updated 10/8/2008 11:36:38 AM ET 2008-10-08T15:36:38

Guest: John Harwood, Nicolle Wallace, Valerie Jarrett, Pat Buchanan,

Eugene Robinson, Michelle Bernard, Richard Wolffe

DAVID GREGORY, HOST: Tonight, round two. McCain and Obama meet face to face again. It is still almost one month before election day, but Senator Obama is trying to deliver a knockout blow while Senator McCain hopes to get off the ropes. Senior advisers from both campaigns are here tonight to make the case for their candidates as the RACE FOR THE WHITE HOUSE rolls on.

Just 28 days to go in the race for the White House.

Welcome to the program. I'm David Gregory.

My headline tonight, "Changing the Tune."

The candidates face off in Tennessee's Music City, with John McCain on a mission to shift momentum away from Obama, who has a clear edge now in every national poll. And among the crucial voting bloc of those Independent voters, McCain trails by four points now. A drop of 13 percentage points in the past two months, according to our latest NBC/"Wall Street Journal" poll.

Look, if there's one thing we've learned, it is never to count McCain out. He has declared in recent interviews that he relishes the underdog role. But if the recent polls are any indication, the continuing economic crisis is going to present a major challenge to the Arizona senator.

The stock market took another beating today. The Dow closed down over 500 points.

Joining me now from the debate site in Nashville is John Harwood, CNBC's chief Washington correspondent and political writer for "The New York Times."

All right, John, this is a big one tonight. It strikes me that this may be one of the final opportunities for McCain to get a game-changer here. How do you see tonight?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: Look, I think, David, John McCain has got a choice. His campaign has signaled they want to shift to cultural issues, which have done better for John McCain at earlier points in the campaign. That's what Bill Ayers is about, that's what Jeremiah Wright is about, Tony Rezko, to some extent.

But how do you do that on a day when the Dow dropped 508 points, you've had a $700 billion bailout passed by the Congress? The economy is so dominant, more dominant than it was in 1992, when Bill Clinton was running against President George H. W. Bush.

I think John McCain has got to go head on, on that issue, and try to push book against this idea that it's a straight line pass from Republican tax cuts and deregulation to this mess we're in, say, no, there were things that Bush did that were wrong, priorities we had that were wrong, but here's how we can fix it.

GREGORY: But John, doesn't McCain have to have a straight-up solid economic message in this kind of forum tonight? He may want to hit him on whether he thinks Obama is a liar, he may want to get into the cultural issues, character questions. But doesn't he have to have, as you just alluded to, a straight-up economic message? If he can't beat Obama at some level on the economy, isn't he done?

HARWOOD: I agree with you 100 percent, David. Look, in our NBC/"Wall Street Journal" poll, as you know, John McCain was down almost 20 percentage points on the handling of the economy. You can not duck that issue.

No matter how much you try to shift the subject of foreign policy or cultural issues, he's got to try to make a straightforward argument that, yes, there are some things we've done wrong in economic policy, but there are things we've done right, and we may need to do some more of those things. He's arguing that a corporate tax cut, for example, is something that's going to spur jobs. Not an easy argument to make with a Republican president in the White House, but he's got no choice but to make the argument for his agenda.

GREGORY: At the same time, Barack Obama has got pressure, as he does in everyone of these debates. He may benefit from this huge external event which is the economy, which his helping his campaign, but he's not a great debater, by all accounts, and this is a setting that really puts a premium on that personal interaction. We've seen a lot of very personal moments in these kinds of debates.

HARWOOD: Connection is what these debates are all about. Everybody remembers in 1992, when President George H. W. Bush in a town hall looked at his wash, sort of advertised the fact that he didn't want to be here. Barack Obama needs to show people that he is comfortable.

Again, reassurance is a major goal of his. Over the last few weeks of this economic crisis, he's been steady and calm. That has been an advantage to him. But he has to make swing voters feel comfortable, taking the risk of voting for him, because it is a risk and a leap for a lot of those voters. We've never had a black president before.

GREGORY: All right. John Harwood with CNBC and "The New York Times."

John, thanks very much.

Here now to talk with me about Senator McCain's goals and challenges tonight, Nicolle Wallace, senior adviser to the McCain campaign. She's also at the debate site in Nashville, Tennessee.

Nicolle, always good to see you.


GREGORY: You worked for President Bush in 2004, so you saw first hand some of the states I'm talking about when I say that at this moment, in nine of George Bush's states from 2004, Senator McCain is either tied or behind running against Barack Obama.

What does he do tonight that changes those conditions?

WALLACE: Well, first, one thing on the politics of this race. When John McCain sees the pundits calling him out or almost out, and he sees the polls tightening up, he feels like he's just getting started. So on the policies for this, I think they're certainly in John McCain's comfort zone to be the underdog. But this is a serious moment of national crisis.

This is a lot more than an economic downturn. This is a national crisis, and it looks like it's turning into a global financial challenge and crisis as well.

