updated 10/28/2008 12:53:07 PM ET 2008-10-28T16:53:07

Guests: John Harwood, Susan Molinari, Joan Walsh, Lawrence O'Donnell, Tim Pawlenty, Nicolle Wallace, Debbie Wasserman-Schultz

DAVID GREGORY, HOST: "Don't believe this for a second, that the election is over," the words of Senator Obama today, warning to his supporters about cheering early. For Senator McCain, those words are his wish as he argues that polls in the battlegrounds are actually tightening. Today, a top McCain adviser is here to make the case for the McCain comeback. Plus, has Governor Palin gone rogue on the campaign trail? Acrimony and distraction within the McCain campaign in the closing days. That and more, as the RACE FOR THE WHITE HOUSE rolls on. We've got just eight days to go in the race for the White House. Welcome to the program tonight. I'm David Gregory.

The headline, "Closing Arguments."The clock ticking loudly as we await an Election Day verdict. Both parties canvassing the country to plead their final case before the American people. Today, Senators Obama and McCain took turns in a state that sealed President Bush's victory in 2004, Ohio. Obama pressing the argument that he'll be the one to turn the page from President Bush's economic policies and philosophy, issuing this challenge of a choice to an audience in Canton, Ohio.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: In one week's time, we can choose an economy that rewards work and creates new jobs and fuel prosperity from the bottom up. In one week, we can choose to invest in health care for our families and education for our kids and renewable energy for our future. In one week, we can choose hope over fear and unity over division, the promise of change over the power of the status quo. In one week, we can come together as one nation and one people and once more choose our better history.

(END VIDEO CLIP)

GREGORY: Meantime, Senator McCain forged ahead on a mission to keep the Buckeye State red, continuing to level the "spread the wealth" charge against Obama. He brought up a 2001 interview Obama had with a Chicago radio station and issued his rival a new nickname in the meantime.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: In a radio interview that was reveal today, he said that "one of the tragedies" of the civil rights movement is that it didn't bring a redistribution of wealth in our society. Redistributive change. That's what change means for the Obama administration, the redistributor. It means taking your money and giving it to someone else. I'm going to create wealth for all Americans by creating opportunity for all Americans.

(END VIDEO CLIP)

GREGORY: Tonight, both candidates make their way through the Keystone State, a battleground that carries with it 21 electoral votes and a state which NBC's electoral map considers to be leaning towards Obama. We're talking about Pennsylvania, of course. The rest of the NBC map also paints a pretty positive picture for Obama at this point, showing him crossing the important 270 electoral vote threshold and leading McCain by a 286-163 advantage. The latest changes, battleground Colorado and Virginia move from the tossup category to lean Obama. Those were both red in 2004. It's significant because Obama, if he wins those two states, plus Nevada, he can still get to 270 even if he loses Florida, Ohio, and Pennsylvania. Again, if he gets Colorado, Nevada, Virginia, he doesn't need the big battlegrounds of Ohio, Florida, and Pennsylvania. But he is leading in those regardless. In addition to these changes, NBC moved McCain's home state of Arizona from likely McCain to lean McCain. A tip to the reality that Arizona without McCain on the ticket would have been a contested battleground, according to our "First Read" blog. Joining me now, Susan Molinari, Republican strategist and a former congresswoman from New York; John Harwood, CNBC's chief Washington correspondent and a political writer for "The New York Times." A great column today about how the country got here politically. Joan Walsh, editor-in-chief of Salon.com, and MSNBC political analyst Lawrence O'Donnell.

Welcome, all. We also want to talk about the conviction today of Senator Ted Stevens of Alaska, something that does promise potentially to tip the scales further in the Democrats' favor in Congress as well. We'll get to that as we move forward. John Harwood, talk about closing arguments here on both sides in this race. What are final weeks of a campaign about? And how is this year different than past years?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: Well, it's, first of all, about sprinting all around the country, trying to touch as many places as you can. The events get more frequent, less time in between them. And the second thing is to try to find some frame of reference for voters to enable them to get off of the pattern that they've been in. And this race has flat-lined in the polls, with Barack Obama holding a lead from seven to 10 points, if you look at the Gallup track, for the last three week, or a month even.

And for John McCain, he is focusing on the single word of "redistribution" and trying to make the argument, to appeal to those tax-strapped voters out there, blue collar voters in particular, to say he wants to tax you to give benefits to somebody else. It's a long shot, but that's what he's got to try to do.

GREGORY: Susan Molinari, on "Meet the Press" with Tom Brokaw yesterday, Senator McCain was feisty, but he didn't necessarily appear confident. What as a supporter of McCain do you think is hopeful?

