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September 07, 2008

Axelrod & Davis on "Fox News Sunday"

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace and this is "Fox News Sunday."

Fifty-eight days till the election and counting. With the conventions over, McCain and Palin, Obama and Biden are sprinting to the finish. What are their plans to win the White House?

We'll ask David Axelrod, chief strategist for Obama, and Rick Davis, McCain's campaign manager -- Axelrod and Davis, only on "Fox News Sunday."

Then, Sarah Palin brings down the house.

(BEGIN VIDEO CLIP)

GOV. SARAH H. PALIN, R-ALASKA: You know, they say the difference between a hockey mom and a pit bull -- lipstick.

(END VIDEO CLIP)

WALLACE: What will the Palin factor do to the race? We'll ask our Sunday regulars -- Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And with the general election officially under way, we go "On the Trail," all right now on "Fox News Sunday."

And hello again, back in Washington after two weeks covering the conventions. So after all the speeches and John McCain's surprise choice of a running mate, where does the race for president stand now?

We're joined by two of the men running the campaigns. First, Barack Obama's chief strategist, David Axelrod, who comes to us from Chicago.

And, David, welcome back to "Fox News Sunday."

AXELROD: Thanks, Chris. Good to be here.

WALLACE: Let's start with Governor Sarah Palin, who a lot of people felt drew some blood in her attacks against Barack Obama this past week. Here's one example.

(BEGIN VIDEO CLIP)

PALIN: Though both Senator Obama and Senator Biden have been going on lately about how they're always, quote, "fighting for you," let us face the matter squarely. There is only one man in this election who has ever really fought for you.

(END VIDEO CLIP) WALLACE: David, how are you going to counter Sarah Palin?

AXELROD: Well, look, this ultimately isn't a race between us and Sarah Palin. It's a race between Barack Obama and John McCain. They're the candidates for president.

And the real issue in this race is who's going to bring the change the country needs. John McCain has voted with George Bush 90 percent of the time. He says we've made great economic progress under George Bush.

Middle-class families, average families, in this country have lost $2,000 of income. Unemployment is at a five-year high. Home values are dropping. The housing industry itself is teetering on the brink.

We can't afford four more years of that kind of progress, and I think that's what's going to be the issue in this campaign -- not the barbs back and forth, but what's going on in people's lives.

Obama represents real change that will help lift the middle class in this country and rebuild our economy. And that's what this campaign is about.

WALLACE: But, David, Sarah Palin is a political fact and she, at this moment, is a political phenomenon. And here's how Obama went after Governor Palin this week. Let's put it up on the screen. "My understanding is that Governor Palin's town of Wasilla has, I think, 50 employees. We've got 2,500 in this campaign."

Question: Does Senator Obama really believe that he has more executive experience than Governor Palin?

AXELROD: Well, look. We'll let the voters sort through the experience issue, but, Chris...

WALLACE: But Wait, wait. No, wait, wait.

AXELROD: Wait, wait. No, wait, wait. No, wait. Hold on a second, because we don't really know -- you don't know as much as you should about her, and neither do we, because she was basically an unknown.

John McCain, we're told, wanted to pick Joe Lieberman, wanted to pick Tom Ridge. The right wing of his party ran him off of that. And she came in late in the game and no one really knows.

She hasn't sat down with you or any interviewer to ask any -- answer any substantive questions. All she's done is read a couple of speeches. So there's a lot to be -- to be learned about this ethics investigation in...

WALLACE: But it's a simple...

AXELROD: ... Alaska, about why she told us she was for the -- against the "bridge to nowhere" when she campaigned for it, why she said she was against lobbyists and earmarks when she hired a lobbyist to go and get earmarks.

I mean, there are a lot of questions to be asked, and hopefully she'll sit down with you soon.

WALLACE: Well, from your lips to the McCain campaign's ears. But I asked you a simple question. Does Senator Obama really believe he has more executive experience than Governor Palin?

AXELROD: I think Senator Obama believes that he has the experience to be president of the United States, the broad experience that's necessary to lead this country forward and bring the change that we need, and we'll let the voters decide about that. We're not running against Governor Palin.

WALLACE: Yeah, but we keep hearing that you're going to put out Hillary Clinton and a lot of the female Democratic governors this week to try to counter Palin. What's their line of attack going to be?

AXELROD: Well, look. We are going to have both men and women out campaigning for us, because our party believes that we need change in this country. And I think the American people believe that, and that's where we're going to go.

Governor Palin plainly is on the ticket because she believes, as John McCain does, that we should continue the policies of George W. Bush, the same kind of tax cuts for big corporations and the wealthy, the privatization of Social Security, which is something that McCain has embraced, the same approach to health care that's been such a dismal failure, the same sort of sloganeering around energy when we need a real energy program to move this country into energy independence and rebuild our economy.

These are the kinds of things we're going to be talking about.

WALLACE: Let's talk about this issue of change, because as you saw at the convention, John McCain says he is the real agent of change, he is the real reformer. Let's watch.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZ.: I will reach out my hand to anyone to help me get this country moving again. I have that record and the scars to prove it. Senator Obama does not.

(END VIDEO CLIP)

WALLACE: Now, David, McCain and Palin do have records of going up against their own parties. When has Barack Obama ever gone up against the Democratic Party in the U.S. Senate?

AXELROD: Well, first of all, let me say this, Chris. Senator McCain on the biggest decision that he'll ever make in public life, which is the choice of a vice presidential nominee, decided not to go up against his own party, was told he couldn't pick the person he apparently thought was the best choice, and he went with Governor Palin instead. So I think that's important to note. WALLACE: All right, but...

AXELROD: One of the first things that Senator Obama did when he came to the U.S. Senate was push for the most far-reaching ethics reforms that we've seen since Watergate.

