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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; DAVID BOAZ, CATO INSTITUTE; MORTIMER ZUCKERMAN, U.S. NEWS & WORLD REPORT TAPED: FRIDAY, AUGUST 20, 2010 BROADCAST: WEEKEND OF AUGUST 21-22, 2010

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MR. MCLAUGHLIN: Issue One: Mosque Madness.

PRESIDENT BARACK OBAMA: (From videotape.) The answer is, no regrets.

MR. MCLAUGHLIN: On almost the eve of the ninth anniversary of the September 11 atrocities, President Obama is satisfied with his stance on the Islamic mosque and cultural center, Cordoba House. Cordoba is slated to be built two blocks from Ground Zero.

PRESIDENT OBAMA: (From videotape.) I believe that Muslims have the right to practice their religion as everyone else in this country. (Applause.) And that includes -- that includes the right to build a place of worship in a community center on private property in Lower Manhattan.

MR. MCLAUGHLIN: A consensus of New Yorkers are opposed to the idea, and increasingly so. A month and a half ago, July 1st, 52 percent of New Yorkers opposed the mosque. August 18th, 2010, 63 percent of New Yorkers opposed the mosque.

Even Obama's fellow Democrats are distancing themselves from the president on this issue. The Democratic Senate majority leader, Harry Reid, issued this statement through his press secretary. Quote: "The First Amendment protects freedom of religion. Senator Reid respects that but says the mosque should be built someplace else," end quote.

The man behind the mosque, Imam Faisal Abdul Rauf, has made comments that have caused an uproar, like this one.

IMAM FAISAL ABDUL RAUF: (From videotape.) I wouldn't say that the United States deserved what happened, but United States policies were an accessory to the crime that happened.

MR. MCLAUGHLIN: Despite the preponderant public backlash against Mr. Obama, some who lost loved ones in the 9/11 attack are not opposed to Obama's view on Cordoba, probably because, in addition to Obama's citation of the constitutional right to profess one's religion as one chooses, the president also said this.

PRESIDENT OBAMA: (From videotape.) I will not comment on the wisdom of making a decision to put a mosque there.

MR. MCLAUGHLIN: Widower Charlie Wolf, who lost his wife in the twin towers attacks, still supports the proposed location for the mosque and the Muslim cultural center.

CHARLIE WOLF (widower of 9/11 victim): (From videotape.) These passions are because they want to blame all Muslims for what happened. I don't want to paint that broad brush.

MR. MCLAUGHLIN: Question: Why did President Obama inject himself into the Islamic cultural center controversy? Pat.

MR. BUCHANAN: He was at an iftar, John. It was the breaking of the fast of Ramadan at night. The Muslim community comes in. The leaders come in. And he felt he ought to speak to it. But the president --

MR. MCLAUGHLIN: Who? Who? Obama.

MR. BUCHANAN: President Obama.

MR. MCLAUGHLIN: Right. So he was scheduled to speak.

MR. BUCHANAN: He had an iftar at the White House -- MR. MCLAUGHLIN: Right.

MR. BUCHANAN: -- and he had them all there. But what happened is the president seems, John, to be totally clueless. He said they have a constitutional right to build there and a legal right. No one has denied that. But it is a matter of immense passion and emotion. A majority of the families of 9/11 said no. New Yorkers were saying no. It was a blazing controversy.

And he stepped right into the middle of it without thinking. And the next morning he said, "Well, I'm saying they can build there, but I'm not sure it's the wise thing to do." So he completely confused the issue and he backtracked, and he left all these Democrats hanging out there, forced to answer a question, "Do you favor building the mosque, as the president does." And they're in trouble because of this.

And quite frankly, I think, John, it suggests that, just like the Sergeant Crowley thing, the president really does not understand and he's not in tune with the country he leads.

MR. MCLAUGHLIN: Do you agree with that?

MS. CLIFT: I agree with what Pat says up to a certain point, that the president -- I think the president said the right things. But sometimes saying the right things is -- it's not enough. And he did appear to be backtracking when he distinguished between the right to build and whether it was the wisdom. And that disappointed his supporters and it really handed the critics a tool to go forward here to inject the president into this fight, which is really one that the Republicans are whipping up to try to inflame sentiment on the eve of elections and on the eve of the 9/11 election.

This mosque was going along perfectly fine until people brought it up and saw political merit. It's an abandoned building that's been there for eight years. They're already holding prayer services in there. There is another mosque just blocks away which is headed by this imam that you referred to in the set-up Imam Rauf. And he's been there 30 years.