So I think what you'll hear John McCain do tonight is to point to the one bright spot in America's economy, and that's the 350,000 jobs that have been added this year. And those are in our small businesses.

Now, the truth about Barack Obama's agenda for small businesses is that his policies would decimate the one bright spot in America's economy. He would raise their taxes. He would mandate health insurance. And he would really snuff out the one bright spot of America's very sick economy.

So John McCain will make the contrast. He'll contrast what is a very different ideology and philosophy on health care.

He believes in giving people $5,000 to go out and buy health care.

Barack Obama is going to mandate health care.

So we'll do as John Harwood suggested. We'll go toe to toe with Barack Obama's way out of the mainstream ideas that would stifle the last bright spots in our economy, and we'll take our ideas to the voters, who will ultimately decide.

GREGORY: Let's talk about some of the polling that we've seen in terms of voters' attitudes about the economy. Who has got an advantage here? That advantage in the poll, Nicolle, as you know, favors Barack Obama.

Who would be better at approving the economy? You see 46-29, the advantage for Obama.

So is there extra work to be done on the part of Senator McCain beyond just pointing out differences on their record?

WALLACE: Sure. And you and I have talked about some of those in recent days.

The strategy will be to start to shine a spotlight on the growing gap between what Barack Obama says and what he does. Tonight he will look the American people in the eye and tell them that he's going to cut their taxes. And that is not true. That is not true.

And to understand what Barack Obama feels and will do about taxes, he has voted for higher taxes on the American people, on the middle class, on working class families 94 times. He has also voted to raise taxes on people making $42,000 a year. So he is an indiscriminate tax raiser.

And John McCain just has a completely different orientation. He believes that particularly in a sick and ailing economy, raising taxes is an awful place to start.

So John McCain will go toe to toe Barack Obama. And if there is any phase in this campaign where we get a little tougher, it's in holding Barack Obama's feet to the fire that is his record. I would be running from it, too. I would be spinning, too. I would lie, too, if I had a record like Barack Obama's in this economic crisis. But it's not going to fly in the last 28 days of an election.

GREGORY: Nicolle, this is what Senator Obama has said about Senator McCain in an ad that he is running on this question of leadership on the economy. Let's watch this and I'll have you react.


NARRATOR: Three-quarters of a million jobs lost this year. Our financial system in turmoil. And John McCain, erratic in the crisis, out of touch on the economy. No wonder his campaign wants to change the subject, turn the page on the financial crisis by launching dishonest, dishonorable assaults against Barack Obama.

Struggling families can't turn the page on this economy. And we can't afford another president who is this out of touch.


GREGORY: So you say that Obama lies, Obama says about McCain that he is erratic and he's out of touch.

WALLACE: Well, listen, if phoning it in from the campaign trail and sitting on the sidelines while our Congress grappled with what was an imperfect but necessary first step to stopping the bleeding in our financial markets, is the choice is between cool, aloof, inaction, and John McCain's bold efforts at trying to be part of the solution, we'll take it.

Let me tell you something about those attack ads. Barack Obama has spent more money than any presidential candidate in the history of this country attacking John McCain. And his lies are totally unnecessary.

And I think at a time when people have enough to be worried about, telling people what to be afraid of and who is to blame is a really, really distasteful way to spend your millions. We all know that Barack Obama has unlimited millions. He decided to opt out of the public financing system. And that's fine.

But I think it is worth looking at how he has decided to spend those millions, and they're on false attack ads. But, you know, we're not going to play that game.

I think the truth of Barack Obama's penchant and cheering for higher taxes is enough of a problem for him. So we're going to try to push away the distractions and let them stand toe to toe.

GREGORY: But Nicolle, you said you're not going to play that game. Let's be clear then. In recent days, we've heard from Sarah Palin and we've heard from-in the course of the attack ads as well that both sides have exchanged, Bill Ayers, Jeremiah Wright. Are those issues that Senator McCain will bring up tonight during this debate to try to hammer home the character questions about Barack Obama?

WALLACE: You know, I don't think anyone is sitting around the kitchen table or sitting in the TV room tonight watching is going to tune in and care too much about any of those issues. On Mr. Ayers, this was raised by Governor Palin as another proof point in Barack Obama's very troubling record of saying one thing and doing another.

William Ayers, as you may or may not have talked about on your show, has been a domestic terrorist. He was a guy at one time, planned and tried bomb the Pentagon and the U.S. Capitol. Thank God he was unsuccessful. He wasn't a good domestic terrorist. He failed.

However, he is a man in his home Barack Obama launched his political career. Now, that is what it is. It sounds like the guy is a productive part of academic circles in Chicago. And that's the truth.

Barack Obama described him as a guy in his neighborhood. You and I live nearby, and you're a lot more than a guy in my neighborhood. It was a lie to say he was just a guy in his neighborhood.

So this is about understanding whether he's going to tell the truth, whether he's going to tell the truth about his plan for raising taxes, whether he's going to tell the truth in a moment of crisis.

