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State of the Union

Interview with Michael Nutter; Interview with Reince Priebus

Aired October 07, 2012 - 09:00   ET


CANDY CROWLEY, CNN ANCHOR: Denver in the rearview mirror as the campaign trail leads to Danville, Kentucky and the men who would be just a heartbeat away.

Today this week's VP debate: the young gun Republican versus the veteran Democrat.


JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: All those policies in a mere eight years, they doubled the national debt.

PAUL RYAN, (R) VICE PRESIDENTIAL CANDIDATE: Mitt and I are going to take on this challenge. We're going to confront this debt crisis. We're going to fix this problem.


CROWLEY: A preview of Ryan versus Biden through the prism of friends Republican Party chairman Reince Priebus and then Philadelphia Mayor Michael Nutter.





CROWLEY: And sizing up the crown jewel of battle grounds with Ohio state attorney general Mike Dewine and former Ohio Governor Ted Strickland.

Plus, the politics of numbers explaining the jobs report and weighing its impact with Moody's analytics chief economist Mark Zandi, former congressional budget director Douglas Holtz-Eakin, New York Times White House correspondent Jackie Collins, and CNN's chief White House correspondent Jessica Yellin.

I'm Candy Crowley. And this is State of the Union.

It was not unanimous, but there was overwhelming consensus among viewers and pundits that Mitt Romney shined in Denver's debate season opener and the president did not. The New Yorker magazine summed it up with a cover cartoon of Romney debating an empty chair, the captain "Mitt Stands Alone."

Campaigns are only as good as their last news cycle, so on to Danville, Kentucky, and Thursday night's battle of the number twos.

Joining me now are Philadelphia mayor Michael Nutter, a long-time friend of Joe Biden, and Republican Party chairman Reince Priebus, a confidant of Paul Ryan and a fellow cheese head. Mayor Nutter, stand by with me a minute, and I want to get to the party chairman, and we'll be back with you.

Mr. Chairman, thank you for joining us. I want to talk about the great burden of great expectations. There was a CNN/ORC poll, and we said who is going to win the vice presidential debate? And the answer was Biden, 39 percent, Ryan, 55 percent. So in many ways this mirrors what happened to the presidential debate. Everyone thought President Obama would win. So there's great expectations here for Ryan.

How much of a microscope do you think there will be on him?

PRIEBUS: Well, I'm not so sure about that. I mean, I don't dispute your polling there, but I think most people understand that Joe Biden has been debating for a long time, I mean, since the early 1900s he has been debating.

CROWLEY: This is a smart young man that he is debating. And he knows his stuff.

PRIEBUS: Right. Right. I think what you see, though, in some of that polling is that some of the, you know, Joe Biden as of late put his foot in his mouth a few times in very public ways. I mean, he said that the middle class was crushed under, you know, the policies of Obama and Biden, and he said some things that were problematic.

However, Paul is a smart guy. He has committed his life to understanding the problems of our economy, presenting a plan for the American people, so I think that Paul is going to do - he's going to do a great job, but I also think it's very important for people to understand, and I think people realize that Joe Biden is a gifted or orator. He is very good at rhetoric, and I think is he very relatable. So I think they are very two different people. And I think it's going to be a great night.

CROWLEY: Have you talked to Ryan at all about his debate performance, what he needs to do, that kind of thing?

PRIEBUS: Well, sure.

I mean, Paul is one of my very good friends. I talk to Paul all the time about a lot of different things, But, you know, I think he is taking it very seriously. He's prepared. But...

CROWLEY: Nervous?

PRIEBUS: Well, sure. I think people - you know, I think both parties should be nervous. I mean, it's a big night. It's a big -- it's always going to be a big night. CROWLEY: Do you think it makes a difference? I mean, there are a lot of people who say, look, VP debates, they're just - they're a side show. It's all about these top guys. Do you think that Ryan has to keep the momentum going from what was widely seen as a Mitt Romney win in Denver? PRIEBUS: We had a good week last week. There's no doubt about it. We have to have a good week this week and the week after. So I think we take it one day at a time.

You know, I don't know, I think that the VP debates are very important. You saw in our presidential primary season, Candy. I mean, we had, what, 22 debates. And at every one of these debates, whether it was on CNN or on Fox or whatever the station, we had broken records for a primary debate. People enjoy these debates. I would expect a lot of people to be watching. And I think Paul is going to do a great job, but I also think that Joe Biden is incredibly gifted when it comes to debating and understanding policy. And he is a good orator.