He's been an emissary to the Middle East, used by the Bush administration. He's currently, I think, in the Middle East as an emissary of the Obama administration. He's from the Sufi faith. They're mystical people. They're not violent. This is an Islamic cultural center, and it has been distorted as a sort of triumphalist mosque on hallowed ground.

And I think that if Americans would just take a deep breath and think about what we stand for in terms of religious diversity and how we were attacked by al Qaeda; we weren't attacked by the Muslim religion. So I think this is a debate which has really gotten out of hand. MR. MCLAUGHLIN: Well, what do you think, David? Does that sum it all up? Do you want to contribute to this forum?

MR. BOAZ: That sums up a lot of it. What I think the error here is is blaming all of Islam for what 19 violent criminals did. That would be like blaming Japanese-Americans for Pearl Harbor. These were co-religionists. But we have a lot of -- we Christians have a lot of co-religionists.

We're not responsible for everything all of them do.

And that's the point here. This isn't an al Qaeda mosque. It's a Muslim cultural center that includes a place of worship. It's two blocks and a half a block away from Ground Zero, among big buildings. It's not going to be very visible. It's a crazy issue to be getting upset about it. And the Republicans ought to be focusing on the economic case against Obama.

MR. MCLAUGHLIN: What do you think of the rap against Obama? On the one hand, he clarified the legality of it. He says it's within -- not only within; it's supported by the Constitution to practice your faith wherever you want.

MR. BOAZ: I was --

MR. MCLAUGHLIN: Secondly, he says, "That doesn't mean that on the judgment level I would have chosen to put the mosque there." What is wrong with that?

MR. BOAZ: Well, I was delighted to hear the president say private property for the first time; first time I've ever heard him defend something being done because it was private property. But --

MR. MCLAUGHLIN: Did you note it?

MR. BOAZ: Yes.

MR. MCLAUGHLIN: Have you noted it in any of your publications? Did you commend it? Did you encourage him to use it more?

MR. BOAZ: I don't believe I have done that.

MR. MCLAUGHLIN: David is a libertarian.

MR. BOAZ: I did do that to --

MR. MCLAUGHLIN: Go ahead.

MR. BOAZ: I did mention that for Mayor Bloomberg, who doesn't think you have a right to smoke on your private property but does think you have a right to build a mosque. MR. MCLAUGHLIN: You think it's a bad rap on Obama, meaning it's bad -- it is untrue, the rap, the rap on Obama.

MR. BOAZ: Well, I think the rap is that he made an eloquent speech and he backtracked the next day.

MR. MCLAUGHLIN: He didn't backtrack.

MR. BOAZ: Yes, he --

MR. MCLAUGHLIN: He clarified. "It's not my wisdom that I would have put it there."

MR. BOAZ: The president speaks from a teleprompter. He shouldn't need to clarify.

MR. MCLAUGHLIN: He's not clarifying. He's extending his remarks. "When I said it's a constitutional right for them to do that" -- then he thought he could leave it there, and why not?

MR. BOAZ: Well, he could have left it there. But --

MR. MCLAUGHLIN: But then he was attacked for saying -- "Well, the president wants it there." And he says, "No, I didn't say I want it there."

MR. BOAZ: He should have anticipated that point and clarified in the first place.

MR. MCLAUGHLIN: I don't agree with this criticism of him at all. I think he was clear. I think he was precise. And I think he did the right thing for the sake of the country where we stand on religious freedom.

MR. ZUCKERMAN: Let me say, I happen to be completely supportive of the construction of that mosque --

MR. MCLAUGHLIN: Really?

MR. ZUCKERMAN: Yes -- in that location. I mean, I think freedom of religion is such a --

MR. MCLAUGHLIN: Really?

MR. ZUCKERMAN: -- fundamental precept of this country. But, to get to the president, what he said when he spoke at that iftar dinner was clearly intended to imply that they should be able to build the mosque there. That was the clear implication of it. You want to put it in constitutional terms. And the next day, clearly -- and he got attacked by this, even by people like David Broder, who's a very moderate columnist -- he just changed his mind in response to whatever he thought the public reaction was. MR. MCLAUGHLIN: I don't think he changed his mind.

MR. ZUCKERMAN: Oh, sure, he did.

MR. MCLAUGHLIN: He enlarged his field of vision. That's all he did.

