updated 1/18/2009 12:32:58 PM ET 2009-01-18T17:32:58

MR. DAVID GREGORY:  Our issues this Sunday:  the transition ceremonies are under way, and in just two days the historic inauguration of Barack Obama as our nation's 44th president.  He'll inherit a country in economic turmoil, an ongoing multifront war on terror and renewed violence in the Middle East. What will be his first priority?  And is he already facing his first fight on the Hill, as Democrats and Republicans clash over a proposed stimulus package?


REP. JOHN BOEHNER (R-OH):  Oh, my God.  I don't even--my notes here say that I'm disappointed.  I just can't tell you how shocked I am at what we're seeing.

(End videotape)

MR. GREGORY:  Will Mr. Obama be able to find a bipartisan solution?

Plus, a bump on the road to the Cabinet; Obama's Treasury pick admits a taxing mistake.  What could this mean for the nomination of Timothy Geithner?  This morning, an exclusive interview with the man who will be by Obama's side in the office:  the gatekeeper of the president, incoming White House Chief of Staff Rahm Emanuel.

Then, Inauguration Day will be a time of great significance in this country. How will Mr. Obama capture the moment?  And will his presidency be able to live up to the high expectations?  Insights and analysis from our special roundtable:  NBC News special correspondent Tom Brokaw; columnist for The New York Times David Brooks; presidential historian Doris Kearns Goodwin; host of PBS' "Tavis Smiley" and PRI's "The Tavis Smiley Show," Tavis Smiley; and NBC News political director and chief White House correspondent Chuck Todd.

But first, incoming White House Chief of Staff Rahm Emanuel.

Welcome back to MEET THE PRESS.  As we look forward to an historic day, Inauguration Day and the inaugural address, the president-elect has spoken about the need to capture the moment that Americans are in.  What does he want to say on Tuesday?

MR. RAHM EMANUEL:  Well, I, I don't--at one level, I don't think it's different than what you've heard over the campaign.  On the other hand, it's a--the inaugural and the inaugural address is something significant in American history and its culture.  I think the--what you will hear is a time and a place in which we all have an era of responsibility, that too long there's been a culture of anything goes, and that to do what we need to do as a country, to, to regain America's greatness and continue to move forward and be an example around the world, that we need that culture of responsibility not just to be asked of the American people, but that its leaders must also lead by example.  And so that for--in both business, in the corporate boardroom, to in government offices, that there has been a culture of--that anything goes and is permissible, and that we want--must once again restore a values system that respects and honors a sense of responsibility, and that we all have something to give to our country and have an obligation to do that, to return it to its greatness.

MR. GREGORY:  Does he want to call on the American people for sacrifice, given the state of our economy?

MR. EMANUEL:  Well, I think--well, it's--well, it's not just the economy. This goes larger than the economy, David.  It goes to a, a values system that, that has held us well for 200-plus years, a values system that's about responsibility, about being held accountable, and that all of us have an obligation.  So it's beyond just--although sacrifice is important in restoring the greatness of the economy, it's to a values system that is so much a definition of who we are as a country.

MR. GREGORY:  Let's talk about the economy.  And as the stimulus or recovery package takes shape, the era of big government is back in a big way.  And I want to ask you about spending.  We have put together a rather staggering chart of the federal bailout and stimulus spending since February of 2008. The first stimulus, $168 billion; the money allocated for Fannie Mae and Freddie Mac, 200 billion, only about 14 billion of that has been drawn down by Freddie Mac; the bailout of AIG, the insurance company on Wall Street, 122.8 billion; the bailout money known as the TARP, you've now got the second half of that authorized, that's $700 billion, some of that for the auto, Bank of America, Citigroup; the proposed stimulus--or recovery plan, as you put it, $825 billion.  That is $2 trillion from February of '08 and, if it's passed in the middle of February, to February of '09.  Now, we wanted to put some of that in perspective here, in some context for the American people.  In terms of the debt burden that Americans are going to facing, per household that's $17,000 worth of debt.  That's an enormous burden on the backs of the American taxpayers.

MR. EMANUEL:  Yeah.  Well, as you probably know, that there--over the last decade, the last eight years there's been actually a--there was a surplus at one time, and now we've added in the last eight years $4 trillion of debt to the nation's obligations.  What you see here--and the president has always said that we must have an approach to spending money differently and respect for the taxpayers' dollars, and do it in a more efficient way and in a different way.  And most importantly, we must deal with the long-term challenges that face this country.  So while he has talked about the need--and everybody I think from economists on the left to economists on the right realize that we must make critical investments at this time.  And yes, they'll add to our obligation.  It has got to be coupled with a serious attack about putting our fiscal house in order.  And for too long that hasn't happened. Challenges that needed to be met, responsibilities that needed to be met have not.  So from the era--from the area of, let's just say, in the defense area.


MR. EMANUEL:  On an annual basis we have about $300 billion in cost overruns. That must be addressed, and we will be addressing it.  Area of subsidies to corporate America, that must be addressed.  And then also, dealing with the bigger obligations of health care costs and their--and what they have done to the federal budget.  So all of that must be done.  But it is essential that--and that's why it is so important to put the economic recovery act in place, that you must begin to invest in creating three and a half million jobs and make sure that America's long-term economic competitiveness, that the things--the foundations play.

But here is what that chart can't tell you, that we have not yet approached to date in this economic crisis, the worst that we've ever had since the Depression, on a two-front basis; one, dealing with the financial stabilization fund to get credit flowing again and to get the system rolling again.  Too many of those things you pointed to were dealing with institutions.  What we have got to do and what we're going to approach the second dollars with that we just--the Senate just approved, is an attempt to get banks again lending both to consumers and businesses.  In addition to that, on the other side of the ledger is making sure people are going back to work, building this country and building up its new schools, its new infrastructure...


MR. EMANUEL:  ...it's new hospitals.  So the economy is in such a state that you can't just approach it with one hand tied behind your back.  Both things must be done simultaneously, and done well.

