updated 10/16/2008 11:43:08 AM ET 2008-10-16T15:43:08


October 15, 2008


Guests: Harold Ford Jr., Susan Molinari, Richard Wolffe, Mika Brzezinski, Joe Lockhart, Ari Fleischer, Valerie Jarrett, Governor Tim Pawlenty

DAVID GREGORY, HOST: Tonight, from game changer to game saver. All of the national polls now show Senator Barack Obama in the lead by as much as 14 percentage points. For Senator John McCain, tonight's third and final presidential debate may no longer be about changing the game but simply doing enough to stay in it.

The fight to the finish is in the home stretch. Can Obama deliver a knockout blow, or is another McCain comeback in the cards? We will hear from both campaigns from the site of tonight's debate.

That and more as RACE FOR THE WHITE HOUSE rolls on. A big night tonight. Just 20 days to go in the race for the White House. Welcome to the program. I'm David Gregory.

My headline tonight, "Defying the Odds."

The last time a presidential candidate overcame as big a lead in the poll was back in 1980, when Ronald Reagan defeated Jimmy Carter. And with the economy seeming to trump all other issues, the stock market plunged once again today, giving back most of last week's one-day run-up. The fear is this, that all the efforts to unlock the credit markets won't be enough to avoid a deep recession.

I asked Treasury Secretary Henry Paulson about the plan to invest $250 billion in the nation's banking system on "The Today Show" this morning.



GREGORY: Will this do enough to head off, in your mind, a deep, painful recession?

HENRY PAULSON, TREASURY SECRETARY: Well, David, I believe this is a major step toward restoring confidence in our capital system, stabilizing our capital system.


GREGORY: Does the market like it? It didn't like it today.

The challenge for the presidential candidates, to prove who is better able to fix our economic crisis. On this important issue, it's advantage Obama in a big way. The latest "L.A. Times"/Bloomberg poll, 48 percent of those surveyed say they trust Obama more to make the right decisions about the economy, compared with 36 percent for McCain.

Tonight's debate at Hofstra University in New York is the last head-to-head face-off before the election. Will it change any minds or help undecided voters make their final choices?

Joining me now, Mika Brzezinski, co-host of MSNBC's "MORNING JOE";

Harold Ford Jr., chairman of the Democratic Leadership Council and an NBC News analyst; Richard Wolffe, "Newsweek" senior White House correspondent, covers Obama full time, also an MSNBC analyst; and Susan Molinari, Republican strategist and former congresswoman from New York. Susan also served as an adviser to Rudy Giuliani's presidential campaign.

And if I'm right, was vetted at the White House the other night at a very important state dinner. I checked the guest list. I saw you were there, Susan.


It's all good.

GREGORY: All right.

Let's talk-first off, Harold Ford, what does McCain do tonight?

Define the challenge, define the strategy.

HAROLD FORD JR., NBC NEWS ANALSYT: I think two things. One, he has got to define in a sharp way the differences between he and Senator Obama. Two-particularly on economic policy. Two, he's got to be even more forceful when it comes to foreign policy and make clear that the world is dangerous, even though the economy appears to be-not only appears, but it's a dominant issue for most Americans.

But I agree with your headline. I don't know if he can find a way back in.

We may have reached a point in this campaign where voters have just said, enough is enough, John McCain will give us four more years of George Bush, and I'm ready for a change. And Barack Obama and his campaign may benefit from that last push, regardless of how he performs tonight.

GREGORY: And Mika, if we look at some of the polling-we'll put it up on our screen- - when McCain attacks, he is not winning over Obama. A summary of some of the polls that we've seen shows Obama's got a strong advantage. The latest, of course, being CBS News, "New York Times." It has him up 14 points.

But this is the key point here-"Is the candidate spending more time explaining positions or attacking opponent?" Look at that: McCain, 61; 27 percent for Obama.

People think that he has gone negative. It's not helping him.

MIKE BRZEZINSKI, CO-HOST, "MORNING JOE": It hasn't worked. The timing has been bad. Unfortunately, the McCain campaign, whether they're raising good, honest questions or not, they have stepped in it, because the dynamics of this race, this election year, are different. Race is in the race, sex is in the race, and all these issues are a challenge for John McCain at this point as he tries to bring down Barack Obama without bringing himself down.

GREGORY: You know, Susan Molinari, you have got in the last couple days, Senator McCain really taking the debate over the economy and making it about tax policy. But the reality that he's facing-and the polls bear this out-he's performed well in the debates, just not as well in the voters' minds as Barack Obama.

MOLINARI: Well, I think that's right. But let me just tell you, the McCain campaign isn't in full panic at this point.

What they're saying is, you have a poll like Gallup. Some of the poll numbers, 14 points. But Gallup, if you get to likely voters, shows that there is a three-point difference.

What they're also counting on is a lot of people who have left John McCain over this economic issue and a lot of the things we've been talking about haven't closed the deal with Barack Obama. They've gotten back into undecided.


MOLINARI: They also say that we're going to pick up the ad pace.

There's going to be more even television time within the next three weeks. And that lastly, they believe that they're winning the ground game, that they are-in some of these swing states, that they are out registering and doing absentee ballots, getting more ballots in than the Obama campaign. So they are believing that slow and steady is what's going to win this race.

