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August 31, 2008

John McCain, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace, reporting from the Republican National Convention in St. Paul, Minnesota. And this is "FOX News Sunday."

(BEGIN VIDEOTAPE)

WALLACE (voice-over): John McCain chooses a running mate.

GOV. SARAH H. PALIN, R-ALASKA: The women of America aren't finished yet and we can shatter that glass ceiling once and for all.

(CHEERING AND APPLAUSE)

WALLACE: Now, can the Republican nominee refocus the nation's attention from the Democrats to his campaign? We'll get answers from the man himself in an exclusive interview. John McCain, only on "FOX News Sunday."

Then, Barack Obama, did his convention put him in a position to win the election? We'll ask our Sunday regulars: Brit Hume, Mara Liasson, Bill Kristol, and Juan Williams.

And our "Power Player of the Week" has left his mark on Republican conventions for decades by making sure no one knew he was even there. All right now on "FOX News Sunday."

(END VIDEOTAPE)

WALLACE: And hello, again. This week, from the floor of the Xcel Energy Center in St. Paul, Minnesota, site of the Republican National Convention, an event that may have to be cut back because of Hurricane Gustav, now expected to reach Category 4 status and hit the Gulf Coast on Monday. We'll talk to John McCain about that in a moment.

But on Friday, McCain rocked the world of politics, choosing the little-known governor of Alaska, 44-year-old Sarah Palin to be his running mate. It immediately raised questions about her fitness to be president and whether she can help McCain reach out to women, especially supporters of Hillary Clinton.

Well, yesterday, we caught up with John and Cindy McCain on the campaign trail in Pittsburgh. And before sitting down for an interview with the Senator, we asked Mrs. McCain about her separate meeting with Governor Palin just before she was offered the job.

(BEGIN VIDEO CLIP)

CINDY MCCAIN, WIFE OF JOHN MCCAIN: (inaudible) both mothers, and that's very important to me as it is her. We share a great deal.

WALLACE: Did you want to get her approval? SEN. JOHN MCCAIN, R-ARIZ.: Oh, yes. Very necessary.

WALLACE: And you gave her the thumbs up?

C. MCCAIN: I did.

(END VIDEO CLIP)

WALLACE: Senator McCain, welcome back to "FOX News Sunday."

MCCAIN: Thanks, Chris. Thanks for having me back.

WALLACE: Let's start with your choice of a running mate. Of all the people you could have chosen, of all the Republican leaders you've known for years, straight talk, can you honestly say that Sarah Palin is the best person to put a heartbeat away from the presidency?

MCCAIN: Oh, yes. She's a partner and a soul-mate. She's a reformer. I don't particularly enjoy the label "maverick," but when somebody takes on the old bulls in her own party, runs against an incumbent governor of her own party, stands up against the oil and gas interests, I mean, they really are so vital to the economy of her -- of the state of Alaska. I mean, it's remarkable. It's a remarkable person.

And I've watched her record, and I've watched her for many, many years as she -- as she implemented ethics and lobbying reforms. And I mean, she led on it. She didn't just vote for it. She led it. I've seen her take on her own party.

Now look, one thing I know is that when you take on your own party in Washington, you pay a price for it. You do. You pay a price for it. And she has taken on the party in her own state. She took on a sitting governor and defeated him.

And so I'm so pleased and proud, because this is a person who will help me reform Washington and change the way they do business. And that's what Americans want.

WALLACE: But let me ask you...

MCCAIN: Sure.

WALLACE: ... about the concerns that a lot of voters, who have never heard of Sarah Palin before yesterday, are asking. Compared to, say, Tom Ridge or Joe Lieberman, why is Governor Palin superior in dealing with national security and foreign policy?

MCCAIN: Look, those people you talk about, Joe, and Tom Ridge, and Mitt Romney, and Mike Huckabee, they're wonderful people. And I'm grateful for the opportunity that I've had to know them and work with them.

But look, what this brings is a spirit of reform and change that is vital now in our nation's capital. Eighty-four percent of the American people think the country is on the wrong track. In our party, we have corruption.

We have former members of Congress residing in federal prison. So it's not surprising to me that we've seen an incredible invigoration around our party and around the nation. Not just Republicans, but Democrats.

And by the way, in the last day-and-a-half, or whatever it has been, we have raised $4 million on the Internet. I wish I had have taken her a month ago.

WALLACE: But you have said that the existential threat we face...

MCCAIN: Sure.

WALLACE: ... the threat to our existence is from Islamic terrorism. Foreign policy is job one for the commander-in-chief.

MCCAIN: Sure.

WALLACE: You have criticized Obama as being, quote, "dangerously unprepared to be president." In the sense of national security and foreign policy specifically, isn't Sarah Palin even more dangerously unprepared?

MCCAIN: Oh, no. Look, she has got the right judgment. She has got the right judgment. She doesn't think, like Senator Obama does, that Iran is a minor irritant. She knows that the surge worked and succeeded, and she supported that.

