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THIS WEEK IN POLITICS

The Week's Political Events in Review

Aired July 27, 2008 - 14:00   ET

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


JOHN KING, HOST: At times this week, it looked like the presidential election was a done deal. Barack Obama might as well just head for the beach, wait for November. However, 100 days is a lifetime in politics. And John McCain has beaten worse. Still, there's no doubt that this week, he was up against a guy on a roll.
(BEGIN VIDEOTAPE)

KING (voice-over): For Barack Obama, this week could be summed up in a single phrase - nothing but net. Front lines...

UNIDENTIFIED MALE: Senator Obama left us feeling very well.

KING: ...to the Middle East to Europe.

BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: The people of Europe have formed a union of promise and prosperity.

KING: Candidate Obama was treated as if he was already President Obama.

OBAMA: You know, I think that that captures what I was trying to communicate.

KING: John McCain was reduced to satire. His staff said that reporters covering him were the JV squad left behind in America. But he kept on plugging away, addressing the economy.

JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We know that Americans are sitting around the kitchen table tonight figuring out whether they can keep their home or not.

KING: Saying a blessing from former President Bush.

GEORGE H.W. BUSH: He will an great president, I'm confident of that.

KING: And blasting his opponent for what he called playing politics on foreign policy.

MCCAIN: Apparently Senator Obama does not understand what's happening in Iraq or fails to acknowledge the success in Iraq, would rather lose a war than lose a campaign.

KING: But it seemed as if John McCain couldn't buy a break. Even a photo-op on an oil rig was upstaged by an oil spill. And no one could buy a backdrop like this. However, there are still 100 days to go. And as any athlete will tell you, no one hits the long shots three times.

(END VIDEOTAPE)

KING: So is it all over but the confetti and the balloons? Well, let's talk to two guys who have been there. Dan Bartlett has seen his share of tight races, even a recount during 14 years of working for George W. Bush. He joins us from Austin, Texas. And with me here in Washington is Joe Lockhart, who went through the thrill of victory with Bill Clinton after suffering the agony of defeat with Mike Dukakis and Fritz Mondale. Thank you both for joining us.

Dan, I want to start with you. 100 days until the election. The fundamentals overwhelmingly favor the Democrats and Barack Obama. So give me the headline of your memo to your friends in the McCain campaign. What are they doing wrong and what do they need to do to fix it?

DAN BARTLETT, FMR. COUNSELOR TO PRES. BUSH: Well, I think it's just the fact that you pointed out that with all the trends going for the Democrats, I think the Obama campaign has to be a little bit worried that had they're not outside three or four points of an advantage here. And I think there's some underlying concerns about the Obama candidacy, whether he really shares the values of most Americans, and whether he really has the experience and the tested leadership to deal with the world problems that our country face and the world expects the United States president to lead on.

So I think the McCain campaign has a real opportunity here to lay out a contrast between the experience, judgment, and policies and values of John McCain vis-a-vis Barack Obama. Obviously, the past week has been one in which there's been a lot of adoration towards Barack Obama on his trip overseas. Yet I don't think it's going to sustain itself. And I think there's some big issues that kind of revealed -- were revealed during this trip that they can be taken advantage, particularly that Barack Obama openly defied the wishes of United States General Commander David Petraeus on the ground. So I think there's an opportunity here. It is going to be tough, but it can be done.

KING: Well, let me jump in on that experience argument you're making. Joe, I want you to listen to something. One of the debates McCain makes is this guy's not ready to be president. And one of the examples they have used is his statement that he's going to sit down with Kim Jong Il of North Korea, with Ahmadinejad of Iran, and other what the government would consider to be rogue leaders around the world. But he seems to be retreating or recalibrating a little bit. Let's listen to Barack Obama then and now.

(BEGIN VIDEO CLIP)

OBAMA: I would meet without pre-conditions. I would at my time and choosing be willing to meet with any leader if I thought it would promote the national security interests of the United States of America. (END VIDEO CLIP)

KING: A recalibration to be polite, they're being less definitive, not I'll meet without pre-conditions?

JOE LOCKHART, FMR. CLINTON PRESS SECRETARY: You know, it's funny because Republicans say he doesn't have experience. And then when he demonstrates experience, they jump all over that. So that has to do with the candidacy that's working.

You know, I don't share Dan's view that there's a value gap. I think Barack Obama very much shares the value of Americans. And that's why he steamrolled through the Democratic primary. He's doing so well now.

I think people do look at him and say does he have the experience? And this was a big step this week. He went around the world. And it's not easy. These places that we're going to, and Dan knows this from traveling the world with the president, very complicated issues, very tricky situations. And Barack Obama performed flawlessly.

So I think it reflects both his experience, the fact that he's taken a big step to show that he can be a world leader, the president on a world stage, and the deficit the country faces. I was struck that John McCain met with George Bush 41 this week because there's such a contrast between 41 and 43. You know, 41 went and built world support when we went into Iraq to free Kuwait. That didn't happen. It's one of the reasons why the world has, you know, so shunned us.

