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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; MORT ZUCKERMAN, U.S. NEWS & WORLD REPORT TAPED: FRIDAY, JANUARY 9, 2009 BROADCAST: WEEKEND OF JANUARY 10-11, 2009

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MR. MCLAUGHLIN: Issue One: Grim Epitaph.

REP. JOHN SPRATT (D-SC): (From videotape.) CBO's latest numbers are a grim epitaph for the outgoing administration. They stand certainly in stark contrast to the budget it inherited -- $230 billion in surplus the year before it took office. When it came to office in 2001, the Bush administration stepped into the largest surpluses in American history in nominal terms. The Bush administration then proceeded to convert $5.6 trillion in projected surpluses -- its number, $5.6 trillion -- into nearly $4 trillion in projected deficits, all of it added to the national debt.

SEN. KENT CONRAD (D-ND): (From videotape.) The numbers released by the Congressional Budget Office today are jaw-dropping. MR. MCLAUGHLIN: The Congressional Budget Office issued a 50-page grim picture of the national economy this week. A few of its features: Current recession probably to be the longest and deepest since World War II, but not comparable, as often is alleged, to the Great Depression; GDP growing by only 1.5 percent in 2010, not its standard 2.3 percent; unemployment over 9 percent in early 2010; national average home prices down 14 percent between 2008 and 2010; the GDP hitherto trending growth rate of 2.3 percent will not occur until 2015. That's six years from now.

Let me repeat: The budget deficit for this year will total $1.2 trillion, or 8.3 percent of GDP. Question: Is the CBO report a big inaugural gift to Obama? Pat Buchanan.

MR. BUCHANAN: It is, because what it says is, "The disaster did not occur on my watch; Bush is responsible." But John, you forgot to add in the $700 billion to $1 trillion package, 5 to 7 percent of GDP, which is going to be piled on top of that 8 percent. If you get up around 14, 15 percent of GDP, we haven't seen anything like that since the middle of World War II.

But Barack Obama -- look, the table is being set for him. He's inherited a disaster. He's going to have some time. But he will not have the kind of time they had during the Depression, where people stood still for 14 to 25 percent unemployment for 10 years. They don't have that kind of time. But the table's set for him, John. He's going to get most of what he wants. I don't think that kind of expenditure and loose money has ever worked except for World War II in curing an economy.

MR. MCLAUGHLIN: Eleanor, what do you think about that? Obama is now immunized against the fault and this grim epitaph of the Bush administration?

MS. CLIFT: Well, he's got his Hoover, and I think everybody is looking at how serious this situation is and they think that he can't possibly make it worse, and they're going to give him a lot of slack to try to make it better.

The deficit, of course, is worrisome, but more worrisome are the unemployment figures. Unemployment has gone up over 7 percent. That's kind of a tipping point. And Obama has now tried to inject a sense of urgency into the work that Congress does. And you would think that, given those deficit figures, we wouldn't want to be adding to it. But Obama does have the consensus of economists from the right and the left that a huge stimulus package is needed.

And I think he has the country pretty much behind him, not to the extent that FDR had it. FDR could write the program in the White House and just send it up to be rubber-stamped. There's going to be a lot of back and forth over this. But essentially the momentum is there for him to spend this money. MR. MCLAUGHLIN: This CBO report effectively says that Obama is secure right through the second term, the mid-point in his second term, that all of that can be blamed on Bush. Do you think that this report is jury-rigged?

MS. CROWLEY: Well, a lot of it can be blamed on President Bush. And I speak as a fiscal conservative here who's been very disappointed in the fact that President Bush and the Republicans in Congress, when they did have control over it, did not rein in federal spending. Actually, they spent money like a soldier on leave in Times Square. This is a very bad fiscal legacy for President Bush to be leaving the new president.

However, I do disagree with Eleanor that Obama can't make it worse. I think he can make it worse. Look, we're talking about fiscal stimulus here of a trillion dollars. It will probably end up being $1.2 (trillion), $1.3 (trillion), certainly over the trillion- dollar mark. That kind of enormous federal spending -- and Obama said this week that we're going to be looking at trillion-dollar deficits for, quote, "years to come."