GREGORY: Is that an issue then-you're going to have millions of people watching, tens of millions. Is that a point in an argument that Senator McCain-he is the principal. Will he make that argument tonight in the course of the debate, where there will be so many people watching. This will not just be a campaign rally where Governor Palin can talk about this. Will he make that argument on this individual, as well as Jeremiah Wright, tonight?

WALLACE: Well, listen, as you know, this is a town hall meeting. So the star attraction tonight are the participants.


WALLACE: And you know, I think that what gets discussed tonight is up to the participants, not up to any campaign.

GREGORY: All right. One more question, Nicolle.

This is a leadership challenge for both sides tonight. And Senator McCain is a straight talker.

What uncomfortable truth will he tell the American people tonight about the road ahead on the economy?

WALLACE: Well, look, I mean, I think that the truth is, we as taxpayers all helped pay a piece of this bailout bill last week, and it wasn't a solution. It wasn't a one-stop solution for the economic crisis we find ourselves in. It was a tourniquet. It stopped the bleeding.

And now we have to begin the very difficult, and it looks like very long, hard work, of getting our economy back into a healthy, strong position. And it is in large part going to be the work of taking on corruption, of putting in place major, major institutional reforms.

The next president is going to have to fix big broken stuff in Washington and on Wall Street. And John McCain is the only man on the field who has ever done that before.

GREGORY: All right. Nicolle Wallace with the McCain campaign.

Nicole, as always, thanks very much.

WALLACE: Thanks, David.

GREGORY: All right.

Coming next, the other side. I'm going to go one-on-one with Obama's senior adviser, Valerie Jarrett, when RACE FOR THE WHITE HOUSE returns right after this short break.


GREGORY: Back now on a big night on RACE FOR THE WHITE HOUSE.

Since the last debate, Senator Obama has seen a bump in the polls. But coming in tonight's match-up, how does he keep that momentum going, especially in the face of the stepped-up attacks from the McCain campaign.

Joining us now, Obama senior adviser, Valerie Jarrett. She's down there in Nashville tonight.

Valerie, good to see you.

VALERIE JARRETT, OBAMA SENIOR ADVISER: Hello, David. How are you this evening?

GREGORY: I'm very well.

Well, Nicolle Wallace was just on the program from the McCain campaign and had some very direct things to say about Senator Obama. That he is a liar, that he is cool and aloof, that he phoned in his leadership when it came to the bailout package, and that he is simply lying about his record on substantive matters and on matters of character.

How do you respond?

JARRETT: Well, I say that's what the Republicans do because they've tried everything else and it's failed. I mean, they telegraphed the fact that they intend to go negative. I believe all the commercials that John McCain is running currently are negative commercials.

And frankly, that's not what I think the American people want to hear. A hundred and fifty-nine thousand people lost their jobs in this country last month. That's serious. We're talking about an economy that is being shaken up like never before in my lifetime.

And I think what the American people want to hear and what they're going to hear from Senator Obama tonight is, what are we going to do for them? I think they're tired of this divisive politics. They're looking for someone who's going to bring our country together, to move us in a positive, forward direction.

We have yet to hear from the McCain campaign what he's going to do to move our country forward. That's what I think the American people want.

If that's the position of Senator Obama, then why is he entering the fray? He's gone negative as well. He put out a big Web video dredging up the Keating Five savings and loan scandal during which McCain was largely exonerated, though cited for poor judgment.

Why have that response?

JARRETT: Well, actually, he wasn't exonerated. I think he was chastised by Congress.

It's relevant because it speaks to judgment. What we just saw last-over the last few weeks was a complete breakdown in our financial systems due to the lack of regulations over the last eight years that we've had Bush as our president. A lack of regulations that was supported by John McCain.

What happened in the Keating fiasco were billions of dollars were lost. People lost their life savings, they lost their jobs. It was the worst financial crisis second to this one, and John McCain was an active part of that.

And so he was chastised by Congress, he was reprimanded. And in fact, he apologized for it at the time and said it was the reason why he was becoming a reformer.

So it speaks to judgment. And the same lack of regulation we saw with the savings and loan disaster is what we just saw in the breakdown of our financial systems over the last few weeks. So it is relevant today.

GREGORY: Let me ask you about the issue William Ayers, who was involved with the violent Weathermen group during the Vietnam War. He has had a relationship with Senator Obama, they've done some work on school reform.

This has become an issue that the McCain campaign has put on the agenda in the last few days. Governor Palin talking about it, and she did so with an NBC affiliate in Florida. Listen to what she had to say and then I'll let you respond.


GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: That past association is not even a matter so much of that association with an unrepentant domestic terrorist who had campaigned to bomb our United States Capitol and our Pentagon. That's not a healthy association, a relationship. That's for sure.

But even more than that is the denial from the candidate that he had, A, known about that past activity of Bill Ayers, and kind of the inconsistencies there in their message on what that association...


