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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, WASHINGTON TIMES; MORTIMER ZUCKERMAN, U.S. NEWS & WORLD REPORT TAPED: FRIDAY, AUGUST 6, 2010 BROADCAST: WEEKEND OF AUGUST 7-8, 2010

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MR. MCLAUGHLIN: Issue One: Hustings Homestretch.

PRESIDENT BARACK OBAMA: (From videotape.) They don't have a single idea that's different from George Bush's ideas -- not one. Instead, they're betting on amnesia. (Laughter.) That's what they're counting on. They're counting on that you all forgot.

MR. MCLAUGHLIN: President Obama is hitting the hustings in full campaign mode, with only 90 days to go until November the 2nd, midterm elections. Air Force One has a loaded schedule over the next two weeks. The U.S. Democratic Party leader and the U.S. president, Barack Obama, will crisscross the country -- Democratic Party fundraisers and Democratic rallies. The president will hustle in eight states: California, Florida, Georgia, Illinois, Ohio, Texas, Washington and Wisconsin. At stake: Control of the U.S. House of Representatives, control of the U.S. Senate, and 28 state governorships.

These pivotal elections are precisely that -- pivotal. They may well determine another outcome, whether or not President Obama will seek and maybe win a second term.

Question: What is the strategy of the Democratic leader, President Obama, for the midterm elections only 12 weeks away? Pat.

MR. BUCHANAN: The message is, "Look, things aren't going as well as we hoped. They may get better. But they're not as bad as Bush and the Republicans. You don't want to go back to that."

It's a terrible mistake, John. He's bashing a president who has acted like a statesman since he left office and has not said a word about Obama. Secondly, it diminishes the president; turns him into a partisan hack, if you will. And it diminishes the most priceless asset he's got, which is the presidency of the United States. You should -- the president, even when he campaigns, should maintain a higher level than that.

MR. MCLAUGHLIN: Does that sum it up, Eleanor?

MS. CLIFT: (Laughs.) I put a little different spin on it. The Republicans are going to say that the Democrats spent too much money and the economic policies aren't working. And so the president is going to come back and say, "You're right that things aren't as good as we'd like, but they're getting better. And remember what those Republicans did to you."

I don't think he's going to mention President Bush by name. But the people remember that the Republicans -- remember the Republican policies. And so the goal is to set this election up as a choice between the Democratic agenda going forward and the Republican agenda going back, and not to make it the referendum on Obama's inability to turn a very big problem around in two years.

MS. CROWLEY: Well --

MR. MCLAUGHLIN: Is Obama trying to make this a referendum on George Bush?

MS. CROWLEY: Well, if he's going to continue to beat that horse, that is a very dead horse, and it frankly looks petty and beneath the president of the United States, as Pat said. Look --

MR. MCLAUGHLIN: Can people see through it?

MS. CROWLEY: Of course. At this point, look, Obama could have gotten away with that in the first maybe three, six months of his presidency. A year and a half-plus into his presidency, it really looks lame and pathetic on his part.

Secondly, the economic policies that this administration and this Congress have put in place have taken a bad situation and made it worse. On Friday, we got an unemployment picture that is incredibly dismal -- paltry job growth, 9.5 percent unemployment rate. And when you look at the total unemployment rate -- those who are working part- time and want to work full-time, those who have dropped out of looking for work -- it is a staggering 18 percent.

So what the American people are saying are there's no job creation going on. The economic policies have taken -- as Obama says, the Republicans drove the car into a ditch. Well, now it's literally off the cliff.

And there's something else, John. One, Obama's job-approval rating is now down to 41 percent. It took George Bush years to get to that level. Obama's done it in a year and a half. And secondly, Congress is down to 20 percent job approval. The Democratic leadership is facing long odds by their own hand.

MR. MCLAUGHLIN: Mort, 8.5 million people unemployed. That's the equivalent of the population of an American city. How serious is that? And is it a killer as far as politics is concerned for Obama?

