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CNN LIVE EVENT/SPECIAL

Second Hour of Pre-Debate Analysis

Aired June 3, 2007 - 18:00   ET

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


ANNOUNCER: This is a special edition of LOU DOBBS TONIGHT: America Votes 2008. Here again, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Welcome back. It's a special edition because we're just about an hour away from the Democratic debates where the candidates, all eight of them for the Democratic presidential nomination.

We are here tonight at Sullivan Arena at Saint Alselm College, the location of both the Democratic and the Republican presidential debates. And tonight, as I said, it is the turn of the Democrats.

In just about an hour, those eight Democratic candidates take the stage with Wolf Blitzer. They'll be stating and defending their positions on some of the critical issues facing this country.

We'll have expert reporting from the very best political team on television including Candy Crowley, she'll be with us tonight. John King, Bill Schneider will also be joining us from his perspective.

We'll hear from political contributors and analysts and I assure you they are the very best.

The latest polls show that front-runner Senator Hillary Clinton is maintaining her strong lead over Senator Barack Obama and former Senator John Edwards, but Senator Clinton is vulnerable on the issue of Iraq, according to many political analysts. Bill Schneider is our senior political analyst and he has our report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Hillary Clinton has the most to lose in the New Hampshire debate. She's the frontrunner, nationally and in New Hampshire.

The most recent poll in New Hampshire shows Clinton with a double- digit lead over John Edwards and Barack Obama, with the other candidates in single digits.

New Hampshire is likely to be crucial for Clinton. Most polls show the New York senator facing a tough fight in Iowa. If she loses Iowa, she needs New Hampshire to do for her what it did for her husband in 1992 - make her the comeback kid.

The top issue among New Hampshire Democratic voters - Iraq. Watch for Obama and Edwards to try to score points with New Hampshire's passionate anti-war constituency, and suggest that they are stronger anti-war candidates than Clinton.

JOHN EDWARDS, FORMER SENATOR: I will stand strongly and proudly against this president, because he's wrong about this war.

SCHNEIDER: Obama is likely to target New Hampshire Independents, who can vote in the Democratic primary. They are intensely anti-war and anti-Bush. And they respond to a candidate who is new and different.

SEN. BARACK OBAMA, (D-IL), PRESIDENTIAL CANDIDATE: So, I think that our best strategy in the coming months between now and September is to continue to build pressure, continue to ratchet up the pressure, for the sort of plan that I introduced.

SCHNEIDER: Clinton's game plan? Not to let any hint of daylight come between them and her on Iraq.

SEN. HILLARY CLINTON (D-NY), PRESIDNETIAL CANDIDATE: If the president does not get us out of Iraq before the end of his term, when I am president, I will.

(END VIDEOTAPE)

SCHNEIDER: Hillary Clinton's secret weapon -- women. Today's "Washington Post"/ABC News poll shows Senator Clinton with a two to one lead over Barack Obama among Democratic women. It's women who are giving her front-runner status and her lead in this race. Lou?

DOBBS: Bill, thank you very much. Bill Schneider, if you will, stay with us throughout this hour.

Candy Crowley now joins us and Candy, as we welcome you into the broadcast, let me ask you, is this now because she is the front- runner, we've heard a lot about the volatility and the high number of undecideds, but also the strength. Is this now Senator Clinton's race simply to lose?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, it is for the most. As you know these are snapshots and anything can happen in the polls in the next couple of months, but she's been the steady front-runner for some time.

Certainly this debate tonight is hers to lose. She needs to be and will be, I'm sure, very cautious because what she needs to do tonight is not make any mistakes to in any way jeopardize that front- runner status.

As far as down the line, as you know, Lou, sometimes in these campaigns things can happen that jolt the numbers and you can see someone moving up or someone tumbling. But at the moment she has been the steady front-runner and for this month, anyway, it's hers to lose.

DOBBS: Candy, thank you very much. And Candy Crowley will be with us throughout this hour as will.

We're now back with Donna Brazile, James Carville and J.C. Watts. I want to go to the issue of Senator Clinton's lead right now because Senator Obama had a terrific momentum that was building that seems to have stalled. I don't know whether that's true, but I'd like to hear your view, and what will be required for him to reassert and regain that momentum.

DONNA BRAZILE, CNN POLITICAL ANALYST: Look, Senator Obama has tremendous support out there, not just broad political support, but it's time he closed the deal with voters.

People are excited about his message. He's the change candidate, but they want to know if he has the real experience to lead this country. I believe tonight Senator Obama will prove to those skeptics out there that he knows how to win and he knows what to do to win.

DOBBS: Let me ask you this, Donna. What makes -- what is it that makes him in your judgment, the change candidate?

BRAZILE: He's new. He's a fresh face, he's a fresh voice. He's a candidate of optimism and voters want to hear a candidate who talks about the future in a very passionate way. I think that's why Senator Obama has such widespread appeal.

DOBBS: Do you agree that he is the change candidate?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think everything about him is different. I think in a year when voters are looking for something different. He's a different color. He has a different name, a different kind of name, he talks differently and dresses differently.

The man literally comes up and almost shakes you and says I'm different. I think that's a helpful thing to have in this year when people are craving that. Donna's point is we know he's different, I think what voters are looking for and it will take a while to decide this, is he deep enough? And that's something that he's going to have to show.

