PBS NewsHour; October 12, 2012 7:00pm-8:00pm EDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: TWO DEBATES DOWN, TWO TO GO AS THE CANDIDATES TOOK TO SWING STATES TODAY AFTER A SPIRITED MATCH-UP BETWEEN THE VICE-PRESIDENTIAL CONTENDERS. GOOD EVENING. I'M JUDY WOODRUFF.

>> Woodruff: THEN, 27 NATIONS-- 500 MILLION PEOPLE-- IN THE EUROPEAN UNION WILL SHARE THIS YEAR'S NOBEL PEACE PRIZE. RAY SUAREZ INTERVIEWS THE E.U. AMBASSADOR TO THE U.S.

>> Brown: WE COME BACK TO POLITICS AS PAUL SOLMAN ASKS THIS QUESTION:

>> WHO DO YOU TRUST

>> Woodruff: PLUS MARK SHIELDS AND DAVID BROOKS ANALYZE THE WEEK'S NEWS. THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

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>> AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND...

>> THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Woodruff: THE-VICE PRESIDENTIAL DEBATE LEFT DEMOCRATS TODAY SAYING THEY'RE BACK ON TRACK AFTER A STRONG SHOWING. REPUBLICANS ARGUED THEIR MAN HELD HIS OWN. INSTANT POLLS SPLIT ON WHO WON LAST NIGHT'S CONFRONTATION, BUT BOTH CAMPS CLAIMED VICTORY. VICE PRESIDENT BIDEN MOVED ON TODAY TO WISCONSIN, PAUL RYAN'S HOME STATE.

>> ANYONE THAT WATCHED THAT DEBATE, I DON'T THINK THERE'S ANY DOUBT THAT CONGRESSMAN RYAN AND I, GOVERNOR ROMNEY AND THE PRESIDENT, WE HAVE A FUNDAMENTALLY DIFFERENT VISION FOR AMERICA. AND QUITE FRANKLY A FUNDAMENTALLY DIFFERENT VALUE SET.

>> Woodruff: DEMOCRATS HAD BEEN DOWN AFTER PRESIDENT OBAMA'S PERFORMANCE LAST WEEK, BUT THE VICE-PRESIDENT AGGRESSIVELY CHALLENGED EVERY POINT RYAN MADE, PROMPTING THIS EXCHANGE.

>> MR. VICE PRESIDENT, I KNOW YOU'RE UNDER A LOT OF DURESS...

>> ( LAUGHS )

>> ...TO MAKE UP FOR LOST GROUND, BUT I THINK PEOPLE WOULD BE BETTER SERVED IF WE DON'T KEEP INTERRUPTING EACH OTHER.

>> WELL, DON'T TAKE ALL THE FOUR MINUTES, THEN.

>> Woodruff: THE PRESIDENT WAS QUICK TO HAIL THAT PERFORMANCE IMMEDIATELY AFTER THE DEBATE.

>> I THOUGHT JOE BIDEN WAS TERRIFIC TONIGHT. I COULD NOT BE PROUDER OF HIM. I THOUGHT HE MADE A VERY STRONG CASE.

>> Woodruff: REPUBLICAN RYAN SOUNDED UPBEAT ABOUT HOW HE'D DONE AT A DINER THIS MORNING BEFORE LEAVING LEXINGTON, KENTUCKY.

>> I FELT GREAT ABOUT IT.

>> Reporter: DID YOU FEEL KNOCKED AROUND BY HIM?

>> NO, IT'S WHAT I EXPECTED.

>> Woodruff: AND MITT ROMNEY PRAISED HIS RUNNING MATE IN RICHMOND, VIRGINIA.

>> THERE WAS ONE PERSON ONSTAGE LAST NIGHT WHO WAS THOUGHTFUL AND RESPECTFUL, STEADY AND POISED, THE KIND OF PERSON YOU WANT TO TURN TO IN... IN A CRISIS. AND THAT WAS THE NEXT VICE- PRESIDENT OF THE UNITED STATES, PAUL RYAN.

>> Woodruff: MUCH OF THE DAY'S FOCUS WAS ON THE VICE PRESIDENT'S DEBATE STATEMENT ABOUT THE ATTACK IN BENGHAZI, LIBYA, THAT KILLED THE U.S. AMBASSADOR AND THREE OTHER AMERICANS LAST MONTH.

>> WE WEREN'T TOLD THEY WANTED MORE SECURITY AGAIN. WE DID NOT KNOW THEY WANTED MORE SECURITY AGAIN. AND BY THE WAY, AT THE TIME, WE WERE TOLD EXACTLY... WE SAID EXACTLY WHAT THE INTELLIGENCE COMMUNITY TOLD US THAT THEY BufooT UTf: A

>> Woodruff: BUT AT A CONGRESSIONAL HEARING A DAY EARLIER, A STATE DEPARTMENT OFFICIAL ACKNOWLEDGED THAT SHE DECLINED REQUESTS FOR MORE SECURITY IN BENGHAZI. AND AT THE DEBATE, RYAN CHARGED THE ADMINISTRATION FAILED IN A CRITICAL DUTY.

>> OUR AMBASSADOR IN PARIS HAS A MARINE DETACHMENT GUARDING HIM. SHOULDN'T WE HAVE A MARINE DETACHMENT GUARDING OUR AMBASSADOR IN BENGHAZI, A PLACE WHERE WE KNEW THAT THERE WAS AN AL QAEDA CELL WITH ARMS? THIS IS BECOMING MORE TROUBLING BY THE DAY. THEY FIRST BLAMED THE YOUTUBE VIDEO; NOW, THEY'RE TRYING TO BLAME THE ROMNEY-RYAN TICKET FOR MAKING THIS AN ISSUE.

>> Woodruff: THE VICE PRESIDENT, IN TURN, CHARGED IT WAS RYAN WHO WAS STRETCHING THE TRUTH.

>> WITH ALL DUE RESPECT, THAT'S A BUNCH OF MALARKEY. IN FACT...

>> AND WHY IS THAT SO?

>> BECAUSE NOT A SINGLE THING HE SAID IS ACCURATE. FIRST OF ALL...

>> BE SPECIFIC.

>> I WILL BE VERY SPECIFIC. NUMBER ONE, THE... THIS LECTURE ON EMBASSY SECURITY-- THE CONGRESSMAN HERE CUT EMBASSY SECURITY IN HIS BUDGET BY $300 MILLION BELOW WHAT WE ASKED FOR, NUMBER ONE. SO MUCH FOR THE EMBASSY SECURITY PIECE.

>> Woodruff: TODAY, ROMNEY AND OTHER REPUBLICANS POUNCED ON THE BIDEN REMARKS.

>> THERE WERE MORE QUESTIONS THAT CAME OUT OF LAST NIGHT BECAUSE THE VICE PRESIDENT DIRECTLY CONTRADICTED THE SWORN TESTIMONY OF STATE DEPARTMENT OFFICIALS. HE... HE'S DOUBLING DOWN ON DENIAL.

>> Woodruff: BUT AT THE WHITE HOUSE, PRESIDENTIAL PRESS SECRETARY JAY CARNEY SAID THE VICE PRESIDENT WAS CORRECT IN WHAT HE SAID.

>> HE WAS SPEAKING DIRECTLY FOR HIMSELF AND FOR THE PRESIDENT. HE MEANT THE WHITE HOUSE AND AS IS, OF COURSE, APPROPRIATE, THESE KINDS OF ISSUES ARE HANDLED IN THE STATE DEPARTMENT BY SECURITY PROFESSIONALS, AND I THINK THAT'S THE CONTEXT OF THAT CONVERSATION.

>> Woodruff: BEYOND LIBYA, THE TWO DEBATERS CROSSED SWORDS REPEATEDLY, ESPECIALLY WHEN RYAN WAS ASKED FOR SPECIFICS ON ROMNEY'S CALL FOR A 20% ACROSS-THE-BOARD TAX CUT.

>> YOU CAN CUT TAX RATES BY 20% AND STILL PRESERVE THESE IMPORTANT PREFERENCES FOR MIDDLE-CLASS TAXPAYERS...

>> NOT MATHEMATICALLY POSSIBLE.

>> IT IS MATHEMATICALLY POSSIBLE. IT'S BEEN DONE BEFORE. IT'S PRECISELY WHAT WE'RE PROPOSING.

>> ( LAUGHS ) IT HAS NEVER BEEN DONE BEFORE.

>> IT'S BEEN DONE A COUPLE OF TIMES, ACTUALLY.

>> IT HAS NEVER BEEN DONE BEFORE. JACK KENNEDY LOWERED TAX RATES, INCREASED GROWTH. RONALD REAGAN...

>> OH, NOW, YOU'RE JACK KENNEDY.

>> Woodruff: ABORTION ALSO FIGURED AS A KEY ISSUE IN THE DEBATE. BOTH MEN ARE CATHOLICS, AND THEY WERE ASKED TO DESCRIBE THEIR POSITION, BASED ON THEIR FAITH.

>> I DON'T SEE HOW A PERSON CAN SEPARATE THEIR PUBLIC LIFE FROM THEIR PRIVATE LIFE OR FROM THEIR FAITH. AND I RESPECT PEOPLE WHO DON'T AGREE WITH ME ON THIS. BUT THE POLICY OF A ROMNEY ADMINISTRATION WILL BE TO OPPOSE ABORTION, WITH THE EXCEPTIONS FOR RAPE, INCEST, AND LIFE OF THE MOTHER.

>> LIFE BEGINS AT CONCEPTION. THAT'S THE CHURCH'S JUDGMENT. I ACCEPT IT IN MY PERSONAL LIFE. I JUST REFUSE TO IMPOSE THAT ON OTHERS, UNLIKE MY FRIEND HERE, THE CONGRESSMAN. I DO NOT BELIEVE THAT WE HAVE A RIGHT TO TELL OTHER PEOPLE THAT WOMEN, THEY... THEY CAN'T CONTROL THEIR BODY. IT'S A DECISION BETWEEN THEM AND THEIR DOCTOR, IN MY VIEW. AND THE SUPREME COURT-- I'M NOT GOING TO INTERFERE WITH THAT.