Now, tonight, I think what you're going to hear a lot about from the campaign is a little more of separation from President Bush. And also, a little bit more of what his economic policy is going to be, versus a government that's going to be run by a Democrat president, Speaker Pelosi and Harry Reid, and all the spending that comes equipped with three levels of government controlled by Democrats.


MOLINARI: And can that keep this economy in check if it spirals?

GREGORY: Well, let me bring in Richard Wolffe.

What is the Obama campaign preparing for tonight? Do they think it gets more personal?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Well, they're preparing for a number of things.

First of all, they think those negative numbers are going to be weighing on McCain's mind. So, how much of an attack can he launch? How nice is he going to be originally from the outset of this debate?

They're expecting attacks on, of course, William Ayers. That whole connection has been flagged up very heavily. And they're expecting attacks on taxes and an extensive discussion with moderator Bob Schieffer about spending proposals and what this does, what the whole economic crisis does to both sides' budget proposals and spending proposals.

So, a number of different things here. But remember, these candidates are going to be seated. So the opportunities to really go after each other is pretty limited.

GREGORY: Harold, to what extent? You know, separation is an interesting argument here for the McCain campaign from Bush because, frankly, they're getting killed on this thing. If you just look at the map, you've got now 10 or 11 Bush states from '04 that have Obama tied or leading. That's how precarious it is for Senator McCain at this stage.

But with the economy in these kinds of dire straits, there's more room for him to say, boy, these guys have really gotten it wrong. He can really do a hard separation, but is it too late?

FORD: You know, with 20 days left, you never know if it's too late. I do know this: Barack Obama is on a glide path right now. What he wants to ensure he does is a lot what Mika said-don't get off your positive path. Regardless of how McCain come after, you continue to state that your tax cuts will benefit 95 percent of Americans. Let McCain look angry.

If you're John McCain, if I were advising him tonight, I would make clear what Susan said, run away from George Bush and his policies and make clear that you're going to be the John McCain of 2000.


FORD: He has a weird way. He embraced George Bush when he was unpopular. And now he's-he ran from George Bush when he was popular, and now he wants to embrace George Bush when he's unpopular. If he goes back to the McCain of 2000, he's got a narrow lane here. But I think the country is just ready for change and ready to move on.

GREGORY: Mika, talking about negative attacks here, I just want to put up this poll from CBS News/"New York Times." This is about the question of William Ayers, which is likely to come up tonight. Senator McCain said he thinks it will come up tonight.

Sixty-four percent have heard about the Ayers/Obama association. Nine percent say it bothers them. It doesn't have a lot of traction. In part, it's up to McCain to make that connection, to say it's about the way Obama has explained that connection, or not sufficiently explained, to raise a question here about judgment in voters' minds, the judgment of Barack Obama.

BRZEZINSKI: I'm not sure that's worked. And I wonder if he should just work on focusing on convincing the American people that he cares about the economy.

Look at Wall Street today. Do you think people want to hear about this? Do you think it has worked?

They have got to be thinking strategy, tactics. It hasn't worked.

Why would they continue with it?

Having said that, if they go there, if Schieffer goes there, Barack Obama, what he should probably do is continue to monitor the situation, unless they go there with this. And then he should be separating himself from the Lewis statements, the Congressman Lewis statements.

GREGORY: Congressman Lewis' statements, who...


BRZEZINSKI: Who's an Obama supporter, but you know what? The McCain campaign stepped in it. The Obama campaign got pulled into it by those statements. And he has to answer to them.

GREGORY: He compared the McCain campaign to segregationist George Wallace.

FORD: The only other hope he has that, really, Schieffer goes after the votes (ph) and says, where will you cut back? And of course, both-if he does that, which I think was your point...


GREGORY: Well, and I want to bring Susan in on this.

Final point here, Susan. Who speaks the hard truth tonight to the American people, to the tens of millions who are watching to say, we've got a lot of spending programs and promises, promises for tax cuts? But the American people need to understand there's going to be some sacrifices and be some real pain here as this economy gets worse.

MOLINARI: Exactly. And so if they were asking Susan Molinari-and they're not going to do this, because they don't want to make a big deal out of this-John McCain would stand up and say, the next four years, we're going to come through this, we're going to be a better, stronger country, but there's going to be some very difficult decisions. And anybody worrying about reelection can't be in a position to make those decisions.

So tonight, myself and Governor Palin say, when we win this election, we're in for four years and we are going to do nothing but concentrate on turning this country around. And then we're leaving it to somebody else.

GREGORY: Susan, just real quick, is there enthusiasm among the Republican ranks?

MOLINARI: There still is enthusiasm. I think people are, you know, still looking at a four-or-five-point split if the ground game is good. You know, there is still an opportunity here. So there is still a lot of enthusiasm.


All right. Richard Wolffe, final word here on the enthusiasm gap right now.

WOLFFE: Well, we're seeing it all over the place. I understand that the crowds have not been as energetic as they were. But McCain can and will close that gap, I believe, on enthusiasm.

As people are faced with a choice, Republicans are going to come home. And that's why the Obama people in part think this is going to close significantly by Election Day.

GREGORY: All right.