SUSAN MOLINARI, REPUBLICAN STRATEGIST: Well, I think that what, you know, they're going to try and do right now is to take that sprint that John just talked about and to play into the perception that some people have shown. If there is this weak spot in Barack Obama, it is this notion that he is for the redistribution of wealth. Look, a lot of Independents come over to the Republican Party based on fiscal sanity and our financials. We lost them for a long time because of our failure to balance the budget and rein in spending.

This compare and contrast may be just the thing that we need to have them look and say, you know, I've heard about them in the Illinois State Senate, and now his talk on how to redistribute wealth just doesn't make me feel comfortable. And maybe I'm going to stay where I feel comfortable, even though I've had some problems with the Republicans, albeit not Senator McCain, in the past.

GREGORY: Lawrence O'Donnell, this is McCain going after Obama and his plans to buy 30 minutes of ad time. He's got all this money. He wants to spend it addressing the American people directly. This is what McCain thinks about that. Let's listen and you can react.

(BEGIN VIDEO CLIP)

MCCAIN: He's planned his first address to the nation for before the election. You know, I guess I'm old-fashioned about these things. I prefer to let the voters weigh in before predicting the outcome. What America needs now is someone who will finish the race before starting the victory lap. Someone who will fight to the end, and not for himself, but for his country.

(END VIDEO CLIP)

GREGORY: Lawrence, is that the only message, which is the guy is celebrating early, so therefore you shouldn't vote for him?

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALSYT: Well, if you can't afford a half-hour for yourself, that's one angle to take.

Look, what Obama is doing with all this money is exactly what any campaign would do with all this money. And they would, of course, purchase these half-hours. It's a real problem for McCain. And one of the dangers of talking about it that way is it actually feeds into the notion somewhat that there is a winner emerging here.

GREGORY: Yes.

O'DONNELL: And one of the problems in the closing days is that final undecided voters tend to go where they think the winner is. They like to vote for the winner. So McCain has to be careful not to help people on to the Obama bandwagon at this point with that kind of talk.

GREGORY: Let me talk about Sarah Palin here, because she is still getting a lot of attention, perhaps a lot more attention than the McCain team would like for her to be getting on a national basis here. This whole controversy about the clothes that the campaign and the party purchased for her and her family so she could be out there on the campaign trail, more than $100,000 worth of clothes. Pretty high-end stuff. She took that on head on, got off the script when she was campaigning over the weekend, and this is what she had to say about it.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: This whole thing with the wardrobe, you know, I've tried to just ignore it because it's so ridiculous. Those clothes, they are not my property, just like the lighting and the staging and everything else at the RNC purchased. I'm not taking them with me. I'm back to wearing my own clothes from my favorite consignment shop in Anchorage, Alaska.

(END VIDEO CLIP)

GREGORY: The problem, Joan Walsh, is that when she is talking about real America versus fake America, being a hockey mom and trying to make this class warfare at some level in the campaign debate, when you're wearing high-end stuff from high-end stuff, doesn't really fit the model.

JOAN WALSH, EDITOR-IN-CHIEF, SALON.COM: No, it doesn't fit the model. But I'm going to surprise you, David, and I'm going to side probably with Susan on this one. I do think that she has been treated badly by the party. I just got on my BlackBerry, you know, a story about the RNC fighting back against what she said and saying that the McCain campaign bought the clothes. I mean, she did not go to Nieman Marcus and by the clothes. And this is just another example of how badly this campaign is doing. They are in full circular firing squad mode right now. They're calling her a diva after using her vitality and her energy and thinking she was a great plus. I mean, this campaign is in full meltdown, and their last week to get across a positive message is starting with this-with sniping, Republican sniping at one other. So I actually think I feel a little bit sorry for her. I feel like she's been used and she is fighting back, and they're firing at her. And that's terrible.

GREGORY: Well, John, what is remarkable here is that you do have a lack of discipline within a campaign where you have open hostility and acrimony between Palin and her top aides and some of those who are inside the McCain campaign, Nicolle Wallace, Steve Schmidt, and others. All of this going out, this is your late message in the final week that's competing with your tax message and the campaign.

HARWOOD: No question about it. And this is a particularly dangerous circular firing squad because they're all pretty good shots. You know, the Democratic circular firing squad usually miss each other.

WALSH: They miss.

HARWOOD: But, you know, this is a very difficult point for them.

I've got to tell you, I think Sarah Palin looked sympathetic when she was out talking about how these purchases were things that she wasn't in charge of, and they're not going to be her clothes. I thought that was not so ineffective for her to do that.

GREGORY: But the overall problem here, Lawrence, is, is it not? Or let me actually ask this to Susan. The overall problem is not even the clothes. It's the fact that she's a bigger drag on McCain, according to our most recent poll, than George Bush. And Americans have made a decision through the polls that she is not qualified for the office. Those were two risks that this campaign knew what they were going into, but they couldn't afford to have them come home to roost like this. Do you disagree?