>> Woodruff: BIDEN WARNED A CONSERVATIVE SUPREME COURT MAJORITY WOULD OVERTURN A WOMAN'S RIGHT TO CHOOSE. RYAN, WHO'S ON RECORD FAVORING SUCH A MOVE, SAID ABORTION POLICY IS BEST MADE BY ELECTED LAWMAKERS. MANY OF THE SAME ISSUES, FROM LIBYA TO TAXES TO ABORTION, COULD WELL COME UP AGAIN ON TUESDAY AT THE SECOND PRESIDENTIAL DEBATE. THROUGHOUT THE PRESIDENTIAL RACE BOTH SIDES HAVE MADE WOMEN VOTERS A STRONG FOCUS. AFTER LAST NIGHT'S EXCHANGE WE CHECK IN WITH POLLSTERS FROM EACH PARTY WITHOUT COWROTE THE 2005 BOOK "WHAT WOMEN REALLY WANT" DEMOCRAT MS. LAKE IS OF LAKE RESEARCH PARTNER, REPUBLICAN KELLYANNE CONWAY IS PRESIDENT OF THE POLLING COMPANY AND WOMEN TREND. LET'S START WITH YOU. PICK UP ON LAST NIGHT FIRST. WHAT DID YOU HEAR IN THE WORDS, MESSAGES, DEMEANOR INSOFAR AS THE CANDIDATES WERE TRYING TO REACH WOMEN VOTERS.

>> I THINK THINK WERE BOTH TRYING TO REACH WOMEN VOTERS AND THEIR ADVERTISING HAS SHOWN THAT AS WELL. WOMEN ARE NOT MONOLITHIC. SO THEY BOTH HAVE TARGETS AMONG THEIR WOMEN VOTERS. BUT IF YOU LOOK AT WOMEN OVERALL, WHO WILL IN THE END BE THE ULTITY SWING VET AND DECISIVE VOTE, YOU SAW THEM GIVE THE HIGHEST RATING TO ANY COMMENT THAT JOE BIDEN MADE LAST NIGHT TO HIS RESPONSE ON A WOMAN'S RIGHT TO CHOOSE, AND GIVE PAUL RYAN THE LOWEST RATINGS THAT HE HAD ON HIS ANSWER ON A WOMAN'S RIGHT TO CHOOSE. I THINK THAT BIDEN WAS VERY STRONG WHEN HE SAID THIS IS NOT A DECISION, IT'S PERSONAL DECISION, IT IS NOT A PLACE WHERE POLITICIANS SHOULD INTERFERE. THE OTHER THING YOU SAW VERY, VERY STRONG AMONG WOMEN VOTERS WITH THE DEMOCRATS WAS A STRONG STATEMENT ABOUT THE MIDDLE CLASS. WOMEN DON'T WANT TO HEAR A BUNCH OF STATISTIC, A BUNCH OF ACRONYMS. THEY WANT TO KNOW, WHAT ARE YOU DOING TO HELP MY FAMILY. HOW ARE THESE ECONOMIC PROGRAM GOES TO-- GOING TO CREATE JOBS IN MY COMMUNITY, CREATE HIGHER WAGE JOB FORCE MY HUSBAND AND MYSELF, MY PARTNER AND GIVE OUR CHILDREN A FUTURE. AND I THINK THAT JOE BIDE NEN HIS VERY STRONG STATEMENTS ABOUT THE MIDDLE CLASS TARGETED WOMEN VOTERS WITH THOSE STATEMENTS.

>> KELLYANNE CONWAY, AGAIN PICK UP ON LAST NIGHT, WHAT DID YOU HEAR?

>> BOTH THE VICE PRESIDENT BIDEN AND CONGRESSMAN RYAN HIT SOME REALLY HIGH NOTES IN TERMS OF CONVINCING AMERICA'S WOMEN THAT THEY CAN HAVE CONFIDENCE IN THEIR COMPETENCE. I DON'T THINK THERE WAS ANY BREAKOUT MOMENT BUT IF YOU HAD THE VOLUME OFF, CLEARLY PAUL RYAN WOULD HAVE BEEN THE VICTOR BECAUSE QUITE CONFOUNDING EVEN TO MANY IN THE DEMOCRATIC PARTY, VICE PRESIDENT BIDEN WAS ROLLING THE EYES AND SPEAKING IN A VERY SNARKY MANNER. ONE NONPARTISAN ANALYSIS SAID HE BANKRUPTED PAUL RYAN MORE THAN 80 TIMES IT DIDN'T SEEM THAT MANY BUT IT CERTAINLY SEEMED LIKE ENOUGH. AND NOBODY NEEDS A POLLSTER TO TELL THEM THAT WOMEN DON'T LIKE MEN WHO ROLL THEIR EYES AND INTERRUPT OTHER PEOPLE. SO I THINK THAT WOMEN RESPOND TO BOTH MESSAGE, MESSENGER AND DELIVERY. ALL THREE OF THOSE ARE VERY IMPORTANT TO FEMALE VOTERS AS THEY ASSESS THESE CANDIDATES. AND WHY THESE DEBATES ARE SO IMPORTANT TO THESE WOMEN VOTERS, I THINK THREE QUICK REASONS. ONE IS THEY ARE THE LATE IN THE GAME DECIDERS. THEY ARE SEVERAL MILLION WOMEN IN ABOUT FIVE OR SIX SWING STATES WHO WILL BE THE DECIDING FACTOR TO WHOM THE NEXT PRESIDENT AND VICE PRESIDENT ARE. NUMBER TWO, WOMEN WERE TOLD FOR THREE STRAIGHT WEEKS BEFORE THE DISASTROUS PRESIDENTIAL DEBATE FOR PRESIDENT OBAMA THAT THE RACE WAS OTHER THAN. PRESIDENT OBAMA HAD ALREADY WON IT, JUST AS WOMEN WERE TUNING IN THEY WERE TOLD DON'T BOTHER, IT'S ALREADY OVER. SO THAT DEBATE ACTUALLY MATTERED MORE THAN IT NORMALLY WOULD BECAUSE THEY ENCOUNTERED AN A ROT -- MITT ROMNEY THEY WEREN'T EXPECTED AN BARACK OBAMA THEY HAD NEVER BEEN SEEN. THE THIRD REASON IS THAT WOMEN, THIS WHOLE MATTER OF ABORTION IS PORN TO WOMEN BUT IT'S NOT IN THE TOP FIVE IN ANYONE'S POLLING. IT'S A GREAT CONVERSATION SPARK AND IT'S VERY IMPORTANT TO WOMEN BUT IT'S ALSO BACKED IN THE CAKE. MEANING THOSE SWING WOMEN ALREADY KNOW WHERE ROMNEY, RYAN ARE ON ABORTION AND WHERE OBAMA-BIDEN ARE ON ABORTION TO A LARGE DEGREE. THEY'RE WAITING TO HEAR AND MORE IMPORTANTLY TO SEE SOMETHING OUTSIDE OF THAT ISSUE. AND LET'S JUST SEE, DOES ANYBODY EVER TALK ABOUT MEN'S ISSUES. WHAT ARE THESE WOMEN'S ISSUES. ALL ISSUES ARE MEN'S ISSUES. I WANT TO PUT OUT THAT I THINK ALL ISSUES SHOULD BE WOMEN'S ISSUES.

>> Brown: THAT SI A FAIR POINT. I ALWAYS THINK ABOUT ASKING AS A GENERAL QUESTION. BUT POLLSTER WAS DO LOOK, LET ME GO BACK TO YOU ON THIS QUESTION, BECAUSE THE POLLS, RECENT POLLS IN PARTICULAR SHOW THAT GOVERNOR ROMNEY CLOSED WHAT HAD BEEN A VERY LARGE GAP, ESPECIALLY AMONG WOMEN VOTERS JUST IN THE LAST WEEK. SO WHAT DO YOU THINK'S GOING ON THERE AND WHAT DO YOU THINK ARE THE ISSUES DRIVING THAT?

>> WELL THERE ARE TWO THINGS GOING ON. FIRST OF ALL WE NEED TO REMEMBER THAT, AND KELLYANNE SAID IT AS WELL, WOMEN VOTERS DIDN'T LIKE MITT ROMNEY, AT ALL. BY 20 POINTS THEY PERSONALLY DISLIKED HIM GOING INTO THAT FIRST DEBATE. THEY SAW AN MITT ROMNEY THAT WAS VERY DIFFERENT THAN WHAT THEY HAD EXPECTED AND SAW SOMEONE THAT THEY THOUGHT WAS MUCH MORE ROD MATE-- MODERATE, MORE LIKABLE THAN THEY EXPECTED. THAT SAID, WOMEN STILL WERE VOTING FOR (BACK-- BARACK OBAMA AFTER THE DEBATE IN THE BATTLEGROUND POLL, FOR EXAMPLE, BY 10 POINTS. AND SO WOMEN ARE STILL SUPPORT OG BAMA, MEN ARE STILL SUPPORTING MITT ROMNEY. AND IN THE BATTLEGROUND STATES THAT'S EVEN MORE. THE BIGGEST DIFFERENCE IN THE POLLS, WERE HOW ENERGIZED THE DEMOCRATIC WOMEN WERE. A LOT OF UNMARRIED WOMEN, A LOT OF YOUNGER WOMEN WERE NOT VERY ENERGIZED AFTER THAT FIRST DEBATE. AND THAT'S WHERE I THINK VICE PRESIDENT BIDEN WAS A HOME RUN. I THINK THAT THESE WOMEN WANTED TO SEE SOMEONE STAND UP FOR THE POLICIES THEY BELIEVE IN, STAND UP FOR A ROLE FOR GOVERNMENT, CALL MALARKEY WHEN IT IS. AND I THINK YOU'RE GOING TO SEE THE DEMOCRATIC BASE OF WOMEN FAR MORE ENERGIZED. AND YOU'RE GOING TO SEE WOMEN THEN TURN OUT IN HIGHER NUMBERS WHICH IS VERY, VERY IMPORTANT TO DEMOCRATIC VICTORIES.

>> Brown: KELLYANNE CONWAY, LET ME COME BACK TO WHAT YOU PICKED UP. YOU COULD PICK UP ON THAT BUT ALSO WHAT YOU SAID ON HOW WE APPROACH THESE THINGS. HOW WE THINK ABOUT WOMEN'S ISSUES PER SEMENT BECAUSE WE KEEP HEARING THAT THE CAMPAIGN COULD WELL HINGE ON WOMEN VOTERS. DO YOU THINK THAT IS A WRONG WAY OF LOOKING AT IT?