Richard Wolffe, rest of the panel, thanks very much.

We're just hours before McCain and Obama face off at Hofstra University in Long Island, New York. Coming up, I'm going to talk to two former Senate powerbrokers about which candidate is best to lead on the economy. That's going to be the big issue tonight again.

RACE FOR THE WHITE HOUSE returns right after this.


GREGORY: Big night tonight, Hofstra University, the final debate. Tonight's final presidential debate will focus on domestic policy. The economy likely to take center stage again.

What do Obama and McCain have to do to prove to voters that they are best able to lead the country out of this economic crisis?

Let's go inside the war room with John Breaux, former Democratic senator from Louisiana, and Trent Lott, former Republican senator from Mississippi and a McCain supporter. Senators Breaux and Lott are the founders of the bipartisan Breaux-Lott Leadership Group.

Senators, welcome both.

JOHN BREAUX (D), FMR. U.S. SENATOR: Glad to be here.

TRENT LOTT ®, FMR. U.S. SENATOR: Good to be here.

GREGORY: Senator Lott, let me start with you. I asked Treasury Secretary Paulson this morning whether he thought the bailout plan was going to help set off, or rather head off a deep recession. You look at the markets today, down a significant amount yet again. The market, the country remain jittery about whether the plan is actually going to work.

LOTT: Right, there are concerns about it, and I think some people have said that this is not the end. This is maybe just the beginning. And we're going to have to continue to watch how the financial stabilization plan works. Is more needed? Or are we going to have to have some sort of additional stimulus package? I'm not sure that's the right way to go.

But these are the kinds of questions you have got to ask. And you can't wait around until it's too late.

I think you've got to be prepared to take direct action. I think John McCain has got to address that tonight. We've got to have some straight talk.

What is he going to do about the economy? The fact of the matter is, in dealing with budgets and spending and taxes, John McCain has a lot more experience than Barack Obama. I don't think he knows anything about the economy based on experience.

GREGORY: But Senator Lott, do you think it was fair for Senator McCain to say he, as he has in the last couple of days, that on tax policy alone is whether we get into a recession or not? He said that if you raise taxes, which we know Senator Obama wants to do-he's also going to cut taxes, but he wants to raise them on upper-income Americans-that he would turn a recession into a depression.

Is that a fair and accurate way to describe how to head off a financial crisis?

LOTT: How you cut taxes does make a huge difference. If you raise all taxes, if you raise the wrong taxes, yes, you can actually get less money. If you cut the right taxes, you can actually get more. We've dealt with that in the past.

I don't think though that you can say that just tax policy will cause or stop a recession. I think a lot of factors coming into play there. And I think you need to be careful how you describe that.

But does anybody really think that Barack Obama will not raise taxes?

I think he will.

GREGORY: Senator Breaux, what do you need to hear tonight from both these candidates? What are the hard truths about the economy that people are expecting to hear?

BREAUX: Well, I think that from the Obama perspective, I think it's very clear. He's got to point out that his plan proposes a tax cut for over 94 percent of the American people.

Everybody making under $250,000, a quarter of a million dollars a year, is going to get a tax cut under the Obama plan. That's where the people are hurting the most. They're the ones that are losing their jobs, losing their houses, losing their automobiles in foreclosures.

On the other hand, McCain, McCain has to hit a homerun. He's got to swing for the fence. I mean, he's 14 points behind in the polls. And any time you have to step up to the plate and hit a homerun, you have a danger of striking out. And I think that's his real challenge tonight.

GREGORY: You know, the big challenge for McCain is that his political opponent is not Barack Obama. His political opponent is the past, the past eight years. And both Senator McCain and Joe Biden talked about that in the last couple of days.

Let's watch.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We cannot spend the next four years as we have spent much of the last eight, waiting for our luck to change.



SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: Look, after John recognized that we have to change our luck, what did John say? John went on to propose virtually nothing new at all from what's been going on in the last eight years. His tax policy is basically the same, his economic policy is basically the same.


GREGORY: Look, Senator Lott, I've covered Senator McCain. I've covered the White House. I know there are some big disagreements between the two.

But when it come to major economic policy, is there a distinction between McCain/Bush?

LOTT: Oh, I think there will be. I think when he came back to talk about the economic stabilization plan, or bailout, if you want to call it that, early on I think he made it clear that what they had at that time was not good enough.

They were going to have to make some more changes. They were going to have to pay attention to some of the ideas, to include loan guarantees. They were going to have to do something on executive pay. So he's disagreed on that, too.

But, I mean, you're right, David. You've seen it. There have been major disagreements and breaks. John McCain probably has broken with this president more than just about any other Republican, including...


GREGORY: All right.

But the reality, Senator Breaux, our latest poll shows 61 percent of voters think that McCain would be more of Bush. It's not resonating. All those disagreements not getting home with people. They think he is a lot like Bush.

BREAUX: David, I think the election is about the future, not the past. I mean, McCain was opposed to the Bush tax cuts. Now he supports extending the Bush tax cuts. That's more of the same. That's about the past, not the future. Obama's plan is to do something different, and that's what I think you see the reflection in the polls and 14-point lead right now for Obama, because he is promising something different, not more of the same.

