IE 11 is not supported. For an optimal experience visit our site on another browser.

'Race for the White House with David Gregory' for **Date**

Read the transcript to the **day show

Guests: John Harwood, Bob Ehrlich, Harold Ford Jr., Ron Brownstein, Robert Reich, David Remnick

DAVID GREGORY, HOST:  Tonight, welcome to the White House. 

After a bruising campaign during which President Bush wasn‘t a candidate but was certainly judged, 43 and 44 came together today to compare notes on the way forward for America.  The first ladies met at well, Mrs. Bush giving Mrs. Obama an insider‘s tour of the residence and a full briefing on what it‘s like to raise a family at 1600 Pennsylvania Avenue. Seventy-one days until the inauguration of President-elect Obama. 

Welcome to the program.  I‘m David Gregory.

In politics, illegal matters.  Well, after a long campaign which featured a near daily drumbeat of what was wrong with President Bush, it was amazing to see this today—the Bushes and the Obamas, all smiles on the south lawn of the White House.  The president and his successor walked along the colonnade before heading into the Oval Office alone for a briefing, president to president. 

Mr. Obama said last Tuesday change had come to America.  Well, there certainly is a change in attitude.  Look at this new polling. 

President Bush‘s disapproval rating has hit an all-time high in a new CNN/Opinion Research Poll, with 76 percent saying they disapprove of the job that he‘s doing.  And for the president-elect, the mere image, high expectations.  A new Gallup Poll shows Obama with a 70 percent favorability rating following his election last week. 

Meetings like today‘s are about advice, one leader to another.  The last time Bush offered some advice was four years ago when Senator Obama came to Washington as a freshman senator, which Obama recounted in his book “The Audacity of Hope.”

“You‘ve got a bright future,” Mr. Obama quotes the president as saying.  “Very bright.  But I‘ve been in this town a while and, let me tell you, it can be tough.  When you get a lot of attention like you‘ve been getting, people start gunnin‘ for you.”

“And it won‘t necessarily just be coming from my side, you understand.  From yours, too.  Everybody will be waiting for you to slip.  Know what I mean?  So watch yourself.”

That was from the president to the president-elect four years ago.

NBC‘s Savannah Guthrie is at the White House tonight.

Savannah, some word that in that meeting in the Oval Office today, the focus, as you can imagine, was on the economy. 

SAVANNAH GUTHRIE, NBC NEWS:  Absolutely.  And what we understand from sources is that Barack Obama brought up to President Bush the need to get this economic stimulus done in a lame duck session, even before Obama takes office.  We‘re also told that he brought up getting help to the ailing auto industry, as well as some relief to homeowners. 

So we hear from that side of the conversation.  We haven‘t heard much more from President Bush‘s side, except for that he described this meeting as good, constructive, relaxed and friendly.  “Friendly” was a word that both gentlemen used to describe their meeting today. 

GREGORY:  And there was something very personal about this exchange as well.  After all, it‘s a very rare group, a small group that can exchange experiences, one having had it, one who‘s about to have it, between each other. 

I want to make sure our viewers see that picture of the two of them sitting in the Oval Office as well as you get a chance to explain to us what else went on the other side of the building, in the residence.  Mrs.  Bush taking Mrs. Obama around. 

GUTHRIE:  That‘s right.  As the gentlemen were having this meeting in the Oval Office—by the way, the first time that Barack Obama had ever been inside the Oval Office—Mrs. Bush was giving a tour to Mrs. Obama of the private residence.  And of particular interest to Mrs. Obama was the children‘s room.  These rooms are historic, dating all the way back to the Kennedy children who lived there. 

Mrs. Obama saw them.  We‘re told she thought they were beautiful.  She loved the private residence. 

And that even President-elect Obama himself got to see the private residence.  That after that meeting in the Oval Office, President Bush took President-elect Obama up to the private residence so he could see it as well.

GREGORY:  All right.  Savannah Guthrie at the White House tonight.

Savannah, thank you very much.


GREGORY:  Let me bring in our panel tonight.

Joining us, Bob Ehrlich, former Republican governor of Maryland; John Harwood, CNBC‘s chief Washington correspondent and a political writer for “The New York Times.”  Don‘t miss his column today.  And Harold Ford Jr., chairman of the Democratic Leadership Council and an NBC News analyst.

John Harwood, let me start with you.  You have a president-elect who is using this opportunity to lobby the president and say, we need a stimulus.  It‘s going to be my top focus.  Get something done during a lame duck period, a lame duck session. 

How effective do you think he can be? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Well, I think he can be a little bit effective.  Look, his watch sort of gradually begins as the power flows away from President Bush and toward Barack Obama.  And he‘s got to try to figure out how he can get this economy turned around very quickly, because it‘s going to dominate his first year in office. 