MR. GREGORY:  But Democrats were always critical of the Bush tax cuts, for instance, which were the first time that, that taxes were cut during a war. There's a $1.2 trillion deficit forecast for 2009, as you well know.  There's a political element to this as well, and that is that the president-elect campaigned on a middle class tax cut.  Now, the projections are if this were to become permanent tax cut beyond two years that would be part of the stimulus, that could be a $710 billion tax cut at least, at least.

MR. EMANUEL:  Mm-hmm.

MR. GREGORY:  Is that the responsible thing to do on top of the debt burden that we talked about, on top of the deficit I just outlined?

MR. EMANUEL:  Look, first of all, let's be clear that the middle class didn't really participate in the tax cuts that you talked about in the last eight years; that they have worked harder, earned less and are paying more.  And the middle class have the fundamental different approach.

MR. GREGORY:  Right.

MR. EMANUEL:  And that's the change we want to bring to Washington as president.

MR. GREGORY:  But an additional $700 billion?

MR. EMANUEL:  President Obama's been very clear, you cannot have a strong economy that does not have a strong middle class.  And the, the approach has been to provide the middle class with a tax cut, and also to start getting the economy moving again by making critical investments.  That's why we want to create three and a half million jobs.

MR. GREGORY:  Right.

MR. EMANUEL:  The--it is no doubt you have to couple it, which has been very clear, which is why the President-elect Obama has called for an--a summit on fiscal responsibility to change the way we spend money, to do it in a more efficient way, to get rid of waste and fraud, but also to deal with the challenges that for too long have been kicked down the road.

MR. GREGORY:  Let's talk about spending.  This is what the minority leader in the House, John Boehner, said on Thursday:  "The plan released ... by congressional Democrats ... appears to be grounded in the flawed notion that we can simply borrow and spend our way back to prosperity." You have said that the top priority is jobs, jobs, jobs when it comes to the stimulus plan.  This is what Jerry Lewis had to say.  He was the ranking member of the House Appropriations Committee, and this is what he found in this package, we'll put it on the screen:  "Before we pass this Pelosi-Obey legislation," his release says, "the costliest in history, Congress has a duty to ask this basic question.  ... Are these items `stimulus'?  Fifty million dollars in funding for the National Endowment of the Arts, $15.6 billion" increase in "Pell Grants, $200 million to `encourage electric vehicle technologies' in state and local government motor pools, 1.9 billion in funding for high level physics research, 650 million to extend the coupon program to allow analog TV owners to continue to watch TV." One more.  "Four hundred million to the Oceanographic and Atmospheric Administration for `habitat restoration.'" What do these expenditures have to do with creating jobs?

MR. EMANUEL:  Well, I'm--David, I'm surprised that you would say that about college education, in this sense:  you wouldn't be here and I wouldn't be here if a college education was not provided to us.  And the Pell Grants, one of the things that--the largest one you pointed to, helps people go to college. Now, is more--is it--important as it is to build our roads and bridges, our electric grid, our new health care IT so we can control costs, the ability to provide people the, the opportunity to go to college in a era where you earned what you learn is human capital investment.

MR. GREGORY:  Right.

MR. EMANUEL:  It's the most important thing.

MR. GREGORY:  That's an investment, though.  Is that a shovel-ready job?


MR. GREGORY:  Is it a shovel-ready project that creates jobs?

MR. EMANUEL:  David, as you know, the president said very--two things: create three and a half million jobs and lay the foundation for long-term economic competitiveness so America, when it comes out of this recession, is a stronger economy to lead the world.  For too long critical investments in this country, both physical and human, have been denied.  And the things that were pointed there, I do believe investing in our basic science research is good economic competitiveness and does create jobs today and lays the foundation for competitiveness.  Investing in people, in their college education in a era where you're competing against people in China, India, money well spent.  And those are critical areas.  We hope everybody will go through it, identify things, will--as the president said, "I welcome ideas, but what I will not challenge is the ability to produce three and a half million jobs." That's why this--what's adjacent to this...

MR. GREGORY:  Rahm...

MR. EMANUEL:  ...and the, and the numbers you put up is--the fact is that's economic plan and recovery plan does produce three and a half million jobs.

MR. GREGORY:  OK.  But what do you say to critics who say under the guise of stimulus and job creation is really the Democratic social agenda?

MR. EMANUEL:  Well, it's very clear this is a, a balanced approach.  It has critical investments in both energy independence, education and health care cost control, as well as making the essential investments to make sure the middle class also get a tax cut.  And I think that is a good approach to getting this economy moving and laying the foundation for long-term competitive economic competitiveness.  That's what this does.  And what I find ironic, it just--it's interesting, there are those who are now saying that, you know, it borrows too much.  Not something we would want to do, but everybody agrees that economists say, both on the left and right, you must do something like this to get the economy moving.  This is the worst challenge we are inheriting as a country...

MR. GREGORY:  Mm-hmm.

MR. EMANUEL:  ...the single worst economic crisis since the Great Depression, and that the way to deal with that is to do something that you wouldn't normally have to do, which is make big investments to get the economy moving. But I find it ironic, since one of the questions and the criticism about the deficit spending is coming from people who actually in a period of time in the last eight years were responsible for policies that left America farther behind in, in, in the sense of deep, deep red.

MR. GREGORY:  Let me ask you about the transition, which has had some bumps along the road.  There was Bill Richardson dropping out for Commerce, Leon Panetta with the CIA, and now Timothy Geithner.  Very important job.  He's the nominee, of course, for Treasury secretary.  This is how the Wall Street Journal reported his tax difficulties:  "Mr. Geithner didn't make any Social Security or Medicare tax payments on his income during the years he worked for the International Monetary Fund.  ... After the Internal Revenue" Services "audited him"--"Service," rather, "audited him in 2006 and discovered the payroll-tax errors, Mr. Geithner corrected them for '03 and '04.  Only after Mr. Obama picked him for Treasury secretary last fall did Mr. Geithner pay the Social Security and Medicare tax he owed for '01 and '02." What gives?

MR. EMANUEL:  Well, as Tim said, you know, it was a big mistake, it was an embarrassment.  But he is the right guy for this job, which is why he has bipartisan support:  Senator Hatch, Senator Lindsey Graham, Senator Judd Gregg.  He has the right type of qualifications for this challenging moment in time.