GREGORY: Senator Lott, what about enthusiasm in the Republican Party? Is the Republican Party experiencing a malaise here? Whatever the results are on Election Day, as you run up this, you look at Senate seats that are in danger, House seats that are in danger, and the White House in danger.

How do you sum that up?

LOTT: I think there's enthusiasm out there. And I think as you get closer to the election-just remember, David-and you know this-three weeks is an eternity in politics.


LOTT: The dynamics will shift back and forth several times between now and the election. And I think that Senator McCain will be getting his message across there very well.

But remember this-people keep talking about change, oh, we just want change. Just change. Look, change can be bad.

The question I think we need to be asking ourselves, do we want to take a chance? These are difficult time on the economy and in foreign policy, on terrorism. We don't really know where Barack Obama is on a lot of issues. He is inexperienced and he's untested in critical areas.

GREGORY: All right. We're going to have to leave it there.

Senator John Breaux, Senator Trent Lott, thanks to both of you for taking some time tonight. I appreciate it.

BREAUX: Thank you, David.

GREGORY: All right.

Coming next, Obama's TV ad blitz all over the country. Just how much is he spending on campaign commercials? It's on THE RACE's radar and we'll bring it to you right after this.


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

Tonight, some shocking figures about just how much ad time the Obama campaign has been buying. Politico.com reports that in D.C. and northern Virginia, in that media market, Obama ran 1,342 ads in the first three weeks of September. By comparison, McCain ran just eight.

The campaign media analysis group estimates Obama is spending $3.5 million a day on TV ads across the country. Is the Obama ad bombardment having an affect on voters?

A new CNN/"TIME" poll of Virginia out today shows Obama with a 10-point lead. Obama, 53 percent; McCain, 43 percent. The last time a Democrat carried Virginia was Lyndon Johnson in 1964.

I want to bring back Morning Joe's Mika Brzezinski right now.

I know you all talked about this, this morning. I mean, this says to me, if you are Obama and you are up in 10 or 11 states, or tied, that were states that Bush won in 2004, this is shock and awe time in all of these states and more.

BRZEZINSKI: Well, this is an incredible amount of money after an historic ground game that has paid off. And now they have got the money to spend. And think about the those two network buys days before the election. The Obama campaign is in the catbird seat right now.

GREGORY: Well, the other thing is, that if you're John McCain and-rather, if you're Obama, you can take North Dakota, where one poll has him up. You can take Arkansas, where there is some closure in the polls. You can take West Virginia.

BRZEZINSKI: Indiana, West Virginia.

GREGORY: You could start blowing cash in these places just to get McCain to try to spend some money in return.

BRZEZINSKI: Some of these states should be a lock for McCain, and they're not at this point.

GREGORY: Right. Right.

I mean, the question is, is there any blowback? I know Joe was making this point. Is there some blowback against Obama that he is buying the election by pouring all this money into ads? Do we see any evidence of that anywhere?

BRZEZINSKI: I think we both agree that this campaign has been well run. And John McCain's has been a little sporadic at times. But think about it now. Anything could happen.

John McCain is really good when he is down. So I don't think we should count him out at this point either.

GREGORY: Well, they'll even say-a senior adviser-look, we're losing the spin war.


GREGORY: I mean, they can't compete on this ground. But this is going to get to an enthusiasm issue for them as well. They've got public financing, $84 million. So we don't know how much of that is left.

BRZEZINSKI: Unbelievable.

GREGORY: All right. So you're going to stick around, thankfully.

And I have got to go do a piece for ""NBC Nightly News" tonight with Brian Williams, so I'll be back here in just a few minutes.

But you're coming next.


GREGORY: You're going to talk to Ari Fleischer. And tell him I'm not ducking him, really.

BRZEZINSKI: I'll tell him you say hi. You go be busy. I've got it from here, David. Thanks very much.


BRZEZINSKI: Up next, the White House insiders. I'll speak with former White House press secretaries Joe Lockhart and Ari Fleischer about tonight's debate strategy.


BRZEZINSKI: The final face-off. Senators McCain and Obama go head to head tonight. And if all of the leading national and battleground polls are correct, the challenge tonight is for McCain to stop Obama's momentum. National poll show Obama ahead. But undecided voters are still very much in play tonight. Could be a deciding factor in their vote and the race for the White House.


MIKA BRZEZINSKI, MSNBC ANCHOR: Welcome back to THE RACE FOR THE WHITE HOUSE. I'm Mika Brzezinski. David Gregory is filing a report on NBC's "Nightly News" with Brian Williams. He'll be back with us to talk to Obama adviser Valerie Jarrett in just a few. We're now just hours away from tonight's third and final presidential debate. What will the candidates say? And as Senators McCain and Obama finish their preparations, what messages should they be crafting at this point?

Joining me now are two former White House insiders. Joe Lockhart, White House secretary under President Clinton. And Ari Fleischer, President Bush's former press secretary. Gentleman thanks for being with me tonight.

Joe, I want to read from "The Washington Post" today, Michael Grossen, McCain ambushed by history previous to this economic freefall after his transformative vice-presidential choice, McCain was about tied in a race he should have been losing by a large margin. The public clearly had questions about Obama's leadership qualities, but the McCain campaign also proved itself capable of constructing an effective narrative. Obama as a lightweight celebrity. McCain as a maverick reformer until history intervened. The history Joe, is the economy. Is that true and what is the strategy if you think it's true? Should he just run out the clock and monitor the situation?

