updated 10/14/2008 2:23:30 PM ET 2008-10-14T18:23:30

Guest: Erin Burnett, John Harwood, Ed Rendell, Michael Smerconish, Joe Watkins, Jennifer Palmieri, Bob Shrum, Ken Salazar; Mike DuHaime, Jesse Jackson

DAVID GREGORY, HOST: Tonight, the stock market rallies as the government prepares to pump money into U.S. banks.

On the campaign trail today, two big rallies from the candidates with new messages from each. John McCain argues, don't write me off. Does he have a shot in Pennsylvania? Governor Ed Rendell will join us to talk about it.

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

Twenty-two days ago in the race for the White House.

Welcome to the program once again. I'm David Gregory.

My headline tonight, "Obama's Battleground Defense."

The state of race shifting to advantage Obama.

Here's the latest ABC News/"Washington Post" poll. It's got Obama ahead by double digits, 10 points, 53-43. And NBC News's latest electoral map shows Obama holding a more than 100-vote lead on the electoral map as well, 264 to 163.

With the ball now firmly in his court, the Illinois senator played offense today on the campaign trail in red state Ohio today, slamming McCain for the economic mess and offering a few new solutions of his own.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Today I'm proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities, and help struggling homeowners. It's a plan that begins with one word that's on everybody's minds. And it's easy to spell: J-O-B-S, jobs. We have got to work on jobs.


GREGORY: A bumper sticker moment, perhaps.

Meantime, Senator McCain played defense in battlegrounds Virginia and North Carolina today. Relishing his underdog role, McCain hit Obama for already measuring the drapes in the Oval Office, he says.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We have 22 days to go. We're six points down. The national media has written us off. Senator Obama is measuring the drapes. My friends, we've got them just where we want them.


GREGORY: So here's what I noticed today. You see from Senator Obama, trying to look more presidential, staging his event as if he is already the president with the flags behind him, up at a podium. He doesn't want to make it look like it's a rally. We saw that today when he was in Ohio.

From McCain, no mention of William Ayers today, no going negative, per se, on personal issues with Obama. Polls are showing that going negative is actually hurting him, McCain. His message today is about himself, why he is the leader for this kind of economic crisis, why he is the guy who can fight for voters.

Meantime, after record lows on Wall Street last week, the market jumped today, and really jumped. The Dow gained over 900 points, recouping nearly half of its losses from last week in just one day and making the biggest one-day closing point ever.

Joining me now to make sense of today's market movement and what it might mean for the presidential race, John Harwood, CNBC's chief Washington correspondent and writer for "The New York Times"; and Erin Burnett, anchor of CNBC's "Squawk on the Street" and "Street Signs."

Welcome to you both.

Well, this is where we were on Friday, Erin, when we were shaking our head about what was going on last Friday. Here we are on Monday shaking our head again.

What happened?

ERIN BURNETT, HOST, "STREET SIGNS": Do you feel a little sick to your stomach or maybe a little nauseous?

GREGORY: Yes, exactly.

BURNETT: I mean, this is-it's truly incredible. You look at the biggest rally in seven decades today after the worst week ever. So you can be forgiven for being confused.

But the bottom line is, I think, David, that this came on confidence, more confidence that the government is doing everything it needs to do. And now we'll probably hear a little bit more from Treasury about taking stakes in banks and increasing deposit insurance tomorrow. The Europeans took big steps. The G-7 said they would do everything necessary, and that's what they're doing.

So this is confidence. But one crucial thing, David. The bond market was closed today, and we all know that's really the scene of the crime right now.


BURNETT: So we will see if this can hold tomorrow when the bond markets open. That's the real test.

GREGORY: And a lot of people will say that it's how the credit markets perform that's more important than the actual market itself.

BURNETT: Absolutely. It really is all about the credit market.

We saw a little bit of improvement there in Europe. But when we have that treasury market open here in the U.S. tomorrow, that's when we'll really see it. If we start to see some of those rates that banks charge each other to make loans go down dramatically, that will be a significantly positive sign.

GREGORY: John Harwood, are we hearing more from the presidential candidates that is concrete in a way that is a compliment to what the administration is doing, and indeed, what their counterparts are doing in other parts of the world as well?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: We are. And first of all, David, what I learned today was that Erin Burnett knows what she's talking about.

We were on "Meet the Press" yesterday, and she said, "I think the markets have gotten what they needed out of Washington." And so you saw that reaction today.

But they're not stopping there. You had Nancy Pelosi out today talking about a second stimulus package, perhaps $150 billion. Not sure what all the components are going to be.

Barack Obama came out today with a set of new economic proposals, including a credit, interestingly, for business that's make new hires, $3,000 per additional full-time worker. That's an attempt for him to try to keep this issue rolling.


HARWOOD: John McCain didn't have new proposals today, as had been advertised over the weekend, but his aides tell me he is going to make an economic policy speech tomorrow which he will have some new policies. Lindsey Graham, the senator very close to him, as you know, said over the weekend that would include capital gains and dividends, tax cuts to try to jumpstart the economy.

