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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; MICHELLE BERNARD, INDEPENDENT WOMEN'S FORUM TAPED: FRIDAY, JUNE 13, 2008 BROADCAST: WEEKEND OF JUNE 14-15, 2008

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DR. MCLAUGHLIN: Issue One: It's the Taxes, Stupid.

SEN. BARACK OBAMA (D-IL, presumptive Democratic presidential nominee): (From videotape.) When it comes to the economy, John McCain and I have a fundamentally different vision of where to take the country.

DR. MCLAUGHLIN: Republican presidential nominee John McCain agrees.

SEN. JOHN MCCAIN (R-AZ, presumptive Republican presidential nominee): (From videotape.) On tax policy, health care reform, trade, government spending, a long list of other issues, we offer very different choices to the American people. DR. MCLAUGHLIN: The economy is the number one issue afflicting Americans, and the presidential election five months from now will pivot on this issue. And get this: Almost nine out of 10, 86 percent, of Americans say that the economy is getting worse.

Democrat Barack Obama blames the Republican president for what Americans see as the wretched economy.

SEN. OBAMA: (From videotape.) We have tried it their way for eight long years and it has failed. It is time to try something new. It is time for a change.

DR. MCLAUGHLIN: Here are McCain and Obama on their plans for American taxation.

Tax cuts: Obama wants to cut taxes, but only for those at the bottom of the economic totem pole.

SEN. OBAMA: (From videotape.) I'll use the money to help pay for a middle-class tax cut that will provide $1,000 of relief -- $1,000 of relief to 95 percent of workers and their families.

DR. MCLAUGHLIN: So Obama wants a $1,000 giveaway to 95 percent of Americans. He also has a plan for retired Americans whose income is less than $50,000 per year -- no income taxes for them.

McCain, on the other hand, wants to continue giving the biggest tax cuts to the wealthiest, making the current tax cuts of George Bush permanent.

SEN. MCCAIN: (From videotape.) As president, I intend to act quickly and decisively to promote growth and opportunity. I intend to keep the current low income and investment tax rate. I intend to keep them, not repeal them.

DR. MCLAUGHLIN: Question: How important will tax policy be as an issue in this election? I ask you, Pat Buchanan.

MR. BUCHANAN: Vitally important, John. The economy is a huge issue, perhaps the issue. And McCain is doing a very effective thing by turning it away from the dreadful economy to the issue of taxes, where Republicans are strong because they're for tax cuts and maintaining the existing tax cuts. And Obama's got a lot of tax increases he favors on capital gains, higher income, even on Social Security at the upper level. So if McCain can get the economic issue onto specifically the tax issue, he's got his best shot.

DR. MCLAUGHLIN: This is a core issue for the Republican base, right, Eleanor? He has to be anti-tax.

MS. CLIFT: Well, it's the only issue they have. And I take it seriously, because it does go to a core belief that the voters have about the Democratic Party, that it's tax and spend, even after eight years of irresponsible tax and spending on the part of the Bush administration.

Look, John McCain didn't always feel this way. He voted against that first set of tax cuts. And no matter what he says, even if he becomes president, those tax cuts that Bush put into place are going to be allowed to lapse. So the McCain people are characterizing it as a tax increase, but basically it's just allowing taxes to sunset that shouldn't have been there.

And I think if you ask most rich people, maybe people on this set excluded, would they be willing to forgo some of their benefits from the government to help the economy in larger ways, I think they would say yes -- Warren Buffett leading the charge.

DR. MCLAUGHLIN: You're referring to Buchanan, right? (Laughter.)

MS. CLIFT: I suspect not. (Laughs.)

DR. MCLAUGHLIN: What did Bush's father say, George H.W. Bush, in 1988 with regard to the subject of --

MS. CROWLEY: "Read my lips: No new taxes."

DR. MCLAUGHLIN: "Read my lips: No new taxes."

MS. CROWLEY: Right.

DR. MCLAUGHLIN: Then what happened? Then what happened?

MS. CROWLEY: And he raised taxes. And guess what: He lost his second term in 1992 primarily because he busted that pledge. John McCain, I think, is going to have somewhat of an easier time in painting Barack Obama as a traditional tax-and-spend liberal because, based on the amount of new spending that Obama is putting out there, what he's proposing, adds up to almost $1 trillion. How in the world is he going to pay for that except by increasing taxes across the board?