I do not believe that you can spend your way out of this problem. If he goes down the path of quasi-nationalizing health care, reunionizing Americans and so on, these are huge gifts to the unions. It is so much spending, John, that he could actually prolong the situation, because it's public-sector solutions that almost never work.

MR. MCLAUGHLIN: Mort, the blame has been pinned on Bush, right?

MR. ZUCKERMAN: The political blame has been pinned on Bush. The problem is that Obama is going to inherit an economic crunch and crisis that at some point is going to be considered Obama's problem. I mean, you are going to be in a position here where, for the first two or three years of his presidency, he will be absolutely overwhelmed by what's happening in the economy.

The expectations of Obama coming into office are still very, very high. Everybody thinks he can cure every problem, and on the seventh day he'll rest. But I have to tell you, this is something that's going to consume the American public. And there's a very good chance that it'll take away all the energy in his presidency for the next several years.

We are looking at by far and away the worst recession since the end of World War II. And nobody knows how to cure it, because this is a sui generis kind of event. I don't know if Obama knows how to cure it or the people around him know how to cure it.

MR. MCLAUGHLIN: What's the checklist of why you're saying that this is a terribly bad financial status for the country? MR. ZUCKERMAN: Well, besides the deficits, the fact is the economy is going down. We are heading into a recession that is going to be led by the consumer. Consumer spending is going to go down dramatically. Housing values are going down dramatically. The stock market has already gone down dramatically. It's going to continue to go down dramatically. We could look at -- as Eleanor said, the unemployment rate is soaring. We lost 1,100,000 jobs in the last two months.

MR. BUCHANAN: (Inaudible.)

MR. MCLAUGHLIN: Let him finish.

MR. BUCHANAN: All right.

MR. ZUCKERMAN: And we're going to be going up -- it's going to be going up over the next four or five months. We're going to see an unemployment rate that, in my judgment, is going to exceed 10 percent.

MR. BUCHANAN: Well --

MR. ZUCKERMAN: And that's the pure unemployment rate. There's another --

MR. BUCHANAN: But it hit 10 percent --

MR. ZUCKERMAN: Wait a minute. Let me just finish one thing.

There are two kinds of unemployment. One is somebody doesn't have a job. The other is somebody who wants to work full-time and can only work part-time. That's going to approach one in every five families in America. That has not happened since the Great Depression. And Obama is going to have to try and find a way to deal with that.

MR. MCLAUGHLIN: Final thought --

MR. ZUCKERMAN: And nobody knows whether there is a way to deal with it.

MR. MCLAUGHLIN: What's the story on banks?

MR. ZUCKERMAN: Well, the banks, frankly, have no capacity to do lending. Why? Because their own loans that they now have on their books are in such terrible shape that all the money they have, they have to keep to protect their own solvency. There's virtually no credit out there. And the confidence bubble, which has burst, is absolutely disastrous. Nobody is willing to lend money outside of their own homes. And that means this is a country and an economy that rests on credit, and that credit -- their credit is based on --

MR. BUCHANAN: It's politics, John. Look, Ronald Reagan, when he came in, he inherited 21 percent interest rates, 13 percent inflation, zero growth, unemployment at 7 percent. He put in his tax cuts, but they didn't take effect till '83. The unemployment went to 10 percent, which was the highest in the post-World War II era. He lost 26 House seats in 1982.

What I'm saying is the patience of the American people that was there in the 1930s -- they stayed with FDR, strengthened him again and again and again, despite horrendous numbers -- it is not there with the American people now. They're impatient. And Barack Obama, if he doesn't deliver --

MR. MCLAUGHLIN: Are they fearful? Are they fearful?

MR. BUCHANAN: If he doesn't deliver in two years, the Democrats will face a wipeout.