MR. ZUCKERMAN: Well, I think it is the devastating issue for the Obama administration, and it's not just the 8.5 million. It's the other millions of people who are literally working part-time when they want to work full-time. It's the people who've seen their largest asset on their balance sheet -- namely, housing -- drop by 30 percent. And there doesn't seem to be any progress. There was supposed to be a stimulus program that would cap the unemployment rate at 8 percent. We're way above that. And so it's a real problem.

The only thing I would disagree with that their polling shows, the Democrat polling shows that the only issue that they can use is to compare him to George Bush. But I've got to tell you, there was a poll that was in The New York Times a couple of weeks ago that showed that in the low 40s; only roughly 43 percent thought that Obama was a better president than George Bush. So George Bush is not going to be the kind of --

MS. CROWLEY: Bogeyman.

MR. ZUCKERMAN: -- bogeyman, right. Absolutely not.

MS. CLIFT: But the question is --

MR. BUCHANAN: And it's destroying the --

MR. MCLAUGHLIN: Let Eleanor in. MS. CLIFT: -- (inaudible) -- to set it up as a choice. If you're not happy with Obama's policies, let's look at what the Republicans will do. And they have not put out any kind of agenda. And if you listen to what they say, the policies are identical to what President Bush put forward.

MR. BUCHANAN: But John --

MS. CLIFT: And so it is too soon --

MR. BUCHANAN: John --

MS. CLIFT: It is too soon --

MR. MCLAUGHLIN: Hold on.

MS. CLIFT: It is too soon for the voters to forget what George Bush and the Republicans did.

MR. BUCHANAN: All right.

MS. CLIFT: And it's too soon for the Republicans to claim they've cleaned up everything and changed their whole act.

MR. BUCHANAN: But what it's destroying, John, is this. Obama came in. He was up at 70 percent. Everybody wished him well. It was hope. It was change. It was a transformational president. Now you've got a president out there who is acting like what we would use Spiro Agnew for, the attack campaign. You don't do that with your most vital and precious asset, which is the president of the United States and the presidency.

MR. MCLAUGHLIN: Do you think that people acknowledge universally --

MS. CLIFT: This dignity stuff is bizarre. (Laughs.)

MR. MCLAUGHLIN: -- that he is a gifted human being and a gifted person?

MR. BUCHANAN: Sure.

MR. MCLAUGHLIN: But is he a leader?

MR. BUCHANAN: He's a gifted -- obviously a gifted human being and a gifted -- MR. MCLAUGHLIN: Is he a leader?

MR. BUCHANAN: He is not a strong leader. No, he's not.

MR. MCLAUGHLIN: Why? Why?

MR. BUCHANAN: Because I don't know that he's got it in his heart and in his gut. I think he's a reactor. I don't really think he's got a great agenda.

MS. CROWLEY: Look, and he is --

MR. MCLAUGHLIN: Wait a minute. What level of conviction does he have?

MR. BUCHANAN: That's just it, John. He doesn't sound like someone --

MS. CROWLEY: Well, wait a minute. No, no, no.

MR. BUCHANAN: -- who desperately believes in --

MS. CROWLEY: I disagree.

MR. MCLAUGHLIN: Let Monica in. Let Monica in.

MS. CROWLEY: I disagree. I think he's got a high level of conviction. He is a pure ideologue. He is a progressive. And that's why you see top economic advisers starting to leave -- Peter Orszag, the head of the OMB; Christina Romer, the head of the president's economic council board.

These people are leaving because -- Orszag was incredibly frustrated that Obama refused to deal with the exploding deficit. Christina Romer has been on the record saying you can't hike taxes in the middle of a recession. It is a job killer. It will kill --

MR. MCLAUGHLIN: Yes.

MS. CROWLEY: -- any kind of economic recovery. These people are starting to leave. Why? Because they were actually thoughtful, responsible people, and they realized that this president doesn't care about the spending or the deficits.

MS. CLIFT: Come on. Let another --

(Cross talk.)

MR. MCLAUGHLIN: Let her finish.

MS. CROWLEY: All in the name of politics. MR. MCLAUGHLIN: All right. He is an ideologue. There's no question about that.

MR. ZUCKERMAN: Right.

