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'Special Report' Panelists Discuss the Ramifications of Not Passing the Rescue Bill and Tonight's Vice Presidential Debate

Friday , October 03, 2008

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This is a rush transcript of "Special Report With Brit Hume" from October 2, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. STENY HOYER, (D-MD) HOUSE MAJORITY LEADER: Obviously, one of the conditions for bringing that bill to the floor will be to ensure that we have the votes. We have no intention of failing again to pass this legislation.

ROY BLUNT, (R-MO) HOUSE MINORITY WHIP: The other day we were a handful of people short, or a double handful. Since then, a lot of members have begun to hear from their local bankers for the first time, that they're really beginning to feel the credit crunch, and we need to do things that help the economy right now.

(END VIDEO CLIP)

BRIT HUME, HOST: And so Congressman Blunt and Congressman Hoyer, both members of the leadership in their respective parties, now hope that the votes will be there to pass this financial rescue package when it reaches the House floor, and it is expected to do so sometime tomorrow.

Some thoughts on all this now from Fred Barnes, Executive Editor of The Weekly Standard, Kirsten Powers, columnist of The New York Post, Bill Kristol, Editor of The Weekly Standard, and Mort Kondracke, the Executive Editor of Roll Call, FOX News contributors all.

All right, Mort, what's your take, your sense on the bill tomorrow? Will it pass and should it?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: It should, and I think it will.

Look, a lot of the opposition on Monday, when it failed, were weather vane voters, and the wind was blowing hot and heavy against this bill. People were hearing from their constituents like 80 to one against.

Then, when they defeated the bill, the stock market lost a trillion dollars in value in one day, and they began hearing, as Roy Blunt said, from community bankers, and stuff like that. The wind has shifted on this.

And, moreover, the two presidential candidates both picked up their act and both said this has got to pass, and they both voted for it in the Senate, so they have got cover there.

And the last thing is that there is a lot in the Senate bill to like. I mean, for liberals, there's mental health parity. For lots of rural people, there is aid to schools. There is an ATM fix.

HUME: That is the Alternative Minimum Tax, which was put in the tax code to hit the rich, but now because of lack of indexation, it hits a lot of people who aren't rich.

KONDRACKE: Right. And there are six or seven states, I forget how many, where they have no income tax, and up till now people have been able to deduct sales taxes in those states. This would permit that to go forward again —

HUME: To continue.

KONDRACKE: To continue. And if it didn't happen, those people in those states would not be able to deduct their sales taxes.

So there is a lot for lots of people to like in this bill.

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: I think it will pass tomorrow. I thought it would pass, Monday, of course.

"You can take that to the bank," to use an unfortunate metaphor in these times.

(LAUGHTER)

KIRSTEN POWERS, COLUMNIST, THE NEW YORK POST: Yes. I think it will pass, and I think that, you know, it is interesting what you were saying, the wind has shifted, and we have seen pretty much the lack of leadership that we have in Washington, that now at least they are hearing from people they want this to pass, and so, hopefully, they will.

The blue dogs are making a lot of noise —

HUME: The blue dogs being conservative Democrats who are worried about the budget.

POWERS: Exactly. They are worried that things aren't paid for, they are threatening to disrupt the rules vote, all sorts of things.

But I think that, ultimately, most people think they will have to go ahead and vote for it. At least the ones who voted for it in the first place can't turn around and say they won't vote for it now over a few things they don't like.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: They could. I don't care about the mental health parity, and some of the other things that don't belong in there.

On the other hand, we have a crisis, and we need to do something.

And, look, I think there is still a lot of opposition out there. Admittedly, I agree, it sort of turned, but there is a lot of opposition, particularly among conservatives.

And —

HUME: What is your opinion, by the way?

BARNES: What I was going to say is if there is no vote, that is almost as bad as a vote against it, because it will mean if the votes aren't there, the market will crash.

But what are these people — when they look around, do they think the lack of this legislation is not having an impact? We have a stock market crash and credit markets freezing up. You can't sell a car, it's hard to sell cars because you can't get credit.

Our economy is falling apart, and they're saying "No, we have to bait around, and this is too expensive," or "We need to end mark to market," or some of those things. Those excuses are crazy. It better pass.

HUME: Let me ask you this question, Fred. You're none unsympathetic to the conservatives in the House of Representatives, and the noisiest opposition to this measure has come from conservatives in the House. Give me your thoughts on the quality of their arguments.