Barack Obama, I think, went and did both of these things, showed that he could handle these issues, had the experience, and showed that -- sent a message to the rest of the world that America will be back and will be a partner again.

Well, Dan, you worked for George W. Bush and on the point we were just talking about, Barack Obama on pre-conditions, some would say that the current president of the United States is a player in this campaign in turning what McCain wanted to be a black and white debate. You do not sit down with these people. They are rogue nations. That's inexperience on Barack Obama's part.

Some say the Bush administration now is making it more gray because there was a meeting with Iran this week. There was a meeting -- Secretary Rice meeting with North Korea this. Not leader to leader, president to president, but some would say well, meetings obviously not such a bad thing. George W. Bush is doing it. Is he muddying the waters for John McCain here?

BARTLETT: I don't think so. And anybody who takes a close look at those situation both in North Korea and Iran vis-a-vis this president and this administration, there's a clear contrast between styles of diplomacy, which I'm sure Joe would argue is to their advantage. I would. And I think that being firm and resolute with dictators around the world is very important. And I think that distinction in this campaign going forward is going to be very important, as well.

One of the things that Joe points out that, yes, this was a "successful trip for Barack Obama oversea", the problem is that he's acting as if he's already been elected president. And I think people here back in our country are going to take issue with that, this kind of idea that he's been anointed president already, going around, giving speeches on foreign soil. I think this is going to be something that over time is not going to sick well with the American people.

KING: How do you answer that question? And one example that Republicans, and maybe this is silly or maybe it's not, but one of the Republicans say this guy is presumptive. He's putting the cart way out ahead of the horse. And that he's arrogant. They say he's all arrogant, all ego. He get a new campaign plane. It comes with an American flag emblazoned on the back. He has that painted over with the Obama logo. You know, in the blogosphere world we live in, that is spread like, you know, what is this guy's problem.

LOCKHART: Listen, I think when somebody has as a successful week like Barack Obama's had, people on the other side have to find something. They've got to say something. You can't just - you can't raise your hand and say hey, we just lost this week, we'll do better next week.

So I think there's a lot of nitpicking going on. And it doesn't do anything to diminish Barack Obama. He understands what he has to do in the next 100 days. He knows history. You know, I can remind him that I worked for Michael Dukakis and we were 25 points ahead at this point with 100 days to go.

KING: I remember that.

LOCKHART: And we lost going away. I don't think he believes he's won this. But I think he made it a very important point, which was not that he was president. It was that he's going to be a different kind of president if he's lucky enough to get elected, one that brings people together, one that actually cares about the opinions of Europe and specific and doesn't dictate. And that's why you saw the reaction to him, not that he - not some sort of arrogance, but a yearning I think from the rest of the world to work with this country again.

KING: We're about a out of time. Gentlemen, I want to put you on the spot. Dan Bartlett, you first. Who are the running mates for John McCain and Barack Obama?

BARTLETT: I'm just going to say this. It's not going to matter. These vice presidential candidate sweepstakes get way overblown. I think the debates in the fall are going to be far more consequential for this election than any vice presidential candidate. So I'm going to skip that. I don't think it'll happen. I don't think John McCain's going to make a selection before the Olympics. I think that's just a lot of hot air. I think he'll do it later in the campaign. It would not be wise to do it now.

KING: Do you want to punt or do you want to...

LOCKHART: Dan has stole my line since we've done this together before. We elect a president of the United States. You name me the last time a vice president carried the state, changed the dynamic of the race, and you're going back in history. And John, you're not that old. So I don't think it matters.

KING: Smartest thing said today on the program. John, you're not that old. Dan Bartlett in Austin, Joe Lockhart here, gentlemen, thank you very much for joining us.

And still to come, the view from inside the campaigns. A close look at the latest attempt to solve the meltdown in the nation's credit markets. And our five favorite ways to lose a campaign.

But first, a news flash about a candidate who just won't take you lose for an answer. Remember this guy? Supporters of the maverick Texas Congressman Ron Paul announced they had to rent a bigger arena for their three day rally for the republic they're holding just down the street from the Republican convention.

As you'd expect from the author of a bestselling book titled, "Revolution", tickets are a mere $17.76. We're going to sell a few tickets. We'll be right back.

(COMMERCIAL BREAK)

KING: Alicia Keyes there singing "Teenage Love Affair." Exactly what one critic accused us in the media of having with Barack Obama. We'll ask the McCain side about that in just a minute.

But first, let's turn to a man who has such a crush on Barack Obama. Way back at the beginning, he urged him to run saying don't worry about Hillary or anybody else, get in now.

Joining us from Capitol Hill is the national co-chair of the Obama campaign, Illinois Senator Dick Durbin.

Senator, thanks for joining us here on THIS WEEK IN POLITICS. I want to start with the Obama trip. A lot of press coverage. Some amazing pictures of the crowds in Germany in particular. And yet from the McCain campaign, a little bit of jealousy about that coverage, but also this argument made by Senator McCain himself. He says that Mr. Obama is a bit presumptuous, that maybe before going to Germany and giving that big speech, he should win the election first. Let's listen.