DOBBS: Can he demonstrate that here tonight on this stage behind us?

CARVILLE: He can help. I think it's a little bit much to ask for someone -- to be one of eight people in a two-hour debate.

DOBBS: I'm not above raising expectations.

CARVILLE: I'm not either, and as someone who is sympathetic to Senator Clinton, to be fair, I think he wants to very much take his game up a notch in the last debate, but, we need to repeat after ourselves six times. It's only June.

DOBBS: Do you -- you said earlier that you believed that Edwards tonight, at least as the focal point of what you think is the likely shift here, has that opportunity? He is amongst these candidates, the populist candidate. Do you think that is an appealing issue for many voters, that strategy and appealing strategy? CARVILLE: Could be. And what Senator Edwards doesn't want to happen is that his fundraises or supporters, the people here's trying to bring in to campaign saying John, we love you, but Hillary and Obama are sucking up the oxygen and we can't see you come up.

He can't in essence, lose contact. Whether he does it tonight or some time over the summer, I think he very much wants to re-establish himself and he can clearly say that he's the only candidate that's talking about poverty.

He's had the most specific proposal on any number of things. I mean, I suspect he's going to be looking to do that at some point and hopefully tonight so we can get something ginned up here.

DOBBS: J.C.? I'm sorry, let me ask you this, if I may and pardon me for interrupting you, but is it enough for any one of these candidates now -- we're looking at historically low ratings for President Bush. We're looking at low and in some cases lower ratings for a Democratically-led Congress. Is it enough for these candidates to run against George W. Bush?

J.C. WATTS, CNN POLITICAL STRATEGIST: Well, I think in terms of running against Bush, I think when you hear all of the talking about Barack Obama, I think Senator Obama is a different candidate, but is he a change candidate? You know different and change could be two different things because am I going to offer the people the same old thing a different way.

DOBBS: Right.

WATTS: And I think that's what he has to answer.

I think, you know, you talked about Senator Edwards, thank god that somebody is talking about the least of these. I applause Senator Edwards for doing that, however, I disagree with his models and the way he would do it, but I do give him a lot of credit for at least talking about it.

CARVILLE: I think an important exercise for the people at home tonight and particularly like high school students. If I was a civics teacher, I'd say mark down every time that President Bush's name is mentioned in this Democratic debate and then Tuesday night, mark down every time it's mentioned in the Republican debate.

I'll bet you the name George W. Bush is uttered many, many more times tonight than you are going to see Tuesday night. That's just my exercise for you civics students at home watching this political strategy 101.

WATTS: You know, James, Newt Gingrich mentioned in "New York Times" article in the first of the week in saying that how long...

DOBBS: J.C., if I may start to run...

WATTS: ... is it going to be before Republicans start to run against the Bush name as well. DOBBS: We have just seen -- we're watching Senator Barack Obama arriving in a very large SUV there as he pulls up here to Saint Anselm.

BRAZILE: He has Secret Service protection, and that's the car of choice for Secret Service.

DOBBS: I wouldn't in any way make an environmental statement or judgment on that. It's fascinating to see all these big, typically black SUVs and big vehicles. It's become sort of the identifying vehicle of political candidates.

CARVILLE: But Donna is right that he has Secret Service protection and that thing has got a certain kind of -- and I guarantee you that car gets two miles to the gallon because its windows probably weigh more than our car weighs.

DOBBS: Among the issues here, you're talking about the environment, we've been reporting on trade and immigration.

Do you think any one of these candidates will be able or will decide or, spontaneously, one doubts spontaneously, but perhaps tonight to take on the issue of trade?

Talk about fast track authority with the president, reclaiming the right of the constitutional right of influence over trade policy, talking about what they're going do specifically in terms of working men and women in this country.

BRAZILE: Well, that's where Dennis Kucinich will likely come in, as you know he's had a detailed plan on trade.

DOBBS: Sure.

BRAZILE: From day one. While he's not considered a top contender, he has a very detailed proposal and labor standards and environmental standards and I think it's probably one of the best comprehensive plans out there today.

CARVILLE: Break out issue again, potentially for Edwards. I mean, this might be the way Edwards comes up and says I'm sorry, Senator Clinton and Senator Obama, but basically, it might be a place he looks to differentiate himself and Kucinich can say what he wants.

DOBBS: The senator and just moments ago.

WATTS: Secret Service is with him as well.

BRAZILE: That's his wife, Elizabeth.

DOBBS: Arriving and handing off the umbrella and picking up the research notes and getting ready. And we'll be back with our panel in just a moment. When we do come back, the underdogs in this campaign trail. You've just seen one of them. We'll have a report on the uphill battle for those so-called second tier candidates. Is there a Cinderella candidate among these eight Democrats? Our panel of political analysts will be here to discuss what's ahead for each of these candidates. We are now less than an hour away from the beginning of the Democratic debate held here in Manchester, New Hampshire. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, we're now just about 45 minutes away from the beginning of tonight's Democratic presidential debate. Eight Democrats competing for one nomination for the presidency, some names very familiar, of course, Clinton, Obama, Edwards, others trying to establish themselves on the national stage.

But as Candy Crowley now reports, the early front runners aren't always a shoo-in for this nomination, giving the underdogs a reason to keep fighting and hope.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Hi, Hillary.

CLINTON: Hi, how are you?