GREGORY: John, we get a lot of talk here from Senator Obama about some of these proposals. How is he going to pay for these? And can he really afford the kind of tax relief he's promising as well?

HARWOOD: Well, it's a good question. And I think the bottom line is, nobody is all that as concerned about fiscal responsibility now, even though they'll come up with numbers and say, yes, this is paid for. But everybody right now is in the all of the above category, which is what John McCain used to say about his energy proposals.

I noted in one of the stories today, the vice chairman of Citigroup said the most important thing for Washington policymakers now is not to undershoot. Better to overshoot the mark. And I think that's the attitude that the Obama campaign is taking right now.

GREGORY: All right. Erin Burnett, John Harwood, thanks, as always.

Senator Hillary Clinton campaigned for former rival Barack Obama today in battleground Pennsylvania, where she debuted a new counter-punch to Governor Sarah Palin's, "Drill, baby, drill" cheer.


SEN. HILLARY RODHAM CLINTON (D), NEW YORK: What we'll create in Pennsylvania, if you give the Democrats a chance to lead and serve you, and what we'll create across America with a Democratic president and a bigger Democratic majority in the House and the Senate, comes down to this: Jobs, baby, jobs.


Joining me now, Obama supporter and Governor of Pennsylvania, Ed Rendell, who was with Senator Clinton today.

Governor, welcome.


GREGORY: Let's put up the latest from Muhlenberg College. Poll numbers out of Pennsylvania gives a biggest advantage to Barack Obama. As you look at the head-to-head numbers, 50-38, according to the Muhlenberg College poll.

Governor, is the race in Pennsylvania out of reach for John McCain?

Are you prepared to say that?

RENDELL: No, absolutely not. Number one, this has been one of the most fluid campaigns I've ever seen. If you go back to a day or two before the economic meltdown, Senator McCain was even in one poll in Pennsylvania, and down by two points.

Now, can an external event happen in the next three weeks that could change the dynamic here? Possibly, number one.

Number two, you know, there is always a 12 percent, even in that 50-38 poll. There's 12 percent who haven't decided. Now, that 12 percent isn't going to fall entirely into Senator McCain's camp, but whenever there's that many people undecided in a poll, there is cause for concern. And so we're not taking anything for granted.

Gosh, Senator Obama, we worked him like a dog on Saturday. We had four stops from 8:00 in the morning until 1:30 in the afternoon. Four stops in Philadelphia where he saw over 60,000 people. The electricity in the air was great.

But look, this is a state, as you know, David, with many different and disparate regions. But we haven't closed the deal yet. But I will tell you, when you listen to Barack Obama's economic rescue plan for the middle class, you know why all of a sudden, those blue collar, white working class families are starting to trend for Obama. I think in one of these polls he is 10 percent ahead in that type of voter.

GREGORY: Well, let me get to that. Let me get to that.

First of all, let me just show some numbers for some contexts here.

If you look at the past two election cycles, when I've been out covering President Bush, starting in 2000 and then 2004, in 2004, Kerry, 51, Bush, 48. In 2000, Gore, 51, Bush, 46.

Do you think there's going to be a wider spread this year for Obama?

And what would lead you to believe that?

RENDELL: Well, if the election were held today, I think, yes, I think Senator Obama would win somewhere between six to nine points, in my judgment. And it's because he has done so well.

Look, in the last five and a half weeks, the nation's attention has been riveted towards government and politics.


RENDELL: That isn't normally the case, even in a presidential year. In that time period, Senator Obama has done great, he's done well in the debates, he's offered some good solutions. His speech on the floor of the Senate was terrific.

Contrast it with Senator McCain, who started off with a colossal blunder, saying the fundamentals of the economy are good, and who really never recovered from that. So that's caused a shift.

Right now, people aren't worried about individual questions about Senator Obama. They're not worried about race. I use the analogy, David, if you're drowning in the middle of the river and there is a guy on the bank of the river with a rope coil in his hand, you don't care what color he is. You just care whether he has a strong enough arm to get that rope out to you in the middle of the river.

GREGORY: Well, Governor, this is what you said back in February about this issue before the primary. You talked about, "You've conservative whites here"-talking about in Pennsylvania-"and I think there are some whites who are probably not ready to vote for an African-American candidate."

Those are comments you made to the "Pittsburgh Post-Gazette" back in February.

Undoubtedly, race will still be an issue in certain pockets of the country. But do you think generally that the economy has overtaken cultural issues in your state and in other states in this election cycle at this stage?

RENDELL: Without a doubt. Does that mean that no one's going to vote based on race? Of course not. But in terms of that big gap of Hillary Clinton voters, working class, white middle class voters, blue collar voters, right now they're worried about their budgets. Their budgets.


RENDELL: They're not worried about who the president is or what he is or what his ethnic background is. They're worried about what answers he has.