The problem though, as you suggested, is that you have a very wide ideological gulf between these two men.  Very good personal relations.  This is President Bush at his best, and Laura Bush as well, entertaining the Obamas, being very gracious.  But they‘ve got an ideological—they‘re at loggerheads, and we don‘t know exactly how it‘s going to work out. 

GREGORY:  You know, Bob Ehrlich, I‘m just—I can‘t get past just the imagery today, because I think it‘s so interesting.  I remember President-elect Bush telling the story to people close to him that when he saw President Clinton and he went up and he joked about the fact that in the 2000 campaign, he used to joke.  Whenever Clinton was around, he would say, during the 2000 campaign, when President Clinton would insert himself into the campaign, he would say, oh, the shadow runs, the shadow of President Clinton.  And they exchanged a joke about that because Clinton thought it was very clever. 

And so here you have these two guys getting together today after such a bruising campaign.  I mention Bush wasn‘t on the ballot, but he was absolutely part of a campaign that was longer than anything we‘ve seen.  And just to see them together is striking. 

BOB EHRLICH ®, FMR. MARYLAND GOVERNOR:  Well, it‘s striking.  It‘s part of the game.David, you know this better than anybody.  This is a tough business.  This is a brutal business.  President Bush, who is just getting absolutely destroyed on the campaign trail.  Everybody running against him, including Senator McCain.  And he has to sit there and smile and be classy and be nice. 

But you know what?  It is part of the game.  It‘s why you have to have a tough hide in politics.  It‘s where your class shines through. 

It‘s really easy to be classy when you‘re winning, when everything is going your way.  But after you‘ve just got brutalized, after everybody has demonized you, to sit there and understand, as the point was just made, this is a very small club.  A very, very small club.  This guy is going to be president of the United States. 

It‘s his fiduciary duty to make it easy for him.  Obviously President Bush gets that. 

GREGORY:  You know, it‘s interesting, Harold.  We have reminders in our country, in our political life, when we recognize that institutions like the presidency are bigger than all of us.  And I thought that President Bush articulated that well the morning after the election when he talked about what a stirring and important moment this was in the history of our country, despite the fact that he was very much a target, despite the fact that Barack Obama—President-elect Obama should have given him a big bear hug when he saw him because he was that important to his campaign.  That President Bush was able to articulate the fact that this was a transcendent moment for the country. 

HAROLD FORD JR., NBC NEWS ANALYST:  Two things happened today.  One is we reminded ourselves why this political system, ours, is so majestic, so admired.  And in many ways, coveted, and why we fight to spread it around the globe. 

To have a peaceful transfer of power with two gentlemen, one whom believes that the other caused most of the problems that caused him to run for president, to see the two of them and the two families, hug, shake hands, and then get on to the Oval Office—and I admire President-elect Obama for reminding President Bush why he won in such a civil way, encouraging President Bush to maybe continue the investing that the United States government on behalf of the taxpayer is making, and to maybe extend that to the car companies.  To think seriously about a stimulus package. 

I think it would have been—it would not have been Barack-like.  It would not have been consistent with the kind of campaign he ran had he not mentioned those things.

So I‘m hopeful and prayerful in many ways that we‘ll see a stimulus package come out of the Congress before President-elect Obama actually is sworn in as president. 

GREGORY:  You know, John Harwood, let‘s circle back to some of the substance here.  And I mean this question seriously.  What can President Bush teach President-elect Obama at this stage? 

HARWOOD:  Well, first of all, just one small note about the pictures you were seeing.  It looked to me as if President Bush and Obama were getting along almost as well as Harold Ford and Bob Corker after that 2006 Senate race. 

FORD:  You‘re a funny guy, John Harwood. 


HARWOOD:  But look, President Bush has a lot of political skills.  OK? 

His numbers are down very much right now. 

He got elected for president twice, and part of the reason is he is a very instinctive politician.  He is somebody who on a personal level relates very well to people at close quarters with him. 

Barack Obama has a somewhat cool, aloof public demeanor.  I think he can learn something by watching President Bush operate. 

But make no mistake, Barack Obama does not think he needs to learn anything in the realm of policy or ideology for President Bush.  But he is trying to be practical about it and see what can get done to ease the burden on him once he takes office and is responsible for this economy. 

GREGORY:  But you know, it‘s interesting.  There were two things that stand out to me based on my reporting and my recollection of this similar meeting between Clinton and Bush, Harold Ford, eight years ago.  And that is that President Clinton told President-elect Bush, don‘t trust Yasser Arafat, and you‘re going to spend most of your time dealing with the threat of terrorism. 

Now both of those pieces of advice were prescient, especially obviously about the terrorism.  But the advice about Yasser Arafat became a major part of what President Bush dealt with in his first term.  So these were pieces of advice that were very much on point, whether the president-elect realized it at the time or not. 

FORD:  No doubt about it.  And you have to believe that President-elect Obama listened closely to President Bush.  There are differences, but I think he not only respects President Bush, but more importantly, respects the office. 