MS. CLIFT: It's only -- MR. MCLAUGHLIN: Okay, Eleanor, let me let you in after Obama. Obama's take on the economy.

President-elect Obama is on the threshold of a specific price tag of what now appears to be an $800 billion government infusion into the economy.

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short term. It is true that we cannot depend on government alone to create jobs or long-term growth. But at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe.

MR. MCLAUGHLIN: Question: Is Obama right, that only the government can bring the U.S. out of a potentially deep and severe recession? Eleanor.

MS. CLIFT: Yeah. The private sector credit markets are frozen, and so government does have to step in. But I want to go back to what Pat said. He's imagining a Republican comeback in two years. The party in power generally does lose some seats, but I don't think it's going to be a wipeout, because Obama has been handed a gift in the sense that, absent this financial crisis, he would be going into the White House without any money to spend, in a financial straitjacket. Now he has basically people begging him to spend $800 billion at least. And with all due respect to Monica, there is wide agreement on Capitol Hill that a substantial package needs to be passed.

MS. CROWLEY: Substantial is one thing.

MS. CLIFT: The Republicans do not have an alternative.

MS. CROWLEY: But I would say that when you take a look at not just Republicans and conservatives, Eleanor, but there are a lot of Blue Dog Democrats who are really concerned about blowing up this deficit; you've got some moderate-conservative Democrats who are saying, "Wait a minute. We're concerned about the size of this too." Plus you've got liberal Democrats saying, "You know what? This package doesn't go far enough."

So Obama's first mission is to try to unite his own party. He's got some serious problems there; try to bring in enough tax cuts to bring enough Republicans on board to get a real consensus. When Obama says that only government can fix this, this is the well-worn path of big-government liberalism, John. Where are the tax cuts on corporations? Where's making the Bush tax cuts permanent? Where are capital gains taxes? If you get that, then you've got the private sector having some incentive here for job creation and incentive.

MS. CLIFT: And you think anybody's going to blow up the (pact ?) without any one of those things? No. MS. CROWLEY: I'm saying that that is a critical component to this that is missing.

MR. MCLAUGHLIN: Hey, Mort, let me ask you this. This is classic Keynesian approach when you funnel government money in. The danger of that, of course, is inflation.

MR. BUCHANAN: Exactly.

MR. MCLAUGHLIN: So there's a limit to this Keynesian drift, correct?

MR. ZUCKERMAN: Yes, that is true up to a point, John. Right now the problem is not inflation. The problem is deflation.

MS. CLIFT: Deflation.

MR. ZUCKERMAN: We are looking at the possibility -- and I believe it'll happen next year, or this year now -- that we will have deflation. That is a real disaster for the economy. So they have to deal with that problem. The inflation problem can be dealt with later on through monetary policy. Right now they cannot --

MR. BUCHANAN: Try stagflation. Try stagflation.

MR. ZUCKERMAN: I don't believe it'll be stagflation, okay?

MR. BUCHANAN: That's what Carter had -- prices surging and no growth.

MR. MCLAUGHLIN: Let me ask you something else, and that's about globalism. You heard me say with great discernment on this program at an earlier date that globalism is really the cause of this, that China and India cannot be taking American jobs in the fashion that they are without us paying the price. Therefore, trade negotiations have to be rewritten. The WTO has to be looked at and other trade formulations. You agree with that. You think globalism is the problem.

MR. BUCHANAN: I think globalism has been a horrendous problem in deindustrializing America to where we're not creating things and making things. This stimulus package -- when you send out money and people go down to the mall, they go to the car lots, half the cars will be Asian or Japanese or European. A lot of the goods will be foreign. The money's going to be going abroad. Economic nationalism, John, in one of your rare predictions that may come true, is coming back dramatically.

MR. MCLAUGHLIN: Why don't we renegotiate GATT? Why don't we renegotiate the WTO?

MR. BUCHANAN: What you do is walk out of the WTO. MS. CLIFT: The theoretical --

MR. MCLAUGHLIN: I want to hear from him. What do you think of globalism being the cause?