MR. ZUCKERMAN: He was implying that it was unwise now to build the mosque there. Now, this is not what I would call -- I'd call it a profile in ambivalence, okay, not courage.

MR. BUCHANAN: But this is --

MR. MCLAUGHLIN: Have you given a speech at some of these forums?

MR. BUCHANAN: John --

MR. ZUCKERMAN: Yes, I have.

MR. MCLAUGHLIN: Well, it's not that you accommodate the truth --

MR. BUCHANAN: John, this is clueless.

MR. MCLAUGHLIN: -- but you want to make clear where the public stands on this, including the president of the United States. It's guaranteed by the Constitution.

MR. BUCHANAN: John, it is not a constitutional question.

MR. MCLAUGHLIN: Why does he have to get into that?

MR. BUCHANAN: It's not a constitutional --

MR. MCLAUGHLIN: Does he --

MR. BUCHANAN: Let me ask David --

MR. MCLAUGHLIN: Why does he have to fault their judgment?

MR. BUCHANAN: Let me ask you this. This is a question. Would it be right to build a Shinto shrine on Ford Island in Pearl Harbor, two blocks from the Arizona? That would be an outrageously stupid thing to do.

MR. ZUCKERMAN: But that's different. This is --

MS. CLIFT: If there were --

MR. MCLAUGHLIN: All right, let Eleanor in, Pat.

MS. CLIFT: If there were a Burlington Coat Factory and a sex shop and other buildings all jammed around, maybe it wouldn't be so different. New York real estate is not like out in Pearl Harbor, where that would --

MR. BUCHANAN: It's two blocks from sacred ground.

MR. ZUCKERMAN: There is --

MS. CLIFT: Nobody is applying to do that. They don't want to do that.

MR. ZUCKERMAN: There is --

MR. MCLAUGHLIN: Let Mort in.

MR. ZUCKERMAN: Just a second in.

MR. MCLAUGHLIN: Let Mort in.

MR. ZUCKERMAN: There is a huge difference, okay. Pearl Harbor was an attack by a country, okay. Here -- if you're concerned at all, you're concerned about radical Islamists. Okay, this is not an attack by the whole Muslim nation.

MR. BUCHANAN: But they acted in the name of Islam.

MR. ZUCKERMAN: Well, some of them -- some parts of Islam.

MR. MCLAUGHLIN: All right, a clear preponderance of New Yorkers don't like the mosque there.

MR. ZUCKERMAN: Overwhelmingly.

MR. MCLAUGHLIN: Do you think, from the point of view of the international community, the world -- this is all over now the media around the world --

MR. ZUCKERMAN: Right.

MR. MCLAUGHLIN: -- a big deal. There's a billion and a half Muslims in the world. You know, it's a big story. Do you think, looking at the fact that he okays it, in a sense, constitutionally, the president does -- doesn't say he'd put it there -- do you think the very presence of a mosque there speaks well of the United States to let it go there? MS. CLIFT: Yes.

MR. ZUCKERMAN: Absolutely, I do.

MR. MCLAUGHLIN: Despite the fact of the horror and the pain and the suffering --

MR. ZUCKERMAN: Right. Absolutely.

MR. MCLAUGHLIN: -- of Ground Zero?

MR. ZUCKERMAN: But John, that's not my rationale, although I happen to support that point. This country was founded -- if there was a great principle, it was freedom of religion, and not to --

MR. MCLAUGHLIN: Pat makes an excellent point. Would you put that next to the remnants at Pearl Harbor?

MR. ZUCKERMAN: It's a different place.

MR. BOAZ: As Eleanor said, you had densely packed buildings all around a large site, and you have to go two blocks and a block over.

MR. MCLAUGHLIN: Right.

MR. BOAZ: Then nobody's going to notice this. It's not like you're putting a minaret over Ground Zero.

MR. MCLAUGHLIN: Are you saying that the proximity and even seeing the Ground Zero from the site is -- you can't really see it, I don't think, except --

MR. BOAZ: You can't see it. But even if you could, Islam did not attack the World Trade Center.

MR. ZUCKERMAN: Right. That's right.

MR. BUCHANAN: Wait a minute.

MR. BOAZ: Some radical --

MR. MCLAUGHLIN: Obama has to think of the whole field of vision.

MR. BUCHANAN: Exactly, John.