Senator Obama still, still to this day refuses to acknowledge that the surge has succeeded. She has been commander-in-chief of the Alaska Guard, that has served back and back (ph). In fact, as you know, she has got a son who is getting ready to go.

But she has had the judgment on these issues and -- that Senator Obama has not had in the -- he has had all the wrong judgments. And Governor Palin understands these issues, and she understands the challenges that we face.

So she has had 12 years of elected office experience, including traveling to Kuwait, including being involved in these issues. And look, I'm so proud that she has displayed the kind of judgment and she has the experience and judgment as an executive. She has run a huge economy up there in the state of Alaska. Twenty percent of our energy comes from the state of Alaska, and energy is obviously one of the key issues for our nation's security.

WALLACE: But, Senator, you talked about her years of experience. Ten of those years were as a city councilwoman and mayor of a town of 9,800 people. And in terms of foreign policy, in March of 2007, after, two months after the surge had started, she was asked about it, and she said: "I've been focused on state government. I haven't focused on the war in Iraq." Understandable for a governor; not understandable for a vice president. MCCAIN: Well, by the way, also she was a member of the PTA. I think it's wonderful. But the point is she has been to Kuwait. She has been over there. She has been with her troops, the National Guard that she commands, who had been over there and had the experience. I'm proud of her knowledge of these challenges and issues.

And of course, as governor she has had enormous responsibilities, none of which Senator Obama had. He -- when she was in government, he was a community organizer. When she was taking tough positions against her own party, Senator Obama was voting "present" 130 times in the state legislature, on every tough issue whatever it was, while she was taking them on. That's the kind of judgment that I'm confident that we need in Washington.

WALLACE: For people who aren't persuaded, at least initially in the first 24 hours, about her experiences, especially on foreign policy, doesn't this raise even more concerns about your age?

MCCAIN: I don't know. Look, it was an issue in the primary, as you know. I've got to show them the vigor. I've got to show them the energy. I've got to show them the judgment. I've got to show them that my experience and knowledge qualifies me to lead.

And what we are finding out in recent days in a couple of weeks is an increasingly dangerous world. But most importantly, that I know how to get the jobs back and get our economy going again. But I've got to show them that. I understand that.

But I also think that you've got the next generation of leadership of America who is committed to good government, to ethics, a wonderful family, a belief in the future of America. Look, I'm so excited about this person, Governor Palin, I can't tell you. And her family is marvelous, also.

WALLACE: The choice of a running mate is the first presidential- level decision that you've made. Why shouldn't we think that this is really about politics, about reaching out to women, especially to Hillary Clinton supporters?

MCCAIN: Well, I think that I had to do what I think is best for the future of the country. That's the point here. And I think, by any parameter of judgment, given the economic difficulties that we're facing today, especially on jobs and health care and insurance, these are issues - - health insurance and education, these are the issues that, really, Americans are most concerned about.

Americans are concerned about our nation's security. And I think she has exercised and shown the judgment to address those issues. But she also understands the fact that people in America are sitting down at the kitchen table this morning, as we speak, and saying, how are we going to stay in our homes? How are we going to keep our health insurance? How are we going to educate our kids? And some of them have just lost their jobs.

So I think Governor Palin is uniquely -- as a governor, she has had executive experience. She didn't sit in the state legislature. She didn't vote just with her party and go along to get along. Senator Obama has never taken on the leaders of his party on any issue. You tell me a time when he had. She has been an independent spirit that has taken them on at every opportunity.

WALLACE: Whether this was the reason or not, do you think she will help you with women and especially with disaffected Hillary Clinton supporters?

MCCAIN: I think she's going to help me with all Americans. I think that the response that we're getting from men, women, young, old, because they want us to change America. They want us to change it. They're sick and tired of business as usual and inside the Beltway kind of thing.

You know, one commentator said, well, she has never been on "Meet the Press."

WALLACE: I didn't say that.

MCCAIN: Well, I hope that she's on your program first. No, she doesn't live inside the Beltway. She doesn't -- she and her husband don't go to the Georgetown cocktail parties. But they do live a life of a wonderful family. He's -- they've had a small business. They are just really good, down-to-earth people who understand the challenges that we face.

So in all due respect to my friends that say that she has never been on some of the inside-the-Beltway activities, I say, thank God.

WALLACE: Let me see if I've got the chronology straight...

MCCAIN: Sure.

WALLACE: ... that people are (inaudible). As I understand it, you met her for the first time at the governor's conference in...

MCCAIN: We had breakfast.

WALLACE: ... in February.

MCCAIN: Yes.

WALLACE: You talked to her on the phone last Sunday. And you met with her face to face -- face to face for the first time to discuss the vice presidential ticket Thursday morning, and then you offered her the job. Must have been a heck of a meeting?

MCCAIN: Well, the fact is, I've been watching her. I mean, look, what she has been doing in Alaska, let's have some straight talk, has affected the representation in Washington, D.C. We've fought against, frankly, the same adversaries, the same challenges.