CROWLEY voice-over): Upper tier candidates can't shake all the hands that come their way. In the lower tier, you go looking for hands.

SEN JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE: Good to see you. Yeah. I remember you.

CROWLEY: It is politics at its most basic, face-to-face, voter- by- voter.

BIDEN: I'm Senator Biden, one of the 800 candidates running for president.

CROWLEY: There are tricks of the trade for the also runnings. First, if you can't draw a crowd, go find one. On Memorial Day, Joe Biden took advantage of a breakfast gathering of veterans. Second, show up early and often. In January, Republican Tommy Thompson vowed to campaign in Iowa every weekend. And if they ask you, you should go.

DENNIS KUCINICH, DEMOCRATIC PRESIDENTIAL CANDIDATE: Hello, New Hampshire!

CROWLEY: Saturday, the day before the debate, five candidates: Biden, Dodd, Richardson, Kucinich and Gravel, underdogs all, all showed up at the invitation of the state Democratic Party Convention.

BIDEN: My fellow Democrats this war must end. This war must end.

(APPLAUSE)

CROWLEY: MIA from the event, Clinton, Obama, Edwards. The entire upper tier didn't show, they didn't have to.

UNIDENTIFIED FEMALE: Hill-a-ry! Hill-a-ry!

CROWLEY: At the top of the field, you can get your people to come even when you don't.

Down the ladder of the presidential campaign, it is hard to find oxygen, known in the trade as free media.

SEN. CHRIS DODD (D), PRESIDENTIAL CANDIDATE: People in New Hampshire don't want to be told by pundits outside who's going to win an election.

CROWLEY: Another rule of the underdogs.

DODD: Half measures won't stop this president from continuing our involvement in Iraq's civil war.

CROWLEY: If you can't get free media, raise money and buy some.

The lower tier can be a lonely place, but not a hopeless one. Before he became a phenom on presidential trail, Howard Dean was known as "the little known governor from Vermont." Long before he became president, Jimmy Carter traipsed through Iowa as "Jimmy who."

GOV. BILL RICHARDSON (D), PRESIDENTIAL CANDIDATE: I don't go to gyms with thousands of people. I go straight to the voters, to their homes, and that's how I'm going to win in Iowa and New Hampshire.

CROWLEY: Anything could happen. The underdogs are banking on it.

(END VIDEOTAPE)

CROWLEY: And one more rule for underdogs, Lou, when you've got a debate, try to seize the moment. It's the biggest audience you've seen yet.

DOBBS: Indeed, Candy, thank you very much -- Candy Crowley.

Back now with our panel, Donna Brazile, James Carville, J.C. Watts.

To what degree will, at all, if at all, these candidates be playing to this very important New Hampshire set of voters as well as to a national audience, Donna?

BRAZILE: New Hampshire is very, very important. Not just for momentum coming out of the Iowa caucuses, but, of course, this is a state that often doesn't ratify the results of the Iowa caucuses, so this is a very important state given the fact that we have a huge mega primary on February 5th.

CARVILLE: Absolutely. As I said earlier the Channel 9 audience, this debate may - in some ways may be more important - Channel 9 being WMUR, the channel we're in partnership with - to some extent may be just as important as our own national audience. It's as important, believe me.

DOBBS: Those chairs down there are being filled by citizens of New Hampshire behind me and they're going to be taking a lot out of the room as well as those images that we're sending out of the room. So that could have some considerable impact -- J.C.?

WATTS: A lot of these are the coffee shop people, Lou, that go to coffee in the morning or they will have coffee in their homes and talk to people. They will be that infrastructure that will spread the word.

I think it's an interesting note to make. Candy talked about the top tier candidate, the top three. James made a point in our last segment when he talked about Dodd, Biden, Richardson - those guys are not going to do anything radical. So how do they break out without doing something radical? So I think the top tier, they're going to be the winners. James Edwards - I mean, Senator Edwards, he can maybe do something a little different. Dennis Kucinich is going to be in this thing come hell or high water.

BRAZILE: And so will Mike Gravel.

CARVILLE: You know, we're going to have a discussion here at some point, in the next couple of months about shouldn't everybody be allowed in these debates? I mean, really we've got people here that we know are not going to be the Democratic nominee or Republican nominee for president and should they be out there taking space up when voters -- who gets to play? Who's in? Who's out? But I mean, they can clearly vote some people off the island.

DOBBS: Let me be a little contrarian on this: isn't there also some reason to suggest that these, as you call them second-tier candidates, also provide some cover for the first tier candidates so that they don't have to get into some of the more uncomfortable issues and positions that they might have to be taken if they had more time?

CARVILLE: Well, exactly. Believe me, every candidate -- every campaign has figured down how much time they're going have. They have 120 minutes. They have eight candidates, they've got this much time to do this, this much time to respond. They're going to guess how much time Wolf has. They know exactly and also, when some of the third-tier candidates and the fourth-tier candidates say kind of ridiculous things, it helps the front runners because it makes them look more presidential.

DOBBS: As Candy Crowley reported, though remember, there is the Governor Jimmy Carter who came back.

BRAZILE: Jimmy who?

CARVILLE: He wasn't.

DOBBS: Thank you very much.

I want to point out that J.C. Watts and James Carville and Donna Brazile will be covering throughout this debate and we'll be back with our post-debate analysis providing their expert eye view and ear to it all and we thank you very much for doing so in this hour.

