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Meet the Press transcript for Sept. 5, 2010

Transcript of the September 5, 2010 broadcast of NBC's Meet the Press, featuring Lindsey Graham, David Plouffe, Erin Burnett, Charlie Cook, E.J. Dionne and Rich Lowry.

MR. DAVID GREGORY: This Sunday, Labor Day weekend and the official kickoff to this
fall's midterm campaign. Can the White House and Democrats do anything to improve the
economy before November? What are the costs and the benefits of America's long wars in Iraq
and Afghanistan? My newsmaker guests this morning: Republican senator from South
Carolina Lindsey Graham, who has recently returned from fulfilling his Air Force Reserve duty
in Afghanistan; and David Plouffe, the man behind Barack Obama's successful run for the
White House and author of the book "Audacity to Win."

Then it's our political roundtable weighing in on the hottest races of the fall campaign. How
bad will it be for the Democrats? Is the party's hold on both the House and Senate in jeopardy?
With us, Charlie Cook, editor of the Cook Political Report; Erin Burnett, anchor of CNBC's
"Street Signs"; E.J. Dionne, columnist for The Washington Post; and Rich Lowry, editor of the
National Review.

Announcer: From NBC News in Washington, MEET THE PRESS with David Gregory.

MR. GREGORY: Good morning. President Obama will spend next week talking up his proposals to improve the economy and lower the 9.6 percent jobless rate. The New York Times reporting this morning that in his speech in Cleveland on Wednesday he will ask Congress to increase and permanently extend a corporate tax credit for research and development. With the election season officially under way now this Labor Day weekend, the president must convince voters that Democrats will offer the best prescription for turning the economy around and creating jobs.

With us now from his home state of South Carolina, Republican Senator Lindsey Graham.
Senator, welcome back to MEET THE PRESS.

SEN. LINDSEY GRAHAM (R-SC): Thank you. Good morning.

MR. GREGORY: I want to start on the economy. The president, reacting to the latest jobs
numbers...

SEN. GRAHAM: Mm-hmm.

MR. GREGORY: ...in the Rose Garden on Friday offered this assessment of where things stand. Let's show that.

(Videotape, Friday)

PRES. BARACK OBAMA: But the, the key point I'm making right now is that the economy is moving in a positive direction, jobs are being created, they're just not being created as fast as
they need to given the big hole that we experienced. And we're going to have to continue to
work with Republicans and Democrats to come up with ideas that can further accelerate that job growth.

(End videotape)

MR. GREGORY: So, Senator, what more should be done, and would you support what the
president appears to be talking about, which is an extension of that R and D tax credit for corporations?

SEN. GRAHAM: Yes, I would. We need to extend all the tax cuts. Now's not the time to raise
taxes. The president has openly said that he wants to increase taxes to 39.6, the top rate, let
some of the Bush tax cuts expire. Let's look at the healthcare bill. The centerpiece of the
Democratic agenda for the first two years has been the healthcare bill. Not one candidate on the campaign trail is talking about it. The stimulus bill that was supposed to keep us at 8 percent or below unemployment has been an absolute disaster. It grew the government instead of creating private sector jobs. Let's go into the stimulus bill, cancel a lot of the big-spending government programs in the stimulus bill, look at health care, get it off the, the public's back, and extend all the tax cuts.

MR. GREGORY: Well, we'll talk about tax cuts in a moment. You talk about the healthcare bill. Should Republicans be out there talking about a repeal of health care in this campaign season?

SEN. GRAHAM: Yes, they should be talking about replacing the healthcare bill. It's going to lead to a government monopoly in health care. It's going to bend the cost curve up, not down. It's going to increase--it's going to make it harder for private sector people to offer health care to
the employees. I talked to Ron Wyden about an opt-out provision where states could opt out of this massive healthcare bill and have more flexibility. The key to this is that no Democrat is
talking about healthcare bill, no Democrat is talking about the stimulus bill. You know, President Obama ran in the center as a centrist, and he's governed from the left ditch. He turned his agenda over to the liberals in the House, and here we are a few months before the election
and it's all caught up with him.

MR. GREGORY: If Republicans are so concerned about the deficit and the overall spending
picture in Washington, as Republican leaders say they are, when you talk about extending the
Bush tax cuts, yes, it's existing tax policy, but is there a responsibility for Republicans to say, if
you want to extend all the cuts, that somehow you have to pay for what the impact will be going forward, beyond the expiration date, on the Treasury?

SEN. GRAHAM: Only if you believe that America taxes too little. I think America taxes too
much, and we certainly spend too much. So I would extend the tax cuts to create private sector jobs. If you increase taxes now on--at any level, it's going to make it harder to create jobs. And we've lost 2 1/2 million jobs since the stimulus package passed. We're at 9.6 unemployment. So I don't think we tax too little, I think we spend too much.

MR. GREGORY: Is there room for compromise on tax cuts? Say, if the president were to
extend all the tax cuts for a period of a couple of years, would that be able to attract Republican support?

SEN. GRAHAM: It might. There's certainly some room to compromise on the death tax. In
January it goes back to 55 percent, at the end of this year it's at zero. So maybe you could find a way to compromise on the death tax to have something below 55 percent, a $5 or $6 million exemption for American families out there that would prevent devastation to small business and family farms. But if the--the idea of increasing taxes now, David, makes no sense to most people. And the agenda the president and his Democratic colleagues has offered the country has increased the deficit, increased the role of the federal government. And he ran as a centrist, and most Americans would say, "Well, I never believed he would do all this." And everything has been so partisan. There was a bipartisan bill on health care, Wyden-Bennett, that was rejected. Senator McCain had a $450 billion stimulus bill. But we didn't go down any of these compromise roses--roads, just big government, more spending. And the Democrats don't have a whole lot to talk about going into November other than more debt and more government.

MR. GREGORY: Well, let's talk about November and let's talk about the political landscape. Do you think there is irrational exuberance among Republicans who think they're going to take over the House and perhaps even the Senate? Or do you think the Democratic control is indeed
in jeopardy?