MR. GREGORY:  But that's not really in question.

MR. EMANUEL:  But, but--I know.  But as he acknowledges himself, it's embarrassing...

MR. GREGORY:  Right.

MR. EMANUEL:  ...he made a mistake and it was wrong.

MR. GREGORY:  But what happened?  If he pays for '03 and '04 once he's audited, doesn't he say to himself, "Well, wait, maybe I should go back to '01 and '02"?  He's going to oversee the IRS, after all.

MR. EMANUEL:  I, I understand that.  And as he said, it's an embarrassment, he made a mistake, but he has the qualifications for the job.

MR. GREGORY:  Right.  But why didn't he pay the back taxes to '01 and '02 if he did it for '03 and '04?

MR. EMANUEL:  Tim, Tim basically had--did '03 and '04, should have done '01 and '02, and he acknowledges he should have done it and paid them.

MR. GREGORY:  Why is it if this was known in November, around Thanksgiving of course is when he was announced, why didn't you all make this public so you wouldn't get into a position where you're not going to have him on day one?

MR. EMANUEL:  No, no.  Well, first of all, I do believe he's going to get confirmed and I feel very good because he has the bipartisan support.

MR. GREGORY:  Right.

MR. EMANUEL:  Number two is we did the right thing by notifying the committee, which is the right process to do that.  As you know, in some cases where committee members haven't been properly notified first, it was wrong. So we followed exactly how you should do it.  We notified the committee and worked with the committee.

MR. GREGORY:  Is--does the president-elect stand behind him in his nomination...

MR. EMANUEL:  Absolutely.

MR. GREGORY:  ...100 percent?

MR. EMANUEL:  Absolutely.

MR. GREGORY:  And you'll continue to support him?

MR. EMANUEL:  That's what absolutely means.


The president-elect was, was also rather adamant in support of Senate Democrats with the issue of Roland Burris.  He, of course, was appointed by Governor Blagojevich in Illinois, who's under investigation, has been charged with corruption.  This is what the president-elect said on December 30th, when Senate Democrats opposed that appointment:  "Roland Burris is a good man and a fine public servant, but the Senate Democrats made it clear weeks ago that they cannot accept an appointment made by a governor who is accused of selling this very Senate seat.  I agree with their decision." And yet just this week there he is, there's Roland Burris being seated as a member of the United States Senate.  Why the switch?

MR. EMANUEL:  Well, the secretary of state of, of Illinois signed the papers to seat him.  At that point there wasn't a objection for the Senate.  He was seated and has served at ready and cast his vote, as he did the other day.

MR. GREGORY:  Senate Democrats switched their position, allowed him to serve.

MR. EMANUEL:  You know, and also...

MR. GREGORY:  As did the president-elect.

MR. EMANUEL:  Yeah.  Once, once the papers were signed by the secretary of state, who originally said he wasn't going to sign it, he signed them. Roland--he also had nice things to say, as you just said also...

MR. GREGORY:  Mm-hmm.

MR. EMANUEL:  ...about Roland, who is a person he obviously served with at a time in Illinois politics.  He also said--has the qualities, he says, to be senator.  And he--now he's the United States senator representing the state of Illinois.  The president's priority...

MR. GREGORY:  Mm-hmm.

MR. EMANUEL:  The president-elect's priority has always been to have a representative for the state of, the state of--the people of Illinois and the state of Illinois to get to work on behalf of the people of Illinois, because this is a critical moment in American history.

MR. GREGORY:  And so President-elect Obama is pleased to have Roland Burris there?

MR. EMANUEL:  He's the United States senator, junior senator from the state of Illinois.

MR. GREGORY:  And pleased to have him working with him on his agenda?

MR. EMANUEL:  He's--yes.  I mean, he's worked, he's worked with him and talked to him already since he's been in office.

MR. GREGORY:  You haven't talked about your role with regard to the communications between the Obama team.  You haven't talked about it publicly; I know you've obviously cooperated with everybody who, who's asked you.  And there was an internal report which specified that you had two calls with Governor Blagojevich and four calls with his chief of staff, John Harris. This had to do with who might succeed the president-elect in his Senate seat. What was the nature of those conversations?

MR. EMANUEL:  As described in the document we made public, we talked in general about the, the right type of people that could be served as U.S. senator.  And those are the conversations you would have with the chief of staff, and they're all the appropriate conversations.

MR. GREGORY:  At any point during those discussions with either Governor Blagojevich or with his chief of staff, did you get the impression or the distinct impression that he wanted something in return for exceeding...


MR. GREGORY:  ...to the recommendation of the president-elect?


MR. GREGORY:  Nothing at all.


MR. GREGORY:  In the criminal complaint, it indicates that Blagojevich said that he knows that the president-elect wants a certain Senate candidate for the Senate seat, but "they're not willing to give me anything except appreciation." Expletive "them." Why would he say that if there would--hadn't been some discussion about whether he'd get anything besides appreciation?

MR. EMANUEL:  Well, I--you know, I--if you need to, we can always make sure that Governor Blagojevich gets on the show.  You need to ask him.


This is what Majority Leader Harry Reid said on this program two weeks ago.

(Videotape, January 4, 2009)

SEN. HARRY REID (D-NV):  Blagojevich obviously is a corrupt individual.  I think that's pretty clear.

(End videotape)

MR. GREGORY:  Do you agree with that?

MR. EMANUEL:  Well, you know, first of all you got to--the U.S. state--rather, the state Senate in Illinois is now in the middle of their impeachment hearings.  You have an ongoing investigation.  That's what the grand jury and the jury is going to decide, if it goes to trial.

MR. GREGORY:  But...

MR. EMANUEL:  It would, it would be wrong, it would be wrong for me to make any judgment like that.  You know, there's a...

MR. GREGORY:  Right.

MR. EMANUEL:  There's a governor who is obviously in the middle of impeachment hearings that are going to be...

MR. GREGORY:  You're going to withhold judgment.

MR. EMANUEL:  No, it's just--it wouldn't be appropriate right--I have my own personal views, and that's not what I'm here to show--share with you.