That didn't please people on either side of the aisle, and he has done that consistently in his career. He's reached across party lines to find consensus, and he's taken on his own party on issues like ethics reform.

You know, what was interesting about these attacks about bipartisanship and so on is that people like Dick Lugar, the very respected Republican senator from Indiana, spoke out and said, "These are just partisan attacks. I've worked with Barack Obama." They worked together on arms control.

Senator Coburn in Oklahoma worked together with him on budget issues, like putting the budget on Google so we could see how our money is being spent, and putting caps on contracts around the Katrina rebuilding.

Senator Obama has a strong record of working across party lines to produce progress for people.

WALLACE: But, David, you know, because you guys always talk about ethics legislation and the nuclear non-proliferation deal with Dick Lugar, I went back and looked.

Both of those measures passed by unanimous consent. They were so accepted by the Senate that there was not even a vote. In fact, ethics legislation was one of the campaign promises. These were not...

AXELROD: Well, Chris...

WALLACE: If I may, if I may, these were not areas where Barack Obama went up against the leadership of his own party nearly in the way that John McCain did on campaign finance reform, on limiting interrogation of terror detainees, on immigration reform.

He did not go up against his own party on either of those issues.

AXELROD: Well, it's funny you mention immigration reform. During the Republican primaries, McCain said he'd now vote against his own bill. So I think you have to put a little asterisk next to that.

The fact is on ethics reform, it was a tremendous battle within his own caucus and within that Senate. Of course everybody voted for the final bill because you can't vote against an ethics bill.

But in shaping that bill, Senator Obama went up against both -- leaders in both parties who weren't happy about changing the rules that they've lived with all these -- all these years.

Let me make one other point on this issue of reform, Chris. I heard Senator McCain say the other day that he would -- that he's going to tell the special interests it's over and that he can't wait to introduce Governor Palin to the lobbyists and the pork barrelers, he said.

Well, all he has to do to do that is convene a meeting of his senior staff because almost everybody who's running his campaign is a major Washington lobbyist, including your next guest.

They've lobbied for oil companies, drug companies, insurance companies, for foreign oil interests, for foreign governments. That's who's running his campaign.

So people have to ask themselves, "If these are the people who are running his campaign, who's going to run his White House?" It's not change. It's more of the same.

WALLACE: McCain -- I want to talk to you about Rick Davis, McCain's campaign manager, who will be on next, because your campaign has been hammering him this past week for something that he said.

And let's put it up on the screen. "This election is not about issues. This election is about a composite view of what people take away from these candidates."

Now, afterwards, the McCain camp said what he meant to say, or to expand on it, is who has the right judgment. And they point to this exchange over the last few days on the question of the troop surge in Iraq. Let's watch.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: I think that the surge has succeeded in ways that nobody anticipated, by the way, including President Bush and the other supporters.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PALIN: I guess when you turn out to be profoundly wrong on a vital national security issue, maybe it's comforting to pretend that everyone else was wrong, too.

(END VIDEO CLIP)

WALLACE: On a matter of judgment, the kind of thing that Rick Davis is talking about, wasn't Obama wrong and McCain right about the troop surge?

AXELROD: Well, first of all, you want to talk about a matter of being profoundly wrong in judgment, it was the judgment to go into Iraq in the first place instead of going after Osama bin Laden, who's resurgent today. But let's leave that aside for a second.

What Senator Obama has said is that he believes that the surge reduced violence beyond what he and anybody expected. What it hasn't done is created the political reconciliation between the parties in Iraq that you need for a stable peace.

WALLACE: Well, let me just pick up...

AXELROD: Hold on, Chris. It has enforced...

WALLACE: How can you say that it has reduced violence beyond what anybody expected? Reduced violence beyond what John McCain expected?

AXELROD: I believe it did. I think if you ask any of the military people involved and they answered honestly, they'd say, "We did not know," and they got -- and there were -- the troops did a magnificent job.

General Petraeus deserves credit. But there was some serendipity involved as well in the Sunni "awakening," in the decision of the Mahdi army to lay down...

WALLACE: Where did John McCain ever say, "The troop surge -- I'm going to support it, but I don't know that it's going to really work?"

AXELROD: The point is this. We were told that the surge -- the purpose of the surge, Chris, was to promote political reconciliation and to shift the responsibility to the Iraqis.

Today we are still spending $10 billion a month to defend Iraq, rebuild -- to defend Iraq and rebuild Iraq, even as they have, the Iraqis, a $78 billion, $79 billion budget surplus. That is wrong, and I think the American people know it's wrong.

And to say that this was a success when we're still mired there at $10 billion a month, when we still have, you know, over 10,000 troops in Iraq is, I think -- really miss the point.

But if we want to talk about judgment, let's go back to the beginning and ask whether it was the right judgment to go in in the first place.

I understand that Governor Palin would like to talk about this aspect of it, but there's a much larger discussion to be had about this. And on the broad sweep of things, including whether we should be in Afghanistan or Iraq, Barack Obama's been right and John McCain has been wrong.

WALLACE: All right. Let's -- because we've got about a couple of minutes left, and I want to talk some strategy with you.

I want to put up Karl Rove's latest electoral map, which is an average of recent state polls. It shows Obama leading in states with 260 electoral votes, McCain leading in states with 194, and states with 84 electoral votes, those in yellow, still toss-ups, with 270 votes, of course, need to be elected president.

Is that basically how you see the electoral map at this point? And aren't you vulnerable in longtime Democratic strongholds like Michigan and Pennsylvania? AXELROD: I think we're going to win in Michigan, and I think we're going to win in Pennsylvania.