MS. CLIFT: He's not an ideologue.

MR. MCLAUGHLIN: But ideologues are not necessarily leaders. They're ideologues.

MR. ZUCKERMAN: No, I think you put your finger on a key issue. The country does not feel he is a leader in the sense of -- not that he can't talk the talk but that he can't walk the walk. The policies aren't working. They're looking for him to be a leader. They're not looking for him to be a politician, go around campaigning, all of this.

MR. BUCHANAN: Right.

MR. ZUCKERMAN: We need a leader at a time of real crisis in this country.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Is there also --

MR. ZUCKERMAN: That is not --

MR. MCLAUGHLIN: Is there an overspread of issues? In other words, where is the field of concentration?

MR. BUCHANAN: Right.

MR. MCLAUGHLIN: Where is the field of insistence about him?

MR. BUCHANAN: He did go all the way there for health care, but I will say this. Look, you don't get the sense that this is a guy who, if it's unpopular -- say, Bush's tax -- I mean, Reagan's tax cuts were; he would go to the wall anyhow. I don't get that sense from Barack Obama.

MS. CLIFT: That's because he's not an ideologue, and he's very pragmatic. And he has passed legislation that will go down as historic.

MS. CROWLEY: Historic blunders. (Laughs.)

MS. CLIFT: And economic policies are working, but they cannot work in this period of time.

MR. MCLAUGHLIN: We're going to get --

MS. CLIFT: He's got to go to the public and ask for more patience, just as the sainted Ronald Reagan did in 1982 -- MR. MCLAUGHLIN: Okay, we're going to get pragmatic --

MS. CLIFT: -- when he said, "Stay the course."

MR. MCLAUGHLIN: We're going to get pragmatic here now.

MS. CLIFT: Reagan's the only word that gets a smile from the other members of this panel.

MR. MCLAUGHLIN: Okay, thank you.

MS. CROWLEY: That's right -- proudly.

MR. MCLAUGHLIN: Okay, the U.S. House of Representatives. All 435 members are up for election. Currently Democrats hold 255 seats. Republicans hold 178 seats. Two seats are vacant. Polls rate 32 to 73 House seats as toss-ups. Republican strategists believe that as many as 70 House seats could go Republican. This would give Republicans more than the 218 they need for a majority.

MR. MCLAUGHLIN: Question: How many seats have to turn, Pat Buchanan?

MR. BUCHANAN: Forty.

MS. CLIFT: Thirty-nine.

MR. MCLAUGHLIN: Forty. Can Republicans do it?

MR. BUCHANAN: Yes, John, I believe they can do it. I didn't think so. I thought we were -- they would get about 34. But things are -- I mean, the economy, the job picture is bad. You've also got this Arizona decision which has inflamed states and communities. Now you've got this gay-marriage thing by that idiot judge in California.

MR. MCLAUGHLIN: What is that? What is that?

MR. BUCHANAN: He's imposed gay marriage on the entire state of California and invalidated the votes of five and a half million people.

MR. MCLAUGHLIN: What do you mean, imposed gay rights?

MR. BUCHANAN: Imposed, because they've got -- gay marriage is what he's imposed over the state.

MS. CROWLEY: He overturned the gay-marriage ban.

MR. BUCHANAN: He saw something in the 14th Amendment its framers never saw, John. MR. MCLAUGHLIN: You want gay marriage to be okayed in the Constitution of the United States in the form of an amendment?

MR. BUCHANAN: No, John. The voters of California threw it out, and they put in an amendment to the California constitution -- no homosexual marriage.

MS. CLIFT: He overturned --

MR. MCLAUGHLIN: Okay, now --

MS. CLIFT: He overturned the Proposition 8 vote.

MR. MCLAUGHLIN: Right.

MS. CLIFT: He is a judge, I might add, who was initially, I believe, appointed by Reagan and reappointed by George H.W. Bush. He's a libertarian. And that case is going to go to the Supreme Court.

But Pat, if your side of this political debate goes rushing off on the cultural wars and misses out on the big economic debate, I don't think that's going to help your party.