MOLINARI: You know, I do disagree. I think Sarah Palin came to the Republican Party and came to the McCain campaign at a time when they were desperate to change the story, to help set the scenario. Barack Obama makes history if elected. Now, John McCain makes history if elected. And it did that. It energized the base. She's still bringing a lot of people out. We raised money like we never raised.

To say that there's a drag on the ticket with Sarah Palin, when at the same time we are dealing with a world economic crisis, we have things like, you know, Senator Ted Stevens happening all the time...

GREGORY: Right.

MOLINARI: ... I think it's very unfair to posit at the feet of Sarah Palin. And you know what? She was a governor of Alaska who now had to enter the national stage, and people saying she needed to look the part. And if you need to look the part, as anybody who does TV knows, you have to dress the part.

(CROSSTALK)

HARWOOD: I saw the same poll numbers, but I don't believe...

(CROSSTALK)

GREGORY: I've got to get a break in here, guys. I've got to get a break in here. We'll come back to this a little bit later on in the program.

Coming next, just eight days to go, the inside word on how McCain plans to stop Obama's momentum. I'm going to go one-on-one with McCain supporter Minnesota Governor Tim Pawlenty when THE RACE returns right after this.

(COMMERCIAL BREAK)

GREGORY: Back now on RACE FOR THE WHITE HOUSE.

Senator John McCain spent much of the day attacking Obama, hoping to chip away at Obama's lead in the polls. Joining me now, McCain supporter Minnesota Governor Tim Pawlenty. His home state is expected to be in the Obama column at this point. The latest Big Ten Battleground Poll showing the Illinois senator with a 19-point advantage. Governor, welcome.

GOV. TIM PAWLENTY ®, MINNESOTA: David, thanks for having me on the show.

GREGORY: Do you concede that Minnesota is all but gone in the Obama column at this stage?

PAWLENTY: Well, there are some other polls that show it much closer than that, but clearly he has the advantage. And Senator McCain is going to have to have a big comeback here to take Minnesota. But at this point, Senator Obama does have the advantage here, but it's not so large it's inconceivable that Senator McCain could win.

GREGORY: Governor, I don't have to tell you that Senator McCain's record is one of being a maverick, and one of being a moderate Republican who knew how to work with Democrats across the aisle. There's lots of examples that he likes to talk about on the campaign trail. And yet, we're seeing within the past couple of weeks this movement of Obamacans-Republicans, mavericks, moderates who are now supporting Barack Obama. Your former Republican governor who was on the program Friday night; Ken Adelman, a friend of the vice president's, neoconservative thinking; Colin Powell. The list goes on and on, including Christopher Hitchens; Chris Buckley, the son, of course, of the godfather conservative movement, William F. Buckley. Why is this happening?

PAWLENTY: Well, I think there is group of folks who perhaps are disenfranchised with what they perceive to be the Republican Party or brand, David. But I think the thing to look at is, if you put Barack Obama in the White House with the Democrats controlling the Congress, you will have an unstoppable train of bad ideas rolling down the track. There will be nobody there to bring it back to center, nobody there to balance it off and bring it to the mainstream. And for those moderate or centrist Republicans, it would be very good to have John McCain there to bring what's going to be a very leftist Congress if Barack Obama is elected, a rubber stamp for a leftist Congress, to bring it back to center, bring it back to the mainstream.

GREGORY: This is what Senator Obama is saying on the campaign trail about Senator McCain, about his strategy in the final week. Let's listen, and I'll let you react on the other side.

(BEGIN VIDEO CLIP)

OBAMA: ... spending these last weeks calling me every name in the book, because that's how you play the game in Washington. If you can't beat your opponent's ideas, you distort those ideas and maybe make some up. If you don't have a record to run on, then you paint your opponent as someone people should run away from. You make a big election about small things.

(END VIDEO CLIP)

GREGORY: Governor, what disqualifies Senator Obama from being president in your mind?

PAWLENTY: Well, I think it just goes to the issue of the differences of the issue positions and policy positions, David. He said the other day when asked, "Do you want to retract the statement about Joe the plumber and the redistribution of wealth?" he said, no, he wants to keep that. So he's proposed to raise taxes on capital gains, on income, on depreciation, on dividends, on payroll, refine (ph) a penalty on health care and down the list. What thinking economist or person would say it's a good idea to have those kinds of tax increases when we're in a recession? And I think if you look at most people's concerns, it's their jobs. And those would be job-killing tax initiatives.

So those are just bad ideas. It's not that Senator Obama is somehow, you know, a bad person or unpatriotic. That's not the case. The case is he just has a very different view of these policy matters than Senator McCain does.

GREGORY: But do those-does that disagreement on policy matters disqualify him, in your mind, from being an effective president?

PAWLENTY: It's just an honest different of opinion on the issues, David. It's not a matter of him being ineligible or disqualified. It's just a very different view of the world, where if you're going to take people who are currently trying to provide jobs, barely getting by, and put those kinds of additional tax burdens on the economy, that would not be helpful. It's unwise. It doesn't mean he's disqualified.