Those are two states that have really felt the impact of these bad economic policies of the Bush administration, and really understand the need for change, and want a president who understands that we haven't made great progress in the last eight years and that we can't just keep doing what we're doing.

I think we're going to do well in those states, Chris, and I'm -- you know, it's going to be a battle. There are going to be a lot of resources in there, but at the end of the day I think we're going to win both those states.

WALLACE: And finally -- and we've got about a minute left -- if you had to frame in one or two sentences the choice that you would like to see voters having in their minds as they go to the ballot box on election day, what would you like the -- how would you seek to frame the choice?

AXELROD: Well, the choice is between a path that leads us to more of the same and a compounding of the problems that we've already seen over the last eight years, and someone who offers the kind of change that we need to rebuild the middle class, rebuild our economy, rebuild our standing in the world and our security and move America forward.

It's very, very simple. You vote for John McCain, you're voting for more of the same. Barack Obama represents change and hope and progress for this country.

WALLACE: Well, I think it was more than two sentences, and they were slightly long, but you certainly framed the choice. David Axelrod, thanks so much for coming in and talking with us today.

AXELROD: Great to be with you, Chris. Thank you.

WALLACE: Safe travels on the campaign trail, sir.

AXELROD: Thank you. See you out there.

WALLACE: Up next, we'll talk with McCain campaign manager Rick Davis about Sarah Palin and the Republican plan for victory. Back in a moment.

(COMMERCIAL BREAK)

WALLACE: Joining us now to give us John McCain's game plan for the final sprint to November is campaign manager Rick Davis.

And, Rick, welcome back to "Fox News Sunday."

DAVIS: Thank you, Chris.

WALLACE: Well, as a matter of personal privilege, I'm going to give you the opportunity to respond to David Axelrod, who said, you know, for all this talk about wait till we come in and shake the lobbyists, but the campaign team of McCain is filled with lobbyists or, in your case, former lobbyists. How do you respond?

DAVIS: Oh, I think that, you know, it's just more of the same from David Axelrod. I mean, they've been running against ghosts of the past all along. And I think it just shows that they don't really have anything to talk about.

If they want to run against Rick Davis or our campaign staff, let them. I think it's hilarious. I think it's a wonderful distraction from the real issues that we're trying to debate.

It's a classic example of a campaign that doesn't have anything else to say, so they pick on staff.

WALLACE: Let's turn to the choice of Sarah Palin as the running mate. What does she add to the ticket? Does she bring new states into play? How are you going to use her?

DAVIS: Well, I think she is exactly what we needed to really focus the public's attention on the fact that the brand of John McCain, the maverick, the independent, the guy who's been railing against corruption and ethics abuses in Washington, the guy who wants reform government -- and she reinforces that.

And it is a wonderful thing for our campaign to be able to get this kind of attention on our ticket for -- coming out of the convention. We've had wonderful events, fantastic rallies. People are excited about this ticket. And let me tell you, this is a ticket that will govern Washington.

WALLACE: But aren't you vastly exaggerating her record as a reformer? Take a look. As mayor of Wasilla, she hired a Washington lobbyist and got $27 million in earmarks. And in her less than two years as governor, Alaska has asked for $589 million in pork barrel projects. Her record as a reformer, particularly on the issue of earmarks, is far from clean.

DAVIS: Well, let's be clear about this. When she was mayor of Wasilla, there were already people in place who were getting those grants from the federal government. And small towns do a lot of that kind of activity because mayors...

WALLACE: She hired a Washington lobbyist who was supposed to...

DAVIS: ... mayors...

(CROSSTALK)

DAVIS: ... already involved in that, and so...

WALLACE: She hired a -- she...

DAVIS: But let me also point out these...

WALLACE: ... she did hire a lobbyist.

DAVIS: ... these pork barrel projects that you talk about -- these were not projects that she tried to get. These were projects that the Republican establishment in Alaska, who she campaigned against and beat many times over -- were the ones picking those grants up.

Let me remind you, she vetoed more bills. She cut back on more pork barrel spending in the state legislature than any previous governor. She converted that legislature into reform because she passed ethics reforms and corruption reforms.

She railed against the establishment in Alaska and was able to accomplish great things like passing a significant energy bill that allowed them to create a natural gas pipeline.

These are all things that a true reformer is able to accomplish. So you know, I don't disagree with the fact that these -- there were pork barrel projects coming to Alaska, but not from her. Within the state legislature, she beat back those efforts.

WALLACE: Wait a minute. First of all...

DAVIS: She's not a federal...

WALLACE: ... as governor, Alaska -- during her 1.5 years, 2 years as governor, Alaska continued to get more federal money for pork barrel projects per capita than any state in the country.

DAVIS: Yeah.

WALLACE: And she was...

(CROSSTALK) WALLACE: This works better...

DAVIS: Sure.

WALLACE: ... if I get to ask the question.

DAVIS: OK.

WALLACE: And she supported the "bridge to nowhere," and it was only after the federal government dropped it out and killed it, the Congress killed it, that she then opposed it. And in fact, she still got the money for the approach, the ramp, to the "bridge to nowhere."

DAVIS: Congress didn't beat back the "bridge to nowhere." That funding...

WALLACE: I know, but she accepted the money.

DAVIS: That funding was in the grant, and she said, "I'm not spending that money." And what they did -- they took a $500 million bridge and she turned it into a $2 million ferry. And that's what she did on her own without any help from anybody else.

WALLACE: Well, actually, it was Congress that killed the money for the "bridge to nowhere."

But let me move on to something else. Governor Palin has given some very good speeches this week, and I think everybody, Republican or Democrat, would say that she was very effective at the Republican convention.

She has not answered a single question from the national media. When is she going to agree to an interview?

DAVIS: She'll agree to an interview when we think it's time and when she feels comfortable doing it.