Eleanor mentioned wanting to repeal the Bush tax cuts. That's tantamount to $300 billion in new taxes, a tax hike for the American people. The Social Security tax that he wants to put into place, Hillary Clinton called it a $1 trillion tax hike on the middle class. So I think the advantage is to McCain as long as he sticks with rolling back the Bush tax cuts and coupling that with reducing spending.

DR. MCLAUGHLIN: There's no way that McCain could call for repealing the tax cut, is there, and hope to get away with it?

MS. BERNARD: Call to repeal the tax code? DR. MCLAUGHLIN: Yes -- no way he could do that.

MS. BERNARD: Well, no, but he could call for a flat tax. The American public is calling for change. And the real change candidate, I say, would be someone who would say, "Get rid of it. Have a flat tax. And let's make sure that the person who works on Wall Street is paying the same amount of taxes as the person who works" --

DR. MCLAUGHLIN: You know this has been tried before. Forbes tried it.

MS. BERNARD: And eventually -- and eventually --

MS. CLIFT: (Inaudible.)

DR. MCLAUGHLIN: You know what happens to it. Those who have exemptions from the tax don't like to lose their exemptions.

MS. BERNARD: But let me talk about --

MR. BUCHANAN: Michelle, if you put in a flat tax, you're going to cut my taxes, quite frankly, 23 or 17 percent. You cut my taxes.

MS. BERNARD: Well, I would think that would make you happy, Pat.

MR. BUCHANAN: It will. But who's going to make it up?

MS. BERNARD: And let me tell you --

MR. BUCHANAN: Who's going to make it up?

MS. BERNARD: No, but let's talk about the American woman worker, for example. Most women live in a double-income household, and usually their husband earns more money than the wife does. If you're a married secretary, for example, because of the progressive nature of our tax system, you get taxed more than you would be if you were a single secretary, simply because you're married. If American women want change, I think most American women would be happy --

MS. CLIFT: First of all --

MS. BERNARD: -- if they could take home more money in their pockets.

DR. MCLAUGHLIN: While you have the floor here, do you want to comment on that $1,000 handout? Is that new? Is that altogether new?

MS. BERNARD: I don't know if it's new, but I can tell you I don't quite understand it. What he actually said, when he spoke earlier this week -- and I'm talking about Senator Obama -- was a $500 tax credit for American workers and a $1,000 tax credit for American workings families, similar to, I think, Jenny and Ryan that he was meeting with earlier this week. And I don't quite understand it. What I do know is I think it probably wouldn't apply to me or anybody else sitting here.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: First of all, they're both looking for ways to help out struggling families. McCain wants to double the child care tax credit. These are not unusual, out-of-the-mainstream proposals. I don't buy the notion that women are always going to be making so much less than their husbands and they're all going to be secretaries. MS. BERNARD: No, I'm not saying always.

MS. CLIFT: But with all of the issues confronting this economy, to focus on a flat tax when it is not even on the agenda for either of the parties or the candidates seems to me a little --

MS. BERNARD: How about phasing out the alternative minimum tax?

MR. BUCHANAN: Let me talk for a second, John.

MS. BERNARD: It's hurting American families. And if the alternative minimum tax isn't fixed --

MR. BUCHANAN: Hey, John, look, Barack Obama --

MS. BERNARD: -- we're going to have huge problems. And McCain is pushing for that.

MR. BUCHANAN: Barack Obama had his proposal when the economy was doing much better than it is now. He is now in favor of tax hikes on Social Security, on upper-income, on capital gains, when the economy is entering a recession. He has got to get off that position --

DR. MCLAUGHLIN: You know --

MR. BUCHANAN: -- because it's idiotic economics. And everybody knows that.

DR. MCLAUGHLIN: I want to get back to the $1,000 giveaway. Who was the last person to propose one?

MR. BUCHANAN: George McGovern and the (Demo Grant ?).

DR. MCLAUGHLIN: In what year? In what year?

MR. BUCHANAN: 1972. And I was in the White House --

DR. MCLAUGHLIN: All right, how liberal was George McGovern?

MR. BUCHANAN: He was the most liberal man running, except for Obama.

DR. MCLAUGHLIN: Does Obama realize that --

MR. BUCHANAN: And you know -- you've got Nelson --

DR. MCLAUGHLIN: -- people as old as you are will remember George McGovern -- (laughter) --

MR. BUCHANAN: You know how we dealt with that?

DR. MCLAUGHLIN: -- and how off the chart he was in his liberalism? MR. BUCHANAN: You know how we dealt with him? We got Nelson Rockefeller to say, "I don't need it." (Laughter.)

DR. MCLAUGHLIN: He is saying, "I am a McGovernite Democrat" --

MR. BUCHANAN: McGovernite, exactly.