SEN. GRAHAM: I think if we voted tomorrow we would do very well. But the truth of the matter is that most of this is a rejection of a Democratic agenda that did not meet the expectations that President Obama created about a new way of doing business. The healthcare bill not only is a monstrosity in terms of growing the government and cutting out the private sector, the way it was passed was sleazy. Every old Washington trick was used to pass the healthcare bill. But, from a Republican point of view, we need to bring checks and balances, tell the American people if we get back in control, we're going to check this Obama agenda that has no limits and we're going to bring about balance by controlling spending, relooking at the healthcare bill, and trying to be more fiscally responsible. But a lot of this has to do without people saying--with people saying no to the Democrats, not saying yes to the Republicans.

MR. GREGORY: Well, so what happens then in the fall? Do you think Republican control--or
rather, Democratic control is in jeopardy?

SEN. GRAHAM: Yes. I think if the election were held tomorrow, it would be. There's a
couple of months to go, and at the end of the day, I don't know what their agenda's going to be between now and November. But what they've done in the past no one seems to like. The
healthcare bill is not being talked about by any Democrat. The stimulus bill has been an absolute flop. So I don't know what they do between now and November other than run against us.

MR. GREGORY: Right. Isn't part of the issue, though--you talk about the ways of Washington. Do you think anybody's going to look at Washington and absolve Republicans for opposing just about everything the president proposed?

SEN. GRAHAM: I'm glad we--well, there was a better way. There was a bipartisan approach to health care that was rejected. There was a $450 billion stimulus package that cut taxes, helped the unemployed, and did infrastructure projects. They've rejected this approach.

They've gone hard to the left, and now they have nothing to show for their efforts but bigger
government and more debt. There was a better way; they chose not to go that way. Now they own this agenda that I think has been the most liberal agenda in modern times. And, at the end of the day, the public is not in the left ditch, they're not in the right ditch, they're in the right center of the road. And the only way the president can possibly survive is come back to the middle. He's tone deaf. Putting KSM on trial in New York City made no sense. Interjecting himself into the mosque debate made no sense. He's tone deaf on terrorism issues, and he's certainly tone deaf on the economy.

MR. GREGORY: Let, let me ask you about troubles within the Republican Party. It's got a 46
percent negative rating right now, hardly a sweeping mandate for power. And you said this to
The New York Times Magazine...

SEN. GRAHAM: Right.

MR. GREGORY: ...back in July, in terms of the state of the Republican Party, I'll put it up on
the screen: "In a previous conversation," the magazine reports, "Graham said, `The problem
with the Tea Party,'" a big force in the party right now, "`I think it's just unsustainable because they can never come up with a coherent vision for governing the country. It will die out.' Now he said, in a tone" casual--"in a tone of casual lament, `We don't have a lot of Reagan-type leaders in our party. Remember Ronald Reagan Democrats? I want a Republican that can attract Democrats.' Chortling, he added, `Ronald Reagan would have a hard time getting elected as a Republican today.'" Is this a Republican Party prepared for the majority to--prepared to actually lead and not just oppose?

SEN. GRAHAM: Yeah, I think so. I think we can unite with our tea party friends and say no to
the Obama agenda; but we also can say yes to fiscal control. We could have a spending freeze
in nondefense areas. We could offer a constitutional amendment to balance the budget that
would make both parties have to get their fiscal house in order. There's a lot of things we can
do on health care that would expand coverage and limit the government--not have this
government monopoly. So I think with the tea party, independent groups, we can come up with a fiscally sound and try to help the president on foreign policy matters where we can.

MR. GREGORY: But you've tried to position yourself as something of a maverick within the
party. You talk about Ronald Reagan not being able to get elected at this point. The tea partiers have called you a "Republican in name only." Do you think the Republicans have some, some work to do before they can really achieve majority status?

SEN. GRAHAM: Well I think what we have to do is come up with a uniting--an agenda, sort of a contract with America. What would we do different on spending? What would we--you know, I, I support the line-item veto. I would give President Obama the line-item veto. But let's look at the, the healthcare bill. Let's replace it with something that expands coverage in the private sector. Let's look at the stimulus bill that doubled the Department of Education's budget and redo the stimulus bill to create jobs. There's a lot of things we can do to balance out what
Obama's done and going forward show the American people the Republican Party can govern. I want a coalition of tea party people, independents, moderate Democrats trying to find a way to move this country forward before we become Greece.

MR. GREGORY: Senator, I want to conclude by asking you a question about Iraq and Afghanistan. The president, of course, ended Operation Iraqi Freedom with an Oval Office
address, addressing the nation on that point on the end of the war. Our own chief foreign
correspondent, Richard Engel, who covered the war throughout and has covered the war in
Afghanistan as well, offered some analysis during an appearance with Ann Curry on the
"Today" show about the legacy of the Iraq and Afghanistan wars. I'd like you to listen and react to it.

(Videotape, Tuesday, "Today")

MR. RICHARD ENGEL: If there had been no invasion, Saddam would still be in power. He
was probably getting more moderate. He was being welcomed into the--into--by, by a lot of
European countries. He was being welcomed into Eastern Europe in particular. He was heading
in a, in a direction of, of accommodation. The, the sanctions regime that was holding him in
place was starting to fail. So I think he would--it would be somewhat of a, a basket case, but it would still--it would be--Iran would be a lot more contained.

MS. ANN CURRY: Hm.

MR. ENGEL: So it would be a dictatorship that was trying to break out of its box, but Iran
would not be as dangerous as it, as it is today.

MS. CURRY: And had the United States not invaded Iraq, would we be done in Afghanistan?

Mr. ENGEL: Probably. That was a giant distraction of resources, of intelligence assets. That
war would probably be over.

(End videotape)

MR. GREGORY: Senator, what do you say?

SEN. GRAHAM: Completely rewriting history. Our planes were being shot at in the no-fly
zones, Saddam Hussein was violating every U.N. resolution to account for his weapons
program, he was openly defying the international community when it came to controlling Iraq.
He was not becoming a good citizen, he was becoming a more dangerous dictator. The world is
better with him dead. If we can get a government together soon in Iraq and it becomes stable
and secure, we'll have a democracy between Iran and Syria. Iran's biggest nightmare is to have a neighbor on their border who practices democracy. So the 4,400 young men and women
who've died have done this country a great service by securing Iraq and making...