(BEGIN VIDEO CLIP)

MCCAIN: I'd love to give a speech in Germany to a political speech or a speech that maybe the German people would be interested in, but I'd much prefer to do it as president of the United States, rather than as a candidate for the office of presidency.

(END VIDEO CLIP) KING: Sour grapes there, Senator Durbin? Or is there some concern that some voters might look at this and say, hey, Mr. Obama, there's still an election here to be won?

SEN. DICK DURBIN, OBAMA NATIONAL CO-CHMN.: You know, Barack Obama understands that the first thing a president has to do is make sure America's safe. And when he visited Iraq and Afghanistan, and met with our troops, got a warm reception from them, sat down with the military leaders and talked about finally bringing the war in Iraq to a close, he was addressing a security issue which many Americans, myself included, think is one of the first responsibilities of the new president.

And then he visited our traditional allies to make certain they understood that if he's elected president, he will continue to count on them to keep America safe in the future. I think it was a good trip. It was good for Barack Obama. It was good for our country.

KING: When the surge was being debated on the Senate floor, Barack Obama said it was a reckless policy and it was an escalation that should not happen. On this trip, he said he met some of the troops who performed brilliantly in bringing down the levels of violence. Should he now say on the narrow point that the surge worked in reducing violence? Should he say that he was wrong to call it reckless?

DURBIN: I took the same approach he did. I thought the surge was not the right decision. But then when I visited Iraq and met with the troops, I didn't criticize them. I wouldn't. They were doing their duty and doing well. And they were bringing peace to the regions they were worked in.

The bottom line test of President Bush and John McCain's policy in Iraq is this. Are American troops coming home? Are we continuing to spend $12 billion to $15 billion a month in Iraq that could be spent in the United States to make us stronger? The surge was just a tactic. But when you look at the overall strategy that George Bush and John McCain have held on this war in Iraq, unfortunately, it's a war without end.

KING: Let's look at the final 100 days of this exciting campaign. Here back home, Barack Obama leads in most of the national polls by five, six points, somewhere around there. The fundamentals of the election certainly favor Obama and the Democrats.

But if you look at some of the polling, there are some warning signs. I want you to look at this. This from "The Wall Street Journal/NBC News poll." Who is the riskier choice for president? Riskier. 55% of the American people think Obama is the riskier choice. Only 35% say that about Senator McCain. And also which candidate has the background and values you identify with? 47% say Obama identifies with their values, shares a similar background. 58% say that with Senator McCain.

On those character questions, readiness questions, there does still seem to be some doubt about Senator Obama. DURBIN: Well, I think that as the campaign progresses, that's going to change. People are going to understand that Barack Obama does come to the presidency with a different background than most, but he certainly comes with a strong life experience, you know, having been raised by a single mom. His father left his family at the age of two, the struggles he's been through in life, working his way through college and then working in communities to improve the lives of people who were victims of our economy. I think people will understand that Barack Obama really will bring change to Washington.

Hard for us as political animals to believe that everyone doesn't follow every event, every day on the political scene, but as we draw closer to the election, and people get to see Barack Obama up close, I think they're going to realize he is the man who will bring real change to this nation.

KING: Let me ask -- follow-up on the question. On the question -- when you look at this, and you do look at it closely, on the risky question, how much of that do you think is a legitimate question? This guy's pretty new. I want to get to know him. I have some questions about him. He's a new comer on the national stage. How much of it is that? And how much of it do you worry is the race factor, that is the country really ready to elect an African-American president?

DURBIN: Well, I really believe America is ready to turn that page and make it clear that an African-American can be president of United States. But in terms of the risk factor, look at the trip he's just completed. There were many who questioned can Barack Obama really work with the U.S. military? And then they saw the reception by the military when he visited with him around the world.

They questioned whether or not he knew firsthand what we faced in Iraq and Afghanistan. Even John McCain raised that issue. But he was there on the ground meeting with the troops and the generals, working with our allies as he returned to the United States. I think Barack Obama is putting to rest many of the questions even John McCain has raised in this campaign.

KING: We're almost out of time, but in a sentence or two, when you meet with Barack Obama after this trip and you say 100 days, my friend, we can win this, if you address this one weakness, what is it?

DURBIN: Well, we have to close strong. We have to close on this economy. That's the number one issue on the minds of Americans. They know the Bush economic policies which John McCain supports have failed America. Working families are struggling to get by, to pay for gasoline and food and to make sure their mortgage payments are there and that their home values are maintained and their retirement's going to be there when they need it.

And then, of course, the whole issue of health care, ignored by the Bush administration, has to be front and center. So Barack Obama is going to come home, focus on those economic issues, laser like, as we prepare for our convention and the election. KING: 100 days to go. And we'll check in with you a few times between now and then. Senator Dick Durbin on Capitol Hill, thanks so much, sir.

