updated 10/24/2008 11:30:11 AM ET 2008-10-24T15:30:11

RACE FOR THE WHITEHOUSE

October 22, 2008

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

Guests: John Harwood, Richard Wolffe, Pat Buchanan, Lawrence O'Donnell, Bill Ritter, Heather Wilson.

DAVID GREGORY, HOST: Tonight, national security and clothing allowances. The talk on the campaign trail yields more surprises as Senator Obama rides his lead in the polls, while John McCain looks for a way to gain some traction.

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

Just 13 days to go now in the race for the White House.

Welcome to the program. I'm David Gregory.

My headline tonight, "Playing Defense."

While looking to score some points, Senator John McCain is pleading with supporters to help stage another comeback, but the numbers continue not to add up in his favor. New polls just out from CNN/"TIME" show Senator Barack Obama with leads in Ohio, Nevada, North Carolina and Virginia. Yes, all Bush states from 2004.

And then there is this. Our new NBC News/"Wall Street Journal" poll shows Obama leading among the crucial Independent vote. Independents now, John McCain's calling card from his political career. Obama ahead by 12 percentage points in that group.

And the economic numbers are just dismal again today. Weak corporate earnings sending the Dow Jones down by over 500 points. Polls showing more voters think Senator Obama would do a better job of handling the economy. It's issue one.

But today, Senator McCain's latest charge was that Barack Obama is looking a little bit too confident.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: My opponent is looking pretty confident these days. He'll be addressing the nation soon. He's got another one of those big stadium spectacles in the works. But acting like the election is over, it won't let him take away your chance to have the final say in this election.

(END VIDEO CLIP)

GREGORY: Senator Obama is capitalizing on his endorsement by former Secretary of State Colin Powell. A meeting with retired generals and foreign policy experts in Virginia today. Obama defended Senator Biden's comments that as president, he would be tested during his first six months in office.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Joe sometimes engages in rhetorical flourishes, but I think that his core point was that the next administration is going to be tested regardless of who it is. And the question is, will the next president meet that test by moving America in a new direction, by sending a clear signal to the rest of the world that we are no longer about bluster and unilateralism and ideology?

(END VIDEO CLIP)

GREGORY: While all this is going on, a new disclosure about Biden's counterpart, Governor Sarah Palin. Financial records disclosed today show that the Republican National Committee has spent more than $150,000 on her wardrobe since last August.

Joining me now, our CNBC's Chief Washington Correspondent and "New York Times" political writer, John Harwood; as well as "Newsweek" senior White House correspondent Richard Wolffe, who covers Obama; former presidential candidate Pat Buchanan; and Lawrence O'Donnell, former chief of staff of the Senate Finance Committee. Richard, Pat and Lawrence are all MSNBC political analysts.

Welcome all.

We showed the Independent voter numbers just a moment ago. That's a key point. But I want to get right back to this topic of Sarah Palin. We'll get to her clothes in just a minute.

She sat down, along with Senator McCain today, with Brian Williams of "Nightly News" and talked about diplomacy in an Obama administration.

Let's listen to what she said.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, "NBC NIGHTLY NEWS": Governor Palin, yesterday you tied the this notion of an early test to the new president with this notion of preconditions that you both have been hammering the Obama campaign on. First of all, what in your mind is a precondition?

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: You have to have some diplomatic strategy going into a meeting with someone like Ahmadinejad or Kim Jong-il, one of these dictators that would seek to destroy America or our allies. It is so naive and so dangerous for a presidential candidate to just proclaim that they would be willing to sit down with a leader like Ahmadinejad and just talk about the problems, the issues that are facing them. So that's some ill preparedness right there.

GREGORY: Ill preparedness, Pat Buchanan. She is trying to take a shot here at Obama's willingness to meet with the Iranian president, if he is indeed someone who Obama would meet with, without any kind of preconditions. We didn't learn a lot, did we, from her approach-from that exchange about her approach to that kind of problem?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: Well, we know we didn't learn a lot about her approach to the problem. But the very fact that Barack Obama had to deal with this and talk about Biden's rhetorical flourishes and move off from the economy when he is on a roll suggests that Joe Biden really stepped in it when he came out and said we're headed for a crisis, it's going to be generated, it's coming at us. And it's going to be just like Jack Kennedy, of course, who went through the Berlin Wall and the missile crisis and Bay of Pigs in his first two years.

So I think Biden has made a mistake, and it's a big distraction from what Obama's doing. But I haven't seen it really change the general momentum, which is clearly going in the same direction.

GREGORY: Yes.

But Richard Wolffe, the point here is that, indeed, what Biden was saying is that Obama, not generally, but Obama specifically, would face a test by some of these leaders around the world, or other actors, non-state actors who would want to test this new president.