GREGORY: What's it going to take for a McCain comeback to become a reality?

PAWLENTY: I think he's going to have to emphasize basically three things. Number one, you don't want a runaway train of all Democrats running the whole country. That's not balance. That's not mainstream. Number two, you don't want to be raising taxes in a recession. That's obvious-or any time. And number three, Senator McCain has got the requisite experience, wisdom and judgment to be the leader of the free world and commander-in-chief.

GREGORY: All right. Governor Tim Pawlenty, as always, good to have you on the program.

PAWLENTY: All right, David. Thank you.

GREGORY: All right.

Coming next, federal agents say they have broken up a plot to assassinate Barack Obama and another group of African-Americans. The latest on this still developing story when THE RACE returns after this.

(COMMERCIAL BREAK)

GREGORY: We're back with a developing story that we've been tracking this afternoon. The government says it has broken up a plot to assassinate Barack Obama. The Bureau of Alcohol, Tobacco and Firearms said today that two Neo-Nazi skinheads planned to shoot or behead dozens of African-American students at a high school in Tennessee. They allegedly planned to end that murder spree by assassinating Senator Obama. The suspects, 20-year-old and an 18-year-old, were arrested last week and are facing several felony charges, including threatening a presidential candidate. NBC News Justice Correspondent Pete Williams reports federal agents are not convinced the plan was well conceived or well developed, and that the suspects had the capability to carry out such an attack. The Obama campaign has not commented at all on these charges. Let me bring in Lawrence O'Donnell quickly to talk about this. It's just a reminder, Lawrence, of race as an issue in the campaign, and the sort of hatred that still exists out there that is nothing new. Does it get people thinking at all a week before Election Day?

O'DONNELL: Well, I think it might. You know, I hope this story passes quickly and is shown to have no real capacity to have harmed Senator Obama. But it takes me back, David, to early in 2007, when shortly after Barack Obama announced his candidacy.

And I found myself in a casual conversation with an African-American who told me she was worried about the candidacy. And I didn't quite get what she was talking about, until she said, well, you know, a lot of us think we might lose him, meaning African-American were thinking about this possibility at the outset of the Obama campaign.

GREGORY: Right.

O'DONNELL: It was high in the minds of some people, whereas a lot of us weren't. It just wasn't something that we thought-that you would think of first in a situation like this. But people, you know, there is a lot of talk around the issue of Colin Powell's decision not to run for president being based within his family, especially on his wife's side, about this very issue. That his wife argued that this was too much of a chance to take, that he would be too inviting a target in this kind of situation. This is the only instance of this sort that we've heard in this campaign. Let's hope it's the last one.

GREGORY: Right, absolutely. And that it passes quickly. Lawrence, thanks very much. Another break coming up here. In our next half-hour, in just a couple of minutes, McCain's senior adviser, Nicolle Wallace, will be here. What is McCain's closing argument and strategy? Can she make the case for a McCain comeback? Also, the infighting within the McCain campaign about Governor Palin. I'll go one-on-one with Nicolle Wallace in the McCain campaign when THE RACE returns. The back half coming up right after this.

(COMMERCIAL BREAK)

GREGORY: Next, election tension. Accounts of dissention between the McCain and Palin camps. One report quotes a McCain adviser as using the word "diva" to describe the Alaskan governor. What is the real story? I'm going to go one-on-one with McCain senior adviser Nicolle Wallace to find out as RACE FOR THE WHITE HOUSE continues right now.

Back now for the back half on RACE FOR THE WHITE HOUSE. I'm David Gregory. Today in Cleveland, flanked by his top economic advisers, Senator McCain made the case for why voters should choose him.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, ® PRESIDENTIAL CANDIDATE: I've been through tough time like this before. And the American people can trust me. Based on my record, and results, to take strong action to they said crisis, restore jobs, and bring security to Americans.

I'll never be the one who sits on the sidelines waiting for things to get better. I believe that to lead, you must put forward your vision of our future, and that's what I've done throughout this campaign. And that's what we'll do for the next eight days.

(END VIDEO CLIP)

GREGORY: But the McCain campaign has been plagued by polls showing Senator Obama is tied with or ahead of McCain in key battleground states like Ohio and Florida. And recent reports of infighting among campaign staff with the handling of Governor Sarah Palin at the center of some of these reports. Joining me now, senior adviser of the McCain campaign, Nicolle Wallace. Good to see you here in person.

NICOLLE WALLACE, SENIOR MCCAIN ADVISER: Thank you for having me.

GREGORY: Here we are, the final week of the closing argument. What is it that Senator McCain wants voters to be thinking about this week and on Election Day.

