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STARTING POINT WITH SOLEDAD O'BRIEN

Suicide Bomber Targets U.S. Consulate Vehicle; Better Off Today Than Four Years Ago?; Tension Between Presidents?; Isaac's Leftovers Soak Parts Of Midwest; One For All And All for One; Better Off Than You Were Four Years Ago?; Unemployment Worsens Over Obama Term; The GOP's Response In Charlotte

Aired September 3, 2012 - 07:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANNOUNCER: This is CNN Breaking News.

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. You're watching "Starting Point." We're coming to you live this morning from the CNN Grill in Charlotte, North Carolina. Our "Starting Point" this morning, we start with breaking news, a brazen attack against Americans. A suicide bomber rams into a U.S. government vehicle in Northwestern Pakistan. It happened overnight.

Plus, the big question today is, are you better off now than you were four years ago? Some Democrats not quite so sure, and Republicans are pouncing on that this morning.

Plus, flooding and blackouts still linger nearly a week after hurricane Isaac slammed into the Gulf Coast.

We've got a packed show for you this morning. We're going to be talking to Maryland governor, Martin O'Malley. Maryland congressman, Elijah Cummings is our guest. Republican National Committee chairman, Reince Priebus is with us.

Jim Rogers is the CEO of Duke Energy. He's also the co-chairman of the host committee for the Democratic National Convention. And design guru, Ty Pennington is joining us this morning as well.

It's Monday, September 3rd, and "Starting Point" begins right now.

ANNOUNCER: This is CNN breaking news.

O'BRIEN: Welcome, everybody, our STARTING POINT this morning is breaking news overnight. A car that was packed with explosives slammed into a U.S. consulate vehicle. It happened in Peshawar in Pakistan. Two U.S. consulate employees were injured. We're now being told that two Pakistanis have been killed as well.

Foreign affairs correspondent Jill Dougherty joins us this morning with the very latest. What are you hear, Jill?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Hey, Soledad. You know, there's a bit of confusion about who might have been killed, how many people killed, how many injured but the latest figures that we're getting from the State Department are two Americans were injured, two Pakistani employees of the consulate in Peshawar were injured. But none from the consulate were killed.

Now the local police are saying that there were two Pakistanis killed. It could be that they were people who were around the site of this blast and that 25 were injured. It is not uncommon, as we both know, that after something like this, there is confusion. In fact, there was apparently a passport found that one of the local officials, the information minister said, belonged to an American and he surmised that that American had died. But again, the U.S. is saying no Americans dead.

It is a serious incident, however, and it comes in an area that has had a lot of problems. Other attacks over this period. And it also, Soledad, comes at a time that Pakistani forces are really taking the fight to the militants in this area. It is an area that has a lot of Islamic militants and as I said, there have been previous attacks. But they will try to get to the bottom of it and it is not out of the realm of the possibility that people who are around that area might have been killed or injured -- Soledad.

O'BRIEN: All right. Jill Dougherty is watching that for us this morning. Thank you, Jill. Appreciate it.

Let's introduce our team this morning, Dana Bash is with us. She is CNN's senior congressional correspondent.

Nice to have you.

Congressman Jason Chaffetz with us. He was with us last week as well. He's a Republican, Republican surrounded by Democrats this week.

REP. JASON CHAFFETZ (R), UTAH: As long as I sit next to Dana, I'm OK.

(LAUGHTER)

O'BRIEN: From Utah, a Romney supporter as well. This morning we're talking to Delaware's governor, Jack Markell. He's an Obama supporter. Joe Klein is with us as well. Has a terrific article out this week.

JOE KLEIN, TIME MAGAZINE: Thank you.

O'BRIEN: We're going to talk a little bit about that a little bit later this morning, with "TIME" magazine, of course. And we have John Berman, the anchor of "EARLY START," doing a little triple duty for us this morning.

Nice to have you with us.

Dana, let's start with you. The big question that was really teed up by the Republicans and now the Democrats have to deal with it as they head into this week is, are you better off now than you were four years ago? $64,000 question and it's been a struggle for some Dems to answer that.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It has been. You know the two Davids, if you will, that head up the Obama campaign, David Plouffe and David Axelrod, they really couldn't answer it yesterday. But there was one top Democrat who did give an answer but it was not an answer that not a lot of people in the Obama campaign were really thrilled about. Listen to what he said.

(BEGIN VIDEO CLIP)

BILL SCHIEFFER, CBS NEWS: Can you honestly say that people are better off today than they were four years ago in?

GOV. MARTIN O'MALLEY (D), MARYLAND: No, but that's not the question of this election. The question without a doubt, we are not as well off as we were before George Bush brought us the Bush job losses, the Bush recession, the Bush deficits, the series of dessert wars charged for first time to credit card -- the national credit card.

SCHIEFFER: Yes, but --

(END VIDEO CLIP)

O'BRIEN: That's a problem.

BASH: It is a problem. And Brad Woodhouse, the DNC spokesman came on --

O'BRIEN: His job is spinning, spinning, spinning.

BASH: Right. But he came on, boom. He had an answer. His answer was yes. It wasn't no. It was yes, and then he couched it and explained it.