He‘s been elected to travel or take the country on a different path and to pursue a different vision, but there‘s no question there are things that—as a friend of mine shared, a father figure in my life shared to me, even the guy who has done the most awful things, there are always lessons to be learned from that person.  In this sense, there are some positive ones, and there‘s some things that I‘m sure Barack will not do. 

But the reality of the day, to handoff to the next president in a civil way.  And two, for President-elect Obama to lay out, here are some of the things I would hope you would consider, President Bush, as you leave office, and things I‘m going to have to tackle as soon as I take office. 

EHRLICH:  David...

GREGORY:  Bob, I want to—go ahead. 

EHRLICH:  I was just going to add that President Clinton, giving those two pieces of advice to President Bush, was relatively easy to do.  President Bush was generally down that road.  Sort of had that philosophical orientation.  Sort of governing from the middle.  President Clinton giving that to a right of center president. 

Today you have right of center, left of center.  Very little room to agree.  Very little common ground when it come to philosophical predispositions. 

FORD:  Let me—I think that‘s a little unfair, just to be fair here. 

One, if you look at where President Bush is now on Iran, Iraq, and even Pakistan, he‘s probably closer to where President-elect Obama was over the last six months.  And two, remember during the campaign in 2000, then-Governor Bush argued against, or suggested that nation building and the kind of foreign policy activities and excursions that President Clinton‘s administration took us on, frankly, were counterproductive. 

In a lot of ways, what we find ourselves doing now, nation building in places, has been forced on President Bush in some regard.  But I think it‘s unfair. 

I think you may find Obama and Bush, there won‘t be similarities, but I think—in large part to their policymaking—but to suggest that Bush was in the middle and Barack is somehow not in the middle, he chose Rahm Emanuel as his chief of staff.  I just want to be—I think it‘s only fair that we make that correction. 

EHRLICH:  No, no, no.  He just chose a very strong partisan as his chief of staff.

My point was President Clinton, vis-a-vis President Bush, moderate conservative.  Today you have right of center, left of center.  Very little common ground. 

And also, Harold, I don‘t think I just heard you say that President Obama‘s policies are going to be similar to President Bush‘s policies.  Did I hear you say that? 

FORD:  No, by no means.  I said President Bush found himself mimicking where President Obama now wants us on Iran, Iraq, and even Pakistan.  So to suggest that he is not middle of the road in many ways, scholars on the left and right are suggesting that we now have to engage with our adversaries around the country. 

GREGORY:  I‘ve got to get to a break.

FORD:  I just think it‘s unfair to suggest that Barack is left of center here.  That‘s an unfair characterization there. 

GREGORY:  All right.  I‘ve got to leave it there.  We have to move on. 

One thing is clear in terms of similarities, their campaigns.  One borrowed very much from the other.  Imitation is the sincerest form of flattery, and to reelect President Bush and the election of President-elect Obama were very strong efforts. 

HARWOOD:  Exactly right.

GREGORY:  Thanks to all of you, panel.  We‘ll talk to you later.

Coming next, after losing the White House, Republicans are looking to rebuild.  Is Governor Sarah Palin the one to lead the party?  Atlantic Media political director Ron Brownstein joins me after this.  And be sure to tune in tomorrow for another rising star in the Republican Party, Louisiana Governor Bobby Jindal.  I‘m going to go one-on-one with him.  That‘s tomorrow on 1600 PENNSYLVANIA AVENUE. We come back right after the break.   


GREGORY:  We‘re back now.

Governor Sarah Palin energized the Republican base throughout the presidential campaign, but is she the right person to lead the GOP as it looks to rebuild? 

Joining me now, Ron Brownstein, political director for Atlantic Media. 

Hey, Ron. 


GREGORY:  All right.  So let‘s talk about Governor Palin and her future. 

First of all, all the attacks coming anonymously from the McCain campaign.  What we knew at the end was that this was a dysfunctional group and they were at odds with one another.  And now there have been all kinds of things and criticisms raised about her, whether she didn‘t know her geography, didn‘t know about NAFTA and the like. 

She is swinging back pretty hard against that criticism.  This is what she had to say. 


GOV. SARAH PALIN ®, ALASKA:  I think that if there are allegations based on questions or comments that I made in debate prep about NAFTA, and about the continent versus the country when we talk about Africa there, then those were taken out of context.  And that‘s cruel, it‘s mean-spirited, it‘s immature, it‘s unprofessional, and those guys are jerks if they came away with it taking things out of context and then tried to spread something on national news that‘s not fair and not right. 


GREGORY:  All right.  So if she‘s looking to break from the McCain team, she‘s pretty far out there now. 

BROWNSTEIN:  Yes, that‘s right.  Ow. 

I mean, look, Tolstoy famously wrote that all happy families are alike.  In politics it‘s the reverse.  All unhappy families are alike.