MR. ZUCKERMAN: That is absolutely wrong, in my judgment, okay. I think it is the way of keeping inflation down, which is when we were able to import these goods. And I would point out to you, for all that you say about the loss of manufacturing jobs, we had a very low unemployment rate just at all of those periods that you mentioned. Okay, and a lot of the cars that you're referring to are manufactured here in the United States. They are not imported.

MR. MCLAUGHLIN: What's your prescription for the way out of this mess?

MR. BUCHANAN: Well --

MR. MCLAUGHLIN: Wait a minute.

MR. ZUCKERMAN: It is not going to come by redoing all of these foreign trade deals, okay? It is going to come -- and the only way it's going to come is over an extended period of time and through a huge government deficit, because monetary policy does not work when nobody is lending and nobody is borrowing.

MR. BUCHANAN: John, how did Reagan do it? How did Reagan do it?

MR. ZUCKERMAN: So the only thing we can do --

MR. MCLAUGHLIN: So you want to keep pumping --

MR. ZUCKERMAN: Absolutely, because we stand --

MR. BUCHANAN: John, how did Reagan succeed?

MR. ZUCKERMAN: -- at risk.

MR. MCLAUGHLIN: How did he succeed?

MR. BUCHANAN: He succeeded with the private sector, exactly what Monica said. He cut taxes across the board, 70 percent to 28 percent, 6 percent of GDP deficit. It took two years, but boom.

MR. MCLAUGHLIN: Have you heard that Obama is not going to totally wipe out the tax cuts of George Bush?

MR. BUCHANAN: He's not going to touch --

MR. MCLAUGHLIN: He's going to modify them.

MR. BUCHANAN: He's not going to touch me and Mort or you.

MR. MCLAUGHLIN: Oh, he'll do something to satisfy the Eleanor Clifts of this world, but not much.

MR. BUCHANAN: He's not going to raise taxes.

MS. CLIFT: Ronald Reagan was 28 years ago. Save the theoretical discussion about GATT and globalization until Barack Obama's second term or Sarah Palin's first term. (Laughter.)

MR. MCLAUGHLIN: Get the Brinks trucks out of the Treasury and pull it all up here.

MR. BUCHANAN: (Laughs.) MR. ZUCKERMAN: Yeah, well.

MR. MCLAUGHLIN: Exit question: Will Obama be able to control runaway pork-barrel spending by the Democratic Congress any better than Bush could control runaway spending and earmarks by a Republican Congress? Yes or no.

MR. BUCHANAN: Of course not. It's the biggest pig-out in human history coming up.

MS. CLIFT: No, he's going to be able to control it because it's a very different political climate.

MR. ZUCKERMAN: Right.

MS. CLIFT: You've got the Internet and the spotlight of pay for play shining on the Congress. He's going to do a much better job.

MS. CROWLEY: Wrong. Wrong. I totally disagree. (Laughs.)

MS. CLIFT: Bush had a surplus to squander, which he did.

MS. CROWLEY: You've got Democrats controlling the Congress and the White House.

MR. BUCHANAN: The governors and mayors. (Laughs.)

MS. CROWLEY: The train wreck has already begun. They're already at the trough. It's only going to get worse.

MR. MCLAUGHLIN: How can he do it?

MR. ZUCKERMAN: Well, it's all a question of definition, John. You have to distinguish between what is in the national interest, which is what every congressman will say, and what is pork. You just have the wrong definition, John.

MR. MCLAUGHLIN: Why don't we give Obama the line-item veto? Wouldn't that help?

MR. ZUCKERMAN: Absolutely.

MS. CLIFT: It's unconstitutional. (Laughs.)

MR. ZUCKERMAN: The line-item --

MR. BUCHANAN: It might be unconstitutional, yeah.

MR. MCLAUGHLIN: What do you mean, unconstitutional?

MR. BUCHANAN: They knocked one of them out. MS. CLIFT: That's what the Supreme Court said.