BARNES: I think their arguments are idiotic and myopic. It is as if they are operating from some ideology that says we cannot interfere with the free market by having the government do more.

But, look, Ronald Reagan would do this. Alexander Hamilton did it. When you have an economic, when you have a financial crisis that threatens to blow up the economy and put America in a deep recession or worse, that's when government is supposed to act.

If you're a libertarian and you don't believe in government, that's something. But those Republicans are not libertarians. They're just nuts.

POWERS: What I thought was interesting was seeing the reporting that there were actually people that were surprised that the stock market crashed. And you had these members of Congress suddenly realizing oh, my gosh, something will happen because of the vote that he we had.

I'm not an economist, but that really wasn't much of a shock to me. And there is this disconnect that they have, where they think that the voters should call and tell them what to do.

But this is not where to put a stop sign. This is about our economy. And that's why they have to be leading on it. They can't just be thinking that we're just going to stick it to Wall Street.

KRISTOL: The stock market goes up and down, and it will go down and there will be a recession. It went down today quite a lot even though the Senate passed the bill overwhelmingly.

HUME: Yes, but there was a real dose of economic bad news-bad jobless number, other bad news. The credit situation tightened, worsened.

KRISTOL: That's the point, though. The administration has done a bad job of explaining the problem. The problem is not that the stock market —

HUME: Yes, but why, in a situation like this, why should it be necessary for these members of Congress who, after all, hold hearings, they're supposed to be informed, they're supposed to read and know what is going on in the country, to have to be sold on something this major in this serious of a situation?

KRISTOL: Look, I think it should have passed. I would have voted for it the first time, and I certainly would vote for it tomorrow.

But I do think the originally drafted bill was kind of an embarrassment-two and a half pages. An overview —

HUME: That wasn't a bill. That was just the outline-

KRISTOL: The proposal that they released — that was the first blush, and that was the thing that began to gin up the opposition.

I think everyone has shown some failures of leadership here, but I think it will pass tomorrow.

But I think people shouldn't kid themselves. It doesn't mean there won't be a recession. It doesn't mean the stock market might not go down. It doesn't immediately resolve the credit crisis. The Paulson bill by itself does nothing about the immediate problem of bank runs and credit tightening. Hopefully prospectively it loosens things up.

But I think people do now have the sense that it is a genuine crisis and to do nothing is really, really dangerous.

HUME: And what effect do you think it will have, Mort, that the credit markets and the players within the credit market will be aware that there is a huge amount of government money about to be expended to absorb these so far unsellable, "toxic," as they're called, assets?

KONDRACKE: The theory is that they're going to loosen up credit because they're going to be able to unload their bad paper, that they're going to be — and if this market to market adjustment gets made so that they don't-

HUME: That's an accounting rule.

KONDRACKE: But they don't have to write down their net worth to zero, that should free up credit

But that's a theory, and we hope it's correct.

HUME: Last word, Fred.

BARNES: Let me just say one other thing about House Republicans. The ones who I think are the smartest and most impressive, Eric Cantor and Paul Ryan, and Mark Kirk, who is Mort's favorite, John Campbell of California — these are the one who have been in favor of it. They just haven't been able to convince a lot of their colleagues.

HUME: OK, on to the other subject we're also excited about, the Biden-Palin debate, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: Frankly, I wish that they had picked a moderator that isn't writing a book favorable to Barack Obama. I mean, let's face it.

But I have to have confidence that Gwen Ifill will treat this as a professional journalist that she is.

FRANK FAHRENKOPF, PRESS DEBATE COMMISSION CO-CHAIRMAN: We didn't know when we named Gwen about the book, although I will say this — knowing now that she hasn't even written the chapters on Obama, it doesn't concern us.

(END VIDEO CLIP)

HUME: That guy is Frank Fahrenkopf. He has been around a long time. He used to be a Republican National Chairman, and he, along with Paul Kirk, who used to be a Democratic National Chairman, are the cochairman of the national commission on presidential debates, which is the sponsor of every presidential and vice presidential debate going back to sometime in 1988, which was, by the way, if my calculation is correct, the last time anybody who was even thought to be a conservative journalist was named to participate in any way in questioning candidates in a presidential debate.

