifically by me because I have been writing a column for a very long time, and a lot these of people feel they have a personal relationship with me. So it was a personal reaction.

GREGORY: What about the fact that, as Nicole said, she is going to be showing up tonight as the Washington outsider who hasn't had a front row seat to all these policy debates. She got off the plane-we can show that video today -- holding her baby. It is a little unlikely scene for most political figures right now. She is different. A lot of people may like that.

PARKER: No doubt about it. Let me say this, that was a very good strategy getting off the airplane with her baby. Nobody wants to pick on a mom with her darling little child. Let me say this, I don't want to take Sarah Palin down. I just simply saw in her someone who is not prepared to be the president of the United States, and unfortunately for her, she is being visited for that job, just because of McCain's age and his health.

In a way, I'll tell you, interestingly, I think I may have helped her. The McCain campaign got very serious about preparing her for this. Also, I have kind of solidified her base. They now have me to hate and her to love even more, because I've now suddenly become part of that media that the so-called ordinary Americans love to despise. The truth is, what's so amusing to me, is I actually live in South Carolina, a small town. I'm hardly one of these-I'm not like you, David, in other words.

GREGORY: Great, yes, thank you. What is the threshold test for her tonight?

PARKER: As everybody has said, the expectations are low. So if she can have subject and verb agree and speak in coherent, complete sentences, she'll probably be fine. Beyond that, I think she will do relatively well. I suspect she has been well trained for this evening. And she is probably going to shine a light on the liberal voting records of both Biden and Obama, and also kind of keep drawing attention to that elite difference.

She is of America. She does have this great narrative. People do still love her for that. If she can emphasize that, she will probably come out all right. I do think, personally, she needs to be substantive and serious, and not try to wander around and think up answers that make no sense.

GREGORY: Kathleen Parker with the "Washington Post," thanks very much for coming on tonight. That is the program for tonight. Just two hours away from the VP showdown. Stay tuned to MSNBC tonight, where I will be bringing you full coverage of the vice presidential debate at 9:00 Eastern time. After the debate wraps up, I will be back with your complete post debate coverage, and then "COUNTDOWN" with Keith Olbermann at 11:00, a late night edition of "HARDBALL."

I'm David Gregory. I have to say go Dodgers, even though I will be watching the debate. "HARDBALL" now.

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

END

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