Look, the reality is when you look at the hard data, that there's no question that things are better because when the president took over we were in a horrible, horrible situation. Politically though, the big problem for Democrats is that there are a lot of people out there, particularly middle class voters, who don't feel better and that is what Republicans are really seizing on.

O'BRIEN: Isn't the issue that it's really a mixed bag. I mean, you know, if you're a voter, so you're just home and you're going to go by how I feel, do I own my home or is my home in foreclosure? You know, are their employment opportunities, you're not necessarily saying, well, is the stock market back? And how's the GDP been over the last six months?

BASH: Exactly. There's no question. And if you look at the specifics, yes, people are getting jobs but some of the jobs and at least many of the jobs that people are getting are lower wages than maybe they had before and people having to work more than one job to make ends meet where they had -- they just had one before. So those are the issues. People are just still struggling out there. And when you talk about the politics of this, if you talk about wanting to reelect a president, that's really what matters not, as you say, whether GDP was down or up.

O'BRIEN: So, Governor Markell, how come it took the Democrats at least 24 hours to sort of come up -- you know from the Democratic perspective, the right answer is yes, right? Now you made a fair argument. But to say no was certainly from the Democratic perspective a bad idea. That's why we're talking about government -- Governor O'Malley and we're going to be talking to Governor O'Malley in a little bit.

Why is it such a struggle for that articulation?

GOV. JACK MARKELL (D), DELAWARE: As you say ,he'll be on shortly and he can clarify. But let me give you the perspective of somebody who took office. Within a month all of the governors met in February of 2009, all the governors met not only with the president but with his team. We met with Ben Bernanke. We met with Peter Orszag who was head of -- they were the three most sobering meetings I have ever had. Because all of them essentially said, you know, we think we can get the economy going again but they were especially concerned about the financial markets because they were shut down --

O'BRIEN: I've got to stop you there. We're having some audio problems with your microphone. So Bruce, why don't you come in and fix that for me.

Jason Chaffetz is here because he is here to do the rapid response team. Some very scary title that you've got going on. But you were going to be pushing that message obviously today, that is at least today the Republican agenda, right?

CHAFFETZ: Well, every American is going to have to answer this for themselves, are they better off than they were four years ago? And as I think Governor Romney said, if the best feeling you had about Barack Obama was when he gave that campaign speech and then he was elected but the next four years have been just a series of disappointments, I think most people are going to look back at that and say, you know, it was nice to put him in there but it just isn't working. We're going to have to try something else.

We want different results, we're going to have to elect different people because the price of gas has doubled, you got 23 million Americans either underemployed or unemployed along the way. I mean there's just so much to look at and think we can and must do better. That's the Republican message.

And when the Democrats themselves struggle to answer this question, you know that the middle of America is really struggling to say, yes, we need to keep doing that same thing that isn't working.

O'BRIEN: The Republican message conveniently doesn't mention George Bush at all.

(CROSSTALK)

CHAFFETZ: Well, it's time to move on. I mean --

O'BRIEN: We'll talk about --

CHAFFETZ: I ran, I ran against the Republicans had the House and Senate and the presidency, I ran against that. I beat a 12-year incumbent Republican to get here. That was my message, too. I think they overspend. I think they did some things wrong. Let's learn from that and move on.

JOHN BERMAN, HOST, "EARLY START": To answer the question, are you better off than you were three and a half years ago from after this thing bottomed out, what would the answer be?

CHAFFETZ: No, we're not. We're not doing nearly what we can possibly do in this country. Energy production we have not prioritized.

(CROSSTALK)

O'BRIEN: But that's a different answer. That's a different answer than the question that John has asked, right? He asked, are you better from three and a half years ago and --

CHAFFETZ: No. No. We are stagnant, we are not moving forward.

(CROSSTALK)

MARKELL: Wait a second. Now that my mike is working, can I jump in?

(LAUGHTER)

MARKELL: Look, we have had 29 straight months of job growth, 4.5 million jobs. And what I was saying before is February of 2009, the financial markets were frozen. In addition to losing hundreds of thousands -- of jobs every month, the financial markets really it was not clear, we were looking at an abyss and it was not clear that we were going to step back. And we have stepped back from that abyss and against what, 29 --

O'BRIEN: OK. I want to get to Governor O'Malley on the other side of our news break. We're going to continue. This is the theme of our conversation today. Going to have a lot of time to keep talking about it. I want to get to Christine Romans first, though. She's got a quick update of the other top stories.

Christine, good morning.

CHRISTINE ROMANS, CNN ANCHOR: Good morning to you, Soledad.

Right now authorities in Washington state are searching for a shooter who fired at cars and police officers in a town about 90 miles north of Seattle. They're also warning Arlington residents to stay inside. One man was shot in the leg yesterday afternoon. Officer say they heard shots coming from the woods and they called in the SWAT team. When the SWAT team arrived, it was fired on also.

The U.S. Open line judge accused of murdering her husband by hitting him with a coffee mug then stabbing him with broken shards she's out on bail. Seventy-year-old Louis Goodman allegedly killed her husband in their California home back in April. She was arrested last month in New York as she has prepared to work at the grand slam tennis tournament. She has pleaded not guilty to murder charges.

