updated 10/6/2008 3:03:58 PM ET 2008-10-06T19:03:58

Guest: John Harwood, Susan Molinari, Joan Walsh, Eugene Robinson, Valerie Jarrett, Ron Fournier

DAVID GREGORY, HOST:  Tonight, Debating Sarah Palin.  She may have been good enough, or even better than that.  But has she changed the race? 

And the president‘s bailout bill passes in the House, yet the stock market takes a tumble.  The Dow closing down 157 points.  Where from here? 

That and more, as the RACE FOR THE WHITE HOUSE rolls on. 

Just 32 days to go in the race to the White House. 

Welcome to the program.  I‘m David Gregory.

My headline tonight, “Back to the Top of the Ticket.”

The spotlight shifts back to Senators Obama and McCain after, get this, 69.9 million viewers tuned in to watch last night‘s vice presidential debate, making it the most watched vice presidential in history. 

Today, Obama and McCain heaped praise on their counterpart‘s performance while out on the campaign trail. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, PRESIDENTIAL CANDIDATE:  How about Sarah Palin last night, huh?  Viva la barracuda! 

(APPLAUSE)

Thank you.  You know, I almost felt a little sorry last night for my old friend Joe Biden.  She did a magnificent job. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE:  We are very, very proud of Joe.  He is going to be outstanding. 

(END VIDEO CLIP)

GREGORY:  Last night Palin appeared confident, punctuating her remarks with her signature folksy charm. 

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE:  I may not answer the questions the way that either the moderator or you want to hear, but I‘m going to talk straight to the American people and let them know my track record, also. 

(END VIDEO CLIP)

GREGORY:  While Senator Obama made last night‘s debate a face-off between him and John McCain, mentioning McCain by name and his record more than 50 times, and George Bush, President Bush, more than a dozen. 

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE:  The issue is, how different is John McCain‘s policy going to be to George Bush‘s?  I haven‘t heard anything yet. 

(END VIDEO CLIP)

GREGORY:  Let‘s put this to our panel. 

Joining me now, John Harwood, CNBC‘s chief Washington correspondent, political writer for “The New York Times”; Republican strategist and former New York congresswoman, Susan Molinari; Joan Walsh, editor-in-chief of Salon.com; and Eugene Robinson, MSNBC political an police and columnist for “The Washington Post.”

John, I‘ll just turn to you with the real headline here, and that is the ratings for this thing.  The most watched debate in history; 69.9 million people watching. 

So what did they take away from it? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Really astounding, that level of interest.  And Sarah Palin has been a tremendous object of fascination ever since she got into the race. 

Sarah Palin did herself some good last night.  She was much better in answering questions than she had been in those interviews with Charlie Gibson and Katie Couric. 

She was very good natured and genial and charming on the attack.  That‘s a rare thing to pull off in politics.  There was none of that tone of sort of snarkiness which sometimes came out in her convention speech, which was great for partisans, but maybe not so much for swing voters. 

On the other hand, Joe Biden effectively, I think, handled his assignment last night to dial it back, not be overbearing, and patiently prosecute this argument that John McCain would be the same as George Bush and wouldn‘t provide anything different.  And that‘s an argument that Sarah Palin did not answer particularly effectively. 

She tried to say that‘s backward looking, that‘s a blame game.  But I‘m not sure that was strong enough. 

GREGORY:  Right.

HARWOOD:  And on one key point, David, on the economy, this bailout thing which we‘ve come to see dominate the news over the last few days, she said in the beginning of the debate that John McCain and Sarah Palin would be reformers who would bring strict oversight to Wall Street.  But she spent much of the rest of the debate saying she wanted to get government out of the way of the private sector.  Those two ideas are fundamentally at odds, and it makes their message a challenge to make it coherent. 

GREGORY:  All right.  With that overview, Susan and Joan, let‘s talk strength and weaknesses. 

Susan, were you wowed? 

SUSAN MOLINARI ®, FMR. CONGRESSWOMAN:  I was wowed.  I thought, you know, this was the Sarah Palin we had seen at the convention, the one we were looking forward to it.  She was smart, she was aggressive, she was likable, she showed that she could talk about things from, you know, the counterinsurgency in Afghanistan, of all things, to energy, to taxes. 

And I think she was very—you know, if Joe Biden was good in putting her on defense about John McCain‘s connection to George Bush, then I think she was just absolutely brilliant about connecting Joe Biden to all the things he said during the primary about Barack Obama and his inability and lack of comfort with Barack Obama being president, and disagreeing with him on a whole host of issues when they were running against each other during the primary. 

So I think she was very successful in defending John McCain, in promoting John McCain, and in making herself look like she could be vice president of the United States. 

GREGORY:  Joan, weaknesses? 

JOAN WALSH, EDITOR-IN-CHIEF, SALON.COM:  Susan, she got the name of our general in Afghanistan wrong.  She called him “McClellan.”  She is going back to the Civil War.  Our military is terrific but they‘ve not really been able to hang in there since the Civil War.  His name is David McKiernan. 

MOLINARI:  She made one mistake. 

WALSH:  She made a lot of mistakes.  She was somebody who just stood there. 

She had been crammed full of facts. 

She did a great job in terms—just in contrast with her interviews with Katie Couric and Charlie Gibson.  She really—she held her own by that very low standard.  But otherwise, I think she was mean. 