Look, your network last night had a wonderful special on -- Greta van Susteren had an intimate portrayal of this mayor or this governor when she was in Alaska still and not on our ticket. It was a wonderful look inside who Sarah Palin is -- a working mother, you know, a brave and courageous politician. And I think you all did a great job of doing it.

It's not like there's no information out there about Sarah Palin, the governor, the mother, the agent for change. There's plenty out there, and I don't think...

WALLACE: Why is she scared to answer...

DAVIS: I don't think our campaign...

WALLACE: Why is she scared to answer questions?

DAVIS: I don't think our campaign is the campaign that has not given immense amount of access to the press. That's the Obama campaign.

WALLACE: Why is she scared to answer questions?

DAVIS: She's not scared to answer questions. But you know what? We run our campaign, not the news media. And we'll do things on our timetable. And honestly, this last week was not an exemplary moment for the news media.

WALLACE: I understand that.

DAVIS: And so why would we want to throw Sarah Palin into a cycle of piranhas called the news media that have nothing better to ask questions about than her personal life and her children?

And I think our attitude would be why don't we let that pass until we expose her to...

WALLACE: I think there are legitimate questions that -- and it doesn't have to be a huge news conference. I'm not telling you how to run your campaign.

DAVIS: Sure.

WALLACE: There are legitimate questions about is she or is she not ready to be commander in chief. If last week didn't work, why not this week?

DAVIS: Sarah Palin will have the opportunity to speak to the American people. She just gave a speech to 40 million Americans in her convention.

WALLACE: But that was reading a script. She's not answering questions.

DAVIS: She's in the process of, you know, getting to know people out on the campaign trail, and she will do interviews, but she'll do them on the terms and conditions of which the campaign decides that it's ready to do it.

And, Chris, all due respect, I mean, you know, the information that the news media has been putting out on Sarah Palin is not what I would call objective journalism.

So until at which point in time we feel like the news media is going to treat her with some level of respect and deference, I think it would be foolhardy to put her out into that kind of environment.

WALLACE: Well, you just said that you -- what a great job Fox News did with this piece last night.

DAVIS: You did.

WALLACE: You just praised it.

DAVIS: Absolutely. WALLACE: My only point is there are legitimate questions to ask her, whether it's For anybody else, about what -- is she ready to be president, what does she know about foreign policy.

DAVIS: Absolutely. No question about that. And she will be available to the news media when and if we decide that that is going to be the case.

WALLACE: So you're not at this point willing to say when.

DAVIS: No.

WALLACE: Let's get back to your comment last week that I discussed with David Axelrod.

DAVIS: Sure.

WALLACE: And let's put it up on the screen again. "This election is not about issues. This election is about a composite view of what people take away from these candidates."

And here's how Democratic running mate Joe Biden reacted to your convention.

(BEGIN VIDEO CLIP)

SEN. JOSEPH R. BIDEN JR., D-DEL.: The silence of the Republican Party was deafening. It was deafening on jobs, on health care, on environment, on all the things that matter to the people in the neighborhoods I grew up in. Deafening.

(END VIDEO CLIP)

WALLACE: Rick, do you want to focus on personality or a composite view of the candidates, not issues, because of the fact, for instance, that we've got 6.1 percent unemployment, the highest in five years?

DAVIS: No, Chris. And what you didn't -- what you didn't show on the screen was the next sentence, which is the composite view is made up of people's values. It's made up of their opinions. It's made up of their judgment and their principles.

And so then I let -- then the next sentence says, "And of course, issues will play an important role in people's final decision."

So I respect the fact that the Obama campaign has some kind of a -- you know, obsession about Rick Davis. I've been the focus of their advertising, and now their candidate seems to be, you know, wanting to attack me more than anybody else. That's fine. The water is warm. I'm happy to go toe to toe.

But to insinuate yesterday on the stump that somehow those comments implied that I was going to, you know, indicate that he was going to have these Muslim connections or that he had these radical relationships is absolutely out of control. I mean, what is this guy trying to do?

WALLACE: But wait. All right, the Muslim thing may be not fair. Your campaign has talked about the fact that he had this relationship with William Ayres.

DAVIS: Absolutely, but does that quote indicate that? I mean, that's the quote that he...

WALLACE: Well, radical connections -- that's what William Ayres is.

DAVIS: But where in that quote is radical connections? I mean, understand something. This is the same...

WALLACE: No, but you just quoted what Obama said on the trail yesterday.

DAVIS: Absolutely, yesterday, against my quote. He said this is what they're saying by saying that it's about personalities. I didn't even say personalities. He's not correct in the way he's quoting me.

And he tries to use that to try and scare you. He says, "They're going to tell you that we're going to scare people. They're going to tell you that, you know -- that I've got Muslim connections." Well, this is the same construct he's done before. He's trying to play victim, and I just don't think it's very flattering on his part.

WALLACE: OK. McCain keeps talking about change is coming. But on all the big bread-and-butter issues -- taxes, Social Security, energy, trade, health care -- there really are not big differences between John McCain and George Bush.

DAVIS: Oh, I think that change is coming. I mean, look at -- George Bush couldn't get anything done on Social Security.

I mean, I think that's a fundamental difference between John McCain and George Bush in the sense that I think John McCain's approach to Social Security -- getting Democrats to come over to the White House, sit down and get a deal so that we can take this off the table so that not only the people who are currently getting Social Security can feel like they're safe and secure, but all those people in the pipeline to receive it in the future know what their benefits are going to be and what it's going to cost.

WALLACE: But wait a minute. Let's take Social Security as an example. In fact, McCain's Social Security plan is almost identical to George W. Bush's. He's talking about some reform of the system plus private accounts.

You're never going to get private accounts through a Democratic Congress.

