Share

The McLaughlin Group

Host: John McLaughlin

Panel:
Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek;
Susan Ferrechio, Washington Examiner;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, June 15, 2012
Broadcast: Weekend of June 16-17, 2012

.STX
(C) COPYRIGHT 2012, FEDERAL NEWS SERVICE, INC., 1120 G STREET NW; SUITE 990; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.

UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.

FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.

FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL 202-347-1400 OR EMAIL INFO@FEDNEWS.COM.

THIS IS A RUSH TRANSCRIPT.
-------------------------

JOHN MCLAUGHLIN: Issue One: Deep Mess.

PAUL TAYLOR (Pew Research Center): (From videotape.) This report is a reminder of just what a deep mess the American public is in. It's three years ago, allegedly, that this recession ended. For most Americans, it doesn't feel like it's over. And this is a reminder -- 40 percent of net wealth gone.

MR. MCLAUGHLIN: Forty percent of wealth. That's how much the average American household hemorrhaged over three years, 2007 to 2010. The Federal Reserve Survey of Consumer Finances is released every three years. This year's survey details how middle-class families' net wealth is tied to the value of their homes.

Middle-class wealth took a big hit during the first three years of the recession with its collapse of the housing market. In dollar terms, says the Fed, the overall wealth of the median household five years ago, 2007, was $126,000. That's overall wealth -- income, financial assets and home worth.

Three years later, 2010, the $126,000 overall wealth had dropped to $77,000, almost a 40 percent drop in three years. Seven trillion dollars in home equity was lost between 2007 and 2010, says the Fed. The housing bust, with its accompanying mortgage defaults, mostly did the deed.

OK, fast forward, March 2011 to March 2012, a one-year spread. Housing prices dropped more, almost 2 percent -- 1.9 percent. Rob Shapiro, Bill Clinton's undersecretary of Commerce, tells us why the bottom keeps falling.

ROB SHAPIRO (former undersecretary of commerce): (From videotape.) We spent $1.2 trillion directly stabilizing the financial markets, and another $2 trillion indirectly through the Fed stabilizing those markets. It worked. We spent virtually nothing to stabilize the housing market. Those values continue to go down. And so we have increased inequality significantly through this event.

MR. MCLAUGHLIN: Question: Have you connected these dots, Pat? And, if so, trace them for us.

PAT BUCHANAN: All right. First off, I mean, the -- take all your stocks and bonds. Ninety percent of those are owned by the top 10 percent in terms of income. And so those folks can go down the roller coaster and come back up. But you take -- with the housing market, that is the one big asset, say $250,000 for each person. When they lose it, they lose everything, John. And what continues to hold housing prices down is millions of houses sitting out there on the market.

Secondly, the people that got wiped out, you no longer can have no documents and no money down and all these benefits to get back into housing. You are out of that. And so that was the number one asset basically of the middle class. And I think the people who have been saved in this recession are -- frankly, it's not the top 1 percent, but it's the top 10 percent.

MR. MCLAUGHLIN: Eleanor.

ELEANOR CLIFT: Well, the recent drop in wealth does have a lot to do with the loss of value in people's homes, and that affects the middle class the most. But, in fact, this inequality between the top 1 percent, 10 percent and everybody else is the result of policies that have been put in place really since 1980. And it has to do with tax policy that generally favors the rich, takes a bigger bite out of the middle class, and the overall decline in wages.

President Obama wasn't in the White House for most of the period that this report acknowledges, but the report does set up the dueling economic visions between the president and his challenger, Mitt Romney. And they have begun to put flesh on that this week.

And I think it's pretty hard for Romney to talk about loss of wealth since he's worth so much. I don't think he likes to remind people of that. He doesn't -- he pointedly doesn't use the word wealth. And I think the president's policies really do respond to what this report seems to call for.

MR. BUCHANAN: Vote for Obama. (Laughs.)

MS. CLIFT: Well, yes. If you're in the middle class, vote for Obama, absolutely. I couldn't say it better myself, Pat.