>> IT IS ABSOLUTELY CORRECT THAT THE NEXT PRESIDENT AND VICE PRESIDENT WILL BE DECIDED ULTIMATELY BY WOMEN. BUT IT'S ABSOLUTELY A FALSE PREMISE TO BELIEVE THAT THERE ARE QUOTE WOMEN'S ISSUES. AND THAT THEY ALL HAVE TO DO WITH, YOU KNOW, WASTE DOWN. WHAT ABOUT WASTE UP, WHERE OUR BRAINS AND HEARTS AND EYES AND EARS ARE. AND I THINK 2010 REALLY PROVED IT. THAT'S WHERE TWO SHORT YEARS AFTER 56% OF WOMEN GAVE A STRAT SPHERIC BARACK OBAMA 56% OF THE VOTE, WAS UNHEARD OF FOR A NONINCUMBENT. AND TWO YEARS AFTER THAT WOMEN VOTED REPUBLICAN OVER DEMOCRAT FOR THE FIRST TIME IN OVER 40 YEARS AT THE CONGRESSIONAL LEVEL. WHY. WELL, WHAT WERE WE TALKING ABOUT. WERE WE TALKING ABOUT ABORTION OR MARRIAGE, NO. IT WAS MOSTLY ALL ECONOMICS. DEBT WAS A FOUR LETTER WORD, DEFICIT, THE TEA PARTY MOVEMENT, TAXES, GOVERNMENT SPENDING, THE ROLE OF GOVERNMENT, THE REACH OF GOVERNMENT. I THINK THAT THE COUPS AND CLUES LIES SOMEWHERE BETWEEN 2008 AND 2010. AND SURE, CHEMISTRY IS IMPORTANT TO WOMEN, BIOLOGY IS IMPORTANT TO WOMEN. BUT IN 2012 THE MOST IMPORTANT ISSUE TO THEM REALLY SUBJECT TO THEM IS MATH.

>> Brown: KELLYANNE CONWAY AND SOLINDAN LAKE, THANK YOU BOTH VERY MUCH.

>> THANK YOU VERY MUCH

>> Brown: IN HER WEEKLY BLOG POST, GWEN IFILL LOOKS AT HOW THE CAMPAIGNS ARE PITCHING HARD TO UNDECIDED WOMEN VOTERS. AND IF YOU MISSED ANY OF LAST NIGHT'S DEBATE, YOU CAN WATCH THE VICE-PRESIDENTIAL MATCH-UP IN FULL ON OUR WEB SITE.

>> Woodruff: LATER IN THE PROGRAM, WE'LL HAVE MORE ON THE PRESIDENTIAL RACE FROM SHIELDS AND BROOKS. ALSO AHEAD, THE PEACE PRIZE GOES TO THE EUROPEAN UNION; AND THE POLLSTERS, THE GAMBLERS, AND THE ACADEMICS PREDICT THE ELECTION RESULTS. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: SECRETARY OF STATE HILLARY CLINTON VOWED TODAY THAT U.S. DIPLOMATS WILL NOT RETREAT FROM DANGEROUS PARTS OF THE WORLD. SHE SPOKE AMID THE ONGOING QUESTIONS ABOUT THE ATTACK IN LIBYA THAT KILLED FOUR AMERICANS. AFTER MEETING WITH THE ITALIAN FOREIGN MINISTER, CLINTON DEFENDED THE ADMINISTRATION'S CHANGING STATEMENTS ABOUT THE ATTACK.

>> TO THIS DAY, TO THIS DAY WE DO NOT HAVE A COMPLETE PICTURE. WE DO NOT HAVE ALL THE ANSWERS. NO ONE IN THIS ADMINISTRATION HAS EVER CLAIMED OTHERWISE. EVERY ONE OF US HAS MADE CLEAR THAT WE ARE PROVIDING THE BEST INFORMATION WE HAVE AT THAT TIME.

>> Sreenivasan: CLINTON ALSO DEFENDED U.N. AMBASSADOR SUSAN RICE, WHO INITIALLY SAID THE ATTACK STARTED WITH A PROTEST AGAINST AN ANTI-ISLAMIC VIDEO. U.S. AUTHORITIES NOW BELIEVE COMPUTER HACKERS BASED IN IRAN CARRIED OUT CYBER-ATTACKS ON PERSIAN GULF OIL AND GAS COMPANIES OVER THE SUMMER. THE ATTACKS CRIPPLED 30,000 COMPUTERS AT MAJOR COMPANIES IN SAUDI ARABIA AND QATAR. AND DEFENSE SECRETARY LEON PANETTA WARNED THURSDAY OF A POSSIBLE "CYBER PEARL HARBOR". HE PROMISED "DECISIVE ACTION" TO MEET ANY THREAT. RUSSIA INSISTED TODAY THAT A SYRIAN AIRLINER WAS CARRYING LEGAL CARGO WHEN IT WAS FORCED TO LAND IN TURKEY THIS WEEK. FOREIGN MINISTER SERGEI LAVROV SAID THE SHIPMENT CONSISTED OF RUSSIAN RADAR PARTS, BUT NO WEAPONS. TURKISH DESCRIPTIONS HAVE RANGED FROM AMMUNITION TO MISSILE PARTS THAT THE SYRIAN GOVERNMENT MEANT TO USE AGAINST REBELS. AN OUTBREAK OF FUNGAL MENINGITIS HAS NOW SPREAD TO DOZEN U.S. STATES. THE CENTERS FOR DISEASE CONTROL REPORTED TODAY THAT 184 CASES HAVE BEEN CONFIRMED, AS A RESULT OF TAINTED STEROID INJECTIONS. 14 PEOPLE HAVE DIED. FOR AN UPDATE, I'M JOINED BY DENISE GRADY OF "THE NEW YORK TIMES." IT WAS JUST ALMOST A WEEK AGO OR A LITTLE LONG TER THAT WE ONLY HAD A DOZEN CASE, HOW IS IT THAT WE HAVE SO MANY CASES DISCOVERED SO QUICKLY?

>> PEOPLE ARE STARTING TO HAVE SYMPTOMS THERE IS AN INCUBATION PERIOD FOR THIS DISEASE. AND MORE AND MORE PEOPLE SEEM TO BE STARTING TO HAVE SYMPTOMS. AND THE DOCTORS ARE ON THE ALERT FOR IT ALL THE PEOPLE WHO HAVE HAD THE SHOTS OR MOST OF THEM ANYWAY HAVE BEEN NOTIFIED THAT THEY MAY BE AT RISK AND THEY SHOULD BE ON THE LOOKOUT FOR SYMPTOMS. SO THEY ARE COMING IN. AND DOCTORS SAY IT'S A GOOD THING BECAUSE THEY WANT TO GET TO THEM AS EARLY AS POSSIBLE BECAUSE THEY THINK THAT THE SOONER THEY CAN START THEM ON THE ANTI-FUNGAL DRUGS THE BETTER THE CHANCE THEY HAVE OF SAVING THEIR LIVES. THIS TYPE OF MENINGITIS CAN CAUSE STROKES AND IT CAN BE DEVASTATING.

>> Suarez: DO THE VICTIMS HAVE ANYTHING IN COMMON? WHAT DO WE KNOW ABOUT THEM. IT SEEMS LIKE A LARGER CROSS-SECTION THAN WE EXPECTED.

>> WELL, THEY THINK THEY ARE ABOUT 14,000 PEOPLE WHO HAVE BEEN EXPOSED. WHAT TENNESSEE IS KIND OF OUT AHEAD OF THE REST OF THE COUNTRY IN THAT THEY'VE HAD MORE CASES THAN ANY OTHER STATE. AND THEIR HEALTH DEPARTMENT IS REALLY LOOKING AT IT VERY HARD. AND WHAT THEY'RE THINKING AT THIS POINT IS THAT OF THE THREE LOTS OF MEDICINE THAT GOT SHIPPED OUT, ONE OF THEM SEEMS TO BE A PARTICULARLY BAD. AND MOST OF THE PEOPLE WHO WERE SICK HAD THAT PARTICULAR LOT.

>> Suarez: SO WE KNOW THAT THE COMPANY SHUT DOWN AND VOLUNTARILY TURNED OVER THEIR LICENCE. BUT WHO'S LOOKING AT HOW TO PREVENT THIS IN THE FUTURE? ARE THERE PARTICULAR GOVERNMENT AGENCIES? ARE THERE PARTICULAR STATE AGENCIES THAT ARE GOING AFTER THESE GUYS?

>> THE FOOD AND DRUG ADMINISTRATION AND THE STATE BOARD OF PHARMACY AND THE STATE HEALTH DEPARTMENTS ARE ALL LOOKING INTO THIS AND NOW THERE ARE A NUMBER OF PEOPLE IN CONGRESS WHO ARE TALKING ABOUT HAVING HEARINGS AND INVESTIGATIONS TO TRY TO FIGURE OUT WHY THESE COMPOUNDING PHARMACIES SEEM TO BE IN THIS KIND OF GRAY AREA WHERE IT'S JUST NOT CLEAR THAT ANYBODY'S PAYING ATTENTION TO WHAT THEY'RE DOING.

>> Suarez: DEVICE-- DENISE GRADER FROM "THE NEW YORK TIMES", THANKS SOME OF.

>> THANK YOU.

>> Sreenivasan: IN PAKISTAN TODAY, POLICE SAID THEY HAVE ARRESTED A NUMBER OF SUSPECTS IN TUESDAY'S SHOOTING OF A 14-YEAR- OLD ACTIVIST BY THE TALIBAN. MALALA YOUSUFZAI HAS BEEN AN OUTSPOKEN CRITIC OF TALIBAN ATROCITIES AND A PROMOTER OF GIRLS' EDUCATION. THE COUNTRY'S PRIME MINISTER VISITED THE GIRL'S FAMILY TODAY AT A MILITARY HOSPITAL NEAR ISLAMABAD. HE CALLED THE SHOOTING AN ATTACK ON PAKISTAN'S CORE VALUES.

>> WE PLEDGE THAT WE WILL NOT ALLOW THE FUTURE OF OUR CHILDREN TO BE ENDANGERED BY THE MILITANT MIND-SET. WE PLEDGE THAT THE ENEMIES OF PAKISTAN WILL NEVER BE ALLOWED TO SUCCEED.

