>> this is tough, the work that they do. >> this week on "inside washington," president obama's chief of staff quits to run for mayor of chicago. faced with widespread voter discontent, president obama tries to fire up his base. >> we cannot let this country fall backwards because the rest of us did not care enough to fight. >> congress decides to leave town without dealing with tax cuts. the->> are cats leave town without stopping -- the democrats leave town without stopping the tax increases, turning their back on the american people. >> jon stewart and stephen

colbert lead a rally in washington to begin before the election. does this mean trouble for democrats? >> oh, my god! [applause] captioned by the national captioning institute --www.ncicap.org-- >> white house chief of staff rahm emanuel is leaving washington to chase his dream. he wants to be the next mayor of chicago. he will opt applied in the place to live, because the people and in his chicago house are not leaving. also leaving, larry summers, and budget director peter orszag is gone, but so is care of the council of economic advisers, christina romer. david axelrod will hang on until a least next year. what impact will this have on the white house operation, nina?

>> it will clean up the language. pete rouse is a different kind of person. >> the new chief of staff. >> at least the interim chief of staff. rahm emanuel was a great enforcer at great political instincts. but he was ruthless, not just to his enemies, but the people in the white house and admit for a difficult situation at times. >> what do you think, mark? >> pete rouse is in the historic old course that in his passion for anonymity and no -- historic mold for staff and his passion for anonymity and no personal agenda. rahm emanuel devoted time and to energy to it, but he had a public persona. you will not see pete rouse

doing ch"charlie rose." >> colby? >> this probably is going to be a good move on the part of president obama to get somebody who is less trouble than rahm emanuel was. >> charles? >> it will make no difference. the buck stops at the president's chair. the future of the presidency depends on obama. he will be without a majority in the house, a more passive two years. rouse can probably handle the passivity. i am not sure rahm could have. >> tell us about pete rouse. >> worked for tom daschle, was on the hill for 30 years, a guy who has widespread trust and respect.

but submerged his own ego. that is the historic pattern for staff people. peter orszag and rahm emanuel were entirely different . peter orzsag posture first move after leaving was to write a column pulling the rug out from his old boss on the taxes. the question of putting people into power on the the staff when they have their own ambitions and agendas is going to come at some point in conflict. >> you will not see pete rouse on sunday talk shows. >> no, we will. this is really inside, but i think it that bush into trouble eventually to have a tight little group of people around. i think it is already getting obama in trouble. it is not a question of bringing in an outsider as chief of staff. it is making sure if you actually have contacts with a

lot of other people. i don't mean in the political sense. i mean actually talking to them, doing a few less media interviews and a few more chats with, let's say, business leaders who really disagree with him on some things. you can actually learn something. >> larry summers at orszag and christina romer gone, will there be changes in economic policy? >> i think the times will dictate some kind of change. for example, on tax policy -- we are going to talk about this probably later in the show, but it is clear that the democrats had no consistent view on tax policy. president obama will have to compromise in someone. >> john boehner, house minority leader, said that the president ought to get rid of tim bender,

too. > -- tim geithner, too. >> tim geithner worked with the bush administration henry paulson and bernanke and tim geithner were a trio, and i would argue saved the american economy, perhaps inadvertent, but trying everything they had available. we just got a report on tarp, that it will lose a lot less money by hundreds of billions than anyone expected. it might even end up turning a profit. he is kind of middle of the road and i don't see why you would get rid of him. the real issue is is obama committed to keynseian economics or not -- keynesian economics or not? i think he is and he will not change policy. >> john kennedy was fond of

saying there are three things that are real, god, folly, and laughter. this is an administration conspicuously free of joy and laughter. it is not self deprecating of anybody in it, in a position of leadership. in a town that wants desperately for barack obama and his administration to succeed. >> i would agree, but it starts at the top, with obama. >> i don't think obama wa without humor. >> have you seen him be self- deprecating? >> yes, i have, but wry does not work as a political tool. >> the problem is lack of success. if he succeeded in the policy,