Is that not a particular blow to a candidate who is already dealing with the fact that people question his experience, as compared to John McCain?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Well, he obviously stepped out of line. And the Obama campaign has been working overtime to try to put it back into some context.

The best argument seems to be that, oh, crazy Uncle Joe, he says this kind of stuff. But it's not a good deal. It does take attention away from the core message.

Obviously, Biden has confidence in the way Obama would handle that crisis. And to be honest, when you look at Sarah Palin's comments, I mean, she says that Ahmadinejad is a dictator. He's not the dictator in Tehran. He may be a totally despicable character, but he's an elected official.

The real dictator is Khamenei, the supreme leader, the theocrat. So, you know, when you're arguing preparedness and experience, Sarah Palin isn't the best person to do it. But no question, Joe Biden has caused Barack Obama some problems.

GREGORY: Lawrence O'Donnell, let's conflate these two issues. You've got Palin and you've got Biden. You've got the running mates, and what kind of drag are they? The polling shows that she is a much bigger drag on Senator McCain. She's got so much attention, even her clothing.

And what hasn't been pointed out in this whole discussion about her clothing is, you know, she really does look good. But it just costs a lot of money.

(LAUGHTER)

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: She sure does. David, we can make you look a lot better for $150,000.

(CROSSTALK)

GREGORY: She can't catch a break right now.

O'DONNELL: Yes. And Joe Biden, in fact, in the polling has some good will that's built up. In the most recent polling, it shows that his favorables have increased more than any other of the three other people on these two tickets. And Sarah Palin's favorables have just been falling off the map. Her unfavorables are skyrocketing.

And I don't think the Biden thing, as unwise as it was to say, has done anything really other than thankfully give us some to talk about in a race that is increasingly becoming an Obama-dominated race with double-digit leads in the polls. I mean, without Biden's slip-up, we would have nothing negative to say about the Obama side of the campaign right now.

GREGORY: John Harwood, talk about Palin and this clothing issue. I mean, these kinds of image problems are especially a problem when you go around saying that small town America represents the real America. Shopping sprees like this in some of these big stores is not really consistent with that.

How damaging is that at this point? Does it compare to some of her other negatives?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: Well, first of all, I want to concede up front that Pat Buchanan has got the best clothes of anybody on this show. And I don't know where he gets them or who pays for them, but they're the best.

(LAUGHTER)

GREGORY: Right.

HARWOOD: Second of all, I think this is not particularly damaging to Sarah Palin. It does help Joe Biden by giving us an alternative narrative to the vice presidential story today. But honestly, I don't think people are going to begrudge this previously obscure governor of Alaska having some money spent on her clothing when she gets put up on a national stage.

It is a lot of money. And in some ways, you know, it can be used against her. But I don't think it's that big a deal. And I think if people really stop and think about it, it's not going to-it doesn't compare to the Katie Couric interview, the impact of Tina Fey and the whole national laughing stock that Sarah Palin has in some ways been turned into by that show and by her own performances.

O'DONNELL: There is one possible big-deal element to this, and that is that it may not be legal for a campaign to buy clothing like that. I don't know what interpretation there is that makes it legal to buy clothes like that.

My understanding of using FEC money does not include obtaining personal items like that and buying thing for babies and kids. There are some very strange expenditures on there, and if they turn out not to be legal, that's a much bigger $150,000 problem.

(CROSSTALK)

HARWOOD: Some members of Congress have spent campaign money on some pretty funky stuff over the years. I don't know.

O'DONNELL: They have, but you're not going to find clothing. That's one of the things you're not going to find in those FEC reports.

GREGORY: All right. Let me get a break in here, panel. We'll stick around, we'll talk to you a little bit later.

Coming next, the West could prove decisive in this election, of course. I'm going to talk to supporters of McCain and Obama from two key western battlegrounds when RACE FOR THE WHITE HOUSE returns after this short break.

(COMMERCIAL BREAK)

GREGORY: Welcome back.

Time to take a closer look at what has become the Wild West in this presidential election. Although swing states like Colorado, Nevada and New Mexico voted for President Bush in 2004, they are now in play in a big way. Increased Democratic voter registration has changed the landscape favorably for Senator Obama, who has also managed to make consider inroads with Hispanic voters in the region.

Both campaigns continue their western fight in these final days. Biden visited New Mexico yesterday, Colorado today, where McCain plans to return on Friday.

Joining me now are Colorado Governor and Obama supporter, Bill Ritter, and New Mexico Congresswoman and McCain supporter, Heather Wilson.

Governor Ritter, I will start with you. Always good to have you here.

GOV. BILL RITTER (D), COLORADO: Great, David. Good to talk to you again today. Thank you.

GREGORY: Let's show the latest CNN/"TIME" poll in Colorado. It's got Obama up outside the margin of error 51-47.