DURBIN: Looking forward to it.

KING: And in a moment, we'll get the view from the McCain side. But first, let's put Senator Barack Obama's worldwind tour in some perspective. A somewhat twisted perspective of our weekly political side show.

(BEGIN VIDEOTAPE)

KING (voice-over): Do you think Barack Obama's trip to Iraq was a media circus? You ain't seen nothing yet. That's right, Heidi Montag, famous for her role in the MTV reality show "The Hills", and Spencer Pratt, famous for well, for Heidi Montag are planning a trip to support U.S. forces in Iraq and Afghanistan. They're reportedly getting help from Megan McCain, the daughter of GOP candidate John McCain. Spencer said, "Her dad definitely has some pull with the military."

HEIDI MONTAG: I'm excited.

KING: And British Prime Minister Gordon Brown was, indeed, stuck with activist Dan Glass. Glass, who protests climate change and the expansion of Heathrow Airport with group called no kidding, Plane Stupid, super glued himself to Brown while receiving an award.

DAN GLASS, PROTESTER: You may be able to shake my hand up your arm, but you can't run away from communities affected by climate change.

KING: Brown then proceeded, you guessed it, shake his hand off his arm.

UNIDENTIFIED MALE: It's bumpy. This is not 'Nam. This is bowling. There are rules.

KING: And it's a battle in the alley for the already slightly surreal Minnesota Senate race. Republican Norm Coleman has an ad with three bowlers talking about opponent Al Franken.

UNIDENTIFIED MALE: We've read all the stuff about Al Franken. Tasteless, sexist jokes and writing all that juicy porn.

KING: Juicy porn as they get a humor (INAUDIBLE) for tomorrow land of sex that Franken wrote for Playboy eight years ago.

UNIDENTIFIED MALE: He brought hockey back.

KING: Franken fired back with ad with another bowler, trying to find a reason to support Coleman.

UNIDENTIFIED MALE: He got hockey back. KING: And here we thought this race would calm down once Jesse Ventura announced he would rather surf than run for that Minnesota Senate seat.

JESSE VENTURA: Surfing versus the Senate.

KING: We'll be back on the next wave.

(COMMERCIAL BREAK)

KING: Going to be tough for anyone to prove that this was a good week for John McCain, but we fully expect our next guest to give it the old college try. And who knows? Maybe he'll convince us.

Tucker Bounds is the national spokesman for the McCain campaign and he joins us now from McCain headquarters. Tucker, thank you. Let's start with Obama's trip. It dominated the headlines this past week. And there were many in your campaign and in the Republican party saying who's this guy think he is? He's not president yet. He's acting like a president. He's being presumptuous. Well, our Candy Crowley put that question to Barack Obama. I want you to listen to his answer.

(BEGIN VIDEO CLIP)

OBAMA: I would point out that John McCain after he won the nomination met with all the leaders that I'm meeting with, that he's made speeches in Colombia, and Canada, and Mexico. So it would be -- I'd be hard pressed to find a big difference between what I've done over the last week and what John McCain has been doing since he won the nomination.

CANDY CROWLEY, CNN CORRESPONDENT: You got more attention.

OBAMA: I did.

(END VIDEO CLIP)

KING: He's gloating at all the attention there at the end there, but does he have a point on the substance, McCain and Obama doing pretty much the same thing traveling the world?

TUCKER BOUNDS, MCCAIN NATIONAL SPOKESMAN: Well, actually, he may have a point, but not on the substance, John. I think it's telling that examples that he cited about Senator McCain's meetings are people that he hasn't met with.

In fact, he's never met with President Ribay (ph) in Colombia as John McCain has. He has still yet to take a trip to Mexico City to have those meetings there. And his relationship with Canada I think took a turbulent roll through the primaries.

So I think actually if you're to look at the experience of both candidates, that there are very telling differences. These meetings that Barack Obama had taken throughout the week were a lot of meetings that John McCain was making for the fifth, sixth, or seventh time in many cases. And these were his first meetings.

So to compare them on the substance, we think, is really incomparable. I think voters are going to know that there are two candidates in this race, one that has the experience and the understanding of our allied relationships and international affairs. And then there's Barack Obama.

KING: Well, one more quick question on the trip. Senator McCain had said for months well, he's never even met with General Petraeus, never had a face to face with General Petraeous. He's had that meeting now. And he said he liked General Petraeus. He respected General Petraeus, thought he was very smart guy, but he also says that he will continue with his plan to have the troops out of Iraq, combat troops out in roughly 16 months. What do you make of that meeting?

BOUNDS: Well, after his meeting, he was quick to admit that General Petraeus didn't agree necessarily with the rigid time line that Barack Obama had put forward. And we think it's something that needs and deserves greater attention.