I think she had—I never disagree with John Harwood—you know that, John—but I thought there was a nastiness and a snark there.  I think she had a real joy in sticking the knife in.  She also but called poor Joe Biden old.  And finally, that moment where she...

HARWOOD:  He is kind of old. 

WALSH:  He is kind of old, and we‘re all getting old, and that‘s fine.  I‘m sure Joe is fine with it.  But that moment where he choked up and she didn‘t even pause, she didn‘t even show any human response, that was a little bit of an android moment, and I think she probably regrets it.  I think she‘s better than that. 

MOLINARI:  Hey, can I just say...

GREGORY:  Hold on.  Let me get Gene in here.

Gene, your initial thoughts on all this? 

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  You know, my initial thoughts, I agree with John that she did herself some good.  Expectations were so low, she clearly exceeded expectations, which were almost subterranean. 

You know, I thought on most issues, there was a gap on substance between Joe Biden and Sarah Palin.  And that seems to be reflected, at least in the instant polls and focus groups, all which seem to believe that Joe Biden won the debate handily.

We don‘t see it necessarily way inside the beltway.  Others seem to see it

that way.  And, you know, so I think it was not a game-changer.  But it was

you know, compared to the Couric interview, she certain did well. 

GREGORY:  Susan, go ahead.

MOLINARI:  OK.  I want to say two things. 

Number one, I think—and I‘m a huge Joe Biden fan after working with him. 

And I think he did—he was terrific and he did great. 

And so I think not only did she have the bar set low for her in expectations, but there‘s not many of us in this town who could survive a debate with Joe Biden.  And so she—you know, let‘s also keep in mind who she went up against.  And she did well. 

And on that other moment when we really saw this sort of beautiful, misty sadness of Joe Biden, I do think you‘re a little tough on her, Joan.  As somebody who has debated, certainly not at the level that she was at, before the AARP on Staten Island, and you get nervous.  And sometimes you don‘t trust your instincts.  And when there is something that is so overwhelmingly human and touching, I think we have to give her a little bit of pass that she couldn‘t figure out in that split second how to deal with that. 

GREGORY:  But Joan, let me ask you this question about Joe Biden.  He made a deliberate choice not to answer some of her very tough attacks on him with regard to his position on the war.  She was slicing and dicing there. 

WALSH:  She was.

GREGORY:  And if he smiled any more broadly, it was going to be an eclipse. 

I mean, he made a decision not to engage.  Was it the right decision? 

WALSH:  You know, let me just say, now that I‘ve seen the polls of the Independent voters, David, I think it was the right decision, but I wasn‘t sure last night.  I would say halfway through the debate, I was giving her very high marks, and I was a little bit worried that, you know, a lot of his handlers and a lot of us in the media as well, myself included, really warned him against seeming condescending and being, you know, attack dog Joe Biden. 

GREGORY:  Yes.

WALSH:  We all felt—you know, it was pretty unanimous, don‘t do that. 

You‘ll look mean. 

And in fact, she was the one who was, I thought, frequently condescending and patronizing.  So I worried that he was being too friendly and deferential in showing that smile too much.  In the end, I think the results are in the polls and I think it worked. 

HARWOOD:  David...

GREGORY:  John, let me just come back to this point, which is, how has this changed the race?  You had almost 70 million people watching.  Is there a game-changer in any of this? 

HARWOOD:  It changes the race zero.  Now, look, it stopped Sarah Palin from sort of further descent, but did it really do anything to turn around the circumstance that has Joe Biden over the last couple—I‘m sorry, has John McCain over the last couple of weeks falling five, six, seven points behind Barack Obama?  I don‘t think so. 

I want to make two other points quickly.

GREGORY:  Yes.

HARWOOD:  Joe Biden, I thought—those of us who were old enough to have covered him in 1988, remember he used to get tagged with the Joe Isuzu smile kind of charge, that he was sort of insincere with that big smile.  I thought last night, Joe Biden was very sincere in how he was relating to Sarah Palin.  I thought they both related to each other very well.

But the other question about Sarah Palin, “You betcha,” “Darn right,” “Dog gone it,” all that stuff, she was charming.  But was she presidential? 

I think there is reason to question whether people looking at that, especially swing voters, would say, yes, I can see her in the Oval Office a heartbeat away.  I‘m not sure about that. 

GREGORY:  Yes.

WALSH:  I don‘t want the president winking. 

GREGORY:  You know, Joan, on that point, people asked me today, was the winking too much?  Was the looking at the camera, winking too much?  You know, and it really—Ron Brownstein, I was talking to him just a couple of minutes ago, and he was making the point, look, it‘s kind of self-limiting perhaps for her, both regionally, around the country.  That kind of approach may turn a lot of people off even as it brings people in. 

WALSH:  Yes.  I mean, I feel confident that she was not winking at me personally, David.  And I know I‘m not her target.  But even so—and you know, I would defer to Susan on this. 

Look, it‘s really tough for women in politics.  It‘s really tough to combine femininity with being authoritative.  And we saw that for Hillary Clinton. 

You know, women have a tougher role there.  But I think she really goes too far in the direction of cute, and it‘s just not professional enough.  It‘s just not—we really don‘t want—I don‘t think we want our president winking at us that way. 