DR. MCLAUGHLIN: -- which is ruinous, is it not?

MR. BUCHANAN: Secondly, it will explode the deficit.

MS. CLIFT: He is not saying --

DR. MCLAUGHLIN: Quickly.

MS. CLIFT: He is not saying that. And also, Richard Nixon wanted a guaranteed annual income, as long as we're delving into the past about proposals that --

MS. CROWLEY: Right.

DR. MCLAUGHLIN: Monica.

MS. CROWLEY: And that was a mistake, too, and Nixon came to understand that was a mistake. This $1,000 giveaway -- you know, Obama is trying to paint it as a tax break for the middle class or the lower to middle class.

MS. CLIFT: It is.

MS. CROWLEY: But it's a trillion dollars in new spending. It's really not going to be a tax break for them --

DR. MCLAUGHLIN: Is he buying votes?

MS. CROWLEY: -- because how in the world else is he going to pay for it?

DR. MCLAUGHLIN: Is he trying to buy votes?

MS. CROWLEY: Of course he is.

(Cross-talk.)

DR. MCLAUGHLIN: Exit question: Which candidate's tax policy will be better for the U.S. economy, Obama's soak the rich, so to speak, or McCain's status quo?

MR. BUCHANAN: First, it ain't so to speak. McCain's politically and economically is a better idea -- politically and economically.

DR. MCLAUGHLIN: It's not going to gain him any votes, though, will it? MR. BUCHANAN: Sure, it will. It's better than talking about the economy in general.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: If this election turns on the economy, it will be a cake walk for Barack Obama. The American people have much more faith in the Democratic Party and the Democratic candidate than the soak- the-poor candidate on the right.

DR. MCLAUGHLIN: What you're saying is the American people can be bought. That's what you're saying.

MS. CLIFT: Bread and butter.

MS. CROWLEY: McCain wins this argument hands down. He's all about keeping the Bush across-the-board tax cuts into place and cutting government spending, including going after those earmarks. Wasteful spending has resonance with the public this year.

DR. MCLAUGHLIN: What do you think?

MS. BERNARD: I think, on tax policy, it's absolutely McCain. He wants to reduce the corporate tax rate in this country to 25 percent. Most studies will show that when you do that, it resonates.

It helps American workers. Salaries go up. It creates jobs. And on tax policy, McCain wins this argument.

MS. CLIFT: When did cutting the corporate tax rate ever win an election in this country? (Laughter.)

DR. MCLAUGHLIN: I think, Eleanor, you are underestimating how the American public has politically and in all ways evolved since those days when what you're saying now was applicable.

MR. BUCHANAN: Socialism doesn't work anymore, Eleanor. (Laughter.)

DR. MCLAUGHLIN: Therefore, I will say that --

MS. CLIFT: Corporatism has exhausted itself too.

DR. MCLAUGHLIN: -- provided that McCain is successful in annotating and giving his policy a little bit more elaboration, that he's got the better side of this argument.

When we come back, "veep" vetting gets complicated for Obama.

(Announcements.)

DR. MCLAUGHLIN: Issue Two: "Veep" vetting.

SEN. OBAMA: (From videotape.) We're going to go through a process in the vice presidential search where I look at a whole range of options. This is one of the most important decisions I can make and I think will signal how I want to operate my presidency.

DR. MCLAUGHLIN: Barack Obama formed a three-person committee last week to search for a vice presidential running mate: Jim Johnson, former Fannie Mae chairman; Eric Holder, former deputy attorney general; Caroline Kennedy, daughter of the late president, John F. Kennedy.

This week Johnson became embroiled in accusations of impropriety as a result of advantageous mortgage loans. Johnson got the mortgages from a subprime lender now under federal investigation, Countrywide Financial. Early in the week, Johnson resigned from the search committee. Obama was asked why he appointed Johnson, and Obama responded in this fashion.

SEN. OBAMA: (From videotape.) First of all, you know, I am not vetting my VP search committee for their mortgages, so you're going to have to direct -- I mean, it becomes sort of a -- I mean, this is a game that can be played. Everybody, you know, who is tangentially related to our campaign, I think, is going to have a whole host of relationships. I would have to hire the vetter to vet the vetters.

DR. MCLAUGHLIN: Question: As we heard a moment ago, Obama says, quote, "I think my vice presidential search process will signal how I want to operate my presidency," unquote. So what does this process tell us about a Barack presidency? I ask you, Eleanor.