MR. BUCHANAN: It helps on all fronts, Eleanor -- all fronts. (Laughs.)

MR. MCLAUGHLIN: Okay.

MS. CROWLEY: The culture wars are now in full flower. But it's not conservatives leading the charge. It's activist judges like this one in California that have now reinflamed the culture wars.

MR. MCLAUGHLIN: What about that? What about that? What's the point?

MS. CROWLEY: Look, the economy --

MR. MCLAUGHLIN: Activist judges, right?

MS. CROWLEY: Activist judges.

MR. MCLAUGHLIN: On that level, the judicial level.

MS. CROWLEY: Yes. But I would say activist judges are probably number three or four on the list of real priorities for the American voter. It's the economy and jobs first. It's deficits and the national debt second and third, okay? And what's happening is 2008, liberals said, "Oh, this is a major realignment in American politics." Maybe so, but it was very short-lived, because guess what: Come November, you're going to see another major realignment. I don't know if the Republicans are going to take the House and the Senate, but you're going to see big, big losses for the Democrats. MR. MCLAUGHLIN: Who's the loser, the Democrats or the Republicans, in the judge's decision? Who's the loser, politically speaking?

MR. BUCHANAN: The Democrats don't want this issue in November. For heaven's sakes, they've got enough problems.

MR. MCLAUGHLIN: Democrats -- (inaudible) -- the loser for that reason.

MS. CLIFT: The American people are not inflamed about that decision. We have moved so far beyond where Pat Buchanan is on gay marriage.

MR. BUCHANAN: (Laughs.) I have some -- (inaudible) -- who are inflamed, Eleanor. (Laughs.)

MR. MCLAUGHLIN: You don't want that on the Democratic agenda.

MR. ZUCKERMAN: Not at this point.

MR. MCLAUGHLIN: Okay, the U.S. --

MS. CLIFT: It's not on the Democratic agenda.

MR. MCLAUGHLIN: Okay, the U.S. Senate. Out of 100 Senate seats, 37 are up for election. Currently Democrats control 59 seats. Republicans control 41 seats; no vacancies. Polls rate eight to 12 Senate seats as toss-ups.

Question: Is it a foregone conclusion the Democrats will keep their current majority in the Senate? I ask you, Mort.

MR. ZUCKERMAN: Well, I think they have a much better chance now because some of the Republican nominees are really, really weak. The strongest thing that the Democrats have going for them in a number of states are the Republican nominees. So I think they may very well keep their majority. But they're going to lose a number of seats, without question.

MS. CLIFT: Right. In the places where the tea party has either hijacked the Republican Party or injected their own candidate, they're handing a contest that the Republicans --

MR. BUCHANAN: We're fine in Kentucky. (Laughs.)

MS. CLIFT: -- were savoring to the Democrats. Harry Reid now looks like he's going to survive.

MR. BUCHANAN: But Rand Paul is looking good in Kentucky still.

MS. CLIFT: Oh, I don't know about that. (Laughs.) MR. MCLAUGHLIN: Are you forgetting something about how the Democrats can keep their majority in the Senate? What's their war chest?

MR. BUCHANAN: Their war chest is very good.

MR. MCLAUGHLIN: Forty-nine million dollars.

MR. BUCHANAN: And Harry Reid's got --

MR. MCLAUGHLIN: Forty-nine million dollars.

MR. BUCHANAN: Well, listen, I think the Democrats very probably -- unless there's a real earth slide, will probably hold the Senate. But they would lose -- I bet they lose six, seven, eight seats.

MR. ZUCKERMAN: I agree. And I'll --

MS. CLIFT: I think it's more like four or five.

MR. MCLAUGHLIN: Multiple-choice exit question -- multiple choice. How many future elections will feel the political impact of this economic recession: A, 2010 only; B, 2010 and 2010; C, 2012 and 2016; D, none of the above?

MR. BUCHANAN: It's definitely going to be 2010 and 2012, because the economy is not going to get well. I think it could go up to 2016. The reason, John, is people believe that the unemployment is going to linger in 2015 at 7 percent.