GREGORY: Valerie, you've known the Obamas a long time. If Senator Obama characterizes the actions of Mr. Ayers as despicable, then why was he somebody that Senator Obama would do work with, even as it pertains to the issue of school reform in Chicago? Why wouldn't he have said, no, there is just a bright red line here, given what did he in the past, I just can't have an association with him?

JARRETT: Look, the fact of the matter is, what happened, as you pointed out, happened during the Vietnam War. This is not somebody who was an adviser to Senator Obama, he's not had any role in the campaign. He would certainly not have any role in an Obama administration.

He just happens to be somebody he served on a couple of boards with doing very good work, benefiting many people who need it. Mr. Ayers is an English professor at a local university.

Mayor Daley, who was an attorney for the county of Cook in Illinois, spoke out strongly in favor of him. But the point of the matter is, is that he is not somebody who rises to the level of being a part of Senator Obama's life, and he's not certainly anyone who's going to have any influence in the administration.

It's a distraction. It's something that the McCain camp would like us to be talking about so that we're not talking about Senator Obama's plan for the economy. That's what the American people want to hear about.

And Senator McCain, by his own words, said we have to pivot away from the economy or we're going to lose this election. So he's pivoting to anything he can think of to try to distract the American people. David, the American people are smarter than that.


GREGORY: But Valerie, does Senator Obama feel the need tonight, in front of tens of millions of people, to clear up this relationship with William Ayers?

JARRETT: Senator Obama is going to answer the questions that are put to him straightforward, in an honest and clear way, transparent to the American people, just as he has always done. He is very interested in answering whatever questions come from the American people.

He is looking forward to the town hall. I just left him a few minutes ago. He is very, very much looking forward to evening. And of course, as always, he's going to be straightforward and honest with the American people.

GREGORY: Let me ask you about tax cuts. "The New York Times" reported this, this morning: "Mr. Obama has said that he would raise taxes on the wealthy, starting next year, to help restore fairness to the tax code and to pay for his spending plans. With the economy tanking, however, it's hard to imagine how he could prudently do that. He should acknowledge the likelihood of having to postpone a tax increase and explain how that change will affect his plans."

It also occurs when "The Wall Street Journal" editorialized today. It's a reminder of Bill Clinton, who wanted a middle class tax cut back in 1992 and saw the economy turning in such a way that it was something that he was not able to deliver on, because he wasn't going to be able to pay for his spending programs.

Does Senator Obama think he can maintain a tax increase on the wealthier in this country, as well as a tax cut in this economic climate?

JARRETT: Yes, absolutely. And let's be clear, because there's been some confusion as a result of some distortion by the McCain campaign on this matter.

Senator Obama is proposing no increase in tax, tax relief for 95 percent of the American people. And so when you say tax increase, we're talking about a very small fraction of the American people.

What he is committed to doing is helping the working class, helping the middle class. And one of the ways that we can get our economy back on track, David, is to stimulate the economy, create jobs. We have to have an infusion into the economy with the people who are most likely to go out and spend that money, the disposable money.

And so, yes, it is still very prudent. He is committed to doing it.

GREGORY: All right.

JARRETT: He is also committed to being very flexible. We don't know exactly how this economic situation is going to turn out over the next couple of months. But his priority is the working class, David. I don't want you to cut me off before I make the point that Senator Obama is going to be looking out for the working families and what will put them back to work and restore our economy.

GREGORY: All right. Never want to cut you off. I'm just running out of time.

Valerie Jarrett, always a pleasure to have you on. Thanks, Valerie.

JARRETT: Thank you, David.


JARRETT: Please do. Bye-bye.

GREGORY: Coming next, who the world wants to see in the White House. We're going to show you a new global presidential poll. It's on THE RACE's radar tonight.

We'll be right back after this.


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

"Reader's Digest" conducted a poll in 17 countries to see if they would like to see McCain or Obama as the next U.S. president. Well, the countries polled included Australia, France, India and South Africa.

The results? Overwhelming support for Obama in every country except one-the United States. In the United States, 38 percent of voters say they're backing McCain, compared to 36 percent who say they're supporting Obama.

Internationally, Obama's strongest support comes from The Netherlands, where 92 percent of people say they would like to see him elected. McCain's strongest support comes from South Africa and India, although, overall, people in both countries still prefer Obama by a wide margin.

Go figure.

Coming next, the questions for our dream team, what they would ask the candidates in tonight's debate, and the question I think should be answered as well.

You're looking live at the debate site at Nashville's Belmont University, where Senators McCain and Obama are just hours away from facing off. It's the second time. It's a big one tonight, town hall format, and Tom Brokaw of NBC will be moderating.

You don't want to miss it.

RACE FOR THE WHITE HOUSE comes right back with the back half after this.


GREGORY: The attacks fly back and forth, as the candidates prepare to come face to face in tonight's debate. It's a town hall debate in Nashville. Will this be about issues or character or both? That and more as the RACE FOR THE WHITE HOUSE rolls on.