HARWOOD:  Democratic pollsters last night were saying that upscale women, when they were testing the results of the debate, were turned off by the cutesy stuff.  Now, that may not be the case for working class women.  That may be more attractive to other types of constituents.  But some of the target audience that they were hoping that she would reach did not appear, at least in these dial group tests, to be responding. 

WALSH:  All women, including working class women, have to work to be taken seriously in the workplace.  And winking doesn‘t go over very well in many places, really. 

GREGORY:  All right.  I‘ve got to get a break in here. 

ROBINSON:  I would say one thing, David.

GREGORY:  Yes, go ahead, Gene.  Real quick. 

ROBINSON:  No, I was just going to say, I thought that on the energy issue, she displayed a kind of confidence and knowledge that she didn‘t on other issues.  That doesn‘t bode particularly well for this election.  For the future, it means that, you know, she can grasp complicated things, and she‘ll be a force in politics for a while, I think. 

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

Coming next, how is team Obama feeling about Governor Palin‘s debate performance last night?  And with just 32 days to go, what is Obama‘s plan to close the deal with voters, especially those Independents?  I‘m going one-on-one with senior Obama adviser Valerie Jarrett here in Washington. 

THE RACE comes back right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALNIN:  You know, I think a good barometer here as we try to figure out, has this been a good time or a bad time in America‘s economy is, go to a kid‘s soccer game on Saturday and turn to any parent on the sideline and ask them, how are you feeling about the economy?  And I‘ll betcha you‘re going to hear some fear in that parent‘s voice. 

(END VIDEO CLIP)

GREGORY:  Back on RACE FOR THE WHITE HOUSE.

That, of course, Governor Sarah Palin, trying to appeal to those soccer moms and dads at last night‘s debate.  With no major slipups on either side, both camps are claiming the governor and Senator Obama exceeded expectations.

So will last night have a lasting effect on the campaign, particularly given those ratings? 

Joining me now here in Washington, Obama senior adviser Valerie Jarrett.

Valerie, good to see you. 

VALERIE JARRETT, OBAMA SR. ADVISER:  Good to see you.  It‘s my pleasure.

GREGORY:  So, was Senator Obama surprised by her performance? 

JARRETT:  Well, he was delighted by Senator Biden‘s performance.  I think Senator Biden had an opportunity to show the American people that he has command, a deep and sincere command of the challenges and opportunities facing our company. 

He connects with middle America.  He understands what it‘s like from his own background to struggle and get knocked down and pick yourself back up.  And he shares Barack‘s vision for leadership for the country.  So I think he was delighted with Senator Biden. 

GREGORY:  You know, the question of experience came up last night and whether there was any of these campaign promises that would have to be scrapped, given the financial condition. 

This is the question that came up to both candidates.  Let‘s take a look at that. 

(BEGIN VIDEO CLIP)

GWEN IFILL, MODERATOR:  So, Governor, as vice president, there is nothing that you have promised as a candidate that you wouldn‘t take off the table because of this financial crisis we‘re in? 

PALIN:  There is not.  And how long have I been at this?  Like five weeks?  So there hasn‘t been a lot that I‘ve promised, except to do what is right for the American people, put government back on the side of the American people, stop the greed and corruption on Wall Street. 

(END VIDEO CLIP)

GREGORY:  Five weeks, and yet Senator Biden has been in there 35 years in the Senate.  Yet he didn‘t take that opportunity to make that point, to point out her lack of experience. 

Why was he so decidedly hands-off in this debate against her? 

JARRETT:  I think his goal was to talk directly to the American people about what Senator Obama and what Joe Biden want to do for our country.  I think that the country is really tired of the divisiveness and the picking at one another.  And their whole message has been, let‘s bring our country together, let‘s focus on our collective vision for how we can turn our country around. 

People are really not interested in him tearing down Governor Palin. 

They‘re interested in, is my job secure?  Is my pension secure? 

What‘s going to happen with the price of oil?  What‘s going to happen with my mortgage?  How am I going to send my kids to college?  And it‘s that more positive message that I think we‘re hearing as we travel around the country. 

GREGORY:  All right.  But still, there were nearly 70 million people who watched this debate.  And the reality is that they weren‘t necessarily tuning in for Joe Biden.  There is a lot of fascination with Sarah Palin. 

So, from a competitive point of view, does Senator Obama think that she did some damage last night to the campaign? 

JARRETT:  Absolutely.  He thinks hands down, that Senator Biden was a homerun. 

He delivered the message.  He was clear.  His depth of knowledge, his track record of experience, his discipline, his vision both in terms of domestic policy and foreign policy, his track record is clear.  So, no, Senator Obama was absolutely delighted with Senator Biden‘s performance. 

GREGORY:  Let‘s talk about the economy. 

Now the president has signed this bailout package that has overwhelmed the race for the past week or so in this financial meltdown.  We see in poll after poll that there is still some—there are reservations about Senator Obama.  He‘s not quite hitting 50 percent in the polls, which is giving them some solace to the McCain campaign. 

What can you say on behalf of Senator Obama about what he would do to leave the country out of this economic mess? 

JARRETT:  Well, let‘s just look at what he‘s done in the last couple of weeks since this crisis really came to the surface. 

He‘s approached it from a very disciplined and thoughtful, measured way.  He‘s listened to the advisers.  He‘s listened to Paulson and to Volcker, his advisers.  He‘s met with the president and with McCain. 