MR. GREGORY: Well, nobody's disputing whether they've done the country a great service. But even our current...

SEN. GRAHAM: We're safer.

MR. GREGORY: ...defense secretary, who's a Republican says, "Iraq will always be clouded
by how it began." Three-quarters of the American people think it was not worth the cost.

SEN. GRAHAM: Well, I can tell you, we will be safer by how it ends. History will judge us,
not by what we did wrong at the beginning, but what we got right at the end. If we can get the government stable in--and, and President Obama, it is now his job to finish out Iraq. If it
finishes out well and it becomes secure and stable, allied with us on the war on terror--this is the place al-Qaeda was beat by fellow Muslims. I can't underestimate how important that was. Al-Qaeda went into Iraq to topple our efforts to bring about stability and representative government, and they were, they were beaten by Muslims with our help. That is a huge win in
the war on terror. So Afghanistan is a--we're getting things better, we got a long ways to go, but I am glad we did what we did in Iraq. America will be safer and history will record this as a big event in the Mideast where a dictatorship was replaced by a democracy in the heart of the Arab world.

MR. GREGORY: All right. But, Senator, before, before you go, on Afghanistan, do you
believe that the president withdrawal timeline of next summer, July of 2011, do you now think
that that can be met?

SEN. GRAHAM: I think it's wrong for the president to say we're going to withdraw next
summer no matter what. I do believe with surge forces some areas of Afghanistan are going to
be able to transition safely. But the president's insistence that we're going to withdraw without--no matter what the conditions are...

MR. GREGORY: But that's not, that's not accurate.

SEN. GRAHAM: ...is hurting our efforts in Afghanistan.

MR. GREGORY: He has said it's going to be conditions-based.
SEN. GRAHAM: No, here's what he said, "We're going to withdraw no matter what. How
quickly we withdraw will be conditions-based." That's different than saying, "We're going to
evaluate next summer and make the best decision." I do see a pathway forward for some limited withdrawal, but the president has announced to the world we're going to begin to leave next summer, the only thing in question is how quick. That is a different way of approaching it. I would rather say, "Our goal is to transition next summer. We'll see what the conditions are." At the end of the day, his statements has hurt. But there is progress in Afghanistan. The surge is beginning to show some benefits in the area of security. The corruption issue looms large in
Afghanistan. It's as big an enemy to the Afghan people as the Taliban, and we must be able to
fight corruption as effectively as the Taliban. That is a work in progress.

MR. GREGORY: Right. Senator Graham, we will leave it there. Thank you as always for
being here.

SEN. GRAHAM: Thank you. And extend the Bush tax cuts.

MR. GREGORY: OK, a final salvo there.

Joining us now with a view from the other side we turn to the man who is in charge of getting
Barack Obama elected president, his 2008 campaign manager and author of the newly-updated
paperback version of his book, "The Audacity to Win: How Obama Won and How We Can
Beat the Party of Limbaugh, Beck, and Palin."

David Plouffe, welcome back to MEET THE PRESS.

MR. DAVID PLOUFFE: Good to be with you, David.

MR. GREGORY: A lot to get to. I want to start on the economy and domestic affairs, and we'll
touch on the wars, as I did with Senator Graham, just a minute. I want to start with the reality, and that is that this president and his party are running on an economic record. And here is that record in a nutshell, and it's not a good one: 9.6 percent unemployment rate, 14.9 million unemployed, 6.2 million of which are long-term unemployed beyond 27 weeks, an estimated three million property foreclosures this year. We cannot forget the depth of the housing crisis. After 19 months in office, President Obama is accountable for this record, is he not?

MR. PLOUFFE: Sure he is. We're less than 60 days out from election and elections are about
choices. So let's remember where we were. The Republican Party that wants to gain back
control, their policies contributed to the worst economic crisis this country's seen since the
Great Depression. If they had their way, we might have headed to a depression, opposing the
Recovery Act. So no one's satisfied with where we are. The question is, are we making
progress? We had 22 straight months in this country of private sector job loss. We've had eight
straight months of private sector job gain. Not as high as anyone would like, but we're on the
right path here. And so the question for the American people is, the Republican experiment's a
very recent one--fiscal irresponsibility, really, an unprecedented assault on the middle-class and small businesses. The same exact policies--and by the way, the guy who's in charge of the Republican campaign committee was on your show about six weeks ago and said if they won back the majority what they were going to pursue were the same policies they had done
previously, which led to this economic calamity.

MR. GREGORY: But isn't it striking after 19 months, rather than being able to run on a record,
when this president's had some big swings legislatively at the economy, that you are left
basically saying, "Well, you know, we, we may not have done the job, but the other guys are
really worse."

MR. PLOUFFE: Well, no one's saying we're not doing the job. We're very proud of what
we've done, which is, this hole was so deep, it's going to--as the president said at his inaugural address, it's going to take some time to dig out. But we're on the right path here: economic policies aimed squarely at the middle class and small businesses; creating a new energy sector; the healthcare law which, over time, I think is going to play a big impact on economic growth. So, no, we're proud to talk about what we've done.

MR. GREGORY: But 82 percent, but 82 percent of Americans polled believe that the country's
still in recession.

MR. PLOUFFE: Well, people are struggling. No one's suggesting otherwise. But the question
is...

MR. GREGORY: Yeah. So they don't believe what you say, which is that we're on the right
path.

MR. PLOUFFE: Well, you're--when people are struggling, they don't have a job, their family
member doesn't have a job, they haven't got a raise, they're right to be frustrated. The question we have to put in front of people in these next two months is, this is a choice. And the Republican ideas were soundly rejected at the ballot box the last two years, more importantly were soundly rejected by the American people. They're offering nothing new, the same old policies that led this country this close--Senator Graham was talking about, you know, the right ditch, the left ditch, they drove us into the ditch. And if we give the keys back to the people who did this, it would be like giving Herbert Hoover the keys in the mid-1930s.

