Transcript: David Axelrod, Steve Schmidt on ‘Meet the Press’ September 28

(Source: NBC)
MR. TOM BROKAW: Our issues this Sunday: the race for the White House. Two more debates and 37 days to go as both sides make their case and a deal on the financial bailout does seem near. Obama vs. McCain; the top strategists from each campaign square off after the debate. With us, David Axelrod for the Obama campaign and Steve Schmidt for the McCain campaign.

Then, we kick off the return of our Senate Debate series: the tough fight in Colorado. Republican former Congressman Bob Schaffer against Democratic Congressman Mark Udall.

And in his fourth annual Global Initiative conference, former President Bill Clinton convenes leaders from around the world to discuss poverty, energy, the environment and more. We talk global policy and American politics, Decision 2008, with our guest, the 42nd president of the United States, William Jefferson Clinton.

But first, it was McCain vs. Obama on Friday night in Oxford, Mississippi, and this morning it’s Schmidt vs. Axelrod, chief strategists for their respective campaigns.

Welcome to MEET THE PRESS, gentlemen. It’s your first…

MR. DAVID AXELROD: Thanks, Tom.

MR. STEVE SCHMIDT: Thank you.

MR. BROKAW: …joint appearance, I’m told. We’re happy to have you here.

MR. SCHMIDT: Yes.

MR. BROKAW: We’re not going to get into this business about who won and lost the debate, because I have a pretty fair idea about what conclusions you would come to. Let’s see if we can agree on one thing. The big winner was Ole Miss. They conducted a–and hosted a very successful debate, and then the Rebels went to Florida on Saturday and knocked them off. Now, neither campaign can take credit for the Ole Miss win in Florida at the beginning, if we can at least stipulate that.

MR. AXELROD: Well, I guess we can agree to that.

MR. SCHMIDT: We’ll agree to that.

MR. BROKAW: You’ll agree to that?

MR. AXELROD: We can agree to that. It was a great, it was a great setting, it was a great debate. Glad that it went forward, glad you guys came.

MR. SCHMIDT: They did a tremendous job down there, and Senator McCain was thrilled to have the opportunity to talk to the American people.

MR. BROKAW: All right. Let’s begin with the news this morning. It looks like they’ve got an agreement on a bailout program; the outline of it, at least. We’ll have greater details before the end of the day. Is Senator McCain happy with what he’s hearing about it?

MR. SCHMIDT: He’s happy that there appears to be a framework completed. Earlier in the week, when Senator McCain came back to Washington, there had been no deal reached. All the financial experts in both parties were saying that this could be an economic catastrophe if, by Monday morning, if the markets opened without a deal done. What Senator McCain was able to do was to help bring all of the parties to the table, including the House Republicans, whose votes were needed to pass this. So it appears that great progress has been made. We look forward to–Senator McCain looks forward to reading the fine print of this. But it does appear that great progress has been made overnight.

MR. BROKAW: But has he been making specific suggestions about what needs to be in this bill? When he came back on Friday, the House Republicans said to him, “This won’t fly because we want an insurance program, not just a buyout.”

MR. SCHMIDT: Does appear that there will be insurance as part of the final package. But importantly, Senator McCain laid out a number of principles, saying, for example, that CEOs cannot benefit from taxpayer dollars, the CEOs of these firms who have ripped off the American people. That there be oversight, that there be accountability. Those principles appear to be contained in legislation. But what Senator McCain was able to do, the reason he suspended his campaign, the reason he came back to Washington was to help get all of the parties to the table. There had been announcements by Senate leaders saying that a deal had been reached earlier in the week. There were no votes for that deal. Senator McCain knew time was short and he came back, he listened and he helped put together the framework of getting everybody to the table, which was necessary to produce a package to avoid a financial catastrophe for this country.