DAVIS: The difference is the approach. George Bush said, "Take it or leave it. Here's the way we do it. Private accounts go first and then the balance of the Social Security system has to be fixed in the process." John McCain says exactly the opposite. John McCain says, "Give me the leadership of Congress, whether Republicans or Democrats, I don't care. Come over to the White House, sit down and let's find out a way to take this off the table."

And then once we satisfy the American public that we've fixed the Social Security system well into the future, then let's sit down and look at Medicare and Medicaid, because those are the things that really are sapping our federal budget.

So what the difference is -- and I think this is an important difference, and it is change politically -- is that John McCain has a history of getting things done in Congress by sitting down with people who are part of the solution, not part of the problem.

He'll sit down with the Democrats, independents, Republicans alike and say, "We have got to change this system." He's got a long history of doing that. Nobody has passed more bipartisan reforms in Congress than John McCain, and he'll do it as president.

WALLACE: So you're willing to concede that his starting out point is very similar to George W. Bush's on all of these bread-and- butter issues, but that it's -- the difference will be the approach in how he deals with Congress?

DAVIS: Oh, I think there are lots of differences in some of these bread-and-butter issues. I think our approach on taxes and trade, even though as a Republican are very similar to George Bush -- we have different proposals today.

I mean, look. And most importantly, we have different proposals than Barack Obama, who has this -- somehow believes that raising taxes is going to cure an ailing economy. I mean, you know, economics 101 will tell you don't raise taxes into a recession. John McCain has said it over and over.

We have to get more money in the pockets of the American public.

WALLACE: I want to get you to talk strategy over the next 58 days. And let's put up, again, Karl Rove's electoral map, which shows Obama leading in states with 260 electoral votes -- again, 270 needed to win the presidency.

Obviously, it's still fluid, but doesn't Obama have many more ways to get to 270 when you look at that map than you do?

DAVIS: No. I think maps are maps and polls are polls, and we're really not going to worry about it. Look. If we were worried about polls, we would have given up a year ago.

What is really amazing about that map, in my opinion, is Colorado. The Democrats just spent tens of millions, maybe $100 million, in Colorado with their convention. They dominated the news media for weeks at a time.

And John McCain just went in to Colorado and had a huge rally, incredibly enthusiastic support. And even though the Democrats have spent tens of millions of dollars in a state that is a clear targeted state, they weren't able to move it into their column.

WALLACE: OK. We've got less than a minute left, and I want to finish with the same question that I asked David Axelrod.

If you had to frame in one or two sentences the choice that you want voters to have in their minds on election day, what would it be?

DAVIS: Well, I think it was really exemplified in the conventions. Our convention focused on putting your country first. John McCain has always put his country first throughout his career -- and willing to sacrifice his own political interests for the country at large.

The Obama convention -- it was all "me first." I mean, Barack Obama has put himself ahead of the Democratic Party, ahead of the country's interests and ahead of his party's interests. And that is a -- that is a - - a history in the way he's conducted himself in his public life that I think is a clear difference between the two candidates.

WALLACE: Rick Davis, we want to thank you for coming in and talking with us today, and please come back.

DAVIS: Thank you.

WALLACE: Up next, the Palin factor -- how has Alaska's governor shaken up the race for the White House? With our hardy band of Sunday regulars, we'll have all the answers when we come right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: Listening to him speak, it's easy to forget that this is a man who has authored two memoirs but not a single major law or even a reform, not even in the state senate.

(END VIDEO CLIP)

WALLACE: Well, that was Governor Palin with one of many deft jabs this week at Barack Obama's record as a reformer.

And it's time for our Sunday group -- 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, also from National Public Radio.

Well, let's give some props where they are due. It was back in June that our very own Bill Kristol flatly predicted that McCain would pick Palin as his running mate. Let's watch.

(BEGIN VIDEO CLIP)

KRISTOL: Republicans are much more open to strong women, and that's why McCain's going to put Sarah Palin, the governor of Alaska, on the ticket as vice president.

WALLACE: Is that your prediction?

KRISTOL: That's my -- I'm moving from Jindal to Palin. I'm being even bolder. She's fantastic. You know, she was the point guard on the Alaska state championship high school basketball team in 1982. She can take Obama one on one on the court. It would be fantastic.

(END VIDEO CLIP)

WALLACE: Well, it was a kind of odd reason to pick her, but in any case, Bill, you did. Obviously, you were impressed with her, but did you have any idea she would have this kind of impact on the -- and make this kind of entrance on the national political stage?

KRISTOL: No. I mean, I think the combination of the surprise and then her impressiveness is what did it. And of course, she was hugely helped by the liberal media, which created such a ridiculous feeding frenzy in the three or four days between her pick and her speech that she was able to, you know, show the world is that she wasn't the caricature of her that they had drawn.

WALLACE: Brit, why do you think she has made such an impact? And you know, the cliche in politics is always well, the running mates, they may get a little buzz, but they really don't make a difference. Could she be the exception?

HUME: I think she's already been the exception in the sense that she has had a galvanizing effect on the Republican base which had been almost torpid toward John McCain, willing to accept him, willing to vote for him, willing to some extent to work for him, but without the kind of enthusiasm that was shown for Ronald Reagan, for example, and for George W. Bush as well.

It was that kind of enthusiasm for Bush that allowed him to win the squeaker in 2004 because he was -- because there were tremendous armies of foot soldiers out there that were willing to go out, knock on doors, try to convince other people to work for him, and produced votes in Ohio that the Democrats didn't even know were available, to name one state.

Well, McCain's going to need all that again. He had little hope of getting that kind of enthusiasm before she came along, and she's come along and had an enormous effect on the Republican base.