If Barack Obama is talking about a responsible position, he has to talk about being flexible, which is what General David Petraeus has always said, which is what the Iraqi government has always said, and it's what our principal military leaders have always said, which is we need to have enough flexibility where we can put together a plan that returns our troops home, reduces troops, just as John McCain has advocated, which is as long as you have the security and the stability of the country, let's go ahead and reduce those troops, but let's bring them home with victory and honor.

And Barack Obama's plan has all sorts of inclusions, but none of which are rigid, victory, and honor requirements, which is what we're looking for.

KING: All right.

BOUNDS: We've gone all this way. Let's make sure we bring those troops home with the victory they deserve.

KING: Let's move on to some of your challenges in the 100 days remaining in this campaign. A Pew Center poll out this week shows stunning numbers among Hispanic voters in the country. Here's the horse race.

For Obama, 66% of Hispanic voters at this juncture, only 23% for John McCain. You ask them their favorable rating, 76% of Hispanic voters have a favorable impression of Barack Obama. Only 44% a favorable impression of John McCain. Tucker Bounds, how do you win an election, can you win an election unless you turn those numbers around?

BOUNDS: Well, John, those are important numbers, but they're only important at the end race, not in July, which is something we're taking comfort in. John McCain has been an experienced leader, who's shown that he will take on his own party in the interest of our country in order to put together real immigration reform. That's something Barack Obama can't say.

And we think that as we reach out to Hispanic voters and explain the facts of how the immigration debate is playing, John McCain's long experience as a border state senator and his real in-depth knowledge of these issues that are important to them, we think we're going to made real inroads on that number. Again, it's just July. This election takes place in November no matter how much Barack Obama might wish it was the other way around.

KING: One quick question in closing, Tucker Bounds. Sometimes it appears the communication staff isn't talking to the candidate. One of your colleagues went on television and said Barack Obama's trip was political. John McCain said a couple hours later, no, I don't think this is political. There was a report yesterday Barack Obama already had a transition team. There was outrage from the campaign and the Republicans saying how presumptuous of this guy. Then your candidate said well, it's close to the election. Any responsible candidate would have a transition team. Does your candidate not always follow the communication strategy?

BOUNDS: Well, what the candidate always does is take the reform principle position that voters expect. And there is a lot of chattering class that's going in Washington that are going to make their conclusions about the best way for to us talk about things.

But the best way that we've learned to talk about things is what John McCain says on the campaign trail is what matches his record. And he has consistently been on the side of reform and changing Washington.

We feel like we couldn't have a better candidate going into the general election than John McCain because he has the experience, the record, and the understanding of the issues to change the way business is done in Washington, to get our economy up and going, to reduce the price of energy, gas prices, keep us secure. We feel very good about his experience. And our message will speak for itself. John McCain believes in reform, prosperity, and peace. We're going to talk about it all the way to election day.

KING: A little bit of spin there at the end, Tucker Bounds, but that's what we expect from our campaign insiders. Tucker, thanks so much for joining us today on THIS WEEK IN POLITICS.

And coming up next, two political pros with all the answers. But remember, one of them must have most if not all of those answers wrong. Someone's got to win. And speaking of wrong, several new ways to pick a president in our weekly look at viral videos.

Detroit Octane from 236.com with this new video when the voting gets tough. But voting is for wimps. It could give the White House to the winner of one of those Japanese style TV game shows like ABC's "Wipeout." Watch out for that domestic oil challenge.

Or if that's too extreme, jibjab.com creates a dance off. Obama and the Democrats against the classical steps of John McCain and President Bush. Hey, it's this or another 100 days of speeches. Think about it. We'll be right back.

(COMMERCIAL BREAK)

KING: The legendary reggae artist Jimmy Cliff there said it all. The harder they come, the harder they fall. So will that happen now for Barack Obama? Yes, treat him like a rock star abroad, but he's still tied in the polls. And a lot can happen in the next 100 days.

I'm joined by two political strategists who know just how hard it is to stay out in front. Jennifer Palmieri, the former press secretary for Democrat John Edwards, also did some time in the Clinton White House. And Kevin Madden, who pulled the same duty, press secretary for Republican Mitt Romney and has been in many battles up on Capitol Hill.

Thank you both for joining us. I want to start with the Obama trip. A lot of attention, wow, if you look at the pictures, but some are picking apart the substance and saying what's this guy doing? And let's start with the surge. Barack Obama on this trip met with General Petraeus for the first time, did get a glimpse of what's going on in Iraq, met with the Iraqi government. I want you to listen to Barack Obama then and now on the wisdom of the surge.

(BEGIN VIDEO CLIP)

OBAMA: The responsible course of action of the United States, for Iraq, and for our troops, is to oppose this reckless escalation and to pursue a new policy. Our troops have performed brilliantly in lowering the level of violence.

(END VIDEO CLIP)

KING: So Jennifer Palmieri, how does the Democrats square that one, that reckless policy as he called it has under that policy, the troops have performed brilliantly in lowering the violence.

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS: I think what he has - what he said, and I think which is probably true, but the surge has found which is that if you want to keep 140,000, 150,000 American troops in Iraq, spend $8 billion to $10 billion a month, you can keep the level of violence low.