>> Sreenivasan: MEANWHILE, A MILITARY OFFICIAL SAID YOUSUFZAI IS IN SATISFACTORY CONDITION, AFTER HAVING A BULLET REMOVED FROM HER NECK. SHE'S BEING KEPT UNCONSCIOUS AND ON A VENTILATOR FOR NOW. THIS YEAR'S WINNER OF THE NOBEL PRIZE FOR LITERATURE VOICED HOPE TODAY THAT A FELLOW CHINESE LAUREATE WILL GET OUT OF PRISON. MO YAN WAS HONORED WITH THE LITERATURE AWARD YESTERDAY. AT A NEWS CONFERENCE TODAY, HE SAID HE HOPES THAT DISSIDENT LIU XIAOBO REGAINS HIS FREEDOM VERY SOON. LIU WON THE NOBEL PEACE PRIZE IN 2010 AFTER BEING SENTENCED TO 11 YEARS IN PRISON FOR ADVOCATING AN END TO CHINA'S ONE-PARTY RULE. THE SPACE SHUTTLE "ENDEAVOUR" HAS BEGUN A FINAL, SLOW-MOTION JOURNEY ACROSS LOS ANGELES TO ITS NEW HOME AT THE CALIFORNIA SCIENCE CENTER. THE RETIRED SHUTTLE LEFT LOS ANGELES INTERNATIONAL AIRPORT SHORTLY AFTER MIDNIGHT, CRAWLING ALONG ON A GIANT CARRIER. CROWDS GATHERED ALONG THE WAY, HOPING TO CATCH A GLIMPSE OF THE SPECTACLE. AT TWO MILES AN HOUR, ENDEAVOUR" WILL NEED TWO DAYS TO MAKE THE 12-MILE TRIP. IN ADVANCE, CREWS RAISED UTILITY LINES AND CUT DOWN 400 TREES TO MAKE WAY FOR THE FIVE-STORY-TALL SPACESHIP AND ITS 78-FOOT WINGSPAN. WALL STREET HAS CLOSED OUT A TOUGH WEEK, ITS WORST SINCE JUNE. THE DOW JONES INDUSTRIAL AVERAGE MANAGED A GAIN OF JUST TWO POINTS TODAY TO CLOSE AT 13,328. THE NASDAQ FELL FIVE POINTS TO CLOSE AT 3,044. FOR THE WEEK, THE DOW LOST 2%; THE NASDAQ FELL NEARLY 3%. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: THE NOBEL PEACE PRIZE WAS AWARDED TO A GROUP OF A HALF-BILLION PEOPLE TODAY; MORE SPECIFICALLY, THE EUROPEAN UNION. RAY SUAREZ HAS THE STORY.

>> Suarez: THE ANNOUNCEMENT CAUSED A STIR IN OSLO THIS MORNING.

>> THE NORWEGIAN NOBEL COMMITTEE HAS DECIDED THAT THE NOBEL PEACE PRIZE FOR 2012 IS TO BE AWARDED TO THE EUROPEAN UNION.

>> Suarez: NORWAY, THOUGH IN EUROPE, IS NOT A MEMBER OF THE E.U. BUT ITS FIVE-MEMBER PEACE PRIZE COMMITTEE AWARDED THE HONOR TO THE 27-NATION EUROPEAN UNION FOR THE "ADVANCEMENT OF PEACE, RECONCILIATION, DEMOCRACY, AND HUMAN RIGHTS IN EUROPE." IN BRUSSELS, THE PRESIDENT OF THE EUROPEAN COMMISSION WELCOMED THE NEWS.

>> THE NOBEL PEACE PRIZE COUNCIL... COMMITTEE, AND IN FACT THE INTERNATIONAL COMMUNITY ARE NOW SENDING A VERY IMPORTANT MESSAGE TO EUROPE-- THAT THE EUROPEAN UNION IS SOMETHING VERY PRECIOUS. THAT WE SHOULD CHERISH IT FOR THE GOOD OF EUROPEANS AND INDEED FOR THE GOOD OF ALL THE WORLD.

>> Suarez: THE FIRST ITERATIONS OF THE E.U. WERE BORN IN THE 1950S, OUT OF THE IDEA THAT CLOSE ECONOMIC TIES COULD HELP MEND A DEVASTATED EUROPE AFTER THE SECOND WORLD WAR. BUT IT'S NOW THE ECONOMY THAT HAS THE E.U. FACING ONE OF ITS BIGGEST CRISES YET. MOUNTING DEBTS, HIGH UNEMPLOYMENT, AND AUSTERITY MEASURES HAVE TRIGGERED PROTESTS IN SOME EURO-ZONE NATIONS. THE ECONOMIC WOES HAVE CREATED DEEP RIFTS AMONG COUNTRIES USING THE JOINT CURRENCY, AND RAISED QUESTIONS ABOUT MAINTAINING THE EURO AND EVEN THEIR UNION. GERMANY IS THE E.U.'S ECONOMIC POWERHOUSE. ITS CHANCELLOR, ANGELA MERKEL, SAID THE NOBEL PEACE PRIZE SHOWS THE VALUE OF EUROPEAN UNIFICATION.

>> ( translated ): THE EURO IS MORE THAN A CURRENCY BECAUSE IN THE END IT IS FOREMOST ABOUT THE ORIGINAL IDEA, THE IDEA OF EUROPE AS A COMMUNITY OF PEACE AND VALUES.

>> Suarez: BUT THERE WERE DETRACTORS, INCLUDING THOSE WHO SAID THE E.U. HASN'T DEALT WITH AN INFLUX OF IMMIGRANTS. THE DIRECTOR OF AMNESTY INTERNATIONAL'S BRANCH THAT MONITORS THE E.U. SAID HE HOPES THE AWARD WOULD ENCOURAGE THE EUROPEAN UNION TO BE MORE OPEN TO REFUGEES.

>> Suarez: THE $1.2 MILLION PRIZE WILL BE AWARDED IN OSLO ON DECEMBER 10. FOR A CLOSER LOOK AT ITS SUCCESSES AND SOME OF THE ONGOING CHALLENGES FACING THE E.U., I'M JOINED BY AMBASSADOR JOAO VALE DE ALMEIDA, WHO LEADS THE EUROPEAN UNION DELEGATION TO THE UNITED STATES. AMBASSADOR, CONGRATULATIONS.

>> THANK YOU VERY MUCH.

>> I THINK A LOT OF PEOPLE AROUND THE WORLD SEE THE EU AS BASICALLY AN ECONOMIC CONFEDERATION. WAS PEACE REALLY PART OF THE ORIGINAL DESIGN?

>> ABSOLUTELY. LET ME SAY FIRST OF ALL THAT WE ARE EXTREMELY HAPPY, EXTREMELY PROUD FOR THESE RECOGNITION OF THE NOBEL COMMITTEE. EUROPE SAY POLITICAL PROJECT. MUCH MORE THAN ECONOMIC. MUCH MORE THAN A COMMERCIAL ENTERPRISE. IT IS A POLITICAL ENDEAVOR.

>> IT IS BROUGHT YOU KNOW MILLIONS OF PEOPLE IN EUROPE TO PEACE, PROSPERITY, DEMOCRACY AND FREEDOM. THIS IS EXTREMELY IMPORTANT. THIS IS EXTREMELY POLITICAL. WE SAW IN THAT OLD BLACK AND WHITE FILM FROM THE EARLY 50s A GERMANY AND FRANCE TYING THEIR ECONOMIES TOGETHER IN COAL AND STEEL. HAS THE EU MADE A WAR BETWEEN THOSE COUNTRY ITS WHICH HAD FOUGHT THREE DEVASTATING WARS IN THE PREVIOUS 80 YEARS UNTHINKABLE?

>> I THINK SO. I MEAN BASICALLY THAT IS SIMPLE, IS THAT IF YOU BRING ECONOMIES TOGETHER, IF YOU BRING PEOPLE TOGETHER, IF YOU STRENGTHEN THE INTERDEPENDENCE AND THE INTERCONNECTION AMONG PEOPLES YOU REDUCE THE CHANCES OF WAR. AND CONFLICTS AND DIFFERENCES WILL BE SOLD THROUGH DIALOGUE, THROUGH NEGOTIATION, SOMETIME AS LOAN, SOMETIMES MESSY AND NOISY BUT STILL WITHOUT USING WEAPONS. I THINK EUROPEANS HAVE HAD ENOUGH OF WARS IN EUROPEAN SOIL.

>> Suarez: IN THE 1980s THREE VERY SIGNIFICANT ENTRIES WERE MADE, GREECE, SPAIN AND PORTUGAL. YOU'RE PORTUGUESE. I THINK A LOT OF PEOPLE DON'T REMEMBER HOW FEW YEARS BEFORE THAT ALL THREE COUNTRIES HAD BEEN DICTATO DICTATORSHIPS.

>> THAT'S VERY IMPORTANT WHAT YOU JUST SAID. AND I LIVED 17 YEARS UNDER A DICK STATERSHIP THERE WAS CENSORSHIP. COY NOT CHOOSE WHAT TO READ OR WHAT TO LISTEN. I COULD NOT TRAVEL ABROAD. THERE WAS ONLY ONE SINGLE PART NOT DEMOCRACY, NO FREEDOM. WE CHANGED THAT. GREECE CHANGED THAT. SPAIN CHANGED THAT. IF YOU THINK OF THE COUNTRIES IN YEARN EASTERN EUROPE THE BALTIC COUNTRIES DIDN'T EXIST A FEW YEARS AGO,. THEY WERE ALL PART SOVIET BLOCK THEY ARE NOW ALL PART OF THE EUROPEAN UNION. I THINK THIS IS AN ENORMOUS ACHIEVEMENT AND I THINK THE NOBEL COMMITTEE WAS ABSOLUTELY RIGHT IN RECOGNIZING IT TODAY.

>> TODAY WE HEARD THOUGH FROM BRITISH EURO SKEPTICS PROMINENTLY MEMBERS OF THE PARTY,-- IN GREECE COMPLAINING ABOUT THE YOUR MEAN UNION AND REALLY MOCKING THE IDEA OF YOU WINNING A PEACE PRIZE.

>> WELL, IN DEM OM-- DEMOCRACY, FREEDOM SPEECH, THAT IS WHAT WE HAVE IN EUROPE AND WE DON'T WANT TO CHANGE THAT. SO PEOPLE ARE FREE TO CRITICIZE. BUT IF YOU TAKE A LOOK AT THE FACTS, YOU KNOW, 70 YEARS AGO, THERE WAS A SECOND WORLD WAR IN THE TERRITORY OF THE EARTH, MILLIONS OF PEOPLE HAVE DIED, 50 YEARS AGO, COUNTRIES WHO ARE NOW IN THE EUROPEAN UNION WERE BEHIND THE IRON CURTAIN. YOU KNOW. 30 YEARS AGO 40RX YEARS AGO MY COUNTRY WAS IN A DICTATO DICTATORSHIP. YOU KNOW, I DON'T THINK PEOPLE CAN FORGET THAT. WE DON'T FORGET THAT. AND WE WANT TO PREVENT IT FROM HAPPENING AGAIN. AND THAT'S WHY WE ARE SO COMMITTED TO THIS POLITICAL CONSTRUCTION. OF COURSE WE HAVE DIFFICULTIES TODAY, YOU KNOW, FINANCIAL CRISIS, THEY HAD HAD A PARTICULAR IMPACT IN EURO AREA, PARTICULARLY SOME OF THE MOST VULNERABLE COUNTRIES IN THE AREA. IF YOU LOOK IN EUROPE, SOLUTIONS ARE ALWAYS POINTING TO FURTHER AND DEEPER INTEGRATION. NO ONE IS SUGGESTING TO SORT OF STOP THE EUROPEAN UNION. EVERYBODY SUGGESTING TO DEEPEN IT.