MR. MCLAUGHLIN: So he knows that he's dealing --

MR. BUCHANAN: You're thinking about --

MR. MCLAUGHLIN: He went to Cairo --

MR. BUCHANAN: Mort -- MR. MCLAUGHLIN: -- and he gave a speech in Cairo.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: He has to be consistent with the positions of the United States.

MR. BUCHANAN: All right --

MR. MCLAUGHLIN: He's not speaking as a free agent, so to speak.

MR. BUCHANAN: Exactly right. Look, you're thinking about abroad. What about the sentiments of the American people here? We were attacked by people in the name of Islam. They were Muslims. That was indispensable to the deed they did and to their identity.

MR. MCLAUGHLIN: Their nations --

MR. BUCHANAN: Everybody knows that.

MR. MCLAUGHLIN: Their nations have all disassociated themselves from the actions --

MR. BUCHANAN: Why not move it?

MR. MCLAUGHLIN: -- of these --

MR. BUCHANAN: Why are you pushing --

MR. MCLAUGHLIN: -- of these killers.

MR. BUCHANAN: Why not move it?

MR. MCLAUGHLIN: The nations they come from have disassociated themselves --

MR. BUCHANAN: Why are you --

MR. MCLAUGHLIN: -- formally and officially.

MR. BUCHANAN: Why not move it? Why not move the mosque? Why are you insisting on that?

MS. CLIFT: At the Pentagon --

MR. BUCHANAN: Why are you insisting on this?

MR. MCLAUGHLIN: Well, they can move it.

MS. CLIFT: Excuse me. At the Pentagon, there is a room 30 steps --

MR. BUCHANAN: I know it. MS. CLIFT: -- from where they were attacked, and there are Islam prayer services being held there. Nobody got worked up over there.

MR. BUCHANAN: Would you --

MS. CLIFT: The politicians -- Newt Gingrich, Sarah Palin and some people --

MR. ZUCKERMAN: Newt Gingrich --

MS. CLIFT: -- running for office in New York have grabbed on to this and have distorted it, made it sound as though --

MR. BUCHANAN: Harry Reid has said, "Move it." Harry Reid says, "Move it."

MS. CLIFT: Excuse me. Excuse me.

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: And they have portrayed this, as you put it, putting a minaret right in the World Trade Center. This is not --

MR. BUCHANAN: Would you object to a minaret?

MR. BOAZ: In the World Trade Center?

MR. BUCHANAN: A minaret --

MR. MCLAUGHLIN: Wait. You're asking a -- he's a libertarian. He's a libertarian, okay?

(Cross talk.)

MR. MCLAUGHLIN: Exit question: Will Obama's views on the mosque, his expressed views, haunt him in future elections?

MR. BUCHANAN: It's going to hurt him, just like the Crowley thing. And the mosque is never going to be built there.

MR. MCLAUGHLIN: How much is it going to hurt him? One percent?

MR. BUCHANAN: It's already hurt him. MR. MCLAUGHLIN: One percent?

MR. BUCHANAN: He's at 41 percent and falling.

MR. MCLAUGHLIN: How do you know this might help him?

MR. BUCHANAN: Help him with whom? (Laughs.) Hamas?

MR. MCLAUGHLIN: You know, those who believe in our Constitution and are proud of the fact that we're able to withstand it.

MR. BUCHANAN: John, it is not a constitutional question. Hamas endorsed it. Why?

MR. MCLAUGHLIN: Of course it's a constitutional question.

MR. BUCHANAN: Because they believe in the First Amendment?

MR. MCLAUGHLIN: They can put it where they want.

MR. BUCHANAN: They can put it. But should they? That's the question.

MR. MCLAUGHLIN: Well, that's governing by zoning laws, and Obama made that clear.

MR. BUCHANAN: They can do it, but should they?

MR. ZUCKERMAN: It is --

MR. MCLAUGHLIN: He didn't -- he took allowance in the fact --

MR. ZUCKERMAN: It is --

MR. MCLAUGHLIN: -- but he also said it's a Bloomberg problem. The mayor of New York is behind the mosque where it is. I mean, he says it's okay.

MR. BUCHANAN: But New York City says no.

MR. MCLAUGHLIN: What did he say? What did he say?

MR. ZUCKERMAN: You are right. He said -- but the clear implication of what he said at that iftar dinner was that they should go ahead with it and could go ahead with it.

MR. MCLAUGHLIN: Who said? Bloomberg?