Back now on RACE FOR THE WHITE HOUSE. I'm David Gregory. Senators McCain and Obama are now making their final preparations for tonight's debate, which is formatted as a town hall meeting. The candidates are going to face questions directly from the audience and the Internet participants, which got us thinking about which questions we hope to hear posed tonight.

Joining me now to share what they would ask the candidates, our dream team, the panel tonight, Michelle Bernard, president of the Independent Women's Forum, Pat Buchanan, former presidential candidate, Eugene Robinson, columnist and associate editor of the "Washington Post," and from Nashville, Richard Wolffe, "Newsweek" senior White House correspondent, who covers Obama full time, all four MSNBC political analysts.

Pat, I want to start with you. Before we get to questions, I want to get a sense from everybody. You've been listening to the program tonight. The strategy you see on both sides that is emerging.

PAT BUCHANAN, MSNBC POLITICAL ANALYST: John McCain's strategy is clearly it's all headed in the wrong direction. If it continues in this direct, Obama wins. He has to interrupt that momentum. Obama is the change candidate. He has to be able to prove, this is unacceptable change. Why? Obama's record shows him to be a hard leftist. His ideas of raising taxes are the wrong ideas for America.

More importantly, in terms of character. Here's a man who doesn't tell the truth. It is not simply that Bill Ayers was a domestic terrorist, he is lying about his association with him. He has lied about my record. He continues not to tell the truth. This is a slippery character and he has to do that without coming off as being mean.

GREGORY: That's the McCain side. Gene Robinson, what do you expect from Obama tonight?

EUGENE ROBINSON, "THE WASHINGTON POST": Steady as she goes. Obama has been doing so well the last couple week. I think he will continue doing what he has been doing. He wants the focus to continue to be on the economy. How could it not be with a 508 point drop in the Dow today. People who check their 401(k) statements are going to want to focus on the economy and hear what these candidates have to say about it, what they're going to do about it. That's a great issue, potentially a winning issue for Obama. So I think he will stay on it.

GREGORY: All right, but Richard Wolffe, you know Obama very well, covering him day in and day out. Does he want the fight tonight or does he want to sit on the ball a little bit and just look the American people directly in the eye and talk about the economy? Or does he want to engage McCain?

RICHARD WOLFFE, "NEWSWEEK": Well, his challenge here tonight is to feel their pain. Really, he wants to be presidential. The duller the better for him. If he holds out the ball and rolls out the clock here, he'll be doing just fine, because he is ahead. The last debate helped him by being cool and even keeled. So, really, the onus is on the other guy. He needs to leave the spotlight on him.

GREGORY: What's interesting about that, Michelle, is we watched that first debate between McCain and Obama, and a lot of people thought, wow, McCain looks commanding; he looks strong; he is making effective points. Obama was holding his own. And yet our polling indicates that in both debates, strong advantage for the Democratic ticket.

MICHELLE BERNARD, MSNBC POLITICAL ANALYST: Yes, absolutely. And I watched the debate and thought it was a snoozer on behalf of both of the candidates. McCain, I think, clearly, from my perspective, did better in the first debate. However, I think what this tells us is that the American public really do want change. Obama looks presidential. He was cool. He was calm. He was collected. He didn't fight McCain hard. There were a lot of people, a lot of pundits in particular, who felt that Obama needed to be a little stronger and really push McCain's button and he didn't do it. Maybe that's an indication of what the public is really looking for, calm and steady. What is the prescription for getting the country out of the economic mess that we're facing now?

GREGORY: I've been mentioning throughout the hour, Tom Brokaw moderates tonight. This is a town hall format. There are voters who are in the hall. There are also voters who have suggested questions on the Internet. And Brokaw's team has been going through that. There will be about 15 or 20 questions. What question are you thinking about? We're going to tell you the questions we're thinking about. Pat, start it off.

BUCHANAN: If I were Tom Brokaw, I would say to both of them, which party and which people in particular are most responsible for the subprime mortgage crisis and the economic calamity this country faces? Name them.

GREGORY: Why assign blame? Is that what voters want?

BUCHANAN: It's not simply to get them to assign responsibility and blame, whether it's Barney Frank or Dodd, which McCain might say, or Fannie Mae or Freddie Mac, or Barack Obama would say it's this Republican philosophy, Gordon Gekko. It's to get them to express what is their philosophy, what they think caused and then move to what they think can cure the greatest financial collapse, I think, since 1929. To get them to come out and say, where is the responsibility, how it happened and how they can change it.

GREGORY: David Brooks writing in the "New York Times" in his column today talks about the stakes. This is what he had to say, "this is the test. This is the problem that will consume the next president. Meanwhile, the two candidates for that office are talking about Bill Ayers and Charles Keating." Richard Wolffe, get to your question in just a minute. But first, what is that balance between character and substance tonight? If you're John McCain, you want to put those issues on the table. He's wanted to do that. Nicole Wallace talked about it tonight. Governor Palin is talking about it on the campaign trail. They're talking about it in the ads. He wants that issue in front of tens of millions of people.