The point is that's not what the long term strategy should be or what the American people want. I mean, there is - you know, he has said that there's reduction of violence, but the point is, so, therefore, what? Therefore, do we stay forever doing that?

And it's not as if the American people, it's what the public wants to hear from Obama. It's not as if they think the surge worked and, therefore, we should keep at that level of troops. I just don't think that, you know, it's a godship people are trying to drive him into the present terms of answering that question, put him on position, but I don't think that it's actually a real issue.

KEVIN MADDEN, GLOVER PARK GROUP: Well, look, I think we have to look at who should get credit for the surge. And ultimately, politically, John McCain has to get credit for it because he helped, you know, design it. And I think the generals on the ground and the troops on the ground have to get credit for it.

They've done the work that has needed to be done in order to help political progress there as well as military progress. And yet in the face of all that evidence, Barack Obama still will not embrace it. And I think that goes to the heart of judgment. And it goes to the heart of readiness. How can somebody go against the generals on the ground who are continuing to advocate for that policy and instead call for an unconditional withdrawal? And that again goes to judgment. And that's the argument that John McCain is going it hammer home in the next 100 days.

PALMIERI: I think that's what the McCain camp wanted to have happen when McCain -- when Obama went to Iraq. I think they were hoping he's going to seem unprepared, he's going to seem overwhelmed, not understand what's actually happening.

And instead, he got there and Maliki said - basically said I think that the U.S. should withdraw on the same time table as Senator Obama. And I don't think anyone even the Obama campaign expected that that would happen.

And so, you know, this ultimate disconnect for Obama. The American people agree with him that we shouldn't have had the war and they agree with him that we should leave, but McCain still does better this terms of who do you think can handle Iraq. And I wonder, is the best case scenario now for the Obama campaign is that people see Obama went over there, he handled himself well, Maliki agreed with him, and maybe...

MADDEN: That goes right to the heart of my argument is that the readiness factor is that -- what ultimately the images coming out of that trip are very good. But the substance is where the McCain campaign's going to hammer home. And they're going to be able to paint him as absolutely not ready and not having the right judgment because he's calling for an unconditional withdrawal which is at odds with exactly what the military commanders on the ground believe.

KING: Let's move on to a different issue. As part of the trip, the McCain campaign was apoplectic. The network anchors go over there to interview him. There's all this what they consider to be fawning press coverage, to the point that the McCain campaign put this cute little video up. Why don't you listen to a bit of it?

(BEGIN VIDEO CLIP)

MUSIC: You're just too good to be true, can't take my eyes off of you.

KATIE COURIC: Barack Obama.

BRIAN WILLIAMS: Barack Obama.

CHARLIE GIBSON: Barack Obama. TOM FOREMAN: The three broadcast network anchors will travel halfway around the world lured by an offer of interviews with the candidates.

(END VIDEO CLIP)

KING: Kevin, I want to go to this one to you first because during the primary campaign, a lot of the other campaigns including the Romney campaign said, dear, God, why is the press so in love with John McCain? Why can't we break through? Pretty ironic for John McCain to be saying hey...

MADDEN: I'll never forget New Hampshire, going up against the earned media juggernaut of the McCain campaign was like going against the 527. I mean, they were very good at cultivating relationships with the press.

Look, I think the press goes where a story is. And the story here was -- it was magnified by the fact that this is an overseas trip by a political candidate. The reason I think it went very well was because not only did Barack Obama recognize mistakes, the high stakes, he embraced it. And you know, he -- the idea that can you make this as a political trip is absurd. Everybody knew that it was going to be a political trip. And I think the reason that it was successful, from an image standpoint, was that the Obama campaign embraced that. And they lived up to the expectations. And you know, quite frankly, I mean, the press went there probably looking to cover a gaffe as quickly as they covered a success.

KING: Right. So let's talk, it's close, on the electoral college. Barack Obama has this amazing press coverage image wise, whether it's deserved or not, we'll leave for another day, but he has a great week...

PALMIERI: Right.

KING: ...from the images. He goes to Iraq, he goes to Afghanistan, he goes to Europe. And yet, if you come back here to the good old U.S. of A and look at the race from an electoral college standpoint...

PALMIERI: Sure.

KING: New polls out this week showing closer in Colorado, Minnesota, Michigan, Wisconsin. Four swing states all moving toward McCain since the last poll. Why is Barack Obama having a hard time closing the sale?

PALMIERI: Well, I think it's still - I mean, it is July, after all. I do think that he will go back to the States particularly that you named, and that there are places that often some of those places are places we don't normally do well, Colorado, Arizona, places that are now battle grounds.

And I think that he - there'll probably be - there may be a little bit of a bounce from this other -- from the Europe trip, but you know, he's in a really strong position.

KING: Headlines in Der Spiegel Berlin are not as good as headlines that John McCain's getting in places like Columbus, Ohio.