he could be as dour as he wanted and people would cheer him. it is not his personality, it is the way he's executing policy in the city. that is where he is having serious problems, not just because of the health-care debate, but on things like afghanistan, the way he attacked -- the tax policy -- it is hard to find a consistent theme with the obama administration. >> let me dissent. the third year of ronald reagan's administration, mixed with cold war tensions and a bad economy, gallup found that american optimism was at its highest point in 25 years, since 1959. bill clinton was able to generate optimism and happiness. i think the president really is , at the white house in particular, sets the tone for the city and indirectly

>> i am telling you, wisconsin, we are bringing about change and progress is going to come. you guys stick with me, you cannot lose heart. >> how bad will it be for democrats? >> there is a hurricane coming. we don't know if it will be class 1, class 3, or class 5. but batten down the hatches, it is going to be a long night. >> democratic pollster peter hart. the latest numbers tell us that 71% of republicans are thinking happy thoughts about the tea party, which means they will run, not walk to the polls. president obama tells "rolling stone," "it is inexcusable for any democrat to sit on the sidelines.

that people are sitting on their hands and complaining is irresponsible." who is he talking to, mark? >> what was once referred to as the professional left. vice-president biden said for democrats to stop whining. that always gets a good response when it is used by a parent to child. "stop winding." "ok, i will." >> have you seen the left blogosphere? it is whining. [laughter] >> you would think the presidency is slightly higher than the of blogosphere. the president has an unbelievably thin skin, left or right. his obsession with fox is a good example of that. look where he delivered that click your show. university of wisconsin. it is in index of how much trouble he is in the word is the go to probably the most liberal

college in america. whorl else will he go? san francisco and berlin? he is in trouble because two years ago he inspired and now he actors -- hectors. "you were not sincere in the first place." that is not exactly the way to win hearts and minds. >> university of wisconsin is an excellent choice. this is were he made his start in the presidential campaign. he got an enthusiastic response -- >> surprise, surprise. >> he is trying to generate -- >> excitement. >> he had a similar event in washington with young democrats to get them fired up, because that is what he has to do. >> madison, wisconsin, is as close as you get in america --

>> oh, come on. >> russ feingold, the incumbent senator is in trouble, right? he is behind in the polls. >> he is in trouble. i don't know how bad the trouble is, but he has to get out and vote, -- get out of that vote, exactly that vote, in wisconsin. i have seen a variety of polls, some work he has been about even and others were he is behind. mark made no better than i about this. >> 7 points in the latest survey, he is trailing, russ feingold. >> the guy he is opposing is a newcomer. >> absolute newcomer, deep pockets, a self-funded.

charles' point about the president being thin skinned about fox news -- fox news is the only news organization in the history of the country that has on its payroll four president candidates, rick santorum, newt gingrich, sarah palin, and mike huckabee. talk about republican primary -- >> fox is the new virginia, the birthplace of presidents. [laughter] >> what a stable. >> washington, jefferson, madison, everybody except adams. >> and they give money to the republicans -- >> nevada, illinois, pennsylvania, colorado. >> tossups. colorado is a tossup.

connecticut is a tossup illinois is a tossup, open seat. reid's seat in nevada, tossup at best. patty murray -- >> washington state. >> west virginia. >> in west virginia, the governor has a 70% approval rating, and is running for the senate and is suddenly seen as in trouble. this is weird. >> he is running on the administration's liabilities. that is what they have done, tied him to washington and a democratic administration. everything else being equal, when you are the candidate of an unpopular national administration, as republicans learned in 2006 and 2008, in a close race you'll probably lose. >> to my colleagues it looks weird. this is the result of two years of democratic governance. >> but it is weird because they

know joe manchin, they know what kind of governor he is. >> of 30 tossups seats, 37 are democrats. - ( music playing ) - we know technology can make you more connected.