Look, we couldn't get the "bridge to nowhere" out, although we tried, people like Tom Coburn...

WALLACE: This was the big pork barrel project. MCCAIN: Yes, the pork barrel project, a $233 million bridge in Alaska to an island with 50 people on it. She, as governor, stood up and said, we don't need it, and if we need it, we'll pay for it ourselves.

Now, that's guts. I saw that, and I said, this, this is what we need in Washington.

WALLACE: Senator, I want to turn to the Democratic Convention. First of all, did you watch much of it?

MCCAIN: I didn't, much, really, because I was traveling a lot.

WALLACE: You won't be surprised, your ears would have been burning, because they were going after you pretty good.

MCCAIN: Yes, I heard that.

WALLACE: I want to give you this first chance to respond to it directly. Senator Obama, in his acceptance speech, quoted you with saying that the fundamentals of the economy are strong, that it has made great progress under President Bush. And then he said this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: It's not because John McCain doesn't care. It's because John McCain doesn't get it.

(END VIDEO CLIP)

MCCAIN: I know and understand, and I did watch excerpts from Senator Obama's speech. As we all expected, he gave a great speech. I even heard that some members of the media were cheering.

But anyway, the -- but I knew he would. And he's a very gifted speaker, and I admire and respect what he has accomplished.

Look, I've said for a long time, America is in trouble. As I've been talking all across America, including the heartland, these are tough, tough times, and we need changes.

Now, what Senator Obama wants to do is raise people's taxes, wants to basically sort of redistribute the wealth. I want to keep everybody's taxes low, and I want everybody rich.

Just like Cindy's dad, who came home from World War II, an Air Force person with a Distinguished Flying Cross that sold his car to start a business and became very, very successful. I want Americans to have lower taxes. You'll see us states right now...

WALLACE: Let me...

MCCAIN: You'll see states right now with a bad economy that raised taxes and it made their economy worse.

WALLACE: But... MCCAIN: He wants to raise taxes.

WALLACE: But, if I may, Senator...

MCCAIN: Yes, sure.

WALLACE: ... the Democrats pointed out at the convention that you have voted 17 times against raising the minimum wage. They say the only reason you voted for it in 2007 was because it was linked to war funding.

MCCAIN: Well, the point is that I have voted to keep taxes low and to cut taxes. And Senator Obama has voted to raise them consistently.

WALLACE: But why have you been (ph) against the minimum wage?

MCCAIN: Even on people as low as $42,000. I'm for the minimum wage increases when they are not attached to other big-spending pork barrel. The practice in Washington is attach a good thing to a bad thing. And that way, then you have to vote yes or no.

The energy bill, the energy bill had a lot of good things in it, and it billions of dollars of pork and good deals for the oil companies. Senator Obama voted for it. I voted against it, because we've got to start giving people a straight choice.

Now, you watch this September. Harry Reid will say, OK, we'll let you vote on offshore drilling...

WALLACE: Senate Democratic leader.

MCCAIN: Yes. The Senate Democratic leader will say, well, let's vote on offshore drilling, but you've got to have A, B, C, D and E. You can't just have a straight up or down vote.

When I'm president, I'm going to veto every bill that doesn't have straight up or down votes on the issues that are important to the American people.

WALLACE: So, you would have been for...

MCCAIN: I'm certainly...

WALLACE: ... alone (ph), after the increases in the...

MCCAIN: Look, I'm certainly...

WALLACE: ... minimum wage, even though you voted against it, I said 17, it was actually 19 times?

MCCAIN: Well, or 29 or 49, whatever it is. The fact is that I am for a living wage for all Americans. And I'd like to see them get it. But the key is to get them jobs, and get them the kind of good educational opportunity and affordable health care. So, I am committed, and my record clearly shows that I've done everything I can to keep their taxes low, to get them available and affordable health insurance, and to secure a good education and give them a choice, not be governed by the teachers' union.

WALLACE: Obama also said that you are dipping into the old partisan playbook, questioning character and patriotism. And then he said this to you directly.

(BEGIN VIDEO CLIP)

OBAMA: So, I've got news for you, John McCain. We all put our country first.

(END VIDEO CLIP)

MCCAIN: Oh, I have no doubt about Senator Obama's patriotism. I have grave doubts and concerns about his judgment, whether it would be on saying that Iran is a tiny problem, about saying that the surge wouldn't work, that it was doomed to failure, and still, incredibly, saying that the surge has not succeeded...

WALLACE: But, Senator...

MCCAIN: ...when every...

WALLACE: ... when you said...

MCCAIN: To his first response...

WALLACE: But, Senator, if I may...

MCCAIN: Yes.

WALLACE: When you say he doesn't think it matters whether we win or lose, when you say, he would rather lose a war to win a political campaign, isn't that questioning his patriotism?