CROWLEY: Let me ask you about - there's a Colorado poll that came out - University of Denver poll that came out right after the debates, and it shows that Colorado is certainly a swing state, kind of shrinking. The lead of Barack Obama 47 percent, Mitt Romney, 43 percent. I want you to focus on this, someone else 4 percent.

How worried are you about the fact that Gary Johnson, as you know is a libertarian candidate, is probably going to be on all 50 ballots, and the conventional wisdom is he is going to draw from Mitt Romney. It makes a difference in Colorado. It makes a difference in Virginia. It will make a difference in North Carolina. Does that worry you?

PRIEBUS: No, it doesn't worry me.

CROWLEY: Really?

PRIEBUS: Because I think people understand that they're not going to throw their vote away when we have an election here that's about the future of America. So I don't see that happening, Candy.

You know, this was a widely debated thing in 1980 with John Anderson, Gary Johnson is nowhere where...

CROWLEY: Sure, but Ross Perot made a difference.


CROWLEY: I think if you talk to the Bush campaign, they think that Ross Perot is why they lost.

PRIEBUS: Right. But we don't have a third party candidate anywhere near the name recognition or the popularity of Ross Perot or John Anderson. I just don't see that happening. In fact, I see that it's almost a nonfactor, so I'm not worried about it.

CROWLEY: Let me ask you about the new economic figures that came out. Unemployment dipped below 8 percent, something I'm sure Republicans celebrate as well. But does it not undercut what has been the central theme of the Republican campaign which was that he has made the economy worse because we are right down looking at an unemployment rate after a really horrible year which you can't blame President Obama for in totality, his first year when he sort of did inherit this big mess, now it's down to 7.8%. Doesn't that show that he is on the right trajectory and kind of undermine the central argument for you?

PRIEBUS: Oh, I don't think so.

You know, it's like this, Candy, if you are getting blown out in a football game but you are scoring field goals once a quarter, you can't point to the three points every quarter and say at least we're scoring some points, you're still getting clobbered.

I mean, the fact of the matter is the president and Joe Biden are getting clobbered on the policies that they put in place. They promised we'd be a heck of a lot better off than we are today. We're nowhere close.

I was in Wisconsin yesterday. I've been in Ohio practically every other day. I'll tell you what, people in Kenosha, Wisconsin, and Lanman (ph), Ohio don't feel better off today than they were four years ago, and they don't think this president has been very good at following through on his promises. That's what this is going to come down to. And I'll tell you what, last week you saw the difference, an unfiltered Mitt Romney and an unfiltered Barack Obama. You saw inspiration, heart, preparedness from Mitt Romney, and you saw a president that came in unprepared, uninspiring.

You know what, maybe Clint Eastwood was right, and I think that's what the American people saw last week.

CROWLEY: Let me ask you about the -- we have some idea of the Democrat's fundraising in September, the totality, the re-election campaign as well as the Democratic Committee, $181 million in September. That's 1.8 million individual donors, 567,000, more than half a million first-time donors, average donation $53. That's a pretty impressive number. Are you going to match it?

PRIEBUS: I don't know if we're going to match it, but it is an impressive number.

CROWLEY: Are you close?

PRIEBUS: I can't tell you that right now. But I will say this I think we all understand that this race isn't going to come down to money, because we've been very competitive. And by the way if you roll the tape, I have been calling -- I have been saying that President Obama is going to raise $1 billion for a year and a half. Remember we called him the billion dollar president. Well -- so it's no surprise to us. And I think we've surprised them by how well we've done at fundraising.

But look this isn't going to come down to money. This is going to come down to heart. This is going to come down to work on the ground, plans, and I think the fact that this president didn't fulfill his promises, that will undo him. And we'll beat them on the ground and we'll have all the money we need to be competitive. CROWLEY: Republican Party chairman Reince Priebus, thanks for joining us.

PRIEBUS: Thank you.

CROWLEY: Next up, I'll talk with Vice President Biden's good friend Philadelphia Mayor Michael Nutter. So what was Biden thinking when he said this.


BIDEN: How they can justify raising taxes on the middle class that has been buried the last four years.


CROWLEY: And later, Ohio's predictive powers in presidential elections.


CROWLEY: We are back with Philadelphia Mayor and Joe Biden friend, Michael Nutter.

Mr. Mayor, thank you for being here.

I wanted to talk to you a little bit about your friend who sometimes makes Democrats nervous. He can be inartful when he says things. As he goes into this debate, what's the most important thing you would advise the vice president to do?

NUTTER: Well, Candy, thank you.

I -- I generally don't advise the vice president, but I heard your segment earlier and I hope Mr. Priebus does advise Mr. Ryan, first and foremost to just tell the truth, unlike what we heard at the Republican convention.