Former News International chief Rebecca Brooks in a London courtroom this morning to answer to phone hacking charges. She's accused of being part of a conspiracy to illegally access voicemails along with six other members of the now defunct "News of the World" tabloid. Later this month Brooks has another court appearance to face three charges of conspiring to pervert the course of justice.

The U.S. has temporarily suspended the training of Afghan police recruits. That gives Special Operations forces time to double check the backgrounds of current Afghan police. There's been a dramatic rise in the number of attacks on NATO troops with more than 40 reportedly killed this year by members of the Afghan security forces or by insurgents dressed as Afghan police.

The book on the Osama bin Laden raid hitting stores tomorrow. "No Easy Day" is a first-hand account of the raid written by former Navy SEAL Mark Bissonnette. He wrote it it under the pen name Mark Owen. The "New York Times" report an e-book written by other Special Ops members claims Bissonnette was willing to break the code of silence because of bad blood with his former unit -- Soledad.

O'BRIEN: All right. Thanks, Christine. Appreciate it.

I want to introduce Ryan Lizza, who is getting miked up and just joined our panel.

Ryan, the show starts at 7:00, remember.

(LAUGHTER)

No, I'm just teasing. I'm just kidding. I'm just kidding you. It's nice to have you joining our team this morning. We're talking this morning with an Obama surrogate, who's a Maryland governor, Martin O'Malley, who, when he came out this morning, said, I'm sorry to be making news for you this morning.

It's nice to see you, sir.

GOV. MARTIN O'MALLEY (D), MARYLAND: Thank you.

O'BRIEN: And I cannot tell you the number of Democrats who've said to me ask him what was he thinking to say no.

O'MALLEY: Yes, well, look --

O'BRIEN: What were you thinking to say no?

O'MALLEY: Here's a -- here's the reality of our situation as a country. We are clearly better off as a country because we're now creating jobs rather than losing them.

O'BRIEN: But you said no.

O'MALLEY: But Soledad, we have not recovered all that we lost in the Bush recession. That's why we need to continue to move forward. Is there anybody on this panel that thinks we've recovered all we lost in the Bush recession? I don't think anybody could say that. But clearly we're moving forward, we're creating jobs. Unemployment is down, job creation is up. And those positive movements would not happen without the president's leadership.

Now the rapid response team will come in.

O'BRIEN: You're sitting next to a member, by the way.

O'MALLEY: They'll cut and slice. Congressman, good to see you. Can you'll tell you -- can you'll tell us how many of the president's jobs bills you actually voted for when you were in Congress?

CHAFFETZ: Well, we got -- we have 30 bills that we passed out as House Republicans sitting over --

(CROSSTALK)

O'MALLEY: President's jobs bill?

CHAFFETZ: these were not jobs bills. I mean we can go one at a time.

O'MALLEY: So anyway, the point is, look --

KLEIN: A lot of these bills were filled with the kind of programs that Republicans have supported in the past, like tax credits for small businesses and so on. I mean that's -- there's been a lot of politics going on here. And this very question of, are you better off than you were four years ago, is a political question. It doesn't deal with the reality of life as people live it in the country.

Everybody knows we've been through a very difficult four years. The real question is, how do we move forward and how do we make the country better for our kids? And --

O'BRIEN: I think it was surprising to people, though, sir, and also for the two Davids, as we heard Dana talk about, that the answer wasn't even a political why, yes, we are, later Brad Woodhouse came out and he was, you know, boom. It took a solid 24 hours before the messaging got out. And I think that that's an indication that at the very least, everybody doesn't have their strategy together.

O'MALLEY: Right. It's all heightened right now. I mean we're going to have three days where we're able to lay out as a party the things that President Obama has done to turn around the American auto industry, largest expansion of the manufacturing sector since the 1980s. Home foreclosures are actually lower now than they were when President Obama took office. So we need to keep moving forward, because it's not just about recovering all of those jobs we lost because of the Bush recession. It's about moving beyond that so we give our kids better opportunities. O'BRIEN: For a -- for a voter, though, is it about those jobs numbers? Is it about when you put up the unemployment figures, unemployment, it was back in 2009, January, 7.8 percent, now it's up to 8.3 percent. If you're a voter, do you just say that actually is a figure? I don't need to know that the stock market is rallying and I don't need to know that home foreclosures are down and I don't need to know these other things?

O'MALLEY: Well, look, we're all in this together. The stronger our country's economy, the better opportunities we have. If we want to be more secure in our homes and more secure in our jobs, we have to understand that we're all in this together. So -- but there's a bit of a tension here in our whole country. There are many of us that would like to pull the covers over our heads, say we're individuals, and we're not part of the larger nation, but in fact we are and we move forward together. And that's what we need to continue to do.

MARKELL: Soledad, the other thing you're asking what -- how does a voter think about it?

O'BRIEN: Yes.

MARKELL: The voter thinks about who has the best plan for actually making it better still.

O'MALLEY: Right.

(CROSSTALK)

O'BRIEN: Right. And when you look at the polling, it says Governor Romney -- he does better in polling on the economy.