Coming up next, Anderson Cooper joins me with a preview of tonight's post-debate coverage. Millions of us just one paycheck away from financial disaster and that is far too many. We'll have that report and I'll be joined by the nation's top political analysts again, what they're looking for in this debate and what they say we should expect in the way of the unexpected. Stay with us.

(COMMERCIAL BREAK)

DOBBS: You know, I don't know about you, but I love that music -- that theme music that tells you something big is going on. We're about 30 minutes from the start of tonight's presidential debate, the Democrats taking the stage behind us.

Our coverage continues immediately after the debate tonight and Anderson Cooper is here with me now for a preview of what we can all expect -- Anderson?

ANDERSON COOPER, CNN ANCHOR: We're going to be with Larry King and a whole host of spinners who are going to try to put their spin on it - no, we're going to try to stay out of the spin room as much as possible.

I think what will be interesting is, as you've been talking about, is really how these candidates try to appeal to independent voters in New Hampshire. It's such an important factor here and as we know, this year Independents seem to be breaking Democrats.

DOBBS: Absolutely. And as many as 70 percent in the most recent poll suggesting that they're going to vote in the Democratic primary. Talking earlier with Ed Rollins, Republican strategist, he said the importance of that which frankly, I hadn't considered is that voters tend to vote for the same candidate in the primary, if the candidate's successful, in the general election. So it could have significant appeal. So you're going to stay away from that spin room.

COOPER: I think so. I hope so, yeah. The one thing in politics that's at least honest, they call it what it really is, the spin room where it's nothing, but spin. So I tend to try to have actual conversations with people and not spin.

DOBBS: And you do a great job by doing so and tonight in this debate as you analyze it after these folks walk away, are you expecting to see a breakout performance here tonight?

COOPER: I don't think so. I think some of the lower-tier candidates are certainly going to be trying to break away. I'm not sure how they can in this format given the amount of time they're going to. Certainly for a leading candidate like Senator Clinton, I think you play it safe and try to not make mistakes at this point. But certainly I think you're going to see efforts by some of the lower candidates to try to do it, but whether they'll be able to, we'll see.

DOBBS: Whether it is by contrary or perverse nature, I'm pulling for one of the second-tier candidates to come up with the wonderful moment.

COOPER: There should be a couple. Gravel had a few moments last time around, so we'll see. I think some people were disappointed with Obama's performance in the last debate and we'll see how he comes out in this one. And John Edwards, some people say he's slipping a little bit. Certainly if you look at poll numbers he seems to be slipping, so maybe he'll try something.

DOBBS: All right, well it's going to be fascinating. And we look forward to you leading us through it in the post-debate coverage. Anderson Cooper, thanks for being here.

COOPER: Thanks, Lou.

DOBBS: Coming up next, middle-class Americans and the challenge they are facing. Are these Democratic candidates listening? Will they speak to those issues and will they do something about it? John King will have a report on the power of those undecided voters and our distinguished panel of political analysts and strategists will be back here. We're now just about a half hour away from the beginning of tonight's Democratic presidential debate. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

ANNOUNCER: This is a special edition of LOU DOBBS TONIGHT: America Votes: 2008. Here again, Lou Dobbs.

DOBBS: We're now less than a half hour away from the beginning of tonight's Democratic presidential debate. You see those chairs filling up with New Hampshire residents; 44 percent of whom are registered independents. They are revved up about this event. And I can assure you the candidates are revved up about getting their message out to not only Americans, all over the nation watching this broadcast tonight, but also to those New Hampshire residents, cantankerously and famously independent.

Millions of middle-class Americans are sadly living on the edge of financial disaster. Many have little to no savings and are often unable to pay for the most basic living necessities, despite being considered part of this nation's middle class. Bill Tucker now has more on the sobering statistics of this nation's middle class.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The assumption that in America each generation does better than the one before is being challenged. A Pew Charitable Trusts found working men today are making less money than their fathers a generation ago, 12 percent less. The Senate Finance Committee recently asked, can the middle class make ends meet? And the assessment was bleak.

ELIZABETH WARREN, HARVARD UNIVERSITY: Today's family has no savings and is spending money it doesn't have.

TUCKER: Americans savings rate in April, a negative 1.3 percent. The president has acknowledged that the wealthy are taking home a bigger slice of the pie. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The fact is that income inequality is real. It's been rising for more than 25 years.

TUCKER: And, of course, today, Americans have fewer children, more cars, and bigger homes than a generation ago, but the value of their home, their biggest asset is declining. One gauge of home prices showing the first nationwide decline in 16 years.

TERRY LOEBS, MACROMARKETS: The vast majority of a consumer's balance sheet is comprised of home equity, for most consumers in this country. And to the extent that they're feeling poorer, they're more inclined not to spend as much as they perhaps have in the past.

TUCKER: It may make some red-hot neighborhoods more affordable to new buyers, but it will hurt anyone looking to sell before retirement, or down size. At the same time, tuition prices are soaring according to the College Board, up 35 percent over the past five years. A UCLA study this spring found a college education, increasingly is the privilege of the rich, incoming college freshmen are more financially advantaged today than they had been at any point in the last 35 years.