MR. GREGORY:  Should Harry Reid have with, with, withheld judgment, do you think, as majority leader?

MR. EMANUEL:  No, I'm not going to--that, that's for Harry, that's for Harry Reid, the Senate majority leader.  He expressed his role.  I have a different position as a former--I mean, David, it's self-evident, I have a different position as a former member of Congress from the state of Illinois.  He was, he was the governor when I was a member of Congress, he use to hold the seat. I'm now chief of staff to the president.  I'm not going to do that.  That would be crazy.


It--let my ask you quickly about the war on terror.  President Bush addressed the nation on Thursday, and he had this to say about some of the decisions that he's made.  Take a look.

(Videotape, Thursday)

PRES. GEORGE W. BUSH:  There's legitimate debate about many these decisions, but there can be little debate about the results.  America has gone more than seven years without another terrorist attack on our soil.

(End videotape)

MR. GREGORY:  Do you agree that that is an accomplishment of this administration that is beyond dispute?

MR. EMANUEL:  Well, we can debate about both the war--the decision to go to war in Iraq.  I have my views.  The president--I, I'm here to reflect the president-elect's views, who said at the time that's not the center on the war on terror, the people that attacked us are in Afghanistan.  We did--just so you know, about 70 of us participated, the present administration and incoming people both from White House and Cabinet, in an exercise if there was a domestic terrorist act.

MR. GREGORY:  Mm-hmm.

MR. EMANUEL:  And we did it for about four hours.  I think we did it on Tuesday of this week.  And at the end of it, I thanked everybody from the outgoing administration for their patriotism, their sense of public service and what they did for the country.  They clearly have lived with--the last seven years with a "what if" post-9/11, they did as professional public servants.  We can have disagreements about policy--and I said it then, we will have our disagreements about policies and priorities.  But they lived every day with the notion that there could be another 9/11.  Things that we could live with, and we will live with.  And you have to do things to protect the country.  And they lived with that sense.  Is it, is the, is the fact that we haven't had an attack on this--on our homeland a result of Iraq?  That's not a, that's not a conclusion I would draw.  I don't agree with that.  I don't think that's a conclusion President-elect Obama would draw.  And we will debate, I think, the decision of why you would go to war in Iraq.  Given that we're there, the president has made some decisions about what we have to do to reduce over the next 16 months our military presence there and begin to focus again on the war on terror as it relates to Afghanistan.  They have done their job in the last--since that time in protecting the country.  We will have policy differences.

MR. GREGORY:  Mm-hmm.

MR. EMANUEL:  But you have to respect them for their love of their country, their patriotism and their sense of public service.

MR. GREGORY:  Before I let you go, there's obviously the excitement and talk of unity in Washington between Democrats and Republicans with the inauguration of Barack Obama's presidency.  Take a look at our recent NBC News/Wall Street Journal Poll, it indicates the type of change the people are looking for: honesty and integrity, 36 percent; 29 percent, a significant number, want more working together, more bipartisanship between Dems, Democrats and Republicans.

You, however, Mr. Emanuel, have a reputation as being a fairly partisan guy over the years.  This is how a colleague of yours from the Clinton days, Bruce Reed, introduced you last year at a Democratic Leadership Council event: "When we worked together in the White House we had a deal--I'd tell him everything I knew about policy, he'd teach me how to crush the enemy with my bare hands.  ... As Democrats we oppose torture, but we're willing to look the other way when Rahm's the one who's doing it." Now, you, you've had a reputation like this for a rather long time.  This is something you actually wrote 20 years ago about how to beat a Republican:  "Now that you have succinctly spelled out your own program, you can start dredging up dirt on your opponent.  ... Even if your early ventures fail to pan out, keep digging.  The untainted Republican has not been invented." My question is, the country is ready for change; are you able to change?

MR. EMANUEL:  Yeah.  Well, I, obviously, hopefully in the last 20 years I've matured.  I do think that if you talk to my colleagues who've worked with me closely, that a number of Republicans will say that I've worked--as I did this week, just this week, helping the president pass a financial stabilization funds.  Larry Summers and I spoke to the Republican Senate Caucus about why it, why it was needed at this time, and we got bipartisan support.  I do firmly believe to fight for the policies of President-elect Obama wants to see enacted, and I will work with--help him work with Democrats and Republicans to accomplish that goal.  I am a strong believer in the principles and policies the Democratic Party put forward.  But if you look at my career, it has always been to work with Democrats and Republicans to get that done.  I do that.  And the president has clearly set an agenda.  I think the biggest thing you should look at, in the last week something major happened.  Even before president was elect--sworn into office, he got a major piece of legislation passed.  He--and it was not popular.  I mean, you would not call the play that we did out of the huddle, the first play, throw an 80-yard pass.  Usually you do things that you build up your political support.  He did it in two significant ways:  made a decision, the legislation was passed with bipartisan support; and most importantly, not done with the type of rancor and political posturing that has been done over the years.  It was done, people laid out their positions.  But then the vote was cast, it passed 52-42--or actually, in this case he defeated it 52-42, and it was done with bipartisan support and not the type of arguments that have happened before.  We will have those goals.  And I helped, as his chief of staff, get that legislation; and also, most importantly, help change the tone in which we had a policy debate.  So that's my responsibilities.  I'll do that.  You'll be judge if I continue to be a better person than I was 20 years ago.

MR. GREGORY:  Rahm Emanuel, good luck.

MR. EMANUEL:  All right.

MR. GREGORY:  Thank you very much.

MR. EMANUEL:  Thank you.

MR. GREGORY:  Coming next, Inauguration Day just two days away.  How will Mr. Obama capture the moment, and will his presidency be able to live up to the high expectations?  Our roundtable weighs in:  Tom Brokaw, David Brooks, Doris Kearns Goodwin, Tavis Smiley and Chuck Todd all here, only on MEET THE PRESS.


MR. GREGORY:  Our political roundtable looks ahead to Inauguration Day, after this brief station break.


MR. GREGORY:  We are back and happy to be joined this morning by David Brooks, Tavis Smiley, Tom Brokaw, Doris Kearns Goodwin and Chuck Todd.