Do you buy some of the reports out there that McCain considers Colorado gone?

RITTER: No. I don't know that he can consider it gone. I don't think if you do the math anyway that I looked at it, I don't think John McCain can win the United States presidency without Colorado. And that's why I think we're seeing the intense visits that we are. My sense is that McCain still has his buy in place going forward the next two weeks-or week and a half.

GREGORY: All right.

Let's talk about something substantive. The charge about-and this is not a charge. This is an observation made by Senator Biden, that Obama, if president, specifically would be tested in the first six months in office by a generated international crisis.

Is that scary to Colorado voters?

RITTER: Well, again, I think that in listening to what the vice president candidate was talking about, is that this is something that's likely to happen no matter who is the president. And I don't know exactly the context he put it in, because I was actually with Senator Obama when he said it.

But I think that anybody who becomes president is going to face very serious tests. And what the people of Colorado are paying attention to has to do really with the economy. And maybe something that they'll listen to in terms of Barack Obama and Joe Biden being better prepared to answer whatever kind of a crisis may come and whenever it comes.

But I think Colorado voters-and I would just make one other point, David.

GREGORY: Yes.

RITTER: The graphic you showed at the beginning is maybe the most important graphic here in Colorado. We do have increased Democratic registrants. We have greater participation it looks like than we've ever had before.

The most important thing in Colorado is where the unaffiliated voters wind up. And the fact that Barack Obama has established the significant lead among unaffiliated very much has to do with why I think he is leading in Colorado and why he's going to sustain that lead.

GREGORY: Let me talk about the economy.

You were on a panel with Senator Obama and others yesterday. In your state, what has to be the first focus in getting the economy book on track with a new president?

RITTER: Well, I think that his focus on small businesses is absolutely helpful. It's an economic driver for us in Colorado, what happens with small businesses. And he has a very specific plan that involves both tax breaks and the Small Business Administration having an emergency loan availability for small businesses that are hurt by the economy. That's important. His stimulus package that relates to how you help state government would be certainly helpful to us here in Colorado.

GREGORY: Right.

RITTER: It's interesting. So far, we haven't been hit as hard as other places around the country have. And so as a state, we're also really pleased that he is focusing on this concept of a new energy economy, because quite frankly, we have had great success on that, and having a federal partner would be extremely helpful for us.

GREGORY: Let me-I don't have to tell you as a man of the West, there's a lot of voters in Colorado and elsewhere in the West who don't like the idea of government intervention to the tune of spreading the wealth around, which has been a big topic of debate on the campaign trail, which his Republican opponent, John McCain, is saying is exactly what he'll do with tax policy.

Is there a real risk for Senator Obama in these last two weeks that voters perceive his economic agenda as being just that, spreading the wealth around to make things more equal?

RITTER: Again, maybe-you know, I'm a supporter of Senator Obama.

I've been with him. I've been able to talk with him about a lot of things.

He talks about economic policy and fiscal policy in a way that I think resonates with the West, and certainly resonates with these Independent voters, which is that it's not about spreading it around, it's about looking for ways to give tax breaks. There's a lot of places the earned income tax credit is, one of those places where people don't pay income taxes, but we have a policy that allows an infusion of capital back into the economy. And I think those are the ways that he's talking about in terms of giving tax breaks to the right people, rolling back the tax cuts that President Bush had given to people who make over $250,000. And because of the demographics here in Colorado, the kinds of small businesses, again, that we have, his fiscal policy really does resonate with the people of this state.

GREGORY: All right. Governor Bill Ritter, always good to have you on the program, and to see you and talk to you. Appreciate it.

RITTER: Thank you.

GREGORY: Let's turn now to the other key western battleground state, one of the few, New Mexico. Joining me from Albuquerque is Congresswoman Heather Wilson. She is a McCain supporter.

Congresswoman, welcome.

REP. HEATHER WILSON ®, NEW MEXICO: Thank you, David. Good to be with you.

GREGORY: I want to show you something from the chairwoman of the Otero County Republican Women's Group. This is Marcia Stirman. She wrote a letter to the editor in a local paper out in Alamogordo, I believe, in which she talked about why she is a Republican. And we'll show what she wrote on the screen.

"I believe there is a moderate and a socialist in this election. I agree with a two-party system, but Obama isn't a messiah or a Democrat. He's a Muslim socialist."

Of course, he is not a Muslim. He's a Christian. That socialism charge has been thrown out.

I don't have to tell you, back in 2004, New Mexico was decided by 6,000 votes. Is this kind of sentiment, this kind of discourse going to be what influences voters in what has always been a hotly contested state on Election Day?

WILSON: You're talking about a letter to the editor in Alamogordo, New Mexico, from a local citizen there. So obviously she has a right to her view. As far as I know, Senator Obama is a member of a Christian church. So I think what's going to matter here in New Mexico is a couple of things.