PALMIERI: But the thing is that -- but Obama's problem has always been what's his vulnerability.

MADDEN: Inexperience.

PALMIERI: Inexperience and not being able to handle national security. So I think while I'm sure there's plenty of field people that work for Barack Obama, they're screaming about when's our candidate coming back to the United States, I think that spending that amount of time, having that successful of a trip is probably...

KING: Sunday's the answer. Sunday is the answer. He's coming back to the United States.

We need to call it quits there for now. Jennifer Palmieri, Kevin Madden, thanks for coming in with us.

And in just a moment, we'll ask Senator Christopher Dodd whether Congress has the right remedy to stop deflation in the U.S. housing market. But first, the inside story of how John McCain ended up being grilled about well, you might say a very different cure for deflation. Carly Fiorina tells Dana Bash why tough questions about Viagra came out of a serious discussion of choice in health insurance.

(BEGIN VIDEO CLIP)

CARLY FIORINA, MCCAIN SUPPORTER: In some ways, I'm quite surprised it caused such a flap. I mean, all you have to do is watch your network CNN and see endless ad after ad after ad for what we are euphemistically calling, you know, male enhancement. But I understand that it perhaps was too memorable an example.

(COMMERCIAL BREAK)

KING: With mortgage rates rising right along with foreclosures, Congress and the White House put politics aside to craft a multi- billion dollar rescue for both homeowners and mortgage lenders. One observer called it "the most important piece of housing legislation in a generation." Of course, he might be a little biased. That quote is from the man leading the fight for the bill up in the Senate. Connecticut Democratic Senator Chris Dodd joins us now from Capitol Hill.

Senator, let's look at some of the details of this bill. Here's among the provisions. It would give cash to Fannie Mae and Freddie Mac. It would give homeowners help to refinance and avoid foreclosure. It would give grants to states to buy foreclosed property. It would offer a tax break for first time home buyers.

I want to ask you this fundamental question many would have about fairness. Why should somebody who has lived within their means, read the fine print on their mortgage, and not borrowed more than they can afford now have their tax dollars used to bail out families who I understand are struggling, but who may have bit too big, if you will, borrowed more than they could afford, or not taken the time to read their mortgage documents? Why should those people be bailed out?

SEN. CHRIS DODD (D), CONNECTICUT: Well, it's -- put it this way, John. Your -- first of all, the overwhelming majority of these people we're talking about were lured into mortgages by unscrupulous brokers and dealers, who frankly knew these people could never afford to pay the fully indexed cost of these mortgages. In fact, "The Wall Street Journal" has pointed out that over 60% of subprime borrowers actually qualified for conventional mortgages but were told they didn't. They actually would have saved their money, they'd be in far better shape today.

But put that argument aside. There are about 8,000 to 9,000 people every single day in this country that are getting foreclosure notices. For every one of those, there are 16,000 people who live next door to that potentially foreclosed property. And while you may be angry about your neighbor getting a deal that you're not able to get at this point here, remember this, it's watching your home value decline if there's a foreclosed sign on the house next door to you.

We know that in every neighborhood on a square block, one foreclosed property reduces the value of every other home in that block that day by a minimum of 1%. Crime rates go up by at least 2%. So there's a contagion effect of all this. And I understand the moral hazard and some of the frustrations that people feel, but it's in everyone's interests to try and keep people in their homes where we can. Everyone benefits if we do that.

KING: So, senator, help me understand. If I'm watching the program, I'm a family of four, I am in this dire mess that the bill addresses, what are the nuts and bolts for me? How do I get the help? And how will it help me?

DODD: Well, the nuts and bolts are, first of all, you have to be in that distressed situation. And that's - and if people feel as though they are, they probably are. If your behind and on your last mortgage or last two, it's time to get in touch with that lender right away. Don't avoid getting in touch with them.

And then they can work out an arrangement where they can put in you a mortgage that you can afford. But it's all voluntary. The lender has to be willing to do this as well.

Now let me tell you as a borrower, you're going to have to pay the insurance FHA on this. And part of that increased equity that will accrue over time you're going to have to pay back to the government for in a sense standing up and supporting a program here that allowed to you stay in the home. So it's not free ride. The borrower isn't get allege free lift here. You're going to cost you to do it, but you get to keep your home.

The lender isn't going to get zero payment from that borrower because that for a borrower will stay in that home under a newly worked out mortgage. And that's -- they're going to pay a price as well, but they don't end up losing everything.

KING: So Senator, this is a big deal. You have 2 candidates for president saying bipartisanship is a good thing. You have an instance here where the president of the United States, who hasn't always gotten along with the Democrats on Capital Hill, drops a veto threat...

DODD: Right.

KING: ...and says I will sign this legislation. So you would think, good, it's a bipartisan moment.

Your leader, Harry Reid, says this. "It's about time the president finally drops his stubborn opposition to this important bill and finally realizes that the Democrats long have, that we must act immediately." Why the about time stubborn opposition? Why not take an opportunity to say, thank you, Mr. President, thank you. Let's try to work on something else?