JOE LOCKHART, FORMER CLINTON WHITE HOUSE PRESS SECRETARY: Well, I think some of it is true. Obviously, the economy has moved to center stage. I think that's a problem for John McCain because there is not a huge difference between his economic approach and the last eight years, and John McCain will admit he doesn't want to run on the last eight years.


LOCKHART: But I think there is another strategic question. Which is these debates should be seen as three debates or four debates as opposed to having a different strategy for each one. Obama sort of had run the same strategy. McCain's keeps changing. I think while he did get a bump out of the convention, it was a somewhat, I think it presaged the kind of erratic campaign of deciding things on the fly. Just going out, suspending the campaign, picking someone he didn't know. And I think we have seen now that is not good strategy.

BRZEZINSKI : Well, it hasn't worked. Things aren't working and they're regrouping. That would also be called a very tight political race as well. Ari Fleischer, let me ask you about this because I think some would agree if we were in the midst of a huge foreign policy crisis right now, McCain might be winning. But we're in an economic crisis. How does he, at this late stage in the game, turn the tide back in his direction?

ARI FLEISCHER, FORMER BUSH WHITE HOUSE PRESS SECRETARY: Well, his options are very limited in terms of the things that he can control. Tonight what he needs to do at the debate is really establish a connection with the American people on the economy and also point out how Barack Obama, just like all the democrats who promised they'll raise taxes only on the rich. They always raise them on the middle class. And that you need somebody to protect the taxpayers from and an old Democratic Washington.

But the bigger reality, this is the problem for John McCain. Is that external events are larger than any one campaign event or daily tactic. This economic situation we're in right now has been a disaster for John McCain. It did change the shape of this race from the race where he was winning, interestingly. And that is more than anything else, that's driven him in this race.

BRZEZINSKI: Let's talk about how they've utilized their star, their rock star on the Republican side and that would be Sarah Palin who came out like gang busters and then had a little dip on the Katie Couric interview. She was out on the campaign trail today and you do see a change in tone from the statement she was using of late which was that Barack Obama pals around with terrorists. That was very controversial.

Now Sarah Palin is putting out a different message. Here it is, take a listen.


GOVERNOR SARAH PALIN ®, VICE PRESIDENTIAL CANDIDATE: Both Joe Biden and Barack Obama have opposed offshore drilling. Of course they've flip flopped recently in debates and in statements that they've made, but that goes to someone's judgment also, in trying to figure out where are they on these issues? Just straight talk. Tell Americans what you feel, what you believe in. What you stand for. Straight talk.


BRZEZINSKI: Ari Fleischer, have they used her in the best way they possibly could have?

FLEISCHER: Well, I think the big problem she's got, and I'm a big fan of hers. But she's got a terrible bum rap. Her problem was she had zero time to prepare for anything. She got thrown right into the deep end. Barack Obama who had less experience than Sarah Palin when he emerged, he had 20 months, most of it scrutiny free at the beginning of the primaries to emerge to learn his lessons, to get used to major politics.

Let me give you an example. On foreign policy, she talked about you can see Russia from Alaska. Not the smartest thing to say. Barack Obama in 2007, he explained his foreign policy credentials by saying he lived abroad for four years. From ages 6 to 10. Now if he made that statement at the same time Palin did, he would have gotten immense scrutiny for it. He got away with it because he got his mistakes out early when no one was watching.

BRZEZINSKI: That's a really good point. Joe Lockhart, do you agree?

Has Barack Obama been held to a different standard?

LOCKHART: I don't think so. He's been in this for some 20 months. He had a very experienced group of candidates, including Hillary Clinton, pressing him and 25 debates so I don't think he has gotten off easy.

I think going back to Sarah Palin, I think if she is emblematic with the problem of the McCain campaign. Because I think they are on their fourth strategy with her. First she was folksy which she did quite well at. And then she was going out and she did media interviews which she failed at. Then she became the attack dog and now she's back to folksy.

The problem is voters are watching, they're engaged, and they have no idea what John McCain and Sarah Palin are trying to tell them they are for. And it is erratic and ineffective.

BRZEZINSKI: Well, that's possibly a good questions. Let's look at the favorability ratings we have. "New York Times", CBS poll, McCain's favorability; 41 percent unfavorable to 36 percent. Obama doing a lot better. And then we have the "New York Times" CBS, Palin/Biden favorability and you see there that Sarah Palin's unfavorable ratings have increased over the past few days.

I wonder, Ari Fleischer, has she been erratic in her message? Has she been a little bit the victim of too many people advising her? Because when she came out into the scene she was sensational and she is very, very skilled.

FLEISCHER: I think the real problem is that when you're down in the polls, you start to lurch from one tactic to another to another to see if any of them work and then you do face the risk that people think you are inconsistent, you're not doing the same thing. That's the problem with losing. You have to search for someone that becomes winning.

I think Sarah Palin has been subject to the worst type of double standard. The type of accusations again her; who fathered her baby's child? There are things that are just horrid that have been thrown against her that is not fair to anybody in politics.