He‘s done what he said he would do throughout this campaign, which is to work on a bipartisan basis to solve the problems that are facing our country.  These are deep-seated problems.  They‘re not ones that Senator Obama is going to solve by himself. 

This is a collective effort.  And I think that the leadership we‘ve seen over the last couple of weeks and how he‘s handled this crisis, compared to Senator McCain, quite frankly, who has been erratic, who, first he said the fundamentals of our economy are strong not just the one time, but 16 times throughout the last year.  He said then we should fire the secretary of the Securities and Exchange Commission.  Then he‘s going to abandon his campaign and forget about the debate. 

Well, then the debate is back on.  Then he‘s announcing that he is responsible for solving it. 

GREGORY:  But they would say it‘s easy not to make a mistake when you just stay on the sidelines.

JARRETT:  I mean, my goodness.  Well, I don‘t think that Senator Obama has stayed on the sidelines. 

And in fact, if you listen to the congressmen who changed their vote today, who voted against the bill on Monday, over seven of them said it was because of Senator Obama picking up the phone and talking to them, and instilling in them the confidence that when Senator Obama is president, that this isn‘t the beginning and the end, this is just the beginning.  We‘re going to move forward and we‘re going to do all kinds of measures that are going to protect the working class people.  That message, David, is resonating with the American people. 

GREGORY:  Senator Obama said what he worries about at night is winning because of all the challenges that the next president is going to face, particularly on the economy.  Has Senator Obama considered convening an economic team, getting toward now so that he might say, even if he is elected, that in that period of transition, they can actually get working on an economic plan that they would have to hit the ground running with on day one? 

JARRETT:  Well, I think he‘s been very open and clear about his economic advisers.  He has talked about Volcker and Rubin and Warren Buffett, and several of his advisers met in Florida right after the bailout proposal was first announced.  He was very open and transparent about his conversations with them. 

That‘s the kind of presidency he‘ll have.  So you‘re going to see the people who he listens to out front and open.  He‘s not going to have these private door meetings that we‘ve seen so much in the Republican administration. 

His presidency will be transparent.  And he is beginning that right now.  You can tell a lot about what kind of a president he will be by how he has handled this economic crisis. 

GREGORY:  What does he think is going to be decisive here, 32 days to go? 

JARRETT:  Well, I think what he does, it‘s not a matter of what‘s decisive.  It‘s a matter of getting up every morning and working hard to earn the confidence and the trust of the American people, and keeping focused on what‘s important to them.  And that‘s what he does every day. 

He doesn‘t allow himself to get distracted by a lot of nonsense.  He stays in tune.  And so when he says he‘s worried about being elected, he knows the hopes and dreams of our country are really resting on the president. 

People want our moral authority abroad restored.  They want our domestic positions back in the United States stable and secure again.  That‘s a weighty responsibility I want him up late worrying about.

GREGORY:  But does he still feel in many ways that, look, that voters have to make that yea or nay decision on me, that comfort level with me?  Is that where this race still is?  More about him than McCain? 

JARRETT:  I think it‘s about the direction that and he Biden, his partner, will take our country.  That‘s what he said across the campaign trail. 

It isn‘t a matter of Barack Obama or John McCain, it‘s a matter of the direction the country wants to go in.  And what he has heard loud and clearly over the last 19 months, and what really got him into this race in the first place, was the clear message that we are tired of the divisive politics. 

We‘re tired of the eight years of Bush.  And we don‘t want another term of George Bush.  And that‘s where he‘s confident that, in the end, the American people are going to decide what‘s in their best interests.  And I‘m confident that they‘re going to decide what‘s in their best interests is an Obama presidency. 

GREGORY:  All right.  Senior Obama adviser Valerie Jarrett.

Have a good weekend.  Thank you for being here. 

JARRETT:  Thank you.  Same to you. 

GREGORY:  Always nice to see you. 

Coming next, Senator Joe Biden faced a tough personal task today, the day after the VP debate.  It‘s on THE RACE‘s radar coming up next.

(COMMERCIAL BREAK)

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

Today, vice presidential nominee Joe Biden saw his son, Delaware Attorney General Beau Biden, off to Iraq.  Biden spoke at the National Guard deployment ceremony in Dover this morning. 

(BEGIN VIDEO CLIP)

BIDEN:  I‘ve come here many times before as a Delawarian, as a United States senator.  But today, I come as you prepare to deploy as a father, a father who got some sage advice from his son this morning.  “Dad, keep it short, we‘re in formation.” 

I always listen to my general. 

(END VIDEO CLIP)

GREGORY:  Governor Sarah Palin‘s son was deployed to Iraq last month.  And Senator McCain‘s son returned from Iraq earlier this year. 

A short break here.  Coming up, President Bush signs the unprecedented bailout bill and says taxpayers will make a profit. 

Plus, the VP debate reviews.  How are conservatives reacting to Palin‘s performance?

Also Chuck Todd on the battleground states.

All that when THE RACE returns.

(COMMERCIAL BREAK)

GREGORY:  The reviews are in for the VP debate.  President Bush signs an unprecedented 700 billion dollar bailout for Wall Street.  McCain and Obama hone their battleground plans and look ahead to their debate showdown next week.  It is all coming up next on RACE FOR THE WHITE HOUSE.