MR. MCLAUGHLIN: We can't get our famous lawyers in Washington to work around that?

MR. BUCHANAN: You can't take a piece of legislation -- you can't take a piece of legislation and draw a line through it when they send it down.

MR. MCLAUGHLIN: We've had this conversation on this show many times. There are ways to implement a line-item veto --

MR. BUCHANAN: Well, look, you think he's going to --

MR. MCLAUGHLIN: -- that's not unconstitutional.

MR. BUCHANAN: This is going to be 100,000 pages. It's going through it line by line?

MR. ZUCKERMAN: Somebody would, and you know it.

MR. MCLAUGHLIN: Issue Two: Gaza Burning.

TZIPI LIVNI (Israeli foreign minister): (From videotape.) When Israel is being targeted, Israel is going to retaliate.

MR. MCLAUGHLIN: Israel's retaliation into Palestinian Gaza is now two weeks old. Its penetration is by land, sea and air. The campaign comes just after a six-month cease-fire with Hamas expires. Hamas has fired hundreds of rockets into southern Israel in the last three weeks, where 500,000 Israelis are within range. Hamas's exiled leader, Khalid Meshaal, lives in Damascus, Syria. He remains defiant. "You need to know that doom will await you and you will be killed, injured or captured."

The human toll now stands at over 700 Palestinians dead and 3,000 wounded, all in Gaza. Four Israeli citizens have been killed in Israel and six Israeli soldiers killed in Gaza. The international response to Israel's retaliation has been blistering. The Vatican described Gaza in these words. Quote: "More and more, Gaza resembles a big concentration camp," unquote.

Israel described the Vatican comment as, quote, "Hamas propaganda." Pope Benedict XVI has been negotiating a trip to Israel for this May. That trip may now be on the back burner.

Question: Is the Vatican description of Gaza as a concentration camp basically true, or is the Israeli government justified in describing the Vatican description as, quote-unquote, "Hamas propaganda"? Mort Zuckerman.

MR. ZUCKERMAN: Well, it certainly isn't a concentration camp. The Israelis left Gaza with considerable force -- that is, force against their own people. They turned over all of Gaza in 2005 to the Palestinians. But every day since then, the Palestinians have rained rockets on the Israeli communities, rockets with increasingly greater range, greater lethality and greater accuracy.

Right now a million people, not 500,000, are within range. And Tel Aviv was just about a year away before they developed that capacity. Israel simply could not tolerate that. And since, when the Palestinians were there, they have -- every single one of those rockets or missiles was directed against civilians. Not a single military target was involved. Israel had no choice but to respond.

MR. MCLAUGHLIN: Here's a question. What is the Israeli action suggesting, telling Obama? Obama.

MR. BUCHANAN: That's to me?

MR. MCLAUGHLIN: That's to you.

MR. BUCHANAN: What the Israelis are doing is they're presenting Obama with a fait accompli. They're going to try to take down Hamas and try to stop these rockets. I don't think they're going to succeed.

MR. MCLAUGHLIN: No, the message is something different. Who can tell me what the message is?

MR. BUCHANAN: Well, let me talk about the concentration camp.

MR. MCLAUGHLIN: Quickly.

MR. BUCHANAN: I think it is a valid comparison. When you shut up a million and a half people, can't get in or out, cut off their food, fuel, electricity, the sewage is running on the streets -- about 50 percent of the kids have dysentery -- that's a concentration camp like the Boer camps in South Africa.

MR. MCLAUGHLIN: I'm more concerned about something beyond where we are now. I want to know what message he's sending -- Israel is sending, not only to Obama, but to the world. What is it saying?

MS. CROWLEY: The message is -- and it was reported this week by the British Guardian newspaper that team Obama would like to begin low-level contacts with Hamas, diplomatic negotiations --

MR. MCLAUGHLIN: And with whom else? And with whom else?

MR. BUCHANAN: Hezbollah.

MS. CLIFT: Iran.

MS. CROWLEY: Possibly with Iran, which is the proxy -- Hamas is the proxy state of the Iranians.