SUSAN FERRECHIO: I don't think you'll hear -- I don't think you're going to hear Romney talking about it, for the exact same reason that you just described -- he's wealthy -- for him to talk about losing wealth. But I think you will hear Republicans talk about the fact that the median income has dropped $50,000. That's a lot of money. It's a lot of loss.

Everybody knows someone -- not only have they seen housing prices crash, but everybody knows someone who's had to take a pay cut, who's lost their job; other things that have caused them to lose wealth, not just the housing market. That falls on Obama's shoulders. And I do think that you will hear Republicans talk about that, even if Romney's not quoting this exact recent study.

MR. MCLAUGHLIN: I would take the opposite view on talking about wealth if you're wealthy. If you're wealthy, you know what wealth is --

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: -- and you can evaluate it better, and it's personal to you and it would make sense. I don't think the American people think any less of you as a historian of wealth or a categorizer of wealth or a definer of wealth or the tax components of it or the public good connected with it. I would think you'd think more.

You're a billionaire. I don't -- I mean, this is very true.

MORT ZUCKERMAN: Look, I do think this country has always been a symbol of an opportunity to do whatever you can with your life. And people have -- a lot of people have made money, and that has always been a part of the American tradition. And a lot of people made a lot of money for many years in the middle class, OK. The biggest storehouse of their wealth was their homes. And those homes have gone down and continue to go down, well past the numbers you saw here. So it's well over 40 percent.

It was the largest asset on the balance sheet of the average American family. But if you combine that with the fact that we have close to 30 million people who are either unemployed, underemployed, or have given up looking for a job, you realize what dire circumstances have affected, in economic terms, so many of the middle- class people of America.

MR. BUCHANAN: John, the average --

MR. ZUCKERMAN: And that is something that is --

MR. BUCHANAN: The average American income has been --

MR. ZUCKERMAN: -- going to be a huge issue.

MR. BUCHANAN: -- stagnant -- has been stagnant since about 1973 -- no real rise in wages.

There's a number of problems, John. One of them is mass immigration by poor folks and folks who don't make much money coming in and competing with Americans; secondly, globalization, where 50,000 factories left the United States, went to Asia and places like that, and exported to the United States.

MR. MCLAUGHLIN: Mm-hmm. (Acknowledging.)

MR. BUCHANAN: These people have lost their jobs. Let me tell you, there's an act of economic treason, in my judgment, going on in this country from both parties for the last 30 years, where the transnational corporation is the one for whom everything is done for its benefit, including just what your introduction was all about.

MR. MCLAUGHLIN: OK, let's take a look and see whether this next gentleman puts anything into focus. Jeb Bush has been around, back in the United States if he was not here. He's former governor of Florida and he's the brother of the former president. He has a sobering view.
Quote: "We're in very difficult times right now, very different times than we've been in. We're in decline. That distinguishes us -- where we are."

"We're in decline." Now, decline is usually interpreted as irreversible, like Rome went into decline and just evaporated in terms of its power.

MR. ZUCKERMAN: It doesn't have to be irreversible to be a serious concern that he is raising. And the fact is we have been in decline in certain ways. We've lost in part because of our processes of manufacturing. We've lost a lot of manufacturing jobs to other countries for globalization. We have not kept up with the technology that has also replaced a lot of jobs.

The blue-collar jobs that we have lost, 6 million of them, have not come back. This has been -- is not a recession but a "mancession." What we need now --

MR. MCLAUGHLIN: Mort, this is --

MR. ZUCKERMAN: -- is to find a way to stimulate those parts of the economy that are growing.

MR. MCLAUGHLIN: Mort, this is loaded with pessimism. We are not a pessimistic nation.

MR. ZUCKERMAN: That's correct.

MR. MCLAUGHLIN: We are an optimistic nation.

MR. ZUCKERMAN: That's correct.

MR. MCLAUGHLIN: Have we lost that?

MR. ZUCKERMAN: No, we have a dysfunctional government that has not been able to address the key issues, like tax policy, like education. I mean, these are the kinds of things that we haven't addressed.