MR. GREGORY: The, the summation--Time magazine has a summation of sort of the depth of
the political peril for the president and the Democrats. I'll put it up on the screen. "With
midterm elections just nine weeks off, instead of generational transformation some Democrats
predicted after 2008, the president's party teeters on the brink of a broad setback in November, including the possible loss of both houses of Congress. By a 10-point margin, people say they will vote for Republicans over Democrats in Congress, the largest such gap ever recorded by Gallup." How did it get so bad?

MR. PLOUFFE: Well, first of all, when you have a tough economy and you're in power, you're
going to have a tough political environment. Secondly, we won so many elections in 2006 and
2008. Even in a neutral electoral environment, it was clear we were going to give some of that
back. So, over the next two months, what we really have to do is two things. One,  Republicans are very enthusiastic about voting. We have to get more Democrats enthused about voting. I think laying out the stakes of this election, the real choice, that they're not just going to bring bad ideas, they're going to roll back all that the president and his party's accomplished. And secondly, for those undecided voters out there, make them understand this is not the new Republican Party. It's the same old ideas, the same old adherence to the special interests. You know, Speaker Boehner was talking about all the reforms he's going to bring. I mean, give me a break. These are the--this is the party that tried to change the rules to allow the majority leader to still serve if he was indicted. John Boehner, who would be the speaker of the House, years ago was handing out checks from tobacco companies on the House floor and is now up on Wall Street saying, "Give us money because we're protecting you by opposing things like financial reform." So, so the movie was a nightmare for America, it's a recent experiment, and we have to make sure everybody out there who's undecided and, just as importantly, those Democrats who aren't any threat to vote for a Republican but who are saying, "I'm sure if I'm going to vote," we have to go talk to them and make sure they understand the stakes here.

MR. GREGORY: One of the things you said back in January of 2009 is that bipartisanship was
so important. And this is what you told The Washington Post at the time. "One thing I'm sure
of, there's not going to be a Democratic solution to the economy or a Democratic healthcare
plan or a Democratic energy plan. It's got to be an American plan and effort, and if that
happens, I think we can make progress." The reality is they have all been Democratic plans.
You have not had bipartisanship, you have lost tremendous ground with 60 percent disapproval
among independent voters. Isn't that problem you, you warned of?

MR. PLOUFFE: Well, first one, bipartisanship, actually, you know, we did get some
Republican support for things like the Recovery Act, for financial reform, on healthcare, is
right. But the votes might have all been Democratic, but the truth is there were so many
Republican ideas in there. And what the--and this is another argument for the election. The
Republicans' opposition with the president and a lot of our party has tried to do is less grounded in principle than it is in politics. This country's in--got deep challenges, but opportunities, too. And rather than participate in trying to move this country forward, the Republicans, in a very crave and crass way, are playing short-term politics. And listen, we're going to have a tough election this November. I think it can be better than people think, but I think the long-term damage the Republican Party is doing to themself is profound.

MR. GREGORY: Well, and I want to get to the Republicans in just a minute, but let me pin
you down on that point. Is Democratic control of the House and the Senate in jeopardy?

MR. PLOUFFE: What I would say is, I think right now, because this is going to be elections
between two people in a state, in some cases it'll be three people where there's tea party third
party candidates, but in states in districts. And I think if you look at that, the Senate, they'd
have to run the table. I don't see any evidence of that, and we've got people running strong
campaigns. We've won a lot of special elections in the House because our House candidates are running great localized campaigns, really focusing on turnout and making that a choice between two individuals. So, now this is turbulent political environment. We have big majorities. So of course we're going to give some of that back. But I think we can maintain control in both chambers if we make this a choice between two people in districts and states, and we have to make sure Democratic turnout jumps up because, right now, the Republicans are coming out at a very high level. We shouldn't expect that to abate.

MR. GREGORY: But isn't part of what you're getting out here is that you have to basically
shift the, the mindset of voters to the shortcomings of their opponents because, if it is a
referendum on the president and his leadership, you come up short?

MR. PLOUFFE: Well, I--listen, elections are choices. So we're happy to talk about, you know,
the Recovery Act and what it meant, the jobs and businesses that have sprouted up all over
America, the new energy economy, combat--our operations in Iraq coming to a close, all the
healthcare assist that seniors are going to get. And so...

MR. GREGORY: But I'm asking about the president's leadership...

MR. PLOUFFE: Yeah.

MR. GREGORY: ...whether that's being graded here, whether it's being tested here.

MR. PLOUFFE: I think the way voters look at this election is: I've got two people running for
the Senate or for the House, and they're going to evaluate positions and views and vote for those people. But listen, I think we as Democrats, we do have to make this a choice, and so the Republicans need to be on trial here, too. But we ought to be proud of what we've done because this is leadership. We--these were not normal times. We were facing unprecedented economic crisis and issues like health care, energy, education, that leadership in this town had refused to deal with for decades.

MR. GREGORY: But, look, the Democrats are in, in power. You, you--one of the things that
got you to the White House was the strength of independent support. Independent voters, as I said, are now disapproving of the president's performance at a 60 percent margin. You have
made the point that everybody out there in America's making adjustments in their lives.
Washington doesn't seem to be making any adjustments in the way they're spending money or
running the government. That has to lay at the door post--or the doormat of the president and
the Democrats.

MR. PLOUFFE: Well, first of all, I do think most voters out there think, when asked who's
really trying to reach out to the other side, who's trying to bring more of spirit of, of debate and bipartisanship to Washington, believe the president's trying to. Secondly, on spending, you
know, the president's done some tough things on spending. First of all, being honest about the
spending, you know, for the first time in a long time. The Republicans, obviously, are lecturing
us about fiscal discipline. It was their policies and their fiscal positions that led us to this
position. So we--first of all, we should not take any lectures from them. And on tax cuts,
which Senator Graham just talked about, they want to extend them for another 10 years, which is $700 billion, without paying for them. So we have to remind people, when President Clinton left office, we had a surplus. We had a record deficit over $1.3 trillion when President Obama took office. Why? Because the Republicans had unpaid for wars, tax cuts, entitlement expansion. Do you really believe three years later you can trust them on fiscal matters?