DODD: Well, you picked the phrase you liked, John. And yesterday on the floor, a speech on the floor of the Senate, I did just that, I thanked the president.

But it's important to point out as well, John, in fairness here, this problem didn't start a few weeks ago. A year and a half ago, we sat down and urged the administration and others to step up and take more aggressive action. They just sort of dismissed this problem as one that would go away, that was already be corrected, things were getting better.

That happy talk went on for about a year. In fact, it included up and through this spring when veto threats on this bill. Now I welcome the president's change of mind in all of this. And I'm particularly grateful to Richard Shelby, my Republican counterpart, and eight out of the ten Republicans on the banking committee who supported this bipartisan bill.

But they had to do so, I might point out to you, with the opposition of the administration all during this process. Now we welcome a conversion on the road to this final passage, but it's a little late in coming.

KING: All right, so we will celebrate this bipartisan moment, but by the sound of that, it doesn't sound like we should expect too many more.

DODD: Well, we hope so.

KING: Democratic Senator Christopher Dodd of Connecticut, sir, thanks for joining us.

DODD: Thank you, John.

KING: Take care, sir. And when with come back, fast track, everything you need to know to know to survive the next week in politics. And late-night laughs, where the best in the business take a shot at this week's politics. Here's a sample.

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "THE TONIGHT SHOW": Well, in political news, there was a huge reception for Barack Obama in the Middle East this past weekend. People were screaming, chasing him, hanging on his every word. And that was just the U.S. press corps. That was unbelievable.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Time now for "fast track", a look ahead at some stories likely to dominate the political discussion next week. Joining us, our senior political analyst Bill Schneider.

Bill, let's start at the White House. President Bush to sit down with Pakistan's prime minister this week. What's on the agenda?

BILL SCHNEIDER: What's on the agenda is $230 million dollars in aid money to Pakistan that the administration plans to allow Pakistan to use to upgrade its old F-16 fighter jets. A lot of Democrats in Congress are complaining. They're saying wait a minute, you don't use F-16 fighter jets to fight al Qaeda and the Taliban. They're used to improve your military posture against India.

KING: Look, a reminder we have to keep an eye on this president while we watch the campaign to see who comes next.

And on that front, John McCain, a big barbecue out at his Arizona ranch this weekend. My invitation is buried somewhere. What's going on there?

SCHNEIDER: Well, everyone's looking at the guest list and they're going to be watching that barbecue to see who gets a lot of quality time with John McCain. He could name his vice president in the next two weeks. They're are all kinds of rumors, because after the two next slow news weeks, you've got two weeks of the Olympics, followed immediately by the Democratic convention, followed immediately by the Republican convention. So people expect it could happen in the next few weeks.

KING: McCain looking for a running mate. There are also reports that Barack Obama's measuring the drapes at the White House already.

SCHNEIDER: That's right. Is that presumptuous or is it prudent? Well, maybe Barack Obama, who's already reported to be planning his transition team, maybe he believes the reports from the economic forecasters who say the forces surrounding this election, the president's unpopularity, the economy, war weariness are so powerful, that a Democratic victory is inevitable. Campaigns, candidates, they don't matter.

Well, if we believe the economic forecasters, we'd all be rich. KING: Maybe a little bit of the cart before the horse there. Bill Schneider, thanks so much for joining us. And from "fast track" now to this week's installment of late-night laughs.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It doesn't get a lot of coverage, but America is still fighting the war on terror. It'd probably be bigger news if the war gave birth to twins. Iran and Syria? How adorable would that be?

JAY LENO: I don't want to say McCain is running a lackluster campaign, but his Secret Service code name is Bob Dole.

JON STEWART: You know, I got to tell you, there's something about a charismatic leader rallying huge crowds of Germans in a large public square. It just gives you goose steps - bumps.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: In the good old days, you know, before air conditioning and 24 hour cable news, presidential campaigns didn't get going until after Labor Day, leading some 60 days to fight it out. We've been talking about 100 days (INAUDIBLE) or more often to lose an election.

John F. Kennedy, for example, looked cool as Richard Nixon sweated under the lights of the first TV debate ever, September 29th, 1960. Gerald Ford declared that Poland wasn't dominated by the Soviet Union in early October 1976. He might have lost to Jimmy Carter anyway, but it sure didn't help. In 1988, Michael Dukakis took that infamous tank ride in mid September. In the equally infamous Willie Horton ad ran in mid October.

Almost one out of five voters picked Ross Perot back in 1992. That was a record for a third party candidate. And he didn't officially throw his hat into the ring until October. And finally, the Swift Boat Veterans for Truth began running ads against John Kerry in August of 2004, ads ridiculing Kerry's windsurfing vacation rolled out in late September and the waves began to break for George W. Bush.

So have hope. This campaign is far from over. But that's it for THIS WEEK IN POLITICS. I'm John King. Thanks for watching. Straight ahead, "LOU DOBBS THIS WEEK."

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