And boy, if you look at the rescue plan that Barack Obama outlined today, making the $1,000 tax cut that he proposed for the middle class available immediately in an IRS rebate, taking $10,000 -- allowing people to take $10,000 out of the IRA without penalty now, the job creation with infrastructure, it's been something we've been calling for, the nation's governors, Republicans and Democrats. It's a great plan, and people react to that. This guy has got good ideas.


Governor, let me get to one more question here.

You were for Senator Clinton. That's well known. You're now very supportive of Senator Obama. But you've watched him as a politicians, you evaluated him, you've gone up against him as a supporter for Hillary Clinton.

At this stage, with three week left, what are the hard questions that you think he has yet to answer effectively, that he must answer if he's going to prevail in Pennsylvania and in this election?

RENDELL: Well, I think he's answered them, David. And I think he's just got to keep on the same track.

The questions are, is he ready to lead? I think he answered that in debate number one and debate number two.

The second question is, does he have real concrete ideas that are going to benefit us, the same people he talked about disparagingly in San Francisco? And I think people are getting the fact that this is a guy with great ideas.

His ideas are very much the same as Hillary Clinton's. You know, Hillary and I were talking about that as we took the stage today. His ideas on health care and on the economy are very much the same as we talked about.

That idea is starting to get through. It's starting to get through. It he has to stay in charge. So I think he's just got to stay in charge, stay in command...


RENDELL: ... not make any errors. And continue-as you said in the beginning of your program, stay on the offensive. Keep giving the American people another good idea, a good reason to vote for you. And he sure did that today in today's rescue plan.

GREGORY: All right.

Governor Rendell of Pennsylvania.

Really appreciate you taking the time tonight.

RENDELL: Thanks, David.

GREGORY: Coming next, team McCain retools its message as new national polls show Obama with a growing lead. What was different about the Arizona senator on the campaign trail today?

When THE RACE comes back we'll tell you about it, right after this.



MCCAIN: I know what hopelessness feels like. It's an enemy who defeats your will. I felt those things once before. I will never let them in again.


I'm an American and I choose to fight.


GREGORY: That was Senator John McCain on the trail in Virginia Beach today, talking about being a fighter, part of his new campaign strategy.

With us to look at that now, Jennifer Palmieri of the Center for American Progress. Jennifer served as national press secretary for the 2004 Edwards campaign. Michael Smerconish, Philadelphia radio talk show host and columnist for both "The Philadelphia Inquirer" and "The Philadelphia Daily News." He represents the Phillies on this program. I represent the Dodgers. So there may be some tension in the air.

And Joe Watkins, Republican strategist.

I didn't even think about that. The tension is so on the surface now, I hadn't even thought about that until I said the word "Philadelphia," which made me go cold suddenly.

And Joe Watkins, Republican strategist and MSNBC political analyst.

Welcome all.

I want to go-we'll get to the Dodgers and Phillies later, but I want to go to some of the new polling from the ABC/"Washington Post" on favorability. And they are striking numbers.

Obama at 64, McCain 52, in terms of their favorability numbers. And you see that for McCain, that number has dropped seven points since September. Obama has gone up six points since September. The unfavorable rating you see, 45 and 33.

Also, look at this issue here of attacks against opponent and how voters are seeing this. Attacking his opponent, McCain, 59 percent versus 35 percent of spending issues-talking about issues. Just the opposite, according to this poll, for Senator Obama.

We'll show those numbers. There you see it, 68 percent say he's addressing the issues, 26 percent say he's attacking his opponent.

Joe Watkins, going negative for John McCain has not worked.

JOE WATKINS, MSNBC POLITICAL ANALYST: Well, John McCain is a fighter, and he's going to continue to fight. And he's been the underdog for a long time. Much of this campaign he's been the underdog.

He certainly was not expected to win the Republican nomination for the presidency. And right now, the polls show that he's a little bit behind. But John McCain is going to stick to a message, I think, which shows that he's going to take this country in a new direction. And I think that that's going to work for him.

GREGORY: Well, but that's fine. But Joe, the question is, going negative against Obama, trying to make the election just about Obama, has not worked because it is down to Obama's benefit in terms of his overall favorability rating. You don't quarrel with that?

WATKINS: Well, you're right. I mean, from a standpoint of what these numbers seem to indicate, that's exactly right so far.

I think that John McCain wants to take the negativity out of it and just show the difference between the candidates on the issues. And that's what he has made a real effort to do.

Some of the surrogates may not stick to the script, but John McCain is going to stick to that script of keeping it clean, keeping it above board, and talk about the differences where he would take the country, the new direction he would take the country in.


Smerc, what's interesting, what I saw again out of McCain today was, we're in a crisis. This is crisis management. Who do you trust to deal with the crisis?

If it's just about the economy is bad and the country is off on the wrong direction, that gets into a change argument, which is better for Obama. McCain wants to frame this as, who do you trust in a crisis?