Welcome to all of you.  A special edition of the program, a special time in Washington as we look toward history on Tuesday.

Doris, this is in many ways a day and a few days that's more about poetry than prose.  How do you capture this moment for the country?

MS. DORIS KEARNS GOODWIN:  Well, you know, the most important thing I think now is that all inaugurals have a certain emotion connected to them.  It's a sacred renewal for our country.  You feel like America can change suddenly because there's a new president there.  But this one has an even more special moment.  There's the high drama of the fact that we're in crises, so it's one of those inaugurals that's likely to be remembered.  There's the fact that it's the first African-American being elected as a president.

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  Which will be so much bigger even than I think we know, when that moment takes place.  And there's the fact that he's got literary capabilities.  Very few inaugurals are remembered when you think about the speeches, except for the terrible ones like Harding.  Mencken said they--it was so horrible that it was glorious.  So all those things together make it possible that this is going to be the most exciting in our memory.  JFK is exciting after the fact because of the literary moment and because of Camelot that, that came after it.  But I'm not sure at the moment that you had people all over the country, as is going to be happening here, in, in little living rooms, in diners, in bars watching this, taking the day as a sacred day.

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  So I think we should all feel good that we're living in this moment.  You always want to live in a moment of high drama.  This is one.

MR. GREGORY:  Tom Brokaw:

MR. TOM BROKAW:  Well, I think more than anytime than I can remember in all the years I've been doing this, the country is paying attention.  The phrase I've been using, "The nerve endings of the country are exposed." And now, after the election and given the magnitude of the problems that we're facing, even Republicans are cheering him on.  They want this to work and they're willing to set aside, you know, a lot of what we've been through for the last eight years and beyond that in terms of the ideological food fights.  And they're saying, "Look, we've got to get through this together." There is going to be some pain.  The economic conditions, the objective reality is they're very, very difficult.  And you can't even find a model that fits, in our lifetime, for what we're facing now.  And what we've learned in the last four months, just when we think we've gotten to higher ground we go off the cliff again.  And I think that has meant for the country not just a crisis of confidence, but sheer terror on the lot of a lot of people, and with good reason.

MR. GREGORY:  Tavis Smiley, tomorrow's Dr. Martin Luther King Jr.'s birthday.


MR. GREGORY:  He would have been 80 to see the inauguration of the first African-American president.

MR. SMILEY:  And you can't escape that.  What a, what a, what a 48-hour run it's going to be, celebrating the person who I regard as the greatest American we've ever produced, my own assessment, Dr. King; and then Mr. Obama's inauguration the next day.  There have been so many King-Obama comparisons as, as evidenced by your question.  I think, though, it's important to state that Obama's election is a down payment on King's dream, it is not the fulfillment of King's dream, and that's a crucial, I think, and critical distinction we have to make.  A significant down payment to be sure, and King would certainly be celebrating this moment.  But the closest thing in King's lifetime to this Obama moment was the election of the first black mayor of a major American city, Carl Stokes in Cleveland.  King went to Cleveland and, if I can paraphrase it this way, talked about this notion of black faces in high places.  And while that's something to celebrate, there is work to be done and we have got to keep the focus on the issues.  And where Mr. Obama is concerned, while black America and all of America will certainly celebrate this, because King is, again, not just a black leader, he's the best of what America is all about.

But while we celebrate this moment, we have to also, I think--back to Doris' point, and what this speech is going to bring--I'm looking for how Mr. Obama's going to challenge us to invest, to spend this, what I call an engagement dividend.  The public clearly has been engaged here.  How do we spend that dividend?  How do we use that surplus to advance the cause of America?  So I want to hear what he has to say about how all of us are going to be included in this progress, in this process of moving America forward.

MR. GREGORY:  And the drama of the day has been built up by the way that the president-elect and vice president-elect have been spending it, a whistle-stop store--tour, rather, down from Philadelphia to Washington, harkening back to the same path that Abraham Lincoln took before his inauguration in 1861. Here's a--just a portion of what the president-elect told crowds yesterday.

(Videotape, Saturday)

PRES.-ELECT BARACK OBAMA:  While our problems may be new, what is required to overcome them is not.  What's required is the same perseverance and idealism that our founders displayed.  What's required is a new Declaration of Independence not just in our nation, but in our own lives; independence from ideology and small thinking, independence from prejudice and bigotry, independence from selfishness, an appeal not to our easy instincts, but to our better angels.

(End videotape)

MR. GREGORY:  Chuck Todd, is he previewing a little bit of what we'll hear on Tuesday?

MR. CHUCK TODD:  I thought that--when I was there yesterday, that's what it felt like.  It felt like he was testing out some inaugural--either they're phrases that have been discarded and they say, "Oh, we'll use them in the speech," or they are, they are some--and one thing I think we've learned about Obama is that he does do that, they do test--they do test out phrases...

MR. GREGORY:  Mm-hmm.

MR. TODD:  ...and they start--and suddenly, you know, if you follow his speeches closely and, and you get to a big one, you'll say, "Oh, OK, I've heard that phrase and that phrase," and they've woven it together.

But I want to go to Tavis' point; I think that that is what I'm going to be curious about Tuesday.  When he did his speech for the stimulus package last week, I thought it was one of his surprisingly weaker performances.  It was very dry, it didn't ask for any sacrifice from the, the country, it was all about government.  And it was an odd thing, because it was supposed to be a speech that was to the American people, getting them--buy in on this, and he didn't ask for any buy in.  Now, maybe they were waiting till the inaugural address to do that, but I think that that is the number one thing a lot of Obama's supporters on the intellectual side of this are all wondering; "OK, Bush didn't do this after 9/11.  We're counting on you to do this.  How are you going to do it and how are you going to make that real?"

MR. GREGORY:  And, David Brooks, I go back to the question I asked Rahm Emanuel, which is what the president-elect has said, the importance of capturing the moment that we're in.  How does he describe that?  What is this moment about?

MR. DAVID BROOKS:  Well, in Philadelphia I thought the key phrase there was the independence from ideology.

MR. GREGORY:  Mm-hmm.

