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Republicans Face Off Over Economy in Thompson’s Debate Debut

October 9, 2007 at 6:25 PM EDT

JIM LEHRER: Next, Fred Thompson joins the Republican nomination debate scene. NewsHour correspondent Kwame Holman begins our coverage.

CHRIS MATTHEWS, MSNBC Host: And here they are, the candidates for the Republicans…

KWAME HOLMAN: The announced purpose of today’s matinee debate, sponsored by MSNBC, CNBC, the Wall Street Journal, and the University of Michigan, Dearborn, was to spotlight economic issues.

MARIA BARTIROMO, Host, CNBC: We’re coming to you from the Ford Community and Performing Arts Center here in Dearborn in the heart of the American auto industry.

KWAME HOLMAN: However, the spotlight also was on Fred Thompson. Today was the first time the one-time senator-turned-actor-turned presidential candidate mixed it up with the eight other Republican hopefuls, and the first question went to him.

MARIA BARTIROMO: The Dow and the S&P 500 today at new highs, tonight record numbers. And yet two-thirds of the people surveyed said we are either in a recession or headed for one. Why the angst?

FORMER SEN. FRED THOMPSON (R), Tennessee: Well, I think there are pockets in the economy certainly that are having difficulty. I think there are certainly those in Michigan that have having difficulty. I think you will always find that in a vibrant, dynamic economy.

I think that not enough has been done to tell what some call the greatest story never told, and that is that we are enjoying a period of growth right now. And we should acknowledge what got us there and continue those same policies on into the future.

KWAME HOLMAN: Each of the candidates was asked to weigh in on the economic health of the country. Several gave good news-bad news answers. Former Massachusetts Governor Mitt Romney.

FORMER GOV. MITT ROMNEY (R), Massachusetts: It’s inexcusable that Michigan is undergoing a one-state recession, that the rest of the country is growing and seeing low levels of unemployment, but Michigan is seeing ongoing high levels of unemployment, almost twice the national rate. Industry is shrinking here; jobs are going away. This is just unacceptable. And, therefore, everyone is going to have to come together to solve the problem.

KWAME HOLMAN: Former New York City Mayor Rudy Giuliani.

RUDY GIULIANI (R), Former Mayor of New York: The president has to work on the fundamentals. What are the fundamentals? Keep taxes low. Keep regulations moderate. Keep spending under control. That’s an area where we need a lot of help.

KWAME HOLMAN: And California Congressman Duncan Hunter.

REP. DUNCAN HUNTER (R), California: But let me tell you, Chris, what is missing from this economy: 1.8 million jobs that have moved to communist China from the United States, including over 54,000 jobs from Michigan.

You know, a couple of years ago, when our guys were getting hurt with roadside bombs in Iraq, I tried to find one steel company left in America that could still make high-grade armor steel plate to put on the sides of our Humvees to protect against roadside bombs. I found one company left that could still do that.

KWAME HOLMAN: Colorado Congressman Tom Tancredo tied the nation’s economic problems to his key issue, illegal immigration.

REP. TOM TANCREDO (R), Colorado: And for every single illegal immigrant family in this country, it costs us $20,000, $20,000 in infrastructural costs. They pay about $10,000 in taxes. You really want to do something to restore the people’s faith in government? Do something about illegal immigration. Don’t just talk about it.

KWAME HOLMAN: Two of the candidates called for overhauling the current tax system. Former Arkansas Governor Mike Huckabee.

FORMER GOV. MIKE HUCKABEE (R), Arkansas: The fair tax does something that is absolutely phenomenal for the economy. It un-taxes productivity. It un-taxes those things which we export. It means that, for the first time in a long time in this country, instead of exporting our jobs, we’ll actually be exporting products that we make in America, and we’ll be able to make sure that there’s a level playing field.

It ends the underground economy that right now makes it so that folks like us end up paying taxes, but drug dealers don’t, illegals don’t, prostitutes and pimps, they don’t, but we do.

KWAME HOLMAN: Kansas Senator Sam Brownback.

SEN. SAM BROWNBACK (R), Kansas: But here’s an optional flat tax. Sixteen countries around the world have gone to the flat tax. Nobody has gone back away from it, because it creates growth, it creates growth in the economy, and it increases revenue for the government.