MARKELL: And we have an opportunity this week to make sure that the country really understands the president's plan and his plan is to really build the economy from the middle class out. And I think if you look at his investments in education, in job skills training, his plans for infrastructure --

O'BRIEN: Jason Chaffetz, it's literally going --

CHAFFETZ: Well, I understand but I mean, you know, it's the rhetoric versus the reality. And so -- and this is a -- this is an important week for us to actually get that message out. Plans are laid out in budgets and the reality is in four years President Obama's laid out a budget, there is not a single person in the House or Senate, Democrat or Republican, who's ever voted for the president's budget.

When the president presented his budget to the Senate, it was defeated 99-0. When it went to the House, it's defeated 414-0.

O'BRIEN: But if plans are everything, everybody has consistently --

(CROSSTALK)

CHAFFETZ: No, but it was the president's plan. So you could say he has a plan --

O'BRIEN: But everybody has consistently said Mitt Romney's plan was very low on details, his plan, right? I mean one --

CHAFFETZ: I would disagree but the president cannot -- how bad is your budget if --

KLEIN: Romney the other night was not light on specifics?

(CROSSTALK)

CHAFFETZ: Fifty-nine point plan, you can't get through --

O'BRIEN: I've heard the 59-point plan. I mean the 59-point plan is long, certainly, 59 points takes up a lot of space but the details, it's very low on details.

KLEIN: It's a 59 platitude plan actually as I read it. The thing that -- what the congressman just said --

(CROSSTALK)

KLEIN: What the congressman just said --

O'BRIEN: We can walk through a little bit later in the show.

KLEIN: When was the last time a budget passed the Congress exactly as the president wrote it? The answer is never. What happened here is that Republicans did gimmicks, they introduced the budget and nobody is going to vote for a president's budget as it is. Democrats want to spend more money, Republicans want to spend less money. This is a political game that you're talking about.

CHAFFETZ: Ninety-nine senators vote against the president's plan as it was presented.

(CROSSTALK)

O'BRIEN: We're going to keep talking about this.

CHAFFETZ: How can the Democrats answer that?

O'BRIEN: Again, this is our theme this morning. We're going to keep talking about this. We've got to hit a commercial break because that is what pays the bills to keep the show on the air. We're going to be back in just a moment on the other side, though.

Still ahead, we're talking Barack and Bill, the first look at -- Ryan Lizza has got a new article in the "New Yorker" about former President Bill Clinton and his relationship with current president Barack Obama. What will the Clinton factor be this year?

Also, we're going to talk a little bit more about, are you better off now than you were four years ago?

You're watching STARTING POINT. We're coming to you live from the CNN Grill in Charlotte, North Carolina. Back in just a moment. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to STARTING POINT, everybody. We're coming to you live this morning from Charlotte, North Carolina. President Bill Clinton is going to give a major speech here on Wednesday in support of President Obama. The two, though, have kind of a strained history.

Ryan Lizza has got a new article in the "New Yorker" which explores that relationship. We've got the first look here right here on STARTING POINT. It's called "Let's Be Friends: Two Presidents Find Mutual Advantage."

You go back into the history of sort of where the relationship first went wrong. Where did it get off on the wrong foot? And even before the 2008 --

RYAN LIZZA, WASHINGTON CORRESPONDENT, THE NEW YORKER: I mean if you go way back in history, you can -- you can trace at least little bits of -- from Obama and Clinton tangling from afar. Right? When Obama gets to Chicago, one of his first jobs is running a voter turnout campaign. That helped the Clinton campaign win Illinois for first time since 1964. And later on when Obama is coming up in politics in the '90s, the quotes that exist for him at that time is -- he was a critic, he was a critic from the left of Clinton in the mid- '90s, he was a critic of Clinton's -- signing welfare reform in 1996.

And then later when he ran for Congress in 2000, who's the guy that comes to south side of Chicago the week before the election and endorses Barack Obama's opponent? Bill Clinton. There was a long shot campaign anyway, Obama wasn't -- probably wasn't going to win.

O'BRIEN: So what's changed? Is it just they both need each other now?

LIZZA: You got to push fast forward, Obama becomes a senator, he's running for president. And, you know, I picked some scabs off some of the ugly history of the 2008 campaign. And, you know, the heart of that campaign was this very ugly fight between the Clintons and the Obamas. And that's the --

O'BRIEN: And President Obama had to -- before he was president had to run as the anti-Clinton, right?

LIZZA: Exactly.

O'BRIEN: I mean, you know --

LIZZA: The messaging of 2008, people remember -- people don't remember this, the messaging of 2008 was, basically Bush -- you hate the Bush years because of the toxic partisanship in Washington, well, you're going to get the same thing with Hillary Clinton. And frankly, the Obama campaign ran essentially a character attack on Hillary Clinton. It wasn't just a policy attack, it was a character attack. And so there was some real, real hard feelings that these two camps had to get over once Obama won.

O'BRIEN: There was a quote that you talk about where, I guess, President Clinton said, you know, a couple of years ago he'd be carrying our bags.

LIZZA: Yes.

O'BRIEN: And some people say, well, that's just a comment about the age of President Obama and the lack of experience, others said that's a racial comment.

LIZZA: I don't think it's racial. I don't think Bill Clinton has a racist bone in his body. But in that campaign, in South Carolina, the Obama campaign did put out some things that the Clintons believed was -- was trying to make him seem racist.