>> Suarez: BUT WHEN ARE YOU ON THE STREETS OF A CAPITAL WHETHER IT'S BUDAPEST OR PARIS OR LONDON AND YOU TALK TO PEOPLE ABOUT THE EU, THEY COMPLAIN ABOUT BRUSSELS. THEY DON'T COMPLAIN ABOUT THE POSSIBILITY OF DEVASTATING WAR OR INTEREUROPEAN CONFLICT. THEY COMPLAIN ABOUT BRUSSELS. MAYBE YOU'VE SUCCEEDED TOO WELL. THEY DON'T REALLY SEE WAR ON THE HORIZON ANY MORE.

>> WELL, I SUSPECT THE-- RESPECT THE CITIZENS, I RESPECT THE RIGHT OF SPEECH AND IT'S NORMAL IN DIFFICULT CIRCUMSTANCES PEOPLE SEE THE NEED TO DEMONSTRATE, TO CRITICIZE. THAT'S ONLY NORMAL. BUT WHEN WITH YOU COME DOWN TO SELECTIONS WHERE PEOPLE EXPRESS REALLY IN A RESPONSIBLE WAY, THE WAY THEY THINK, YOU SEE PARTIES IN EUROPE, THAT SPORTS EUROPEAN PROJECTS AS BEING SELECTED-- ELECTED. THE MOST RECENT TOOK PLACE IN THE NETHERLANDS, WE HAVE PEOPLE THAT SUPPORT EUROPE. IN SPITE OF THE POSSIBLES-- PROBLEMS AND THEY WANT TO ADDRESS THE PROBLEMS. MAYBE SOMETIMES THEY ARE DIFFERENT VIEWS ABOUT THE WAY TO ADDRESS THE PROBLEMS BUT THEY WANT TO DO IT INSIDE THE CONSTRUCTION BECAUSE THEY BELIEVE THAT THIS IS THE BEST WAY TO SAFEGUARD ULTIMATELY THE INTEREST OF EUROPE. AND FOR THE YOUNGER GENERATION, WHO HAVE ALREADY FORGOTTEN THE WAR, THERE IS ANOTHER NARRATIVE THAT IS COMING UP. THE IDEA THAT IN A GLOBALIZED WORLD. SMALL COUNTRIES LIKE EUROPEAN COUNTRIES AT THE END OF THE DAY ARE RELATIVELY SMALL COMPARED TO THE U.S. OR CHINA OR RUSSIA OR BRAZIL. THEY KNOW THAT ISOLATED TO HAVE INFERENCE, TO HAVE WEIGHTS IN THE WAY, THIS NEW NARRATIVE ABOUT THE PLACE OF EUROPE IN THE GLOBALIZED ECONOMY IS COMING UP WITH A NEW GENERATION, THE REASON WHY WE SHOULD PROCEED IN THIS PROCESS.

>> AMBASSADORuf JOAA VALE DE ALMEIDA, THANK YOU VERY MUCH.

>> THANK YOU VERY MUCH.

>> Suarez: ONLINE, YOU CAN REVISIT KEY MOMENTS IN EUROPEAN UNION HISTORY IN A "THEN AND NOW" SLIDESHOW. FIND THAT ON THE RUNDOWN.

>> Brown: POLLS THAT SAY THIS, POLLS THAT SAY THAT, PROFESSIONAL ODDS-MAKERS, AND FOLKS WHO JUST THROW A DART AT A DARTBOARD. SO WHO'S GOT THE MOST ACCURATE FORECAST WHEN IT COMES TO THE PRESIDENTIAL RACE? OUR ECONOMICS CORRESPONDENT PAUL SOLMAN WENT ON A QUEST FOR ANSWERS. IT'S PART OF HIS ONGOING REPORTING, "MAKING SENSE OF FINANCIAL NEWS."

>> Reporter: WANT TO KNOW WHO'S GOING TO WIN THE PRESIDENTIAL ELECTION?

>> DID THE PRESIDENTIAL DEBATE MAKE YOU MORE LIKELY TO VOTE FOR BARACK OBAMA, LESS LIKELY, OR DID IT HAVE NO EFFECT ON YOUR VOTE CHOICE?

>> Reporter: WELL, SO DO WE. BUT WHO TO ASK? THE POLLSTERS? DOUG SCHWARTZ RUNS QUINNIPIAC UNIVERSITYS POLLING INSTITUTE.

>> RIGHT NOW, PEW HAS ROMNEY UP BY THREE POINTS. GALLUP HAS OBAMA UP BY FIVE POINTS IN THEIR SEVEN-DAY TRACK, BUT SINCE THE DEBATE THEY HAVE OBAMA UP BY JUST THREE POINTS.

>> Reporter: OR HOW ABOUT OLD FRIEND RAY FAIR, AN ECONOMIST WE'VE BEEN VISITING EVERY FOUR YEARS SINCE THE GEORGE H.W. BUSH ADMINISTRATION. HE'S GOT AN ECONOMIC MODEL.

>> SO RIGHT AT THIS MOMENT, ITS 49.5% OF THE TWO-PARTY VOTE FOR OBAMA.

>> Reporter: SO THE POLLS AND MODELS CALL IT A TOSS-UP. BUT CURIOUSLY, THE BETTING PUBLIC TELLS A VERY DIFFERENT STORY. ONLINE BETTING PREDICTION MARKETS, LIKE IRELAND'S INTRADE, WHICH TAKES BETS FROM AMERICANS, AND ENGLAND'S BETFAIR, WHICH DOESNT, HAVE MADE OBAMA THE STRONG FAVORITE FOR MONTHS. THE LONE DOMESTIC AND ENTIRELY LEGAL BETTING HAVEN, THE IOWA ELECTRONIC MARKETS AT THE UNIVERSITY OF IOWA. EVER FRUGAL, WE ASKED HARI SRINIVASAN, OUR MAN IN THE MIDWEST-- AT LEAST LAST WEEK-- RE IOWA ELECTRONIC MARKET?IS HE ENTIRE IOWA ELECTRONIC MARKET?

>> THISS RVK ISER ER ROOM RIGHT HERE. HE EEIRnivasan: NT TSE PREDICTION MARKETS RIGHT HERE?

>> IN THAT LITTLE BOX.

>> Reporter: GRANTED, A VISUAL LETDOWN BUT THIS IS WHAT ELECTRONIC BETTING LOOKS LIKE EVERYWHERE. IN IOWA, A MACHINE THROUGH WHICH 1600 PEOPLE ARE CONSTANTLY BETTING, WITH A $500 LIMIT PER PUNTER. THE ODDS ON IEM, ACCORDING TO ITS PROPRIETOR, JOYCE BERG?

>> RIGHT NOW, THE MARKETS ARE FAVORING OBAMA. IF YOU LOOK AT THE WINNER-TAKE- TSL MARKET, THAT MAR NGOWI OHAT OUR TRADERS BELIEVEO WBAIL GET MORE THAN 50% OPUTHPOE LA PO VOTE.

>> ReptHAer: TT WAS BEERE: TH FIRST PRESIDENTIAL DEBATE, HOWEVER. THE ODDS ARE NOW MUCH LOWER. BUT THEY'RE STILL ABOVE 60% THAT PRESIDENT OBAMA WILL WIN THE POPULAR VOTE. SO, WHO'S RIGHT, THE PROFESSORS, THE POLLSTERS, OR THE PLUNGERS? LETS START WITH ECONOMICS PROFESSOR RAY FAIR. FAIR'S EQUATION USES JUST FOUR VARIABLES TO FIGURE EACH CANDIDATES ODDS: INCUMBENCY-- A SITTING PRESIDENT HAS AN EDGE; PARTY-- BEING A REPUBLICAN SEEMS TO HELP; INFLATION RATE-- THE LOWER THE BETTER; RATE OF INCOME GROWTH PER PERSON-- THE HIGHER THE BETTER. SO, THIS YEAR?

>> THE MODEL SAYS ITS A VERY CLOSE ELECTION PREDICTED. IF THE ECONOMY WERE BOOMING, THE EQUATION WOULD BE PREDICTING A PRETTY SUBSTANTIAL OBAMA VICTORY. IF THE ECONOMY WERE GOING INTO A RECESSION, IT WOULD BE A SUBSTANTIAL ROMNEY VICTORY. THE ECONOMY'S MORE OR LESS IN BETWEEN.

>> Reporter: UNLIKE MOST OF US, FAIR HAS A PROFESSIONAL INTEREST IN THE OUTCOME.

>> IF THERE'S A CLOSE ELECTION, THE EQUATION WILL HAVE DONE QUITE WELL. IT'S BEEN PREDICTING A CLOSE ELECTION FOR OVER A YEAR, SO IT WILL BE A RATHER SUBSTANTIAL PLUS FOR THE EQUATION, THE FACT THAT IF WE HAVE A CLOSE ELECTION, REGARDLESS OF WHO WINS.

>> Reporter: SO EVERYBODY ELSE, PRETTY MUCH, HAS A HORSE IN THIS RACE, BUT YOUR HORSE IS YOUR EQUATION?

>> I'M AN ECONOMETRICIAN, NOT A PUNDIT, RIGHT? SO THE HORSE YOU'RE INTERESTED IN, OKAY, IS MY EQUATION. BUT I HAVE ANOTHER SIDE OF ME WHICH I'M NOT TALKING TO YOU ABOUT, WHICH IS WHAT I PERSONALLY WOULD LIKE TO SEE.

>> Reporter: AND YOU'RE NOT GOING TO TELL ME WHAT THAT IS.

>> I'M NOT GOING TO TELL YOU WHAT THAT IS, NO.

>> Reporter: HOW ACCURATE HAS THE MODEL BEEN?

>> MY INTEREST IS IN VOTE SHARE, AND ON THAT METRIC, LOOKING AT THE PREDICTIONS THE AVERAGE ERROR OVER THESE ELECTIONS IS 3.6%.

>> Reporter: 3.6%?

>> THAT'S CORRECT. WITHIN THIS MARGIN OF ERROR, YES.