When campaigns lose, a lot of fingers are pointed.  It‘s pretty unseemly whenever it happens.  I think it is kind of unseemly for the McCain folks to be pointing so much blame at Palin given the difficulties that they contributed to themselves, and, of course, the overriding consideration of Bush‘s unpopularity and how it shaped the race.  But, I mean, there are reason to look at her, and I think to conclude that she was more of a negative than a positive in the end, particularly when we look at these exit poll numbers that show us roughly 60 percent of Americans said she was unqualified to be president. 

GREGORY:  Right.  And it‘s something that we talked about over the weekend, that you were particularly interested in looking inside those numbers.  And we were able to do that today. 

And again, 60 percent of those polled after they voted indicated they thought Palin was not qualified.  This was the big issue throughout the campaign. 

So what did you find that you found important inside the numbers? 

BROWNSTEIN:  Well, here‘s the real story, David.  I mean, the Republican Party comes out of this race with its reach, its electoral reach, severely narrowed, both demographically and geographically.  And when you look inside the numbers of Sarah Palin, she seems more—she seem more likely to compound that problem than to solve it. 

The doubts about her qualifications are significantly greater among groups outside the Republican base than even that 60 percent number would suggest.  And if you kind of look at it whether by education, among college graduates who moved away from the Republican Party in this election, even deeper doubts if you look at it geographically.  There, 63 percent of college graduates saying no. 

If you look at it by party, obviously most Republicans thought that she was qualified to be president.  But when you get outside of the Republican base, those numbers fall off the table.  Only 35 percent of Independents, only 9 percent of Democrats. 

And just as strikingly, the regional variations.  When you look at where the Republicans lost the most ground in this election, the East and the West. 

Look at those numbers.  Only 31 percent in the East.  Only 32 percent in the West.  She‘s strongest in the south and pretty weak again in the Midwest. 

GREGORY:  Right.

BROWNSTEIN:  So when you look at all of these one by one, they basically say this is a candidate who faces enormous skepticism outside of the Republican base.  And you have to wonder if that is the best standard bearer to help lead the party back where they lost ground in this election. 

GREGORY:  Right.

Well, I understand that in a geographic and in a demographic issue, which you write about in the cover story for “National Journal” this week, which is the Republican Party is shrinking.  It‘s going in the wrong direction.  It‘s going against the demographic trends, where Obama is tapping into that. 

But isn‘t this an area that can be rectified?  I mean, she has time now to learn, to become more qualified.  Time that she certainly didn‘t have being plucked out of nowhere, politically speaking, and put on the ticket. 

BROWNSTEIN:  Nothing in life or politics is static or frozen.  But I would offer three thoughts here. 

One, these number are an indication of how deep the hole is.  It‘s even deeper than the national number, 60 percent, would suggest.  Outside of the Republican base, she has a lot of ground to make up. 

Second, you never get a second chance to make a first impression, as your mother told you. 


BROWNSTEIN:  And, you know, these impressions, I think, are pretty formidable. 

And third, you look at the precedent of Dan Quayle, who never really recovered from his initial impression, even after serving as vice president for four years.  When he tried to run for president, subsequently he could not get off the ground. 

The challenge here for Republicans, I think she embodies a larger president.  I mean, she is very popular with the Republican base.  The leaders that are left in Congress tend to come from and represent the Republican base.  But you have to ask whether the voices that are popular with that base necessarily have the best ear for how to reach out beyond it, which is clearly the task. 

When you look at some of the overall results in this election, the growth among the college educated whites for Obama, the enormous number among Hispanics, other minorities, young people, Republicans have to reach out beyond their comfort zone.  Because as you said, that comfort zone is shrinking, both demographically and especially geographically, into those most culturally conservative parts of the country. 

GREGORY:  All right.  Ron Brownstein, thank you for all your help on election night, all your expertise on election night.  And good to have you here tonight. 

BROWNSTEIN:  Thanks, David. 

GREGORY:  And coming next, Terry McAuliffe has long had a hand in helping Democrats get elected, but the next race he may want to win could be his own.  We‘re going to go inside the briefing room tonight, right after this break.


GREGORY:  Back now with a look at what‘s going on inside The Briefing Room tonight.

Terry McAuliffe, former chairman of Hillary Clinton‘s presidential campaign, is considering making his own run for Virginia governor next year.  McAuliffe also the founding chair—founder, rather—chair of the DNC signed papers today setting up his campaign committee.  He will spend the next two months traveling around the state talking to Virginians, and will make his decisions on January 27th

McAuliffe‘s adviser, Mo Elleithee, said, “He wants to not only share his vision for Virginia, but more importantly hear what they‘re thinking.  He knows not every good decision comes from Richmond, and is looking forward to hearing from Virginians as he explores a run.”

Also tonight in other DNC news, Howard Dean announced today that he will not run for a second term as chairman of the Democratic National Committee.  A name being floated as a possible replacement is Claire McCaskill, Missouri‘s junior senator and one of the national co-chairs of the Obama campaign.