WALLACE: I thought Governor Pawlenty summed it up pretty well. There are a lot of people who have seen these two candidates over the last two years really who have strong opinions. But there is a big chunk of the American public who is tuning in for these final days to make a final decision. And they're tuning in in the midst of an economic crisis. And they have got probably the most vast difference between opinion and the way these two men see the economy. On the one side, you have Obama who seems to be running as redistributor of wealth in chief. And on the other side, you have John McCain who is running on a platform of growing the economy, a rising tide lifts all boats. And I think people will tune in and make a choice based on that difference.And the other thing that I think Joe Biden really brought in as a sharp focus, his belief that Barack Obama would be tested by the world or by America's enemies. So I think we're having a closing argument about experience and about growth versus redistribution of wealth that will set up John McCain very well going into the final days and hours of this race.

GREGORY: Yet in the final days, there is also this as reported by the politico.com Web site. "A close Palin ally outside the campaign who speaks regularly to the candidate tells Politico her strategy was to be trustworthy and a team player during the convention and thereafter but she felt completely mismanaged and mishandled and ill-advised. Recently she has gone from relying on McCain advisers who were assigned to her to relying on her own instincts. Palin's loyalists say she has grown particularly disenchanted with the veterans of the Bush reelection campaign including Steve Schmidt and Nicolle Wallace. Wallace declined to engage publicly in the finger-pointing that has consumed the campaign," the article goes on to say, "in the final weeks," quoting you as saying, "'I am in awe of Palin's strength under constant fire by the media,' she said in an e-mail. 'If someone wants to throw me under the bus, my personal belief is that the most graceful thing to do is lie there.'" Acrimony, distraction, discussion of clothes for her on the campaign trail. This has got to be fighting your message here in the final week.

WALLACE: Well, listen. This is not something that anyone living in Ohio or living in Florida or living in Michigan or living in Nevada or Colorado gives one single hoot about. This is, you know, Washington clamoring and clanging and it is a real disservice, I think, to the honorable campaign that Senator McCain has run to the absolute vitality of Sarah Palin. The notion that Sarah Palin asserting herself is something that we don't celebrate and embrace and welcome. She and John McCain are two peas in a pod when it comes to not just bucking the script but to political convention. And I think that's what people are looking for in Washington.

GREGORY: But is Senator McCain upset that infighting within the campaign has spilled out now publicly?

WALLACE: Well, look. Everyone wants to keep the voters focused on the big choice in this election. So certainly inasmuch as the media is riveted by stories of personalities, I can promise you, I've done this long enough, no one cares at all about campaign staff except campaign staff. What voters care about is what are you going to do to make things better? How are you going to turn Washington upside down? We had a sad reminder just today of how deep corruption and the way Washington and Washingtonians and people in the Congress and the Senate lost their way. So I think that people are looking for change. And I think the two people best equipped to shaking things up and turning Washington upside down are John McCain and Sarah Palin.

GREGORY: But she has gotten a lot of attention. And it's not the attention the McCain campaign wanted. Certainly she's energizing the base. That has kept on. But in terms of being a drag on the ticket and the polls show she is a bigger drag than President Bush, according to our poll and also a question of her qualifications. Her own hometown newspaper, "The Anchorage Daily News", a paper that would know her well having covered her as governor wrote this in endorsing Obama, "Despite Governor Palin's formidable gifts few who have worked closely with the governor would argue she is truly ready to assume command of the most important, powerful nation on Earth, to step in and juggle the demands of an economic meltdown. Two deadly wars and a deteriorating climate crisis would stretch the governor beyond her range. Like picking Sen. McCain for president putting her one 72-year-old heartbeat from the leadership of the free world is just too risky at this time."

WALLACE: Well, look, the voters are going to make their choice. And I think in a week, they are going to look at one ticket which certainly the top of the ticket you have the most liberal person ever to be nominated by the Democratic Party and you have a running mate who is guaranteeing America and Americans that that president, President Obama if he should win, will be tested by the world. And that is certainly on the menu. If someone wants their wealth to be redistributed, if they believe success should be taken from those who achieve the American dream and handed out to others. That is on the menu.

GREGORY: He would point out that part of his plan to reduce taxes for 95 percent of those paying. He does raise them on the top earners but he also is cutting them.

WALLACE: But listen, David, even that has been revealed to be not exactly what Obama describes it as. To say you're going to give 95 percent of Americans tax relief, only 60 percent of those people pay taxes. So for 40 percent of the public, it is a redistribution of success, a redistribution of wealth. But again on the other side, you have John McCain. One of the most experienced voices and leaders in our nation's foreign policy. He was right about the way to win the war in Iraq. He's been right about every major foreign policy. He's worked with Democrats, he's reached across the aisle and he has led. And on that ticket, Sarah Palin is somebody who has reform in her DNA. She is someone who has taken on the entrenched interests. She has done something to help America achieve energy independence and she has walked the walk when it comes to performing and taking on trench interests. So it depends on what people want. Do they want a redistribution of wealth? Do they want the least experienced president in America's history at a time of historic challenge? Or do they want the McCain/Palin ticket of reformers and experience.