MR. BROKAW: Mr. Axelrod, I think it’s fair to say you have a skeptical expression on your face. Your candidate left Mississippi, however, and resumed campaigning. He didn’t come back to Washington. Has his role in this been primarily as a man who’s been getting information from Democrats on the hill

MR. AXELROD: Well, I’ll tell you what his role has been from the beginning. He’s been in touch with Secretary Paulson, Chairman Bernanke, the leaders of Congress, and he is the one who has been urging these principles that Steve has now embraced today. The fact is, when the–when this crisis emerged, Senator McCain’s first reaction was to say the economy is fundamentally strong. The next day he suggested a commission to study this and by eight days later he said it was such a crisis that he was going to suspend his campaign. He showed up a day later in Washington. It isn’t clear what his role was, so it’s a little bit of fiction to now claim credit for it. That’s not the important thing, though. The important thing is that the principles that Senator Obama outlined originally are now embraced and taxpayers will be protected.

MR. BROKAW: Let me just share with you what The Wall Street Journal had to say about the opening statements of your two candidates at the debate the other night.

“The debate took place amid the backdrop of the financial crisis, and perhaps most disappointing was how neither man seemed to have anything useful to say about it. … What neither man showed was any real insight about our financial market issues, or any political courage in offering a solution.”

Are you going to have to go back and replate your economic program, Mr. Axelrod, going forward, because of the changed conditions that result–as a result of this bailout program?

MR. AXELROD: Well, first of all, I don’t accept the premise of the Journal piece. The fact is that Senator Obama’s been warning for a year and a half about this crisis–about the possibility of such a crisis because of the lack of oversight and greed on Wall Street, and he’s been talking to the players from the beginning to kind of–to try and find a solution that works for taxpayers. In terms of any–the new president is going to have to deal with the realities of our situation and this is going to add to the problems that the policies of the Bush administration, supported by Senator McCain, have created huge deficits, unemployment at a five-year high, wages declining, home values declining. We have a lot of problems in this country. It’s going to put pressure on the budget and we’re going to have to make some hard decisions. But the decisions we make are to prioritize, and this is what Senator Obama said that night, are to prioritize the middle class. What was phenomenal about that debate was that in 40 minutes on the economy, Senator McCain never once mentioned the middle class, never talked about the struggles people are going through. We need to create an economic recovery plan that puts at its core the middle class in this country.

MR. SCHMIDT: Well, Tom, you know, this was a debate about national security, about foreign policy. You never heard the word victory from Senator Obama when it came to wars this country’s fighting. But we did talk about the middle class. We talked about the fact that Senator McCain proposes raising the child care–the child exemption from $3500 to $7,000, about giving a $4,000 tax credit to the American people for healthcare. One of the things in this race is the difference between what Senator Obama says–he is a great talker–but what his record is. He has, over the course of this campaign, called for taxing people’s investments by raising capital gains taxes. He’s talked about raising taxes on natural gas and on coal. He has talked about raising the top rates on income taxes. He has talked about taxing Social Security benefits.

Now we’re 38 days from the election. Senator Obama now on a lot of these issues has changed his positions. He’s laid out a different–a number of different tax plans during the course of the debate. But fundamentally, what Senator Obama’s record is different from what he says out on the campaign trail. Ninety-four times, Tom, 94 times, when he had an opportunity to vote against higher taxes or to vote to lower taxes, he took a pass, including voting to increase taxes through a budget resolution that he said were his priorities on people making as little as $42,000 a year. It’s a recipe for disaster for the economy of this country.

MR. AXELROD: Now let’s have a reality check, because this is the–these are the miss–miscast lies, essentially, about taxes that we’ve heard from this campaign over the course of many, many months, and it’s been–they’ve been rebutted again and again by independent sources who say that the Obama plan provides three times as much tax relief for the middle class as the McCain plan. The McCain plan is essentially $300 billion in new tax breaks, $200 billion for big corporations, $100 billion for the very wealthy, and 100 million Americans are left out. It’s more of the same.

MR. BROKAW: But the picture economically is darker with every passing day, and here’s what Robert Bixby, who is with the Concord Coalition, had to say about your two candidates. “I don’t think either candidate is treating the deficit, or the debt, seriously. I don’t see any proposals from either one that would make the situation any better.” This is a nonpartisan observer who is looking at it. Senator Obama the other night was asked to name one program that he would cut given the economic realities. We’re going to be at war in two countries, he wants to reform healthcare, have alternative energy and early childhood. He didn’t name one program, Mr. Axelrod.