MR. MCLAUGHLIN: What are the economists saying as to how long the period of time will be before we can get back to the full- employment levels that we wish?

MS. CROWLEY: Years.

MR. BUCHANAN: A lot of folks are saying we could have 7 percent unemployment --

MR. MCLAUGHLIN: Ten years. Ten years.

MS. CROWLEY: Ten years.

MR. MCLAUGHLIN: Ten years, right?

MS. CLIFT: To get back to 6 percent --

MR. ZUCKERMAN: It'll be -- MR. MCLAUGHLIN: It's 2010. That brings us up to 2020. What do you think, Eleanor?

MS. CLIFT: To get back to 6 percent unemployment is going to take a long time. But for the Republicans, who are already measuring the drapes in the Oval Office for 2012, I think President Obama could be looking good and the economy could be on its way up.

MS. CROWLEY: I don't know any Republicans measuring the drapes. But I will say that this has been an unusually long and unusually deep recession that has been unusually resistant to unusual amounts of fiscal stimulus, and I don't see it recovering any time soon.

MR. ZUCKERMAN: And monetary stimulus.

MR. MCLAUGHLIN: For every 8.5 million people actually unemployed, two or three other family members or nearby friends and so forth are affected.

MR. ZUCKERMAN: Right. Absolutely.

MR. MCLAUGHLIN: And they are disillusioned too. So you multiply that all out and it's going to take 10 years to get back to a reasonably full employment status. So where are you?

MR. ZUCKERMAN: Let me compare where we are today to every other recession we've had since World War II. Two and a half years into this recession, which is where we are, with the most aggressive fiscal and monetary stimulus, you would have replaced all of the jobs you've lost and you would have created a million and a half jobs. So we're 10 million jobs shy of where we would be.

MR. MCLAUGHLIN: Okay, my prediction is it'll last through 2016.

Issue Two: Kiss-off?

PRESIDENT OBAMA: (From videotape.) I think Charlie Rangel's served a very long time and served his constituents very well. But these allegations are very troubling. He's somebody who's at the end of his career, 80 years old. I'm sure that what he wants is to be able to end his career with dignity. And my hope is that that happens.

MR. MCLAUGHLIN: President Obama grieves over the contretemps of fellow party member Congressman Rangel, who finds himself embroiled in controversy. House of Representatives investigators charged the former chairman of the potent Ways & Means Committee with 13 ethics violations.

Octogenarian Rangel, from Harlem in New York City, is accused of using the official congressional letterhead asking for charitable contributors for the Charles B. Rangel Center for Public Service. The former chairman's financial reports are also being questioned. Mr. Rangel is not admitting wrongdoing and issued a 32-page response calling the investigator's findings, quote-unquote, "deeply flawed."

The congressman was also a strong supporter of his home-state senator, Hillary Clinton, in the 2008 presidential election. During the race, Rangel told The New York Times, quote, "This ain't no time for a beginner," emphasizing President Obama's relative inexperience. Some believed President Obama's recent remarks are vagrantly vindictive. These accusations are said to come at a bad time for Democrats, who appear to be facing an uphill battle for November's midterm.

Question: Is Rangel being railroaded? Pat.

MR. BUCHANAN: Revenge is a dish best eaten cold, John. (Laughs.) Well done, thou good and faithful servant, but go, man, go. I think that Obama -- first, I think Obama does want him out of there as a tough leader of the party, because to have a trial in the fall of him and Maxine Waters would be a disaster.

Secondly, Charlie, I'm afraid, is guilty of these things, and they're serious charges. Pelosi has been --

MR. MCLAUGHLIN: Did you read the 13 assertions?

MR. BUCHANAN: Well, look, yeah, Charlie's been up to his ears in problems. As Mort can say, he's got that Caribbean thing; he didn't report taxes. He ought to -- all they offered him, John --

MR. MCLAUGHLIN: Don't you think some of that ethics probes is loosey goosey?

MR. BUCHANAN: No, John. They offered the guy a reprimand like Newt Gingrich got if he just accepted the charges. The problem is, some of them may be --

MR. MCLAUGHLIN: What are the four possibilities that the Ethics Committee would entertain?