MR. ZUCKERMAN: No, what Obama said.

MR. MCLAUGHLIN: Okay. What did Bloomberg say about Obama? MR. ZUCKERMAN: He --

MR. BUCHANAN: He hailed him the first night.

MR. ZUCKERMAN: Bloomberg supported him --

MS. CLIFT: Bloomberg said --

MR. ZUCKERMAN: -- supported him the first night.

MR. MCLAUGHLIN: He said, "I don't have a problem with it."

MR. ZUCKERMAN: Right.

MR. MCLAUGHLIN: "New Yorkers don't have a problem with it."

MR. ZUCKERMAN: I mean, as I say, I support it completely.

MS. CLIFT: Bloomberg --

MR. ZUCKERMAN: And my newspaper supports it completely. But what I think is the president was ambivalent again.

MS. CLIFT: Bloomberg has --

MR. MCLAUGHLIN: All right, it was injudicious.

MS. CLIFT: Bloomberg has been a terrific leader on this. He spoke in front of the Statue of Liberty. And the kind of heated passion that you're hearing from Pat Buchanan is going to eventually blow back on the Republican Party. They're way overdone on this.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: You've got --

MR. BUCHANAN: Seventy percent of the country says don't build it.

MS. CLIFT: You've got --

MR. MCLAUGHLIN: Right now. Right now.

MS. CLIFT: You've got --

MR. BUCHANAN: You think they're going to be enthusiastic about it?

MR. MCLAUGHLIN: They're just hearing about it. They're just hearing about it.

MS. CLIFT: I want to finish my thought. You've got Qur'an burning set for 9/11. You've got people protesting about mosques around the country. This is dangerous stuff. We don't want to be at war with Islam. It has national-security implications. Just to try to win an election?

MR. BUCHANAN: Your problem --

MS. CLIFT: Take this to the shameful territory.

MR. BUCHANAN: Your problem is with the American people.

MS. CLIFT: No, it is not.

MR. BUCHANAN: Your problem is with the nation.

MS. CLIFT: No, it is not. It is with the politicians who have distorted this issue for political purposes.

MR. BUCHANAN: They're doing that in Sheboygan too?

MR. MCLAUGHLIN: Quickly, David, what's your answer?

MR. BOAZ: We don't let political majorities decide where churches can be built. It's true that there's a majority against this, but that's why we have private property and religious freedom guaranteed in the Constitution.

MR. MCLAUGHLIN: Is this going to haunt Obama in future elections?

MR. BOAZ: No. People are going to forget about it.

MR. MCLAUGHLIN: Forget about it.

MR. BOAZ: Yeah.

MR. MCLAUGHLIN: What do you think?

MR. ZUCKERMAN: No, I think it will haunt him, not because of this issue but because it reveals something about Obama that the country does not like, and they don't see that in a leader.

MR. MCLAUGHLIN: What is that?

MR. ZUCKERMAN: Ambivalence.

MR. MCLAUGHLIN: It's not ambivalence.

MR. ZUCKERMAN: You may not think it's ambivalence. MR. MCLAUGHLIN: It's a clarification --

MR. ZUCKERMAN: I thought it was -- and most people --

MR. MCLAUGHLIN: Obama taught constitutional law. He's a teacher.

MR. BUCHANAN: That's his problem.

MR. MCLAUGHLIN: He's a teacher.

MR. BUCHANAN: His problem is --

MR. MCLAUGHLIN: He also has an obligation to teach the country.

MR. ZUCKERMAN: John, I agree with that. He didn't teach the country.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Do not be overwhelmed by the emotions attached to the horrors of 9/11 to think that this is going to diminish the constitutional freedom that exists.

MR. BUCHANAN: John, his problem is he's a professor.

MR. ZUCKERMAN: He shouldn't have said what he said --

MR. BUCHANAN: And he's not --

MR. MCLAUGHLIN: A problem? Now you're knocking the academic community, Buchanan.

MR. BUCHANAN: There's no internal response here.

MR. MCLAUGHLIN: The answer is this will hurt him, but not for long.

Issue Two: Iraq Exit.

PRESIDENT OBAMA: (From videotape.) By the end of this month, we will have brought more than 90,000 of our troops home from Iraq since I took office.