MR. GREGORY: Well, but, but let's talk about tax cuts for a second, because Mark Zandi,
who is an economist who has advised Republicans and Democrats, wrote this in The New York
Times about the tax cuts we can afford. "The prudent middle ground," he wrote, "would be to
forestall any tax increases in 2011 and to phase in higher rates on upper-income households in
2012 when the economy will be on firmer ground." In other words, don't raise any taxes right
now, extend all the Bush-era tax cuts. Why isn't that a good idea? There are a lot of
Democrats, by the way, lining up behind that very position.

MR. PLOUFFE: First thing I'd say, what the congressional Republicans are proposing is a
permanent extension of tax cuts for the wealthiest, which means 80 percent of the people that
get those tax cuts are millionaires, OK? Permanent. Now, in a recession, I understand those who say maybe for a year we should consider this. My view would be, and I'm not an
economist, and I'm certainly not involved in these decisions. The White House...

MR. GREGORY: But what's the president's view?

MR. PLOUFFE: But here's that, that if we're going to borrow money from the Chinese to give
further tax cuts it not--ought not go to millionaires. We ought to do more for small businesses
in tax cuts. So what the president is proposing is permanent extension of tax cuts for the middle class. We have a small business plan right now in front of the United States Senate that would provide huge tax relief, incentive for lending, incentive for expansion. That's what we ought to be doing.

MR. GREGORY: Would the president entertain the idea of extending all the tax cuts for a
period of two years?

MR. PLOUFFE: You know, I don't know what his final position's going to be. I--what--he's
been pretty clear on this, which is the middle class and small businesses ought to be the target of our tax relief, that those at the very top--and again, we're not talking about the mom and pop small business person, we're talking about 80 percent of the people the Republicans want to give permanent tax credits to are millionaires, without paying for it. So this is a very important issue, I think. We won the tax debate with John McCain in 2008 because the American people believed that we wanted to tuck--cut taxes for them, not the big corporate interests and not millionaires in this country.

MR. GREGORY: I'm curious, when we talk about economic recovery and the political scene,
former President Clinton has been campaigning, The New York Times covered one of his
statements when he was on the trail, and I'll put it up on the screen. He said, "A year and a half just wasn't enough time to get us out of the hole we are in, so I want you to stick with us. Give us two more years, two more years until another election. If we fail, you can throw us all out." Does President Obama see it that way? In other words, he's got one term to turn this thing around?

MR. PLOUFFE: He doesn't view it through the prism of politics. He views it through the
prism of the country was in an enormous hole so we had to do everything we can to dig out of
that. Plus, we had ignored the long-term challenges of health care, energy, economy, education reform. And that's how he views it. And if you make decisions based on politics, you're going to do the country a big disservice.

MR. GREGORY: But, but what, what, what maybe President Clinton was referring to, do you
envision a primary challenge from another Democrat in 2012 against this president?

MR. PLOUFFE: Oh, I can't imagine that. And, you know, we've got--listen, we've got one
election in front of us. It seemed like the last one just ended.

MR. GREGORY: Right.

MR. PLOUFFE: So there'll be time to talk about 2012.

MR. GREGORY: But given who made that statement, do you--can you rule out, based on
actual information, that Secretary of State Clinton would not pursue the presidency again,
would not challenge President Obama?

MR. PLOUFFE: Listen, you saw this week they're working so well together, working on
Middle East peace, and it's a wonderful partnership. And, you know, I think that was a really
inspired choice by the president, and Secretary of State Clinton is just doing a remarkable job.

MR. GREGORY: So is that a yes, no, or maybe?

MR. PLOUFFE: Listen, they're, they're, they're a team and a great team for America.

MR. GREGORY: I want to talk more generally about the, the economy. Christina Romer, the
president's top economic adviser, leaving the White House, suggested there should be additional stimulus, as she was leaving, tax breaks but also additional infrastructure spending. Does the president think in retrospect that he did too little to jump-start the economy?

MR. PLOUFFE: Oh, I don't think so. And, listen, obviously you mentioned at the top of your
show, the president's going to be unveiling some more proposals this week to, to help with the
economy. And I think they're going to look at everything they can because this is a crisis out
there for the American people. But no. And the--listen, it's very clear, economists who have
looked at this said that this Recovery Act added over three million jobs. As I said, 22 straight
months of private sector job loss. So these aren't government. Eight straight months of private
sector job creation. Recovery Act played a big role there. We would have been unemployment
rate probably in the high teens. Some economists even say over 20 percent, by the way.
So the Recovery Act that the Republicans are attacking, if they had their way, we wouldn't have done anything like that. We probably would have unemployment rate--if the Republican ideas and policies had been in place that drove us into this economic calamity in the first place, we'd be sitting here with unemployment almost double what it is, with no positive growth, no glimmers that we're coming out of this. So again, big choice. But, no, I think that history will show that the Recovery Act, the help for the financial sector, the auto industry--by the way, all of these things were clearly going to be very tough politics. But this wasn't--the America--the, the country was in crisis and the president and a lot of people in his party knew they were going to take tough political positions to try and move the country forward and stave off another Great Depression. And they did that, and we should be proud of that.

MR. GREGORY: Is President Obama the campaigner-in-chief in this midterm season? Or is
he as much of a liability as an asset around the country?

MR. PLOUFFE: No. He's, first of all, president. But he's going to be out there making his case
about how he sees these elections, the stakes in the elections, why we can't afford to, to go back, which is essentially the question here. Again, we'd all--no one's completely satisfied with where we are in the moment. But are we going to continue on a path of forward progress or are we going to go back? And I think he'll make that case out there. Obviously, he's got a lot of other duties.