O'BRIEN: So what's changed now?

LIZZA: Well, it's changed since Barack Obama became president.

(LAUGHTER)

LIZZA: His wife was offered the secretary of state job.

(CROSSTALK)

LIZZA: And look, Bill Clinton -- Hillary Clinton did -- this has been well documented. Hillary Clinton was very skeptical of the secretary of state job. It was Bill Clinton that advised her to do it and pushed as hard as he could. Remember he had to release all that information about his Clinton Global Initiative. He really went to bat to make sure she could take that job.

O'BRIEN: So a lot of Republicans have been in trying to bash President Obama have sort of said, well, President Clinton did this and President Clinton did that. You know, and I wonder if it's going to be problematic for Republicans if President Clinton gets up on the stage and says, the person who has the greatest vision is Barack Obama, which I think you've been a good guess that that's what he's going to do.

LIZZA: Sure is.

CHAFFETZ: Safe bet. Just -- yes, I'm sure that's what he's going to say. But I think at the end of the day people are going t still look at their own pocketbook, their family, they're going to look at their mortgage, their job, and they're going to think, I'm not better off than I was four years ago.

O'BRIEN: Or they'll look at the president where the last time that they felt really good and stable economically.

CHAFFETZ: I don't know that --

O'BRIEN: And say if President Clinton loves Barack Obama then -- and he's a guy who would know a good economy, this is how the direction I should go. But that's a gamble that they're --

CHAFFETZ: I don't -- I don't know that the endorsements mean much. Of course they're going to do that.

O'BRIEN: Do they mean much?

O'MALLEY: I think it means a lot because you have in President Clinton a president who governed and made choices that led to the greatest expansion of opportunity and jobs and then you contrast that with the policies that Mitt Romney wants to take us back to and George Bush that drove our economy into the ground, largest job losses, greatest recession we've seen since the Great Depression.

So I think it's a pretty clear contrast between government that works, good decisions that create opportunity and grow jobs versus, you know, Governor Romney who ranked 47th out of 50 governors in rate of job creation.

(CROSSTALK)

O'BRIEN: President Clinton could be a wildcard, though, right? I mean he has, you know, he can get up there and we know that he has said, we got clips of things that he said to CNBC, et cetera, et cetera, praising Governor Romney, which, you know, I'm sure he believed but I think Democrats would say -- his business record but again would say from a PR standpoint, maybe don't say nice things about my opponent.

KLEIN: But you know, the -- you know, first of all, two points. Presidents have more in common with each other even when they are of different parties, so, you know, there is a presidents clubs, colleagues of mine wrote a book by that nature. But also Bill Clinton and Barack Obama have had very similar experiences with the Republicans.

Clinton couldn't get a Republican vote for his 1993 budget plan that raised taxes and caused the Great Depression of the 1990s as we remember it -- actually it was, you know, it was a very successful economy in the 1990s. Barack Obama has had the same thing. The Republicans tried to impeach Bill Clinton over practically nothing. And so Clinton and Obama have had serious -- similar experiences with a Republican Party that doesn't give an inch.

LIZZA: I think that's the turning point in the relationship. After 2010 when Obama loses the House and loses seats in the Senate, Bill Clinton, they do that famous press conference, Obama has cut a deal with Republicans to extend the Bush tax cuts for two years. Liberals in Congress are outraged by this. And who goes to bat for Obama? It's Bill Clinton, who says this was a good deal and he's right, we're got to support it.

O'BRIEN: All right. We're going to --

LIZZA: Things sort of changed a little bit.

O'BRIEN: He's going to speak on Wednesday night, right? UNIDENTIFIED MALE: Yes, speaking Wednesday night.

O'BRIEN: So we look forward to watching that as well.

Got to give you a quick programming note. Chief White House correspondent Jessica Yellin has got a documentary, "OBAMA REVEALED: THE MAN, THE PRESIDENT." It's going to premiere tonight at 8:00 and 11:00 p.m. Eastern Time right here on CNN.

We've got to take a short break. STARTING POINT is back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Still ahead this morning on STARTING POINT Democrats have a serious problem. That's what "TIME" magazine's Joe Klein says in his new article. We're going to talk to him about why he said that problem comes from the party's greatest strength.

Also, nearly a week after Hurricane Isaac slammed into the Gulf Coast, the new threats this morning that are posed by swollen rivers and lakes. We'll take you right to the damage zone in New Orleans.

We're coming to you live from the CNN Grill in Charlotte, North Carolina. We're back right after this short break.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to STARTING POINT. In just a few minutes, we're going to talk to Joe Klein. He's got a new article in "Time" magazine that's giving some warning to Democrats about their future.

Plus Republican National Committee Chairman Reince Priebus, really busy last week. This week he is also busy. He is going to be here to tell us what the strategy is for the GOP in Charlotte.

First though, we want to talk a little bit about the remnants from Hurricane Isaac. This morning still a threat, storms expected to soak parts of the Midwest today.

Meantime, later today, President Obama is going to tour the flood-damaged parts of Louisiana where flooding and power outages are still causing some very big problems.

Let's get right to George Howell. He is live for us in New Orleans. Hi, George. What's the latest there?