Back now on RACE FOR THE WHITE HOUSE.  I‘m David Gregory.  Welcome back.  The historic 700 billion dollar bailout bill passed the House early this afternoon.  President Bush signed it shortly afterward, promising quick action to rescue Wall Street at low risk to the taxpayer. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  Ultimately, the cost to taxpayers will be far less than the initial outlay.  See, the government will purchase troubled assets, and once the market recovers, it is likely that many of the assets will go up in value.  And over time, Americans should expect that much if not all of the tax dollars we invest will be paid back. 

(END VIDEO CLIP)

Let‘s bring back John Harwood, cNBC‘s chief Washington correspondent, political writer for the “New York Times.”  That‘s going to be a tough sell, it seems, in a lot of the parts of the country where this bill remains very popular, the idea that people are actually going to see a profit. 

HARWOOD:  It is a tough sell.  The irony of this for the people who voted in favor of it is that now that it is passed, if it actually works, they are not going to get any credit for it, because people are not going to appreciate, except for that little drop in the stock market the other day, what might have been averted.  I suspect this is going to be pretty good fodder for some of the challengers in Congressional races. 

Look, now we have to see if this thing works.  People put their faith in the warnings they got from Ben Bernanke and Hank Paulson.  I thought our colleague, Gwen Ifill, last night in her question to the candidates put it exactly right when she asked, does this show the best of America or the worst of America?  I think it really showed both.  What happened on Wall Street was pretty ugly.  The legislative process was pretty ugly.  The housing market is pretty ugly right now.  When it came down to it, you had enough people with enough faith in the authority figures who were telling them they needed to act that they finally mustered the votes, even though it was a very, very tough vote a lot of members of Congress to cast. 

GREGORY:  The Dow was down another 157 points today.  The question is not only whether it will work, but how long it will take to work.  The reality is that as this diminishes as an issue on the campaign trail, not the economy, but just the ins and outs of this bailout man, there‘s some real concerns about whether a year‘s time for it to work through the credit markets is nearly enough. 

HARWOOD:  Absolutely.  And we‘ve got to acknowledge everybody, even the people who might know best what they‘re talking about, are shooting in the dark here.  This was not anticipated.  We did not know.  Some people warned a while back that we could be headed for this trouble.  But I remember hearing from the likes of Bernanke and others that the subprime crisis was contained.  It wasn‘t spreading to the broader economy. 

So I think there is a lot of uncertainty about exactly how it‘s going to play out, whether it is going to work, whether this was the best approach.  But‘s right now the only approach we‘ve got. 

GREGORY:  Let‘s bring in the rest of the panel.  We‘ll go inside the war room with the rest of our folks here.  We have Republican strategist, former New York Congresswoman Susan Molinari, Joan Walsh, editor in chief of Salon.com, and Eugene Robinson, MSNBC political analyst, and columnist for the “Washington Post.”

I want to go back to discussion of the debate last night between Biden and Palin.  And I want to show an exchange that highlights, I think, Palin on the attack and Biden really not responding directly to her.  The subject was Iraq.  Have a look. 

(BEGIN VIDEO CLIP)

PALIN:  It is so obvious that I‘m a Washington outsider, someone just not used to the way you guys operate.  Here you voted for the war.  And now you oppose the war.  You‘re one who says, as so many politicians do, I was for it before I was against it, or vice-versa.  Americans are craving that straight talk.  And just want to know, hey, if you voted for it, tell us why you voted for it.  And it was a war resolution. 

BIDEN:  For John McCain, there is no end in sight to end this war. 

Fundamental difference, we will end this war. 

GWEN IFILL, PBS ANCHOR:  Governor?

PALIN:  Your plan is a white flag of surrender in Iraq.  And that is not what our troops need to hear today.  That‘s for sure.  And it is not what our nation needs to be able to count on.  You guys opposed the surge.  The surge worked.  Barack Obama still can‘t admit the surge worked. 

(END VIDEO CLIP)

GREGORY:  Gene Robinson, if you look at those exchanges, I think it highlights the fact that this was the best of her approach in the debate, which is she had a very likable way about her, yet very, very sharp.  I mean, you can agree or disagree with Joan‘s take that she was mean at times.  But she had a broad smile and a way to really drive in the knife there against Joe Biden. 

ROBINSON:  Yes.  I think Joe Biden would want to you define that term likable.  I‘m not sure he found that exchange likable.  On the war, I mean, that was kind of meat for the conservative base, for the Republican base.  However, most of the country is tired of the Iraq war, and agrees with the Democrats that it is time to set a timetable and get out of Iraq.  So, again, I‘m wondering exactly what it accomplished.  If the idea was to appeal to independents, to undecided voters, people who haven‘t quite made up their minds, I‘m not sure that gained her a lot, except that broad smile from Joe Biden, which I‘m sure he meant sincerely. 

GREGORY:  Susan, Adam Nagourney in the “New York Times” wrote an analysis which included this: “it was not a tipping point for the embattled Republican presidential ticket, the bad night that many Republicans had feared.  But neither did it constitute the turning point the McCain campaign was looking for after a stretch of several weeks in which Senator Barack Obama seemed to be gaining the upper hand in the race.”

Here you had nearly 70 million people watching this last night.  But was it anything other than fascination with her, in terms of impact on the race? 

