All-Star Panel: What will second Obama administration look like?

This is a rush transcript from "Special Report," November 8, 2012. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: I don't think the secretary's plans have changed. You've heard her say many times that she intends to seek through a transition of a successor and then she will go back to private life.

ERIC HOLDER, U.S. ATTORNEY GENERAL: It has been an interesting and tough four years. So I just really don't know – I don't know at this point.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: The attorney general, talking about his plans. He doesn't know. Although, what he said today, it sounded like his plans may be to leave the administration. And Secretary Clinton has said she has plans to leave, others as well, Secretary Geithner, treasury, Secretary Panetta. So what will the second term look like in the cabinet? We're back with the panel.  Kirsten, what do you think?

KIRSTEN POWERS, COLUMNIST, NEW YORK POST: Well, I think that it's not much of a secret that John Kerry wants Hillary Clinton's job, and he seems to be really the only one in the running. Before Susan Rice was talked about, but she probably didn't have enough stature anyway, but after the Benghazi stuff, it sounds like she is totally – totally out of the running.

BAIER: Although, I saw a Bloomberg story today that she was in the, still in the running and one of the top choices.

POWERS: That's not what I've heard. I heard it's pretty much down to John Kerry. And that in terms of other big changes, I heard different things about Holder, but I did hear that Janet Napolitano is very interested in taking that job if he left. Probably the White House chief of staff is leaving. Perhaps he would end up at treasury.

BAIER: Jack Lew.

POWERS: Tom Nides, who's a longtime Washington hand, has been talked about -- a former boss of mine – has been talked about being new chief of staff, which would be an excellent choice. And I think those are probably the big changes.

BAIER: What about defense, Steve, if Panetta leaves?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Yeah, I don't know. There are a lot of people who would certainly be up for consideration for secretary of defense. I don't think if you look at the world the way that I do, Leon Panetta is probably a good person to have at defense. And Hillary Clinton leaving the Obama administration to the extent that these cabinet secretaries really affect the way, the direction, the strategic direction of the Obama administration, she is a good person to have at the State Department.

So I think you are likely, given the way that the president has governed, given his world view, given the fact that -- particularly on foreign policy, he has embraced -- remember Joe Biden cited leading from behind, used it in the campaign, talked about it, you are going to lose two people who have been potentially the best friends of what I would consider to be a sane, reasonably sane foreign policy.

BAIER: At treasury, if Geithner leaves as expected, Kirsten mentioned Jack Lew moving over from the White House. But also being tossed around a name out there, Erskine Bowles, one of the two Bowles-Simpson. And if the president was to embrace Bowles-Simpson and put Erskine Bowles at treasury, would that be a signal that he is in it for the long haul on Bowles-Simpson in the broad term?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think it would be. It would be a brilliant idea. I think if he can get some kind of agreement on the lines of their recommendations, that will be a triumph politically for him. And I think also, the country will benefit. I think one thing he might do if it's not going to be Bowles would be to offer the treasury to Romney. I'm sure he would probably turn it down but it would be the ultimate gesture. I don't think it will happen. I agree John Kerry will probably end up at secretary of state.

I must say that my sources in the Obama White House have been rather quiet since January 2009.

(LAUGHTER)

KRAUTHAMMER: So, I'm not sure that I have any other inside information. I do think that Panetta is an interesting man, because he has said that if the sequestration, the reduction of funds of the Pentagon happens it will destroy, it will hollow out the military, and whether he stays -- I mean if he is deposed and he leaves that will allow Obama a lot more leeway in cutting the Pentagon. Otherwise, Panetta could actually resign on principle if the sequestration were to happen. And that would be embarrassing.

BAIER: So you think it doesn't happen?

KRAUTHAMMER: I think he will likely be eased out so there will be somebody more pliable at defense.

HAYES: I think the term for is it "flexibility" in this administration's second term.

KRAUTHAMMER: Or malleable.

HAYES: The president prefers flexibility.

KRAUTHAMMER: Yes, he will be flexible after the election, he told his good Russian friend.

HAYES: That's right.

BAIER: This is the parlor game we play, finding out who will be in the cabinet the second term. That is it for the panel, but stay tuned for a final election message from one of the campaigns.   

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