'This Week' Transcript: Obama Adviser David Axelrod and Sens. Jim DeMint and Robert Menendez

White House Senior Adviser David Axelrod, Republican Senator Jim DeMint (R- S.C.) and Democratic Senator Robert Menendez (D- N.J.) on This Week Sunday, January 24, 2010.

TERRY MORAN, ABC ANCHOR: Good morning. It's a brand-new ballgame here in Washington, as the president heads to Capitol Hill this week to deliver the State of the Union address. He's dealing now with a Congress that's been dramatically altered by the stunning victory in Massachusetts. The Republican, Scott Brown, to fill the Senate seat head for 46 years by Ted Kennedy.

Health care reform is now in deep trouble, as is much of the president's agenda and the Democrats' political fortunes this election year.

And this morning, a reminder that this all takes place in a still-dangerous world. There's a new audiotape believed to be from Osama bin Laden, in which the Al Qaida leader specifically mentions the failed Christmas Day terror attack onboard Northwest Flight 253.

So joining us this morning to talk about all of this, David Axelrod, the president's top political adviser.

Thanks for being with us this morning.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: Good to be with you, Terry.

MORAN: Well, that was the week that was, wasn't it? After the Massachusetts upset, the Republicans are stoked -- yes, why are we going to stop?

(BREAK)

TERRY MORAN, ABC ANCHOR: Good morning. It's a brand-new ballgame here in Washington, as the president heads to Capitol Hill this Wednesday to deliver the State of the Union address. He's dealing now with a Congress that's been dramatically altered by the stunning victory in Massachusetts, a Republican, Scott Brown, to fill the Senate seat head for 46 years by Ted Kennedy.

Health care reform is now in deep trouble, as is much of the president's agenda and the Democrats' political fortunes this election year.

And this morning, a reminder that this all takes place in a still-dangerous world. A new audiotape believed to be from Osama bin Laden, in which the Al Qaida leader specifically mentions the failed Christmas Day terror attack onboard Northwest Flight 253.

So joining us this morning to talk about all of this, David Axelrod, the president's top political adviser.

David, thanks for being with us.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: Good morning, Terry.

MORAN: That was the week that was. The upset in Massachusetts has Republicans stoked, Democrats shocked and in near panic mode. And polls in general are showing that the public is rapidly losing confidence in the president's policies and his leadership. Just by way of illustration, Time and Newsweek this week, their covers, Newsweek, "The Inspiration Gap." It says, "How the trailblazer of 2008 became the stymied president of 2010." Time, "Now What? Obama Starts Over."

So is it that the president failed to connect with ordinary Americans? Or is this all a sign that the country's rejecting his approach in his first year?

AXELROD: Well, first of all, let's understand that we are governing in the worst economy since the Great Depression. When the president walked in the door, he was handed the worst economic downturn since the Great Depression, a financial crisis that held out the prospect of the collapse of the financial system and a fiscal crisis. President Clinton left a $237 billion surplus; President Obama received a $1.3 trillion deficit.

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