Giuliani vs. Romney on taxes

KWAME HOLMAN: Romney and Giuliani both said they favored lower taxes. Then, each criticized the other's method for getting there.

MITT ROMNEY: We both believe in cutting back on spending, as well. But if you want to cut taxes, you're going to have to cut spending. And the best tool that a governor has and the best tool the president has had is a line-item veto. And Mayor Giuliani took the line-item veto that the president had all the way to the Supreme Court and took it away from the president of the United States. I think that was a mistake.

RUDY GIULIANI: The line-item veto was unconstitutional. I took Bill Clinton to the Supreme Court and beat Bill Clinton. It's unconstitutional. What the heck can you do about that if you're a strict constructionist?

And, finally, the point is that you've got to control taxes, but I did it. He didn't. I controlled taxes. I brought taxes down by 17 percent. Under him, taxes went up 11 percent per capita. I led; he lagged.

MITT ROMNEY: That's bologna. Mayor, you've got to check your facts. No taxes -- I did not increase taxes in Massachusetts. I lowered taxes, number one.

Number two, the Club for Growth looked at our respective spending record. They said my spending grew 2.2 percent a year. Yours grew 2.8 percent a year. But, look, we're both guys that are in favor of keeping spending down and keeping taxes down. We're not far apart on that. The place we differ is on the line-item veto.

RUDY GIULIANI: The line item veto is unconstitutional. You don't get to believe about it; the Supreme Court has ruled on it. So you can bang your head up against a stone wall all you want.

I am in favor of a line-item veto, except you have to do it legally. And as the mayor of New York, if I had let President Clinton take $250 million away from the people of my city illegally and unconstitutionally, I wouldn't have been much of a mayor.

KWAME HOLMAN: Thompson was asked about the alternative minimum tax and the dilemma of what to do about it.

CHRIS MATTHEWS: If we eliminate the alternative minimum tax, it costs the federal government $100 billion that has to be replaced similarly somewhere else.

FRED THOMPSON: It ought to be phased out. I think the responsible thing to do, though, until we get a handle on our mandatory spending side of the ledger, is to index it for inflation and fix it for another year while we look at the budget in total.

KWAME HOLMAN: Questions in the debate turned to foreign policy, specifically what to do if Iran is found to be developing nuclear weapons.

CHRIS MATTHEWS: Thank you. Governor Romney, that raises the question, if you were president of the United States, would you need to go to Congress to get authorization to take military action against Iran's nuclear facilities?

MITT ROMNEY: You sit down with your attorneys and tell you what you have to do. But, obviously, the president of the United States has to do what's in the best interest of the United States to protect us against a potential threat.

REP. RON PAUL (R), Texas: This idea of going and talking to attorneys totally baffles me. Why don't we just open up the Constitution and read it? You're not allowed to go to war without a declaration of war.

SEN. JOHN MCCAIN (R), Arizona: ... situation is that it requires immediate action to ensure the security of the United States of America. That's what you take your oath to do when you're inaugurated as president of the United States.

If it's a long series of build-ups where the threat becomes greater and greater, of course you want to go to Congress. Of course you want to get approval, if this is an imminent threat to the security of the United States of America.

So it obviously depends on the scenario, but if -- I would at minimum -- I would at minimum consult with the leaders of Congress, because there may be come a time where you need the approval of Congress. And I believe that this is a possibility that is may be closer to reality than we are discussing tonight.

KWAME HOLMAN: Questions also focused on oil dependency, trade, and how to fix Social Security, and the answers filled two hours. The Republican candidates will debate again in two weeks in Orlando, Florida.

Thompson's debate debut

JIM LEHRER: Judy Woodruff takes it from there.

JUDY WOODRUFF: And for some instant analysis of today's debate, we turn to Holly Bailey. She's been covering Fred Thompson's campaign for Newsweek magazine, and she joins us from the debate center in Dearborn. Also joining us is Chris Cillizza of He's here in Washington.

Thank you, both.

Holly Bailey, to you first. You were there on the ground. What did Fred Thompson need to do today? And did he do it?

HOLLY BAILEY, Newsweek Magazine: Well, Fred Thompson came into this debate with pretty difficult circumstances. On one hand, you know, the expectations were really low, but on the other hand expectations were a little bit high, because everyone was wondering what he was going to do.