MICHAEL SMERCONISH, RADIO TALK SHOW HOST: And he's wise, I think, to focus on the economy, because, David, what has been a net loser for the McCain campaign is the negativity: the William Ayers, talking about ACORN, trying to regurgitate Reverend Wright.

What John McCain needs to be is the John McCain who took that microphone out of the hands of the woman who said we can't trust this guy because he's an Arab. Folks are worried about their 401(k) and their job, and that's what he has got to address now.

GREGORY: Jennifer, from the other side of the aisle, what is it that the Obama camp should be worried about right now? There's a lot of-a lot of the trends point in his direction. He seem to be pulling away in some of that polling.

But assuming that McCain can close that gap, he's in a good position for John McCain. Yes, he is behind, but he plays best when he is behind.

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS: Right. Well, I think that the campaign is doing what they need to do in terms of going on the offensive, as Governor Rendell pointed out. You know, a lot of-I know there was a lot of coverage last week that said that they were going to play it safe for the last three weeks of the campaign, and that would have been a mistake, and it's not what they're going to do.

Today, he came out with a new plan that addressed probably the three things that people are most worried about right now: jobs, being able to protect your retirement savings, and being able to stave off foreclosure. So I think that you are going to continue to see Senator Obama propose new policies as they're warranted, at least, and certainly protect against any attacks that are about policy with John McCain.

You know, I think he was very effective in last week's debate making sure that everyone in America understands his mantra, that if you make less than $250,000 a year, he will not raise your taxes. I think that they need to be very vigilant in making sure that his record and his policies don't get distorted on that front. But you know, otherwise, other than that, it looks pretty good.

GREGORY: Joe Watkins, what do you do at this point if you are McCain? You've got a new framing for how you want to talk about the campaign, how you want to talk about these last three weeks. But what does he have to do? What does he focus on in these final weeks?

WATKINS: I think that he focuses exactly on what Michael Smerconish said, how do you save people's jobs? And I think he's going to do that.

He's going to say, you know what? If you elect me president, I'm going to save jobs, I'm going to help people save their homes so they won't have to worry about being out on the street. I'm going to lower the cost of gas at the pump so you don't have to take it the way you've been taking it over the past. And I'm going to make sure that America is a safer place, that businesses have a chance to have lower taxes so they can hire people.


Smerc, one of the thing you see out of-and you just referenced this a minute ago. Senator McCain now trying to stop some of this businesses, his own campaign rallies, or rallies where Governor Palin has been, where people are really going after Obama in a way that is nasty, that is untrue, that there is no basis for, in fact. Which isn't to say that there isn't that sort of stuff that happens on the other side as well. But he seems to be now out front a little bit more in saying, we don't want to go into this at this stage of the game.

SMERCONISH: You know, it's hard to control the knuckleheads who will show up at an event on both sides of the aisle. You could say that the McCain campaign has fostered an environment where those folks feel comfortable in coming and shouting out things like, "Off with your head!"


SMERCONISH: And there is a quote on the front page of yesterday's "New York Times" from the statewide Republican chairman here in Pennsylvania, and he got it right. He said that's going to turn off the moderates who are the swing voters.

David, they've been too focused on the base and they haven't played toward the middle. They've got three week left to right that.

GREGORY: Jennifer, final thought?

PALMIERI: Well, I think that today is sort of a good illustration of John McCain's problem, which was that Obama came out with a new policy, focus on the economy. And McCain came out, and as you said yourself in the opening segment, with a new message about himself.

And more than any other campaign, this is not a personality contest. And I think the more he makes this about himself and how he is a fighter and he's going to come back, as opposed to focusing on issues and focusing on the troubles of the American people, he's just going to find himself further in a hole.

GREGORY: Well, I quarrel with you that this isn't a personality contest. To the extent that this has been a referendum on Obama for much of this campaign, and indeed, McCain's greatest strength is his political biography, it is a question of, who can handle a crisis, who can handle some of these huge issues like the economy?


GREGORY: But I do think it has become a question of personality.

PALMIERI: But the pull that you talked about at the beginning, I think I found three things that were really interesting. Two of the numbers you already showed, and the third one was that people trust-excuse me, trust Obama more to lead in a crisis.

WATKINS: You said it right. They trust McCain.

PALMIERI: No they didn't. They chose Obama to lead more in a time of crisis. They thought that he had the better experience. They thought that he was better to lead as commander-in-chief.

These are all things that John McCain used to lead on. And Obama has convinced people that he-that he has met those bars.

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

Smerc, a storm is coming. Derek Lowe's on the mound tonight.

SMERCONISH: Joe Blanton is on the mound tonight. Joe Blanton.

GREGORY: All right. Thanks, guys.

Coming next, HARDBALL host Chris Matthews catches up with VP nominee Joe Biden on the trail in Pennsylvania. Is Obama connecting with those working class voters?

It's on THE RACE'S radar when we return right after this.