MR. BROOKS:  In 1961 there was a book written by Daniel Bell called "The End of Ideology," we're going to move beyond the brutalizing politics of the '50s, McCarthy era and all that.

Unidentified Man:  Oops.

MR. BROOKS:  And it was, it was a very popular book.  Then the '60s happened, we had 30 years of ideology, of pulverizing politics.  Barack Obama, born in 1961, I think really sees himself moving beyond the politics that really grabbed this in the '60s and never let go.  And the way that plays out practically is a stimulus package that's going to run up the deficit in the next couple of years, but then in 2010 I think he's seriously committed to tackling entitlement reform:  Medicare, Social Security.  That's where we all sacrifice.  The pension benefits, the health care benefits, we are going to have to sacrifice.  And if he can do that, if he can put the country on a fiscal balance after the current explosion, then he really will be a great president.  And I think he's already thinking in that arc.

MR. GREGORY:  Mm-hmm.

Let's talk about the comparisons, Doris, to Abraham Lincoln.  The New York Post this week on the cover had "Abe-Bama." That was the image.  There it is. This is how Bloomberg News talked about the comparison:  "For most of the 144 years since Lincoln's death, presidents of all political persuasions have tried to enlist Lincoln's reputation for honesty and courage in support of their own ambitions.  ... Still, the election of America's first black president, from the same state as the leader who issued the Emancipation Proclamation, gives Obama a stronger claim than most predecessors to Lincoln's legacy, says Tom Schwartz, a historian at the Abraham Lincoln Presidential Library in Springfield, Illinois.  There's a `very clear thread that connects the two,' says Schwartz, who describes Obama's history-making election as `a kind of bookend to Lincoln's legacy in the Civil War.'" How so?

MS. GOODWIN:  Well, truly it is, in a sense.  He's the one who signed the Emancipation Proclamation, started us on a journey, which we're now taking a giant step forward with the election of the first African-American president. But I think you can't have a better mentor than Lincoln, as long as he doesn't grow a beard.  I can take the stovepipe hat and everything else.  But I think the great thing about Lincoln is not only what he did--which Obama has also tried in some ways to emulate by putting powerful people around him who are going to argue and question him, so he's going to get a lot of options--it's who Lincoln was.  There's no better person to summon the spirit of than somebody who had the emotional intelligence of Abraham Lincoln, and I think we see hints of it in Obama:  not wanting to demonize the opposition, bringing people like David Brooks and other people around him to--and Reverend Warren in, who may not agree with him on all occasions, but wants to listen to them.

MR. GREGORY:  Rick Warren, who will be doing the invocation at the inauguration.

MS. GOODWIN:  Who will be doing the invocation.  Being willing to look at the past and say, " don't want to focus my energies on the past." His whole dealing of how he's going to deal with Guantanamo and the torture issue, "I'm going to stop it how--now, but I'm not sure I really want to look back," and have the whole country brought up in the momentum of that.

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  Being able to deal with people, create loyalty within your inner circle.  His team has been incredibly loyal.  And more importantly, being able to engage the country through your literary talents...

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  ...through your plain speaking, to follow what you're doing. If you can follow Lincoln on those things, you can't be--you can't have a better person.  I think to become concerned with history--maybe it's because I love history so much--it makes you bigger, it enlarges you.  I felt every day, living with Lincoln, as I woke up with him in the morning, went to bed with him at night--metaphorically, anyway--that I was becoming a better person.  I mean, weird as that sounds, everybody who's studied Lincoln feels that way. That's why there's 14,000 books.  Ida Tarbell once said there's no one more companionable than Lincoln.  Let him be companionable for Obama, we'll be in great shape.

MR. GREGORY:  Is the question, Tavis; here he is, Obama, as a champion of the left in many ways, particularly on the war...

MR. SMILEY:  Mm-hmm.

MR. GREGORY:  ...and yet he's emerging as a president who's a moderate.

MR. SMILEY:  Mm-hmm.  It is fascinating for me.

But I want, I want to go to Doris' point here about, about Lincoln.  I don't know if--you're the historian, not me, you may disagree with this.  But in my study of history, great presidents aren't born, great presidents are made.  I want, as we all do--to Tom's point earlier about even Republicans cheering for Mr. Obama to succeed; 58 percent of Republicans, David, who supported McCain, are--want Obama to do well, and they're, they're excited about what, what this, what this next four years will mean.  So the country wants him to do well.  That said, while we want him to be a great president--and Doris makes it very clear he has all the requisite talent to become a great president--because they're made and not born, presidents, I think, have to be pushed into their greatness.


MR. SMILEY:  Even with all their good ideas and all the people around them, Abraham Lincoln--you wrote about it brilliantly, Abraham Lincoln is a great president in part because of a guy named Frederick Douglass.



MS. GOODWIN:  That's right.


MR. BROKAW:  Right.



MR. BROKAW:  I spent yesterday at Bull Run at Manassas.  I drove out there, 25 minutes from here.  That happened five months after Lincoln took office. And it was supposed to be the battle that would end the war, and of course it was the battle that started the war.  And I thought about that time and what Lincoln faced, and I think the lessons that still carry forward is how he could adapt to all of the bad news and the tough stuff that was going on--changing his generals, changing his strategy in dealing with it.  And I think that's going to be the test of Obama.  We're in the abstract now.  You know, Tuesday he walks into the Oval Office, he's taken the oath of office. That's when the rubber hit the road.

MR. GREGORY:  Mm-hmm.

MR. BROKAW:  To use a cheap cliche.  And I think that's going to be the test of him is the adaptability.  He ran on one platform; conditions have changed, he's had to adapt to it.  Somebody told me over the weekend, we were talking about how much better off he is for having lost New Hampshire, because I think it made him a much better candidate to go through the whole process.  And let's give her credit where it's due, Hillary Clinton made him a better candidate.

MR. SMILEY:  Absolutely.

MR. BROKAW:  That person, who was very familiar and was a, an intimate of Obama at the time, said Obama came to everybody, they were dejected, and he said, "This is better for us."

MR. BROOKS:  If I could...