WOLFFE: You do. But my question is, look, both of you candidates have been very critical of negative campaigns in the past. So why do you think it helps voters to go negative about each other now? The truth is that character is what the McCain campaign is talking about now. But the issues are clearly where this election is going; 59 percent of the country wants to talk about the economy, wants to hear about it. And in the end, these are two unconventional candidates, who made their name being different kinds of politicians. They're both running very conventional campaigns now.

GREGORY: But there is no question that John McCain is a well known figure in America. Barack Obama is not quite there yet. So if you're McCain, it makes sense to try raise doubts about Obama. Is this a guy that you trust, especially when there is so much on the line right now.

WOLFFE: It does make sense. But you have to tie it back to the economy. If you're not, then 40 percent of the country will be listening to you; 60 percent will still want to hear about the economy. Ayers doesn't take you back to the economy. It takes you away from it. So if you're going to raise doubts, raise doubts about some economic, financial questions.

GREGORY: Michelle, what questions do you think should be asked tonight?

BERNARD: Given the fact that we know there is a really significant gender gap in this country, meaning more women go out and vote than men do, I would focus on women. If were Tom Brokaw, what I would say to the candidates tonight is what specific economic policies are you going to enact if you're elected president that are going to advance and promote women's economic progress and help women balance family and work life?

GREGORY: Why such a specific focus in the particular question? Why do you think that's beneficial for them to address?

BERNARD: Both candidates are going very hard after women voters. There is a gender gap. But also, women are really concerned with pocket book issues. Do they stay at home and take care of their kids? Do they go out and work so they can help economically at home and get their kids into a better school district? How are women's lives going to be better? I think they have to ask very specific questions, because no one yet is giving us a prescription for how to get out of this economic mess. That is a something-it's a pocket book issue that women and men alike are worried about.

GREGORY: Gene, you're on deck. Pat, what is interesting about that, in our polling, you see that they are running about equal on white men. If you're John McCain, you have to make some inroads among women. Gene, hang on a second. Pat, true, right?

BUCHANAN: If they are running even among white men, it is all over, quite frankly. You're losing white women? Who are you winning? Look, it is clearly-McCain has to make moves tonight. He has got to somehow stop the momentum, bring Barack Obama down, make him unacceptable as the alternative and unacceptable change.

GREGORY: All right. Gene, question.

ROBINSON: David, I would go to an issue that we haven't talked about yet tonight, but yet won't go away. I would ask both candidates, aside from the few who are needed to defend the U.S. embassy, at the end of your first term, will there be U.S. troops in Iraq? If so, how many? This is an issue on which there are real divisions, real differences between the two candidates. Everybody understands it's not going to be easy to end the occupation in Iraq.

But how serious is Barack Obama about what he says about getting us out of Iraq, and how serious is John McCain about seeming to want to want a much longer U.S. presence in Iraq. So let's use the end of the first term as bench mark. Are you going to have U.S. troops there or not? And how many?

GREGORY: Which one of the candidates wants that issue more?

ROBINSON: I think they both want it in a funny way. I think they both believe passionately in their view of Iraq, both believe passionately in their view of the U.S. role in the world, the proper U.S. role in the world. I think they would both welcome the question. I think we would see some real fireworks there, because they sharply disagree.

GREGORY: Let me tell you what's on my mind tonight. I posed this question to Nicole Wallace. I can remember covering John McCain back in 2000 when he said, you may agree with me or disagree with me, my friends, but I will always tell you the truth. This year, in the course of the debates, during the primary, I remember Senator Obama saying, I will speak hard truths to the American people, even if they don't want to hear it.

So my question is, what uncomfortable truths are they going to speak to the American people tonight? And I think both candidates could be challenged on this issue, which is are they really leveling with the American people about the kind of impact the economy is going to have on the next administration and the priorities of the next president?

WOLFFE: It's a great question because it also gets to the sense of shame they may have about the kind of campaign they're running right now. Of course, given the state of the politics, they all say they are telling the truth all the time. But you're right. There is a job here for both the president, the current president, and the next one to explain this crisis, what it means and what it takes to get out of it. And that's what this question gets to. It's not just the Jim Lehrer question, which is what are you going to cut, but what do we all to contribute to get out?

GREGORY: Pat, quickly.

BUCHANAN: That goes right to your point. What McCain could do is say, Barack Obama is not telling the truth. After the market has lost five trillion in value, you can't raise taxes like you promised to do on the five percent who paid 60 percent of all taxes. And you can't spend another trillion dollars when we have a trillion dollar deficit. You're not telling the truth. It is a pattern with you, Obama. You don't tell the truth. I think that is the line. If he is going after the character issue, yoke it right to the economic issue.

GREGORY: We're going to take another break here. Coming next, McCain's new attack ad said Obama lied to voters. How is Obama responding? Plus, a look at where the race stands in some key battleground states tonight. Very important. All of that when THE RACE returns after this.