A short segment here.

Coming next after the break, what is President-elect Obama‘s prescription for the ailing economy, and how fast will he move on his economic agenda?  I‘m going to go one-on-one with Obama economic adviser Robert Reich, former secretary of labor, when 1600 PENNSYLVANIA AVENUE returns right after this. 


GREGORY:  Tonight, for the first time, President-Elect Obama sets foot in the Oval Office, where he will soon face the challenge of running two wars and the worst economic crisis since the Great Depression.  Plus, what President Obama will mean to race in America when 1600 PENNSYLVANIA AVENUE continues. 

Welcome back to 1600 PENNSYLVANIA AVENUE.  President-Elect Obama says he‘ll get right to work on the economy as soon as he takes office, and with good reason.  Just today, Circuit City filed for bankruptcy, and General Motors is facing even more bad news with some worrying it will run out of money by next year.  Bob Ehrlich, former Republican governor of Maryland, John Harwood, cNBC‘s chief Washington correspondent and a political writer for the “New York Times,” and Harold Ford Jr., chairman of the Democratic Leadership Council and an NBC analyst all join me now. 

Gentlemen, let‘s start by hearing Barack Obama, President-Elect Obama on Friday, talking about what he does first when he gets into office. 


OBAMA:  I want to see a stimulus package sooner rather than later.  If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States. 


GREGORY:  Harold Ford Jr., we know from the meeting today in the Oval Office between both these leaders, 43 and 44, that this is really a focus for President-Elect Obama.  He said he wants that second stimulus now in the lame duck session.  What chance does he have of persuading President Bush to go along? 

FORD:  Hopefully a good one.  I think that Republicans in the House and the Senate who had not only experienced the smaller or shrinking numbers that they are faced with now, would have to be looking to respond to some of the anxieties in their own districts.  What better way to do it than to get a head start now? 

I might ad, I was encouraged to hear the president-elect say the manufacturing backbone of the country is there in Detroit.  If we lose these jobs, or lose more jobs in that area, and one of these companies is forced to take a different kind of course, it could have a multiplier affect across this economy.  I was pleased to hear him raise those issues today. 

Again, George Miller and Nancy Pelosi and others in the Congress are working on a package.  Hopefully, President-Elect Obama was able to have some persuasive—or some influence with President Bush today in encouraging him to sign something. 

GREGORY:  John Harwood, one of the big issues over the last couple of days is helping Detroit, providing some bailout money for the auto industry.  Where is the back and forth between Congress and the White House on that issue? 

HARWOOD:  Well, everybody is trying to figure out, whether you‘re just sending good money after bad to the auto companies.  They have 25 billion dollars in the pipeline already.  Obama wants to accelerate that.  He has talked about modernization aid for Detroit, to try to get their factories in line to create more fuel efficient cars in the future. 

But Detroit needs cash right now.  The question is, if you just send that cash, is it really going to do any good?  Obama is plainly inclined to do something, but nobody quite knows what will work. 

GREGORY:  Governor, how bold should the president-elect be right now?  He has a significant majority in Congress, and he faces a pressing need to do something.  Somebody has to put some money in the economy because consumers aren‘t doing it right now. 

EHRLICH:  Well, I would disagree with my great friend Harold.  That‘s the last thing we need to do, a short term stimulus package that didn‘t work very well in the first place.  I would hope the president would stick to his guns and that the more thoughtful folk in Congress would understand.  We just had an experience with a stimulus package that got us nowhere, spending more money again, more money after bad.  It is not exactly good economic policy. 

If he wants to be bold, he‘ll talk about and follow through on some tax cuts, on suspending his thought about raising capital gains, and obviously freeing up liquidity, freeing up capital in this capitalist society, not spending money we don‘t have for short term stimulus reasons that will not get this economy going.  Nobody I know believes that. 

FORD:  David, you asked a specific question.  What route could you take?  Some have raised questions about a blank check to the auto manufacturers.  What if—I know the president-elect and a team have to be considering a range of options.  What if he provided a tax credit to those who bought plug-in or new hybrid cars?  It roughly costs somewhere between 2,500 or 3,000 more for the average consumer to buy a more fuel efficient car.  What if you provided a tax credit to consumers, so the money wouldn‘t go directly to the car companies.  There is some concerns those companies may use the money in ways that may be most efficient. 

It would stimulate the economy.  It would address the climate change issue and it would keep people working.  I do unfortunately disagree with Bob Ehrlich.  And thankfully, 76 percent of the country agrees with me.  We need a different path when it comes to the economy.  And I‘m glad that President-Elect Obama is going to go a different path. 

Ultimately, governor, as you well know, the voters will make the determination four years from now if he‘s right.  One thing is clear, we need a different course.  Being more creative, I would agree with you on that regard, is something that I‘m certain this administration will do. 