And the question is because Gwen Ifill's book has gotten in the mix, questions have begun to be raised again about these debates, how they're organized, and about this commission. Fred, your thoughts?

BARNES: You might think, Brit, that this commission is a government agency. No. That it is some public agency. No. It is just a commission that has been set up, and they run it themselves, three people.

There is also the executive director, his name is Janet Brown, and they run it, and they decide what sites, what colleges they go to. They decide who the moderator is, who the questioners are going to be. They don't tell the campaigns ahead of time who they're going to pick, and they're completely high handed in all this.

The campaigns don't get to try to decide some things, but the commission. And the commission schedules the debates, like last Friday's debate. Why was that such a stupid idea to have it on a Friday in the fall?

You know why? Friday is high school football night almost everywhere in the country. Millions and millions of people go to those games. And that's one of the reasons, of course, why the ratings were down by about ten million from the first Bush-Kerry debate.

HUME: I can recall that it used to be a feature of every presidential campaign, you had a series of predictable events. You had the nominating process and you had the conventions, and then you had at the beginning of the campaign, you had the debate over debates.

And that was a debate that was carried out between the two campaigns, and each would play chicken with the other about it, and they would eventually work it and figure out a way to do it.

Is that all gone now?

KONDRACKE: Yes.

HUME: Is that a good thing or a bad thing?

KONDRACKE: If you had a commission that consulted the candidates, and the candidates had some veto power over this, where they would select the dates and they would suggest the dates, and they would consult with the political parties, perhaps, ahead of time, that would be good. But they seem to do this on their own.

But I think that the pressure on Gwen Ifill now will result in her probably bending over backwards to be fair to Sarah Palin.

KRISTOL: Ha! You are a deeply credulous person, Mort!

(CROSSTALK)

KRISTOL: Let me clue you in on something. The mainstream media wants Barack Obama to be the next president of the United States.

I'm very happy about the Gwen Ifill kerfuffle, because it has just exposed the obvious fact the media has never been more biased. They want Obama to win and McCain to lose. They hate Sarah Palin. I have never seen anything like it before.

And now they are trying to demoralize conservatives by pretending the race is over.

HUME: I want to hear Kirsten on this — your thoughts?

POWERS: I actually agree with what you just said. They are at the worst place they have ever been, the media. It is a transparent agenda, there is no doubt about that.

I do have a lot of respect for Gwen Ifill, and I do believe, actually, that you could be writing something positive and also have the capability to be objective. And so I'm willing to hear her out and let her do her job.

HUME: I agree with that as well, because if you have a bias and you are aware of your biased, it's not so hard to screen it out. I'm always a little bit more afraid of unconscious bias.

POWERS: That's the point, yes.

I think, look, in the end, this is good for Sarah Palin, because whatever happens the conservatives will be able to come out and say Gwen Ifill is writing a book about Barack Obama. She is out to get her. The deck was stacked against her. What could she do?

And so it probably works to her advantage.

BARNES: I don't that will work. It won't work with me.

But Gwen Ifill should have stepped down.

HUME: You think?

BARNES: Yes, of course. Come on.

Look, there are a lot of people in this business, Brit, to choose from. She doesn't have to be there. Hundreds and hundreds and hundreds could do that job.

KONDRACKE: Charles Krauthammer had a great idea last night.

In any event, look, I think —

HUME: Who was that?

KONDRACKE: Me.

HUME: That's right. Yes, you would be good!

KONDRACKE: The reason that she is going to bend over backwards — I bet you that there are no jeopardy-style, got you questions.

HUME: How could there be in a debate, really?

KONDRACKE: You could — Katie Couric asked, I think, quite normal questions, several of which Sarah Palin fluffed. But that precedent, I think, and the pressure against Gwen Ifill will indicate that she not going to put her through a quiz show routine tonight.

KRISTOL: That's really grateful! Gwen Ifill, she might behave appropriately, how wonderful. How wonderful — thank you, mainstream media!

KONDRACKE: If I were the debate panelists, I very well would be interested in testing whether Sarah Palin is qualified for president.

KRISTOL: Well I'm glad Gwen Ifill is there.

BARNES: Here's the ting.

HUME: Let's go. We have to get out quickly.

BARNES: These are four liberals doing all of these debates. If there were four conservatives there, you would be going volcanic. You'd be crazy!

HUME: That's it for the panel.

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