And she also seems, at the same time, in a remarkable way to have sort of gotten in the Obama campaign's kitchen, thrown them a little off guard. They seem not quite to know how to react to her and so forth. So she has made a difference.

Now, it may fade with time, and as the coverage of her diminishes, as it probably will, it may fade to some extent. But so far, she's made a huge difference.

LIASSON: Yeah, I think she's made a huge difference. I can't think of a single other one of those finalists on that short list that could have given a speech like that. I mean, she is an incredible talent.

As a matter of fact, some of the ones on the short list which the Obama campaign keeps on pushing, the Lieberman and Ridges, would have caused a revolt at the convention.

But I think that she has made a huge difference. I think she cannot only energize the base, but she gives him a chance to talk to some of those voters in Appalachia, in Ohio, West Virginia, Kentucky, all those voters who are very leery of Barack Obama.

And I think that in terms of what happens over time, I don't think she's going to fade. I think the big question is does she implode or not. Is there something else that we don't know? What happens to all these inquiries about "troopergate," et cetera? But I think so far she's exploded on the scene. She's done a great job for John McCain, even at the cost of bearing the criticism of picking someone who isn't ready to take over on day one.

WALLACE: Juan, you know, as you saw, I had a go-round with Rick Davis on the question of when is she going to answer questions. Is that something that we care about? Or at some point, if she doesn't begin to answer questions, does that become an issue for voters?

WILLIAMS: I think it's a big issue right now, because the real issue with Sarah Palin is experience. And I think it's something like more than 50 percent of American voters say, you know, she doesn't have the experience to be vice president of the United States.

That's not a small matter when you have a 72-year-old in John McCain as president if you decide to make him your president. And so would you really trust America -- would you trust American foreign policy at a time when we're at war with terrorists -- would you trust American energy policy to Sarah Palin? And I just think most Americans are very doubtful about that, dubious.

You know, when you asked Brit about whether or not she makes a difference, I think she's made a difference in terms of T.V. ratings. Gosh, the Republican convention actually did better than the Barack Obama spectacular in Denver.

I think she's made a difference in terms of exciting the base, which is exactly what Bill Kristol was so pressing about. But you know what? This wasn't the intent of Rick Davis and the McCain campaign.

They were going after white women voters. And I don't think that they have been successful with that demographic. In fact, the fact that she is so opposed to abortion rights in the country, the fact that she's so for gun ownership, I think has turned off those people who might have been Hillary supporters.

KRISTOL: Well, you may think that, but the Rasmussen poll in which Obama was ahead by six points on Tuesday is now even. The Gallup poll in which Obama was ahead by eight points on Tuesday is now a two-point lead. So the pick of Palin seems to be doing just fine.

And some of those voters are coming over. It's not just the base. Those are not just the base. And in fact, the Rasmussen's poll -- women have moved -- Obama's edge among women has been cut in half, from about 14 points to about seven points.

We'll see what happens. It's early. But here's the key point. Here's the key point. When Palin was announced, the Obama campaign put out a snotty statement, a dismissive statement. "John McCain today has taken a former mayor of a town of 9,000 with no foreign policy experience and made her -- put her a heartbeat from the presidency."

What did David Axelrod, who's not a -- who's a very smart man, say to you today when you asked about Governor Palin? "We're not running against Governor Palin." What does that -- that tells you everything. They're scared to run against Governor Palin.

He would not take her on, and they realize they made a horrible mistake going after her and letting Obama get in a fight with Palin, which, of course, makes them -- who has more experience, the Democratic presidential candidate or the Republican vice presidential candidate?

WALLACE: Mara...

WILLIAMS: Wait. Your comments, though, right now suggest that you're more interested in Palin than giving credit to John McCain and suggesting that maybe the bump, any bump that comes out of this convention, is because John McCain is an attractive candidate for the Republicans, because he is a maverick from the Republicans. He's trying to separate himself from authority.

WALLACE: Kristol seems perfectly content to say that's true.

WILLIAMS: But it's not...

KRISTOL: They're not mutually exclusive, Juan.

WILLIAMS: No, my point is...

KRISTOL: They're not mutually exclusive.

WILLIAMS: ... it's not about Sarah Palin. You might want to put it on Palin, but it may be John McCain deserves some credit.

WALLACE: Let me go back, because this segment is about Sarah Palin.

Mara, how worried -- do you get a sense talking to Democrats -- how worried is the Obama camp about Sarah Palin, and how are they going to handle it?

LIASSON: I don't think they've quite figured that out yet. As Bill kind of explained, they've tried out some different tacks. The first focus was all about her tenure as mayor. She's the governor of a state. I mean, they don't -- they seem to kind of forget about that.

And also, you know, deciding who's going to go after her -- is it going to be Biden? Is it going to be Hillary? Is it going to be Obama himself, which I think would be a mistake? I mean, why would the presidential candidate argue against the vice presidential candidate?

I think, you know, look, the Obama campaign is in a pretty good shape when you look at that electoral map. Of course they're nervous, and they should be nervous. They're trying to do something that, you know, has never been done before, which is elect an African American president.

On the other hand, you know, those Karl Rove maps -- he's around 260 and McCain is in the 180s. I mean, they're in pretty good shape. They still feel the economy is number one.

McCain -- that is the one glaring exception at the Republican convention. They didn't focus on that. The fundamentals are still going their way. I think they're worried. I think they still feel pretty confident.

HUME: My view is that they ought to stop talking about Sarah Palin. I don't think talking about Sarah Palin helps them at all. I mean, if you -- as Bill points out, you raise the experience issue against her, it underlines the issue about Obama himself. It's foolish to do that.

You know, they are leading. They have issues that they can run on. Basically, they're running on two things. Republicans don't have a plan to fix the economy. They don't even talk about the economy. And it's the third term of George Bush.

