This is a rush transcript from "On the Record," October 28, 2011. This copy may not be in its final form and may be updated.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For the last three years, we've worked to stabilize the economy, and we've made some progress. An economy that was shrinking is now growing, but too slowly. We've had private sector job growth, but it's been offset by layoffs of teachers and police and firefighters in the public sector. And we've still got a long way to go.


GRETA VAN SUSTEREN, FOX NEWS HOST: Welcome back to our live Fox News special, "The Economy and 2012." And voters are making it clear, the road to 2012 starts and ends with jobs and the economy, President Obama desperate to spark job creation, now doing everything he can to sidestep Congress. This week, he even invoked his executive powers in the name of getting people back to work.

And the president's approval rating is taking a beating, thanks to the economy. A recent Washington Post poll puts President Obama's overall approval at 42 percent -- that's not good -- but his economic approval rating is even worse. It's only 35 percent.

Former adviser to President Clinton, Doug Schoen, joins us. Doug, I mean, we're at such a desperate situation that it shouldn't be, you know, How do I get reelected? And I'm not suggesting that's what the president's doing, but it should be, How do we get jobs? But nonetheless, you're not going to get reelected if the job market keeps going down. Do you agree?

DOUG SCHOEN, DEMOCRATIC POLLSTER/FOX NEWS CONTRIBUTOR: Oh, absolutely. This is the whole story in the election, Greta, no jobs, no reelection, period.

VAN SUSTEREN: Well, and you look at -- you look at history. President Carter had a terrible economic situation. He had only one term. President Bush 41 ran into the same sort of situation with taxes and the economy. He didn't get reelected. So it's interesting to watch this, though, but it -- in some ways, though, it looks like the president isn't running against his own record but trying to demonize Congress for being in a logjam.

SCHOEN: Absolutely. He's running against the Congress, against the Republicans. He's running as an outsider, anti-Wall Street. Greta, he's doing everything he can to become an outsider so he can get away from his own record.

VAN SUSTEREN: Well, is Congress, though, part of the problem? I mean, are they standing in the way of implementing programs that would create jobs? And I look back to the stimulus bill. He got that, and we didn't get a whole lot out of it. So people are really gun-shy on another one. And yet then you've got the Democratic Dodd-Frank bill which creates lots of regulations, and Republicans say that's the problem.

SCHOEN: Well, he makes the argument that, you know, he wants to do things that have traditionally been passed with bipartisan majorities, like infrastructure bank, payroll tax cuts. And he says he's being blocked by Republicans in Congress.

He doesn't talk about things like regulation, which arguably are just as serious problems. So he's running against the Republicans in Congress, reminiscent of Harry Truman running against a do-nothing Congress. The only problem is, the Democrats control the Senate. The Republicans don't control the whole thing.

VAN SUSTEREN: Well, sort of the interesting dynamic, though, to him, running on infrastructure and cutting, like, payroll taxes, is that -- is that that's what he got in February of 2009. And you know, it would behoove him if that were successful. I mean, I don't -- and you know, that's -- that's also -- I mean, I understand it's a difficult problem. But he's really sort of running against himself. Unless he can convince the American people that was a great idea, he better come up with something different than half a stimulus now.

SCHOEN: Well, he's got sort of a two-step -- I stabilized the economy with my first stimulus, the Republicans have blocked me from doing what I really wanted to do. And a la FDR, he's running against the big banks, the Republicans' corporate interests, who somehow are frustrating the American people's desire to get back to work.

VAN SUSTEREN: But it's interesting. He says that he stabilized a teetering economy, but he says that the growth and everything isn't what we'd like it to be. But the -- but it seems like a -- not much to sell, if you're saying, OK, I stabilized it, but it's still very sluggish. I mean, it's so unappealing to so many Americans, when the unemployment rate, you know, in a stabilization since February of '09 has actually gone up in unemployment. So it's not a particularly convincing argument to a lot of Americans.

SCHOEN: Precisely the point, Greta. It isn't convincing, which is why he is going to demonize the Republicans, whoever they ultimately end up with, presumably now Mitt Romney. That's why the campaign will be unalterably negative, because the best case he can say, stabilized the economy, a little economic growth in the third quarter, but no reduction in unemployment. So that's why we're going to see tough, tough negative ads.

VAN SUSTEREN: You know, I never expected miracles out of the president because the economy was rough when he took office, but I've always said that -- that he owns the trend. You know, whatever the indicators are, if they're -- if they -- if they're going in the right direction, you know, he owns it and he gets credit for it. But the problem is, is the indicators, to the extent they're even favorable, they're so sluggish to be unimpressive. He doesn't have -- he doesn't have much time to turn this around, to own a good trend between now and next November.

SCHOEN: Yes. I think his advisers have decided he's not going to own the trend. The best case he can argue, for stabilization, and that's why you're going to see a campaign where he tries to run as an outsider, running against the Republicans, running against Congress and Wall Street, anybody but his own record, which he really can't defend.

VAN SUSTEREN: And I guess the best thing he -- I guess he should also hope for an opponent that is not particularly impressive or inspiring to the voters.

SCHOEN: So far, it looks like he's going to get somebody like that because Mitt Romney has his flip-flops. He has the problems with closing businesses and cutting jobs at Bain Capital. So I think he's got an opponent, in his mind, that he thinks he can beat. The electoral map, though, presents real challenges because a lot of people, a lot of core Democrats out of work, Greta.

VAN SUSTEREN: Except that he may -- he may get a surprising one. He may even find himself up against someone like Herman Cain, who so far, at least -- he's on a roll. I don't know what he'll be on soon, but at least right now, a lot of people are getting more interested and not less, but a lot can change. Doug, thank you.

SCHOEN: That's right. Thank you, Greta.