MR. MCLAUGHLIN: Commander in Chief Obama's drawdown of U.S. forces is on schedule. Ninety thousand combat troops will have left Iraq within two weeks from now. Fifty thousand non-combat troops will remain in Iraq. That's 50,000. Their function will be to advise and assist Iraqi forces until the end of 2011, one year and three months from now. Some refresher history: Seven years have passed since the United States invaded Iraq, then ruled by Saddam Hussein. During these seven years, the U.S. military has suffered more than 4,400-plus deaths. The U.S. dollar amount that has been funneled into Iraq over the span of seven years totals more than $620 billion-plus.

The troop extraction is a plus for the U.S. But there are minuses: No cohesive Iraq central government now in place five months after Iraq's national elections held in March this year. Meanwhile, al Qaeda has been in Iraq for the last seven years, and Iraqis that were earlier on our side are beginning to shift to al Qaeda. Al Qaeda is buying its Iraqi recruits.

Iraq's most senior military official stated in August that U.S. troops will be needed for a decade to stabilize the nation. So they stay until 2020. Despite these negatives, U.S. commander general in Iraq, Ray Odierno, remains optimistic about the impact of the 90,000 U.S. troop withdrawal.

GEN. RAY ODIERNO (commanding general, United States Forces-Iraq): (From videotape.) I think if we get this right, I think, overall, stability will improve in the region.

MR. MCLAUGHLIN: Question: Is President Obama's withdrawal of two thirds of the U.S. troops in Iraq premature? I ask you, David.

MR. BOAZ: Premature? We've been there seven years. We're still going to leave 50,000 troops in a war-torn country that's getting more violent. I don't think this is premature. I think this president's whole argument for getting elected was "I was against this war in the beginning. I am against it now, and I will bring the troops home in 2009."

Well, it's 2009, and it turns out we're leaving 50,000 troops behind in an increasingly dangerous country. So, no, I don't think this is premature.

MS. CLIFT: Yeah, this was a promise --

MR. MCLAUGHLIN: He's not withdrawing the troops. He's reducing the number of troops.

MR. BUCHANAN: He's got them to 50,000. I think David's exactly right. I'll tell you one thing, though. We're saying basically we're out of this war. No, we're not. And the war is not over, John. The casualties of Iraqis in June were the highest level in two years.

I think Americans are out of combat, but that place could fall apart. I think the 50,000 troops are going to be there a lot longer than 2011. I think they're going to have to renegotiate that. They've got no government in there. Muqtada al Sadr, who's got lines to Iran, is the king maker. That place is not resolved in any way. MR. MCLAUGHLIN: Do you want to take on the fact that these troops left, our combat troops? They're trained in combat.

MR. BUCHANAN: Well, they are trained in combat. But the troops left behind, those guys know how to shoot as well.

MR. MCLAUGHLIN: The ones who are left behind are trained in combat just like the ones that were taken out.

MR. BUCHANAN: They are, but they're supposed to be trainers.

MR. MCLAUGHLIN: Training others, okay.

MR. BUCHANAN: Training Iraqis.

MR. MCLAUGHLIN: But they are technically within themselves.

MR. BUCHANAN: They're --

MR. MCLAUGHLIN: They are combat trainers and they're ready for combat.

MR. BUCHANAN: And we're also sending in more mercenaries.

MS. CLIFT: Right.

MR. MCLAUGHLIN: They're equipped for combat.

MR. ZUCKERMAN: They're not going into --

MS. CLIFT: Right, and they're --

MR. ZUCKERMAN: They're not being sent into combat now.

MS. CLIFT: And they're keeping --

MR. ZUCKERMAN: They're there as trainers.

MR. MCLAUGHLIN: They're not being sent in to be combative.

MR. ZUCKERMAN: Right.

MR. MCLAUGHLIN: But they may be sent in there --

MR. ZUCKERMAN: Yes.

MR. MCLAUGHLIN: -- with the other troops to train them.

MR. ZUCKERMAN: But the fact is, you do not have a government. You still have a Shi'a-Sunni conflict. The Iranians are playing games, of course, with the people on their side. And if we withdraw prematurely -- MR. MCLAUGHLIN: Why --

MR. ZUCKERMAN: -- the Kurds are still fighting. We may have another breakup of that country, in which case Iran will control the southern part, the Shi'a population.

MR. MCLAUGHLIN: You think we're being weasel-worded when we describe the troops that are staying as non-combat troops when they can and are able and are trained for combat?

MR. ZUCKERMAN: Yeah, but --

MR. MCLAUGHLIN: They're indistinguishable from the other troops.