I -- I think the big thing with Vice President Biden is that he speaks from his heart; he's an earthy guy; he's a Pennsylvanian, grew up in Scranton; of course, represented the state of Delaware for a long, long period of time.

And I think -- I haven't talked to him and I -- and I didn't see the clip live, but I think all he was really trying to communicate is that the middle class has had some rough time. And he's honest about that. But progress has been made. I heard you talking earlier, of course, about the jobs numbers, 40 straight months of growth in the private sector, unemployment now down to 7.8 percent, which is about what it was when President Obama came into office in January of 2009.

So Vice President Biden is the real deal. He'll give it to you straight. He communicates in a way that I think connects with people at a real level.

CROWLEY: Do you expect him to, because there's a lot of Democrats out there looking at the president's performance. I think he needed poorly (ph) who are hoping that Joe Biden can do -- can sort of blunt Romney's momentum, which is beginning to show up in the polls. We haven't seen anything truly definitive but we know most people thought that Mitt Romney won the debate.

So, Democrats in particular, are looking for Biden to blunt that momentum. Can he do that?

NUTTER: Well, one of course, Joe Biden, again, knows how to communicate very, very well. I think when people talk about last week, the expectations for President Obama, of course, are always exceedingly high and it was relatively easy for Mr. Romney, who had an 11th hour conversion.

We recall that he is the Etch-A-Sketch guy, has transformed himself and, quite frankly, we always have to wonder which Mitt is going to show up.

And so, if you just lay out lie after lie after lie about your own plan, as well as what the president has been talking about, of course you can look good.

Vice President Biden will do very, very well. He knows what's been going on. He's in touch with the American public and I'm just hopeful that Mr. Ryan will tell the truth, whether it's about Medicare and that it's a voucher program that Mr. Romney...


NUTTER: ... and Mr. Ryan, their health plan will leave many uninsured and put people back out...

CROWLEY: Mr. Mayor...

NUTTER: ... if they have preexisting conditions.

CROWLEY: Let me just -- let me just step back just a minute here about your defense of the president's performance.

What is your theory -- I mean it was widely panned and the -- and the thing is if -- if -- if he thought, as he said the next day, that Mitt Romney isn't telling the truth, that Mitt Romney is remaking himself. Why wouldn't he say that on the stage? What went wrong there?

NUTTER: Well, again, I mean not in President Obama's mind. I mean you're -- I -- I was -- I was in Denver. I was in that audience and, you know, as a debater, of course, I've never run for president, but you know, you have to decide, do you want to spend all your time, all night long refuting someone's lies about your record or even about their own.

I mean Mitt Romney is a guy, I've never seen this before, he's been on two different sides of his own plan which, of course, he won't explain. So he can have multiple positions about something that doesn't exist. I -- I think the president wanted to get across his points. He had facts, Mr. Romney didn't and, you know, that debate is over, so you know, I mean I guess I would only suggest, we don't need to debate about the debate.

There'll be two more and I fully expect that President Obama will get his points across as well as smack back the -- the lies that Mitt Romney keeps telling.

CROWLEY: Then let me -- let me move you on to something else. We -- we talked a little bit about the new unemployment figures and I wanted to show you, and I'm sure I don't have to tell you, but I want to show our audience.

When it comes to unemployment among African-Americas, stands at about 13.4 percent, which is obviously a lot higher than 7.8. That is down from September of -- of the year before. But there's a lot of talk that this will depress African-American turnout come November. And obviously that -- that's part of his base that the president wants to reinvigorate, how can he do that?

NUTTER: Well, I think all Americans know that President Obama has been working very, very hard to put Americans back to work. He's had virtually no cooperation from the Republicans in Congress and certainly in the House...

CROWLEY: He might get the same kind of...

NUTTER: ... who have made it their mission...

CROWLEY: He might get the same kind of Congress he's already got though.

NUTTER: I understand; the American public is not going to put up with post-election, the American public is not going to put up with this kind of gridlock in Washington, D.C. And so again, Mr. Priebus was on earlier.

Republicans have to take responsibility for blocking much of the American Jobs Act and other efforts that the president has put forward.

We've seen private sector growth in the jobs area, but we also know that we've had state and local government lose over 700,000 jobs and unemployment was already high before the president came in, and the African-American community and the Great Recession has only made that worse.

But as you said, even in the African-American unemployment is coming down. African-Americans are proud. I mean they're not a monolith, I can't speak for all African-Americans of the country, but many of us...

CROWLEY: You'll think he'll...

NUTTER: ... are simply very, very proud... CROWLEY: ... you think he's going to get a good turnout?

NUTTER: ... of the work that President Obama has being doing.