I think the third term of George Bush argument gets a bit threadbare after a while, but I don't see any sense that -- any sign at all that they're beginning to relent on that.

WALLACE: What about the idea, Brit -- and we're running out of time in this segment -- of, as they're apparently going to do, sending out Hillary Clinton and female Democratic governors like Sebelius and Napolitano to basically say, "She may be a woman, but on all the issues you care about," and this is talking particularly to Clinton supporters who are women, "Sarah Palin is not your girl?"

HUME: Well, that -- if they do that, it will underscore the fact that they really do think she has the potential of drawing away those voters, and whether those voters are going to be talked out of being attracted to Sarah Palin because Hillary Clinton tells them to, or Kathleen Sebelius argues that she's not the right kind of woman, I think is a very open question. I'm not sure it will work.

WALLACE: All right. We have to take a break here.

But when we come back, after two conventions and the choice of two running mates, where does the overall race for the White House stand as we head into the home stretch? We'll ask our political handicappers after the break.

(COMMERCIAL BREAK)

WALLACE: On this day in 1977, President Carter signed the Panama Canal Treaty, giving up control of the canal by the year 2000.

The canal created a shortcut for ships traveling between the Atlantic and Pacific Oceans.

Stay tuned for more panel and "On the Trail."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: If you watched the Republican National Convention over the last three days, you wouldn't know that we have the highest unemployment rate in five years because they didn't say a thing about what is going on with the middle class.

(END VIDEO CLIP)

WALLACE: Well, that was Barack Obama Friday hitting what he thinks may be the Democrats' best issue, the state of the economy.

And we're back now with Brit, Mara, Bill and Juan.

So, 58 days to go. Where is this race? Where -- what are the two sides' strengths and weaknesses?

Juan, what do you think will decide the election?

WILLIAMS: Well, you know, I think that ultimately -- Brit says it's threadbare, but I think it's right on target, which is that the Democrats need to say, "Do you want a third term of George W. Bush," that that's what McCain embodies.

From watching these two conventions, you'd have to say the Democrats are hitting hard just on this theme, change, change, change. The Republicans have come along and said, "Wait a second, we can actually deliver on change. We're reformers and mavericks."

I think Bill Clinton in his sort of unscripted comments at the Democratic convention, where he said you have Candidate X and Candidate Y, and you agree with everything about change with Candidate X, but Candidate Y says some things you don't disagree with, but he says I can deliver on them, so who do you vote for?

Well, Bill Clinton had so much going on, has this subconscious, I think, anger at Obama, but basically that's what the election is about -- do you think that for all this talk about change that Obama has the level of experience and the capacity to deliver, or do you think John McCain, who might agree with you on some things and not on others, but has a record of getting things done -- do you think that he -- are you willing to vote for him and take the risk that he's a third term of George W. Bush?

WALLACE: Brit, where is this race now?

HUME: It's pretty close. Obama is ahead. He'd have to be favored at this point. I think that the McCain campaign does need to address the economy.

It has one issue within that where its position is much more aligned with the voters' position, and that is on energy, than is the Obama campaign. And there is a real weakness on the Obama campaign on that, because they don't want to do very much. They're against, you know, more drilling, really, and so on.

So I think McCain, you know, has a real shot. And of course, I think, you know, there is this problem. There's a Barack Obama problem that has to do with the fact that he's -- you know, he almost lost to Hillary Clinton.

And I think there's a chance that when we look back on this, if Obama loses, we will say that the fateful moment for him came at the convention when he declined to pick Hillary Clinton. Think how differently it would look.

Sarah Palin might not even have been chosen if he'd done that. So I think that that's something he has to carry through this. He may win. The public wants change. But it ain't done.

WALLACE: Mara, how persuaded are you that McCain is going to be able to separate himself from the Bush record, especially now the Bush economic record, and persuade voters that he is the true agent and the most effective agent of change?

LIASSON: I think it's going to be hard. I think that his history and his record shows that it should be easy, but he's going to be facing a huge onslaught from the Democrats to try to make him into "McBush."

I think the fact that he doesn't have a real economic agenda -- he didn't talk about it much at the convention -- I think is a problem. I think the economy is important.

I think it's amazing that McCain has actually gotten as far as he has without a reform economic agenda, and -- but I do think that's important. That's one of the fundamentals that is going Barack Obama's way. He's got a whole lot of other ones.

It's hard to succeed a two-term president of your own party. And also, I think Obama does have a very good ground game. Finally late in the game, the Republican base is getting revved up, and they certainly did a great job in 2004.

But I do think Barack Obama has put down roots in a lot of places. They've been working at this for a very long time. That's one silver lining of that long and divisive and perhaps sapping Democratic primary, is that they did increase registration on voter lists all over the place.

WALLACE: Bill, let's pick up on the economy. The unemployment rate as of Friday is at a five-year high. Banks continue to close. The government is about to take over the mortgage giants Fannie Mae and Freddie Mac. Aren't those all killers for the Republicans?

KRISTOL: No, because no one seriously has much more -- I don't think most people have more confidence that Barack Obama knows what to do about that more than John McCain.

People are complaining that John McCain doesn't have a reform economic agenda. That just means he doesn't have a liberal economic agenda. Conservative economic policies -- lower taxes, et cetera -- are reasonably popular and remain reasonably popular.

I don't think the McCain campaign needs to shy away from a debate on tax policy, on energy policy, on health care policy, for that matter. So I think he's in pretty good shape.

I think it's going to -- I think, in fact, he's in quite good shape, McCain. It's going to be very hard to make McCain-Palin the Bush third term. And I think that McCain's convention speech -- I want to agree with Juan here that I was -- I want to now give McCain credit as well as Palin.