MS. GOODWIN:  (Unintelligible)

MR. BROKAW:  "We've lost New Hampshire, and we're going to be better."

MR. BROOKS:  If I could make one more Lincoln point, because I really do think it's uppermost in Obama's mind, Lincoln gave more speeches about economics than about slavery.

MR. TODD:  Yeah.

MR. BROOKS:  He had an economic philosophy, and it was a philosophy based on labor.  It was about the poor boy who works hard and rises up.  And that create, that created in Lincoln's time an emphasis on stabilizing the banking system.  We've championed the bank.  It emphasized infrastructure and internal improvements.  When Lincoln was in office, Republicans like William Pitt Fessenden created the Homestead Act, Land Grant Challenge Act, the railroad legislation, using government not to create a nanny state, but to give people the possibility to work hard.  And I do think that Lincoln economic philosophy, aside from everything else, is, is in Obama's mind.  And it's an ideology that is not strictly liberal and not conservative, but really is a lost ideology in American life, and gives me hope that he will actually be a less partisan economic player than may seem.

MS. GOODWIN:  Oh, I think you're so right.  I mean, the philosophy was to lift artificial weights from all souls' shoulders...

MR. BROKAW:  Right.

MS. GOODWIN:  ...so that everyone has an unfettered chance in the race of life.  And that means you deal with crumbling schools, you deal with the problems of the barriers that discrimination has fostered, but you let everybody have that equal chance.  That...

MR. GREGORY:  We're talking about the Civil War; I want to come back to Tom to talk about World War II.  You wrote an essay for Newsweek magazine this week that frames that period of time, and this is part of what you wrote: "When the veterans came home [from World War II], they didn't just put down their arms and say, `I've done my share; let someone else worry about the country.' They married in record numbers; went to college in record numbers; they built new industries; they gave us new art and new science.  They had learned how to take on big problems and work them through.  Women and African-Americans were determined that their sacrifices and contributions during the war would not go unrecognized.  It was an audacious time of big ideas and big dreams formed and realized in fearless fashion.  If, as contemporary economists and pollsters believe, we're now suffering from a crisis of confidence, Barack Obama may want to invoke that heady, uncertain era following World War II."

MR. BROKAW:  Well, it was a remarkable time.  And people forget how difficult it was right after the war in this country.  There's a kind of an MGM musical version of what happened:  the war ends, everybody comes home and begins raising babies.  And by the way, the baby boomers were suppose to change America.  Their time has come and gone.  They had two presidents, George W. Bush and Bill Clinton, and now we've moved on to another era.

The difference between now and then, obviously, on a lot of, on a lot of different levels is that that generation was conditioned by the Depression and World War II.  The test now is we've gotten soft and we've gotten accustomed to having other people bail us out along the way.  And I think as much as anything with this president, and I think he's capable of doing it, is having a national dialogue about values.  It's not about sack cloth and ashes.  We're still a great country, have enormous amount of prosperity.  But it's getting us back to proportion and real values, and how we move forward together on that count.  And I think if he looks at the World War II generation, he'll find inspiration in that.  And a lot of them are still around.

MR. GREGORY:  Let's talk, Chuck Todd, about what the president-elect has been dealing with in this transition period:  Cabinet appointments, some bumps along the road, dealing with some controversy, dealing with both Republicans, Democrats on, on Capitol Hill, meeting with conservatives like David Brooks and others over dinner at George Will's house this past week.  What have we learned--here's the president-elect at George Will's home, with Charles Krauthammer, Lawrence Kudlow, George Will, Bill Kristol, I mentioned David Brooks, and others.  What have we learned about the kind of leader that Obama will be through this period?

MR. TODD:  What's funny--and it, it was something that Tavis said that reminded me of this--I think that in his heart of hearts, when you say he's a moderate, I really think Obama is an appeaser.  And I mean this not in the Neville Chamberlain sense, OK?  Meaning he does want to make the other side feel like they have buy in.  I mean, I think he is serious about it, he wants Republican support for his stimulus package.  And it may mean putting in something in there that he may not philosophically agree with, maybe more tax cuts than he would want or normally support, but he feels like it's important to him to have that.  The--sometimes that can lead to incrementalism, right?

MR. GREGORY:  Mm-hmm.

MR. TODD:  And it goes to what you were saying, and, and this idea that there is an expectation that he not be an incrementalist president.


MR. GREGORY:  That he not be worried about midnight basketball and school uniforms like Bill Clinton, but that he make these big decisions.  Now, the thing--and you say what's going to push him.  I think the times push him. The--what's going on right now, the fact that he--a big decision has to be made because there's no choice in the matter.  I think he likes this idea of being a compromiser, which can lead to certain things, but I think he's going to be forced to do bigger--make bigger decisions just because of the moment in time.

MR. SMILEY:  I, I, I would agree, but I think one of the ways he gets traction with the everyday people, with the American people, is to make sure--speaking of taxes and stimulus--that this bailout plan, that this stimulus package eventually works its way down to the weaker working class. And there's no evidence as we sit here this morning that anything that we have done as yet has gotten to the people that need it most, those people who are politically, economically disenfranchised.  The money has not, pardon the phrase, trickled down to the everyday people.  And when you have all of this talk about bailing out Wall Street and the auto industry, but the average everyday American--who the polls indicate this morning are willing to give Mr. Obama time to turn this around.  The polls surprised me this morning, David, that they--the American people, by and large, are willing to give him two years, they believe, to turn this situation around.  That goodwill, that gradualism will eventually catch up with the Obama administration if they don't get this money to the weak working class, to the everyday people. That's a real problem.

MR. BROKAW:  Well, they're already seeing it in their polling.  David Axelrod told me the other night, that the American people hate TARP.


MR. BROKAW:  Which is the Troubled Assets Relief Program.

MR. SMILEY:  Yeah.

MR. BROKAW:  And--but he said when they flipped the question then and say, "But do you trust President-elect Obama to do the money?" then it works well for them.  My guess is he won't have two years.  And I know that's what the polling says now, but that's an abstract.  There is a lot of impatience out there because we are in a crisis, these are dire times.  People are losing not just their jobs, but when they lost their jobs in the past they could go home. Now they're losing their jobs and their homes.