MR. MCLAUGHLIN: Now, what is Israel signaling by this --

MS. CROWLEY: Israel moved now because they are petrified that Barack Obama is not going to have the same kind of support for Israel, under attack by these Islamic jihadists, that President Bush has had.

MR. MCLAUGHLIN: So it's signaling --

MS. CROWLEY: So it's signaling to Obama that "We Israelis are willing to move without the United States, if necessary, to protect our state."

MR. MCLAUGHLIN: Is Israel also signaling that it's capable of preemptive self-defense in order to protect --

MR. ZUCKERMAN: They are -- MR. MCLAUGHLIN: -- its freedom?

MR. ZUCKERMAN: They are signaling --

MS. CLIFT: Well --

MR. MCLAUGHLIN: Is it also saying to Obama, "If you are going to have dealings with Iran and you ignore the fact that they're developing a nuclear bomb," if that is the conclusion -- my own thoughts are not in that direction -- but if they are, that Israel will strike Iran?

MR. ZUCKERMAN: No, I don't think -- that's a separate issue here. You have a situation now in which the vast bulk of the Israeli citizens have been under attack for three years without any serious response.

MR. MCLAUGHLIN: I understand that.

MR. ZUCKERMAN: Iran is wholly different. Right now Hamas --

MR. MCLAUGHLIN: But it is a large message that is being sent to everyone, is it not?

MR. ZUCKERMAN: Well, absolutely. You are saying basically that Israel is trying to build up its deterrence after Hezbollah and Lebanon a few years ago, and that is also true.

MR. BUCHANAN: Israel --

MR. ZUCKERMAN: But let me just say this.

MS. CLIFT: Israel's goal is to eradicate Hamas and stop the rocket attacks. I agree with Pat; they're not going to accomplish either of those, and they're going to make it more difficult for Obama to maneuver once he takes office.

MR. MCLAUGHLIN: Yeah.

MS. CLIFT: But he has pledged greater diplomatic involvement. And you cannot solve this crisis in the Middle East without engaging the people who are involved, which is Syria, Iran and Hamas.

MR. MCLAUGHLIN: And oddly enough, oddly enough, Ehud --

MR. ZUCKERMAN: Olmert.

MR. MCLAUGHLIN: Huh?

MR. ZUCKERMAN: Ehud Olmert has been engaging --

MR. MCLAUGHLIN: Ehud Olmert seems to share your view. MR. ZUCKERMAN: Right. He has been trying to negotiate with the Syrians, with the Palestinians, on a two-state solution. One of the things that's going to come out of this thing --

MR. MCLAUGHLIN: But he also said --

MR. ZUCKERMAN: Let me just say --

MR. MCLAUGHLIN: -- the military return is limited at best.

Issue Three: Burris and Blago.

ROLAND BURRIS (Illinois U.S. Senate appointee): (From videotape.) As a former attorney general of my state, I have no knowledge where a secretary of state has veto power over a governor's carrying out his constitutional duties. I'm qualified. I was elected four times in my state.

MR. MCLAUGHLIN: Roland Burris, former multi-term attorney general of Illinois, was turned away from the U.S. Senate chamber this week when he went there to assume his seat as junior senator from Illinois, so designated by Governor Rod Blagojevich to fill the empty Senate seat vacated by former Senator Barack Obama, now U.S. president-elect.

Blagojevich is now charged with a complaint, not an indictment, of corruption and abuse of power brought by U.S. Attorney Patrick Fitzgerald. So the ongoing contretemps originates with the Fitzgerald-Blagojevich faceoff, not with Senator Burris.

Burris has been a distinguished public servant for decades, with what has been described as a spotless reputation. And he's a loyal Democrat. Burris does not appear unnerved by the continuing turmoil, even after being stiffed by Senate Majority Leader Harry Reid and the Senate sergeant at arms or his proxy.

Here's Burris reading a statement immediately after the Senate door was equivalently slammed in his face.