MR. AXELROD: That’s not true, Tom. He talked about the Medicare Advantage program, which is a big giveaway to the insurance companies within the Medicare program. That’s $15 billion a year right there. Another big item that we have to deal with is the $10 billion a month we’re spending in Iraq while Iraq has a $79 billion surplus. Senator McCain would like to continue there indefinitely. The American people want to come home from Iraq, to send some troops from Afghanistan, and to begin investing that money here at home. So there are many things that we can do. Obviously, we’re going to have to look at the budget, and Senator Obama said he’s going to go through it line by line, and he’s going to get rid of things that don’t work. We have, for example, a one–a reading program that was installed by the Bush administration that turned out to be a big boondoggle. It’s not helping any kids learn. We ought to say that doesn’t work, let’s get rid of it. And that’s the approach he’s going to take. If we’re going to do the things we need to do, the things you mentioned, the things that are going to strengthen the middle class in our economy, we’re going to have to be very, very flinty-eyed about what we can keep and what we don’t.

MR. BROKAW: Mr. Schmidt, this is The Economist, and this is the issue right…

MR. SCHMIDT: Mm-hmm.

MR. BROKAW: …before the Republican convention, and it says, “Bring back the real McCain.” They say “Hawkish foreign policy, irresponsible tax cuts, more talk about religion and abortion: all those sounds too much like Bush Three, the label the Democrats are trying to hang around the Republican’s neck. We preferred McCain One.” Aren’t you going to have to go back to McCain One given the reality of this economy?

MR. SCHMIDT: There’s only one John McCain. It’s the authentic leader that you’ve seen on display this week, putting his country first, going into the heat to try to solve a huge problem for this country. We reject the premise of it. I would like to respond to something that David said. It’s important. Barack Obama, in the United States Senate, in a budget resolution vote that he said was his priorities, voted to increase taxes on people making as little as $42,000 a year. That’s the record. That’s the truth. What the Obama campaign does any time the record is criticized is they respond by saying that’s a lie. It’s dishonest politics. Fundamentally, we have a choice in this race between somebody who has a record of voting to cut spending, as someone who has been a protector of the taxpayer vs. Mr. Axelrod’s candidate, Senator Obama, who on every occasion throughout his career, has been a vote for higher taxes, for more taxes, for injurious taxes on the American people. That’s the record. Now, 38 days before…

MR. AXELROD: That is not the record. Here’s, here’s what the–here’s what the–here’s what the record is, David.

MR. SCHMIDT: …38 days–let me finish, David–38 days before an election, he’s trying to portray himself as a tax-cutting Ronald Reagan. Totally disconnected from reality. And with regard to Iraq, I would like to say this. What Senator McCain has said is our troops will come home, but they will come home in victory. We must finish the war we are on the edge of winning in that country because of the strategy that John McCain proposed and the strategy that Barack Obama opposed. Had Barack Obama had his way, this country would have lost the first…

MR. AXELROD: Tom.

MR. SCHMIDT: …war of the 21st century…

MR. AXELROD: Tom.

MR. SCHMIDT: …to al-Qaeda and to Islamic extremists with devastating consequences for the security of this country and the world.

MR. AXELROD: Al-Qaeda, al-Qaeda, Steve, al-Qaeda, as was discussed in the debate, the central front in the war on terror is Afghanistan and Pakistan.

MR. SCHMIDT: Not according to General Petraeus.

MR. AXELROD: Osama bin Laden is resurgent today because of the dreadful mistake that was made by Bush and McCain in taking this war to Iraq. But let’s talk about taxes. The fact of the matter is that Senator Obama has been–he wrote the earned income tax credit in Illinois, cutting taxes for working families. They just have a difference in philosophy. Steve and Senator McCain believe, as George Bush does, that if we give lavish tax breaks to people at the top, it will trickle down and the economy will grow, and that’s what he’s proposing now, $300 billion in new tax breaks for corporations and the wealthy, and no way, really, to pay for it. It’s the same philosophy with government. And the thing that we saw in that debate is that what Senator McCain was doing was essentially defending the same policies we’ve seen for the last eight years.