GREGORY:  John Harwood, Governor Ehrlich brought up the issue of taxes.  And one of the questions for this incoming Obama administration is whether they want to make good on raising taxes on the rich, which is the plan.  Of course, they don‘t face an immediate choice on that, because they might simply allow the Bush tax cuts to expire in 2010.  They don‘t have to do anything more than that.  They can focus on the middle class tax cut.  True? 

HARWOOD:  Yes.  That is the big question.  Do they wait for them to expire in 2010?  They‘ve been deliberately ambiguous throughout the campaign season on that front, and still are when I talk to Obama advisers in the last few days.  They could wait or they could proceed.  And Barack Obama in his news conference on Friday seemed to indicate that he was inclined to go forward.  Rahm Emanuel was not committing one way or the other, but also was echoing that sense from Obama on the Sunday talk shows yesterday. 

So I think Barack Obama, for all the signs that I can tell, intends to proceed.  I do think there is likely to be some common ground that the president and this Congress can agree on in a lame duck session.  I don‘t think Governor Ehrlich is right that there is nothing they can agree on.  Something on food stamps, unemployment benefits, maybe even that proposal that Barack Obama talked about in the campaign—if you want to balance those spending increases with tax cuts, Obama talked about a 3,000 dollar tax credit for business that‘s hire workers.  I could see that being something this Congress might include as a glue to bring Republican and Democrat together. 

EHRLICH:  I didn‘t say that there was nothing they could agree on.  I just simply said what I think is the truth, the first stimulus package did not work, and I don‘t believe this one will work either.  Everybody understands that.  If you‘re talking about manipulating the tax code, there is tax credits that you‘ve heard both guests discuss here.  I think there will be some common ground.  Again, concerning inconsistency and tax cuts, 150,000, 250,000; if you‘re going to hammer small business people with a tax increase, it is the wrong way to do it. 

HARWOOD:  He did not change the thresh hole for the taxes.  That was -

the McCain campaign was taking a Biden statement that was out of context. 

They‘ve been very consistent in saying that people over 250,000 dollars would see their taxes go up.  And everybody under 200,000 dollars would not.  They haven‘t flip flopped on that. 

FORD:  David, in short, Michigan needs a little break.  The Wolverines won on Saturday.  Hopefully, the Lions will get a game in here and hopefully Congress will do something before President Elect takes office.  

GREGORY:  Let me get a break in here.  Still to come on 1600 PENNSYLVANIA AVENUE, crowds at the gate of the White House as Barack Obama makes his first visit to the White House as president-elect.  With black and white America watching, how will race affect an Obama presidency?  What kind of issue was race in the campaign?  That‘s coming next on 1600.  Don‘t go away.


GREGORY:  Back now on 1600 PENNSYLVANIA AVENUE, talking about Obama‘s economic agenda.  Joining me now, Robert Reich, member of President-Elect Obama‘s Transition Economic Advisory Board, former secretary of Labor under President Clinton, and author of “Super Capitalism, the Transformation of Business, Democracy, and Every Day Life.”  Mr. Secretary, welcome back. 


GREGORY:  What is the priority here?  You wrote on your blog this week referring to the economy as a mini-depression, that maybe the government is the spender of last resorts.  Somebody has to put money into the economy because consumers are pulling back. 

REICH:  That‘s exactly right.  Consumer have no money anymore.  Consumers are at the end of their ropes.  We saw that unemployment report last Friday showing that not only are median wages continuing to drop, but more and more people, unfortunately, are losing their jobs or they are working part time and they would rather be working full time.  Well, businesses are not going to invest under these circumstance.  So where do you look to keep the economy going?  Whether you like it or not, regardless of your ideological position, government is the spender of last resort.  We have to look to government to stimulate the economy. 

GREGORY:  It‘s no surprise then the President elect is with the President Bush today saying we need action now, even during a lame duck session.  President-Elect Obama has the realization, he can‘t even wait until January to get this thing started. 

REICH:  The tricky bit, David, is that obviously he is not president for the next ten weeks, even though the public has huge expectations, even though the public is ready to go, even though he‘s ready to go.  The fact of the matter is, George W. Bush is president until 12:00 noon on January 20th, Eastern Standard Time.  So Barack Obama can try to influence events.  He can try to use his leverage as president-elect, but George W. Bush is the president of the United States. 

GREGORY:  How fast sway do you expect he will have on this process before he is in office? 

REICH:  Well, he has a lot of sway simply by virtue of the fact that he is number one, president-elect, number two, president-elect by a pretty wide margin, number three, there are a lot of Democrats in Congress.  Congress has a larger Democrat majority than before.  Not 60 votes in the Senate, but still almost there.  So all of that gives Barack Obama a great deal of leverage. 

The question is, is it enough leverage to create the kind of—a spending package, a stimulus bill that he would like, or will he have to wait until after January 20th to get the stimulus bill he wants? 