MR. BUCHANAN: It's reprimand, censure and expulsion.

MR. MCLAUGHLIN: And expulsion. Isn't there a fourth? Fines. Isn't fines the fourth category?

MR. BUCHANAN: I think that's part of one of them. I think that's part one of them.

MS. CLIFT: Yeah, I think he doesn't want to admit -- (inaudible). That may make him then vulnerable to --

MR. BUCHANAN: Justice. MS. CLIFT: -- prosecution. I think the president really is trying to nudge him gently forward.

MR. MCLAUGHLIN: Nudge him?

MR. BUCHANAN: (Laughs.

)

MS. CLIFT: Yes, because if this goes to trial, there is no way that -- it's going to be an 8-0 conviction -- there's no way he comes out better. He needs to make a deal along the way, if a deal is still possible.

Now, as to what he did, other members -- probably every member up there has done parts of what Charlie Rangel did.

MR. MCLAUGHLIN: Allegedly to have done.

MS. CLIFT: Allegedly to have done. But it's too many, too much finagling for too long a period of time. And you mentioned the Clinton connection. I noticed that Congressman Rangel is having an 80th birthday party in New York, and I saw that President Clinton won't be there because he'll be in Arkansas at the time. So these friendships --

MS. CROWLEY: Coincidence?

MR. BUCHANAN: (Laughs.)

MS. CLIFT: -- only go so far.

MR. MCLAUGHLIN: Well, Lanny Davis will be there, and Lanny Davis was the -- is the defense attorney of Rangel, and he was defense attorney of --

MS. CROWLEY: Very close to the Clintons.

MR. MCLAUGHLIN: -- Clinton during the impeachment. Correct?

MR. ZUCKERMAN: Yeah.

MR. BUCHANAN: As his spokesman.

MS. CROWLEY: Well, look, this defense of "Well, so many members of Congress do this," that defense may have worked in another time, in another year. But we are at a political moment now where the American people are fed up with these kinds of hijinks and antics by their elected leaders. Look, the Democrats are going to face a very difficult situation come September. The country is going to see the black representative from Harlem and the black representative from Watts in California, in Los Angeles, standing trial on ethics charges. President Obama does not want any part of this. And that's why he not so gently threw Charlie Rangel under the bus.

MR. MCLAUGHLIN: Do you remember --

MS. CROWLEY: The Democrats have enough problems going into November without this.

MR. BUCHANAN: Maxine is not going quietly, though.

MR. MCLAUGHLIN: Who remembers Joe McQuaid (sp), Congressman Joe McQuaid (sp)?

MS. CLIFT: It would be nice if both of them would take --

MR. BUCHANAN: Joe McQuaid (sp) is the --

MS. CLIFT: -- a bullet for the team, but they're not inclined.

MR. MCLAUGHLIN: Joe McQuaid (sp) is a Republican on the Appropriations -- was -- Committee. He was charged by the U.S. attorney with using his office as a corrupt enterprise under RICO. GOP leaders pressed him to quit. He didn't quit. Fighting Joe stayed on and he won that battle. Do you remember that 15 years ago, Pat?

MS. CLIFT: Yeah, but --

MR. BUCHANAN: We won it. (Laughs.)

MS. CROWLEY: Because we don't remember. (Laughs.)

MR. BUCHANAN: That does not ring a bell.

MR. MCLAUGHLIN: Why shouldn't --

MS. CLIFT: In the current environment --

MR. ZUCKERMAN: There's no reason why he shouldn't fight it, if that's his view. But he has been involved in problems after problems of this kind for a long time. It's been in all the newspapers. And I think it's very tough for him.

On the other hand, look, he was a hero in the war in Korea. He's had a long career. I don't think a lot of people would like to see him leave this way.

MR. MCLAUGHLIN: What do you think Obama's motivations are? Is this revenge of the nerd? MR. ZUCKERMAN: Well, I think, you know, he was not exactly close to Charlie Rangel, to put it mildly. But in addition to that, it's what Pat says. You don't want to have this in the middle of a congressional election.