Now, I will say this about the old John McCain. The old John McCain said that to cut, to cut taxes in the middle of a war was irresponsible. The old John McCain said, originally, that the Bush tax cuts offended him because they were too skewed to the wealthy. He then embraced them and made a Faustian bargain with the Bush faction and the, and the right wing of his own party in order to be the nominee of his party. And we’ve seen that on issue after issue. And now what he’s offering is essentially a third Bush term, more of the same policies. They haven’t worked. People want a change. They’re not going to get that change from John McCain.

MR. BROKAW: All right. We–I’m going to end on two notes here if I can, very quickly. We have a crowded agenda this morning. Let’s go back to this business about winning in Iraq, if we can. In fact, a number of people on the Republican have–side have said that we’re winning. But in an interview with the BBC, General David Petraeus said he did not know that he would ever use the word victory about Iraq. “This is not the sort of struggle where you take a hill, plant a flag and go home to a victory parade. … it’s not” a “war with a simple slogan.” So isn’t it misleading in many ways for Senator McCain to say we are winning and we’ll come home when we have declared victory?

MR. SCHMIDT: Well, absolutely not. Here is what victory means in Iraq. It means an Iraqi government that is able to protect its borders, and it means an Iraqi government that is able to protect its people, then moves forward on its path to democracy. This country was losing this war. Senator McCain stood up to the Bush administration, called for the firing of Don Rumsfeld, risked his political career to advocate a strategy almost by himself that has led us to the edge of victory there. Senator Obama opposed that strategy. In the debate you heard not one time from Senator Obama the words victory. We must win this war. This country doesn’t have a choice. Senator Obama’s judgment on issues of security to this country, whether it’s on Iraq or calling Iran a tiny threat or saying that…

MR. AXELROD: Tom.

MR. SCHMIDT: …he would sit down unconditionally with the Iranian president without preconditions make the world more dangerous. It is…

MR. AXELROD: It is, it is, it is…

MR. SCHMIDT: …a fundamental consideration for the American people.

MR. AXELROD: …ludicrous, it is ludicrous to assert after four years of mistake after mistake after mistake, when he didn’t challenge Mr. Rumsfeld, when he didn’t challenge the Bush policy, when he cheerleaded for it to then say that he was a critic of the policy.

MR. SCHMIDT: Just not true that he didn’t challenge Secretary Rumsfeld.

MR. AXELROD: Just a, just a, just a second. Just a second, Steve. I let you speak.

MR. SCHMIDT: Not true, David.

MR. AXELROD: I let you speak, let me, let me finish.

MR. SCHMIDT: Not true.

MR. AXELROD: What has happened is, as Senator Obama predicted from the beginning, that we got distracted in Iraq and now Osama bin Laden, who was the person who attacked the United States, killed 3,000 American citizens, is now resurgent. He is stronger. And that’s the result of the misbegotten decision of John McCain. And he stubbornly wants to continue, even as the Iraqis won’t take responsibility, sitting on $79 billion of their own surplus while we spend $10 billion a month. It doesn’t make sense. We can’t take more of the same, Steve.

MR. BROKAW: In fairness to everybody here, I’m just going to end on one note, and that is that we continue to poll on who’s best equipped to be commander in chief, and John McCain continues to lead in that category despite the criticism from Barack Obama by a factor of 53 to 42 percent in our latest NBC News/Wall Street Journal poll.

Gentlemen, thank you very much. I wish we could spend the rest…

MR. AXELROD: Thank you, Tom.

MR. BROKAW: …of the day talking about these issues. But you’re invited back, and I hope you’ll make your second…

MR. AXELROD: Thank you. Thank you.

MR. BROKAW: …appearance right here on MEET THE PRESS.

MR. SCHMIDT: Thank you, Tom.

MR. BROKAW: Thank you very much for being with us.