MS. CLIFT: Well, it shows how difficult it is to extricate yourself from the Washington system and scene. Even though he's only been in Washington a short while, he relies --

DR. MCLAUGHLIN: Four years.

MS. CLIFT: Well, yes, that's a short while by Washington terms. Most people spend decades here, present company included. But I think that the atmosphere we now have of trying to find every little thing on the other side that you can go after shows the elevation of opposition research. And I would point out that the Obama campaign started a new website called StopTheSmears where they're basically putting up all of the rumors and knocking them down one by one. So it's a very overheated campaign.

DR. MCLAUGHLIN: Okay. Well, let's check that.

Changing the course.

SEN. OBAMA: (From videotape.) These aren't folks who are working for me. They're not people who I have assigned to a particular job in a future administration. And, you know, ultimately my assumption is that this is a discreet task that they're going to be performing for me over the next two months.

DR. MCLAUGHLIN: So now he's downgrading them. What do you make of that?

MS. CROWLEY: (Laughs.) Here's Barack --

DR. MCLAUGHLIN: They aren't important.

MS. CROWLEY: Here's Barack Obama's problem on this. This is a candidate who's running on his judgment, and yet we haven't seen much judgment in his selections. His first wave of appointments, the vice presidential search team -- Caroline Kennedy, fine; Eric Holder, the former deputy attorney general, who recommended the Marc Rich pardon to Bill Clinton, not exactly an inspired choice; and now we have the third choice, Jim Johnson, having to resign because -- look, Obama can't be seen to be a hypocrite. He has railed against Countrywide. He's railed against the subprime mortgage crisis. And yet one of his first appointments is up to his eyeballs in a possible scandal of sweetheart deals and --

DR. MCLAUGHLIN: You mean with Countrywide.

MR. BUCHANAN: Yeah.

MS. CROWLEY: Yes.

MR. BUCHANAN: John, his problem is this. Barack Obama is running on the new politics, higher than everybody else, all the rest of it. When you do that, it comes back to bite you. This guy is not a bad guy, Johnson.

DR. MCLAUGHLIN: Who? Johnson.

MR. BUCHANAN: This fellow, Johnson. He's got a conflict. Eric Holder did do the Rich thing, which was very suspicious. But when you put yourself up on the pedestal like some preachers do, for example, and then you're caught in something --

DR. MCLAUGHLIN: All right, straighten out one thing for me.

MS. CLIFT: But isn't there another --

DR. MCLAUGHLIN: When he left Fannie Mae -- I'm talking about Jim Johnson, Eleanor -- the stated amount of separation was $7 million. It turns out it was $21 million, I believe. Now, is that the worst thing Johnson has ever done, conceal how much money he got from Fannie Mae when he left?

MS. BERNARD: Look, I don't know Jim Johnson. What I am told is that Jim Johnson is an okay guy. I've got to tell you, on this issue I'm with Eleanor.

DR. MCLAUGHLIN: He's an insider. He's a consummate insider.

MS. BERNARD: He is. And I think what it shows is that when the nation is talking about having this discussion about change, that change is difficult. When you are running a presidential campaign -- and this is what is difficult for Barack Obama, because he has railed against Countrywide; he is running on a campaign slogan of bringing change. But sometimes change is difficult.

Jim Johnson, from what I am told, is a good man. I personally know Eric Holder. He made a bad decision, but he is a good person. You know, John McCain has Charlie Black working for him -- DR. MCLAUGHLIN: Eleanor --

MS. CLIFT: Right. And --

DR. MCLAUGHLIN: Hold on. I want to get your judgment on this. Obama presents himself as the consummate outsider. He's new to Washington. It turns out that he's the consummate insider because he knows about Johnson and he puts Johnson, who is a consummate insider -- Johnson's apparently a good guy, but he's an insider. He's a total insider.

MS. CLIFT: Johnson has done the vice presidential search for the last two presidential elections. He knows where a lot of the skeletons are. Presumably he had a head start on the process.

DR. MCLAUGHLIN: So he's thinking he's a good choice.

MS. CLIFT: Yeah. And he knows how to keep a secret. He's a terrible source. So, yes, by Washington standards, it was a very good choice.

DR. MCLAUGHLIN: What about the Countrywide connection?

MS. CLIFT: Look, there's another candidate --

MR. BUCHANAN: Eleanor --

MS. CLIFT: Let me finish. There's another candidate running. His name is John McCain. He's also running on a holier-than-thou "I'm a reformer.

" He has had numerous lobbyists resign from his campaign --

DR. MCLAUGHLIN: Why did Johnson resign? Why did he resign?