GREGORY: Retooling the massage, both campaigns hold big rallies today. Obama unveils new economic proposals while Senator McCain backs off some of the negative campaigning and says don't write me off. But, what is his plan to get back in the game? That's all coming up next on RACE FOR THE WHITE HOUSE.

Back now with RACE FOR THE White House, I'm David Gregory, time for the back half. Today in Ohio, Senator Obama continued to emphasize the economic drag under the Bush administration. A frustration McCain seemed to echo and a new speech in Virginia, today.


OBAMA: It's getting harder and harder to make the mortgage or fill up the gas tank or even keep the electricity on at the end of the month. At this rate, the question isn't just, are you better off than you were four years ago, it's are you better off than you were four weeks ago.


MCCAIN: We cannot spend the next four years as we have spent much of the last eight, waiting for our luck to change.


GREGORY: That's part of McCain's retooled message as we head into the final three weeks of the campaign. Joining me now are Democratic strategist Bob Shrum, and the host of MSNBC's MORNING JOE, Joe Scarborough.

Welcome both.

Joe, let me start with you. Where are we here, 21, 22 days before Election Day?

JOE SCARBOROUGH, MORNING JOE: Well, Barack Obama asked whether Americans were better off than they were four years or four weeks ago, I can tell you, John McCain right now is much better off than he was even four hours ago. The Dow has closed, it has had an up day, I think anybody that understands where the poll have gone and how they've dropped know that as this financial market lingered, and the more the Dow Jones went down, the more John McCain's numbers went down.

I think this is important for McCain to see these numbers going up. He needs green arrows up for the next 21 days. And if so, I think we're going to see this campaign take one last final turn. I'm not saying McCain will win it, but I suspect he's going to get closer.

GREGORY: It is interesting, Bob, even if we don't see green arrows everyday, and who knows with this market, to the extent that the economy is an issue, the real crisis, the credit crisis is an issue, goes to a different level, a level where the governments around the world are working and it become less of an exigent issue on the campaign trail, does that inure to McCain's benefit? Does that level off the race under some of the issues that they were fighting about prior to this really flaring up?

BOB SHRUM, DEMOCRATIC STRATEGIST: Well, the market were a really visible symbol of this, but the exigent is in people's lives, it's what's going to be a big increase in unemployment, it's the trouble people are having making the mortgage payments, it's the fears students have that the they're-whether they'll be able to borrow money in terms of student loans to go back to college, next semester, next year. So, I think all of those thing are very real. I would not have, if I were John McCain, suddenly say we had an up day on the market, maybe we'll have a few more up days and by the way, we're still far below where we were a month ago-maybe we'll have a few more up days and that will carry me, because it is not. People watched him during this crisis and I think he looked erratic; he didn't look like he had the sense of calmness that you wanted in a president and Obama did.

GREGORY: Bill Kristol wrote today in the "New York Times" the following:

"It is time for John McCain to fire his campaign...junk the whole

thing and start over. Shut down the rapid responses, end the frantic e-

mails, bench the spinning surrogates, stop putting up new TV and Internet

ads every minute. In fact, pull all the ads-they're doing no good

anyway. Use that money for televised town halls and half-hour addresses in

prime time. And let McCain go back to what he's been good at in the past -

running a cheerful, open and accessible candidate. Palin should follow suit.

The two of them are attractive and competitive politicians. They're happy warriors and good campaigners. Set them free."

Joe, you look at the "Real Clear Politics" averages, Obama is at 50 percent for the first time. You see McCain's negatives have gone up. Going negative against Obama has not worked for John McCain, even, and I watched you this morning, even as Obama may not be getting tagged by voters in the same way for going negative against McCain.

SCARBOROUGH: Right, and you know, his bigger problem is whether you're talking about the state of Florida or Northern Virginia is the fact that Barack Obama is running-and this is irony of it all-he's running nothing but negative campaigns against John McCain, he's outspending him about five to one, right now. I can tell you in Northern Virginia, he's outspending him probably 100 to one because McCain can't afford the ads. In Florida, he's outspending him four to five to one and they're all negative ads and those ads have an impact after a while.

But, I was laughing at Bill Kristol's comments because I love the panic. It's like the "Washington Post," after one month of bad, very bad things happening to our market, they have a headline that asks, "the end of capitalism?" I mean, this is like a 250-year battle and capitalism has beaten socialism and Marxism and centralized economic theories, and yet everybody is panicking. I think Bill Kristol needs to take a deep breath. There are still 21 days in the campaign and ask Bob Shrum, how long 21 days is in a presidential campaign. In fact, ask him how long five hours is. He can ask President Kerry is how long five hours is.

GREGORY: Go ahead, Bob.

SHRUM: Well, you know, I was going to say, you know how long a weekend is if you lived through end of the Kerry campaign and you saw the Osama bin Laden tape come along. But, that was a very, very close locked up race. I think what happened here, and what's happening, is that people really want change in this country, they want it very, very strongly...

SCARBOROUGH: Well, bob, you were saying that a couple of weeks ago.


SHRUM: But the question was...