GREGORY: Winning presidential tickets don't have stories about political infighting within the campaign. You're an accomplished veteran of the Bush campaigns. And a public servant in the Bush administration. These kinds of stories about disagreements within the campaign certainly didn't spill out in the course of the campaign itself. This was what Robert Draper wrote, who was a biographer of the Bush administration, about John McCain's approach. Senator McCain's approach and this campaign's approach in this particular cycle.

He writes this, "John McCain's biography has been the stuff of legend for nearly a decade and yet Schmidt," Steve Schmidt "and his fellow strategists had difficulty explaining how America will be better off electing as opposed to simply admiring a stubborn patriot. In seeking to do so the McCain campaign has changed its narrative over and over, a candidate who is variously a fighter, a conciliator, an experienced leader and a shake-'em up rebel." You say that people in Ohio and Nevada don't care a whit about any of these things. But this infighting, this lack of agreement affects the candidate that they're seeing.

WALLACE: Well, listen, I came of age watching and admiring the Clinton administration and I read more riveting books about infighting in the Clinton administration and I think 67 percent of the American people approved of the job he did at the time and afterwards. So I disagree there can't be vigorous and robust debate that sometimes spills out into the public for someone to be successful and certainly for someone to win. But I would say specifically campaign tactics, the times have changed. Things have adapted to the times. We certainly came out of our convention with a strong message about growing this economy, about winning these wars. And then we faced and we embraced the challenge of a global economic meltdown. So we are certainly proud that we work for the candidate who was on the ground, in the arena, engaged and maybe not making the stuff that great campaign speeches are made out of or sound bites, that he was on the ground, in the fight, trying to manage our government and our country through one of the greatest economic crises that we've seen since the Great Depression. And the other choice, again, people have a choice. It doesn't matter what you and I think. In seven, eight days, people will make their own choice and the choice there is between a cool cucumber who sat on the sidelines, took some polls, took the temperature, and waited for events to kind of gel. Our candidate was in the mix. He was in the ring and he was fighting. And I am very proud, very proud to work for someone who lets the political chips fall where they may. And if I can, that is the choice here. There is someone who, much to the chagrin of advisers like me. When it's all over, we are meaningless. People choose. They can see through all this. They see through the ads, in Obama's case, they see through 10 times the ads we have on the air. People see through all that and they choose a leader.

GREGORY: Final point here, obviously Senator McCain and you have made the argument that the polls are tightening. He fully expects to make this close and to pull out victory. So we don't know what is going to happen. Has Senator McCain thought at all about what he might do if he does not prevail in this campaign to work with Senator Obama? In an Obama administration?

WALLACE: Well, look. I don't think that anyone contemplates anything other than a victory on Election Day. But if you look back at the record, it is John McCain who has reached across the aisle. One of his closest friends in the Senate is Joe Lieberman, it is John McCain who made history in passing bipartisan reforms to campaign finance. It is John McCain who has worked with Democrats to solve our global climate problems. It is John McCain who built the coalition to really help us see through the Iraq War to a better place than it had been under Secretary Rumsfeld. So John McCain has a long record of reaching across the aisle. And it is Barack Obama who hasn't always reached back.

GREGORY: Has Obama surprised McCain?

WALLACE: I don't know if he surprised him. But I think that we scratch our heads sometimes when Barack Obama comes out with a new economic policy. The heat is on and he adds some tax reductions that he thinks polls well. He tells Joe the Plumber, yes, yes, I am going to redistribute wealth and he sees the public doesn't react very well to that so he pivots a little bit further. So I think we're stunned by how his rhetoric varies on a daily basis seem to diverge farther and farther from his record. But I think John McCain has been doing this long enough that nothing surprises him.

GREGORY: All right. Nicolle Wallace, thank you very much, Nicolle.

WALLACE: Thank you.

GREGORY: Appreciate it.

Coming up next, inside the battleground map, even Karl Rove says it is not quite over but certainly a steep challenge for Senator McCain. But is he right? RACE FOR THE WHITE HOUSE returns right after this.

(COMMERCIAL BREAK)

GREGORY: Back with our panel tonight. Susan Molinari, Republican strategist and former congresswoman from New York. John Harwood, CNBC's chief Washington correspondent and political writer for "The New York Times."Joan Walsh, editor-in-chief of salon.com. And MSNBC political analyst Lawrence O'Donnell. Lawrence, let me start with you. We just heard from Nicolle Wallace and these reports of infighting on the campaign over Palin. Senator McCain not happy about it. She makes the argument that voters aren't going to care out there. But this kind of infighting reflects a campaign that is in trouble. Voters sense it. They pick up on it. It is not something that is sort of, washes over the Washington media, is it? Does it play larger than that?