MR. MCLAUGHLIN: Susan.

MS. FERRECHIO: Well, that's where government policy becomes really critical here. Do we want to be a country where the government is going to support everybody and be the answer to all things, or do we want the private businesses, the private world, to get our economy going again? Which side is going to be more successful? And I think that's what voters are going to be --

MS. CLIFT: First of all, it's not --

MS. FERRECHIO: -- deciding in November.

MS. CLIFT: It's not either-or. It's not no government and all private sector or the other way around.

I'd like to point out that Jeb Bush's brother, George W. Bush, presided over eight years in this century where there was negative job growth. And we are in the midst of a presidential campaign, and Mitt Romney's challenge is to say what he would do differently from George W. Bush. His policies mirror Bush's, which is --

MR. BUCHANAN: John, if you can't see decline --

MS. CLIFT: -- lower taxes for the rich, less regulation.

MR. MCLAUGHLIN: Are you forgetting something in your acrimony against Jeb Bush -- not Jeb Bush, his brother -- that he lowered your tax rates and my tax rates and everybody's tax rates, personal income tax rates? Are you forgetting that?

MR. BUCHANAN: John --

MR. MCLAUGHLIN: He cut the taxes --

MS. CLIFT: It didn't translate into jobs. And that's what we're talking about is policies going forward.

MR. BUCHANAN: How can you look at the country and not think we're in decline? This is -- look at Europe. They're not in decline?

MR. MCLAUGHLIN: Decline means an irreversible --

MS. CLIFT: No, it's not. (Laughs.)

MR. MCLAUGHLIN: -- continuing state that leads to ruin.

MR. BUCHANAN: Well, look, I think there's no doubt about it; "Decline of the West" by Spengler. Look at all the --

MR. MCLAUGHLIN: Oh, come on. You think we're there?

MR. BUCHANAN: Look, no -- it's a long-term process of --

MR. MCLAUGHLIN: You mean -- it took Rome about 500 years to actually evaporate -- 500.

MR. BUCHANAN: It took a couple of hundred -- the Soviet Union evaporated in what, two years.

MR. ZUCKERMAN: With all due respect --

MR. MCLAUGHLIN: You're comparing us to the former Soviet Union.

MR. ZUCKERMAN: No.

MR. BUCHANAN: I think Europe and the United States --

MR. MCLAUGHLIN: Come on, Pat, will you?

MR. BUCHANAN: -- are in inexorable decline. Every statistic --

MR. ZUCKERMAN: The story of the United States is not over. We still have the best universities. We have the most flexible people.

MR. MCLAUGHLIN: Right.

MR. ZUCKERMAN: We have an open government.

MR. MCLAUGHLIN: Right.

MR. ZUCKERMAN: We have an open society. We do need a functional government, and we have not had a functional government for quite a period of time.

MR. MCLAUGHLIN: Like how long? How long?

MR. ZUCKERMAN: A good decade, OK; a good decade.

MR. MCLAUGHLIN: So that carries --

MR. ZUCKERMAN: And including the last four years.

MR. MCLAUGHLIN: That carries us back well into Clinton.

MR. ZUCKERMAN: No, no, not Clinton.

MR. MCLAUGHLIN: That carries us back to Clinton.

MR. ZUCKERMAN: No, it doesn't. No, it doesn't.

MR. BUCHANAN: No, 2002 would be Bush II.

MR. ZUCKERMAN: Bush II. All I'm saying here is that this is not over, this game, OK?

MS. CLIFT: Right.

MR. ZUCKERMAN: We need a different kind of leadership in this country than we've had, including, if I may say so, in the last four years, which has been a disaster, as far as I'm concerned. And we've got to find some different way of addressing these key issues.

MR. MCLAUGHLIN: It carries us back to Clinton --

MR. ZUCKERMAN: We have not been able to --

MR. MCLAUGHLIN: -- but not into Clinton; to Clinton. We're at that borderline, 2002.