MS. BERNARD: Because it was --

MS. CLIFT: Because --

DR. MCLAUGHLIN: Let her finish.

MS. CLIFT: Because it conflicted with Obama's rhetoric. He didn't do anything illegal.

DR. MCLAUGHLIN: Why does Obama lie --

MS. CLIFT: He's not lying.

DR. MCLAUGHLIN: -- or why is he mendacious in his rhetoric?

MS. CLIFT: He's not mendacious in his rhetoric. He's reaching for a higher standard, and it's very hard to get there.

MR. BUCHANAN: Eleanor has a basic point. Let me finish.

MS. CLIFT: It's hard to get there for John McCain as well.

MR. BUCHANAN: Eleanor's basic point is this.

MS. CLIFT: He's reached the point of ludicrousness in this knocking off lobbyists and insiders.

DR. MCLAUGHLIN: I want to hear from Pat. Go ahead, Pat.

MR. BUCHANAN: Look, Eleanor has a basic point. McCain is running around saying --

MS. CLIFT: It took me a long time to make it.

MR. BUCHANAN: -- no lobbyists involved, and Obama the new politics. All over the place these guys are in town. They've got jobs. They're all hip-deep in this stuff. DR. MCLAUGHLIN: How damaging is this on a damage scale to Obama?

MR. BUCHANAN: It's about a one or two, and it's gone.

MS. BERNARD: Yes.

MS. CLIFT: Right. Yes, it's a .5.

MS. CROWLEY: I think it's bigger than that because it speaks to Obama's lack of judgment --

MS. CLIFT: Oh --

MS. CROWLEY: -- which is his entire basis for his candidacy. The reason Jim Johnson stepped down was not necessarily the Countrywide thing. It was that The Washington Post ran a front-page story saying that he was part of this executive compensation for United Health Group where the CEO was getting a $1.4 billion golden parachute. Now, Barack Obama introduced legislation to try to control executive compensation, and here's this guy overseeing, you know, billions of dollars --

MS. CLIFT: His judgment is that he gets rid of the guy -- good judgment.

DR. MCLAUGHLIN: Now, what does Obama have to labor under? And I will start you off on this. He cannot go inside for his next person to head up his "veep" committee, so he's going to be deprived of that insider knowledge, which in Washington you really need in order to perform a lot of specified functions. It helps to have experience in this town.

MS. BERNARD: Well, here's what I think. I think the dirty little secret is Barack Obama probably already knows who he's going to select to be his vice presidential running mate. You put out the search committee, probably because Hillary Clinton was all over his back last week --

DR. MCLAUGHLIN: So this is a smokescreen. This is a smokescreen.

MS. BERNARD: I don't know if it's a smokescreen, but I think he has a good idea who his vice presidential running mate is going to be. And the search committee is much ado about nothing.

DR. MCLAUGHLIN: Issue Three: Guantanamo Rights.

The Supreme Court dealt a blow to the Bush administration this week on a ruling that the detainees at Guantanamo Bay are eligible to challenge their detention by using U.S. civilian courts. The decision was 5-4.

Question: Was this a good ruling? Yes or no, Pat. MR. BUCHANAN: It was a dreadful ruling, John. The president of the United States, when you're at war -- these are prisoners of war. Not only that; they're terrorists. They're in Guantanamo. And the idea of extending rights to prisoners of war, guilty of terrorist attacks, is preposterous. It's damaging to the War on Terror.

DR. MCLAUGHLIN: Quickly.

MR. BUCHANAN: It helps McCain --

MS. CLIFT: The right of habeas corpus is one of the most fundamental rights in this country. It's the right to challenge your detention. Some of these people have been held in Guantanamo for six years without even a hearing, and that's what turned the Supreme Court around.

DR. MCLAUGHLIN: Good ruling.

MS. CLIFT: That does not -- excellent ruling.

MS. CROWLEY: Bad ruling. This is a totally irresponsible and dangerous decision to extend U.S. constitutional rights to foreign enemy combatants. I was at Guantanamo Bay in the fall of 2006. These are the world's most hardened jihadists who should not have the rights and privileges of American citizens.

DR. MCLAUGHLIN: How can you improve on that?

MS. BERNARD: (Laughs.)

DR. MCLAUGHLIN: Quickly.

MS. BERNARD: I can't, if they are --

MS. CLIFT: It's not true.

DR. MCLAUGHLIN: Do you agree with the ruling?

MS. BERNARD: I have to read the ruling. I want to see the ruling.