>> Reporter: AS IT TURNS OUT, THAT'S ABOUT THE SAME MARGIN OF ERROR AS FOR THE SECOND MAJOR SOURCE OF PRESIDENTIAL PREDICTIONS, THE POLLS.

>> IN 2008, WE POLLED IN A BUNCH OF SWING STATES, WE GOT WITHIN THREE POINTS OF PRESIDENT OBAMA'S ACTUAL MARGIN-- OHIO, PENNSYLVANIA, FLORIDA, COLORADO, WISCONSIN.

>> WHO DO YOU THINK WOULD DO A BETTER JOB ON THE ECONOMY, MITT ROMNEY OR BARACK OBAMA?

>> Reporter: ON OCTOBER 7, QUINNIPIAC SURVEYED VOTERS IN THREE OF THIS ELECTION'S SWING STATES: COLORADO, WISCONSIN AND VIRGINIA.

>> YOUR TELEPHONE NUMBER WAS RANDOMLY GENERATED BY A COMPUTER, AND I NEED TO PICK SOMEONE AT RANDOM FROM YOUR HOUSEHOLD TO PARTICIPATE IN THIS SURVEY.

>> Reporter: TO MAKE SURE THEY'RE POLLING A SCIENTIFIC SAMPLE OF LIKELY VOTERS, THESE CALLERS USE RANDOM DIGIT DIALING OF LAND LINES AND CELL PHONES. BUT THAT'S JUST FOR STARTERS, SAYS DOUG SCHWARTZ.

>> WHEN WE CALL A HOUSEHOLD, WE DON'T AUTOMATICALLY SPEAK TO WHOEVER PICKS UP THE PHONE, BECAUSE THEY TEND TO BE WOMEN. WE SPEAK TO WHOEVER HAS THE NEXT BIRTHDAY IN THE HOUSEHOLD. WE ALSO CALL OVER SEVERAL DAYS BECAUSE WE DON'T WANT TO JUST REACH THE EASY TO REACH PEOPLE. FOR EXAMPLE, SENIORS, PEOPLE WITH YOUNG CHILDREN ARE EASIER TO REACH. SO WE'LL CALL A PHONE NUMBER AT LEAST FOUR TIMES, BETWEEN 6:00 AND 9:00 DURING THE WEEK, BUT THEN WELL ALSO TRY ON WEEKENDS. WE ALSO CONDUCT INTERVIEWING IN SPANISH. SO, IT ALL GETS BACK TO THIS PRINCIPLE OF MAKING SURE THAT EVERYONE HAS THE EQUAL CHANCE OF BEING SELECTED.

>> Reporter: BUT OF COURSE, NOT EVERYONE WANTS THAT CHANCE. DO PEOPLE GET ANGRY AT YOU?

>> OH, YEAH, THEY DO. THEY BLAST US OUT.

>> Reporter: AND WHAT DO THEY SAY WHEN THEY BLAST YOU OUT?

>> OH, I CANT SAY.

>> Reporter: IN FACT, OUT OF 100 PHONE CALLS, CALLERS REACH ONLY ABOUT TEN ELIGIBLE RESPONDENTS.

>> HELLO?

>> Reporter: AND OF THOSE, ONLY ABOUT HALF COOPERATE.

>> OF 100 NUMBERS, HOW MANY ACTUALLY GO ALL THE WAY THROUGH THE SURVEY?

>> I WOULD SAY OUT OF 100 I WOULD PROBABLY GET, LIKE, FIVE INTERVIEWS.

>> Reporter: BUT THOSE WHO DO TAKE THE CALLS SEEM TO DO SO GLADLY

>> GENERALLY, PEOPLE WHO ARE INTERESTED IN TALKING ABOUT POLITICS LOVE TO ENGAGE, SO THEY TALK TO US QUITE A BIT.

>> Reporter: BUT SINCE EVERY POLLSTER CLAIMS TO COME UP WITH A SCIENTIFIC RANDOM SAMPLE EVENTUALLY, HOW CAN THE RESULTS BE ROMNEY UP BY FOUR AND OBAMA DOWN BY THREE AT THE VERY SAME TIME? NEWLY MINTED PhD ECONOMIST DAVID ROTHSCHILD WORKS AT MICROSOFT RESEARCH IN MANHATTAN. ROTHSCHILD LOOKS AONECOMOM MODELS, STATE POLLS AND MARKETS. HIS CURRENTLY GIVES OBAMA A 65% CHANCE TO WIN.

>> I NEVER SWEAT TOO MUCH ABOUT ANY INDIVIDUAL POLL BECAUSE THERE'S TOO MUCH NOISE.

>> Reporter: TOO MUCH NOISE MEANING...

>> TOO MUCH MOVEMENT.

>> Reporter: TAKE THE SO-CALLED BUMPS - AFTER A VICE- PRESIDENTIAL PICK, OR A CONVENTION. OR TAKE THE FIRST PRESIDENTIAL DEBATE. SAY YOU'RE A DEMOCRAT, THE MORNING AFTER. A POLLSTER CALLS YOU, YOU DONT WANT ANYTHING TO DO WITH IT, YOU'RE UPSET, YOU HANG UP THAT PHONE. THEY CALL ANOTHER GUY, THE EXACT SAME DEMOGRAPHICS AS YOU BECAUSE THEY'RE TRYING TO FILL SOME SORT OF DEMOGRAPHIC HOLE OR WHATNOT, HE'S A REPUBLICAN, HES STOKED. THE SAME PERSON ON PAPER LOOKS LIKE HE SWITCHED TO REPUBLICAN BUT WHAT HAPPENED REALLY IS THAT REPUBLICANS WANT TO TALK THAT DAY VERSUS A DEMOCRAT WHO IS LIKE, I'M NOT EVEN ANSWERING THE PHONE. I'M IN A BAD MOOD, OBAMA SCREWED UP LAST NIGHT.

>> Reporter: BETWEEN PREDICTION MARKETS AND POLLS WHICH DO YOU TRUST? DI IM GOING TO TAKE PREDICCT S ET ARKVEF HA O PLLTH MARKETS HAVE ALL OF THIS POLLING INFORMATION AVAILABLE TO THEM AS WELL AS ADDITIONAL INFORMATION

>> Reporter: THE LATEST ECONOMIC STATISTICS, FOR EXAMPLE, OR A SECRETLY TAPED FUNDRAISING TALK.

>> HERE IS ROMNEY, THAT SECRET VIDEO TAPING OF THE 47%.

>> Reporter: WE FOUND ONE SUCH BETTOR, MIT SLOAN SCHOOL STUDENT ANDRE GLORIA.

>> THE QUESTION THAT YOU'RE REALLY ANSWERING WHEN YOU'RE PLACING A BET IS: WHO DO YOU THINK WILL WIN? NOT WHO WILL YOU VOTE FOR?

>> Reporter: GLORIA IS CONSTANTLY CHECKING BETTING MARKETS THE WORLD OVER.

>> ILL HAVE A NICE CHRISTMAS BREAK, THANKS TO THIS, YEAH.

>> Reporter: AND THOUGH THIS MBA STUDENT DOESN'T PLAY IN LOW- STAKES IOWA, HE'S VERY MUCH LIKE HER SPECULATORS, SAYS JOYCE BERG. OUR MARKET TRADERS ARE VERY DIFFERENT THAN THE GENERAL VOTING POPULATION. THEY'RE PREDOMINANTLY MALE, THEY'RE WEALTHIER THAN THE AVERAGE VOTER, YOUNGER THAN THE AVERAGE VOTER, BETTER EDUCATED THAN THE AVERAGE VOTER.

>> Reporter: AND AS WE TAKE ONE LAST LOOK AT THE IOWA MARKET, THE QUIETEST BOOKIE IN AMERICA, ONE LAST QUESTION-- HOW ACCURATE HAVE THE POLLS PROVED TO BE?

>> SO WE'VE GONE BACK OVER TIME SINCE THE '88 ELECTION, LOOKED AT OVER 900 POLLS AND COMPARED THE IEM PREDICTION TO THE POLL PREDICTION AND FOUND THAT IN 75% OF THE CASES THE IEM WAS MORE ACCURATE THAN THE POLLS. WE ALSO LOOK AT NIGHT-BEFORE FORECASTS, AND IN THAT CASE, WE FIND THAT WE ARE USUALLY WITHIN 1.3% OF THE ELECTION OUTCOME.MA

>> Reporter: FOR THE LATEST POLL RESULTS FROM IOWA, INTRADE AND BETFAIR, JUST GO TO OUR MAKING SENSE WEB SITE, WHERE WE LINK TO ALL OF THEM IN REAL TIME.

>> Woodruff: AND TO THE ANALYSIS OF SHIELDS AND BROOKS-- SYNDICATED COLUMNIST MARK SHIELDS AND "NEW YORK TIMES" COLUMNIST DAVID BROOKS. GENTLEMEN, WELCOME. SO WE JUST HEARD IT FROM PAUL SOLMAN, MARK S IT THE MARKETS OR IS IT THE POLLSTERS OR THE ACADEMICS WHO GIVE US THE MOST ACCURATE FORECAST?

>> WELL, WE'RE ALL PRISONERS AND PRODUCTS OF OUR OWN EXPERIENCE. SO I HAVE ALWAYS TRUSTED THE POLLS.

>> Woodruff: YOU WILL LEAVE IT AT THAT.

>> YEAH, I HAVE RELIED ON POLLS. I'M FASCINATED BY THE MARKET AS WELL AS THE ACADEMIC STUDY. BUT YOU KNOW, A GOOD POLLSTER IS SOMETHING, ONE FINDS GOOD POLLSTERS TO CHERISH AND TO VALUE AND TO LEARN TO TRUST.

>> Woodruff: TO EMBRACE.

>> I LIKE THE CHECKS. LISTEN, I LIKE THE POLLS. I LIKE, LOOK, WHOEVER IS AHEAD IN THE POLLS IS MORE LIKELY TO WIN THAN THE OTHER GUY. I GET THAT. I LIKE THE ECONOMY. IT'S REALLY IMPORTANT IN DETERMINING AN ELECTION. WHAT I HATE ARE THE FORECAST. WHEN THEY SAY SO AND SO HAS A 66% CHANCE OF WINNING OR 32% CHANCE OF WINNINGMENT BECAUSE IF YOU TELL ME YOU THINK YOU CAN QUANTIFY AN EVENT THAT IS ABOUT TO HAPPEN THAT YOU DON'T EXPECT LIKE THE 47% COMMENT OR A DEBATE PERFORMANCE, YOU THINK ARE YOU A WIZARD. THAT'S NOT POSSIBLE. THE POLLSTERS TELL US WHAT'S HAPPENING NOW. WHEN THEY START PROJECTING, THEY'RE GETTING INTO SILLY LAND. THE LAST COMMENT. NOT TO PICK ON THE IOWA MARKETS, BELIEVE ME I PAY TENSION TO THE IOWA MARKETS. THEY'VE DONE BETTER SINCE 1988. THAT IS A SAMPLE SIZE OF SIX. WHAT STUDY WOULD HAVE A SAMPLE-- WE'VE HAD SIX NATIONAL ELECTIONS SINCE THENMENT WHO HAS A STUDY WITH A SAMPLE SIZE OF SIX. SO I LIKE THE POLLS. I LIKE THE ECONOMY. I DON'T LIKE THE FORECAST.