MR. MCLAUGHLIN: Is this personal payback on the part of the --

MS. CLIFT: No, no. In this --

MR. ZUCKERMAN: It's politics. It's politics.

MS. CLIFT: In this --

MR. ZUCKERMAN: For Obama, it's politics.

MR. MCLAUGHLIN: You know, Charlie supported --

MR. ZUCKERMAN: I know.

MS. CROWLEY: Hillary.

MR. ZUCKERMAN: I know.

MR. MCLAUGHLIN: -- Hillary.

MR. ZUCKERMAN: There are a lot of people who supported Hillary that he is not --

MR. MCLAUGHLIN: You don't think Rahm Emanuel whispered in his ears, "Don't forget that that so-and-so" --

MS. CLIFT: No.

MR. MCLAUGHLIN: -- "supported Hillary over you"?

MR. ZUCKERMAN: But Rahm could say that about a lot of people. I don't think Obama's trying to make enemies of all the people who supported Hillary. That's one of the reasons she's in the Cabinet.

MS. CLIFT: Nancy Pelosi said she was going to drain the swamp.

MS. CROWLEY: Right.

MS. CLIFT: And she has created a new office of ethics, and it's working. And the president could not defend Charlie Rangel, because the facts are really not in dispute.

MR. BUCHANAN: Yeah.

MS. CLIFT: And maybe he could make a deal if he --

MR. MCLAUGHLIN: I don't know. I wouldn't -- I think you're getting ahead -- MS. CLIFT: He will get a reprimand --

MR. BUCHANAN: It does speak well of the Congress, Pelosi's Congress.

MS. CLIFT: Exactly.

MR. BUCHANAN: They're very tough on her and on Maxine Waters, and it took guts.

MR. MCLAUGHLIN: Quickly, quickly.

MS. CROWLEY: Remember, though, remember there's some hypocrisy here. In 2006, Nancy Pelosi and the Democrats ran on cleaning out this culture of corruption by the Republicans. And now, look, they've got --

MR. BUCHANAN: They're doing it.

MS. CLIFT: They're doing it.

MS. CROWLEY: -- a morass of their own.

MR. MCLAUGHLIN: Issue Three: Potheads Welcome.

CALIFORNIA GOVERNOR ARNOLD SCHWARZENEGGER (R): (From videotape.) I think all of those ideas of creating extra revenues, I'm always for an open debate on it. And I think that we ought to study very carefully what other countries are doing that have legalized marijuana.

MR. MCLAUGHLIN: Marijuana is back. On Election Day, November 2, almost three months from now exactly, California will decide on whether to legalize recreational marijuana. California needs money badly. The state's budget deficit has ballooned to $19 billion, the largest of any state at any time in the history of the United States.

California, by the way, is the eighth-largest economy in the world, ahead of Canada, Spain, Brazil, Russia. In the scramble to find new ways to generate income, the taxation of marijuana helps. If enacted, Proposition 19 will put a $50-per-ounce levy on marijuana, bringing tax revenue directly into the California treasury per year, $1.4 billion.

California residents like the idea. In a recent poll, 52 percent approve of the passage of Proposition 19, 36 disapprove; almost two to one in favor of passage. What a difference four decades make. Thirty-eight years ago, a similar marijuana measure, also titled, oddly, Proposition 19, was on the '72 November ballot. The marijuana measure then failed.

Question: If Proposition 19 passes, will President Obama have to choose between enforcing federal law or endorsing state law? Mort Zuckerman.

MR. ZUCKERMAN: Yeah, I suppose, to some extent, he will. I mean, I'm totally opposed to legalizing marijuana. Anybody who knows anything about that field knows it's the gateway drug to a lot of additional drugs. I just think that the consequences --

MR. MCLAUGHLIN: Well, how is he going to handle this? You're going to make believe it doesn't exist? Have you heard of benign neglect?

MR. ZUCKERMAN: Yes, I certainly have. A good part of my life has been based on that theory. (Laughter.)