MS. CLIFT: Optimism always carries the day, and both the president and Mitt Romney are going to put forward an economic vision that will be optimistic. And, you know, Europe is going to --

MR. MCLAUGHLIN: My optimistic comment --

MS. CLIFT: Europe is going to recover too.

MR. BUCHANAN: Optimism didn't carry the day for Rome.

MS. CLIFT: The world isn't --

MR. MCLAUGHLIN: My optimistic comment is dream on. Exit question --

Exit question: Can the middle class recover? Yes or no.

MS. CLIFT: Yes.

MR. BUCHANAN: Not with current policies, no.

MS. CLIFT: Yes. Yes, definitely. And with current policies it can, if the policies can be put in place.

MS. FERRECHIO: Not under these current policies -- no way.

MR. MCLAUGHLIN: So a change in presidency might do it?

MR. BUCHANAN: Might.

MS. FERRECHIO: A change in the policies.

MS. CLIFT: The middle class is going to thrive under Mitt Romney?

MR. MCLAUGHLIN: Don't we need to change presidents to do that?

MS. CLIFT: That's the dream.

MS. FERRECHIO: We -- well, yes, in this case, definitely. Definitely we do.

MR. MCLAUGHLIN: Yeah. By the way, I think Romney wears his wealth with great modesty.

MR. ZUCKERMAN: Actually, I think he does, actually.

MR. MCLAUGHLIN: He's a modest guy.

MR. ZUCKERMAN: Absolutely. I really think he does. I mean, I knew him when he was the governor of Massachusetts, and he was a very --

MR. BUCHANAN: (Inaudible.)

MR. MCLAUGHLIN: (Inaudible) -- when he had Bain Capital. Now, what was that like? Give me about a minute on that, half a minute.

MR. ZUCKERMAN: Bain Capital was one of the best companies to reinvigorate a lot of companies that were going down, and he did that very successfully and created a lot of wealth, and a lot of jobs, I might say. So he was a recognized --

MS. CLIFT: He didn't create a lot of jobs.

MR. ZUCKERMAN: I'm sorry, I'm not going to argue. I know about Bain Company since I was involved in it.

MR. MCLAUGHLIN: He's got about a quarter of a billion dollars. He's got about $250 million.

MR. ZUCKERMAN: Yes, whatever it was. He didn't -- it wasn't something inherited.

MR. MCLAUGHLIN: He's got a couple of homes.

MR. ZUCKERMAN: It's something he earned --

MR. MCLAUGHLIN: He sold off a lot of the homes.

MR. BUCHANAN: John -- even Clinton said his record at Bain, Eleanor, was sterling.

MR. ZUCKERMAN: Was sterling.

MS. CLIFT: Yes, he made --

MR. BUCHANAN: Sterling record.

MR. ZUCKERMAN: Sterling, yes.

MR. MCLAUGHLIN: When did he say that?

MR. BUCHANAN: Bill Clinton said that. He said he's a fine businessman with a fine record.

MR. ZUCKERMAN: Right.

MS. CLIFT: That doesn't mean his policies that he's advocating are going to create that kind of jobs for the rest of us. I mean, you talk about the modesty --

MR. BUCHANAN: How is Obama's business record?

MS. CLIFT: Check out that garage he's building in California -- two-story garage --

MR. MCLAUGHLIN: (Laughs.)

MS. CLIFT: -- with an elevator.

MR. MCLAUGHLIN: Well, he's got five boys. Are they still living at home?

MR. ZUCKERMAN: Right. Yes.

MR. MCLAUGHLIN: She said she's got the groceries and, you know --

MS. CLIFT: They're not living at home.

MR. BUCHANAN: Eleanor --

MR. MCLAUGHLIN: Figure that out when you've got five boys.

MR. BUCHANAN: Eleanor thinks you've got to be --

MR. MCLAUGHLIN: Issue Two: Political Ads Wars. First, Romney.
(Begin videotaped segment.)

(Headline on screen: "23.2 Million Americans Are in Need of Work.")

(Headline on screen: "40 Straight Months Over 8% Unemployment.")

(Headline on screen: "Middle-Class Struggles Deepen Under Obama.")