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shared knowledge is even more powerful. kaiser permanente. thrive. >> washington democrat's campaign to save their own jobs but are doing nothing to save the jobs of working americans. >> that is congressman mike pence of indiana. congress has decided to call votes on tax cuts. why would they do that, charles? >> because of the sheer incompetence. i think it will be a strong issue. you will not ideological issues, but you will also have -- you

will have ideological issues, but you will also have issues of democrats and sheer incompetence. for the first time in a quarter- century, not a single appropriations bill passed, and here is a party in control of the house and senate and white house and cannot tell americans what the tax rates will be january 1. dividends, capital gains, estate tax. sheer incompetence. >> what is going on overall in the house and senate, more in the senate, is a demonstration of what the conservative minority can do, unified minority, with a very peculiar rules. one thing -- on things think you could have easily gotten through, the money pledged for haiti, it is on hold, and appointments, judicial, ambassadorial, they are being held up by some members of the

senate. >> i would love to say that it is really the best of the republicans doing this. i would love to -- say to really the -- that is really the dastardly republicans doing this. i would love to say that. but the democrats said they were willing to have the tax cut debate before the election, and it would cut the tax cuts for the baltic people -- for the wealthy people. >> and then they didn't. >> they punted. of course republicans are having a field day with this. they keep it up. -- teed it up. >> but no wonder people are angry. they want people to get something done. >> no question about it, and the anchor is institutional, geographical, against washington on this and government in general.

as far as tax cuts are concerned, a word in defense of house democrats, who have cast all the tough votes. charles says there is no legislative record. there is a historic legislative record. the question is, is it popular? it is not popular now. will it be popular a generation from now? we don't know. they are going to walk the plank again and vote to raise taxes or let them expire for those most affluent and most privileged, the millionaires and hedge fund people on the ones that charles wants in. the deserving rich. >> like you and me. >> they stood up, that democrats and the senate, and they cannot do it. the republicans were absolutely united, saying, "we will do it." they are committed to fiscal discipline, balancing the budget and cutting taxes further.

14% of gdp of the country in taxes -- >> those are arguments for democrats to do what they should have done, and they did not do it. the failure lies with them. there is an obstructionist group of republicans, but it is the democrats -- >> there was a letter written by 31 democratic members of congress to nancy pelosi opposing her position on tax cuts. that is why it did not happen. there were also rebels in the senate. mark is talking about the world historical stuff that the democrats have done. perhaps americans -- i am talking about sheer competence on the business of the order of the day. just hold on a second. appropriations, nothing. no budget, in an era of huge deficits. and taxes were uncertainty is holding money on the sidelines -- no business knows what taxes

are going to be january 1. now you may. >> when a party has huge majority, it has huge diversity, and that is part of the problem democrats have. >> you interrupted to say that? >> yes. hi.

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was abe lincoln honest? mary: does this dress make my backside look big? abe: perhaps... save you fifteen percent or more on car insurance?really host: is having a snowball fight with pitching great randy johnson a bad idea? man: yeah, i'm thinking maybe this was a bad idea. >> tonight i announce the "rally to restore sanity." [applause] >> a lot of people think it is a great idea. in a lot of people are not comfortable with the glenn beck- sarah palin politics. what do you think, colby? a week before the election. >> i am not big on stephen colbert because my name is

colbert and it has always been pronounced colbert. the white colberts purchased my ancestors -- >> you cannot hang that on stephen colbert. >> no, but it has always been the white colberts and black colberts announcing it that way. how dare he bring his group to washington. >> i am a devotee of the program because it is fun, and he has been pretty savage about obama and democrats who smear people, too. so i'd like the idea of the rally for sanity. >> is it good for democrats, mark? >> no. >> it is terrible for democrats.

>> what did we just hear from the president and vice president? it is important and stakes are high. what will we do the last weekend? laughed and giggled. >> i am joining the rally. i believe in a restoration of sanity, and we will get it election day. >> keeping if you're alive? >> that has been at a republican staple for years now. >> see y

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