MR. MCLAUGHLIN: Look at where you are, right? (Laughs.) Do you think that Obama should exercise benign neglect in resolving this situation, where federal law condemns recreational marijuana --

MS. CROWLEY: Yeah, well, look --

MR. MCLAUGHLIN: -- and the state --

MS. CROWLEY: -- California's public finances are in abysmal shape. It's a catastrophe out there. And it's really a story here that they've got to resort to trying to legalize drugs to generate revenue for the state.

MS. CLIFT: Well --

MS. CROWLEY: But, look, this is yet another example of states being in conflict with federal law. We see it with the Arizona illegal-immigration law. We see it with the vote this week in Missouri, where voters by three to one said, "We're going to choose to opt out of the federal Obamacare law." We have huge, huge conflicts coming up between states and the federal government.

MS. CLIFT: Yeah, this is not unusual. The Oregon dying-with- dignity law was in conflict with the federal laws, and the federal government chooses to look the other way in these instances.

MR. MCLAUGHLIN: Mmm-hmm.

MS. CLIFT: I'm in favor of legalizing marijuana.

MR. MCLAUGHLIN: Recreational marijuana?

MS. CLIFT: Yes, recreational marijuana. MR. MCLAUGHLIN: Really?

MS. CLIFT: California has already taken a very big half-step with medicinal marijuana. And this initiative is coming at a time when, across the border in Mexico, they are fighting a deadly war. Twenty-eight thousand people have died since President Calderon took that on. If you legalize marijuana, you take a lot of the violence out.

MR. BUCHANAN: Hey, John --

MS. CLIFT: And California --

MR. BUCHANAN: -- what this is about --

MS. CLIFT: -- needs the money.

MR. BUCHANAN: What this is -- that's what it's about.

MR. MCLAUGHLIN: What do you think of this?

MR. BUCHANAN: It's about money. Look at where the states and government is now. It shows the corruption of our people. We now -- government makes more money from booze and from cigarettes and from gambling, and now from narcotics, than any other institution in society.

MS. CLIFT: Well, where should they be making it from, oil revenues, Pat? (Laughs.)

MR. BUCHANAN: What happens to the country, you know, when government gets --

MS. CLIFT: You're going to see a lot more interest --

MR. ZUCKERMAN: That's a serious question that he poses, I might say, okay? It really is a serious question.

MR. MCLAUGHLIN: Let's see if we can shoehorn this.

MS. CLIFT: I don't think marijuana is corruption. Smoking marijuana is not corruption.

MR. MCLAUGHLIN: Okay, Webb on weed. Virginia Democratic Senator Jim Webb cast the marijuana usage net even wider. Webb wants all drug policy, federal and state, to be, quote-unquote, "on the table" as part of a comprehensive overhaul of the criminal-justice system.

In a 2009 interview, Webb says flatly, quote, "I think everything should be on the table, and we specifically say that we want recommendations on how to deal with drug policy in our country. And we'll get it to the people who have the credibility and the expertise and see what they come up with," unquote. Question: Is Senator Webb right about reassessing the war on drugs? Pat.

MR. BUCHANAN: Yeah, but I don't believe we ought to start legalizing drugs. I think that's the end of the country.

MR. MCLAUGHLIN: You think the whole policy has to be re- examined?

MS. CLIFT: Senator Webb is a crusader on prisoner reform. He sees everybody locked up on drug issues. And he won a big one recently by --

MR. MCLAUGHLIN: So you think he's right.

MS. CLIFT: -- (inaudible).

MR. MCLAUGHLIN: Do you favor that?

MS. CROWLEY: No, I don't. And this is all about a big revenue grab for the federal government.

MR. MCLAUGHLIN: Forced scrutiny: Who won the week, Pat?

MR. BUCHANAN: Religious right, John.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Obama and the people of the Gulf. The well is dead.

MR. MCLAUGHLIN: Monica.

MS. CROWLEY: The Republicans, because 71 percent of Missouri voters opted out of Obamacare this week.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: The Republicans, because every poll shows Obama way, way behind.

MR. MCLAUGHLIN: You are all correct.

Bye-bye.

END.