(On camera): And then there's the shock of filling up the gas tank. According to the Lundberg Survey, gasoline prices are up an average $1 per gallon so far this year. Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: We're closing in on the beginning of tonight's Democratic presidential debate, now less than a half hour away. All of the candidates have now arrived, they're here; they're getting ready. And also here, and ready, our own distinguished panel, of political analysts, Ed Rollins, former White House political director, Republican strategist; Michael Goodwin from the "New York Daily News"; Pulitzer prize-winning columnist and Democratic strategist, Democratic National Committeeman Robert Zimmerman.

Ed, let me turn to you. The idea that these candidates can hold a debate tonight and not address those issues that are so critically important to our middle class, so important to working men and women, whether it is trade, whether it is skyrocketing public college -- public university costs, whether it is soaring healthcare, are these the issues that are going to galvanize the prospective voters?

ED ROLLINS, REPUBLICAN STRATEGIST: Certainly in a state like New Hampshire, that has always been a barometer, as I said earlier, it's a tax state, it's a state that's always had a lot of employment move out of it. And I think to a certain extent once you move away from the war, which everyone is concerned about, there is a lot of these middle class things that people are concerned about, here. A lot of Bostonians have moved to New Hampshire to get lower taxes.

DOBBS: Right.

ROLLINS: So I think these are critical issues. MICHAEL GOODWIN, "NEW YORK DAILY NEWS": Right, look, all over the country I think people are feeling the squeeze. Income inequality is growing. Sometimes there's a good side to that. A lot of people are really moving up, but there's clearly a kind of a permanent underclass. And the middle is sinking down in many cases.

And I think that is a concern. But, obviously, these are not easy questions. And so I think the Democrats, if they're going get beyond tonight, get beyond the platitudes, it will be interesting to see if they can do that.

DOBBS: Particularly the lower-tier candidates have to deal with those issues in your judgment?

GOODWIN: I think that would be a perfect opportunity for them to say something different. I think that one of the mistakes that candidates make like this, in this kind of group, is that they assume all Democratic voters are the same. Well, they're not.

I mean, labor is one issue. We talked about immigration earlier. They have a different point of view than other groups. The candidates have to try to focus on the issue and not the groups.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: But these issues with healthcare costs, issues of public education, issues of having a future as a young family, these are issues that will galvanize the electorate. And truly Democrats not only have to campaign on those issues, they've got to produce a record in this Congress that's going to be -- that's going to demonstrate their commitment to it.

DOBBS: Right. But you know, interestingly too, though, Robert, as Michael is suggesting, this cuts at least two ways here. Most of these candidates voted against President Bush's tax cuts, in this very -- as Ed Rollins suggested -- in this very tax-conscious state. That's going to be a difficult road for some of them to follow, isn't it?

ZIMMERMAN: Actually not, because most of the residents in this state didn't benefit from the tax cuts that George Bush provided. It went to the top 1 percent earners. And the Democrats can't be on the defensive over issues like tax cuts, because in terms of protecting the middle class --

DOBBS: Now, you know that a lot of people from New Hampshire are listening to you right now.

ZIMMERMAN: I hope they are, one of the benefits Democratic candidates have is that Karl Rove and George Bush have really so isolated the Republican Party from mainstream Republicans. You'll see a lot of them supporting the Democrats.

ROLLINS: You're hearing exactly what you are going to hear on the stage tonight. Basically --

ZIMMERMAN: These are some facts and statistics, Ed.

ROLLINS: Cutting taxes, letting you keep more of your money is wrong. Letting them spend your money is good and that's the -- let me just -- you had your piece.

And that's whether it's the will to do, or the middle class, or what have you, the more of your tax dollars you get to keep to invest or spend, benefits the economy.

ZIMMERMAN: What happened, Ed, is the Bush administration didn't cut taxes for the middle class. They just passed the tax burden down to state and local governments.

DOBBS: OK, so let's get to that issue. We're looking right now at a 33 percent approval rating, now five months into a new democratically led Congress. We are watching this Congress get hammered even more in these opinion polls than the previous Congress, which I think is historically one of the worst in terms of accomplishment -- I think, I know.

What in the world does that is a about Democratic leadership? And how much is what this Congress accomplishes -- democratically led -- Congress accomplishes or doesn't accomplish going play into the 2008 presidential election?

GOODWIN: I think quite a bit. I think right now we have a very impatient and somewhat unhappy electorate. And I think that the Democrats basically took Congress by beating up on George Bush. And don't forget, coming down the stretch you had Republican corruption scandals, that sort of thing. I think the Democrats, presumably at some point, in the next two years will have a scandal of their own. And they can find themselves in the --

DOBBS: Now we're projecting scandals?

(CROSS TALK)

ROLLINS: Always the optimist, Mike.

GOODWIN: No, but I think it's just likely. It happens virtually in everybody Congress sooner or later.

DOBBS: Right.

GOODWIN: So they've got to produce while they still have the opportunity, but these are very complicated issues. I don't mean to say they're easy.

DOBBS: Let's take complicated issues. These candidates tonight, Senator Clinton has to maintain her lead. Senator Obama has to regain what appears to be at least a paused momentum. Senator Edwards has to recharge his campaign because he is somewhat stalled, and in some cases slipping in the polls. For these three candidates, what do you expect here tonight?

ROLLINS: Well, I expect Obama to be more aggressive on Hillary. Edwards has been very anti-Clinton. He's got his populist message. And the reality is Hillary basically is the only one who, today, looks like a states person. And her weakness is the war. She's clearly got many positions on the war and she has to basically explain what she wants to do.