MR. BURRIS: (From videotape.) My name is Roland Burris, the junior senator from the state of Illinois. I presented my credentials to the secretary of the Senate and advised that my credentials were not in order; I would not be accepted and I will not be seated and I will not be permitted on the floor. And therefore, I am not seeking to have any type of confrontation.

MR. MCLAUGHLIN: General Burris then added that he was turning the matter over to his lawyers. The following day, Senator Reid danced away from his earlier disapproval of Burris. Reid's reasons are open to interpretation, but one of which is said to include his personal baggage. On Friday afternoon, the Illinois Supreme Court confirmed Burris's view. "The Illinois secretary of state has no constitutional veto power, absent an election, over an Illinois governor's appointment of a senator to fill a vacant seat."

Question: Was it politically unwise for Obama to have opposed Blagojevich's appointment of Burris? I ask you, Pat Buchanan.

MR. BUCHANAN: Yes, it was. And what the Obama --

MR. MCLAUGHLIN: Why did he do it?

MR. BUCHANAN: He did it to get in line with Harry Reid and the Senate Democrats. He said, "I agree with them."

MR. MCLAUGHLIN: Did he have his own candidate?

MR. BUCHANAN: Well, listen -- look, there's a -- look, Rahm Emanuel apparently -- and we don't know for sure -- called the governor and said, "We've got four candidates" after Ms. Jarrett dropped out. Not one of them was African-American.

MR. MCLAUGHLIN: Was Valerie Jarrett the first candidate?

MR. BUCHANAN: Valerie Jarrett was the first one, apparently, that Rahm wanted in there.

MR. MCLAUGHLIN: Right.

MR. BUCHANAN: Exactly. And also Harry Reid allegedly -- he denies it -- called Blagojevich on December 3rd and said, "There's three candidates we don't want." Two of them were African-American congressmen; the other, the African-American State Senate president.

But Obama, John, got well on this. As soon as this thing hit on Wednesday, he cut Reid dead. He said, "He's a fine man, and if everything goes right and it looks like it, I'd be happy to work with Mr. Burris."

MR. MCLAUGHLIN: So he successfully again worked both sides of the street.

MR. BUCHANAN: He moved away from an untenable position.

MR. MCLAUGHLIN: And no one saw him cross the street. (Laughter.)

MS. CLIFT: Yeah. He encouraged the Senate Democrats to accept Mr. Burris, which was the right thing to do. Constitutionally he belongs there. And for the racial issue, I think there is this notion that a black candidate can't win statewide in Illinois. But Barack Obama has won there and so did Carol Moseley Braun. And we've had very few African-Americans in the Senate. Two of them have been from Illinois.

MR. BUCHANAN: But you don't deny them the seat that's theirs for that reason.

MS. CLIFT: I don't think it's their seat.

MR. BUCHANAN: You don't think it's his seat?

MS. CLIFT: I think it's Roland Burris's. It's not necessarily an African-American seat is what I said.

MR. MCLAUGHLIN: Okay. Rush to the rescue.

REP. BOBBY RUSH (D-IL): (From videotape.) Why, in the U.S. Senate, there are no African-Americans. There are two Asians, three Latinos, 11 women, but no African-Americans. MR. MCLAUGHLIN: What about that? This is the racial card.

MS. CROWLEY: That was Bobby Rush, former Black Panther, playing the race card. He was pretty much the only one playing the race card, although, unless Pat's correct and the reporting on the Reid phone call is correct, it was a little bit of a racial situation that blew up here. And I'm surprised that it took Obama frankly so long to put the whole kibosh on this.

MR. MCLAUGHLIN: It is a political plus for Obama to talk to Iran. True or false?

MR. BUCHANAN: Good policy, bad politics.

MS. CLIFT: Plus.

MS. CROWLEY: False.

MR. ZUCKERMAN: Without the right conditions, bad policy, bad politics.

MR. MCLAUGHLIN: The answer is it would be a plus.

Bye-bye.



END.