MCCAIN: No, it's questioning his judgment. He went out to run for the nomination of his party and took the far left position, MoveOn.org.

In fact, when MoveOn.org ran an ad, a full-page ad in The New York Times, saying, "General Petraeus or General Betray-us," and we had a resolution on the floor of the Senate condemning that, this great man, these terrible aspersions on his courage and his reputation, he refused to vote. He was on -- he was in the Senate at the time, refused to vote on it.

Well, obviously, he went to the left of his party on the war in order to secure the nomination of his party. So, I think that's very clear.

WALLACE: Senator McCain, we have to take a break here. But when we come back, we'll have much more for the senator, including the charge from a former president that he is milking his status as a POW for political gain.

Back in a moment.

(COMMERCIAL BREAK)

WALLACE: And we're back now with Senator John McCain.

Senator, former President Carter said this week, his words, not mine, that you have been milking every possible drop of advantage from your five years as a prisoner of war in Vietnam.

The president said, at the Saddleback Forum with Rick Warren, quote: "John McCain was able to weave in his experience in a Vietnam prison camp, no matter what the question was."

Your response.

MCCAIN: Oh, I have great respect for former President Carter. But it's not the first time we've disagreed, his statements about Israel and the Palestinians. And the way he conducted his presidency I respect. But I vigorously disagree with many of the things that -- activities that he has had since.

I think he's a man of very good heart and very...

WALLACE: But are you offended by his suggesting that you're milking your POW?

MCCAIN: Oh, no. Look, I have respect for President Carter, and I don't think most Americans share that view. In fact, most of my supporters say, talk more about your experiences. And they were formative experiences.

And Pastor Rick Warren wanted to know not only our positions on the issues, but what our makeup was, and why we feel that we think it's important to serve this country in the highest and most responsible position, the most powerful position in the world.

So, I'm pleased to have been able to talk to so many Americans in a straightforward fashion, and tell them about why I am the person I am today.

If we would have had this conversation a month ago, we wouldn't have been -- had a word about Georgia, a tiny country a long ways away.

So, we don't know what's around the corner of history, and we have to judge people's character. And my character, a great part of the formation of that character took place in a prison camp. WALLACE: As we sit here today, on Saturday, Hurricane Gustav is bearing down on the Gulf Coast. Are there any circumstances under which you would consider suspending the Republican Convention, if the hurricane really bashes that part of the country?

MCCAIN: I'm afraid, Chris, that we may have to look at that situation, and we'll try and monitor it. I've been talking to governors Jindal, Barbour, Riley, Crist. I've been talking to all of them.

But, you know, it just -- it wouldn't be appropriate to have a festive occasion while a near tragedy or a terrible challenge is presented in the form of a natural disaster. So, we're monitoring it from day to day, and I'm saying a few prayers, too.

WALLACE: But what would you do?

MCCAIN: Well, I think we would have to -- we're looking at various options. And so, I don't know exactly what we would do, because you don't know how severe it is, where it's going to hit.

WALLACE: No, but I mean, are you seriously...

MCCAIN: Yes.

WALLACE: ... talking about suspending the convention, not holding it for a day or two?

MCCAIN: At least some of the activities, or maybe devoting some of the activities to bringing American people's attention to trying to help its victims. But right now, it's too early, frankly. All we're doing right now is exploring the various options.

WALLACE: In the wake of Katrina, and a perception, at least, of Republican failures, would it look bad for your party to be conducting business as usual while people are really suffering on the Gulf Coast?

MCCAIN: Oh, I don't think so. I think, again, we don't want to appear in any way festive when you have that kind of tragedy possibly revisiting itself on the city of New Orleans and areas around it.

So, we'll be judging it day by day and looking at the options. But right now, our prayers are that it doesn't hit, at least in heavily populated areas. It's pretty clear, at least at this moment, that it's going to hit somewhere.

And so -- and also, might I say, I think that we are far, far better prepared than we were the last time.

WALLACE: Just four months ago, you told Shepard Smith on Fox News the kind of campaign that you intended to run. You said this.

(BEGIN VIDEO CLIP)

MCCAIN: Americans want a respectful campaign. Now people say, well, negative ads move numbers. They may. But do we have to go to the lowest common denominator? I don't think so.

(END VIDEO CLIP)

WALLACE: Senator, in the last two months, you've run ads comparing Barack Obama to...

(LAUGHTER)

WALLACE: Well, you're laughing as I say this, to Paris Hilton and Britney Spears. You've run an ad charging, perhaps accurately, that he got help buying his home from a convicted felon.

What happened to your pledge to run a respectful campaign?

MCCAIN: Oh, I think it's respectful. But first of all, I also at that time asked Senator Obama to go to town hall meetings with me. We could appear in front of the American people the way Barry Goldwater and Jack Kennedy had pledged to do.

I'll tell you, that changes the tenor of a campaign, I know because I've done them in the past. And unfortunately Senator Obama refused to go to town hall meetings with me and appear before the American people so we can both answer their questions and comments.