DOBBS: Before we continue that -- and I want each of you to address that issue. But it is curious to me that Senator Clinton seems to me to have been straightforward, if I may say this. She has said she voted on an issue, the war, in an entirely different direction than she would have had she known -- then -- what we all know now. Why isn't that a satisfactory response? Because it seems to me to be the one that is most commonsensical?

GOODWIN: And I think she's absolutely right about that. That was the right vote at the time. And, obviously, based on what we know now, no one would have voted that way.

But I think what has happened also, Lou, is in the meantime, particularly this year since she announced that she was running for president, she's taken basically a different position every month. She's had five different positions. She was for and against withdrawal, she was for and against cutting off the funding, and for and against the timetables. So she's been all over the lot this year. She wanted to cap the troops and then she dropped that idea.

So, I think what she needs to do tonight is be clear. What do you stand for? What do you believe about Iraq? What would you do as president about Iraq in full detail not just, I'll end the war. Because she has said we need to keep many troops there for a long time.

DOBBS: Robert Zimmerman is about to bust a button on this one.

ZIMMERMAN: As you well documented, I'm a Hillary Clinton supporter and proud of it. But putting that aside, Democrat --

DOBBS: But you're not a paid supporter in any way.

ZIMMERMAN: I'm not a paid supporter. I have no role in the campaign, just a supporter.

But the point here is for all these Democratic candidates they cannot be on the defensive in terms of discussing this war. Democrats are grappling with how to find the best choice out of this tragic situation that the Bush White House put us in the middle of. They're doing their best, Republicans in the Congress are joining them, but the issue is Democrats can't go into group therapy and try to debate a vote in 2002.

ROLLINS: It's not exactly --

ZIMMERMAN: Let me just finish my point, Ed.

ROLLINS: Absolutely.

DOBBS: You two are so gracious to one another.

ZIMMERMAN: The point is here, the winner of this debate and the winner in next election will be the one that can outline how to move forward. That's the challenge. ROLLINS: But the two front runners of this party, both sitting in the back in the shadows, as Senator Kennedy would say, waiting to be the last ones to vote to see whether Obama will vote yes, or whether Hillary will vote yes. To me, that's not an act of courage for two people running for commander in chief.

DOBBS: It will be in the profiles of courage, perhaps, for the presidential nomination race 2008.

ZIMMERMAN: The profile in courage is having the courage to change this mission and George Bush could take a lesson from that.

DOBBS: I think we have you on record. We're going to be back with more of Robert Zimmerman, on the record, and Michael Goodwin and Ed Rollins.

Coming up here next, there are plenty of votes up for grabs in New Hampshire and there will be for some time. This is a fiercely independent state. We'll have a report on the undecided constituency, in one of this nation's hottest political arenas, one of its most important. And, of course, we'll have more with this panel of gracious and conservative, reserved --

UNIDENTIFIED MALE: Independent minded.

DOBBS: constrained, not conservative, panel of political experts. We're less than 20 minutes away from the beginning of tonight's Democratic presidential debate. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: We have just about a quarter hour before the beginning of tonight's Democratic presidential debate. The small state of New Hampshire is a very big, very important stage for these presidential candidates. Traditionally, holding the first primaries for both the Democratic and Republican parties, it's an early, important indicator of who just may win their party's nomination. And as John King reports, the fight for New Hampshire is already in full swing.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice over): George Bruno is a living, breathing, cliche and proud of it.

GEORGE BRUNO, HNEW HAMPSHIRE DEMOCRATIC ACTIVIST: I'm in no rush. I'm enjoying meeting the candidates. And I'm trying to be helpful to a number of the candidates. And the upcoming debate, I think, will be extremely useful.

CROWD CHANTING: Hillary! Hillary! Hillary!

KING: It's all part of New Hampshire's quadrennial legend, or myth, depending on your perspective. Presidential hopefuls spend months courting local activists, looking for endorsements, and more importantly, a network of grassroots supporters.

KATHLEEN SULLIVAN, FMR. N.H. DEMOCRATIC CHAIRWOMAN: I am not one who believes that endorsements matter that much in New Hampshire.

KING: Easy for her to say. Kathleen Sullivan recently stepped down as New Hampshire Democratic chairwoman. She led the party to huge gains here, and is considered the most influential Democratic activist yet to pick a presidential candidate.

SULLIVAN: Big fish in a small pond, I don't know, maybe really little fish, really, in a big pond. I don't know about that, but --

KING: Media attention and TV ads play more of a role now, but former Governor Jean Shaheen -- who made her name as an activist back in 1984 when she helped Gary Hart to a stunning upset of former Vice President Walter Mondale -- says the old-fashioned approach can still make a difference.

JEANNE SHAHEEN (D), FMR. N.H. GOVERNOR: If you have someone's name who has a constituency, and who is willing to go out there and get that constituency fired up about the candidate, then it does make a difference.

KING: Which is why candidates they keep courting proven activists like Kathleen Sullivan and George Bruno.

BRUNO: We were on a campaign run, one day before he was president.

KING: Bruno was a big Bill Clinton guy here, back in 1992. He speaks fondly of Hillary Clinton, but -- insert virtual here -- says he's on the fence and listening.