You know, he came in early. I think he seemed a little nervous, which was strange, but as the debate went on, he got a little bit more comfortable. He was clearly more comfortable talking about issues regarded to the war as opposed to the economy. And he had a few good answers at the end of the night, answering Mitt Romney on a "Law and Order" joke. He seemed to hold himself well there.

JUDY WOODRUFF: Chris, some of the pundits were saying ahead of this debate that all he had to do was basically show up and I think one said not drool. Others said he really needed to perform well. What did you see?

CHRIS CILLIZZA, The Washington Post: Yes, I think they guessed to what Holly is talking about, the sort of conundrum of Fred Thompson. On the one hand, he's this professional actor. He's somebody who's done this plenty of times in front of a camera. On the other, his campaign hasn't gotten off to the kind of start you would have expected.

I'm in more in the "he did enough, he walked in, chewed gum at the same time" in this debate, that he did enough. I think Holly is right: He was very nervous clearly at the top of the debate. He had this long audible pause in his first answer, which made me have a little sort of lump in my own throat.

But he got through it. And I think, as it went on, he got more and more comfortable. I think he was pretty good on the war. I think he generally outlined his governing philosophy, which essentially is, "Things are OK now, but we are bankrupting our kids and our kids' kids."

And I think that could be a compelling argument, though there's always the danger of people don't necessarily vote for pessimists. They tend to like to vote for optimists in their president.

JUDY WOODRUFF: And that was striking, I thought, Holly, that I think particularly from McCain and from Thompson, you did get a somewhat more realistic, if not pessimistic, view. I mean, at one point I wrote down Thompson said, "We need to tell the American people the truth. We're bankrupting the next generation." But on the other hand, from Giuliani and Romney, a much more upbeat outlook.

HOLLY BAILEY: Well, you know, I think after four years when, you know, the Bush administration has been clearly criticized about selling a rosier scenario than has been what's going in Iraq, for example, I think that they're trying to, you know, walk a line here where, you know, they do speak optimistically, but they're also realistic in that they're not trying to sell the country a bill of goods that isn't going to happen.

JUDY WOODRUFF: Did you think, Chris, in what you heard, that we learned something new about Fred Thompson's economic philosophy, because that was supposed to be the main focus?

CHRIS CILLIZZA: Not really. You know, unfortunately, Judy, I think these debates, a lot tends to be what you look like as opposed to what you say. And I think he looked OK. I think he was conversant on the issues.

He passed what had the potential to be a "gotcha" question. Chris Matthews, one of the moderators, said, "Who's the prime minister of Canada?" He immediately responded Harper, Stephen Harper. That's the kind of thing that, if he tripped up there, would have been the story of this debate, like it or not like it about how the media covers these things.

But if he had made a mistake there, it would have tripped him up, and that would have been the whole thing. Is Fred Thompson ready? Is he prepared? Does he not know who the world leaders are? It would have played into a storyline that's out there about Thompson. Is it too lazy? Does he not want to learn? Is he not interested?

I thought he came across as pretty well-versed on the issues. I thought he came across, especially in the second half of the debate, as someone who is a good communicator, thought pretty well on his feet. He didn't hit it out of the park, but he also didn't swing and miss, and I think swinging and missing was the real danger for him today.

Appealing to optimists

JUDY WOODRUFF: So, Holly, where do you put him, if you want to say, the ideological spectrum of these Republican candidates, I mean, based on what you knew going in and what you heard in this debate?

HOLLY BAILEY: Well, he's clearly trying to appeal to social conservatives, but you didn't really hear that so much in this debate, frankly. You know, I think he has a lot of the same issues as McCain, and they voiced those.

But the thing is, one thing that I thought was really interesting, he basically was, again, much more skilled in talking about issues about the war, issues about, you know, Congress, powers of Congress versus the White House. He didn't seem so skilled on the economy, which is sort of interesting, because that was the focus of this debate.

And so I wondered, you know, he's clearly spent a few weeks now prepping for this. I wonder what happened there.

JUDY WOODRUFF: Do you think -- you're the one who brought up this notion about the pessimistic outlook a minute ago. Is that something that -- clearly, his campaign has thought about that. Is that something that's going to sell with the Republican voters?

CHRIS CILLIZZA: I don't know, because who's the president that you always hear cited by these folks? It's not George W. Bush; it's Ronald Reagan. Morning in America, the great optimist. And I think you see Mitt Romney very clearly trying to play into that mold.