GREGORY: Back on RACE FOR THE WHITE HOUSE. Senators McCain and Obama meet face to face for their second presidential debate in less than three hours time now. What are the goals for each candidate heading into tonight, and how does the debate fit into their overall strategies here with less than a month to go? Joining me now with a look inside the campaigns, Harold Ford Jr, chairman of the Democratic Leadership Council, and MSNBC news analyst, of course, and Pat Buchanan, MSNBC political analyst, and a former presidential candidate. We're trying to establish our hook up with Harold Ford.

Let me start with you, Pat. We'll get into strategy in just a moment. You've been talking about it. Here is what Senator McCain is saying on the airwaves about Senator Obama. Let's watch.


UNIDENTIFIED MALE: Who is Barack Obama?

UNIDENTIFIED MALE: Obama's presidential campaign is asking Missouri law enforcement to target anyone who lies or runs a misleading television ad.

UNIDENTIFIED MALE: How hypocritical. Obama's Social Security attack was called a falsehood. His health care attack, misleading. Obama's stem cell attack, not true. Barack Obama, he promised better. He lied.


GREGORY: This is in your face stuff. This is who is he? He is a man of mystery. Can you trust him? And he lied.

BUCHANAN: You can't trust this guy. He is a liar. That's exactly what John McCain's ad is saying. That is as rough as it gets in presidential politics, I think, to use that kind of direct term about your opponent. But McCain realizes, he has to make Obama unacceptable change to the American people.

GREGORY: Is it too late to do that, Pat? He was on that track when he brought up the celebrity business earlier on in the general election campaign. Then they got off that. And now they're coming back to it.

BUCHANAN: As a friend said to me during Watergate, you got a better idea, Pat? Look, you have four weeks down in this thing. Everything is going in Barack Obama's direction. He is ahead on rounds. He's ahead on points. McCain has to come out smoking and his handlers are telling him, John, if you don't take him down and take him out, we lose this.

GREGORY: Did Hillary Clinton do something similar at the end of the primary run?

BUCHANAN: She did. Hillary did a terrific job. She did reinvent herself in Pennsylvania and Ohio as she came out-as somebody said, she came out as the love child of Norma Hill and Joe Ray, this former Wellesely gal. She did a great job and she beat him consistently. Ten points Ohio, ten Pennsylvania, 41 West Virginia. That's what McCain has got to do now. He and Palin, he has to come out smoking. He has to win this thing.

GREGORY: Let's go through some of the states here. I talked to Nicole Wallace earlier in the program. And I said, look, these nine Bush states from 2004, you're either losing or you're tied. That mean he has got to pull off an inside straight. Look at these numbers. These are CNN/"Time Magazine," North Carolina: Obama 49, McCain 49. Obama is there inside 30 days. He's campaigning in North Carolina.

BUCHANAN: A yellow flag is up in Indianapolis. All the cars are in position. Obama is a lap ahead. If they keep going around the track at this speed, Obama wins. That's why McCain has to change things. Look at those numbers, nine states. McCain would have to win everyone of them.

GREGORY: And you go through Ohio, Obama 50 percent, McCain 47. There is another poll from ABC/"Washington Post" that has the lead at six. It is the economy.

BUCHANAN: Here's what you've got to do. You can't go state by state anymore. Four week is too short for that. You have to raise your national number up to equal to Obama and moving ahead. If you're going in 48-48 into this election, I think McCain can win it, because it will mean Obama hasn't closed the sale. As of now, people are starting to move to Obama, saying he is acceptable. He is not that frightening. His ideas aren't that bad. He is good debater. He seems kind of a centrist guy. He may be sort of a Jack Kennedy Democrat, maybe.

GREGORY: Is there a danger though, Pat, if you use tonight's debate to make it that he is a liar, you can't trust him, who is he? If you're too in his face about doing that, do you run the risk of turning off all those voters who want an economic message?

BUCHANAN: It is a difficult thing to do, because McCain can come off as not just a tough guy, but a mean guy, an unpleasant guy. When you start doing this type of campaigning, usually you hurt the guy you're going after, but you hurt yourself in the process. And how you bring this off, it is a very tough thing. That's why you normally give that assignment to the bayonet of the party, the vice presidential candidate.

GREGORY: But how do you-let me just show a couple more. In Indiana, McCain 51, Obama 46. That's actually outside the margin. That's better news for McCain in a state where Obama has been doing pretty well. Florida though, Obama, 48-46. You have a huge number of foreclosures down in Florida. It's difficult.

If you're Obama, he has two competing ideas here. One is, I've got to fight this guy. If he is going to throw a punch, I'm going to throw the last punch. He still remembers 2004 and reeling like Kerry didn't fight back hard enough. The other side of that is that he wants to sit on the ball. He wants to be presidential. He wants to ride out the clock. Which is it?