MOLINARI:  Well, I think it was more than fascination.  I think we‘re diminishing how interested people are in her because of her accomplishments, her achievements and what she promises to be for America.  I think maybe it is fascination, but it is really based in change, and what picking her represented to John McCain and the Republican party.  We don‘t expect—unless this was an absolute disastrous performance, which it clearly was not—it was a great performance—this campaign is going to be ticked one way or the other based on what our presidential candidates do.  I think this was a great moment for us, and I was very proud of her.  But I think the tipping point in this campaign is going to be next Tuesday and the debate after that. 

I sound silly even saying this.  We all know this.  About what we‘re going through in this economy, the fears people have with their 401(k)s.  And who stands up and presents to America—I think all this other stuff about change and looking back and looking forward is going to be diminished in terms who have can appear presidential and gain my confidence that you can take me through this financial crisis that‘s keeping me up at night.  I think that‘s the whole game. 

GREGORY:  Joan?

WALSH:  I agree with Susan on that one.  So that‘s great.

MOLINARI:  I want to wink at you first. 

WALSH:  I can feel you winging at me.  I am winking right back at you. 

HARWOOD:  It‘s a condescending wink. 

WALSH:  It was a nice wink, we agree.  I will say though that if really that is going to be the barometer, I really do worry for John McCain and Sarah Palin, because, although she talked a good game last night, they haven‘t either of them been about regulation, reform, cautious oversight of our financial markets.  And when I listened to the clip you played, David, at the very top of the show, where John McCain is praising her and say, “viva la barracuda,” I mean, I have to go to Susan on this.  Is that really the kind of politics America wants right now?  That we‘re going to praise her as a barracuda for going after Joe Biden, in my opinion, not very likable?  There is something—the McCain campaign is really playing the nasty card right now in the absence of really having policies that can lead us out of this mess on Wall Street.  I think you saw that last night.

GREGORY:  I have to get in here.  I‘ll take another break.  When we come back, the path to 270, the electoral votes needed to become the president.  NBC News political director Chuck Todd breaks it all down with me when we come back after this.

(COMMERCIAL BREAK)

GREGORY:  We‘re back.  Time now for too close to call.  The McCain campaign is scaling back its efforts in Michigan, one of the six states that went for Senator John Kerry back in 2004 against President Bush that McCain is targeting now.  Also on that list, Pennsylvania, Wisconsin, Minnesota, New Hampshire, and now they‘re adding Maine to all that.  Joining me now, our political director of NBC News, Chuck Todd. 

Chuck, talking to the McCain folks, you get a sense that there is kind of an uneasy feeling here, because that list of states where they can go on the offense, where they have to go on the offense, is shrinking before their eyes. 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  It is.  Now we‘re seeing, David, this money advantage that a lot of people knew Obama was going to have.  I‘ll tell you, for the last few months, it did seem as if McCain and the Republican National Committee, in the different ways they were raising money, were going to be able to keep up, that they were going to be able to fight in every state that Obama was fighting in, that they were going to be able, if they needed to, to go into North Carolina. 

Well, now we‘re seeing that they can‘t.  They do have to make decisions.  Was it going to be Michigan?  Was it going to be Pennsylvania?  Which one were they going to pull out of?  They‘re down high single digits in both of them, potentially double digits.  But the economy just cratered, and when the America‘s economy catches a cold, as one Republican told me, Michigan catches the flu.  That‘s the one they decided to pull out of.  Move that money to Pennsylvania, Wisconsin, you mentioned Maine, but also, Indiana.  This is another defensive state they have to deal with. 

GREGORY:  Right.  We‘ll get to that in a minute.  I want to stay on Michigan, because if their sense of malaise in the McCain campaign right now is that the political environment is so tough because of the economy and also because there is blow-back against the Bush administration and Republicans generally for what has happened on Capitol Hill and what has happened in the markets the last couple of weeks, Michigan may just be the starting point for that.  They‘ll feel in some of these other states as well. 

TODD:  Absolutely, they‘ll feel it particularly that entire Rust Belt, the industrial Midwest there, from Wisconsin all the way to New Hampshire.  All of these states are—that they‘re trying to target Wisconsin, Ohio, Pennsylvania, now Michigan, New Hampshire; they‘re very susceptible not just to the economy but to an anti-Washington message.  All of those states, you‘ve seen anti-Washington politicians succeed there.  But right now, McCain is paying the price for both that R next to his name and this economy. 

GREGORY:  Look at the states—these are the Kerry states that McCain is trying to target now.  Michigan is now off the table.  So it is Pennsylvania, Wisconsin, New Hampshire, Minnesota, maybe Maine.  Minnesota would be a very tough fight for them.  They like the fact that Obama looks like he‘s deploying some resources there, but still that has trended away from them.  You mentioned Wisconsin, New Hampshire where McCain has appealed certainly with independent voters. 

Pennsylvania is interesting.  Do you think they have a real game there? 

TODD:  I don‘t know.  When you look at some of the polling, you see that the Southwest part of the state, Pittsburgh, that area, Allegheny County, where there are a punch of the working class Democrats that Hillary Clinton did so well with, they‘ve been sitting in undecided.  They hadn‘t moved so much.  You know what, we‘ve been seeing those folks start to come into the Obama column because of the economy. 