BRZEZINSKI: All right both of you; I want to look ahead to tonight. And Joe Lockhart, if she forgoes there with dirty politics and the whole Bill Ayers this is brought up and the issue of race and how that plays in or doesn't is brought up, Does Barack Obama deal with the Congressman Lewis statesman and publicly and very clearly denounce them? He has, of course, over the weekend compared the McCain campaign to George Wallace.

LOCKHART: I think Barack Obama has dealt with the race issue for more than 20 months now and he's been consistent and no one has knocked him off. It is not about race. It is about the future. It's about the ideas that he brings to the table.

I think McCain has got an interesting challenge tonight and it reminds me of 1996 with Bob Dole. Because he does have to attack. He's got to change the dynamic but people have been waiting for him to attack and they sort of presaged this. He's going to go after him on terrorism and Bill Ayers or maybe even Jeremiah Wright. And I think all of these attacks have back fired because he is not talking about what he wants to do. And Obama is up with TV ads that are positive and biographical and feel-good and McCain's, they feel like more of the past attack ads.

BRZEZINSKI: You know what; I've got to agree with you. And Ari, how does he deal with this? Because if he goes there with these, it has been proven not to work even in some polling here at this point. And even if it is good questions that are being raised about his allegiances, Barack Obama's, with certain people, it is coming off as dirty politics. It's coming off as attacks. How does he get his campaign back on track? Is there a moment he can have tonight, John McCain, that can prove to the American people that he wants to raise the conversation to a higher level and that he wants to deal with Wall Street's woes and the economy, which I think is what everyone is really worried about. Bottom line.

FLEISCHER: Well, I tell you, I find it fascinating how everybody wants to point the finger at John McCain as that's he's being the negative one. But Barack Obama has a lot of the negative ads that are up on the air too.

He's not all positive, biographical, happy la-la ads.

BRZEZINSKI: OK, point out to me attack ads.

FLEISCHER: By Barack Obama?


FLEISCHER: Barack Obama has been blaming everything on the past eight years. That's where he's pointed fingers. And equated John McCain to everything from the last eight years. If you ask Barack Obama, are people getting cavities, he'll say yes because of the last eight years.

That's my point. He's being just as negative. John McCain, though, takes the hits for being negative. And John McCain still has the problem, he's got to address what he believes and what he stands for in an environment that excessively tough for Republicans.

BRZEZINSKI: Alright, is it fair to say, and Joe Lockhart, chime in, Ari, take him on, just as negative and when you have Sarah Palin, you send her out there you say, Barack Obama "pals around with terrorists", plural. Is that just as negative? What attack ads have we seen that go there?

LOCKHART: I don't think it is just that I think you can look this as measurable. I think I read yesterday that, Barack Obama, about three quarters of his ads are biographical are on his program. About a quarter of them go after McCain. And whatever service was looking at this looked at the McCain ads and he has none. All of his ads are about Barack Obama and the results are in the polls.

Barack Obama has a double digit lead because the public is rejecting that kind of politics. These are measurable.

BRZEZINSKI: Ari, final words.

FLEISCHER: I think Barack Obama has the lead because of the state of the economy. That's when I point about a lot of this is out of John McCain's hands at this point. If the Democrats cannot win an election in 2008, they need to stop showing up for presidential elections.

This is a year where everything is pointing to a Democrat victory. And if John McCain wins, which he still has the outside shot of winning, it will be a miracle that will send the Democrats home packing and they should stop contesting the campaign.

LOCKHART: I think politics will go on beyond 2008.

BRZEZINSKI: All right, Joe Lockhart and Ari Fleischer, gentlemen, thanks very much for being with me tonight.

It's a big night tonight. We'll be watching the debate.

Coming up, what McCain and Obama hope to accomplish in tonight's final presidential debate. Obama's Senior Adviser, Valerie Jarrett, and McCain supporter Governor Tim Pawlenty joins us when THE RACE returns with David Gregory.


GREGORY: Back now on RACE TO THE WHITE HOUSE, I'm back as well.

Most polling showed Senator Barack Obama approved on his performance in last week's second presidential debate. Joining me now from the site of tonight's debate, Hofstra University is Valerie Jarrett, Senior Adviser on the Obama campaign. Valerie, welcome, good to see you.


Good evening.

GREGORY: So as you talk to Senator Obama, what do you tell him now?

What do you think he has to worry about tonight?

JARRETT: Well, I think Senator Obama is looking forward to this evening. I left him a few minutes ago. I think his challenge is to do what he's done throughout this campaign and what he's demonstrated over the last two debates very well. He'll speak directly to the American people. He'll talk to them about the issues that they care most about. We know the economy is front and center. People are concerned about losing their jobs. They're worried about their mortgages and whether they'll be foreclosed on their homes. They worry about the economy and what's happening in our global marketplace. And so he'll speak directly to those issues that the American people care so much about.

GREGORY: Valerie, we know what the promises are. We know what the priorities are. But we also know the state of the economy, that continues to deteriorate. The market down over 700 points on fears of a deep recession.

What is Senator Obama prepared to say tonight to tens of millions of people watching? About the hard truths that they're going to have to sacrifice coming up in this economy, and the hard truths about promises that he's made that he may not be able to keep.