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Well, I think the details don't get much beyond the Washington media. But you're right about, David, that it is a signal of a campaign that's in serious trouble. And this campaign has outward signals of that. You can see it in the turnouts of crowds for John McCain. Not as enthusiastic for Sarah Palin and certainly not as enthusiastic as the ones for Barack Obama. There are all sorts of problems wit this campaign.One of the extraordinary thing about the Obama campaign actually is that there has never been an article written where there is an unnamed source in the Obama campaign saying something negative about someone else in the Obama campaign.

GREGORY: Right.

O'DONNELL: What has broken out in the McCain campaign is the kind of death throes versions of it. But this does occur in most campaigns and somewhere there is an article written about the insides of campaigns where there is some dissension. We've never seen word of that about the Obama campaign and that is truly extraordinary.

GREOGRY: Well, the question for me, though, John Harwood, about Sarah Palin, is what is the difference between enthusiasm, as Susan pointed out early. The ability to draw new donors into the party, get the excited again at a time when they made this election. There is a lot of thought she could be the future of the party. And then radioactivity with stories that bring all kinds of negative attention to the campaign which by most objective measures has happened here if you look at surveys that indicate that she is an overhang for McCain in this campaign.

JOHN HARWOOD, "NEW YORK TIMES": No question about it. And all that has eaten away at some of those advantages. I do think the advantages that Palin brought to the ticket in terms of enthusiasm and fundraising and sort of a burst of energy out of the convention, that was real. I do not believe that Sarah Palin is more of a drag than George W. Bush. George W. Bush is the framework for the entire election that has put John McCain behind the eight ball. The question is really, where does Sarah Palin go from here? If this campaign tends way we think it does. Can she salvage a career out of this? But for right now, she is of no use to John McCain with swing voters. And the ability that she has to rouse people on the right has been undercut.

GREGORY: And yet, Susan, this is the argument from the McCain campaign. It is her primary role here. Not just to energize base but she can make a pitch to working class women in Pennsylvania. The one state where they're on offense.

SUSAN MOLINARI, FORMER REPUBLICAN CONGRESSWOMAN: Well, look, I think one of the thing we never talk about here in terms of what are some of the problems the McCain campaign is having is the imbalance in money. Barack Obama broke one of the first promises he made when he announced for president, which is that he was going to stick to campaign finance reform. He is totally-how do you get your message out, whether it is the problem with infighting or some of the other thing you want to talk about. It is very hard for John McCain to get out any of his messages over the noise that Senator Barack Obama can buy. So we can pick and choose to at all these other little things many may add up to not that much. But the point is there is such inconsistency in terms of what Barack Obama has to spend and what John McCain has to spend that it is very hard to get that message out there.

JOAN WALSH, SALON.COM: But Susan, I would have to say, I agree with you. And certainly if were in your shoes and the Republicans were outspending the Democrats, I would point to it. It is out there. It is true. But they're botching their opportunities to get free media. They're using it in all these ways with all these messages that are not resonating. This whole thing about the redistributor. First of all, that interview was really interesting if you listen to it. Because Obama was talking specifically about the plight of African Americans after slavery when there was a need for redistribution. They were slaves. They were owned, they did not own anything. And he talked in a conservative way about the civil rights movement relying too much on the courts, which I've heard lots of conservative people say and he talked about how there needed to be more emphasis on political will, on legislation and on community organizing. These are conservative messages. So that to me what you a whole new low blow and a whole new kind of missed opportunity for the McCain campaign. They're making something up about something he didn't really say seven years ago. And meanwhile, fighting with each other. The free media, the attention, the crowds, it is all being squandered because they don't have message control. And David, I thought you made the best point of all with Nicolle. It is not about which staff member doesn't like which staff member. It is really about why have they not been able to settle on a message that has resonance and coherence. A lot of it is that they disagree with each other, they are fighting. And McCain is not in the end coming down and saying, I'm the decider. This is my message. This is what we're going to do. He's tolerating it. That matters.

GREGORY: Lawrence, we've got only about a minute left here. I want to get to the issue of Senator Stevens today being found guilty, and what this means not just to the Republican brand which is in such turmoil in this election cycle, but what it could actually mean in Congress. He is up for re-election, after all.

O'DONNELL: And he is very likely to lose his reelection. This could deliver 60 votes in the Senate for the Democrats. They could easily now pick up nine. And possibly 10. Mitch McConnell is in trouble in Kentucky. Al Franken is running very strong in Minnesota. This is a bad day for the Republicans in the Senate. And there could be more drama in this, David. If Senator Stevens does not resign-assuming he loses his reelection. If he does not resign, he may be expelled before this Congress closes. It is inconceivable to me that the Senate would allow someone convicted of a felony to stay in the Senate. So there could be more drama in the Stevens story.