SCARBOROUGH: No, no. I know, you can use-you can use your talking points all you want to, but the fact is, there was an economic meltdown.

SHRUM: Would you just let me finish a sentence?

SCARBOROUGH: And that has changed everything.

SHRUM: Joe. Joe.

SCARBOROUGH: So, your talking points aren't relevant right now.

SHRUM: You guys have a (INAUDIBLE). They want change, they want change on the economy. It's not just the economic meltdown, they want change on healthcare. They have a fundamental question: Could Barack Obama pass the test, the threshold on commander-in-chief? He did it in that first debate and that is also when things moved very decisively.

GREGORY: Here's my question for both of you. If you look at our new battleground map, Obama has got an advantage, according to the political unit, of 264-163 with 111 toss-up electoral votes, here. And you know, Joe, I keep coming back to this, if you look at the tossups are: Colorado, Florida, Indiana, Missouri, Nevada, North Carolina, Ohio, Virginia-these are all Bush states from 2004. That is the biggest challenge in this campaign right now for John McCain.

SCARBOROUGH: I'll make the very simple and I do want to agree with Shrummy. I think John McCain hurt himself in the first two debates and Barack Obama looked more presidential, he looked more like a commander-in-chief. And yes, McCain has looked erratic and at times, angry and mean. But, let me make it really simple, David, if five days left in this campaign, if McCain is trying to nail down North Carolina, Florida and Virginia, the race is over. I mean, a rising tide lifts all boats, he'd better hope the polls shoot up in the next week-and-a-half, because if not, it is Barack Obama's race.

GREGORY: All right, got to leave it there. Joe Scarborough, Bob Shrum, thanks as always.

Coming up next, too close to call. Colorado senator, Ken Salazar, on whether his state will turn out to be an Obama-Rocky Mountain high-one of those states on the toss-up list. And a top McCain adviser, tonight, on the senator's electoral map strategy, when the RACE returns.


GREGORY: Coming next, a few from the battleground, Obama supporter Ken Salazar on the dead heat in Colorado. And McCain political director, Mike DuHaime, on McCain's path to 270 electoral votes. That and more when the RACE returns.


GREGORY: Back now on the RACE, it is time for "Too Close to Call," we'll look at one of the battleground states that will help decide the election just 22 days from now. Though Colorado has picked a Democrat for president just once in the last 40 years, its nine electoral votes are very much in play. The latest Mason-Dixon Poll of Colorado voters shows senators McCain and Obama in a dead heat, each at 44 percent with eight percent of the votes still undecided. Here with me now, Obama supporter, Democratic senator from Colorado, Ken Salazar.

Senator, welcome.

KEN SALAZAR (D), COLORADO: Hello David, it's good to be with you this afternoon.

GREGORY: Thank you. Are you surprised this is still a dead even race in Colorado, given the state of the economy?

SALAZAR: Colorado has always been a tough state and I think it's going to be until close to the end, but I feel comfortable Senator Obama is doing everything he can, because he's talking to the issues that really affect the middle-class of America. And I think the people of Colorado really feel the middle-class has been forgotten under the last four years of George Bush and they really want to turn the page, start anew and are looking for the kind change that Senator Obama will be as president of the United States.

GREGORY: All right, but Senator, we're now 22 days away, so a lot of people are taking a more specific look at these candidates. You've got Independent vote who seem to still be split among these two candidates. And I know the Obama campaign feels strongly about Colorado. The younger voters, new voters might even be a higher number than those over 60, but it's a question of getting they will out to the polls, and you still have Senator Obama, in this latest poll, at 44 percent. So, what specifically is going to be decisive in your judgment?

SALAZAR: David, I think the people of Colorado are going to look at the issues and I think when they look at the issues, they will choose Senator Obama.

You know, I just came back from traveling to some 20 counties around rural Colorado. We have 40 offices opened for Senator Obama all over the state that is unprecedented and unheard of. And in places like Chaffee County, out in rural Colorado, there was a woman who was the former chairperson of the Republican Party two years ago who came up to me and said: I'm going to support Senator Obama. And I'm going to support him because we care about jobs here in America and in Colorado, we care about healthcare and we can't have four more years of what he had the last eight years. This is from the former chairman of the Republican Party in Chaffee County.

So, I think with that kind of energy out there, David, the polls I have seen show us surging ahead. I think we're going to deliver those nine electoral votes and we're going to take Senator Obama from 251 to the 270 votes that he needs.

GREGORY: What about the general question of the comfort level with Senator Obama? We see this in other parts of the country. And while his head-to-head number are increasing, there are still questions about whether there's enough of a comfort level with him, either personally or as commander-in-chief or as somebody who can lead in a crisis, similar to the race in 1980. Do you sense that among more conservative rural voters, even Democrats and Independent voter of which there are so many in your state?

SALAZAR: You know, I think as the people of Colorado have seen Senator Obama perform in the debates and have learned more about the policies, the Independent voters, and moderate Republicans are coming over to his side.