>> ALL RIGHT, YOU HEARD IT HERE.

>> WOW.

>> Woodruff: NOW LET'S TALK ABOUT WHAT HAPPENED LAST NIGHT. THE DEBATE BETWEEN THE VICE PRESIDENTIAL CANDIDATES, 24 HOURS LATER, MARK. WHAT STANDS OUT?

>> WHAT STANDS OUT IS THAT BARACK OBAMA HAS HAD TWO CHARACTER WITNESSES, BILL CLINTON IN SEPTEMBER MADE THE CASE FOR BARACK OBAMA BETTER THAN BARACK OBAMA HAS MADE IT FOR HIMSELF. AND JOE BIDEN IN OCTOBER MADE THE CASE FOR BARACK OBAMA IN HIS RECORD, HIS ADMINISTRATION BETTER THAN BARACK OBAMA HAS. AND I WOULD HOPE THAT BARACK OBAMA WILL STUDY THE GAME FILMS OF BOTH CLINTON AND BIDEN IN PREPARATION FOR NEXT TUESDAY NIGHT. I MEAN I THINK JOE BIDEN GAVE-- DEMOCRATS TODAY WERE SINGING ALL OVER TOWN. I MEAN THEY WERE TAP DANTION THEY WERE SO HAPPY. IN LARGE PART BECAUSE HE BROUGHT PASSION. HE MADE THE CASE. HE BROUGHT THE CASE AGAINST MITT ROMNEY, THE 47%, THE FACT THAT A ROM ME'S EFFECTIVE TAX RATE, WHAT HE PAYS TO THE FEDERAL GOVERNMENT IS LOWER THAN THAT OF A SECRETARY OR A FIREFIGHTER. IT WAS JUST, IT REMINDED DEMOCRATS ON WHY THEY WERE DEMOCRATS TOO. AND I THINK THAT REALLY, REALLY DID HELP.

>> Woodruff: SO HE BROUGHT WHAT THE PRESIDENT NEEDED LAST NIGHT?

>> HALFWAY. HE LIFTED THE MORAL OF THE DEMOCRATS AND I THINK IT IS MULTILY AND ALSO TRUE THAT HE OFFENDED A LOT OF PEOPLE. A LOT OF REPUBLICANS WERE DEEPLY OFFENDED. A LOT OF YEPS WERE OFFEND. THERE IS THE DEBATE FOR PEOPLE WHO WATCHED, WHICH WAS A LOT.

>> 61 MILLION.

>> PEOPLE ARE REALLY INTERESTED. SO IT'S VERY HIGH RATING. BUT THEN THERE'S THE DISCUSSION PERIOD ABOUT THE DEBATE. AND THAT DISCUSSION PERIOD IS MOSTLY ABOUT BIDEN'S MANNERS. AND SO I PERSONALLY DID NOT LIKE THE MANNERS. I FIND BIDEN EXTREMELY ENGAGING AND CHARMING AND ALSO ANNOYING SIMULTANEOUSLY. AND SO IF I HAD INTERRUPTED MARK OR ANYBODY CAME ON THE NEWSHOUR AND BEHAVED THE WAY BIDEN DID, WE WOULD KICK HIM OFF IN THE MIDDLE OF THE SET IT IS JUST NOT WHAT DISCUSSIONS SHOULD BE LIKE. NOT EVEN ON THE NEWSHOUR, YOU COULD GO ON HARDBALL AND YOU DON'T TALK THAT WAY. SO I THINK THE EXTREME CONDESCENSION, THE CONSTANT INTERRUPTION, THE WEIRD SMILING, I DO THINK THAT WILL DOMINATE THE DISCUSSION PHASE. AND I DO THINK THAT WILL TURN OFF PEOPLE BECAUSE INDEPENDENTS REALLY DON'T LIKE THE WAY POLITICS WORKS. AND I DO THINK THAT WILL HELP SYMBOLIZE IT.

>> NOT TO GET INTO MARKETS AND ACADEMICS AND POLLS BUT THERE WAS ONE POLL DONE BY CBS OF INDEPENDENTS. AND UNCOMMITTED VOTERS. THAT WAS THEIR ENTIRE SAMPLE. AFTER THE DEBATE. AND BIDEN WON 50-31.

>> Woodruff: JUST INDEPENDENTS.

>> JUST UNCOMMITTED, PEOPLE WHO WERE SUPPORTING A CANDIDATE BUT SAID THEY COULD SWITCH, COULD LEAVE THAT CANDIDATE. AND SO BIDEN DID-- I DIDN'T FIND, I MEAN JOE BIDEN'S DEFAULT FACIAL EXPRESSION IS A SMILE. I MEAN IF HE'S IRRITATED HE SMILES. HE'S GOT GREAT TEETH, I DON'T BLAME HIM FOR SMILING. BUT IF HE'S HAPPY HE SMILES. IF HE-- IF HE IS A LITTLE NERVOUS HE SMILES. I DIDN'T FIND IT TO BE-- I MEAN HE DID INTERRUPTION BUT I DIDN'T FIND IT TO BE SO OVER THE TOP.

>> Woodruff: YOU DIDN'T THINK IT TOOK AWAY FROM THE SUBSTANCE.

>> I THINK THAT YOU COULD CERTAINLY ON A SPLIT SCREEN IF YOU WOULD PREFER IT THAT HE HADN'T DONE IT THE WAY HE DID IT. AND THERE WERE OCCASIONALLY SOME SOUNDS OF DISPLEASURE. BUT I THOUGHT AT NO POINT DID PAUL RYAN EXPRESS, OR MANIFEST OTHER THAN THE ONE TIME HE RAISED THE QUESTION, AND I THOUGHT IT WAS PERFECTLY APPROPRIATE ON HIS PART, WHERE HE SAID I THINK IT WOULD BE BETTER OFF, PEOPLE WOULD GET MORE OUT OF THIS IF WE DIDN'T INTERRUPT EACH OTHER. AND I THOUGHT THAT WAS APPROPRIATE STATEMENT ON HIS PART.

>> Woodruff: BUT DAVID, IT'S INTERESTING YOU SAY THAT, BECAUSE LAST WEEK THE PRESIDENT WAS CRITICIZED FOR NOT ENGAGING. BUT YOUR POINT IS, THE VICE PRESIDENT WENT TOO FAR IN THE OTHER DIRECTION.

>> WELL, THERE'S ENGAGING. YOU MAKE YOUR CASE STRONGLY. AND I THINK OBAMA MADE, HAD SEVERAL CHANCES-- CHANCES TO MAKE HIS CASE STRONGLY ON HEALTH CARE, SOCIAL SECURITY AND OTHER THINGS BUT JUST DIDN'T MAKE 'TIS CASE. THAT DOESN'T MEAN YOU INTERRUPT EVERY FEW SECONDS OR MUG FOR THE CAMERA WHEN THE OTHER GUY IS TALK. I THINK IT'S MORE THAT AND AS I SAY, WHAT WE HAVE TO DO, WHAT THE NEXT PRESIDENT IS GOING TO HAVE TO DO AND VICE PRESIDENT IS DEAL PRIMARILY WITH THE FISCAL CLIFF RIGHT AWAY. WHICH IS ALL THESE THINGS ARE WINDING DOWN. THAT WILL TAKE A VERY COMPLEX SET OF TRADE-OFFS WITH THE OTHER PARTY. AND SO, AND BY THE WAY, SO I DON'T THINK BIDEN, SO CONDESCENDING, I DON'T THINK HE SET HIS CAMPAIGN UP FOR THINKING THEY'LL TAKE THAT SERIOUSLY. AND I DO WANT TO ADD ONE THING WHICH IS A PARADOX, WHAT I AM DISCUSSING SO FAR IS THE PRESENTATION WE SAW LAST NIGHT. I DO THINK BY THE WAY THAT BIDEN ACTUALLY IN REALITY IN THE SENATE HAS BEEN A DEAL MAKER. AND MORE OF A DEAL MAKER THAN PAUL RYAN. SO I DO WANT TO SEPARATE THIS.

>> THERE IS A DIFFERENT FORMAT. THIS IS A CAMPAIGN DEBATE. I MEAN AND JOE BIDEN HAS HAD-- YOU KNOW, A RECORD OF 40 YEARS OF WORKING ACROSS THE AISLE, OF BEING OPEN AND FRIENDLY TO-- UNDERSTAND THIS. JOE BIDEN WAS ON A RESCUE MISSION LAST NIGHT. HE WAS IF DAMAGE CONTROL BECAUSE IN DENVER THE PRESIDENT OF THE UNITED STATES WAS GUILTY OF UNILATERAL DISARMAMENT AGAINST MITT ROMNEY. HE JUST DID NOT-- IT'S A LOT BETTER TO HAVE A DEBATE WHEN BOTH PEOPLE SHOW UP. AND BARACK OBAMA DID NOT SHOW UP. AND THAT LEFT-- JOE BIDEN WITH A REAL-- HE HAD TO MAKE THE CASE THAT WASN'T MADE. AND BECAUSE THE PRESIDENT DIDN'T EVEN ENGAGE IN DENVER, YOU CAN SEE IN SPITE OF THE POLLS AND PAUL SOLMAN'S CASE, YOU CAN SEE THE SURGE OF MITT ROMNEY IN A STATE LIKE FLORIDA WHERE THE ISSUE OF SOCIAL SECURITY, THE PRESIDENT SAID THERE'S NO REAL DIFFERENCE BETWEEN US. THAT GAVE MITT ROMNEY AN OPENING THAT HE HAS DRIVEN AT LEAST TWO CADILLACS THROUGH. AND --

>> WOULD YOU EVER DO THAT? WE DEBATE ON TV. WOULD YOU EVER BEHAVE THE WAY DE.