Second of all, I thought, one, that those ads draw differences between our positions. He is against offshore drilling, he wants to raise taxes. But the other thing, I thought they were pretty humorous. And for those people who have lost their sense of humor, turn of your computer, go out, get a breath of fresh air and get your humor back.

So we're going to...

WALLACE: So there's a big laugh about Tony Rezko, a convicted felon helping him...

MCCAIN: No, I think that they should laugh when they see Charlton Heston. And -- but look, there are serious issues, there are serious issues. And...

WALLACE: You don't think your campaign has gone negative in the last two months?

MCCAIN: No, no. We have certainly drawn the differences and we will continue to draw those differences. And I might add, and that the negative ads that were begun long ago by the Democratic National Committee that continues to this day by the Obama campaign are something we understand.

I'm a big boy. But we will continue to draw the differences between ourselves and -- myself and Senator Obama, particularly since he has a tendency to shift those positions.

WALLACE: Obama and Democrats continue to try to wrap President Bush around you. Big question, how do you assess the Bush presidency? MCCAIN: I think history will judge that. I do think it's a fact that America has not been attacked again since 9/11. I think the president deserves credit for that. I think history will judge the president.

As is well-known, I was adamantly opposed to the spending spree that we went on, and predicted that we would be in the difficulties as far as our physical sanity is concerned if we continued the largest increase in government since the Great Society. And I urged vetoes.

I believe strongly that we needed to address the issue of climate change in a comprehensive fashion. I obviously don't want to torture any prisoners. There is a long list of areas that we were in disagreement on. But I also think...

WALLACE: You're not suggesting he did want to torture prisoners?

MCCAIN: Well, waterboarding to me is torture, OK? And waterboarding was advocated by the administration, and according to a published report, was used. But the point is we've had our disagreements and I've been called a quote "maverick."

And I'm not the most popular person in my party. And nor do I believe is Governor Palin the most popular with some in her Republican Party in the state of Alaska. And that's why I'm so glad I found a soul-mate and a partner for this campaign.

WALLACE: And so step back and in less programmatic terms and more in sort of conceptual terms give us an overview. How would the McCain presidency be different from the Bush presidency?

MCCAIN: Well, the first thing we would do is rein in spending. I mean, we've got to veto all of these pork barrel bills. We would eliminate pork barrel and earmark spending. We would seriously and comprehensively address the issue of climate change.

We would also absolutely, absolutely make sure that I address the issue of Afghanistan and our nation's security, and build a coalition of nations in an attempt that I think we can succeed on in reining in the Iranian weapons -- development of nuclear weapons.

But most importantly, a comprehensive immediate plan of action to fix our economy and create jobs and get people back to work again and get our economy going again, that has got to be the first priority. And I'll work with the Democrats. I'll reach across the aisle.

And we have got to keep taxes low, and we have got to have a job creation program in which alternate energy and nuclear power are a big part of it.

WALLACE: Finally, Senator, what do you hope to accomplish at the convention? If there is one or two central messages that you want to get across to voters about the choice between you and Barack Obama, what would they be?

MCCAIN: Reform, prosperity, and peace. We'll reform the way that Washington does business. Senator Obama has never taken on his party or had any real reform agenda. Prosperity, get jobs back, keep taxes low, invigorate our economy and get it moving again, and peace, I know how to secure the peace.

I hate war. I hate war. Most veterans do. All veterans that I know do. And we can secure the peace. This is a very dangerous world we live in and I know how to do that. Senator Obama has been consistently wrong on national security issues. I have been consistently correct.

WALLACE: Are you going to carve up Obama at your convention?

MCCAIN: I think we'll try to draw the differences. But I think the message of hope and that America is -- and restoring trust and confidence in our government and our best days are ahead of us, I am convinced that America's best days are ahead of us in these very difficult and challenging times.

WALLACE: Senator McCain, thank you for talking with us.

MCCAIN: Thank you, Chris.

WALLACE: See you in St. Paul.

MCCAIN: OK, good to see you.

(END VIDEOTAPE)

WALLACE: Senator McCain and Governor Palin are traveling to Mississippi today to visit an emergency command center preparing for the hurricane. There are reports President Bush is likely to skip the convention to oversee relief efforts. And Republican officials are discussing a possible fundraising drive for the victims of the hurricane during the convention.

Well, coming up, is McCain's vice presidential pick a stroke of political genius or a very risky gamble? Our Sunday regulars will have plenty to say when we come right back for the Republican convention in St. Paul.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: Some of life's greatest opportunities come unexpectedly, and this is certainly the case today. I was just your average hockey mom in Alaska.

(END VIDEO CLIP)

WALLACE: As you can see, we've moved up from the floor of the convention to our Fox skybox overlooking the Xcel Center. And I'm joined here by our Sunday regulars: Brit Hume, Washington managing editor of Fox News; and Fox News contributors Mara Liasson of National Public Radio; Bill Kristol of the Weekly Standard; and Juan Williams of National Public Radio.