Let‘s do some simple math here, David.  There is not a single state that John Kerry carried that Barack Obama is not up by at least five points.  He is up outside the margin of error in every single state that John Kerry carried.  That includes Pennsylvania, Wisconsin, Maine, Minnesota, New Hampshire.  Now throw in Iowa, New Mexico, the two red states that Bush carried, where Obama has a lead of five or more points.  And he is up to 264 electoral votes.  If you just went by states that Obama has a five-plus point lead in, all he has to find is six more and he‘s got about ten states to pick from. 

GREGORY:  Let‘s look at the Bush states that Obama is targeting now where McCain would be on the defensive.  New Mexico, and I‘ve heard from people in the business that Udall‘s race there is trending for him.  They‘re got Richardson‘s organization.  New Mexico looks good for the Democrats.  Nevada, North Carolina, Iowa, Colorado and Florida; a lot of these states are states you‘re talking about in terms of in the toss-up column, where McCain has to play a lot of defense. 

TODD:  Not only that, Nevada, the registration advantage with the Democrats at this point.  Colorado, there are not many polls you can find that has McCain up.  Obama‘s lead is inside the margin, so nobody wants to move it out of toss up at this point.  But Obama has had a consistent small lead there.  Throw in Virginia, where we‘ve seen as many polls with Obama up as we do McCain up.  Florida has suddenly been moving in Obama‘s direction.  North Carolina, McCain still feels like he has a narrow lead there, but it is very narrow. 

We didn‘t even bring up Indiana, which has just come out of nowhere. 

GREGORY:  You‘ve talked this week about new voters.  The turnout model has become very important, because the Republicans will argue they have a great history of turning out their voters.  In this cycle, we know that all these new voters the Obama campaign is counting in states like Colorado and Florida, new voters, younger voters who are going to vote for them.  So will it come down to how they get their voters out?  Doesn‘t that also benefit an Obama grassroots organization that has so many volunteers and such a big apparatus? 

TODD:  Absolutely.  Let‘s take four states, Colorado, Virginia, North Carolina, Florida.  These are growth states.  These are the ones that we‘ve seen big surges in new voter registrations.  You lay over that new voters poll that we did with Myspace and the “Wall Street Journal” that showed Obama leading two to one among new voters.  In our polling, we‘ve seen that approximately 10 to 15 percent of new voters—of the entire electorate is going to be new voters.  So if Obama is winning a chunk of 15 percent of the electorate two to one, and you see these increases in places like Colorado.  And Colorado, let‘s say, has a 20 percent turnout increase.  Ten to 15 percent is nationwide.  We know in some of these battleground states, it‘s going to be higher.  So figure 20 percent in North Carolina, 20 percent in Virginia, 20 percent in Colorado, 20 percent in Florida. 

What does that do if Obama wins them two to one?  Florida is flipped. 

Obama would win it based on what happened in 2004.  Colorado is flipped.  Obama would win it.  Virginia is too close to call.  And North Carolina would be about a two-point race, inside the margin of error, probably still a McCain win, but, again, too close to call.  That‘s how important these new voters are to Obama.  The key to him, of course, is getting them to show up. 

GREGORY:  Right.  The final point has to do with Sarah Palin.  In a state like Pennsylvania, the McCain camp would argue she has an appeal beyond just the base.  She is helping him with women, with even moderate Republicans, if you think about the Philly suburbs.  Is that true? 

TODD:  We haven‘t seen any evidence of it.  If anything, one of the more interesting things last night about all the dial tests—you know, we have a bunch of cable networks doing it.  You have all the—both campaigns do al testing.  The one consistent thing that I saw with all of these dial tests, she performed better with men than with women last night.  It was men reacted more positively to the various things she said.  I don‘t think she has helped anymore with, particularly, these suburban women when they need her.  You mentioned the suburbs of Philadelphia; if he doesn‘t improve those numbers there, I don‘t know how he carries Pennsylvania, no matter how much he stays competitive in the Pittsburgh area. 

GREGORY:  The most important number, of course, is one.  One more game for the Dodgers and we go to the Championships Series. 

TODD:  I‘m pinching.  It‘s—We‘ve won more playoff games this week than we won in 20 years!

GREGORY:  Unbelievable.  Bring it home to L.A.  We‘ll be watching. 

TODD:  Philly, you‘re next.  

GREGORY:  That‘s it.  We‘re coming.  The storm is coming.  All right, coming next, the state of the race in the wake of last night‘s VP debate, as McCain and Obama look ahead to their next showdown on Tuesday.  THE RACE will be back right after this. 

(COMMERCIAL BREAK)

GREGORY:  Back now on RACE FOR THE WHITE HOUSE.  With the VP debate behind them, the campaigns are looking ahead to the next big event as the second debate between McCain and Obama on Tuesday.  Joining me now, Ron Fournier, Washington bureau chief for the Associated Press.  Ron, good to have you here.  Let‘s talk about the state of this race right now.  First of all, we‘ve been talking about the debate impact, huge ratings.  What does it do to the race? 

RON FOURNIER, ASSOCIATE PRESS:  I think what it basically does is takes the vice presidents off the table.  If Palin had really blown up, it really would have pretty much derailed the McCain campaign.  She did fairly well.  I think now we get back to where we normally do, where the vice presidential candidates really don‘t have a huge impact, maybe a point here or there.  Now we reset the race on Tuesday.  It is going to be Obama versus McCain. 