GEORGE HOWELL, CNN CORRESPONDENT: Soledad, good morning. You see the GNO Bridge back there. The lights on and things are slowly returning to normal in the city of New Orleans, but we do know that at least 129,000 people are still without power according to the utility, Entergy.

And you see these utility trucks throughout the area going neighborhood to neighborhood slowly, but surely getting power restored to many different areas. Also across Lake Pontchartrain and St. Tammany Parish, there's still a threat of flooding for many homes right along the West Pearl River.

That river expected to crest later today. We're talking about all that floodwater that's rushing down the river. There was also concern about two locks very near that river, but officials are quite sure at this point that those locks are stabilized.

Now we also know, Soledad, as you mentioned that President Barack Obama will be visiting the area to tour those areas affected.

O'BRIEN: All right, George, we'll get a sense of what the president has to say I'm sure with his remarks after that. George Howell for us this morning. Thank you, George. Appreciate the update.

Here in Charlotte, North Carolina, the Democratic National Convention officially kicks off. It's going to officially kick off tomorrow. It's going to give the Democrats an important chance to share their message with voters on a national stage because the challenge though is to convince voters that they are better off now than they were four years ago.

Joe Klein has a new article. He is a columnist for "Time" and member of our team this morning. He lays out how the Democratic Party's greatest strength is also becoming one of their biggest problems.

Joe, let's talk a little bit about that. You know, to me it seemed like when you think the Democratic Party and I think the Democratic Party officials would say diversity is our strength and you say that strength is a problem, why?

KLEIN: Well, I think that the strength has been the strength, but when, you know, inclusion becomes exlusive, you start running into problems.

When Democrats are identified as members of the black caucus or the Latino caucus or the human rights caucus, which is the gay caucus, people on the outside who are deciding between these two parties predominantly white say what's in it for me?

Where's my caucus? The point is at this point given the fact that the Democrats really have become the party of the center in this era, in foreign policy and in domestic policy, it's time for them to lay that aside.

O'BRIEN: So there are 14 caucuses. Let me read through some of them. I had no idea that they are 14 caucuses. They are the African- American -- Asian-American and Pacific Islanders, Mediterranean Americans, faith caucus, labor caucus, LGBT causes, the senior caucus, the military family caucus, the women's caucus, Americans with disabilities caucus, first Americans Latino rural veterans youth, I mean, it goes on and on so when you say --

KLEIN: And the thing is most of these -- many of these caucuses have won their agenda, you know, the LGBT caucus has gotten the Democratic Party to support a full roster of equal rights including gay marriage. You know, women --

O'BRIEN: Is the issue get rid of some of the caucuses or is the issue create a white male caucus --

KLEIN: No, this is America. Pretty soon in a couple of generations everybody is going to look like you.

O'BRIEN: I support that fully I think.

KLEIN: We're going to be gorgeous, but we're going --

O'BRIEN: Joe, you come sit next to me. I knew we had him on the panel for an important reason.

KLEIN: It's time for the Democratic Party after the civil rights era as we move forward into a multiracial country. It's time for the Democratic Party to be the party of all of us --

O'BRIEN: You have staggering statistics, which is 70 percent of voters are white. We always talk about how the demographics are changing, especially around Latino. You're saying that at this moment --

KLEIN: Democrats don't have to change a single policy. And I'm sure still both parties will be targeting people on the basis of gender and ethnicity. You saw the Republican Party last week.

I never saw so many women and Latinos on a stage last week. But the fact is that ultimately this country is about one principle that is that the things we have in common are more important than the things that divide us. The Democratic Party has become the opposite.

BASH: If you look at the polling, particularly now, but this way for the past decade or so, maybe more. It really speaks to what Joe wrote about, which is that working class white males are more and more moving towards the Republican Party.

It didn't used to be like that. Historically this was flipped. Remember the Democrats and solid south was really not that great when it came to civil rights and women's rights, now the parties have kind of flipped when it comes to those issues.

And I think that your point is really dead on, that Democrats have taken it to an extreme and if you look at the polling, working class white males have said, I don't belong there.

MARKELL: I thought Joe's piece was interesting, with that being said, if you look at the kinds of things you focus on at this convention, it's about education and about putting people back to work and infrastructure.

The point I agree with, we're always better off talking about the American dream and not just talking about the American dream, but what kinds of things are we doing to make it real and make it real for everybody. I really do believe this convention will be a great opportunity for our party to highlight not only the progress that we've made over the last four years, but the significant differences in terms of making that American dream real over the next four years between the two candidates.

LIZZA: Look, I think there's an irony, because the Democratic Party is more diverse than it's ever been. We saw the 14 caucuses. At the same time it doesn't seem as divided the way it was in the '80s and '90s over racial issues.

KLEIN: That's right.

LIZZA: What's the harm that they have the 14 caucuses?

KLEIN: The harm for Democrats is from the other side, from people and independents looking into Democratic Party and only seeing a conglomeration of caucuses rather than a united message.

In some ways I think this actually harms the Democratic message because what Republicans do often is talk about you know, entitlements and special pleading and they make the argument that half of the people in the country get checks from the government.

And I think that the message that the subliminal message there, the dog whistle is that these are all of these caucuses getting their little bit?