BRUNO: My cell phone rang and it was Senator Obama. And so I pulled the car off to the road and we had a 10 or 12-minute chat about foreign policy. It's nice living in New Hampshire. New Hampshire is a good place to live.

(END VIDEOTAPE)

KING: As you can see, Lou, the activists here enjoy this ritual. They certainly enjoy the courting. I was asking people over the last few days, if you had a list of the top 100 Democratic activists in the state about how many are still free agents, out there to still be recruited and courted by the candidate? They said maybe 50 or 60, so maybe tonight's debate will help make up maybe a few minds, Lou.

DOBBS: As you go to a higher percentage. John, thank you very much. John King.

KING: Thank you.

DOBBS: We're back now with our panel, Ed Rollins, Michael Goodwin and Robert Zimmerman.

The idea that this state is so important, that Iowa, later, will be important or they may switch it around. New Hampshire won't like it much. But as this debate gets underway tonight, do you think that it's going to be persuasive to New Hampshire voters? ROLLINS: New Hampshire voters are the most -- first of all, everybody in New Hampshire has been a state senator, assemblyman, it's the most active political state. I've never quite understood it. It's nice to come here in June. Normally, you're here in January. Hawaii has four electoral votes. I always thought there should be a Hawaii primary in January, and do this in June.

This is the earliest debate, ever, that I can remember. And also one of the longest debates. So I think there are a lot of people that will pay attention here and a lot of people may make up their mind, not across the country, but certainly in this state, they may start choosing right now.

DOBBS: At least one of the things that viewers, and New Hampshire voters, but across the country, viewers tonight for the most part will not be struggling to decide, do you think, whether or not they're going to vote Republican or independent or Democrat in 2008. Is it likely that most of the people focusing here are Democrats?

GOODWIN: I would think so. I would think that they're the ones with the most at stake in a debate like tonight. Republicans will have their debate Tuesday night. But I think that this is a wonderful system when you think about it, it's long, it's arduous, and it's very difficult for the candidates, a lot of money, and crisscrossing.

But I think the fact that they have this entire year really to be heard on all these issues, we have this year to figure out where they stand. The voters have lots of opportunities to watch them, to see what they're doing. Here in New Hampshire it's still that retail (ph) of campaigning that matters. So I think it's a wonderful process, if people pay attention and force the candidates to give real answers and not just platitudes.

ZIMMERMAN: That's New Hampshire's history, the retail politics, the scrutiny these voters, independents and Democrats give the Democratic candidates is the best type of Q&A that I've seen in American politics.

They do it in town hall meetings. They do it in neighborhoods. In fact, there's a famous story of a woman saying, in an interview, I'm not sure about Bill Clinton he's only been to my home three times to visit me.

They are tough and demanding it makes for a stronger candidate and a stronger nominee at the end.

ROLLINS: One time, Mo Udall, years ago when he was running against Carter, he said I met you four times, are you going to vote for me? She said, "I never vote for any of them. It just encourages them."

(LAUGHTER)

DOBBS: Well, there's some truth to that. The people of New Hampshire are very -- they have a great deal of pride about their role in the process, for both parties. UNIDENTIFIED MALE: I think also, Lou, the fact that so many of them are independents. It forces the candidates to take a larger view. You can't just appeal to a small group in New Hampshire. The independent vote is crucial across America. It's a little bit different here, but I think basically when you speak to an independent voter in New Hampshire you could be speaking to one in Ohio or in Pennsylvania or in New Jersey.

DOBBS: Let me ask our leading Democrat and our leading Republican on this panel, how much you're concerned about the fact that a state like New Hampshire, 44 percent registered independents, and we see a rising number of people identifying themselves as independents.

How much of a concern is that to you as a Democrat, Robert?

ZIMMERMAN: Well, what concerns me about it is that I come from a state where if you're a registered Democrat you vote in the Democratic primary. And I worry about it breaking down the two-party system. As imperfect as it is, I think it is our strongest system. In New Hampshire their history -- the role of the independent voter has forced the candidates to address a broad array of issues. And I think that's significant.

DOBBS: Now, as a registered independent I have to say to you, it's not the independent breaking down the two-party system, it's the two parties, I would argue, breaking down the two-party system.

Ed, your perspective from the Republicans.

ROLLINS: It concerns me. Obviously, it means that my party is failing to attract moving away from them and becoming independents. And that's what's happening at this point in time. Somehow we have to get the independent vote back and that's what cost us in 2006, if we don't get them back, if we lose 60 percent of the independents in this presidential -- there's no way we can win.

ZIMMERMAN: New Hampshire is an interesting test, in a way, an interesting example. Because New Hampshire had a historic Democratic victory on the state and federal level in the 2006 election. It's a very tough scrutinizing voter, and it's going to require the candidates to really layout their programs.

GOODWIN: Well, I think also what happens, Lou, as the campaign moves on and as they move deeper into the system, deeper into other states, we have events, like Iraq, for example. Yesterday, the bust of the JFK terror plot. Those things, events are uncontrollable and unpredictable by definition. And they can upset the best plans in the state by state progression. So the candidates always have to have one eye on where they are, but another eye on the larger look at the whole nation as a whole.

ROLLINS: The other thing, you asked the other question, are New Hampshire voters going to be watching Democrats and Republicans. Every voter in this state will be talking about this debate tomorrow, Republican and Democrat. Every voter on Wednesday will be talking about the Republican. That's just the way they are. This is their sport. Every four years they look forward to it, they participate, they watch it closely.