GREGORY:  What surprise could he be in for in January?  He is going to inherit this financial collapse and the immediate remedy for it, the TARP program, where the government goes in and is shoring up this financial institution.  There‘s tax policy and then there is spending, pure and simple, government spending.  Is there an additional layer that he has to think about? 

REICH:  Well, the big issue, it seems to me, is that right now the government is spending so much trying to prop up the financial sector, including AIG, the big insurer, that the deficits—by the time January 20th rolls around, the budget deficit may be very large.  The question is, does the economy, nevertheless, even with a large deficit, need the kind of spending that may be necessary to get the economy going? 

You‘re not going to create a lot of new jobs by giving a lot of money to the financial sector.  You‘re going to create a lot of job by generating new infrastructure projects, repairing our roads and bridges and rapid transit systems and making sure that there is alternative energy.  That‘s the kind of stuff that has a lot of jobs attached to it.  But the money right now is all heading toward propping up financial companies.  That‘s not a job creator. 

Now there are a lot of people who have jobs in the financial sector.  I‘m not in any way denigrating them.  But that‘s not where the big multiplier is. 

GREGORY:  Is there a concern within the advisory group and those like you who are advising President-Elect Obama that a discussion of a tax hike on the rich, undoing the Bush tax cuts, sends the wrong message to entrepreneurs around the country, people who need to put money into the economy? 

REICH:  Well, it would be inappropriate for me to, obviously, reveal anything of our discussions.  Let me say just this, like Rahm Emanuel said on Sunday, I haven‘t heard anything that suggests that the president-elect wants to move away from his campaign promise to end the Bush tax cuts on the wealthy. 

GREGORY:  What does he get about this problem that you think will serve him well? 

REICH:  I have been repeatedly impressed, both before he became the president-elect and now, at our meeting last week, by his capacity to understand in depth is happening and ask really good questions.  He had around that table some of the nation‘s experts in the corporate sector, the financial sector.  And Barack Obama knows how to synthesize a great deal of new information.  He is very, very well versed.  He has been talking to Hank Paulson.  He has been talking to Hank Paulson almost daily right until the election. 

He is prepared.  Again, there are a lot of decisions that are going to have to be made.  I‘m concern a little bit, as I‘m sure he is, about expectations being so high, David, that he is going to have to manage them.  Nothing can change overnight.  He is also going to have to mobilize the public to make sure that they are pushing Congress and pushing him to get what needs to be done, done. 

GREGORY:  Secretary Robert Reich, always a pleasure to have you on. 

REICH:  Thanks, David.  Bye-Bye. 

GREGORY:  Coming up next, the issue of race in this campaign.  It‘s an historic time for the country.  How did Senator Obama, now President Elect Obama, manage it all?  We come back right after this.



OBAMA:  We have a choice in this country.  We can accept the politics the breeds division and conflict and cynicism.  We can play Reverend Wright sermons on every channel every day, and talk about them from now until the election.  That is one option.  Or at this moment, in this election, we can come together and say, not this time. 


GREGORY:  That was President-Elect Obama when he was still Senator Obama in Philadelphia back in March.  Today, visitors crowded the White House gate to see Barack and Michelle Obama arrive at their future home, a building made of stone quarried and cut by slaves.  As the first African American, a representative of a multiracial America, prepares to take office, how will perception of race change?  Here with me to talk about all that, the role of race in the Obama presidency and in his campaign, David Remnick, editor of “The New Yorker” magazine, who writes about race and the Obama campaign in a comprehensive and fascinating way.  Also joining us, Mark Whittaker, NBC News Washington Bureau Chief. 

Welcome to both of you.  David, I was enthralled by the piece today, because thinking about this campaign for these now many, many months; the issue of race has been the question surrounding Barack Obama.  So if we accept that, what was the answer? 

DAVID REMNICK, “THE NEW YORKER”:  Well, the speech that you showed a snippet from was the turning point of the race.  Without that speech, which Obama decided to make on his own in the wake of the Jeremiah Wright clips on TV, that speech saved the campaign and it did an amazing thing.  What it did was address race in a different way.  Jesse Jackson in his ‘84 and ‘88 campaigns tried to build what he called a rainbow coalition.  It was based on a black base and some left leaning members of coalition. 

This time around you had an African-American candidate for president who was headed toward possible victory in a disastrous situation suddenly embracing everyone, showing that he could understand even the white worker who has seen his job go overseas, and he is annoyed about affirmative action.  And Obama was able to embrace something Bill Clinton couldn‘t have embraced, because he would have been accused of racism, and Jesse Jackson never would have embraced.  I think it was a whole new vocabulary for talking about race, and I think it was pivotal in his victory. 