African-Americans are going to strongly support President Barak Obama.

CROWLEY: OK. All right.

Thank you so much, Mayor Michael Nutter.

NUTTER: Thank you.

CROWLEY: I hope you'll come back. We appreciate it.

Next up, there is a reason why the campaigns have spent $75 million to win Ohio and later, why 114,000 new jobs in September is still not enough.


CROWLEY: Ohio is a political bellwether. In the last 12 elections, the candidate who won Ohio won the White House. Maybe because Ohio is a microcosm of the nation's electorate with its Democratic dominated union friendly areas in Cleveland and Toledo in the northeast, the college town of Columbus and Central Ohio, the Republican leaning Cincinnati and its suburbs in the southwest and the working-class culturally conservative Appalachian communities along Ohio's southeastern border with West Virginia.

So if this is an election about the economy, it's worth noting that Ohio's jobless rate has dropped from 10.6 percent in early 2010 to 7.2 percent last August. There is debate over who gets the credit for that.

President Obama points to the auto bailout for helping save and create 72,000 jobs in the state, but Ohio's Republican governor, John Kasich says his policies, including brining more businesses and manufacturing to the state, have made the difference.

The Obama and Romney campaigns have all but suffocated Ohio airwaves with more than $75 million in ads. Since June, the candidates, their running mates and wives have campaigned in the state 65 times. That's an average of about four visits per week.

Before Mitt Romney's well reviewed debate performance an NBC Wall Street Journal found Obama leading Romney 51 to 43 percent among likely Ohio voters.

Can a debate change Ohio's Democratic drift? The state's Attorney General Mike DeWine and Former Governor Ted Strickland are next.


CROWLEY: I am joined now by Former Ohio Governor Ted Strickland, the national co-chairman of the Obama Campaign and Ohio Attorney General and Romney supporter, Mike DeWine.

Gentlemen, thank you both.

Let me sort of kick this off and answer the first question for you. Governor Strickland, I assume you believe that President Obama will win Ohio. Back that up for me. STRICKLAND: Well, most of the polls over the last several months have shown the president with a consistent, though small, but a consistent lead and that lead seems to have widened within the last 30 days.

But I -- I believe the president's going to win Ohio because he -- he rescued the auto industry, which is so important to our state. He passed the Recovery Act, which was important to me in terms of keeping police officers and firefighters and teachers and other people building infrastructure in our state.

Plus, you know, Candy, the president tells the truth and quite frankly, I don't think Mr. Romney is a very truthful person when it comes to talking about the -- the economy and what he plans to do.

He says, for example, that the Ryan budget is a marvelous budget. It -- it does achieve balance for 30 years. It's not a fiscally responsible budget. It voucherizes (ph) Medicare and it privatizes Social Security and it cuts Medicaid and Pell grants.

And so there are a lot of reasons why I think Ohio is trending toward the president.

CROWLEY: Let me -- let me...

STRICKLAND: And I'm sure Mike has a different opinion.

CROWLEY: Yeah, I -- I bet he does which is why -- why we'll go to him and -- and I will -- I will -- you probably need much prompting, but I -- I want to throw something into the mix here. And these were our flash polls after the debate -- CNN's flash polls after the debate.

And the question was, who would better handle the economy? Romney, 55 percent; Obama 43 percent. Then among debate watchers, who would better handle health care? Romney, 52 percent; Obama 47 percent.

The question is, that's who won the debate. Is it going to move anything in Ohio where polls have shown advantage Obama?

DEWINE: Candy, can I -- I jump in here.

CROWLEY: Yes sir, it's your turn.

DEWINE: You -- you know, Romney's going to carry Ohio. Romney's going to carry Ohio. It's going to be a very, very close race. But this race fundamentally changed Wednesday night in Ohio, at least. I think it did across the country.

But tremendous energy now, but I think here's where we were going into the debate. People like we've had in other presidential campaigns when we have an incumbent, people look at the incumbent and say, I like the guy. I like his family. He's a good person. But he's just not doing a very good job.

But the opponent's -- then the next question is, is the challenger up to it? Is he the person we want?

And frankly, going into Wednesday night, people had not answered that second question. Romney had not frankly made the sale.

I think what you saw Wednesday night was the first opportunity that the average person had to see these two candidates head-to-head for an extended period of time. And when they saw that, guess who won?

DEWINE: Romney won. He looked presidential. He had confidence. He was - had a plan. He was confident in that plan.

The president, on the other hand, was in a situation where he couldn't defend the last four years, maybe that's not because he is not a good debater. We know he is a good debater. He couldn't defend the last four years because you can't defend it. You can't defend not getting the job done.