LIZZA: I disagree, I don't think -- that's a problem with the Republican attack, I don't think that's a problem with the Democrats can change by getting rid of caucuses.

O'BRIEN: We'll keep this going, obviously, I agree with you on this, Ryan, what the strategy is, get rid of the caucuses or do you -- it sounds like you're saying create another one that would be more inclusive in a way.

If you want to find out what it's really like to experience the Democratic National Convention from the inside and you're not on the inside, join the CNN Election Roundtable with Wolf Blitzer and the CNN's political team.

You can submit your questions and get answers in real time. It's live virtual chat tomorrow at 12 Noon Eastern. Just go to cnn.com/roundtable.

Still ahead this morning, CNN has done the polls and the issue is clear it's all about jobs, so which candidate would make the best CEO in chief?

We'll examine those questions and much more. You're watching STARTING POINT live from the CNN Grill in Charlotte, North Carolina. We're back in just a moment.

(COMMERCIAL BREAK) O'BRIEN: Welcome back, everybody. You're watching STARTING POINT. We're coming to you live from Charlotte, North Carolina. We want to talk to Delaware Governor Jack Markell who has been sitting on our panel this morning.

He is an Obama supporter and head of the National Governors Association. Why did it take so long for the Democrats to answer with any kind of articulate message, you know, anybody should tell you the answer should be yes.

Regardless of whether you believe it or not to, are you better off than four years ago, right, from a PR standpoint, the answer is say yes and something else after that. They really struggled over the last 24 hours. Why is that?

MARKELL: Well, first of all, I'm here not in my capacity as chair of the National Governors Association, but here as a Democratic governor. I didn't follow all that closely the last 24 hours, but to me it is clear that we are better off.

Especially going back to what I said a little while ago, we were in unbelievably desire straits, the financial markets were frozen and economy was in free fall, hundreds and thousands of jobs being lost every month now 29 straight months of job growth. Is it enough? Do we want more?

Absolutely and I think President Obama is the first one to say we need to keep doing better. Of course, the most important thing in terms of the election and the great opportunity for the convention is for us to make sure people understand, A, all of the progress that we've made and B, the very different plans both candidates have going.

O'BRIEN: Dana, why was it such a problem because clearly the governor --

BASH: I don't know the answer to that actually because it was a problem. It actually is baffling that's what I'm thinking about. It's not just Martin O'Malley saying no. That was one word and afterwards he was kind of on message.

To me the most fascinating and perplexing thing was that the two heads of the president's re-election campaign, who are very, very savvy strategists, David Axelrod and David Plouffe didn't know how to answer the question.

If you're running a president's campaign when you know that no president has won re-election with this unemployment rate since FDR and don't have an answer are we better off than we were four years ago --

O'BRIEN: What's the impact of that though? I mean, you have covered a million campaigns.

KLEIN: I've covered a zillion, million campaigns. The problem with this question for Democrats is that the politics answer as you said is yes, you're better off than you were four years ago, but the reality is that most people understand that we've come through a very rough patch --

O'BRIEN: Some people feel we are in a rough patch and haven't come through it.

KLEIN: That's right. The real question people are asking themselves is, are my kids going to be better off than I've been or are they going to be worse off. And when you travel around the country, most people believe their kids won't have it as good as we have.

So you have to accept if you're a politician and if you're Barack Obama, you have to accept that reality is out there and you have to tilt forward and say, here's what I'm going to do about it, same with Mitt Romney.

LIZZA: The challenge is the whole messaging is you've got to give me more time, right, so four years wasn't enough. That's why their simple slogan is forward and that's why they started to compare the bush years with not the Obama years, but with the Clinton years.

Do you want to go back to the Bush years or do you want me to continue the policy of the 90s of the Clinton years. That's what Obama is saying.

O'BRIEN: That's what the response team is going to be doing today.

CHAFFETZ: The problem is the answer is no. The reality is Democrats have the House and Senate and presidency. They don't have any excuses, they had all of the controls and levers of government at their hands.

They focused on health care. They didn't focus on jobs, economy, getting people back to work. What you hear President Obama saying today is the same thing he said four years ago and it's not working.

BASH: If you look at jobs numbers, when the president took over, 800 something thousand jobs were lost. Now -- it's not great, but it's plus not minus.

CHAFFETZ: The president said go out and spend this 800 plus billion dollars on the stimulus and we'll drive unemployment to less than 8 percent -- and that was not the metric, it was it will get unemployment below 8 percent.

O'BRIEN: Well, he did not say that as you know. That has been a big talking point. The president never said that.

KLEIN: It was a gaffe, not a metric.

MARKELL: We were losing hundreds of thousands a month and now we're gaining. The real question is who has a better plan going forward.

O'BRIEN: You can continue to fight this out during the commercial break. We have to take a short break and Republicans are returning the favor this week of crashing the Democrats Party. Up next, we're going to talk to Republican National Committee Chairman Reince Priebus to join us live talking about what the GOP has in store.

You're watching STARTING POINT. We're coming to you live from the CNN Grill in Charlotte, North Carolina. Back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. You are watching STARTING POINT. We're coming to you live from Charlotte, North Carolina for the Democratic National Convention. It's not just Democrats descending on Charlotte this week.