DR. MCLAUGHLIN: Are you a lawyer?

MS. BERNARD: I am a lawyer. I want to take a look at the ruling, because I don't believe that terrorists should have the right to sue in United States courts. Here's what I think is troublesome. If some of these people have been locked up and they're not terrorists, it's a huge problem.

DR. MCLAUGHLIN: Michelle, I'm with you. I'm with lawyers all the way. We'll be right back with predictions.

(Announcements.)

DR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Ireland will do the right thing and dynamite the EU Lisbon agreement.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The next president will do the right thing and dynamite Guantanamo. It's gone.

DR. MCLAUGHLIN: Monica.

MS. CROWLEY: Illinois Governor Rod Blagojevich will resign.

DR. MCLAUGHLIN: Michelle.

MS. BERNARD: The Republican Party will make sure to stay away from Michelle Obama and not engage in a smear campaign.

DR. MCLAUGHLIN: The Group joins me in extending our deepest sympathy to Maureen Orth Russert and Luke Russert on the tragic loss of husband and father Tim Russert. Our prayers and thoughts are with his family and loved ones and with Tim, a man of such great religious faith, patriotism and unexcelled intellectual honesty. May he rest in peace.

MR. BUCHANAN: Amen.



END.

Laughter.)

DR. MCLAUGHLIN: I think, Eleanor, you are underestimating how the American public has politically and in all ways evolved since those days when what you're saying now was applicable.

MR. BUCHANAN: Socialism doesn't work anymore, Eleanor. (Laughter.)

DR. MCLAUGHLIN: Therefore, I will say that --

MS. CLIFT: Corporatism has exhausted itself too.

DR. MCLAUGHLIN: -- provided that McCain is successful in annotating and giving his policy a little bit more elaboration, that he's got the better side of this argument.

When we come back, "veep" vetting gets complicated for Obama.

(Announcements.)

DR. MCLAUGHLIN: Issue Two: "Veep" vetting.

SEN. OBAMA: (From videotape.) We're going to go through a process in the vice presidential search where I look at a whole range of options. This is one of the most important decisions I can make and I think will signal how I want to operate my presidency.

DR. MCLAUGHLIN: Barack Obama formed a three-person committee last week to search for a vice presidential running mate: Jim Johnson, former Fannie Mae chairman; Eric Holder, former deputy attorney general; Caroline Kennedy, daughter of the late president, John F. Kennedy.

This week Johnson became embroiled in accusations of impropriety as a result of advantageous mortgage loans. Johnson got the mortgages from a subprime lender now under federal investigation, Countrywide Financial. Early in the week, Johnson resigned from the search committee. Obama was asked why he appointed Johnson, and Obama responded in this fashion.

SEN. OBAMA: (From videotape.) First of all, you know, I am not vetting my VP search committee for their mortgages, so you're going to have to direct -- I mean, it becomes sort of a -- I mean, this is a game that can be played. Everybody, you know, who is tangentially related to our campaign, I think, is going to have a whole host of relationships. I would have to hire the vetter to vet the vetters.

DR. MCLAUGHLIN: Question: As we heard a moment ago, Obama says, quote, "I think my vice presidential search process will signal how I want to operate my presidency," unquote. So what does this process tell us about a Barack presidency? I ask you, Eleanor.

MS. CLIFT: Well, it shows how difficult it is to extricate yourself from the Washington system and scene. Even though he's only been in Washington a short while, he relies --

DR. MCLAUGHLIN: Four years.

MS. CLIFT: Well, yes, that's a short while by Washington terms. Most people spend decades here, present company included. But I think that the atmosphere we now have of trying to find every little thing on the other side that you can go after shows the elevation of opposition research. And I would point out that the Obama campaign started a new website called StopTheSmears where they're basically putting up all of the rumors and knocking them down one by one. So it's a very overheated campaign.

DR. MCLAUGHLIN: Okay. Well, let's check that.

Changing the course.

SEN. OBAMA: (From videotape.) These aren't folks who are working for me. They're not people who I have assigned to a particular job in a future administration. And, you know, ultimately my assumption is that this is a discreet task that they're going to be performing for me over the next two months.

DR. MCLAUGHLIN: So now he's downgrading them. What do you make of that?

MS. CROWLEY: (Laughs.) Here's Barack --

DR. MCLAUGHLIN: They aren't important.