GREGORY: Let me jump here, I've got to get to another break. Coming next, Bill Clinton will hold his first campaign event with Obama Wednesday in Florida. What are Obama's chances of winning the Sunshine State? I'll ask Florida Congresswoman Debbie Wasserman-Schultz when THE RACE returns in just a moment.

(COMMERCIAL BREAK)

GREGORY: Back now with our final numbers on THE RACE. Polling numbers in Florida have been to say the least, a see-saw. In February John McCain saw 10 point leads, by August Obama overtook him by a point. A new poll from the "St. Petersburg Times"/"Miami Herald" shows Senator Obama with a seven-point lead now, 49 to 42 percent. Not at 50 percent just yet. With just a week to go before the election, will Obama hold on to that? Joining me now is Obama supporter Debbie Wasserman-Schultz, congresswoman from Florida. Congresswoman, welcome, good to see you.

REP. DEBBIE WASSERMAN-SCHULTZ, (D) FL: Thank you. You, too, David.

GREGORY: Are you prepared to say that Obama has got Florida in his win column?

WASSERMAN-SCHULTZ: Well, we've got eight days left to the election. I am prepared to say that I think things are looking really good and voters are clearly responding to Senator Obama's message of moving this country in a new direction and they're responding to his message of change. They are really tired of the focus from the Bush administration on the wealthiest few Americans. And they know that John McCain will offer more of the same. We have among the highest foreclosure rates in the country here. So we've got people really struggling.

GREGORY: What about in a tight race in Florida, Jewish voters are a sizable percentage. There's been a lot of concern in the Jewish community about Senator Obama. And yet if you look at some of the latest polling, the Gallup Poll shows that he's getting to levels that John Kerry was at. Do you think some of the out and out racism in the Jewish community or some of the other concerns Obama have dissipated as we get closer to the race?

WASSERMAN-SCHULTZ: Absolutely. I can tell you. I will predict that Barack Obama will actually do better in the Jewish community than John Kerry did. I think that Gallup poll is accurate. I can tell you just all over my district and all over south Florida, and all over the country. I've spoken to Jewish communities all across this country. People are embracing Barack Obama and Joe Biden. They know he will solidly stand behind Israel and they know he stands for all of the values of the Jewish community, not just some of them. So I think we're going to do very, very well in the Jewish community.

GREGORY: Let's talk about another argument that McCain campaign is making in the final days and Senator McCain made it himself on the campaign trail today, talking about Democratic rule. Have a listen.

(BEGIN VIDEO CLIP)

MCCAIN: This election comes down to how you want your hard-earned money spent. Do you want to keep it invested in your future or have it taken by the most liberal person to ever run for the presidency and the Democratic leaders, the most liberal, who have been running Congress for the past two years? Nancy Pelosi and Harry Reid. My friends, this is a dangerous threesome.

(END VIDEO CLIP)

GREGORY: What is your answer, congresswoman, to the idea of the dangers of one party rule that certainly a lot of Republicans and maybe undecided independent voters say maybe we don't want that much forward motion. Those who were critical of the bush administration say that might have been the problem with Republican rule back in the early part of this first administration.

WASSERMAN-SCHULTZ: I think John McCain and his campaign are at the point where they're trying to throw enough on the wall and hope some of it sticks. They are in the last eight days and they have been divided and depressed and demoralized. And now they're desperate. But what I say is that Barack Obama is going to move this country in a new direction. People are responding to his message of change. They're responding to his proposal to give tax cuts to 95 percent of Americans and they don't want more of the same which is what John McCain has been offering.

GREGORY: But do they want one-party rule in Washington? What makes you think they want one-party rule?

WASSERMAN-SCHULTZ: They're not thinking about what party rules which branch of the government. What they're thinking about is that they want an investment in alternative energy so that we can truly be energy independent. They want universal health care, they want a tax cut policy that is fair and that targets the middle class. They don't want to continue down the path we've been on and have a tax cut policy that focuses on the wealthiest few and offers them more. They want to make sure the government is on their side again. And Barack Obama is asking people to think about not just whether they are better off now than they were four years ago, but whether based on the choice they make for president, they will be better off four years from now. That's the question people have to ask themselves in the next eight days.

GREGORY: All right. Congresswoman Debbie Wasserman-Schultz. Always good to have you on the program. Thank you.

WASSERMAN-SCHULTZ: Thank you so much, David. Good to be with you.

GREGORY: All right, that does it for RACE FOR THE WHITE HOUSE for tonight. Just eight days before election day. I'm David Gregory. Thank you for watching. We'll be back here tomorrow night. Same time, 6:00 p.m. Eastern only on MSNBC. HARDBALL WITH CHRIS MATTHEWS coming your way right now. Good night.

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

END

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