I think that out in rural-American rural Colorado, people care a lot about issues like renewable energy. Well, Senator Obama has been a champion of renewable energy. On the other hand, Senator McCain, 23 times, has voted against our renewable energy package. Senator Obama cares about the farm bill and has championed rural economies, and has championed family farmers and ranchers. Senator McCain has been on the other side. Senator McCain has been a part of George Bush privatization of Social Security. Senator Obama has pushed back against that.

So, I think as people have learned more about the stance of the candidates on the issues, they have become increasingly more comfortable with Senator Obama and his leadership qualities. I know both men and I know them well and Senator McCain is a good friend and an honorable man. But I think the people of my state, where I won here in 2004 by a five percentage vote-victory margin-five percent margin I think the people of my state are ready for the kind of changes that Senator Obama will bring to the country. And he is resolute and determined to bring that change about.

GREGORY: All right, Senator Ken Salazar from Colorado, thanks very much for joining me, tonight.

Let's look at the other side, now, and Senator McCain's battleground strategy. Joining us from campaign headquarters in Arlington, Virginia, is the McCain campaign political director, Mike DuHaime.

Mike, good to see you.


GREGORY: Very well. Let's look at our toss-up map. And I made this map with Joe Scarborough just a couple minutes ago on the program. Toss-up states, right now, where you are either tied or behind Colorado, Florida, Indiana, Missouri, Nevada, North Carolina, Ohio, and Virginia-Senator McCain today, pardon me, with three weeks left in the campaign in North Carolina and Virginia, campaigning today. Does it make sense to you? There are a lot of Republicans ringing their hands, pretty worried about the state of the race, given that you've got nine Bush states, or 10 bush states where you have to play defense right now?

DUHAIME: Well, I think it was mentioned earlier, David, by Joe, earlier on, you've had a really a colossal economic crisis, here. And even before the crisis, certainly, you had a very difficult political environment for Republican. Somehow in that political environment, where we have historically low right track direction, only at eight percent in today's "Washington Post" poll, you have the historically low approval ratings for the Republican Party, somehow we were winning in that, because John McCain has the ability to get Independents and crossover Democrats.

I think it's interesting that you had Senator Salazar on. His own cousin, Silver Salazar, actually heads up Democrats for McCain in Colorado. So, certainly you have a lot of Democrat crossover voters that Senator McCain is able to get. And when you look at the map, David, I think you have laid out a number of states that the president won in 2004. And if you look at that, those states tend to elect centrist Democrats, they Democrats they do, whether it's in Virginia or North Carolina, when Democrats get elected there, certainly tend to be centrists, and I believe with John McCain versus Barack Obama, John McCain is going to come out on top.

GREGORY: So, what happens then in the last three weeks, Mike, that-where these voters in these states break for McCain over Obama, what is it, in your judgment, that's going to be decisive?

DUHAIME: Well, I think, you know, in term of the issues, I think ultimately when it comes down, it's going to be leadership attributes and I think when people look at the issues like the economy, and importantly now, I think voters also think about crises that are unforeseen, certainly...

GREGORY: Apparently, we lost the shot of Mike DuHaime, there, political director for Senator McCain. A little satellite problem. We'll see if we can reestablish him from Arlington. We'll work on that. First we'll take a break. RACE FOR THE WHITE HOUSE returns right after this.


GREGORY: Back now on RACE FOR THE WHITE HOUSE we lost Mike DuHaime of the McCain campaign because of a satellite problem.

Mike, you are back. I just want to spend another minute with you, if I can. I want to ask you directly, how much responsibility does Senator McCain bear for the polarizing nature of this campaign, for a tone in the campaign that has left, there was one picture at a campaign event today in Virginia, some McCain supporters holding up an "Obama bin lyin'" poster at that rally. Senator McCain has tried to dial back some of the questions and some of the sentiments being expressed by supporters at a town hall, the other today. How much direct responsibility does he and Governor Palin bear for that tone?

DUHAIME: Likely no more, no less than Senator Obama or Senator Biden do. This is certainly a tough campaign. We condemn any type of signs like that. That is, we condemn that or any types of speech that Senator McCain has certainly spoken out about that and spoken out forcefully about that. Unfortunately, we live in a polarized electorate right now, and it's been that way for too long. Senator McCain spent his entire career bringing people together, he certainly has taken positions that have gone against his own party and in some states, paid a political price for that.

And so, I think he's always tried to do what's right, unfortunately, in the campaign, oftentimes, whether it's what we talk about here on shows like this, or the nature of a campaign, or talking about the differences between candidates and it is unfortunate that it is like that, sometimes, but we certainly don't accept any type of, anything, sign or speech like that, certainly we don't want to see that. But, hopefully we can still have a vigorous debate about differences between candidates.

GREGORY: All right, Mike DuHaime, thanks for coming on. Always good to talk to you.

DUHAIME: Thank you, David, you too

GREGORY: Appreciate it. Sorry for the technical glitch, there.

