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'Special Report' Panel on Proposed Gas Tax Hike; Russia's Flexing Muscles

This is a rush transcript of "Special Report With Brit Hume" from August 22, 2007. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP JIM OBERSTAR, D-MINN.: If you are not prepared to invest an additional five cents in road reconstruction, bridge reconstruction, then god help you. You haven't got a sense of the future.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: If rebuilding bridges is that big a priority, then we ought to prioritize that in the highway money that we have already budgeted as opposed to helping individual congressmen or senators realize pet projects in their districts. In other words, "prioritization" means real prioritization.

(END VIDEO CLIP)

BRIT HUME, HOST: What are these two guys talking about? Well, what they are talking about is a proposal to increase the federal gasoline tax. Some thought on this issue, which has legs, from Fred Barnes, executive editor of The Weekly Standard, Jeff Birnbaum, columnist of the Washington Post, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

So what is going on here, Fred?

FRED BARNES, EXECUTIVE EDITOR, WEEKLY STANDARD: Well, this is all spurred by that collapse of the bridge in Minneapolis, and it has lead people to call — we need to do more for our infrastructure, we need to strengthen our bridges…

HUME: And the infrastructure approvals are financed by what?

BARNES: By the highway trust fund, which is about 18 plus cents on each gallon of gas that you buy federally. Then there is state and local taxes as well, in most places. But the federal tax is what Oberstar is talking about, raising from 18 cents to 23 cents a gallon.

This is very unpopular. It is not going to happen, and it is a bad idea. But we do need to spend more money on bridges and highways, no question about that.

HUME: Well, if we need to spend more money, what's the problem?

BARNES: Because only 60 percent of the money that goes into the Highway Trust Fund goes to highways and bridges. It also goes to light rail and recreational trails, and covered bridges, and all kinds other stuff. And $24 billion of it goes to earmarks.

Oberstar, the guy we just saw saying god help you if your not for this tax hike. It has 61 earmarks in the Highway Bill, millions and millions of dollars. That is the first thing you have to do is use that money.

BIRNBAUM: Oberstar, it is his job to try to increase the amount of money that goes to transportation. He is the Chairman of the Transportation Committee in the House. It is his jurisdiction.

He is also from Minnesota, where the…

HUME: A neighboring district.

JEFF BIRNBAUM, COLUMNIST, WASHINGTON POST: A neighboring district. Not Minneapolis, St. Paul, but the state nonetheless. Those are two very good reasons why he would want to increase the gasoline tax.

HUME: Or at least very real reasons.

BIRNBAUM: Very real reasons.

But he is not the chairman of the tax writing committee in the House, that's the Ways and Means Committee. And there is no serious consideration that I am aware of, of an increase in the gasoline tax, which is considered regressive.

That is, it is disproportionately paid by lower-income people, which the Democrats, who are now in charge there, are very much against.

And the chairman of the Senate's tax writing committee, the Senate Finance Committee, Max Baucus of Montana, has said flatly that he does not support a tax increase. And more importantly, and the real reason why this won't happen…

HUME: I have a feeling those taxes are going to get really hammered by the time you are finished with it.

BIRNBAUM: President Bush has made it clear for years, even in internal debates, that he opposes tax increases, especially a tax on gasoline.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: At the risk of piling on, it is a terrible idea. It is completely hypocritical.

Apart from the aggressive attacks, Fred is right. It is not that the money is not there. A quarter of a trillion is spent in this '05 bill for transportation. About 10 percent is spent on pet projects, not a penny on this bridge.

In Minnesota itself, there was a $2 billion surplus in the budget. Not a penny was spent on the bridge. It was spent on...

HUME: This was a federal or state bridge?

BIRNBAUM: Federal.

BARNES: I-35, yes.

KRAUTHAMMER: You can spend the money either way, but nobody is spending on it because everybody wants his name on a new bridge and not on the new rivets on an old bridge.

The way to fix this is what Utah has. Utah has a law that says that you cannot spend money on a new project until you have appropriated all the money required for the maintenance of old projects. You ought to have that as a Congressional law.

HUME: Fred Barnes is not a big fan of government spending, but he is a fan of government spending on bridges and highways.

BARNES: But there is a better way to raise the money and also deal with our traffic congestion that is so terrible in so many urban areas. What you tax people on is not how much gas they buy, you tax them on where they drive and when they drive.

In other words you tax people…

HUME: Toll roads, you mean?

