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MR. HARWOOD: And joining us now, Republican Congressman Roy Blunt of Missouri, the Republican whip. Congressman, let me start with a question that I asked Nancy Pelosi last night: are you confident that Sarah Palin is capable of stepping in as president on day one if need be?

REP. BLUNT: I think she could if she needed to, John. She's had executive experience as a governor. You know, it's not the biggest state in the country population wise, but it's a state where probably the governor has more authority than many states. The governor has to figure out in that first -- their very first year in office how to run state government, how to make government responsive.

I think what we really see here is in the vice presidential choice Barack Obama made perhaps the most business-as-usual choice possible in Joe Biden -- who I like, but he's been in Washington a long time and represents Washington. She clearly does not, and we see from this choice that McCain and Palin are ready to change things in Washington. I think that's what the American people are ready for.

MR. HARWOOD: Congressman, how do you see this turmoil on Wall Street? There's a lot of rhetoric flying around on both sides about corruption and greed on Wall Street, about the failure of Republican regulatory policies. How do you think this changes the election equation, either for president or in the races for Congress?

REP. BLUNT: Well, I do think that the regulatory policies needed to catch up with the way business is done today. Certainly in the Clinton years we moved toward a lot of regulatory relief, and that change hasn't really been arrested or changed. At the same time, we haven't looked at what the impact of this instantaneous global marketplace is. We're going to have to work real hard in the Congress as we respond, hopefully and eventually, to something like the proposals Secretary Paulson made a year ago to have a new regulatory relief and a new regulatory regimen that really meets the needs of the time. But for Congress it's hard to do that. It's hard to keep up with anything changing as dynamically as world finance or world communications is today. We're behind on that now. Again, Hank Paulson laid out an agenda over a year ago, no response from the leadership in this Congress to move forward with that agenda, and we see some of the results of what happens if we don't make changes going forward, and they're not good results.

MR. HARWOOD: Congressman, I want to shift gears and talk a little bit about the energy issue. Let's play a sound bite from Sarah Palin with Charlie Gibson on this issue last week and I'll ask you a question on the other side.

(Begin videotaped segment.)

MR. GIBSON: ANWR. You favor drilling in the Arctic National Refuge, he does not.

GOV. SARAH PALIN (R-AK): I sure do.

MR. GIBSON: You changed him on that? He changing you?

GOV. PALIN: I'm going to keep working on that one with him. ANWR, of course, is a 2,000-acre swath of land in the middle of about a 20-million-acre swath of land -- 2,000 acres that we're asking the feds to unlock so that there can be exploration and development.

MR. GIBSON: So you'll agree to disagree on ANWR?

GOV. PALIN: That's exactly right. We'll agree to disagree, but I'm going to keep pushing that, and I think eventually we're all going to come together on that one.

(End videotaped segment.)

MR. HARWOOD: Congressman, what's the future of this energy issue? You guys are getting ready to vote on the Hill on a bill that looks like a compromise, it appears that it's likely to pass, but not likely to become law. Democrats have got stuff in there that you don't like, and of course you're trying to get Democrats to do things that environmentally they don't want to do. What is it going to take to get Washington to do something that means something about energy?

REP. BLUNT: Well, John, I do think it's important, talking about Sarah Palin, to point out that she does understand energy not only as governor, but as someone who was on the commission that regulated that big industry in Alaska. Twenty percent of all our oil comes from Alaska. I think it's also important to point out that she resigned from that commission -- more than half of their family income -- because she thought something unethical was going on.

This bill today, you know, you said it appears to be a compromise. I think that's only until you look at it. Nobody got a chance to look at it until 9:45 last night. We're voting on it today. It does appear that it might unlock some of the coastal drilling potential in the country, but then when you look behind the door, it really doesn't do that because it doesn't create the necessary incentive to unlock that door. It doesn't do all of the things that Republicans and a number of Democrats have been saying needed to be done.

There is a bipartisan majority on the House floor to pass a real energy bill that includes drilling, that includes safe nuclear, that includes oil shale, that includes wind and solar. That's not this bill. And I think the very fact that the majority wouldn't let anybody see the bill until virtually the minute we were asked to vote on it indicates there's not much there there.

MR. HARWOOD: Well, Congressman, it's pretty clear that that search for a bipartisan energy solution that can pass is going to go on for a while and into the next presidency. Thanks so much for joining us.

REP. BLUNT: Good to be with you, John.

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