ZIMMERMAN: It's also a good part of the economy, too. It will contribute to that here. You know it's really -- I marvel at the system and the impact that it does have. These early contests are very important because of the intense retail politics.

GOODWIN: Yeah. I mean, I think what we're all looking forward to, ultimately is winnowing down the field a bit. I think when you have eight candidates here, the Republicans will have 10, Fred Thompson would make it 11. So it gets a little unwieldy.

DOBBS: Well, you left out -- if you're going to say that then we have to talk about eight and possibly Al Gore here.

GOODWIN: Al Gore, yeah and Wes Clark hanging out, waiting to get in.

DOBBS: And others to be named later.

GOODWIN: I assumed Gore would not get in unless a few dropped out and the field got smaller and he had a better chance. Right now we're in the preliminary rounds. It's going to matter, but, still, this is the first inning of a long game.

ZIMMERMAN: It goes back to the point we talked about in the beginning of the program -- and I believe this very deeply -- with all of the Democrats relatively holding the holding the same positions on most of the key issues, what it will come down to in these early contests is which candidate can prove they can deliver, either by their record, or which candidate can prove they really have a vision for the future. And that's going to be a tough scrutiny, but that's what I think voters in this state, in particular are going to look for: Who can deliver? Who can produce and with interest (ph)?

ROLLINS: They also have some time tonight, which is interesting. We have a two-hour debate.

DOBBS: You bet.

ROLLINS: They'll have some time to talk so people can really make an impression.

DOBBS: And we've got Wolf Blitzer and Anderson Cooper and Larry King are going to hold them accountable here tonight. So we're just moments away from that.

We're going have more on tonight's debate, what you can expect with our political panel and debate -- as I said, just a few minutes away. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Welcome back. In just a few minutes the debate, the presidential Democratic presidential debate will be beginning here. And as you can -- if you can look over my shoulder there, you can see that all of the Democratic candidates have taken up their positions. And they're ready for what I know will be an energetic and vigorous questioning by my colleague, Wolf Blitzer, who will be moderating this debate.

We are here about our panel, Ed Rollins, what should we expect? What do you expect?

ROLLINS: I expect a very meaningful, opening remarks. I think that first impression is going to matter. I think they have worked on that pretty hard.

DOBBS: OK.

GOODWIN: I would like to see clear expressions on Iraq and the war on terror. I think it needs to be resolved. The leading candidates need to start acting like potential commanders in chief and not just primary candidates.

DOBBS: Robert?

ZIMMERMAN: I'm looking forward to a format that allows them and encourages them to answer the questions directly. That's got to be the challenge and that's got to be expected. I think that is going to be significant. I think what is also going to be worth observing is how each of these candidates can truly distinguish themselves. What issues they're going to focus on that will help them stand out.

Attacking each other will not work with registered Democrats. People want to see a united party and focus on who can beat George Bush most effectively.

GOODWIN: But I think -- just before the break, Robert said they all have more or less the same positions. I think that does not speak well of the Democratic Party. I think that's a weakness of the party, not a strength.

I would like to see them be a little tougher on each other, distinguish themselves on substantive issues, and not just all kind of be in a herd mentality on the major issues.

ZIMMERMAN: That's why, Mike, you're a journalist. And I'm delighted to see the Democrats united with, in fact, the majority of American people on most of the critical issues.

GOODWIN: By contrast the Republicans have a much more philosophically diverse field of candidates.

ZIMMERMAN: Well, I'm looking forward to Ed defending them.

(LAUGHTER)

ROLLINS: True, you are all very similar on all your positions, most of them wrong -- but that's OK.

(LAUGHTER) DOBBS: Republican strategist Ed Rollins reporting --

UNIDENTIFIED MALE: Objective analysis.

DOBBS: Let's get to what we're going to see here tonight. Is this debate going to make a difference in the minds -- you mentioned Democrats, Robert, I know those are closest to your heart, but the fact is more people are identifying themselves as independents than Democrats. Is this going to make a difference?

ROLLINS: I think it is. I think this is an important debate for the simple reason we're now going into summer, there won't be much other activity. I think the reality is people make an impression, and favorable one (INAUDIBLE).

GOODWIN: But I think, to stand out, each of them is going to say something other than just platitude, other than just I agree with John, I agree with Susie. They're going to need to need to say something different, and be sharp and be distinctive.

DOBBS: You mean, just like Robert Zimmerman and Ed Rollins.

(LAUGHTER)

GOODWIN: That's why they could win.

ZIMMERMAN: Every poll shows how closely the country is watching this next election. "Newsweek" had a poll where the overwhelming majority wanted the Bush administration to be over. People are worried about their future. They take this -- they are taking this election very seriously and they're very mobilized around it, in both camps.

ROLLINS: It's 597 more days, Robert, suffer.

(LAUGHTER)

ZIMMERMAN: I'm looking forward to it.

DOBBS: For those who have not been following Ed Rollins, 597 days refers to the number of day for which George W. Bush will retain the presidency.

Michael Goodwin, Ed Rollins, Ed Zimmerman, thank you.

Stay with CNN for the Democratic presidential debate here in Manchester, New Hampshire. CNN's coverage continues immediately following the debate as well. The candidates are all in place, as I said. The Democratic presidential candidates, they begin debating right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com

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