>> I JUST-- I DIDN'T-- SEE, I DIDN'T FIND IT AS OFFENSIVE AS YOU DID. I THINK IF THAT HAPPENED IT WOULD SHOW IN YOUR FACE. PAIN BECAUSE PAUL RYAN WAS SO PRETER NATURALLY COOL LAST NIGHT AND CALM, AND HE WAS. AND I THOUGHT TO HIS CREDIT. AND BY CONTRAST, BUT HE NEVER REGISTERED A SENSE OF OUTRAGE ORANGER THAT HE WAS HURT BY IT.

>> Woodruff: WHAT ABOUT ON THE SKUB STANDS. DID WE LEARN ANYTHING NEW FROM THE TWO OF THEM. ARE THERE DIFFERENCE BETWEEN THE CAN DARKTS THE ROMNEY-RYAN TEAM AND OT BAMA-BIDEN TEAM IS IT MORE CLARIFIED AS A RESULT OF LAST NIGHT.

>> I THINK THERE WERE VULNERABILITIES WE KNEW ABOUT WHICH WE SAW DEVELOPED. SO RYAN'S WEAKEST MOMENT BY FAR WAS TRYING TO DEFEND THE TAX PLAN. HOW ARE YOU GOING TO BALANCE THE BUDGET. REALLY, THAT WAS AN EMBARRASSMENT BECAUSE HE JUST DOESN'T-- THERE IS NO SUBSTANCE THERE IS NO ANSWER TO THAT QUESTION HOW ARE YOU GOING TO CUT TAXES.

>> Woodruff: BECAUSE THEY HAVEN'T LAID OUT.

>> THE CUTS. AND YOU KNOW, IF YOU GOT RID OF EVERY LOOPHOLE OUT THERE, YOU COULD REDUCE THE RATES BY 4%. SO HE'S PROMISING 20%, AND NOT GETTING RID OF EVERY LOOPHOLE SO IT JUST DOESN'T ADD UP. WE SAW THAT EXPOSED. THE BENGHAZI THING THAT HURT BIDEN A LITTLE, THE LIBYA THING. I THINK A LOT OF THINGS ACTUALLY IN RETROSPECT AS I THINK ABOUT THE DEBATE WERE NOT EXPLORED. AS MUCH AS THEY SHOULD HAVE BEEN, THE JOBS AND MEDICARE. I THINK ACTUALLY THE REPUBLICANS DODGED A BULLET BECAUSE WITH RYAN SITTING RIGHT THERE, BIDEN COULD HAVE SPENT A LOT OF TIME ON MEDICARE, ATTACKING THE RYAN PLAN WHICH IS AN UNPOPULAR PLAN. AND I THINK THE REPUBLICANS SINCE IT WAS SO TRUNCATED THEY DODGED THAT ONE.

>> I JUST THINK JOE BIDEN WAS TAKEN ON ONE AGAINST TWO. I MEAN SO THE CASE, FOR EXAMPLE, HE POINTED OUT WHICH THE PRESIDENT DIDN'T EVEN MENTION LAST WEEK, THAT PAUL RYAN HAD BEEN A SPONSOR OF PRESIDENT BUSH'S BILL, TO PRIVATIZE PARTIALLY SOCIAL SECURITY. AND YOU KNOW, I THOUGHT MAYBE THEY AREN'T NEW ISSUES BUT TO MOST VOTERS THEY ARE NEW ISSUES. AND I THOUGHT HE RAISED THEM VERY EFFECTIVELY. WHAT JOE BIDEN CAN DO IS JOE BIDEN CAN TALK AND PUT A HUMAN FACE ON ISSUES. IT DOESN'T SOUND LIKE A WASHINGTON THINK TANK OR A POLICY CONFERENCE OF WHITE PAPERS. JOE BIDEN TALKS LIKE HE JUST CAME FROM TALKING TO PEOPLE WHETHER IT'S IN A CHURCH HAUL OR IN A COMMUNITY CENTRE. AND THAT IS A-- THAT'S A GREAT GIFT, SOMETHING THE DEMOCRATS NEED DESPERATELY.

>> AND IT WAS A DEFICIT OF PAUL RYAN AS ONE OF US SAID LAST NIGHT, THAT WHEN HE WAS ASKED ABOUT CHARACTER, WHEN RYAN WAS, HE TALKED ABOUT POLICY. AND SO IT WAS-- IT WAS A MUCH MORE EARTHY-- .

>> Woodruff: AND THE VICE PRESIDENT CALLED HIM ON THAT.

>> AND HE IS AN ERTY, ROOTED VERY AUTHENTIC GUY TALKING ABOUT HIS PAST, HIS FAMILY ALL THE TIME.

>> Woodruff: SO AS WE WRAP UP HERE, WHERE DOES THE RACE STAND NOW AND WHAT DOES THE PRESIDENT AND WHAT DOES GOVERNOR ROMNEY NEED TO DO NEXT TUESDAY?

>> WELL, I THINK IT'S BASICALLY A TIE. I THINK IF YOU LOOK AT NATIONALLY ROMNEY IS UP ONE. IF YOU LOOK AT THE SWING STATES OBAMA IS UP ONE. OBAMA STILL HAS AN ADVANTAGE IN OHIO AND SOME THOSE OTHER STATES BUT IT'S EXTREMELY CLOSE. AND SO TO ME WHAT ROMNEY HAS TO DO IS FILL IN THAT BIPARTISAN THING. WHICH I THINK THAT'S WHAT, THAT WAS EFFECTIVE FOR HIM IN THE FIRST DEBATE. I CAN WORK ACROSS THE AISLE. YOU KNOW T DEPENDS WHICH ROMNEY ARE YOU CHOOSING FROM. BUT HE HAS TO FILL THAT IN. AND OBAMA HAS TO LAY OUT MORE OF A VISION, I WILL STILL GO BACK TO THAT AGAIN.

>> Woodruff: AND HE HAS TO DO IT IN A TOWN MEETING FORMAT WITH VOTERS ASKING.

>> YEAH, HE CAN'T COME OUT AND TRY AND OVERCOMPENSATE, THE PRESIDENT CAN'T, FOR HIS MISSING IN ACTION IN DENVER. BECAUSE IT IS A TOWN HALL FORMAT AND YOU'RE ANSWERING THE QUESTIONS OF REAL CITIZENS AND YOU JUST CAN'T TURN AND SAY WELL, IT'S A GOOD QUESTION, JUDY, ABOUT CLIMATE CHANGE BUT LET ME TELL YOU ABOUT DAVID. HE DIDN'T PAY HIS TAXES. YOU CAN'T DO THAT THERE. BUT IT HAS GOT TO DRAW DIFFERENCES, JUDY. HE'S GOT TO GIVE A SENSE OF HOW THE NEGOTIATION TERM GOING TO BE DIFFERENT FROM THIS TER. I MEAN HOW IT'S GOING TO BE BETTER. AND REMEMBER THIS, I MEAN SINCE THE DEBATE THE PRESIDENT SEEMS TO HAVE TALKED WERE THE DEBATE EVERY DAY, YOU KNOW. I WAS TOO POLITE AND SO FORTH. THIS ELECTION IS ABOUT THE PEOPLE. IT'S ABOUT THE VOTERS. AND I THINK THAT'S SO IMPORTANT FOR HIM. FOR MITT ROMNEY HE'S GOT TO FORGET HE'S NEVER GOING TO BE LIKABLE. I SAW THAT AGAIN, AGAIN IN OHIO THIS WEEK. A FOCUS GROUP DONE BY PETER HART. THEY'RE JUST NEVER GOING TO LIKE HIM. SO WHAT HE HAS TO DO IS SELL LIMB SELF AS THE LEE IACOCCA OF 2012. THAT I CAN TURN.

>> I AM THE GUY. HE SAVED CHRYSLER, I CAN SAVE THE UNITED STATES OR THE ECONOMY, THAT'S ALL.

>> Woodruff: WELL, EVERY FRIDAY NIGHT THE TWO OF YOU SAVE THE NEWSHOUR.

>> OH, GEEZ.

>> Woodruff: MARK SHIELDS, THANK YOU,-- AND

>> Woodruff: AND MARK AND DAVID KEEP UP THE TALK ON THE "DOUBLEHEADER." THAT'S ON OUR WEB SITE COMING UP AFTER THIS PROGRAM.

>> Brown: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: BOTH MAJOR PRESIDENTIAL CAMPS CLAIMED VICTORY AFTER LAST NIGHT'S VICE PRESIDENTIAL DEBATE. THEY ALSO TRADED NEW CHARGES OVER THE ATTACK IN LIBYA THAT KILLED THE U.S. AMBASSADOR. AND THE NOBEL PEACE PRIZE FOR 2012 WENT TO THE EUROPEAN UNION FOR EFFORTS TO FOSTER PEACE AND DEMOCRACY SINCE WORLD WAR TWO. AND ONLINE TONIGHT-- SOME COMIC BOOK HEROES DEFY THE LAWS OF PHYSICS; OTHERS GET THE SCIENCE RIGHT. HARI SREENIVASAN EXPLAINS.

>> Sreenivasan: SO HOW MUCH SILK DOES SPIDER-MAN NEED TO SWING THROUGH NEW YORK CITY? WE TALKED TO ONE PHYSICS PROFESSOR WHO IS TRYING TO BRING SCIENCE FICTION A LITTLE CLOSER TO SCIENCE FACT. PLUS, WILL THE NEW HEALTH CARE LAW COVER NON-CITIZENS? YES, IF THEY'RE HERE LEGALLY. FIND THAT STORY FROM OUR PARTNERS AT KAISER HEALTH NEWS ON THE RUNDOWN. AND ON TONIGHT'S EDITION OF "NEED TO KNOW," RAY MODERATES A ROUNDTABLE DISCUSSION ABOUT THE FISCAL CLIFF AND CONGRESS'S DEADLINE TO DEAL WITH EXPIRING TAX CUTS AND AUTOMATIC SPENDING CUTS. FIND A LINK TO "NEED TO KNOW" AND MUCH MORE AT newshour.pbs.org. JUDY.

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON MONDAY, WE'LL TALK WITH NPR'S PETER OVERBY ABOUT SPENDING BY SUPER-PACS ON CAMPAIGN ADS. I'M JUDY WOODRUFF.

>> Brown: AND I'M JEFFREY BROWN. "WASHINGTON WEEK" CAN BE SEEN LATER THIS EVENING ON MOST PBS STATIONS. WE'LL SEE YOU ONLINE AND AGAIN HERE MONDAY EVENING. HAVE A NICE WEEKEND. THANK YOU AND GOOD NIGHT.

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