Well, Governor Sarah Palin for vice president. Brit, good choice or too risky?

HUME: I think both, risky and a good choice. In your interview with Senator McCain, he really didn't -- and for political reasons, probably couldn't - mention the most conspicuous benefit that Sarah Palin has been to him and that is that she has electrified his base.

Look, the Democrats went to school on what happened to them in 2004. They had a wonderful organizing effort to get the vote out in 2004, and it was surpassed by the one that Karl Rove and the Republicans put together, which depended on the efforts of thousands of volunteers, many of them religious conservatives, who worked day and night and, in the end, delivered the state of Ohio and other key states to President Bush.

The Democrats are going to have a better effort this time, and McCain needs a better one that Mr. Bush had. And he didn't have the foot -- he really didn't have the enthusiasm of the foot soldiers needed for that. So that's one example. She has fired these people up.

You have the Second Amendment enthusiasts who are excited. Anti- abortion activists are excited. Economic conservatives are excited. Reform-minded people are excited by this.

So I didn't -- I must say, Chris, I thought that the least important decision of this period would be the Republican vice presidential nominee. Boy, was I wrong.

WALLACE: Mara...

HUME: This has made a -- this has already made a difference. Now, she could flame out in a heartbeat, which is the big risk.

WALLACE: Mara, what struck me in the interview with Senator McCain is how vulnerable he seemed to feel on voters' desire for change and their economic anxiety. And he clearly feels that Sarah Palin helps him with both.

LIASSON: Yes, I do. I don't know if she's going to do the trick, but, look, McCain understood the position he was in. I think there was this feeling -- maybe people were lulled by these polls that showed it so close and, oh, he's doing fine. Maybe all he needs to do is pick somebody safe.

In fact, I think he is in a position of weakness. And this was a pick made from a position of weakness. But it was a very smart pick, if you're in that position, because you have to answer the desire for change. You've got to fire up your base.

And I agree with Brit. I think she fires -- she's more important for firing up the base than she is in reaching women voters. I think that's -- that's her thing.

And whether she's going to crumble at the first question about Waziristan, we don't know. We're going to find out.

WALLACE: Bill, I have to say, when I was interviewing Senator McCain, that I mentioned the fact that you had been pushing Sarah Palin for some months now. And his reaction -- and I hope you won't be insulted -- is in a very growly voice. He said, "Even a blind hog finds an acorn every once in a while." So I want you to know that the senator sent his best to you.

(LAUGHTER)

KRISTOL: I'm flattered. It's not every day I get compared to a blind hog, but I think...

WALLACE: Well, actually it's every other day. KRISTOL: I think it's a term of endearment.

WALLACE: But, anyway, so what do you and John McCain see in Sarah Palin? And what do you think it does for the ticket?

KRISTOL: Look, I mean, McCain likes to play craps, but if I can -- I know poker better, so I'll use a poker analogy. McCain has gone all-in on Sarah Palin. He was behind, and he put all the chips on her. And now everything depends on her performance.

Brit is right. She's really energized not just the base, I think. I've gotten a ton of e-mails from people who, you know, cousin is not that political and they watched the event on Friday when she was unveiled and were moved by it, inspired by her story.

It's a pretty amazing story of personal success, being at once a traditional woman who broke all of these traditional barriers, kind of the best of both worlds, if you believe in traditional values and in equality and opportunities for women, a conservative who's also, you know, energetic and forward-looking, a very successful governor.

She's only been two years, but she took on the oil companies and has passed a new oil production tax and gotten this natural gas pipeline going.

I talked to a friend in Alaska who said, you know, when she said she was going to get this done, everyone laughed at her as being naive. The oil companies ended up compromising on her terms, not on theirs.

So I -- you know, but everything depends on her performance. I've never really -- I can't remember presidential -- think of it this way. What if she does badly? What if she sort of flames out in the debate and just looks not up to it? McCain is going to lose. I mean, it will be a devastating indictment of his judgment.

But what if she does well? Then I think he's doubled down on change. He's got the foreign policy experience. She's the fresh face, and it could win him the election.

WALLACE: Juan, we've sort of been skirting around a little bit. What about the commander-in-chief issue? I mean, flat-out, is she ready to be a heartbeat away from the presidency?

And if you take what we're hearing some Republicans say -- and you heard McCain today -- well, she's as experienced or more experienced than Barack Obama. Have you lost the experience issue with Obama when you have Palin on the ticket?

WILLIAMS: Well, I don't ever want to hear conservatives complain about affirmative action again. This is unbelievable. This woman has no experience, zero.

So it struck me initially when I heard this as a gimmick, a novelty act. Then I thought, "Well, wait a second." She can make inroads with the key constituency in this election -- I think the decisive constituency, the swing vote -- which is mostly white, suburban women, because they will identify with her.