MR. GREGORY: Finally, a quote from your book, handicapping the Republican field, this is
what you write in the new part of "Audacity to Win." "This is the Republican Party of 2010, and
I think it will be the Republican Party for a long time. It is hard to see how a Republican gets
the presidential nomination without winning the plurality of the Palin-Limbaugh-Beck base of
the Republican Party. Without a drastic change in orientation, they will probably nominate
someone a good bit out of the mainstream." Who do you have in mind? Who do you think is
the most formidable Republican likely to challenge President Obama?

MR. PLOUFFE: Oh, I have no idea. I mean, this time four years ago there was very few of us
talking about Barack Obama running for president, including me. So I think some of the people
that we think are going to run may not run. There'll be other people who'll run. We'll see. I
wish I could just sit back with a tub of popcorn and, and enjoy it because I think it's going to be quite an adventure.

MR. GREGORY: But who is the leader of the Republican Party, would you say?

MR. PLOUFFE: I think the--I think right now--and this is a problem for them long term--I do
think that Rush Limbaugh, Glenn Beck, Sarah Palin, they are the leaders of the party. And you
see whenever--I was struck by--Senator Coburn from Oklahoma, I think, was at a town hall
meeting and said, "I don't agree with anything the Democrats are doing, and I don't agree with
Speaker Pelosi, but she's a nice person," and got attacked for that. There, there is an intolerance in that party and an extremism that I think is where the real energy is. And so I think, as you see in '11 and '12, as that presidential primary, those are the people that are going to come out to vote. So I think that's where the real energy is, and I think particularly in, in elections where more people vote, in presidential elections where you have a lot more younger people, minorities, independent voters who skew a little bit more moderate, that's going to be a big problem. So we'll just have to wait and see. But let's get this--through this election first, and then we'll be right on to the next one.

MR. GREGORY: Will you be running the re-election campaign for the president?

MR. PLOUFFE: I don't know. We--again, we're not focused on that. You know, he's very
focused on trying to do the right things for the country. There'll be a time for politics, and at
that point, all of us that feel strongly in his leadership will do all we can to help him.

MR. GREGORY: And we'll be watching. David Plouffe, thank you very much.
And up next, the hottest races across the nation in this fall midterm campaign. Can the
Democrats hold on to both the House and the Senate, or is a GOP takeover in the cards?
Insights from our roundtable: Charlie Cook of the Cook Political Report, CNBC's Erin Burnett, E.J. Dionne of The Washington Post, and Rich Lowry of the National Review.

(Announcements)

MR. GREGORY: Coming up, our roundtable previews the biggest races to watch this fall. Is
the Democrats' hold on the House and Senate in jeopardy? After this brief commercial break.

(Announcements)

MR. GREGORY: We're back. Joining me now, our political roundtable: editor of the
National Review and Fox News contributor Rich Lowry, Washington Post columnist E.J.
Dionne, editor of The Cook Political Report and political analyst for the National Journal
Charlie Cook, and anchor of CNBC's "Street Signs" and "Squawk on the Street," Erin Burnett. Welcome to all of you.

Erin, I want to start with you because there is news on the tax question. You heard Senator
Graham say, yeah, he could support what the president's talking about, a research credit, a tax credit for corporations. Is this what the business community wants to hear more from the
administration?

MS. ERIN BURNETT: They do. And by the way, that particular tax credit is very, very
popular. It's likely to go through. It's got a big price tag to it, $100 billion, but they like it.
They, of course, want to hear more.

MR. GREGORY: Yeah.

MS. BURNETT: Some of them are along the lines of, "Look, we can start to create a lot more
jobs if we have more tax breaks for business." But it looks like the research credit is something
that will be popular, he can get support clearly on both sides of the aisle for that. But that's
probably as far as he's going to be able to go when it comes to those business tax credits.

MR. GREGORY: And big picture, the president maintains, in response to the jobs numbers,
"Look, we're going in the right direction here. We are part of the solution, not part of the
problem." But as I suggested to David Plouffe, there is a--an economic record there that is tough to run on.

MS. BURNETT: Yes, very tough to run on. He's right, though. I mean, I call it the "tortoise
economy." The economy's growing. The numbers are coming out. We're getting better--in fact,
after this recession we have--our recovery started more quickly than after any other recession in the past 25 years. So it's accurate to say we're growing and we're going in the right  direction.

Politically, though, how do you spin a 9.6 unemployment rate to have it be positive? That's
incredibly difficult. And it's very hard politically to see how they're going to make that case.

MR. GREGORY: Rich Lowry, are Republicans going to give this president anything on taxes,
any victory before November, even if on paper it makes sense, it's something that they would
want?

MR. RICH LOWRY: Remains to be seen. Just at this time of year everything becomes so
political. And this research and development credit, businesses and corporations love it. But
it's been around since, what, 1981 or something? It's not a new initiative. It's not going to make a big difference in the economy, in the aggregate. And that's the problem the administration has had since the stimulus, which I think is pretty clearly a failure. Everything since then it's been $20 billion, $30 billion here. That just doesn't make a big difference in a $14 trillion economy.

MR. GREGORY: E.J., the economy and taxes and where things stand.

MR. E.J. DIONNE: Well, actually, I think the administration is in a position where it should
pick a big fight with the Republicans. I, I at least half agree with what Rich just said. They're
clearly down in this election. If the election were held now, they'd probably lose the House,
though not the Senate. I think they can claw back enough to hold on to the House. I think they should pick a big fight on the renewal of the Bush tax cuts and say, "We want to renew them for everybody earning under $250,000 a year. Heck, maybe we can actually renew them for everybody earning under a million dollars a year." Draw a line and say, "We want to give them tax cuts now. They want to fight for millionaires." So you can have that fight. I think they can win it. But they need to shake up this race to salvage some of those seats. They need to hang on to 218 House seats.

MR. GREGORY: Right. I'm going to get to Charlie in a second. But, Rich, back to the--you know, because I've, I've pressed Republicans on the point of, "Hey, you want to cut the deficit? Well, it's going to cost $3 trillion to extend all of these tax cuts. How do you pay for it?" And  Republicans say to me, "You know, that's--that argument is off base here, that it's existing tax policy and that you shouldn't be making that argument." And respond to E.J.'s point.

