REICH: It's all about the economy. I mean, I think the criticisms that are sticking with regard to the president have all to do with the anxiety that a lot of Americans feel right now. If the economy turns around -- or even if the direction of job growth is in the correct direction, we're going to see the president's polls going up, and we're going to see the -- the Democrats...
STEPHANOPOULOS: I think that is the great X factor right there. You can -- is direction going to be enough on jobs?
REICH: Well, the White House is counting on it. History shows that direction counts a great, great deal. You know, the unemployment rate officially is still going to be around 10 percent come next November. But if people feel that things are somehow getting better, if their own personal status and their only -- their own family economy is in less danger, they're going to be fine. They're going to vote...
STEPHANOPOULOS: Sorry. One of the most endangered Senate Democrats is the leader, Harry Reid, and he got into a little bit of hot water over the weekend. This new book, "Game Change," by Mark Halperin and John Heilemann, quotes him in a private conversation, saying that -- let's show it right now. "Reid was wowed by Obama's oratorical gifts and believed that the country was ready to embrace a black presidential candidate, especially one such as Obama, a 'light-skinned African-American' with 'no Negro dialect, unless he wanted to have one,' as Reid said privately."
This has already drawn a lot of criticism. Republican Chairman Michael Steele this morning is saying that Reid ought to resign. The president has accepted Harry Reid's apology.
But Steele himself in some hot water, as well. He's got a book out this week, a lot of Republicans angry about that. And he's saying he's not going to take the criticism anymore.
(BEGIN VIDEO CLIP)
STEELE: I'm telling him, I'm going to look him in the eye and say, I've had enough of it. If you don't want me in the job, fire me. But until then, shut up. Get with the program, or get out of the way.
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STEPHANOPOULOS: Judy, let's talk about Reid first. He didn't need this at all, already at 52 percent unfavorable in Nevada, being defeated, behind both his opponents right now.
WOODRUFF: Ouch. He didn't need this, but, you know, he does have friends in the White House. Somebody very close to the president said to me yesterday, after all this blew up, said, you know, this is the Mormon from Searchlight with an ear of tin and a heart of gold. He's done some very good things for the White House. They know he's carried their water on -- on health care, and they're not -- they're not going to put any distance between themselves and Harry Reid.
STEPHANOPOULOS: There had been some talk which Reid -- sorry -- which Reid tried to squash that he might not even go through with the election in November. You say he's in the race to stay?