'Meet the Press' transcript for July 13, 2008

MR. TOM BROKAW: Our issues this Sunday: The faltering economy tops the debate in the presidential campaign as a key economic adviser to Senator McCain says it's only a mental recession.

SEN. BARACK OBAMA (D-IL): I guess what he meant was that it's a figment of your imagination, these high gas prices.

SEN. JOHN McCAIN (R-AZ): Phil Gramm does not speak for me. I speak for me. So I strongly disagree.

MR. BROKAW: The campaigns square off. Our guest for John McCain, RNC Victory 2008 chair and former Hewlett-Packard CEO Carly Fiorina. And for Barack Obama, his campaign's national co-chair, Senator Claire McCaskill of Missouri.

Then, Obama responds to Jesse Jackson's critical comments and moves closer to the political center, while McCain courts Latinos in a new ad and tries to regain his footing on the economy.

And both sides continue the hunt for a vice presidential candidate. Insights and analysis on all of this from our political roundtable: NBC News political analyst and former Democratic congressman from Tennessee Harold Ford Jr., NBC News political analyst who worked for McCain's 2000 presidential campaign Mike Murphy, and NBC News correspondent Andrea Mitchell.

And in our "Meet the Press Minute," we remember former White House Press Secretary Tony Snow, who died yesterday at the age of 53.

But first here this morning, we're joined by the former CEO of Hewlett-Packard and now a top adviser to Senator John McCain, Carly Fiorina; and the national co-chair of the Obama campaign, Senator Claire McCaskill of Missouri.

Welcome to both of you. As I don't need to tell you, this campaign is running at full octane seven days a week, 24 hours a day. The most explosive comments, I think it's fair to say, Ms. Fiorina, came this past week from Phil Gramm, a principal economic adviser to Senator McCain, when he had this to say about what he says is the real state of the American economy: "You've heard of mental depression; this is a mental recession. ... We may have a recession; we haven't had one yet. ... You just hear this constant whining, complaining about a loss of our competitiveness, America in decline. We have never been" in a "more dominant" position, "we've never had more natural advantages than we have today. We've ... become a nation of whiners." Well, not surprisingly, Senator Obama had an immediate response to that, and this is what he had to say to Senator Gramm's characterization.

(Videotape)

SEN. OBAMA: This economic downturn is not in your head. When people are out there losing their homes and property values are declining, that's not a figment of your imagination.

(End videotape)

MR. BROKAW: And, at the same time, Senator McCain had this response to his friend Phil Gramm and economic adviser.

(Videotape)

SEN. McCAIN: I don't agree with Senator Gramm. I believe that the, that the person here in Michigan that just lost his job isn't suffering from a mental recession. Phil Gramm does not speak for me. I speak for me. So I strongly disagree.

(End videotape)

MR. BROKAW: Ms. Fiorina, what is the status of Senator Gramm in the campaign of Senator John McCain this morning?

MS. CARLY FIORINA: Well, John McCain, after making the statement that you just played, was asked directly whether Senator Gramm would have a position in his Cabinet, and his response was, "Well, perhaps he'd make a good ambassador to Belarus, but I'm not sure the citizens of Minsk would welcome him." I think John McCain's been real clear that Phil Gramm wasn't speaking for him and, in fact, John McCain has said now for many months that he believes the economy is in a recession. It's clear Americans are hurting. It's--they're hurting when they fill up their car with gas; they're hurting when they go to the grocery store.

MR. BROKAW: But the question is will Senator Gramm continue to have a role in the campaign? Will he be listed on the letterhead and will he be in the meetings in which they discuss the economy?

MS. FIORINA: I don't think Senator Gramm will any longer be speaking for John McCain, and I think John McCain was crystal clear about that this week. And I think...

MR. BROKAW: But he...

MS. FIORINA: ...by the way, outside of Washington, where this is an interesting parlor game, I think most Americans are not really focused on what a bunch of surrogates are saying. They're focused on what the candidates are saying. I was in town hall meetings with John McCain all week. Not one question about Phil Gramm. Not one question.

MR. BROKAW: Well, with all due respect, we have you here as surrogates, and we hope that America is paying attention to what you have to say because the campaign is on a broad front.

But let me just play for you what Senator McCain had to say on this broadcast earlier this year in January about the economy vis-a-vis terrorism as an issue when he was questioned by my dear friend, the late Tim Russert.

(Videotape)

SEN. McCAIN: I believe that most Republicans' first priority is the threat of radical Islamic extremism. Now, I know the concerns about the...

MR. TIM RUSSERT: More than the economy.

SEN. McCAIN: More than the economy at the end of the day. We'll get the through this, the economy. We're going to restore our economy in many of the measures we're taking right now, although it's very difficult now. This transcendent challenge of radical Islamic extremism will be with us for the 21st Century.

(End videotape)

MR. BROKAW: So have the priorities changed in the McCain campaign from radical Islamic terrorism to the economy as the number one issue?

MS. FIORINA: I think John McCain has also been very clear that the economy is struggling, that people are hurting, and that he, as president, has a plan to get the economy growing again and to create jobs. But he believes...

MR. BROKAW: More important to him, more important to him now.

MS. FIORINA: But he believes, as I think all Democrats believe as well, that the first and most important priority of the federal government is to protect its citizens. I think that's what he was talking about. But it's also clear that government has a role in helping to create jobs and get the economy growing again, and that's why John McCain spent all week talking about the economy this week in this way.

MR. BROKAW: But in January of this year he did not anticipate that the economy would worsen as quickly as it has.

MS. FIORINA: I don't think anyone expected that it would worsen as quickly as it has. In fact, if you go back and look at the surveys of economists and what they predicted in terms a recession, you would see the number of economists who thought we would be in a recession in January was materially lower than the number of economists who think we will have a recession today. So no one predicted the economy would worsen as quickly as it has. The facts are, however, that in April John McCain also came out and said Americans are hurting, and that's why he proposed relief from gas taxes, which would create instant relief in America's pockets. That was way back in April. So I think he's understood the economy's an important issue for some time now.

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