MR. LOWRY: Well, there, there, there are a couple things. I think E.J.'s political advice is
exactly wrong, although I appreciate him half agreeing with me. I'll take what--I'll take
whatever I can get.

MR. GREGORY: Right. That may be all you get.

MR. DIONNE: That's great progress.

MR. GREGORY: That may be all you get.

MR. LOWRY: But, you know, before August, before they left--Congress left for the August
recess, you had three Senate Democrats saying, "We need to extend all these things less
temporarily." And that was before this awful last month the Democrats suffered. I think it only
got harder, if not impossible, not to extend all of these. So I expect the Obama administration
either to say, "Let's do it for one year," or to punt it to the lame duck session. But even if they
extend it for one year, that will be an amazing sign. If you have these large Democratic
majorities in the Senate and the House extending all the Bush tax cuts, huge sign of the way the worm has turned politically.

MR. GREGORY: Yes.

MR. DIONNE: One idea is to put on the table, one of the things you could do with the money
you save from not giving the tax cut to people earning over $1 million, you could either
redistribute the rest of that to people down below a million, or you could begin to create an
infrastructure bank to try to build us for the long-term. You need to look like you're making a--
you're drawing a clear line with the Republicans.

MR. LOWRY: But there, there, there you're sucking money out of the economy in the shortterm
in order for the long-term in a weak economy. That makes no sense. Raising taxes, there's
no theory in which raises taxes in a slow economy makes sense.

MR. GREGORY: All right.

MR. LOWRY: Keynesians don't favor it, supply-siders don't favor it.

MR. GREGORY: We can come back to this, but all of our effort in terms of our graphics have
been for you, Mr. Cook, OK? Because we want to look at the landscape as we kick off this
election season. All right...

MR. CHARLIE COOK: I was feeling unloved.

MR. GREGORY: Yeah. No, no, we got plenty of love for you. Here's the big picture, OK?
You see here 19 seats in the Senate that could plausibly turn over--13 held by Democrats, six by Republicans. You see that on our graphic. Now, let's look at some of the tight races. Open
seats, Republican seats in Florida and Kentucky. Florida the very interesting race. Former
House Speaker Marco Rubio, Kendrick Meek and Governor Charlie Crist. We should point out
we had hoped to have that Senate debate. Marco Rubio's father sadly passed away. Our
thoughts and prayers are with him, and we hope to reschedule that debate. But that is obviously a, a tightly fought contest. And in Kentucky, you've got Rand Paul, the tea party candidate, and the attorney general, Jack Conway. Rand Paul, in a poll out this morning, way ahead here. What do you see, Charlie?

MR. COOK: Well, I think Republicans have to almost run the table. And the thing about it is,
but that's pretty common. In fact, in three of the last six elections the--one party has won over 80 percent of the final toss-up races that are out there. So this--there's a cascading effect that tends to happen. Florida, you called it interesting, I'd call it bizarre. And early on, Democrats thought, "Well, we get two bites of the apple. We'll have a Democratic nominee, and then we'll have Charlie Crist, who has turned away from the Republican Party." But, instead, what you've got is Marco Rubio, the Republican has consolidated the right of center vote, so you basically have two candidates, a former Republican and a real Democrat that are splitting the nonconservative vote, and I think it gives a, gives an edge to Rubio.

MR. GREGORY: OK. Let's look at some of the tight Democratic seats. These are incumbents
who could lose. We'll go through them. In California, very interesting race, Senator Boxer with
a tough fight on her hands with Carly Fiorina, former head of HP, of course. Then in
Washington State, Patty Murray defending against Dino Rossi. He's run for governor twice, a
more moderate Republican. He doesn't have to deal with Republican problems. He's got a lot
of--a better environment this year. Wisconsin, Russ Feingold is defending. He's got a primary--
the Republicans have a primary September 14th. Ron Johnson looks to be the most likely
Republican to win that race. And, of course, Nevada, the Senate majority leader, Harry Reid,
trying to hold out Sharron Angle, also a tea party supporter. What strikes you about these
races?

MR. COOK: Well, this is a class of Democratic incumbents that have never had a really, really
difficult year and they've lived sort of charmed lives. And, and take Barbara Boxer, for
example. She's always been able to win by being a social, cultural liberal, and, and
environmentalist, and all of that. Well, the thing is--and which fits California very well. But in
a really, really tough economy, she's having a hard time sort of pivoting away from that
traditional Democratic message. Russ Feingold, his opponent was totally unknown in Wisconsin, was totally unknown three, four months ago, but he's a self-funder. He's never run for anything before, so he doesn't have a baggage of, of legislative voting record, anything like that. Democrats are having a hard time getting a handle, getting grip on him, and tearing him down because he doesn't have any record.

MR. GREGORY: And it's interesting, E.J., the president goes to Milwaukee to talk about the
economy tomorrow. Who won't be there? Russ Feingold. It goes to my question to David
Plouffe. Asset or liability? How does Obama work on the campaign trail this year?

MR. DIONNE: Obama is both, and that's the tricky thing for the Democrats. On the one hand,
they really need Obama to gin up turnout in the Democratic base. Among all those voters who
came in for the first time in 2008 to vote for him, but are looking like they won't vote this time,
particularly younger voters, African-American voters, so that's on the one side. On the other
side, Obama ignites the Republican base. And so I think you're going to see them using Obama
in an interesting way where he is going--they are going to use him to raise money, they are
going to use him to turn out the base. But candidates are going to have, you know, are going to pull away from them--from him when they have to. Democrats have used this strategy before. When they won the Mark Critz special election, the congressman from Pennsylvania, a very conservative district, Democrats were happy to pull him away from Obama and House Speaker Nancy Pelosi if that's what it took to win.

MR. GREGORY: Well, one of the things, Erin Burnett, is this--the populist streak running
through the country right now, and kind of who owns that populist anger. You talk about how
candidates are positioning themselves. Here is Congressman Joe Donnelly, he's in Indiana
running for re-election, he won in '08, and this is the ad he's running. It's about immigration,
but it tells an interesting story. Watch.