(Headline on screen: "Millions of Homeowners Underwater on Mortgages.")

(Headline on screen: "The President's Response?")

PRESIDENT BARACK OBAMA: The private sector's doing fine.

(Headline on screen: "The Private Sector Is Doing Fine?")

PRESIDENT OBAMA: The private sector's doing fine.

(Headline on screen: "How Can President Obama Fix Our Economy...")

(Headline on screen: "If He Doesn't Understand It's Broken?")

PRESIDENT OBAMA: The private sector's doing fine.

FORMER MASSACHUSETTS GOVERNOR AND REPUBLICAN PRESIDENTIAL CANDIDATE MITT ROMNEY (R): I'm Mitt Romney, and I approved this message.

(End videotaped segment.)

MR. MCLAUGHLIN: Is that ad effective? I ask you, Susan.

MS. FERRECHIO: Absolutely. Not only does it bring in some of the things we were talking about earlier, about the decline in wealth and other economic issues that are really saddling the Obama administration right now, but it just -- I think the private sector doing
fine comment, I think, highlights what a lot of opponents of Obama believe is his theory about it's the public sector that needs to be elevated over the private sector.

MR. MCLAUGHLIN: Do you think this is unfair to Obama? Because he acknowledges it was a gaffe, meaning that it was an unintended sequence of words. He doesn't believe that the private sector is doing fine.

MS. FERRECHIO: No, I think most people believe that he really does think the private sector needs less help than the public sector.

MR. MCLAUGHLIN: So it was not a gaffe.

MS. FERRECHIO: All he's saying is -- he's going around saying, well, of course everybody knows that the economy needs help.

MS. CLIFT: Well, it was plucked -- it was plucked out of context, but political campaigns do that. But I must say, this last week, thanks to modern technology, I was able to witness a focus group in Denver of independent voters conducted by Peter Hart, a very respected Democratic pollster.

He screened a couple of ads -- not this one. But the reaction to these ads was totally underwhelmed. They look at it. They think it's just more political trash talk. And they want to hear, what are they going to do? What are the specifics? So I think this ad is -- you know, it's fun for us savants --

MR. BUCHANAN: I disagree.

MS. CLIFT: -- to sit around and judge it, but that's not going to -- that does not --

MR. MCLAUGHLIN: It's not us sitting around -- I mean, the press has noticed this.

MS. CLIFT: Yeah, but I don't think --

MR. MCLAUGHLIN: And the press has underlined it.

MS. CLIFT: I don't think people are --

MR. BUCHANAN: But it underscores, John --

MS. CLIFT: -- impressed by this.

MR. BUCHANAN: -- an impression of Obama that the guy is out of touch with the private sector, working folks. He's a man of government and he doesn't know how people get jobs and lose jobs and go back to work.

MR. MCLAUGHLIN: OK.

MR. BUCHANAN: He's spent his whole life in tax-supported institutions.

MR. MCLAUGHLIN: Mort, let me clarify this. I said it was a gaffe. It's more properly described as a lapsus linguae, a slip of the tongue, meaning the tongue was in error. It wasn't my thinking. I just used the wrong words. Now, is there any defense of that?

MR. ZUCKERMAN: Well, there is a defense of that, if that's exactly what happened. This is not a man who generally uses the wrong words --

MR. MCLAUGHLIN: Right.

MR. ZUCKERMAN: -- if I may say so. So what Pat is going to say is -- anybody who knows what's going on in the economy, and he does, knows that we are not doing well. We are not even creating enough jobs every month to deal with the number of people entering the labor force every month. A hundred fifty thousand people enter the labor force every month. We're creating 69 (thousand). You can't make that statement if you're the president of the United States.

MR. MCLAUGHLIN: OK, one final question before we go to the next one, and that is, Obama's spending a lot of time talking about the Eurozone. And he's talking about competition from Europe. I think his last press conference was more or less about -- well, almost all of it devoted to that.

MR. ZUCKERMAN: Yes.