MR. ZUCKERMAN: They're not being --

MR. MCLAUGHLIN: But they're non-combat troops, which means they're not dedicated for combat.

MR. ZUCKERMAN: Right. But they're not being sent into offensive missions. They will defend themselves, but that's as far as it goes. They're basically going to be using them --

MR. MCLAUGHLIN: Well, who says?

MR. ZUCKERMAN: -- to train the --

MR. MCLAUGHLIN: Who says that there's an emergency of some kind?

MS. CLIFT: Well, they're not forward-leaning combat troops. But if the president left them there unarmed, what would we be saying about him? Look, the president deserves credit. This is a promise kept. It is an uncertain future. And I think leaving that force behind also -- the largest embassy in the world is in Iraq. We still have a vested interest in that country --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- and in trying to see if it can have a stable future.

MR. MCLAUGHLIN: Do you think it will take a generation, not three to four years but a generation, before Iraq really stabilizes? A generation.

MR. ZUCKERMAN: If it does. If it does.

MS. CLIFT: Probably.

MR. MCLAUGHLIN: Right now it is a cauldron. You know that.

MR. ZUCKERMAN: Yes, absolutely. And we are withdrawing. And we're the only force -- MR. BUCHANAN: (Inaudible.)

MR. MCLAUGHLIN: What?

MR. ZUCKERMAN: -- that has kept stability there.

MR. BUCHANAN: I agree with Mort. I think it could break up.

MR. MCLAUGHLIN: Issue Three: Democrats Bail.

PRESIDENT OBAMA: (From videotape.) We're on the right track. The economy is getting stronger.

MR. MCLAUGHLIN: Well, Mr. President, let's take a look. Polls this week: Overall disapproval, Barack Obama, 50 percent; overall approval, 42 percent.

Now the economy. Handling of the economy: Approve, 41 percent; disapprove, 56 percent.

Unemployment rate: 9.5 percent. Unemployment claims: 500,000, up 12,000 claims, the highest since mid-November '09, nine months ago.

Economy growth rate: 2.4 percent. Double-dip recession? Survey of corporate financial officer, CFO, sample: Yes, 38 percent, up from 33 percent in mid-May.

Midterm elections just 11 weeks ago. An uncomfortable economic outlook, falling presidential poll numbers -- these may turn the Democrats' campaign party leader, Barack Obama, into a drag.

Also this twist.

JOEL HALLET (Columbus Dispatch): (From videotape.) It could have a negative impact because he energizes Republicans probably more than he does Democrats.

MR. MCLAUGHLIN: Democrats are feeling the heat. Despite non- stop campaigning and fundraising by President Obama, some Democrats have decided to keep him at arm's length. Georgia Democrat Roy Barnes is currently seeking to reclaim the governorship. Barnes claims scheduling conflicts, avoiding greeting Obama during the president's Georgia trip.

Now answering to voters, Democrats in Congress are now rethinking their once steadfast support of the president's legislative agenda, which will be front and center when Congress gets back to town in three short weeks.

Question: What do you want to pick out of that, Mort, on the economy? MR. ZUCKERMAN: Well, certainly the economy is much weaker than anybody anticipated. We're two and a half years into the most massive fiscal and monetary stimulus, and it's going to be laid at Obama's doorstep because he's the president. That's the way it works. In fact, the unemployment numbers are much worse than the nine and a half percent.

The economy -- the consumer is weak. Housing is falling off the edge of the cliff.

There is a great deal of concern that we are going to head -- if not into a double-dip recession, we're certainly not coming out of the recession. And that means there's going to be a huge dissatisfaction with the -- and that's the number one issue, the economy and jobs.

MR. MCLAUGHLIN: Are you saying a double dip yourself?

MR. ZUCKERMAN: I think that we're going to have a modest (downward dip ?). That is to say, it'll go down 1 or 2 percent. It won't go down 4 or 5 percent, which is what it did last November.

MR. MCLAUGHLIN: Will the recovery begin before the end of '11?

MR. ZUCKERMAN: Before the end of '11? Possibly. But I'm --

MR. MCLAUGHLIN: Are you predicting that?

MR. ZUCKERMAN: No, I'm predicting it's going to last longer into that.

MR. MCLAUGHLIN: Into '12?

MR. ZUCKERMAN: Yes.

MR. BUCHANAN: Hey, John, the real problem is the 500,000 jobless claims. It looks like unemployment may even rise --

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: -- in October and November. And everybody was looking for things to get -- look, Obama's not only in trouble. The country is in serious trouble.