MS. CROWLEY: Here's Barack Obama's problem on this. This is a candidate who's running on his judgment, and yet we haven't seen much judgment in his selections. His first wave of appointments, the vice presidential search team -- Caroline Kennedy, fine; Eric Holder, the former deputy attorney general, who recommended the Marc Rich pardon to Bill Clinton, not exactly an inspired choice; and now we have the third choice, Jim Johnson, having to resign because -- look, Obama can't be seen to be a hypocrite. He has railed against Countrywide. He's railed against the subprime mortgage crisis. And yet one of his first appointments is up to his eyeballs in a possible scandal of sweetheart deals and --

DR. MCLAUGHLIN: You mean with Countrywide.

MR. BUCHANAN: Yeah.

MS. CROWLEY: Yes.

MR. BUCHANAN: John, his problem is this. Barack Obama is running on the new politics, higher than everybody else, all the rest of it. When you do that, it comes back to bite you. This guy is not a bad guy, Johnson.

DR. MCLAUGHLIN: Who? Johnson.

MR. BUCHANAN: This fellow, Johnson. He's got a conflict. Eric Holder did do the Rich thing, which was very suspicious. But when you put yourself up on the pedestal like some preachers do, for example, and then you're caught in something --

DR. MCLAUGHLIN: All right, straighten out one thing for me.

MS. CLIFT: But isn't there another --

DR. MCLAUGHLIN: When he left Fannie Mae -- I'm talking about Jim Johnson, Eleanor -- the stated amount of separation was $7 million. It turns out it was $21 million, I believe. Now, is that the worst thing Johnson has ever done, conceal how much money he got from Fannie Mae when he left?

MS. BERNARD: Look, I don't know Jim Johnson. What I am told is that Jim Johnson is an okay guy. I've got to tell you, on this issue I'm with Eleanor.

DR. MCLAUGHLIN: He's an insider. He's a consummate insider.

MS. BERNARD: He is. And I think what it shows is that when the nation is talking about having this discussion about change, that change is difficult. When you are running a presidential campaign -- and this is what is difficult for Barack Obama, because he has railed against Countrywide; he is running on a campaign slogan of bringing change. But sometimes change is difficult.

Jim Johnson, from what I am told, is a good man. I personally know Eric Holder. He made a bad decision, but he is a good person. You know, John McCain has Charlie Black working for him -- DR. MCLAUGHLIN: Eleanor --

MS. CLIFT: Right. And --

DR. MCLAUGHLIN: Hold on. I want to get your judgment on this. Obama presents himself as the consummate outsider. He's new to Washington. It turns out that he's the consummate insider because he knows about Johnson and he puts Johnson, who is a consummate insider -- Johnson's apparently a good guy, but he's an insider. He's a total insider.

MS. CLIFT: Johnson has done the vice presidential search for the last two presidential elections. He knows where a lot of the skeletons are. Presumably he had a head start on the process.

DR. MCLAUGHLIN: So he's thinking he's a good choice.

MS. CLIFT: Yeah. And he knows how to keep a secret. He's a terrible source. So, yes, by Washington standards, it was a very good choice.

DR. MCLAUGHLIN: What about the Countrywide connection?

MS. CLIFT: Look, there's another candidate --

MR. BUCHANAN: Eleanor --

MS. CLIFT: Let me finish. There's another candidate running. His name is John McCain. He's also running on a holier-than-thou "I'm a reformer.

" He has had numerous lobbyists resign from his campaign --

DR. MCLAUGHLIN: Why did Johnson resign? Why did he resign?

MS. BERNARD: Because it was --

MS. CLIFT: Because --

DR. MCLAUGHLIN: Let her finish.

MS. CLIFT: Because it conflicted with Obama's rhetoric. He didn't do anything illegal.

DR. MCLAUGHLIN: Why does Obama lie --

MS. CLIFT: He's not lying.

DR. MCLAUGHLIN: -- or why is he mendacious in his rhetoric?

MS. CLIFT: He's not mendacious in his rhetoric. He's reaching for a higher standard, and it's very hard to get there.

MR. BUCHANAN: Eleanor has a basic point. Let me finish.

MS. CLIFT: It's hard to get there for John McCain as well.

MR. BUCHANAN: Eleanor's basic point is this.

MS. CLIFT: He's reached the point of ludicrousness in this knocking off lobbyists and insiders.

DR. MCLAUGHLIN: I want to hear from Pat. Go ahead, Pat.

MR. BUCHANAN: Look, Eleanor has a basic point. McCain is running around saying --

MS. CLIFT: It took me a long time to make it.

MR. BUCHANAN: -- no lobbyists involved, and Obama the new politics. All over the place these guys are in town. They've got jobs. They're all hip-deep in this stuff. DR. MCLAUGHLIN: How damaging is this on a damage scale to Obama?