MS. CLIFT: Well, urging them --

MR. MCLAUGHLIN: Well, he's talking about the economy, but he's talking about how can I handle this, because what's going on in Europe is affecting our economy.

MR. ZUCKERMAN: Without question.

MR. MCLAUGHLIN: Therefore, I am dealing with heads of state on this. He was asked about that.

MR. ZUCKERMAN: Without question, that is going to have an effect on the U.S. economy.

But the U.S. economy --

MR. MCLAUGHLIN: But it also moves it away --

MR. ZUCKERMAN: -- has been hurting --

MR. MCLAUGHLIN: It moves it away from the domestic concerns --

MR. ZUCKERMAN: Well, it enables you --

MR. MCLAUGHLIN: -- (inaudible).

MR. ZUCKERMAN: -- to do what he does very well, which is always to blame it on some other party, OK.

MS. CLIFT: Well --

MR. ZUCKERMAN: But the fact is, that is certainly going to have an impact on the economy. But so, too, have been the policies --

MR. BUCHANAN: John --

MR. ZUCKERMAN: -- that this administration has put in.

MR. BUCHANAN: It's politics.

MR. MCLAUGHLIN: OK, now Obama revs it up.

(Begin videotaped segment.)

PRESIDENT OBAMA: I'm Barack Obama, and I approved this message.

PRESIDENT OBAMA: (From campaign speech.) We're still fighting our way back from the worst economic crisis since the Great Depression. Our businesses have created almost 4.3 million new jobs over the last 27 months, but we're still not creating them as fast as we want.

ANNOUNCER: The president's jobs plan would put teachers, firefighters, police officers and construction workers back to work right now. And it's paid for by asking the wealthiest Americans to pay a little more. But Congress refuses to act. Tell Congress we can't wait.

(End videotaped segment.)

MR. MCLAUGHLIN: President Obama says jobs have been created for 27 months. He's been in office --

MR. BUCHANAN: Forty months.

MR. MCLAUGHLIN: -- for 42 months.

MS. CLIFT: Jobs weren't being created for at least the first year because we were still -- I think we were losing 800,000 jobs a month when he first took office. And he does point out that under previous presidents, when Republicans were in office, that state and local government grew, because traditionally the Congress sent money to hire police officers.

Remember Bill Clinton, 100,000 cops on the streets, teachers and so forth. And the fact that Congress is sitting on this money and thinks it's perfectly fine for teachers to be losing their jobs is really a commentary on the two different approaches --

MR. BUCHANAN: John --

MS. CLIFT: -- of these two candidates who are running for president, job creators.

MR. BUCHANAN: We're talking about ads, John. We're talking about ads. When he says the public sector is doing fine, it's like, you know, Kerry saying I was before it before I was against it. It reinforces an impression of the guy that is very negative. And with Obama, it's that he's out of touch.

MR. MCLAUGHLIN: All right, let's get to a -- maybe there's a conclusion here. Quote -- brace for impact: "With five months until Election Day, Barack Obama" -- watch the screen -- "faces a grim new reality: Republicans now believe that Mitt Romney can win, and Democrats believe that Obama can lose," unquote.

That's Mark Halperin, senior political analyst for Time Magazine in this week's issue of Time. What do you think of that basic observation?

MR. ZUCKERMAN: I think that's absolutely true. I mean, I don't know how far it goes. It certainly has changed the level of confidence on both teams, so to speak. And we'll see how it plays out.

MR. MCLAUGHLIN: Now, he's talking about the level of belief.

MR. ZUCKERMAN: Yes. Well, that's another word for confidence. Each side has a different --

MR. MCLAUGHLIN: Well, is that something new that's now --

MR. BUCHANAN: It is June of this year. And I think Mort's word, confidence -- a lot of Republicans were saying, geez, we don't know if we can do it with Mitt. We had a bad primary. And Obama's a good candidate -- (inaudible).

MR. MCLAUGHLIN: Do you think --

MR. BUCHANAN: They now agree with Halperin.

MR. MCLAUGHLIN: You travel a lot with Romney.

