All-Star Panel: Political fallout as Republicans cave on debt ceiling

This is a rush transcript from "Special Report," February 11, 2014. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, R – OH, HOUSE SPEAKER: You can't raise the debt ceiling without doing something about what's driving us to borrow more money and to live beyond our means. The idea that we should continue to spend money that we don't have and give the bill to our kids and our grandkids would be wrong. This isn't about me and frankly it's not about Republicans. This is about saving the future for our kids and our grandkids.

UNIDENTIFIED MALE: On this vote, the yeas are 221, the nays are 201. The bill is passed without objection. The motion to reconsideration is laid on the table.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Well, that vote to increase the debt ceiling passed the House. Speaker Boehner was one of the votes for increasing the debt ceiling despite what he set a few months ago about not doing that. This comes on the day when the head of the Congressional Budget Office said this in testimony about the federal debt.

(BEGIN VIDEO CLIP)

DOUGLAS ELMENDORF, CONGRESSIONAL BUDGET OFFICE DIRECTOR: We estimate federal debt held by the public will equal 74 percent of GDP at the end of this year and under current law will reach 79 percent in 2024. Such large and growing federal debt could have serious negative consequences, including restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis.

(END VIDEO CLIP)

BAIER: So what about this back and forth? We're back with the panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, if you are not holding any cards, you fold.  And Boehner held no cards. I think they made a mistake. I think there was an opportunity to actually push a single issue, and that is the bailout of the insurance companies. There are couple of provisions in ObamaCare which will subsidize -- bailout the insurers.

BAIER: Not to interrupt, but how could they have any leverage if they couldn't get military pensions? They didn't have any votes to get the minimal things? How could they get insurance bailouts?

KRAUTHAMMER: Well had the Republicans been able to agree among themselves in the House to pass a prohibition on a bailout of insurers, Harry Reid would have tried to stop it in the Senate. And imagine him having to make the case and Obama having to make the case on willing to risk the breach of the debt ceiling and the first time an American default in order to preserve the bailout of insurance? Make that case Harry. See how long that is going to last.

BAIER: But they did it with Tim Cruz and they held the line.

KRAUTHAMMER: But it was on an issue of abolishing on ObamaCare on which there is not an overwhelming majority. You talk about the bailout of insurers, there's an overwhelming majority of Americans who will say no.  If you're going to risk the debt ceiling or if you are going to shut down the government, you have to choose an issue on which you know you have got 80 percent of the population. They would have easily had 80 percent of the population. And I would have liked to see the Democrats defend a bailout and risk the debt ceiling.

But there weren't enough Republicans in the House who would do that, and thus, Boehner had no cards and thus, he had to fold. It was the right thing to do given his circumstances.

BAIER: Kirsten?

KIRSTEN POWERS, COLUMNIST, NEW YORK POST: Look, I think Boehner absolutely did the right thing. And I think if you are the Republicans, you just want to get -- you want to stay on ObamaCare. You don't want to change the subject to anything else, and this would have changed the subject. I think they probably would have lost in the end, even if they would have tried this gambit. And we saw the damage that was done to the Republican Party the last time. And I think it's smart for them to try to move towards the upcoming elections and just talk about ObamaCare as much as they can.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I agree with that. But I think it would have been wise to fight a little bit on the debt ceiling. And I think Charles' argument about attaching the bailout provision would have been a good one had there been more consensus in the House Republicans.

BAIER: But explain to me how the president doesn't come out and say this is paying for Congress' previous bills? And Democrats need to hold the line. And he gets Senator Reid to do the same thing. And he says we can't attach anything. And then Democrats fall in line and they do the exact same thing that they did with Ted Cruz, and then Republicans look the exact same way.

HAYES: First of all, I think it's very different when you are talking about the debt ceiling versus the government shutdown. Secondly, this is something that the president would have to end up having to defend. And there is, I think, considerable value if you are a Republican in making the president defend not only raising the debt ceiling, but doing so, by adding – by defending in effect the bailouts – the insurance company bailouts -- or the proposed insurance company bailouts.

The other thing they could have done had they been a little more nimble is attach an indefinite suspension of the employer mandate. I mean this is something that the president --

KRAUTHAMMER: Of the individual.

HAYES: Well, individual would be one thing, but the employer mandate.  The president made the argument yesterday we can't do this. We have to change this.

BAIER: But he has a lot of conservatives. Why didn't they?

HAYES: Because, basically, at the end of the day, you have 30 or 40 people that don't want to vote for a hike in the debt ceiling, period. This is why they couldn't do the military COLA argument. It's why they couldn't do anything. It's why Boehner ultimately had to do what he did. It's hard for conservatives who argued that they were not going to vote to increase the debt ceiling or that they were going to use this to fight to go back and explain to their constituents why that didn't happen.

KRAUTHAMMER: Would Mary Landrieu and other red state Democratic senators had opposed this thing of stopping a bailout and risked the credit of the United States?

BAIER: Senator Reid might not have brought it up for a vote.

KRAUTHAMMER: But it would have been an issue out there. Everything would have hinged on it. She would have had to express herself, and I don't think she would have supported Reid or the president.

BAIER: That is it for the panel. But stay tuned to see what could be the first campaign ad of the 2016 cycle on the Democratic side. 

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