So I think that's -- this has changed. Yesterday's -- one last thing, Candy, yesterday we had 150,000 doors being knocked on just in one day in Ohio. We have great energy. The governor is going to win this state. It's going to be close. He is going to win.

CROWLEY: Governor Strickland, you know, without sort of getting into more debate performance and how the president did or didn't do, do you think that Mitt Romney perceived as the winner of that debate by a large margin picks up steam now in Ohio that you all have to push up against?

STRICKLAND: Well, Candy, if I was as rich as Mitt Romney, I would bet Mike DeWine $10,000 that the president is going to win Ohio.

CROWLEY: You better watch that.

STRICKLAND: Romney did well in the debate, Candy. Romney did well in the debate, I will admit that. I give him a B-plus on style, but I give him a D-minus on substance and truthfulness.

CROWLEY: You know, why...

STRICKLAND: Mitt Romney did not tell the truth.

CROWLEY: And President Obama didn't challenge him on the stage, which I think probably is what a lot of Democrats think the problem was.

Let me ask you about Ohio's job numbers. As you know, both of you know, Ohio's unemployment rate is lower than the national average. It was 5.4 percent, governor, when you took office. It hit its high point in 2010, ten points, now it's down by 7.2.

Now, I want to just play you what Governor Kasich, a Republican, said at the RNC.

(BEGIN VIDEO CLIP) GOV. JOHN KASICH, (R) OHIO: We've made real progress in Ohio in restoring confidence because that's what so much of life is about. And we are setting people free in order to build success, but we need a new partner in Washington, this relationship is just not working. It is holding us back.


CROWLEY: So governor, first to you. Who is responsible for the good economy, or relatively good economy in Ohio?

STRICKLAND: Well, Candy, thank you for playing that segment. Governor Kasich was not telling the truth. He said in that speech that Ohio's economy was 38th, I believe, in the nation when he took office. That's not true, we were sixth in the nation in terms of economic job growth. The recovery started in Ohio before John Kasich became governor. If you look at the data, Ohio's unemployment declined 1.6 percent in 2010. It declined another 1.7 percent in the first year and a half of the Kasich administration.

Ohio's recovery is due in large part -- it's due in large part to two things, I believe, that's the Recovery Act which enabled us to stabilize Ohio and to stop the free fall and, secondly, Candy, it's the auto rescue. One in eight jobs in Ohio is related to the auto industry. Mitt Romney said let Detroit go bankrupt, but today in Toledo and in Youngstown and in the Cleveland area multimillion-dollar investments are being made by GM and Chrysler, people are working, and Ohio's economy is benefiting as a result.

CROWLEY: I want to get -- Senator DeWine, I want to give you the last word on this. I mean, the car industry is a pretty powerful argument.

DEWINE: Candy, if you asked Ohioans why Ohio is starting to come back, the majority of Ohioans will say Governor Kasich. Governor Kasich inherited an $8 billion shortfall...

STRICKLAND: No, he didn't, Mike. It was not an $8 billion deficit.

DEWINE: the rate. Ted, I didn't interrupt you. I didn't interrupt you. 87 cents...

STRICKLAND: But I want you tell the truth. It was not an $8 billion deficit.

DEWINE: Ted, everybody is lying according to you. $250 million.

STRICKLAND: Well, only the Republicans.

DEWINE: saying about the auto industry - auto industry is exceedingly important in the state, but if you look at where Ohio has grown in job creation since Kasich became governor, it has been in manufacturing. We have had significant growth in jobs in the state, 123,000 new jobs. Those have not been in the job -- in the auto industry. Auto industry has not gone up. If you look at what Kasich has done, he has made a real difference. He has the same philosophy and will do the same thing that Mitt Romney will do as president: lower taxes, less regulation, balance the budget. These are things that make a difference.

The other thing that Romney will do that the president is not doing and simply, frankly, is incapable of doing. I served with him for two years in the U.S. Senate, nice guy, talented, but horribly partisan. What Mitt Romney will do as president is the same thing that Ronald Reagan did and, frankly, Bill Clinton did, hold your principles, be tough, but in the end you know you have to negotiate, and that's the only way this country can move forward. That is what President Romney will do, and that's the president that people saw potential president that people saw next president they saw debating the other night.

CROWLEY: Governor Strickland, the last 30 seconds to you. When we see those new polls out of Ohio when they come, is it going to be a closer race than it has been?

STRICKLAND: Of course, Ohio cannot be taken for granted, Candy, by any candidate or either political party. It will be a very close race. But I believe because of the president's saving of the American auto industry, which, in fact, is related to manufacturing jobs in Ohio. And Ohio is coming back, and we're grateful for that, but the president deserves, in my judgment, the lion's share of the credit for Ohio's economy, and its rebound.