MR. ZUCKERMAN: Right.

MR. MCLAUGHLIN: What's happened to the recovery?

MR. BUCHANAN: Because, look, Obama's --

MR. ZUCKERMAN: What recovery?

MR. MCLAUGHLIN: We had a small recovery. MR. ZUCKERMAN: We had a small recovery, which was --

MR. BUCHANAN: He's used every tool in the toolbox.

MR. ZUCKERMAN: -- an inventory buildup, because everybody thought consumer sales would be stronger. And now you're going to have -- you have the federal -- the state governments, $200 billion a year.

MR. MCLAUGHLIN: You mean it was a --

MR. ZUCKERMAN: That's falling apart. The stimulus program --

MR. MCLAUGHLIN: -- faux recovery -- (inaudible).

MR. ZUCKERMAN: That's correct. That's exactly correct.

MR. MCLAUGHLIN: Is that what you think?

MS. CLIFT: (Inaudible.)

MR. ZUCKERMAN: When you have 500,000 --

MR. MCLAUGHLIN: Wait a minute, Eleanor. Is that what you think?

MR. BOAZ: It was definitely a faux recovery. And there was a lot of cash for clunkers and cash for houses --

MR. ZUCKERMAN: Right.

MR. BOAZ: -- and cash for computers, trying to bribe people to buy things. But that runs out. And now you've got this huge deficit that is a burden on the economy. I don't anticipate a recovery. The economy is strong, but it may not be strong enough to provide this.

MR. MCLAUGHLIN: Why has so relatively little of the TARP funds -- correct me if I'm wrong -- and the stimulus money, for that matter, been spent, so little of it?

(Cross talk.)

MR. ZUCKERMAN: No, no, no.

MR. BOAZ: It's hard --

MR. BUCHANAN: One third is left.

MR. MCLAUGHLIN: What?

MR. BUCHANAN: One third is left.

MR. MCLAUGHLIN: Well, there's a lot left. MR. BUCHANAN: But the point is --

MR. MCLAUGHLIN: Of what, TARP or the stimulus?

MR. BUCHANAN: No, no, the stimulus. But one thing -- his problem, John --

MR. ZUCKERMAN: TARP is over.

MR. BUCHANAN: -- he's run out of tools in the toolbox.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: He's used every one, Obama has.

MR. MCLAUGHLIN: What about these --

MR. BUCHANAN: There aren't any more.

MR. MCLAUGHLIN: What about these infrastructure jobs --

MS. CLIFT: Can I get in here, please?

MR. MCLAUGHLIN: -- that we have --

MR. BUCHANAN: Those are the ones left. They're down the road.

MS. CLIFT: How about letting another voice in here? In a market-oriented society, the number of -- I don't know what's so funny about that; I'm just trying to get a turn to speak.

MR. MCLAUGHLIN: Quickly, Eleanor. Quickly. We've only got --

MS. CLIFT: In a market-oriented society, the tools that a president has are limited. And the Republicans are blocking what few tools he has. They're blocking legislation that would help small business. And in truth, when he took over, we didn't know if the banking system would surprise. We didn't know if we'd have an automobile industry. We now have GM thriving and we have Wall Street doing fine. The benefits have not made it down to ordinary people. He needs more time for that.

MR. MCLAUGHLIN: When -- we've only got five seconds. When will the recovery kick in, the real recovery?

MR. BOAZ: I don't believe you can predict that sort of thing, but we are laying more and more burdens. And when the tax increases of 2011 kick in, that's not going to help things.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Fitzgerald should not retry Blago, but he will. MS. CLIFT: Newly unleashed corporate money and money raised by outside groups founded by Karl Rove and others are going to give the Republicans a huge fundraising advantage going into the November elections.

MR. MCLAUGHLIN: David.

MR. BOAZ: In Kentucky, the Democrats are calling Rand Paul an extremist. Rand Paul is responding by calling his opponent a Democrat. In the end, the voters will be more scared of a Democrat.

MR. MCLAUGHLIN: In Kentucky.

MR. BOAZ: In Kentucky.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: The high unemployment numbers are going to put a great deal of pressure on the public-service unions in America to get their pensions reduced and the long-term costs of those people off the books of the states.

MR. MCLAUGHLIN: I predict that Rod Blagojevich will walk.

Bye-bye.

END.