JARRETT: Look David, I think what Senator Obama has said throughout this campaign, he's been open; he's been transparent with the American people. He's been very clear about the challenges. We didn't get into this condition overnight. We've had eight long years of deregulation. We've had eight long years of President Bush as our president who has really been detached from the issues that every day people face every day. And so it is going to take us a while to get out of it. But I think what we need right now is someone with judgment, with the temperament, with the steady hand whose is disciplined and who can lead our country in a new direction. That's Senator Obama.

GREGORY: But he's not prepared to say I will have to trim my sails a little bit in terms of promises I've made either for tax cuts, for raising taxes, or on spending programs? He's not prepared to say that he's got to trim some of that?

JARRETT: When you just said raising taxes on spending programs. Let's be clear. Senator Obama is going to cut taxes for 95 percent of the American people. And in fact, anyone can go on our website right now, put in your income and you'll calculate what your tax will be under Senator Obama's programs.


JARRETT: I think what he is going to say is we have to jump start the economy, David. We have to get jobs created. We have to do whatever we can to grow right here at home. And we have to do what we can to end the war. We're spending $10 billion a month on the war in Iraq. Imagine what we can do with those dollars right here at home.

GREGORY: The question about foreign policy, Valerie, tonight. The Reverend Jesse Jackson is quoted as saying, that Zionists who have controlled American policy for decades will lose a great deal of their clout when Barack Obama enters the White House. That's from Jesse Jackson.

The McCain campaign put out this statement. "It should not surprise anyone that Obama supporters see what others from the terrorist group Hamas to Iranian President Ahmadinejad, have seen; an Obama presidency would bring real change to America's policy of support for Israel." That's from his senior policy advisor Randy Scheunemann.

Does Senator Obama condemn and repudiate the Reverend Jackson's remarks?

JARRETT: Let me be very clear about this. Senator Obama throughout this campaign has been clear about his support for Israel. That support is steadfast. That support is not going to change the day he is elected. He has never, listen to me, David, he has never discussed foreign policy with Reverend Jackson. Reverend Jackson is not an adviser to this campaign. He has not had any input and he will not have any input going forward.

GREGORY: So he was wrong to speak for Senator Obama in this instance?

JARRETT: I don't think he was speaking on his behalf. He would say that he was misquoted and taken out of context. But it doesn't matter. The clear message that I want to send to you tonight is that Senator Obama is a supporter of Israel. He is a supporter now. He's been a supporter throughout this campaign. He has been very clear on that issue. And Senator Obama is not going to change his position after he's elected. And most importantly, Reverend Jackson has had absolutely no input. They've never even had a conversation about foreign policy, let alone Israel.

GREGORY: Is there a danger, just a political question here real quick, Valerie; is there a danger for Obama with the standing in the poll of complacency between now and Election Day?

JARRETT: Absolutely not. You don't know Senator Obama. He wakes up every morning early. He rolls up his sleeves and he is going to work hard to prove to the American people that he is worthy to be their president. He doesn't take it for granted. He never paid attention to the polls when he was down. He certainly isn't going to pay attention to the polls when he is up. That's not how you earn the trust of the American people.

GREGORY: Valerie Jarrett at the debate site tonight. Valerie, always a pleasure to have you on.

Let me turn now to Minnesota Governor Tim Pawlenty. Governor Pawlenty is a McCain supporter. He is with the campaign at Hofstra University for tonight's debate as well. Governor, good to see you.

GOV TIM PAWLENTY ®, MINNESOTA: Good to see you, David.

GREGORY: How do you define the challenge for Senator McCain tonight?

PAWLENTY: I think the challenge; really, the opportunity is for him to address the American people from his heart on leading issues. The economy obviously is the main issue for Americans right now.

Senator McCain has got a great plan but he needs to make sure that gets conveyed in a way that reassures people. He can do that. He has got the wisdom, the experience, the judgment, the maturity, not the rhetoric about those characteristics but the actual record and life experience. Barack Obama does not. And those labels being applied to him ring hollow.

So Senator McCain has to highlight and feature those differences tonight.

GREGORY: But Governor, you and I have been having these conversations since the convention in St. Paul. The reality is there have been a couple of important debates so far. And the American people have rendered a judgment in the polling. And that is the advantage goes to Obama on the very issue of the economy that you are talking about.

PAWLENTY: Well, of course the economy has took a very dramatic downward turn in the last few weeks and was in trouble even before that, David. But it's clear that Senator McCain is going to have to equalize and exceed the expectations of people on that issue. It's the number one issue. But the overall campaign is not limited to just that. There are issues of national security. But the overarching theme here is, Barack Obama who three years ago was a state legislator. I mean do you really want that?

But as importantly, if he gets elected president, the Congress of the United States and Barack Obama combined will be a runaway, liberal train. There will be no check, there will be no balance. That will not be good for the United States of America. John McCain cannot only bring that check and balance but he can work across party lines to make sure there is not gridlock and get things done. He will bring the agenda back to common sense in the main stream as the theme that will come up as well.

GREGORY: One party rule, the last time we had that in Washington was when the Republicans were in charge, much of the last eight years. Senator Joe Biden on the campaign trail today, raising that point.