CROWLEY: Former Ohio Governor Ted Strickland, Ohio Attorney General and former Senator Mike DeWine, thank you both for being here.

Up next, making sense, or at least trying to make sense, of September's eyebrow raising jobs report.


CROWLEY: Perhaps the September report was the October surprise. At least it was to some conservative who say the numbers don't add up: 114,000 new jobs were added to the economy in September. That's a fairly lackluster number. And more jobs were created in July and August than originally reported, so those numbers were revised up by 86,000.

But they are all still below the levels needed to sustain a drop in unemployment. And that's why some people found it odd that unemployment fell by 0.3 of percent, below the 8 percent mark to 7.8, the lowest level in four years.

The numbers may have more meaning for the campaign trail than the economy, politically speaking, dropping under 8 percent was a clear headline and a psychological boost for a president who needed something after his dismal debate appearance.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This morning we found out that the unemployment rate has fallen to its lowest level since I took office.



CROWLEY: Mitt Romney countered that 7.8 is nothing to celebrate.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The reason it has come down this year is primarily due to the fact that more and more people have just stopped looking for work.

CROWLEY: Some conservatives continue to suggest that the president's Labor Department cooked the jobs report for his political gain, but most experts have roundly slapped down that possibility. Numbers and politics with economist Mark Zandi and Douglas Holtz- Eakin, plus reporter and Jackie Calmes of The New York Times, and CNN's chief White House correspondent Jessica Yellin, next.

(COMMERCIAL BREAK) CROWLEY: Joining me around the table, Moody's Analytics chief economist Mark Zandi, New York Times White House correspondent Jackie Calmes, CNN chief White House correspondent Jessica Yellin, and former Congressional Budget Director Douglas Holtz-Eakin.

So we're five minutes into the show now...


CROWLEY: OK. Let me start out by asking you whether -- you two, whether you both agree that the Labor Department didn't cook the books, that the question, is there a mistake here, or is this correct? Were the numbers correct?

DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE: The numbers were collected in a professional way. It's the same procedures used every month. It's a statistical anomaly, not a conspiracy.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, I think it's silly, counterproductive. I mean, silly because these are professionals doing it, not politicians. And I think it's counterproductive because, you know, it seeks to undermine the legitimacy of the political process. And I don't think that's good for anybody.

CROWLEY: So then let's -- politically can we agree that was a good headline for the president to have?


CROWLEY: How happy were they that morning?

YELLIN: I mean, it's more "whew" after that debate performance. Finally it's a number that was such an important symbolic marker for the president. The most important job number because it's a month out. This is when a lot of people believe that the undecideds make their decision and sort of opinion-solidify, and then also they can stop sort of talking about the debate a little bit.


JACKIE CALMES, THE NEW YORK TIMES: Yes. Just one more to go, the Friday before the election.

CROWLEY: Well, how -- are they worried at all and could it go back up over 8? I mean, if it can go down, could it go back up?

CALMES: Right.

HOLTZ-EAKIN: I think -- I mean, honestly, you should take both the conspiracy theory and the celebration and send them to the time- out corner. I mean, this could very well unwind next month, at least in part. And that would not be a good news story for the president.

CROWLEY: Politics is celebrated by the news cycle, so they... CALMES: Between now and then there will be a good share of people who have already voted. You know, there were about 40 percent or so who early voted in the last election.

And contrary to what Mitt Romney had said on Friday, this was not -- this was finally a report that wasn't based so much on the unemployment rate going down because more people had quit looking for work. People actually had found jobs. And that was the reason for the...

ZANDI: Yes, but the reality is that employment is growing about 150,000 per month. That's exactly what we've been growing for the past year -- past two years, and actually since job growth resumed a little over two-and-a-half years ago, almost exactly 150k. So we have to look past this month-to-month variability in data and get to the underlying trend.

CROWLEY: And look at the whole -- the year on average.

ZANDI: You know, in a normal time, that would be not bad. You know, that would be consistent with a slowly declining unemployment rate. But unemployment is too high.

CROWLEY: We're so far in the hole, right.

ZANDI: Yes, we're so far in the hole.

CROWLEY: Let me -- I want to play something that Romney said Saturday and get, first of all, your economic take and then the political take.

(BEGIN VIDEO CLIP) ROMNEY: If the number to people -- if the percentage of the American population that were in the work force were the same today as the day he was elected, our unemployment rate would be above 11 percent. This is inexcusable that a nation that's so prosperous as ours...


CROWLEY: So this is the "work force has shrunk" argument.