MR. SMILEY:  Tom, when--but when the American people, Tom, come to see, though, that the first half of this money has been spent by those who got the $250 million--has been spent on acquisitions...


MR. SMILEY:  ...on other investments; this money not being loaned to everyday people.  How do you stimulate the economy if the money that we have given to the banks end up being used by them for acquisitions and other investments?

MR. BROKAW:  Well, that, that's what I'm saying, is that he, I mean, he's going to have to--all the goodwill that he has coming in here will evaporate pretty quickly...

MR. SMILEY:  Exactly.

MR. BROKAW:  ...if he doesn't get it out there more swiftly than two years.

MR. GREGORY:  David Brooks, let me ask you about an appeal to religious conservatives.  Rick Warren, a controversial choice to give the invocation.  A lot of elements of the Obama base really upset about that.  And then you add Guantanamo, the fact that the president-elect has said not going to be so easy to close down this detention center here, also a disappointment to a lot of progressives.  What does that say about the kind of leader he wants to be?

MR. BROOKS:  I would add, he was very nice to Joe Lieberman after the race.

MR. GREGORY:  Mm-hmm.

MR. BROOKS:  You know, he does not want to prosecute the Bush people over alleged torture or torture.  He really means it about changing the tone.  I mean, he's walking the walk.  What strikes me about Obama--and I'm not allowed to talk about what happened at our dinner the other night, but I will say it was not like a group of people on one team and a Democrat on another team.  It was a group of Americans sitting around talking; agreeing, disagreeing, just a bunch of people talking.  And what strikes me about him and has always struck me about him is that with some people--and frankly, with President Bush, when you disagreed with him it was like a little status issue.  The people who disagreed were somehow a little lower status.  That's what the '60s culture war was all about, my lifestyle's better than your lifestyle.  Obama's lifestyle is very traditional, no one could possibly object to it, and disagreement is not about status with Obama.  And therefore, he sees himself, and I think he's to a large extent empirical.  The problem with the stimulus is no one knows how to do it.

MR. GREGORY:  Mm-hmm.

MR. BROOKS:  We've never had it successfully done.

Offscreen Voice:  Very true.

MR. BROOKS:  Until four months ago, the consensus in the economic profession was that you relied on the Fed to stimulate the economy.  We're only doing this kind of stimulus now because we ran out of the other kind.  So we're just guessing, and he's guessing the best he can.

MR. GREGORY:  I want to talk about unique leadership test for this president, and that's with the African-American community.  There was some discussion about this and your role over the course of the campaign as reported in The Atlantic magazine in its new issue.  And let's put it up on the screen and go through it.  "Last February, ... Tavis Smiley held his annual State of the Black Union forum in New Orleans.  For the second year in a row, Obama declined to attend.  ... Smiley was angry about the slight and criticized Obama openly.  The backlash against Smiley was intense.  ... The Smiley backlash was evidence to Obama's inner circle that, in the words of one adviser, `Barack became untouchable in the community.' ... `Tavis Smiley was the object lesson for everyone,' says Anita Dunn, a senior campaign strategist." The article goes on to explain the campaign's strategy with regard to this issue.  "Obama did not have to ... pander to black leaders; he did not have to target specific messages at the black community with the attendant risk of exacerbating economic tension between blacks and whites.  He did not have to bring up race.  And that was key, because [internal Obama] polling confirmed that culturally anxious whites were willing to vote for a black candidate so long as they did not" mediate--"meditate," rather, "on the candidate's blackness.  Obama was able to credential himself as an African American without engaging in overt racial politics."


MR. SMILEY:  That's a good question.  I don't think he has more of a responsibility, but he certainly has a moral responsibility given that African-Americans are disproportionately impacted by so many of the issues that he's going to be grappling with in this administration starting a couple of days from now.  That said, this campaign was run strategically, strategically, David, brilliant on this notion of, how might we put it, reducing white suspicion and playing up black solidarity, or sort of taking advantage of black solidarity.  It was a brilliant strategy for running and winning this election.  I'm not so sure that you can govern that way.  You, you, you can't run a country by trying to dance around, avoid dealing with issues where there are clearly racial and economic disparities.  So the strategy for the campaign is one thing; running the government, government is, is another thing.  And I think ultimately when this adviser, whoever this person is, suggests that I was the object lesson and that Barack Obama was--or he is untouchable in the black community, I don't even think the black community likes that kind of language.  Because untouchable to me is, is equivalent to unaccountable, and I don't think anybody, blacks or anybody else, wants a president right now who is unaccountable.  Everywhere you look you hear the word accountable...

MR. GREGORY:  Mm-hmm.

MR. SMILEY:  ...about the auto industry, about Wall Street.  We want accountability, we are craving accountability.  So to suggest that he is untouchable suggests he's unaccountable, and that's unacceptable.

MS. GOODWIN:  But I think the best way for him to deal with that, as you said, sort of a responsibility that he has to the African-American community, is to remind the American people that the ideals of our country demand that all people be given that equal shot.  I mean, one of the things Lyndon Johnson said in his great "We shall overcome" speech:  "This is not a Negro problem, it's not a white problem..."

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  "...it's not a northern problem, it's not a southern problem, it's an American problem, and we shall overcome." And I think to the extent that he can say that the problem of everybody having a chance to rise, as Lincoln said...

MR. GREGORY:  Mm-hmm.

MS. GOODWIN:  ...without artificial weights on your shoulders, that applies more to the black community given the problems they're facing.  But he has got to make us realize it's our ideals that we're fighting for; not just that community or any other community, but American ideals.

MR. SMILEY:  And ultimately when you make black America better, Doris, you make all of America better.

MS. GOODWIN:  Absolutely.  Absolutely.

MR. GREGORY:  All right, we're going to, we're going to leave it there.  Lots to continue to discuss.  Thank you all very much.  And we'll be right back.


MR. GREGORY:  That's all for today.  Stay with NBC, MSNBC and msnbc.com all day Tuesday for nonstop inaugural coverage.  We'll be back next week.  If it's Sunday, it's MEET THE PRESS.


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