First, we have a ticket on the Republican side that is a western ticket. And of course, Senator McCain from our neighboring state in Arizona, and Governor Palin from the largest energy-producing state in the country. New Mexico is also an energy-producing state, and it is a big part of our economy here.

And jobs and tax policy will be a major issue here. I mean, it was Senator Obama, who in a moment of candor, said that he wants a tax policy to spread the wealth around. And his tax proposal is actually giving tax relief to people who don't pay taxes in the first place, taking it from people who earn that money. And it's not the government's money, and it's not up to the government to be spreading the wealth around.

GREGORY: Although in fairness, Senator McCain supported a rebate check in this last stimulus that went to people who didn't pay income taxes as well.

WILSON: And obviously there are thing that you do to try to stimulate the economy. But one of the things that did concern me about Senator Obama's tax proposal is, first of all, he is talking about raising taxes. I don't care-why should we be talking about raising taxes on anyone, let alone the folks-as Senator Baucus, a Democrat on the Finance Committee said, 80 percent of the tax relief in 2001 and 2003 went to small business owners who pay those tax brackets where they're S Corporations or partnerships and so for the.

That's the engine of economic growth in America. And we don't want to hurt that sector of our economy. But a significant amount of Senator Obama's so-called tax relief is actually shifting-is giving payments to people who don't pay taxes in the first place.

GREGORY: Congresswoman, just as a matter of political tactics, is this the strongest way for John McCain to end his campaign, in an ideological debate about taxes? Is that in keeping with the John McCain you've known over the years, the maverick?

WILSON: There are a couple of big differences between these candidates. One of them is what direction we need to go, what change we need to make with respect to getting book track with the economy. And there's big differences in choices there.

The second one, of course, is experience. And that's something that ironically, it was Senator Biden who brought to the floor with his candid comments about there are foreign leaders who are going to test this guy because they don't think he is experienced, which was striking to me.

GREGORY: Congresswoman, I've got to go. Will Senator McCain be back before election day in New Mexico?

WILSON: In fact, he's coming here on Saturday. So we expect to see a lot of these campaigns over the next two weeks.

GREGORY: OK. So you don't think the state is gone? You don't think it in Obama's hands?

WILSON: Oh, no. Governor Palin was here on Sunday. Senator McCain will be here on Saturday. The television and phone banks and everything are all up and running full speed.

GREGORY: All right.

Congresswoman Heather Wilson, always good to see you and talk to you.

Thank you very much.

WILSON: Thank you.

GREGORY: Coming next, a "Smart Take" about the recent comments from politicians about what's the real America and who is a real American when THE RACE returns after this.

(COMMERCIAL BREAK)

GREGORY: A short segment here for "Smart Takes," but something we wanted to share with you.

"The Wall Street Journal" weighed in on the theme of authentic America versus phony America, writing today, "The perception of reality is an amazing political tonic, and with it, conservatives have cemented a fact-proof worldview of lasting power. It is simply this: conservatives are authentic and liberals are not. The country is divided into a land of the soulful, hardworking producers and a land of the paper-pushing parasites. A plainspoken heartland, and the sinister big cities, where they breed tricky characters like Barack Obama, all eloquence, as John McCain sneered in last week's presidential debate, but hard to pin down."

Pat Buchanan, a comment?

BUCHANAN: Sure. That's Thomas frank, and that is the sneering contempt of the American people on the part of some and the liberal intelligentsia who think the American people are stupid and they've been fooled in seven out of 10 presidential elections by these infinitely clever conservatives who don't happen to control the big media.

It reminds me, David, of the statement by Pauline Kael of "The New York Times" in 1972, when we won 49 states for Nixon and Agnew. She said, "How could Nixon have won when I don't know anyone who voted for him?"

And this is exactly what Mr. Frank is saying. And he is in "The Wall Street Journal" but not of "The Wall Street Journal."

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

Coming next, who has the right temperament to be president? The results of our latest NBC News/"Wall Street Journal" poll.

Plus, what will voters think about Governor Palin's hefty shopping bills?

When THE RACE returns.

(COMMERCIAL BREAK)

GREGORY: McCain and Palin make a hard push in the state that decided the 2004 election, and Governor Palin pushes back against claims she is not ready to lead the country. What she told NBC "NIGHTLY NEWS" anchor Brian William in a new interview. Plus, national polls show Obama with double digits leads, but polls in some states and key voting groups suggest a potential opening for McCain.

We're back for the back half on RACE FOR THE WHITE HOUSE. I'm David Gregory. Just 13 days left to go, and slipping poll numbers. Senator John McCain has his work cut out for him. Always one to relish that underdog status, he continues to insist that he's got the competition right where he wants them.