DUHAIME: I think it was the computer, Davie.

GREGORY: Right. Joining me now, the Reverend Jesse Jackson, founder and the president of the Rainbow Push Coalition.

Reverend, welcome.


GREGORY: I'm very well. Let me ask you about the events of this week when Congressman John Lewis, an old friend of yours, comparing the McCain campaign to George Wallace, making the accusations that the-McCain has been stirring up some of the sentiment and hatred that has been expressed against Senator Obama. Do you share that view?

JACKSON: No, and further, he stepped away from the position. And further, both candidates must take a real lead and end the personal attacks. Here we are facing Gregory, (INAUDIBLE) lose and retiree funds, banks are collapsing, jobs are leaving, unemployment rising, there's some big stuff out here in the next few weeks, and I would hope that this would be an end to the kind of fear mongering and polarization that does not lead to any good for America's future.

GREGORY: We heard from VP nominee, Joe Biden, in his conversation with Chris Matthews where this question came up of some of the sentiments that has been expressed at rallies around the country for McCain/Palin.

This is what he had to say:


JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: Don't throw race, terrorism, you know, the other guy, who is this man. That's a combustible mix.

CHRIS MATTHEWS, HARDBALL: Are we talking potential violence here? Is that what we're talking about?

BIDEN: Well, I don't-I hope not. I hope not. It's just not a useful time to be running an ad, I'll just stick to that, that says, look, the guy consorts with terrorists, puts a picture of a guy up nobody knows, doesn't explain Barack Obama was eight years old when this guy did bad things and...


GREGORY: You'll see more of that interview, by the way, with Chris Matthews coming up in just a few minutes at the top of the hour on HARDBALL.

Reverend, how much is race going to loom on Election Day? Do you think Barack Obama has moved beyond it in terms of the issue that you're talking about with the economy being more important?

JACKSON: I think in some sense, it is, but in some sense America has grown so much. You know, I think of August 20th 1955, (INAUDIBLE) it was almost states sanctioned terror, August 28, '55 Dr. King in '63 speaking of a dream in Washington, August 28, 2008, Barack getting the nomination. I've seen America grow, but not in the kind of redemptive transformative moment and it's a good moment to seize this moment to get beyond the limitations of race and gender and focus on what really matters. We're in the most disastrous economic crisis we've known maybe in 60 years, when the banks are falling.

I met with Mr. Paulson today about this, we've other to infuse capital at the top to stop the panic, there must be cap at the bottom to stop the hemorrhaging and so, the people losing their homes, job, retirement benefits, let's move from racial battleground to moral higher ground and on to economic common ground.

GREGORY: Reverend, you've been through this. You've been through a races for the White House before. Three weeks to go, Barack Obama is in the position he's in. What is the best advice you can give to him at this stage?

JACKSON: Well, if you're flying with the eagles, don't come down and run with the rabbits, keep flying high. Keep focusing on what matters. People are going beyond tradition lines because when you had about the fact that GM was the largest employer 20 years ago, $18 an hour, plus benefits, now it's (INAUDIBLE) without those benefits.

The "Big Three" was a big deal in Detroit 20 years ago, now the "Big Three" is not all the makers, but gambling boats. They're going through profound economic crisis and it is now global. And in part it's because of lack of congressional oversight, lack of enforcement of (INAUDIBLE) lending laws, lacking FBI agents in the forest (ph) who have been on their job. I mean, some real structural stuff.

Gregory, this really is a Roosevelt moment. Does the government has a role, it has a role to balance off labor and business? And we walked away from that and now we have a calamity. Wall Street got what they wanted and that does not like what it got. And so, I think if we stay at that level, we're going to see a change for the better in November the 4th.

GREGORY: All right. Reverend Jesse Jackson, always appreciate you being with us.

JACKSON: Thank you, sir.

GREGORY: That's going to do it for on RACE FOR THE WHITE HOUSE, tonight. Before we go, a programming note for you. Be sure to tune to MSNBC this Wednesday, October 15, when John McCain and Barack Obama face off at Hofstra University for the third and final debate. I'll be leading our coverage, 9:00 Eastern Time, for that debate.

I'm David Gregory, we'll see you back here tomorrow night, same time, 6:00 p.m. Eastern Time on MSNBC. Stay where you are, HARDBALL with Chris Matthews, an interview with Joe Biden featuring that hour, starts right now.

The two candidates finally agree on something-Barack's ahead.

Let's play "HARDBALL." good evening.



Transcription Copyright 2008 ASC LLC ALL RIGHTS RESERVED. No license is

granted to the user of this material other than for research. User may not

reproduce or redistribute the material except for user's personal or

internal use and, in such case, only one copy may be printed, nor shall

user use any material for commercial purposes or in any fashion that may

infringe upon NBC and ASC LLC's copyright or other proprietary rights or

interests in the material. This is not a legal transcript for purposes of


Watch Race for the White House each weeknight at 6 p.m. ET


Discussion comments