GREGORY:  I want to put up a piece of your article called “Civil Rights,” is what we‘ve called it.  You call the piece, “The Joshua Generation,” which of course—we refer back to the Bible.  Joshua was the prophet who learns from Moses and Aaron but actually goes to the promise land, but actually Moses does not.  That‘s the set up for writing about civil rights.  And you write, “the civil rights struggle is definitely recast by Senator Obama in term not of national guilt but in national progress.  The rise of the Joshua Generation, what the African-American left once referred to as the black freedom struggle, becomes, in Obama‘s terms, an American freedom struggle.” 

Mark Whittaker, why is that a significant generational change in this campaign? 

MARK WHITTAKER, NBC NEWS WASHINGTON BUREAU CHIEF:  Well, you know, Obama grew up and was part of the generation that obviously benefited from the struggles of the civil rights movement, but got used to, starting in law school, being accepted and being the best at what he did.  I think that he surrounded himself in Chicago with people like that, and who had that perspective.  They just—to put it one way, they just didn‘t have the hang-ups that I think a lot of their elders did. 

They were respectful of them, but I think also realize the way in which the country had changed and how demographically we might now be prepared for a black candidate.  And as David points out in his article, Obama benefited from being the black candidate from the sense of enthusiasm in history that was caught up in his candidacy, without, apart from that speech in Philadelphia, really having to emphasize it. 

REMNICK:  I should say that Obama himself made a speech not long after deciding to run for president where he used this language, saying I stand on the shoulders of giants, meaning King and John Lewis and Sannie Lou Hamer (ph), and saying, now it is time for the Joshua Generation, his generation, to bring the movement forward into the promise land, literally into the White House.  With enormous audacity, in his terms, he puts himself at the forefront of that movement. 

GREGORY:  The Reverend Al Sharpton, who of course ran for president, said this about President Elect Obama on Saturday.  Let‘s play it and then we‘ll talk about it. 


REV. AL SHARPTON, CIVIL RIGHTS LEADER:  What happened the other night is civil rights won, because many whites now have grown aware.  We fought and marched and hoped American would get to.  He is president of the United States.  He is president because he did not impediments in his way, the same impediments, because people, white and black, fought to remove those impediments.   


GREGORY:  Is that to say, Mark Whittaker, that we have reached this post-racial moment in the country?  Or is that a bit of an overstatement? 

WHITTAKER:  Well, again, in the end, politics is a matter—a game of numbers.  And it doesn‘t mean that there still aren‘t overt racists or people who are uncomfortable about race.  If you analyze a lot of the final vote, you still see that there are pockets of that throughout the country.  What it does mean is that the number of people who have gotten beyond it now outnumber them. 

The other thing that I think is interesting about David‘s article is the significance of Obama‘s perspective as a biracial American, the way in which it both allowed him intellectually to see different sides of things, sociologically.  He could be seen by others as a symbol of racial cooperation.  And psychologically, in coming to term with his own identity, I think it gave him a peace with himself, and a calm that I think clearly served him very well. 

REMNICK:  But it‘s a calm he had to achieve.  He came from a very difficult circumstance.  He did not come to what he saw as typical, if there is such thing as typical African-American experience, easily.  He is coming from a biracial family, but also in Hawaii.  He shows up in places like Chicago and Boston and really has to learn a lot about himself, about identity in a way that would have come naturally to some other people. 

Nevertheless—and that‘s the subject of this great book of his, his first book, “Dreams From My Father,” which really I think will turn out to be—the proof will be that is the best book ever written by a president since Ulysses Grant. 

GREGORY:  David, let me follow up on this point.  We have limited time left.  We talk about a Sister Soldier moment, which means standing up to the base of your party, going back to President Clinton.  In this case, was there a Sister Soldier moment for Senator Obama, standing up to the African-American community or the political establishment? 

WHITTAKER:  I think the Sister Soldier moment, as Julian Bond put it to me, was that very profound moment when Jesse Jackson was caught—he thought he was off camera, but he made a motion with his hand that he was going to do something to Obama that wasn‘t particularly painless, let‘s say, and he was angry that Obama had been making speeches about black responsibility, which to him was a code, which is a kind of Bill Cosby like speech, but it had greater meaning coming out of the mouth of a presidential candidate.  Jesse Jackson, who was part of the Moses generation, who had been there with King, was feeling certainly his age, feeling that he was being overcome by Obama. 

And yet at the end, in Grant Park, we saw tears streaming down Jesse‘s face.  So there is great emotion in it. 

GREGORY:  All right.  We‘ll leave it there.  David Remnick, a terrific read in this week‘s “New Yorker.”  A chance to reflect on this important issue now with a little bit of time from the election.  Thanks very for being here.  And to Mark Whittaker, thanks, boss.  See you again soon.  That‘s going to do it for 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Gregory.  Thank you for watching.  Back here tomorrow night.



Copy: Content and programming copyright 2008 NBC.  ALL RIGHTS  RESERVED. Transcription Copyright 2008 ASC LLC  ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon NBC and ASC LLC‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.