Back with me to go inside McCain's war room, Richard Wolffe, "Newsweek's" senior White House correspondent, Pat Buchanan, former presidential candidate, and Lawrence O'Donnell, former chief of staff of the Senate Finance Committee. Richard, Pat and Lawrence all MSNBC political analysts.

Let me start with you, Lawrence. We've heard on the trail from New Hampshire and then in the interview with Brian Williams tonight this idea that McCain is the underdog, that Obama is overconfident. Where does he go with that argument? He is certainly relying upon history, which shows him capitalizing and being a better campaigner when he is that far down. How does he use it to his advantage now?

LAWRENCE: I don't think he does. At this stage of the campaign, there are people who decide, undecided voters who decide generally in the direction of the winner. They get feel of who the winner is going to be. There is a certain momentum that goes with the winner. I don't think this is a safe area for McCain to be trying to exploit at this point. If there was a lot more time in the campaign, if this was the middle of the summer and he wanted to claim underdog status, that's one thing.

But right now, this is not something he should be emphasizing. Today, some of the video we had of him doing that today, it almost had the look of, well, yes, it kind of makes sense that you are. You look like the guy who is behind and should be behind. I think he has to go out straight ahead in a straight-on campaign, as if he is in this to win and nothing in relationship to the other guy at this point. Every comparison to the guy at this point hurts McCain.

GREGORY: Pat Buchanan, if you look at the temperament numbers, our new poll, NBC News/"Wall Street Journal," who has the right temperament to be president, again, it's the advantage Obama by a large margin, 50 to 30 percent. So if you're John McCain, what can go wrong for Obama at this stage that you can capitalize on?

BUCHANAN: It is hard to see when can really go wrong for Obama, quite frankly. I would hope Joe Biden would be out on the road a lot speaking. I think that's the one shot he's got. Seriously, I do agree that McCain is right to take underdog role. We're fighting back. The American people tend to like a close battle and they don't like the see someone tromped in the dust. There might be a sort of sympathy vote there. He is going after the socialism, Joe the plumber thing. I gather that their polls must be telling them it is working. But I'm not sure, David, that it is. It may be the one card he has to play on the economic issue will.

GREGORY: All right. Richard, we talk about Sarah Palin on the trail as well. This is a comment she made yesterday in Nevada, swing state. She's talking about Hillary Clinton. Let's roll the tape and talk about it.

(BEGIN VIDEO CLIP)

PALIN: When it came time for choosing, somehow Barack Obama just couldn't bring himself to pick the woman who got 18 million votes in his primary. You've got to ask yourself, why wasn't Senator Hillary Clinton even vetted by the Obama campaign? Why did it take 24 years, an entire generation, from the time that Geraldine Ferraro made her pioneering bid until the next time that a woman was asked to join a national ticket?

(END VIDEO CLIP)

GREGORY: So I suppose, Richard, the argument is that Barack Obama was sexist, on its face. It seem like a long ball. It also seems specifically aimed at Pennsylvania, where they are spending so much time trying to pick off that Hillary Clinton voter.

WOLFFE: I think you're right. I think that strategy is almost entirely Pennsylvania right now. Unfortunately for Governor Palin, this was a good argument when she first aired it, straight after being rolled out at the Republican Convention. At this point, enough Hillary voters have taken the measure of Palin on the issues. And if you look at the polls, the enthusiasm, the number-the percentage of Democrats who say they'll vote for Obama suggest that those Hillary voters have come into Obama's column.

She actually needs to connect with those Hillary voters on something other than Hillary Clinton right now. That means the small town values that she is still popular with and can still speak to. She has to be doing that in Pennsylvania, not with these big crowds, but in small towns and small setting. I think that's the problem they're doing right now. They're locked in a track which is repetitive for the McCain campaign.

GREGORY: Pat, look at this pattern that we're seeing here for McCain/Palin her, where they're going after Obama, socialism, Joe the plumber, whether they're part of this or not. There are other people talking about whether he is a Muslim, whether he's a he real American. That's certainly been a question as well. Their pitch to Pennsylvania voters. Are they going for a lower common denominator, try to disqualify Obama, raise character questions, whether he is too mysterious to be in office? Is it a narrow argument that they're making in some of these states where they think they can make some pick-up?

BUCHANAN: I think in Pennsylvania it is a good argument in this sense. What they're trying to do is read Obama out of the center and back to the left, where they had him a while ago. And everybody had doubts about him. But the trouble is, Obama has removed some of those doubts in the debates, and apparently removed almost all of them. They're trying to get it back. That will be an appeal to central and south western Pennsylvania.

However, in the Philly suburbs, McCain has to win those independents on his older appeal and leave that other job, I think, to Governor Palin.