MS. FERRECHIO: Mm-hmm. (Acknowledging.)

MR. MCLAUGHLIN: Do you think -- can you sense anything from your travels with him that we are now reaching an Obama -- reaction to Obama -- with this crowd, of course, it's different -- but do you think already done there, already done the Obama thing -- in other words, this is now a referendum on Obama?

MS. FERRECHIO: It's going to be a referendum. It depends what the economy is looking like in the months before the election, right before the election. But people are definitely feeling a real sense of anxiety about the economy that it's just not getting any better. And they're looking who's going to help get them out of this. And I think that's what's really helping Romney right now.

MS. CLIFT: Well --

MS. FERRECHIO: People are losing faith in Obama --

MS. CLIFT: We crossed the Rubicon last week or 10 days ago when that very weak jobs report came out and it looked like the economy was going into another stall. That's bad news for the president, good news for Romney. And that focus group I talked about that I attended --

MR. MCLAUGHLIN: Mm-hmm. (Acknowledging.)

MS. CLIFT: -- nine of those 12 people voted for Obama in `08, and only three of them would say they were leaning toward him. So the president has got a lot of ground to regain, and there's an opening for Romney.

MR. BUCHANAN: Romney has not closed --

MS. CLIFT: People who know nothing about Romney --

MR. MCLAUGHLIN: Which is a largely Democratic group?

MS. CLIFT: No, these are self-declared independents, and they --

MR. BUCHANAN: John, but Romney hasn't --

MR. MCLAUGHLIN: Do you think they've become disillusioned with Obama?

MS. CLIFT: Yeah. And actually, they were all saying the economy is getting better, but they do not give him credit because they measure him against --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- the expectations that he set for himself. But they know so little about Romney. All they know is he's a rich, successful businessman.

MR. BUCHANAN: But Romney --

MR. MCLAUGHLIN: Do you think Obama's entered a phase of been there, done that --

MS. CLIFT: Well, the media --

MR. MCLAUGHLIN: -- as far as the American people are concerned?

MS. CLIFT: No, no, no.

MR. BUCHANAN: Yes. Look --

MS. CLIFT: No.

MR. BUCHANAN: -- people are ready to move away from Obama. But Mitt Romney has not closed this sale yet.

MR. MCLAUGHLIN: Why?

MR. BUCHANAN: He just has not quite done it yet. People are looking at him, but he hasn't closed the sale.

MR. MCLAUGHLIN: Well, they say he doesn't have enough personality. He doesn't --

MR. BUCHANAN: Well, he's got --

MR. MCLAUGHLIN: He's not warm enough.

MR. BUCHANAN: Well, he's got --

MR. ZUCKERMAN: He was in a difficult primary.

MR. MCLAUGHLIN: Hey, he can run businesses.

MR. BUCHANAN: Look, and he did good in the Republican primaries. He came right through them fine. I think he can do it.

MR. MCLAUGHLIN: Also he's got a great family. What about that wife of his? You travel with her.

MS. FERRECHIO: Right. Well, first, he'll be running against one of the most charismatic campaigners this country has ever seen. But luckily --

MR. MCLAUGHLIN: Who's that?

MS. FERRECHIO: Well, Obama. That's who he'll be running against this summer and this fall. But luckily he does have Ann Romney at his side, and she has really been a great help to him on the campaign trail. She gets up and warms up the crowd. She softens the edge of Romney, because he is not as great of a campaigner as Barack Obama. Nobody would argue that. But she's a real asset.

But people are going to ultimately look to him when he's up there talking. What's he going to do to help the country?

MR. ZUCKERMAN: He went through a very, very bitter primary, OK, in which everybody got cut up. We'll see how he does when he's on his own, speaking to the American people. When he speaks to the American people --

MR. MCLAUGHLIN: You know him from Bain Capital.

MR. ZUCKERMAN: Yes. I know him from Massachusetts, and he's --

MR. BUCHANAN: He's got a chance now.

MR. ZUCKERMAN: I think he's an outstanding man.