HOLTZ-EAKIN: And the numbers are real. Labor force participation, the fraction of people actually trying to find a job or have a job, is at levels we haven't seen since 1981. And so the question becomes how many of those have left the labor force for good pursuits like retirement or to go to school, and how many are just so discouraged they've given up? And if it's really the latter, then we have a lot of disguised unemployment.

ZANDI: Yes, but that's not the case. I mean, we know demographics are playing a key role here. We're all getting older. Baby Boomers are approaching retirement, and they are retiring, so the participation rate that has fallen 2.5 percentage points over the past four or five years, 1.5 percentage points is due to just simply demographics.

That would happen regardless of what's going on in the economy, but 1 percentage point is due to the economy, that's about a million, million-and-a-half people. If they came back in, the real unemployment rate wouldn't be 11, that's overstating the case, but it would be closer to 9. Still bad.

CROWLEY: It would be higher. And so the work force has shrunk.

ZANDI: Oh, yes. It has.

CROWLEY: And is it also true that the numbers that are coming in are sort of lesser jobs, that people -- that these aren't as good a jobs as the ones that people got thrown out of?

ZANDI: Well, no, I disagree with that. I mean, if you look at the job creation across industries, it's across a lot of industries. I mean, it's everything: professional services, financial services, we see some manufacturing jobs, transportation, distribution, and lower paying jobs, retail, leisure, and hospitality.

So that would indicate that we're getting a wide distribution across the income (ph).

HOLTZ-EAKIN: I think the real problem in the recovery has been that all of the jobs have not been as good as they should be. I mean, people who had jobs haven't seen their real incomes rise. Real disposable incomes with spending power has risen very slowly in this recovery.

So it's not a matter of having jobs or not. Yes, (INAUDIBLE) the economy growing generates some income, that's a big problem here. CROWLEY: Let me talk to you all because it seems to me that what people take away from this is 7.8. What does the Romney campaign do now rather than go inside the figures, as he tried to do, and say, but wait a second, this isn't really what it looks like, because it kind of does bolster the president's case that the trajectory is good. What does Romney do now?

CALMES: Well, I think he should continue to stay on the economy. I mean, it's not like it's great. And just -- in fact, he is -- in the past couple of weeks we saw too often or I think for political -- his political benefit where they were digressing from the economy and talking about anything else.

And so I think that, you know, just stay on it, because -- but you know, for the most part people generally think in campaigns that voters have pretty much made their mind up about the trajectory, the trends in the economy. And so that's why these conspiracy theories are sort of funny because if the White House was going to cook the books, they should have started doing so in June or July.


CALMES: But -- go ahead. YELLIN: The thing that shocked me about this campaign to date is, we all know what connects our personal stories, and we have not heard people on the trail tell a lot of personal stories. Romney did it during the debate pretty effectively. If he wants to break through, he probably needs to start telling more stories of people who are struggling in this economy, despite 7.8, 8.1, get away from the numbers, and tell the reality.

The president needs to be doing more of that as well.

YELLIN: It's been one of these very abstract debates where they're talking about a lot of things that have nothing do with people's real lives.

CROWLEY: Moody Analytics came out with an election prediction said as far as they can tell looking at these battleground states adding up the electoral votes, the president is still on track to win this election. Does anything - is there anything economically coming up that changes that given that early voting has started and when you look at some of the battle ground states, which we brought up, Colorado, Florida, North Carolina, Michigan, Nevada, all of them as of August still had pretty high unemployment rates. So how do you come to that conclusion?

ZANDI: We do the modeling based on the electoral college by state. And actually the key state is Ohio, that's where it all goes down to. And Ohio is doing pretty well. The unemployment rate there is closer to 7 percent, job growth in Ohio is much higher than the national average. And improvement there is related to the auto industry. And, of course, the president can say I saved the auto industry.

YELLIN: And does...

ZANDI: Yeah, and does, regularly.

CROWLEY: And frequently. And the question is why doesn't Mitt Romney say hold it a second, I did not say, you know, let's tear the auto industry apart and not have an auto industry.

HOLTZ-EAKIN: The president didn't save the auto industry. He saved two companies in a very large industry and did it in a way a lot of people don't like - handed it to unions and so this is not a uniform winner if Mr. Romney is aggressive about it. And between now and the election...

CROWLEY: It's been pretty effective in Ohio, it seems, that bin Laden's dead, GM is alive thing.