And she also brings in the idea of someone who gets it. Remember what Obama said about McCain, he doesn't get it. I think Sarah Palin gets it. She understands the challenges facing working families and the country.

But when it comes to something like foreign affairs, she has no experience whatsoever.

I think the problem for Joe Biden in a potential vice presidential debate is not to beat her up, is not to make her look so unprepared that people will somehow identify with her and say, "Gosh, Joe Biden went overboard." So to me that's the key here.

I think the firing up of the conservatives is true, but it's really been a second-layer effect. I think, when you get Rush Limbaugh and James Dobson and others praising her, that wasn't the plan.

I think Steve Schmidt, who was, you know, doing a brilliant job of running the McCain campaign, his job was to find a way to win those swing voters who are right now the decisive vote, and that's why Sarah Palin is there.

WALLACE: Let me ask you, Mara, about that, because, obviously, whether McCain is going to admit it or maybe it wasn't even in his head, that is one of the hopes, that she'll reach out to women, especially the disgruntled Clinton supporters.

But if you look on the issues, on choice, on the war, on economic policy, there are big differences between Hillary Clinton and Sarah Palin. So which wins, gender or policy?

LIASSON: I think that maybe, in some of these culturally conservative communities, kind of the Appalachian belt where Obama didn't do well, I don't know if those voters would have voted for, you know, a Democrat anyway, maybe a little bit.

I really think that women -- as they proved in the Democratic primary -- are just not going to reflexively vote for a women. I think she is refreshing. She gives him a way to talk to those women, but I think, especially for the diehard Hillaryites, those people -- those women are liberal women. Those are pro-choice women.

And I think, if they're still really, really angry and the Obama campaign doesn't follow up on the very, very good start that the Democrats made in Denver, then maybe she has an opening. But I think she's more important for the base.

WALLACE: But I want to take a right turn here. The overlay to this convention now is that huge hurricane bearing down on the Gulf Coast, Gustav. There is talk that Bush is unlikely to come to the convention, talk about possibly doing a telethon or a fundraiser, some kind of fundraising thing for victims here at the convention, even talk that John McCain may address the convention, his acceptance speech by satellite from the gulf region. What do you think of all this?

HUME: Well, I think it's political correctness, but I think it's necessary for the Republicans, because the public perception of the handling of Hurricane Katrina is that -- is that the administration and, therefore, by extension, the Republicans made a horrible shambles of it and were insensitive and all that.

So you're going to see maximum sensitivity. And it's going to take some real imagination to figure out a way to present this convention in this context so that it ends up being an effective communication device for this -- for this nominee and his running mate.

WALLACE: All right.

HUME: I don't know how they're going to do it, but that's the challenge.

WALLACE: All right, we have to take a quick break here.

But when we come back, we'll talk about the other big story in politics. Did Barack Obama do what he needed to do in Denver? Back in a moment from the site of the Republican convention.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WALLACE (voice-over): On this day in 1997, Princess Diana of Wales died in Paris after an early-morning car crash. More than 1 million people lined the streets of London for Diana's funeral, while millions around the world watched on television.

Stay tuned for more from our panel and our power player of the week.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: We meet at one of those defining moments, a moment when our nation is at war, our economy is in turmoil, and the American promise has been threatened once more.

(END VIDEO CLIP)

WALLACE: That was Barack Obama Thursday night trying to set the terms for the debate in a fall election.

And we're back now at the Xcel Center in St. Paul with Brit, Mara, Bill, and Juan.

So, Bill, with a few days to reflect, how successful was the Democratic convention? Did Obama do what he needed to do?

KRISTOL: I thought it was successful. I thought his speech was very shrewd and effective. And they got some bounce out of it.

But I do think McCain's pick of Palin has sort of taken the spotlight away and minimized the effect of that convention. So I'm not -- I think McCain is in better shape than I would have expected, much, much better shape than I would have expected today.

Thursday night, every Republican I talked to after Obama's pretty spectacular performance was morose. It was going to be a boring pick of Tim Pawlenty, with all due respect to Tim Pawlenty or Mitt Romney, or a more kind of conventional pick. It was, sort of how do the Republicans compete? Now I think there's a real sense among the Republicans that they have a real shot.

WALLACE: Obama -- I mean, Juan, Obama, it seems to me, had several missions, first of all, to try to persuade voters that he isn't, quote, "different," but shares their values, second, to try to frame the choice between himself and McCain for voters. How do you think he did at both?

WILLIAMS: Well, in short, he had to tell people, you know, where he's come from and where he's going. And I think he conveyed a strong, intelligent presence, especially for the TV audience.

And in combination with the event, which was just spectacular -- I mean, I just came from Beijing, and this was up there, you know, with Beijing, 80,000 people, people standing in long lines to get in, fireworks, unbelievable.

Anyway, in combination with that, I think it had a tremendous impact, the TV audience unprecedented in its size.