MR. MCLAUGHLIN: Issue Three: White House Leaking?

SENATOR JOHN MCCAIN (R-AZ): (From videotape.) I can't think of any time that I have seen such breaches of ongoing national security programs as has been the case here.

MR. MCLAUGHLIN: We're five months from a presidential election. President Obama is seeking a second term as president and commander in chief. Therefore, he and the White House have been leaking national security secrets to the press so that Mr. Obama will look better at protecting our national security. That's the bad rap that Obama has been presented.

Eric Holder was questioned about that bad rap at a Senate Judiciary Committee hearing. Watch.

At the Holder hearing, Republican Senator Lindsey Graham voiced his frustration on another front, namely the attorney general's decision to appoint two of his own DOJ lawyers to investigate the origin of recent national security leaks.

Lindsey Graham believes the leaks may originate in the White House. Graham wants a special counsel, independent of the Obama administration, to investigate the leaks instead of Holder's own handpicked lawyers.

SENATOR LINDSEY GRAHAM (R-SC): (From videotape.) You're not willing to embrace the idea that it would be better off for the country if you would pick somebody that we all could buy into from the get-go rather than picking somebody -- two people that you saw are great that I don't know anything about. So at the end of the day, I can't believe that this is even a debate, given the national security implications of these leaks.

MR. MCLAUGHLIN: Question: Why won't Holder appoint a special counsel? Eleanor.

MS. CLIFT: Look at the recent history with special counsels, from Ken Starr to Pat --

MR. BUCHANAN: Fitzgerald.

MS. CLIFT: -- Fitzgerald. It's not been a happy one on either side of the political aisle. These are two U.S. attorneys that Attorney General Holder has appointed. One of them was appointed by George W. Bush. The other is an Obama appointee. They're -- they have specific expertise in the kind of investigation that this requires. And I think it's perfectly legitimate. And if the White House or the Justice Department tries to sit on their findings, I think we'd hear about it pretty fast. So I think this is --

MR. MCLAUGHLIN: Do you think Ken Starr is as bad as she's described, the special counsel --

MR. BUCHANAN: No.

MR. MCLAUGHLIN: -- that sat on what, the impeachment of Bill Clinton?

MR. BUCHANAN: Yeah.

MS. CLIFT: That's right.

MR. BUCHANAN: But this is enormously big, John, especially if Obama wins a second term. You've got the three things that happened -- the killing of bin Laden; the secrets have been leaked even to Hollywood. You've got the kill list the president's deciding on right there in the Situation Room. And what's the -- the third one is the Stuxnet thing that you talked about last year, how it got into the Iranian centrifuges and how it got out.

MR. MCLAUGHLIN: Namely, we did it.

MR. BUCHANAN: Yeah, we did it, but all the details of this. This is extraordinary. It came right out of the Situation Room.

MS. CLIFT: You don't know that, Pat.

MR. BUCHANAN: And Obama says --

MR. MCLAUGHLIN: The Situation Room. Where is the --
(Cross talk.)

MS. CLIFT: It came right out of the Situation Room?

MR. MCLAUGHLIN: Where is the Situation Room?

MR. BUCHANAN: The Situation Room is on the basement floor of the White House West Wing, John.

MR. MCLAUGHLIN: So Obama leaked it.

MR. BUCHANAN: But Obama says leaks -- these leaks are terrible. But they clearly came out of -- right out of his own entourage.

MR. MCLAUGHLIN: To make Obama look good, like he's --

MR. BUCHANAN: That's what everybody says. I don't know where else you could get material like that.

Susan, you cover the White House. Where else could you get that kind of detail?

MS. CLIFT: How about the --

MR. MCLAUGHLIN: Wait a minute, Eleanor.

MS. FERRECHIO: OK, Obama says it's coming from bureaucrats. It's not lower-level bureaucrats, people who are talking out of school. But this is very likely coming from people high up, because some of the sources cited were cited as high-ranking administration officials. But their names weren't used.

MR. MCLAUGHLIN: Out of time. Happy Father's Day. Bye-bye.

END