(Videotape, Joe Donnelly campaign ad)

REP. JOE DONNELLY: I went down to the border and saw for myself just how bad the
situation really is. That's why I voted to hire 5,300 more border agents, penalize any business
that hires illegals, deport illegals who commit felonies, and eliminate amnesty because no one
should ever be rewarded for breaking the law. That may not be what the Washington crowd
wants, but I don't work for them, I work for you. I'm Joe Donnelly, and I approve this ad.

(End videotape)

MR. GREGORY: Now here, of course, is a Democrat running against, you know, the
Washington crowd, all of them Democrats. But it goes to this point about the economy as well
and populist anger, which is the idea that--the criticism that President Obama ceded that ground to the Republicans, to the tea party, and he's got people out there, congressmen, saying, "Look, I'm for you, I'm not with the guys in Washington."

MS. BURNETT: Yeah, I mean, it's amazing because you wouldn't even know necessarily what
party that ad came from unless you, unless you clarified it.

MR. GREGORY: Right.

MS. BURNETT: The populist--I think you're right. He has ceded it. And every time he's
trying now, it's "It was what I was handed by Bush." I mean, there's this sort of, "Let's go back
and blame that." To me it seems like he can't really win on the tax front right now because the
left won't get enough, the right will say he's running up the deficit. I think he needs to take a
third way and come up with his vision of American exceptionalism, talk about this is the place
immigrants and the world want to come. We're the number one destination, we're the richest
and best country in the world, and he needs to take that positive, positive way of looking at it.
So that--and that's what he's good at. That's about rhetoric and vision, and that's where his
strength lies.

MR. GREGORY: All right, but for everybody here, what is the bottom line? How did the
president and Democrats get to this point? Is it a bad economy, case closed, Charlie, or is there a leadership question, a failure of leadership by the president that has got him to this point?

MR. COOK: Democrats desperately needed three things to happen this year. Number one, they
needed unemployment to turn around. And when you look at the, the groups that were sort of
the booster, that pushed them over the top, among African-Americans the unemployment rate is 16.3, you know, way more than it was when the president took office; Hispanics, 12; young
people, 26, the job market for recent college graduates the worst in 35 years. He desperately
needed unemployment to turn around. Number two, he needed attitudes toward healthcare
reform to fundamentally change, with people saying, "OK...

MR. GREGORY: And that hasn't happened.

MR. COOK: And that--it just hasn't happened. And they had to get control of the agenda. And
right now what they're doing is they're paying a price for having focused so thoroughly on
health care for a solid year at a time when the economy was deteriorating. And, for a lot of
voters, they just see the president and Democrats as having checked the box on stimulus and
then gone to cap and trade and health care leaving the economy to deteriorate.

MR. GREGORY: Have it out, you two. The question of the economy rules everything, or a
question of leadership, E.J.?

MR. DIONNE: First of all, in that Donnelly ad, it's interesting that John Boehner, the
Republican leader, was also in that picture.

MR. GREGORY: Yeah.

MR. DIONNE: And there are Republicans--the Republicans are unpopular, too. That's going to
be something Democrats want to play. I think the biggest mistake Obama made was in not
making a big argument from the beginning, "Here's where we started, here's where we're going.
It's going to be rough getting there. But if you stick with me, this is going to get better." FDR
did that, Ronald Reagan did that. He needed to do that.

MR. GREGORY: But trust in government was different when FDR did it.

MR. DIONNE: Right. But he needed to restore trust in government, and I think he was in a
position to do that. He needed to emphasize the way they're actually reforming government,
which they are, but nobody knows it.

MR. GREGORY: The flipside of that question, you can address this big one.

MR. LOWRY: Sure.

MR. GREGORY: But is also, have, have Republicans done anything to really regain trust about
their leadership...

MR. LOWRY: No, it's most...

MR. GREGORY: ...to an oppositional strategy?

MR. LOWRY: ...it's mostly a free gift from Obama fundamentally fumbling this. And I
disagree with E.J. again. I'm going to have to agree with you at some point, E.J. just to be a
good colleague here on the set. But people know what Obama's about. They know what the
program is. They know he's growing government because he thinks that's good for the economy and good for the country's future. They get it. The problem, I think, is threefold. One is ideological grandiosity. Democrats thought in '08 they had a mandate from heaven to do
everything they ever wanted, when really they were just getting an opportunity because people were recoiling from the Republicans and the poor state of the economy. Then there was the cynical opportunism that Charlie referred to, a crisis is--never let a crisis go to waste. Therefore do health care, try to cap and trade, things that have nothing to do with the economy or may actually be harmful to do it. And then three, there's the fact that the program has not worked on its own terms. The stimulus has not worked. So you add all three of those things up and you have a very grim picture. And another huge problem, independents are much closer to the tea partiers on the big issues and even on the smaller hot-button ones--spending, debt, Arizona immigration law, Ground Zero mosque, all that--much closer to the tea partiers than they are to the Democrats.

MR. GREGORY: But, Erin Burnett, the big question on unemployment, if, if--and in 30
seconds, when is there a meaningful dent in the unemployment rate that can help these political fortunes?

MS. BURNETT: Well, I think it's interesting, because by the way, I don't think the stimulus has
been a failure, and I think that you are correct that it is perceived that way. But I don't think it's actually true. Without that stimulus, we would be significantly worse off than we are right now. There, there's really no question about it. You can ask any economist on Wall Street or any CEO. I see you shaking your head, I know you disagree. But, but, but, but my reporting would show otherwise.

MR. DIONNE: Keep going.

MS. BURNETT: I--look, I, I, I think the problem is you have the fastest job creation in this
recovery than you have in any recession in 25 years, but it is still not enough. You aren't going
to win this on jobs, and that is the problem. It's going to take a long time. I don't know how
you get around that problem, but technically speaking, this recovery has not been tepid.

MR. GREGORY: All right. We are going to leave it there. Obviously, it's going to be an
exciting next couple of months on the campaign trail. We'll be following it week in and week
out right here. And we'll be right back.

(Announcements)

MR. GREGORY: That is all for today. We'll be back next week. If it's Sunday, it's MEET
THE PRESS.