SENATOR JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: When Barack Obama is president; we're not going to be waiting to quote John, for our luck to change. We'll going to do what Americans' always - were going to change our luck! That's what Americans do! Change our luck!


GREOGRY: Is there anyway, Governor, for Senator McCain to break the link with George W. Bush with President Bush? That is the biggest issue here. Our recent poll shows 61 percent of voters still think it will be more of the same of George Bush if John McCain is president?

PAWLENTY: David, I think there are too ways to that. Once is to recite the differences that he's had with President Bush and they are many and they are numerous and they are deep. He has the reputation as a maverick for a reason. That's because he's been a maverick, even relative to the administration. But as importantly, if they want to take Senator McCain with the Bush Presidency, you have to keep in mind the current congress run by the Democrats, Nancy Pelosi and Harry Reid is about half as popular as President Bush. And if Barack Obama becomes a rubber stamp for that, Katy bar the door, it will be very ugly and I don't think it will be good for the country. And I don't think most middle of the road voters ticket splitters and undecideds would like that either so that is a point that has to be driven home.

GREGORY: I want to ask about this general argument about Obama's judgment. About his record, and about the idea of one party rule.

This is from the "New York Times" CBS poll. The question was, do these candidates understand the needs of people like you? Look at the numbers here. 64 percent say yes for Obama. Just 43 percent say yes for McCain. Where do you think McCain has failed thus far to communicate the kind of message that you say he's got and an effective one? Why isn't that being communicated effectively to people such that they feel they connect to him?

PAWLENTY: Well, first of all, the environment has been challenging for Republicans. Any time you have a situation like the current one, an up-hill battle. Senator McCain is somebody who has got a record that allows him to break free of that. I think. Or at least have more running room than a traditional candidate might in this environment.

Clearly though, David, the challenge for him, is he has to connect on the economy. There is no question about that. But I also think raising the issue of this runaway train of the undivided government, and lastly, judgment, character, wisdom, experience. John McCain has it, Senator Obama does not.

GREGORY: Governor Tim Pawlenty from Minnesota, the debate side.

Governor, thanks as always.

PAWLENTY: You're welcome.

GREGORY: More on the debate when we come back right after this.


GREGORY: Right now RACE WITH THE WHITE HOUSE we are nearly two hours away from tonight's third and final presidential debate between Senators Obama and McCain. Back with me Mika Brzezinski and joining us now from the debate site at the Hofstra University, Hempstead, New York is Chris Matthews, host of "Hardball with Chris Matthews". Right here on MSNBC coming up in a couple minutes, well, Christopher, what are you thinking about tonight?

CHRIS MATTHEWS, MSNBC CORRESPONDENT: Well, I think that John McCain has always benefited when he can sort of do something novel or have something novel happen. Tragic or not. The Russian invasion of Georgia gave him the one pop in the campaign he's had.

The selection of Governor Palin gave him another pop. He needs to pop the thing. He needs to move it away from the thing we're normally talking about. The other fellow, the other candidate Barack Obama does better when we just sort of think about conditions as they are.

John McCain has to raise the topic. He has to have something come up for him to do well. That's why I think he will do something tonight of interest.

GREGORY: What I get from the McCain campaign, Chris, is that it's got to come back to judgment. They have to get this argument away from George Bush and the economy, hurting McCain, get it to the question of Barack Obama. Americans saying is this really what you want? Do you want one party rule? Can you trust such a guy in a difficult time?

MATTHEWS: Yes, but I think if they risk going in to the area of judgment, what they're really talking about is of course his relationship, his association with the former weatherman terrorist Bill Ayers or Jeremiah Wright, the preacher.

The trouble with going in those areas is, you're really questioning his patriotic impulse. You're subtly saying, he doesn't share our natural feeling of love for our country. When Sarah Palin talks about him saying the country is so imperfect, that he would "pal around with a terrorist," you're really in a troubling area where Barack can just come back and hit him hard and say, you're questioning my patriotism. So you can call it judgment. But Barack can come back and define it his way.

GREGORY: All right, Chris thank you. Mika, final thought here on what to expect tonight?

BRZEZINSKI: And it could be actually what Chris says. It's a fine balance for John McCain. I think his campaign misstepped and misjudged the sensitivities of this campaign this time around with all the different dimensions on the table. A black candidate, a female candidate. And I think he has to somehow tonight show that he is control of his campaign and that he is in control of his message. And the one thing I think he has going is he is scrappy. He is good when he is down and he might be able to do it.

GREGORY: All right, Mika, thank you for being here throughout the hour. Appreciate it very much. Mika Brzezinski and Chris Matthews as well. That does it for RACE FOR THE WHITE HOUSE. Thank you for watching. Thanks again to Mika for her help all night.

Stay tuned to MSNBC tonight where I'll be bringing you full coverage of the third and final presidential debate. It begins at 9:00 Eastern Time right here on MSNBC. Afterward a wrap up at 10:30. I'll be back with post debate coverage here on MSNBC. Then it's "Countdown" with Keith Olbermann at 11:00 and a special late night edition of "Hardball" at midnight. I'm David Gregory in New York. Bath to Chris Matthews at Hofstra University. "Hardball" starts right now.



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