There's not anything about America that Mitt Romney doesn't feel positive about. And so there's a real contrast there I think between Romney -- and I would put Giuliani in that more optimistic camp. And as you pointed out, Judy, McCain and Thompson in the more either realistic or pessimistic, depending on how you want to define it.

JUDY WOODRUFF: Well, speaking of Romney and Giuliani together, I think they were in a competition, Holly, as to who could bring up Hillary Clinton more times. In fact, Giuliani even brought up Bill Clinton. What is that all about?

HOLLY BAILEY: Well, that's basically them trying to appear as the nominee. They're showing that they can be tough against Hillary Clinton.

And it was sort of funny. You know, during their bickering back and forth, I looked -- there was a wide side of the stage. And you could see right in the middle Fred Thompson smiling. And that was one of the few times he didn't look nervous.

And, you know, that really played into their hands. While they're back bickering, he can sort of walk through and be the guy that appeals to the country and is not fighting, and I think he really enjoyed that part.

JUDY WOODRUFF: The expression on the face can make a difference in these debates.


JUDY WOODRUFF: I saw a couple of cutaways where he looked pretty serious, I would say, worried even.

CHRIS CILLIZZA: You know, I think he has -- he runs the risk of appearing too dour, certainly. I think his tone and his natural inclination is to sort of seriously address these issues.

I thought his first answer was very dour. And then you had both Clinton -- I'm sorry, Clinton, I've got Clinton on the brain. You had Giuliani and Romney both make jokes in their next answer to draw that contrast. "Hey, look, we're at ease here. And this is the guy, the TV star is the guy who's nervous."

So he runs that risk. But as I said before, I really did think he relaxed. I did think he got better as the debate went on. And he landed a few blows toward the end on Romney, on Giuliani, on others.

Democrat absence in Michigan

JUDY WOODRUFF: Now, this debate was in Michigan. And I want to ask you both about the Democrats, because there was an announcement today, Holly -- I assume you did hear about it -- that four of the Democratic candidates for president are saying not only are they not going to campaign in Michigan, they're going to take their names off the ballot. That's Obama and Edwards, Richardson and Biden. It's only Hillary Clinton among the major candidates, Hillary Clinton and Dodd, who are going to leave their names on the ballot.

Help us understand what's going on, on the Democratic side?

HOLLY BAILEY: Well, I think, you know, when this happens here in the press filing center, there were several Republican Party officials from the state Republican Party who are basically smiling with glee. They loved it.

But, you know, it's interesting. It's hard to say that Hillary Clinton didn't -- what she did wasn't appear to some sort of like almost a betrayal. At least that's what the other opponents are saying, because she agreed not to participate.

But, you know, the fact is they say that she can stay on the ballot. She's not going to spend any money here. She's not going to campaign here. But, you know, basically her name still being on the ballot guarantees a win for her here.

JUDY WOODRUFF: We should explain that this is all about Michigan's Democratic Party decision to move its primary much earlier, and the candidates all said, Chris, that they won't campaign there. But now they've gone even farther.

CHRIS CILLIZZA: Right, well, at issue here is the primacy of Iowa, New Hampshire in this nominating process. Having the caucuses first in Iowa, in New Hampshire the primary first, is a huge economic windfall for both of these states, not to mention the press attention they get. So they guard this quite -- I don't want to say jealously. Let's say carefully.

Michigan has long been opposed to this "monopoly," as they call it, and have tried to essentially break the system by moving their primary up. All of the candidates said, "We will not campaign there." By the way, they said the same thing about Florida, which is doing a similar thing.

The question now becomes, as Holly points out, do activists and people involved in Democratic politics in Iowa see this as a betrayal by Senator Clinton, or are they willing to say, "OK, she's not campaigning in the state even if her name is still on the ballot"?

None of the other candidates I think wanted to take that risk. Iowa appears to be the whole kit and caboodle here. Win there or else, I think. And so I think no one else wanted to run the risk of angering Iowa or New Hampshire. Clinton has a little bit more of an edge there as the frontrunner nationally.

JUDY WOODRUFF: I think we're all getting a headache trying to figure out when these contests are and who's campaigning where, but we know that we're glad to have both of you with us today to watch this debate. Chris Cillizza and Holly Bailey, thank you both. We appreciate it.


HOLLY BAILEY: Thank you.