GREGORY: Lawrence, what do you do, even the tax argument-you heard Heather Wilson earlier. They're hammering home the redistribution of wealth and the fact that Obama is going to raise taxes. Our poll shows that voters trust him more on taxes than they do McCain. This is the one issue that he's been amplifying on, if you're John McCain.

O'DONNELL: This, by the way, is the one issue that I thought the McCain campaign was going to be very effective on. They were going to be running the Republican anti-tax campaign against the Democrats. And to see Obama turn that around and emphasize his tax cut for 95 percent of the tax payers as being the winning side of that argument has been just extraordinary to me. That I think is the single most successful piece of the Obama campaign, one that I could not possibly have predicted.

McCain is just not getting traction on it. Pat is saying that McCain is trying to push Obama out into the left. He is trying to push him right out beyond the borders of the United States. The left in this country is not called socialism. They're trying to push Obama way into Canada and France, as some sort of alien socialist. And people just aren't buying it at this point in their exposure to Obama.

BUCHANAN: The most left wing voting record in the Senate.

O'DONNELL: In the United States of America, the left side is not called socialist.

BUCHANAN: Lawrence, the fourth most liberal voting record is socialist Bernie Sanders. Those two guys are to the left of him, according to the "National Journal."

O'DONNELL: Give up that Medicare card, Pat.

BUCHANAN: It's perfectly legitimate. Look, you're taking away from the top five percent and giving it to the 40 percent who don't pay any taxes.

O'DONNELL: The earned income tax credit, which has been in law for decades now, gives money through the tax code to people who do not pay taxes. It is not a new idea. Republicans have voted for that. Democrats have voted for that. Republican presidents have approved that, Pat. It is not a new idea. And it is not socialism in the modern definition.

(CROSS TALK)

BUCHANAN: It's not a new idea. It goes to the 19th century. Go ahead, David.

GREGORY: Richard, here is my question, is this the argument that John McCain, the maverick of 2000, the guy who bucked Bush, bucked his party, is this really where he wants to close, the guy who got independent votes? Does he want this to end on a strong ideological argument? Is that his best showing as a candidate?

WOLFFE: No, it is not. And I suspect the real John McCain would like to go back on to the Straight Talk Express and drive around New Hampshire. In this case, he should be driving around Pennsylvania and doing-and reconnecting with what he used to be and with voters. Remember, he did that in 2000 because he was outspent massively by Bush. He is being outspent massively by Obama now. Just one thing, by the way, the conservative governments in France and Canada would hate to be called socialist.

O'DONNELL: They certainly are compared to the American government.

Every government is more socialist compared than the American government.

BUCHANAN: We're getting there.

O'DONNELL: We certainly are, Pat. Your Medicare card and your Social Security card are nice little socialist indicators that you've profited by.

BUCHANAN: I might have put something more into that than I ever have gotten out of it.

O'DONNELL: You did. You put more into Social Security than you will ever be paid back. That's correct, Pat. That does make it a socialist program, but you are part of it.

GREGORY: All right, guys. We're going to take a break here. Thanks very much. Coming up, McCain and Palin are barnstorming Ohio today. What is Obama's strategy rather to win the Buckeye State and its 20 electoral votes? We'll talk to Senator Sherrod Brown when THE RACE returns right after this.

(COMMERCIAL BREAK)

GREGORY: McCain and Palin are barnstorming Ohio today, as a new poll out tonight shows Obama with a slim lead in the Buckeye State. The new CNN/"Time" poll has Obama at 50 percent, McCain at just 46 percent. This is just outside the margin of error, but it is still tight. Joining me now is Obama supporter, Senator Sherrod Brown of Ohio. Senator, welcome.

SEN. SHERROD BROWN (D), OHIO: Glad to be with you. Thank you.

GREGORY: Let me show you a piece of reporting from the "Boston Globe," where they were talking to Youngstown voters and getting their thought about this election, such a tight race in your state. This is what the reporting was, "they are both Democrats, these voters they spoke to, feeling like they have two bad choices, wishing Hillary Clinton was still in the race. McCain to them would be an extension of President Bush. When we asked about Obama, they made clear they felt a cultural disconnect. They did not trust him. They did not see him as one of their own."

You have the McCain campaign on the hunt right now for Hillary Clinton supporters. You also have the race in Ohio, senator, that is tighter than in some other battleground states where the economy is also an issue. Is this going to be a tougher state for Obama to pick off?

BROWN: This is a state that Barack Obama is going to win. Ohio is traditionally slightly Republican. It is a difficult state for a Democrat to win. But Barack is doing what he needs to do here. He is talking about jobs. He's talking about the middle class. That's working. He is winning in these polls. He has a great grass roots effort. But what Ohioans have waited for with John McCain is to give one example, just one break that he would-one example of how he would do something different on the economy, do something differently from George Bush. The voters haven't heard that in Ohio from John McCain.