But the speech itself, I tell you, I thought it was OK. You know, I mean, I think he took it to McCain, took the fight to McCain on the patriotism thing. You asked about it in your interview with McCain.

He also took it to McCain in terms of saying, you know, you vote with Bush 90 percent of the time, so I'm not willing to say -- risk 10 percent change. Where's the change?

But then he gets into things like, you know, McCain says he'll follow bin Laden to the gates of Hell, but he won't get him in the caves. But wait a second. If Obama knows where McCain -- bin Laden is, why doesn't he tell us all? Let's go get him now.

I think there was a lot of sort of vague, ambiguous stuff rather than the specifics that I think could have helped him.

WALLACE: Juan -- I mean, Brit, for all the talk of change, has this, in effect, become a traditional conservative-versus-liberal, right-versus- left election?

HUME: It certainly has, Chris. And in a sense, these things always do. I mean, everybody's proceeding here from the roots of their own political convictions, which leads you inexorably in one direction or another on issues like taxes, and defense, and on down the line.

Senator Obama seems to be talking about change, but not to the extent he used to. And the sense that he was a pied piper who was going above and beyond the normal politics of the day to lead us into a new age, not only of governance but of campaigning, as well, that's all gone.

He made a quite conventional choice of a vice presidential running mate. We have two very strong liberals on the ticket now. And the convention speech was a set of pieces designed to accomplish standard political goals.

So despite the extravaganza -- and it was certainly a spectacle -- I think a little of that -- a little of that image that Obama has, as someone entirely new with an entirely new message and an entirely new style of politics, has faded away now.

LIASSON: Yes, I still think this is an election about change versus more of the same, the past versus the future. Obama himself is just by definition a big change. I think that hasn't been gone completely.

But, yes, it's getting a little bit more traditional. We had one potential swing state crossed off the list this week, Alaska, which I don't think ever was going to be one, but we can -- so, in other words, the map is getting more and more traditional as, I think, we move forward.

But now they are both battling over this reform label, which is pretty interesting. I mean, they're both going after the same kind of demographic. They're both trying to capture the reform, which is the change mantle, and I don't think this is just a simple, old-fashioned liberal-versus-conservative election.

WALLACE: Let me ask you about that. There is talk about change and reform -- and you could see animated, with the pick of Palin, McCain now seems to be, Bill, about, you know, "We're the reform candidates. We're going to take on the establishment."

But yet when I hear what they're proposing, whether it's the war -- on both sides -- on the war or taxes or Supreme Court -- it seems to me like it's the old arguments.

KRISTOL: Well, it's always going to be, to some degree, but I actually don't agree. I think this is a pretty volatile and unusual election at this point.

With Obama at the top of the Democratic ticket, Palin number two on the Republican ticket, I did think McCain has now doubled down on reform and change. And he's gotten back, I think, some of that energy and reformist spirit and impulse that made him attractive to a lot of independent voters in 1999 and 2000.

Mara is right. McCain -- the pick of Palin can't get hard-core Hillary supporters, but it can get lots of vaguely affiliated voters, not just women, but maybe mostly women, who want change in Washington, might be more re-assured with McCain as president than Obama, but do think -- I think correctly -- that the pick of Palin shows that he's not going to just be -- it's not going to be a Bush third term. It's not going to be politics as usual.

I think it's a more -- it's a more wide-open race now. And Palin, weirdly, the vice presidential candidate is now the center -- at the center of the drama. How she does is, in a way, the biggest question of the race now.

WALLACE: Let me ask you about that, because -- Juan, because we've had vice presidential candidates who were controversial. In fact, Bill Kristol worked for one of them, Dan Quayle, who had, by all accounts, a disastrous vice presidential debate. It really didn't make much difference in the end, did it?

WILLIAMS: No, it didn't there, but I think that, in this one, she becomes the focus, because she is an intriguing story, very -- I hope I'm not offending anybody in saying that she's a very attractive woman, got wonderful story, the children...

WALLACE: I'm offended.

WILLIAMS: ... her son -- her son going off to war. I think that's all very interesting.

But what it -- what strikes me is that you have Sarah Palin standing there next to Joe Biden, and I think that the comparison in some ways does not do well for Sarah Palin.

WALLACE: Brit?

HUME: Let's not get too carried away here. Vice presidential picks seldom make a big difference in the outcome of an election, and I doubt it will here in the end.

Now, it has done some internal things for McCain which are important. And it has helped to recast him, perhaps, as Bill suggests, as the enthusiastic reformer he has always tried to be.

But beyond that, let's get -- let's be realistic. The V.P. pick is marginal.

WALLACE: Juan?

WILLIAMS: Well, I think -- the benefit is it blows President Bush and Dick Cheney out of this convention potentially.

WALLACE: Well, they may not be here to begin with because of the hurricane.

WILLIAMS: That's what I'm saying.

WALLACE: All right, panel, thank you all. We'll see you all this week around the convention hall in St. Paul and Minneapolis, the Twin Cities.

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