Republicans are setting up an aggressive response operation. They're focusing on the key question, are you better off now than you were four years ago?

It's lead by our next guest, Republican National Committee Chairman Reince Priebus. It's nice to have with us. Good morning. We certainly appreciate it.

REINCE PRIEBUS, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Thank you for having me.

O'BRIEN: It's a rapid response team. It sounds very official and effective and efficient. What's the plan?

PRIEBUS: Well, our plan is obviously in today's news cycle we have about three news cycles a day, as you know, and one of the things that's really important for our side of the aisle is to be ready with the facts, responses during the Democratic National Convention so here is what we did.

We were able to secure a great space down the street at the NASCAR hall of fame. We set up with about 50 to 75 press folks down there and we're going to be ready to respond to everything that the Democrats say.

And I think that the real issue this week and what you're seeing happening yesterday on the Sunday morning talk shows is the fundamental question back on the table for Americans, which is are you better off today than you were three or four years ago?

Issues come and go and they will, but at the end of the day this is going to be about facts.

O'BRIEN: As you know, there are plenty of people who would say, and we heard them on this panel in the last hour, yes. Yes, the economy was in a free fall four years ago. Yes, the banks were frozen and there was no access to capital. So, yes, we are better off than we were. It may not feel great. Obviously, there should be more jobs created, et cetera, et cetera, but the answer is yes.

PRIEBUS: The problem with that answer is the facts don't bear it out and that's why people like David Axelrod and Robert Gibbs and David Ploufe couldn't answer the questions yesterday on the Sunday morning shows because the facts are fewer people are employed today.

The debt is more out of control than it ever was in the history of this country. The president didn't cut the deficit in half like he promised. Here is the other fundamental issue --

O'BRIEN: We were shedding 800,000 plus jobs and now we're adding 160,000 --

PRIEBUS: We're worse off. There's half a million more people unemployed today than three or four years ago not to mention the under employed, people who aren't making what they should make.

Here is the other issue, though, that I didn't get a chance to get to. The president in '08 ran knowing where the economy was. He ran against the bush economy. He ran against where the economy was.

He won in large part because of the economy and because, he said, that he would fix the economy and people would be better off four years from now because of him.

So it's not good enough, what you're going to see this week and say, well, we don't want to go back to Bush.

O'BRIEN: And Bush was conspicuously absent at the RNC, right. I mean, the goal was to not have him have a big presence clearly.

PRIEBUS: I don't think that was the case, Soledad. I mean, the fact is I know bush senior is not feeling up to par. They did a great video tribute to the bush family.

The fact is, though, this is going to come down to the economy and all of the distraction also go away and people will look at this president, did he fulfill the mission of his presidency.

O'BRIEN: So when President Clinton gets up and speaks on Wednesday and he says I handed off to President Bush a surplus, a massive surplus, and the person who lost that surplus was President Bush.

The person who took us through wars was President Bush. The person who -- I didn't realize President Bush had an MBA. He is the first president -- all those things.

He was a businessman. So it's the Bush economy that we're reeling from. President Clinton who has a really high approval rating could do a lot of damage to your message.

PRIEBUS: A different time, a different situation. The problem that Obama has with Bill Clinton is that Obama is not your daddy's Democrat. I mean, he's not a mainstream Democrat like Bill Clinton. Bill Clinton worked with both sides of the aisle. He was able to get things done. Bush worked with both sides of the aisle.

O'BRIEN: As you well know, some of the people would say that's because the Republicans have been obstructionists.

PRIEBUS: But wait a second. Obama had for two of the four years he was president, Obama had a super majority in the House, a 60 vote majority in the U.S. Senate. He passed a billion dollars --

O'BRIEN: My question is, is Clinton going to be a big problem for you? The minute he points and says, President Bush, everybody, the GOP is a picture of President Bush who started with a surplus and spent it down?

PRIEBUS: No, not at all. I think the opposite. I think Bill Clinton is actually going to help us because he's going to illustrate to the American people that Barack Obama is not Bill Clinton.

Barack Obama made everything worse. He wasn't able to work with anybody on the other side of the aisle. He didn't show leadership and didn't fulfill the promises he made in '08. You have to be able to say I fulfilled these five things.

Here is what I promised. Here is what I did. What can he espouse that he did?

O'BRIEN: Can I ask you a question about the empty chair at the RNC, the Clint Eastwood thing? Did you think that went well or badly?

PRIEBUS: I think it was great. At the end of the day, it was Clint Eastwood telling the American people Barack Obama didn't fulfill his promises, and Barack Obama has to go and I think --

O'BRIEN: Do you think people took that from that? The conversations have been like he was talking to an empty chair with some sort of expletives.

PRIEBUS: There's a Washington spin and a media spin.

O'BRIEN: I don't live in Washington.

PRIEBUS: There is --

O'BRIEN: I was in a hurricane.

PRIEBUS: My cousins in which is with which is and Ohio, I mean, there's two different views of this and it's still Clint Eastwood saying Barack Obama was not a man of his word and he's got to go.

O'BRIEN: Reince Priebus, always nice to see you. We have to take a short break. We're back in just a moment. Stay with us.

(COMMERCIAL BREAK)