Palin's pick energized -- got a lot of people to tune into McCain's convention speech, which -- as many people who watched Obama. Who would have predicted that two weeks ago?

And the speech, which didn't play that well in the hall or I think among us, maybe -- it seemed a little -- I have now talked to several not- so-political types who watched it who thought -- who were impressed by it.

He laid out a sensible, moderately conservative agenda. He addressed a lot of issues, and the end was quite moving, of course, about his own biography. So I actually think McCain had a very good convention even after the very good pick of Sarah Palin.

WILLIAMS: So let me just say that despite what you said, it just strikes me that Republican economic policies haven't worked.

If you're thinking about unemployment...

HUME: Oh, please. Oh, for goodness sake, Juan.

WILLIAMS: If you're thinking about why the banks are closing, regulation of Wall Street, and all the kind of excesses and what's going on with Fannie Mae and Freddie Mac...

HUME: Juan, the problem...

KRISTOL: Who are the great defenders of Freddie Mae (sic) and Fannie Mac (sic) in Washington?

WILLIAMS: For the longest time, sadly, Democrats were.

KRISTOL: The Democratic Party. Thank you.

WILLIAMS: But no longer. No -- I mean, now...

KRISTOL: Oh, that's nice. Now they've decided hey, hey, all of our Democratic cronies...

WILLIAMS: OK, that's one -- I'll grant...

KRISTOL: ... who were running Freddie Mae (sic) and Fannie Mac (sic)...

WILLIAMS: Let's grant you that one issue. But we're talking about eight years, and we're talking about bad economic performance for working- class Americans.

HUME: Juan, the truth of the matter is that the economy grew in the face of unbelievable headwinds, to include Hurricane Katrina and 9/11, throughout most of these eight years.

The jobs out of the economy is a huge number. There's no doubt we're in a bad patch, and that's a burden that John McCain has to carry. But what does the Obama campaign offer, this campaign of change?

It offers a set of really almost pre-Clinton Democratic ideas. It's the same old stuff -- higher taxes, more regulation. We're going to have - - they're going to be tough on trade, which means that there won't be free trade as we know it under an Obama administration.

Now, these ideas -- there's nothing new about these ideas. Indeed, they're, in many respects, older than old, which I think in a way flies in the face of the Obama message of change, and I think is a weakness for his campaign. His prescriptions are the same old medicine.

WILLIAMS: Do you think that when people hear that, in fact, Barack Obama is not going to raise taxes on people who earn less than $250,000, and that maybe the rich in this country should bear their share of any burden for the cost of the war on terror, bear their share of the cost for protecting us after 9/11...

HUME: Juan...

WILLIAMS: ... people might say, "Oh, well, gee, why didn't President Bush and the Republicans do that?"

HUME: Well, Juan, if you look at the share of taxes paid by the rich in America today of the national revenue, it is higher than ever.

LIASSON: You know, what strikes me about this whole race is it is kind of reverting to form. I mean, these are two very different characters, politicians, but the conventions were pretty conventional.

I mean, I think both of their agendas are typical Democrat, typical Republican. I think it is going to be a more old-fashioned race than we thought. I also think the map is...

HUME: Always is. LIASSON: Well, and I also think the map is reverting to a more old-fashioned map as opposed to this explosion of battleground states that we were talking about a couple weeks ago.

I think this is going to get to be one of those who can turn out the base, and they're fighting over independents, of which John McCain needs more of them this year because of the decrease in party I.D. for the Republicans.

But this is getting to be a much more traditional type of race.

WALLACE: And the one thing that we haven't mentioned at all -- the debates. I mean, aren't the debates going to be huge?

HUME: Which is why all of this silliness about whether Sarah Palin will get -- be adequately questioned is out the window. She's going to have to face a debate with Joe Biden in which...

WALLACE: Do you think she can go for another month without answering questions from reporters?

HUME: I don't think the public gives a fig whether Sarah Palin answers questions from reporters or not. They do care whether they get a good look at her. They'll get a good look at her. WILLIAMS: She's running and hiding, and you think...

LIASSON: It would do her good to answer some questions. She can get herself in shape for the debates.

KRISTOL: Well, I think she'll answer plenty of questions. If I were running the McCain campaign, I might put her in front of town hall audiences and let her answer questions from normal Americans, not from the liberal media.

WALLACE: Not from people like us, aliens. All right. Thank you, panel. See you next week.

And as the host of a Sunday talk show, she should answer questions. That's my platform.

Up next, we take a look at both campaigns in these intense days after their conventions, "On the Trail."

(COMMERCIAL BREAK)

WALLACE: With both conventions held so late, we're now into the shortest general election campaign ever. With less than two months till election day, it's already fast and furious, "On the Trail."

(BEGIN VIDEO CLIP)

AUDIENCE: Yes, we can. Yes, we can.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) AUDIENCE: John McCain, John McCain, John McCain.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: ... and the pork barrelers and the lobbyists and all the special interests whose day is done, my friends. It's over. It's over.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: Who is it that he's going to tell that change is coming? I mean, come on. They must think you're stupid.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PALIN: There is only one man in this election who has ever really fought for you, and that man is John McCain.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BIDEN: The American people are looking for a government that will help them back up on their feet. That's all they want, is a fighting chance.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: I know the governor of Alaska has been, you know, saying she's change, and that's great. She's a skillful politician. But you know, when you've been taking all these earmarks when it's convenient, and then suddenly you're the champion anti-earmark person, that's not change. Come on.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: If you want real reform and if you want change, send a team of mavericks who aren't afraid to break a little china.

(END VIDEO CLIP)

WALLACE: And just think, we have eight weeks and two days more of that before the election.

But that's it for today. Have a great week, and we'll see you next "Fox News Sunday."

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