MR. BUCHANAN: It's about a one or two, and it's gone.

MS. BERNARD: Yes.

MS. CLIFT: Right. Yes, it's a .5.

MS. CROWLEY: I think it's bigger than that because it speaks to Obama's lack of judgment --

MS. CLIFT: Oh --

MS. CROWLEY: -- which is his entire basis for his candidacy. The reason Jim Johnson stepped down was not necessarily the Countrywide thing. It was that The Washington Post ran a front-page story saying that he was part of this executive compensation for United Health Group where the CEO was getting a $1.4 billion golden parachute. Now, Barack Obama introduced legislation to try to control executive compensation, and here's this guy overseeing, you know, billions of dollars --

MS. CLIFT: His judgment is that he gets rid of the guy -- good judgment.

DR. MCLAUGHLIN: Now, what does Obama have to labor under? And I will start you off on this. He cannot go inside for his next person to head up his "veep" committee, so he's going to be deprived of that insider knowledge, which in Washington you really need in order to perform a lot of specified functions. It helps to have experience in this town.

MS. BERNARD: Well, here's what I think. I think the dirty little secret is Barack Obama probably already knows who he's going to select to be his vice presidential running mate. You put out the search committee, probably because Hillary Clinton was all over his back last week --

DR. MCLAUGHLIN: So this is a smokescreen. This is a smokescreen.

MS. BERNARD: I don't know if it's a smokescreen, but I think he has a good idea who his vice presidential running mate is going to be. And the search committee is much ado about nothing.

DR. MCLAUGHLIN: Issue Three: Guantanamo Rights.

The Supreme Court dealt a blow to the Bush administration this week on a ruling that the detainees at Guantanamo Bay are eligible to challenge their detention by using U.S. civilian courts. The decision was 5-4.

Question: Was this a good ruling? Yes or no, Pat. MR. BUCHANAN: It was a dreadful ruling, John. The president of the United States, when you're at war -- these are prisoners of war. Not only that; they're terrorists. They're in Guantanamo. And the idea of extending rights to prisoners of war, guilty of terrorist attacks, is preposterous. It's damaging to the War on Terror.

DR. MCLAUGHLIN: Quickly.

MR. BUCHANAN: It helps McCain --

MS. CLIFT: The right of habeas corpus is one of the most fundamental rights in this country. It's the right to challenge your detention. Some of these people have been held in Guantanamo for six years without even a hearing, and that's what turned the Supreme Court around.

DR. MCLAUGHLIN: Good ruling.

MS. CLIFT: That does not -- excellent ruling.

MS. CROWLEY: Bad ruling. This is a totally irresponsible and dangerous decision to extend U.S. constitutional rights to foreign enemy combatants. I was at Guantanamo Bay in the fall of 2006. These are the world's most hardened jihadists who should not have the rights and privileges of American citizens.

DR. MCLAUGHLIN: How can you improve on that?

MS. BERNARD: (Laughs.)

DR. MCLAUGHLIN: Quickly.

MS. BERNARD: I can't, if they are --

MS. CLIFT: It's not true.

DR. MCLAUGHLIN: Do you agree with the ruling?

MS. BERNARD: I have to read the ruling. I want to see the ruling.

DR. MCLAUGHLIN: Are you a lawyer?

MS. BERNARD: I am a lawyer. I want to take a look at the ruling, because I don't believe that terrorists should have the right to sue in United States courts. Here's what I think is troublesome. If some of these people have been locked up and they're not terrorists, it's a huge problem.

DR. MCLAUGHLIN: Michelle, I'm with you. I'm with lawyers all the way. We'll be right back with predictions.

(Announcements.)

DR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Ireland will do the right thing and dynamite the EU Lisbon agreement.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The next president will do the right thing and dynamite Guantanamo. It's gone.

DR. MCLAUGHLIN: Monica.

MS. CROWLEY: Illinois Governor Rod Blagojevich will resign.

DR. MCLAUGHLIN: Michelle.

MS. BERNARD: The Republican Party will make sure to stay away from Michelle Obama and not engage in a smear campaign.

DR. MCLAUGHLIN: The Group joins me in extending our deepest sympathy to Maureen Orth Russert and Luke Russert on the tragic loss of husband and father Tim Russert. Our prayers and thoughts are with his family and loved ones and with Tim, a man of such great religious faith, patriotism and unexcelled intellectual honesty. May he rest in peace.

MR. BUCHANAN: Amen.



END.