HOLTZ-EAKIN: The auto industry isn't even close to the largest employer in Ohio. I mean, it looks like the rest of the country. It's got financial services, it's got health care, and, you know, those are issues that should matter in Ohio as well. And the largest issue is between now and the election, there are things that can still happen. And you should worry a lot about Europe melting down. It could at any point. You should worry about oil prices going up, because the Middle East is far from a safe place. And the president has some self- inflicted problems - budget data are going to come out again. They are never popular. And so it's a ways to go...

ZANDI: ...the auto thing just a little bit. I mean if GM and Chrysler went down, I think it's clear the entire industry would go down. And the industry knew that. They were lobbying for that bailout. And so you go talk to Ford.

COLLINS: Including Ford.

ZANDI: Including Ford.

CROWLEY: But you can see -- I want to ask about the veep debate here, but you can see that Mitt Romney is -- did not say let Detroit go away. He wanted a managed bankruptcy, much as what happened only he wanted it done with private equity.


CROWLEY: OK. Let's talk about the VP debate which is coming up. Does it matter?




HOLTZ-EAKIN: Absolutely.

I think, again, as we saw with the first presidential debate, for the first time Americans will see Paul Ryan without the distraction of the campaigns, talking directly to the American people. They're going to be surprised by what they see. YELLIN: I also think a lot of people will be tuning in to see how Vice President Biden tries to make up for the president's belly flop last week.

CROWLEY: Yeah. They're looking to be the blunt...

COLLINS: And hoping for entertainment value, perhaps, that he makes a gaffe.

YELLIN: But he doesn't in debates.

COLLINS: But he doesn't.

YELLIN: He's very good...

COLLINS: You know, and when you think back to the 2008 Democratic nomination race, there were a lot of people, including myself, who thought that Joe Biden won most of those debates. He was running at 2 percent in the polls so it didn't matter much, but he did a good job.

CROWLEY: He knows his stuff.

Quickly, Mark. You're got the last word.

ZANDI: Hey, I'm an economist.

CROWLEY: You are no fun.

Thank you so much, all of you. I appreciate you being here.

Next up, a political viewer's guide to the week next.


CROWLEY: And, finally this Sunday, we rounded up some of CNN's political junkies again, this time to look what lies ahead. Call it your political viewer's guide, although some people, and they know who they are, veered off topic.

(BEGIN VIDEOTAPE) UNIDENTIFIED MALE: You ever heard that term dead cat bounce? You drop anything high enough it will bounce a little bit, even a dead cat? What people have to do is look at the Romney campaign and say all this excitement coming out of this debate, is that a real thing?

ROMNEY: You may have known a couple of nights ago, we had a debate. You may have had a chance to see that.

UNIDENTIFIED MALE: Does it really grow into something, or is that a dead cat bounce?

UNIDENTIFIED MALE: I'd be looking for how the president plans to continue to try and bounce back from his debate performance. Will his team, which was tight-lipped about the details of the first debate boot camp, now talk about a more aggressive strategy. UNIDENTIFIED FEMALE: I know everybody in the political world is looking ahead to the vice-presidential debate this week, but I actually had a chance to talk to Paul Ryan about how he prepared, so I want to see if that's going to pay off.

DANA BASH, CNN CORRESPONDENT: Forget about the guys at the top of the ticket and their running mates, I'm keeping my eye on the surrogates this week.

BILL CLINTON, FRM. PRESIDENT OF THE UNITED STATES: You got to get one thing, it takes some brass to attack a guy for doing what you did.

UNIDENTIFIED MALE: Former president Bill Clinton, Ann Romney, and former vice president Dick Cheney all have high-profile events this upcoming week.

UNIDENTIFIED MALE: We're also going to be keeping a close eye on my home state of Massachusetts where Elizabeth Warren and Scott Brown are facing off again in another debate. This has become a very nasty contest between these two candidates.

SCOTT BROWN, (R) MASSACHUSETTS SENATE CANDIDATE: Excuse me. I'm not a student in your classroom. Please let me respond, OK? Thank you.

UNIDENTIFIED MALE: The winner in November could help determine which party controls the senate in 2013.

JOHN KING, CNN CORRESPONDENT: We're going zoom in right here on the nation's capital. We'll stretch out the map a little bit and here is the big question, playoff baseball is back in Washington. How are the Nats going to do? Candy.


CROWLEY: OK, John. You may have a magic wall, but I have a crystal ball. I checked and the Cardinals will beat the Nats. Did I mention I was raised in St. Louis? You know those Midwest roots are tough to cut. They thrive anywhere.

Thank you so much for watching State of the Union. I'm Candy Crowley in Washington, have a great week of politics, baseball, and anything else that catches your fancy.

And if you missed any part of today's show, find us on iTunes. Just search State of the Union.

Fareed Zakaria GPS is next for our viewers here in the United States.