GREGORY:  Huge economic mess, this vote here in Congress.  The bill has been signed, but the issue doesn‘t go away.  What is the state of this race? 

FOURNIER:  I think you just hit the biggest issue.  John McCain—any Republican is going to have a hard time in this kind of economy, in part because Democrats tend to own that issue.  He did very poorly last week in the roll up to the vote.  Now folks are really worried about the state of the economy.  They‘re upset with Washington.  They‘re upset with politics.  They want change.  Who is the guy who has been billing himself as the candidate of change?  Who is the guy who hasn‘t been in politics very long?  It‘s Barack Obama. 

The landscape really favors Obama right now, unless somehow John McCain can change the subject. 

GREGORY:  Why can‘t Obama get to 50 percent in the polls? 

FOURNIER:  It doesn‘t matter.  It‘s irrelevant.  He has to get to 270 electoral votes.  As Chuck Todd was telling you, he is almost there. 

GREGORY:  You go down these states—this is something the McCain campaign keeps bringing up, where they say, look at the primaries, a lot of late deciders there.  They broke for Hillary Clinton in some of these states.  There is still some apprehension about Obama as a leader, what‘s he really about.  It may just be the race factor as well. 

FOURNIER:  I think that‘s part of it.  This race is not over.  Don‘t get me wrong.  A lot can happen in a month.  Right now, we‘re looking at a month where Barack Obama is winning or tied in nine of the states that George Bush won.  He is only defending three or four states and he is really ahead in those three or four states that John Kerry won. 

The economy is in the tank.  People are upset with Washington.  The landscape favors him.  A lot of things can still happen.  And you‘re right, race is an issue.  AP did some polling with Yahoo last week that showed that race is a factor, that there is a lot of white Democrats, about a third of white Democrats who hold some views, some misgivings about the other race.  We saw that—

Ironically, that‘s why I was surprised about Michigan, my home state.  I thought that was the one big blue state that John McCain might be able to win back from John Kerry four years ago, in large part because of the race issue.  What‘s the big issue that turned it around?  The economy.  People up there are really hurting in Michigan.  It is kind of the bellwether for the rest of the state.  What I would be worried about if I were McCain is what other states around the industrial Midwest start turning because of the economy. 

GREGORY:  Yet, those blue states where he would like to be on the offense, Wisconsin, Minnesota, Pennsylvania—

FOURNIER:  He is behind right now.  Those are the kind of states he has to pick up.  Right now, if Barack Obama can just pick up one or two—maybe he only needs one—but one or two of the state George Bush won in 2004, he has this race.  And he has nine within his grasp right now. 

GREGORY:  We then through that, Ohio, Florida, Virginia, Indiana, New Mexico, Nevada, Colorado and Iowa.  Iowa and New Mexico already look very strong for him. 

FOURNIER:  They‘re pretty much gone.  If you‘re a Republican and you take money out of Michigan and put it into Indiana, you‘ve got some problems.  Indiana should be firmly Republican right now. 

GREGORY:  Is there anything besides the economy that flips this?  What is McCain—where he‘s had some traction in this race, early on in the general, is where he really put the focus in a negative way on Obama. 

FOURNIER:  That‘s what he has to do.  Starting Tuesday, he can recast this race and make it real clear this is a contrast not between Biden and Palin, and not between my economic policy and his economic policy, not between George Bush and Barack Obama.  It‘s between me and him.  And he‘s going to cast Barack Obama as a guy who is barely out of the Illinois legislature, who, in McCain‘s words, is naive and not ready for the job.  And here I‘ve been in the arena a lot longer.  I‘m a maverick.  And he‘s going to try to make it man on man, and say that Barack Obama is not the man who should be the next president. 

GREGORY:  In these states, red or blue, where the vote is close are these late deciders, are they a lot of independent voters?  Is McCain in a position to win those independents outright? 

FOURNIER:  That‘s one thing our AP polling is showing.  There‘s as many as 20 percent of voters who still could swing either way, are still persuadable.  Even though right now, if you push them hard enough, they will line up with one of the candidates.  We have a month to go yet.  A lot of things that you and I can‘t predict can still happen.  There‘s still some people out there who are persuadable. 

GREGORY:  A debate on Tuesday all about the economy.  This is important. 

FOURNIER:  And 30, 40 million people watching.  John McCain has a chance to try to get Barack Obama to melt down in front of 30 million people.  That could change the race.  An event we can‘t predict could change the race.  Right now, Barack Obama has got a big tail wind.  

GREGORY:  We‘ll be watching.  Ron Fournier, good to see you.

FOURNIER:  Thank you.

GREGORY:  That does it for RACE FOR THE WHITE HOUSE for tonight. 

Before we go, a quick reminder—Ron and I were just talking about it—

McCain and Obama will face off at the second presidential debate Tuesday night, October 7th.  NBC‘s own Tom Brokaw will moderate.  I‘ll have complete coverage starting at 9:00 p.m. Eastern time on MSNBC.  That‘s coming up next Tuesday.  I‘m David Gregory.  Have a peaceful Friday night.  I‘m thinking about politics.  I‘m also rooting for the Dodgers. 

Stay where you are.  “HARDBALL” with Chris Matthews coming up next.

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