And in contrast, they do know what Barack Obama is going to do for the middle class on education and health care, and most importantly, jobs. I was in Youngstown today. I was in Jefferson Community College in Steubenville. That's what people were talking about. What are we going to do to put people in my state back to work? They look at alternative energy. They look at both the old economy and the new economy. And Barack Obama is talking directly to middle class voters about those issues.

GREGORY: You want to talk about the economy. Certainly, Obama is talking about the economy. But in rust belt states like Ohio, are cultural concerns, the cultural connection with Obama, that comfort level, are those still going to be hurdles for him?

BROWN: People are increasingly comfortable with Barack. I don't worry. I worry-we all worry that this is a different kind of election. But we also know that we've seen what has happened. Voters, white voters especially - -white voters now are increasingly flocking to Barack Obama.

When he talks about the middle class, when he talk about jobs, when he talks about renegotiating NAFTA and putting people back to work and all the issues about jobs that he talks about, and John McCain is out there doing name calling. Barack is talking about opportunity. John McCain is calling basically not relating to people. And that's why Barack is going to win this state.

GREGORY: What can go wrong for Obama at this stage? You look at a widening lead in the national polls. And he is doing better in Bush states from 2004. As a supporter, what do you worry about?

BROWN: Well, I don't worry in the sense that I know Barack Obama will continue to talk about jobs and continue to talk about the middle class. I think that this election going our way. I'm not over-confident by a long shot. I know the kind of grassroots efforts that we have in Ohio on the Democratic side. I also know that Republicans in this state try all kinds of things the last two weeks before the election. That concerns me. But I know our message is strong. I know our candidate is strong.

I compare the leadership. Look in the last debate. That's why voters are increasingly comfortable in rural areas and suburban areas, everywhere, with Barack. Look at the steady leadership of Barack Obama and compare that with the erratic kind of back and forth, not sure what issues to talk about of John McCain. That's why so many of us are confident, not over-confident, but confident that Barack Obama will win this state.

GREGORY: All right, Senator Sherrod Brown of Ohio, Thanks very much for your time tonight.

BROWN: Thank you.

GREGORY: Coming up next, a look at some key voting groups, Catholics, suburban voters. Has Obama locked up these traditional swing voters or is there an opening for McCain? I'll go one-on-one with the "Atlantic Magazine's" Ron Brownstein when THE RACE returns right after this.

(COMMERCIAL BREAK)

GREGORY: Back now on RACE FOR THE WHITE HOUSE. As we showed you earlier in the program, our latest NBC News/"Wall Street Journal" poll has Senator Obama ahead by 12 points among independent voters, and with a 10-point lead among all voters. Joining me now to take a closer look at how the American electorate is breaking down is Ron Brownstein, political director for Atlanta Media. He wrote the cover story, "Hidden History of the American Electorate" for this month's issue of "National Journal Magazine." Ron, great to see you. Where are we?

RON BROWNSTEIN, ATLANTIC MEDIA POLITICAL DIRECTOR: Well, I think we're back where history would suggest that we were inevitably going to get. We have an election being driven fundamentally by discontent over the country's direct. We have a big referendum that is, above all, being driven towards the Democrats and Barack Obama by a sense that the country is on the wrong track.

In your NBC/"Wall Street Journal" poll today, 84 percent of the people who approve of President Bush's job performance are voting for John McCain;

68 percent of the people who disapprove are voting for Barack Obama. The problem for McCain is that the latter group, the disapprovers, are two and a half times as large. When you look back through history, it is a steep up-hill climb for the president's party to hold the White House in an open seat election when the outgoing president is as unpopular as Bush is today.

So with all the maneuvering and all the money and the kind of campaign interplay, we're back in the place where the fundamentals of the country's mood would have predicted we might be quite some time ago.

GREGORY: Is this the mood of 2006, plus an economic crisis?

BROWNSTEIN: Yes. It is a tougher overall environment for the Republicans than 2006. Bush's approval rating is lower. There is a strong correlation between how people feel about the president and how they vote, not only in the presidential race, but in Congressional races. On average, in our exit polling since 1982, over 80 percent of the people who disapprove of the president vote against his party's candidate in House elections. So this kind of record high disapproval ratings that President Bush is facing, 66, 67, 71 in one Gallup poll last week, literally their highest ever, that is an enormous weight on McCain.

All the kind of jump starting and zig zagging we've seen from the McCain campaign sort or flows from that fundamental fact, which is that the trajectory of this election is toward a rejection of the party in power. And they constantly have been searching for ways to interrupt that dynamic. Some of them have been effective. Others, like Palin, now look less effective.