BUCHANAN: You get back to the fight metaphor. He can't let this guy crowd him. He has to start punching back, and hitting back. Frankly, if McCain starts hitting him on character, he goes back and says, I've got some bad associations with those guys, bad judgment on Reverend Wright. You have bad judgment on Charlie Keating. Come back and hit him with it and show he's a tough guy. He has to do that for a lot of these hardcore white male Democrats who like a fighter, a guy who doesn't just sit there and takes it, but delivers punches.

GREGORY: He didn't do that in the last debate. We kept watching. He did a little bit, but he seemed to falter at delivering that real line.

BUCHANAN: He doesn't like it. He is not good at it. He is faculty lounge. He really is. He is a nice guy.

GREGORY: Late breakers, late deciders in these days. You have close states. How real is that as a factor? We look at our polling, and we see the independent voters are trending toward Obama.

BUCHANAN: They're trending towards him, but that's the one thing McCain has going for him. Even the trend toward him, I think there is still doubt and hesitation that Obama is the guy. A generic Democrat I think would win this. They're still looking at Obama. They say you have that cooky pastor. Who is this bomb character. They don't know about. They aren't sure. He hasn't quite closed the sale. That is the McCain opportunity.

GREGORY: You are so excited tonight. You've got me so excited about tonight.

BUCHANAN: I think it will be a really great debate.

GREGORY: I think it is going to be an important moment in this campaign. Pat Buchanan, great thanks. Coming next, Chris Matthews joins me live from Belmont University in Nashville, the site of tonight's second presidential debate. We're going to hear from Chris, who is doing HARDBALL after HARDBALL after HARDBALL from the debate site. You don't want to miss those. You don't want to miss Chris. He's coming up here in just a couple minutes when THE RACE returns.



RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago? Is it easier for you to go and buy things in the store than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was?


GREGORY: Back now on RACE FOR THE WHITE HOUSE. That, of course, a look back at a defining moment from the Reagan/Carter presidential debate back in 1980. We're now just a couple hours away from the second presidential debate between Senators Obama and McCain. Big question on our minds, will there be a big game-changing moment tonight?

Joining me to share his prediction is Chris Matthews, host of MSNBC's "HARDBALL." He is down at the debate site in Nashville. Chris, good to see you. You're a student of history, among other thing. You look at that moment from the 1980 debate. Do you expect a moment like that? Is tonight that big?

CHRIS MATTHEWS, MSNBC ANCHOR: Yes, it is. And I think you see a lead on the part of the Democratic candidate to the Republican candidate. John McCain is going to have to do it. He's the one that has to be the aggressor tonight. And we'll have to understand-we can't predict exactly what he'll do. But everyone would predict that he has to take the aggressive move. It has to be the game changer that he executes.

GREGORY: Chris, do you see this as an opportunity for McCain to try to bloody the nose of Obama, to raise the issue of mystery? Who is Obama? Take him down on character? Or does he have to go toe to toe on the economy and out-do him on the economy?

MATTHEWS: I think most people understand that the what, the state of the economy, the question of who has been running the country for the last eight years, that what question has been dominant in the voting so far. I think John McCain has to take to it a who question. Not to which political party, not to which record, but who personally do you trust to run the country? I think it is the only way he can make the game changer tonight.

GREGORY: This is a format where, Chris, those personal moments can mean a lot, those personal interactions. I think back to the 2000 debate between Gore and Bush, where Gore stepped up on Bush and he shot him that glance. You think back to 1992, Bush's dad looking at his watch. Those kind of moments matter a lot. Don't they, in this kind of format?

MATTHEWS: Yes, and I also think body language. Barack Obama possess this almost gravity-less way of moving around. He walks with tremendous elegance, more Than even Jack Kennedy, who was perfectly elegant. And whereas John McCain still clearly carries the scars of battle of war. His arms are a bit stiff. He is shorter of stature. He can't move with as much mobility. Tonight, I think you're going to see these two men move around a lot in a way that is going to display their comparative agility. And I think that, too, will matter, not just the big moment, but the look of the two guys.

Americans are health conscience. They're youth oriented. No matter what they say, they're looking for the healthiest candidate. They're looking for the youngest seeming. That is going to matter tonight. We are not about to elect an old man president. John McCain must not act like an old man tonight. He must act like a very youthful 72. And he has to do it. That's a challenge for him.

GREGORY: All right. Chris Matthews, thank very much. We'll be seeing you throughout the night, of course. That does it for RACE FOR THE WHITE HOUSE for tonight. Stay tuned to MSNBC tonight, where I'll be bringing you full coverage of the presidential debate. It begins at 9:00 eastern time. And after the debate wraps up, I'll be back with you for complete post debate coverage. Then it's "COUNTDOWN" with Keith Olbermann at 11:00 p.m. and a special late night "HARDBALL." That is at midnight.

I'm David Gregory in New York. It's time to head back out to Chris Matthews in Nashville, the site of the all important debate, for "HARDBALL." Good night.



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