GREGORY: Here is what is interesting, though, is that in 2000, when George Bush ran, he not only ran against Clinton and Clintonism to some degree, but it was basically his eight years. But he also sought to redefine the Republican party away from, say, the 1994 crowd. He became a very right leaning and governing president. Nevertheless, that was the pitch he made to voters. Is John McCain selling to voters a reformulation of the Republican party?

BROWNSTEIN: It is a very mixed message. On the one hand, he is saying that he will reach across party lines and often says that I have more of a record of working with Democrat than Barack Obama has working with Republicans. But the ending message is a very ideological one. And it is not only kind of a small government versus big government, small tax versus big tax. It using the S word and basically arguing that Obama represents socialism.

Among the base, that probably-that's what people want to hear, because that is what they believe. I think among independent voters and swing voters, it seems a little shrill and kind of over the top.

GREGORY: Let's show our voters something that you wrote in your piece in the "National Journal," "the Hidden History of the American Electorate." You write this, "McCain's best hope in this difficult climate may be the durability of the underlining partisan allegiances that have divided the country almost exactly in half between the parties for much of the past 15 years. Thirty four states voted the same way in all four of the presidential elections from 1992 to 2004, and many of the demographic trends in this fall's polls follow familiar grooves."

Which leads to this question: whatever discontent there is with President Bush, is America still a center right country politically?

BROWNSTEIN: There are more people that call themselves conservative than liberal, no question. The issue is how much has the whole baseline shifted toward the Democrats. We've been living in a period of enormous political stability, trench warfare between the parties, not only geographically as you said; 34 states voting the same way in each of the past four elections. You have to go back to the beginning of the 20th century to see that level of stability. Ninety three percent of the counties in the lower 48 states voted the same way in 2000 and 2004.

But it's not only geographic. It is demographic. In the last five elections, very different Democratic candidates, Dukakis, Clinton, Gore, Kerry, the Democratic vote among white men has varied only between 36 percent and 38 percent. The vote among non-college voters altogether has varied only between 38 and 44 percent. Among college voters, white college voters, 40 and 44 percent. There has been enormous stability here.

Now, these basic patterns are still holding, but the entire baseline on all of these fronts is shifting toward Obama, largely because of economic discontent and dissatisfaction with the direction under Bush.

GREGORY: Is he changing the electorate with these new voters? We don't know yet. Is that what the potential is, that the baseline shifts because new voters come in a way?

BROWNSTEIN: He has the potential to do two things. He has the potential to change the electorate by bringing in large numbers of new voters. This early voting African-American turnout in places like Georgia and North Carolina is staggering, and has potential to lock in-potentially lock in a Democratic advantage among young people is also significant.

But it's not only that. He has the potential to move the existing electorate. You know, our modern polling goes back to 1952 with the University of Michigan's national election studies, our longest running data series. No Democratic presidential candidate in that entire period has won white voters with a college education. Obama in the Pew poll today is leading by about five points among those voters. He has the potential to accelerate a trend that had been begun in the '70s and '80s, moved under Clinton, Democratic strength in these white collar suburbs, Montgomery and Delaware County outside of Philadelphia, Oakland County outside Detroit, Fairfax now outside Virginia, now Mecklenburg and Wake County in North Carolina.

He has the potential to change the electorate, not only in terms of enlarging it, but moving blocks of voters. It's only a temporary grant. If you win, you've got to cement that allegiance through how you govern.

GREGORY: That's one of the big questions in all of this. You concluded this in one of your recent columns, which is the test for this election is whether-and I'll put this simply. Are Americans thinking differently about what they want their government to do?

BROWNSTEIN: A little bit, but perhaps not as much as the overall election result would suggest. The election result seems to be driven primarily now by a rejection of Bush's governance, and in that sense, a rejection of the Republican agenda. Now, that does give more space to Democrats. Certainly, if Barack Obama comes in and wins a big victory and brings in a lot of Democrats in the House and Senate. By the way, no one has done that trifecta since Reagan in 1980. There will be more space there. How much more space is a big question. Is this simply a rejection of George W. Bush? Or is it also a reject of Ronald Reagan, and the way in which he has framed the debate for the last quarter century, in which those who want to expand government's reach start out with the presumption against them.

Are we now moving where the needle has tipped and there is more political room and willingness in the country to accept new government programs, all the thing that John McCain is railing against. I don't think we know the answer on that. I think that the likelihood is that there is not as much license as Barack Obama and some Democrats might think. And one of the things that will be fascinating, if he does win, is how far the red state Democrats are willing to go toward expanding government without some of the protections that Bill Clinton thought was necessarily, like balancing the budget, reducing the work force, reforming welfare.

GREGORY: Ron Brownstein, 13 days to go. Getting exciting. That does it for RACE FOR THE WHITE HOUSE for tonight. Just 13 days to go. We'll have it covered here. I'm David Gregory. Thanks for watching. "HARDBALL" with Chris Matthews coming next. Good night.

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

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