BARNES: No, we get to position technologically where we can have everybody taxed that way because of something on their car.

You want to tax people more when they are driving during rush hour, causing congestion, then you do if they are driving on Saturday morning at 6:00 a.m., when there is no congestion. It makes sense. We can deal with our traffic congestion, we raise revenue. It just makes a lot more sense.

KRAUTHAMMER: You want the government to actually know where your car is at all times.

HUME: Private investigators and divorce lawyers would want that information.

BIRNBAUM: It is also not an impossible amount of money that we're talking about to replace even the bridges like the one in Minneapolis, St. Paul that fell down. It is about $9 billion a year for the next 20 years. That is not an infinite amount.

HUME: I said something, folks, at the beginning of this segment about the gas tax idea, that it had legs. It seems I was wrong.

When we come back, Russia appears to be flexing its muscles for the world to see. Is this just posturing, or is it more ominous? The all stars on that, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT: I have made a decision to renew the flights of strategic aviation on a permanent basis. And today, at midnight, 14 strategic bombers of Russia, together with support planes and refueling tankers, took off from seven air fields in various parts of Russia. It was the beginning of combat air patrol, with 20 aircraft taking part.

ALEXANDER KLIMENT, THE EURASIA GROUP: This is the latest example of Russia doing a little bit of saber rattling. I think it is largely symbolic. The risk, I think, is that the more missiles and bombers you have pointing at each other, the greater chance there is of a miscalculation.

(END VIDEO CLIP)


HUME: Well, it may largely symbolic, but some Russian aircraft have flown, we are told, into U.S. airspace over Alaska, where they were escorted out, and also over Guam. And the Republic of Georgia, which is, of course, formerly part of the Soviet Union, reports today that not for the first time recently, Russian aircraft have violated its airspace.

So something may be going on here. Back with our panel. Charles, what is your take on this?

KRAUTHAMMER: Well, this is Putin flexing muscles. He has made deals with Iran and Syria. He has threatened the Ukrainians and the Czechs. He has had military exercises with China just last week. Look, he is not a communist, he is a believer in power. He is an old secret service, KGB. And they were too sophisticated and too worldly to actually believe in ideology. But he believed in power. He has accumulated it for himself by dismantling democracy in Russia. And he wants it for his country.

Now, there is a lot of evidence of this assertion of power. It is really undeniable at this point. It is dangerous. But it also has a comical edge.

They claim to the North Pole, and they released a film of a sub that was shining spotlights on the floor of the Arctic…

HUME: Reportedly a Russian sub.

KRAUTHAMMER: A Russian sub showing a Russian flag on the floor of the Arctic Ocean, until a 13-year-old Finnish schoolboy called a local station and said that was a clip out of "Titanic."

HUME: Which it turned out to be.

KRAUTHAMMER: Even in this new world, yes, the Russians will always offer you a bit of comic relief.

BIRNBAUM: It is undeniable that the Russians would like to restart the cold war.

HUME: Really?

BIRNBAUM: A warmed over war, basically.

HUME: Why?

BARNES: Yes — they lost the last one.

BIRNBAUM: For the reasons I think Charles was suggesting, that it is not just the interest in accumulating power. It is an ancient history of Russians trying to assert themselves across their borders, going back to the Czars, I think.

But the question is, can they really do so? Is it just an anomaly that they have these new resources because of their natural assets, meaning oil and gas, which they have a ton of, and the price of which is so high now that they have new-found wealth? Almost very much like the Arab states have, very much like Norway has, and parts of the world like that.

Is there accumulation of power and their exercise of power — will it go up and down with the cost of oil? Or is this something more long lasting? There is no question that they want to assert themselves as a superpower like the days of old.

BARNES: What you said, though, about the country's are acting like — particularly the Arab countries, these third-world countries with great natural resources in oil and gas. So, what do they do? Do they develop their countries? Do they go into other areas and build other industries?

No, they just sell their oil and gas and have a few rich people at the top, that certainly is Saudi Arabia, and that is it. And their countries are entirely dependent on these natural resources. And they do much better when the price is high.

What are they pumping money into? The Russians — some of it is to buy — and this is a bit scary — utilities, and so on, in eastern European countries, public utilities. But they are also pumping all kinds of it into a military aircraft, which is not going to do them any good.

That is like the Saudis, who now want $24 billion of dollars in military hardware from the U.S., most of which they probably do not need.

But look, at least while Putin is still in power, and that is another year into 2008, we are not going to see this change.

I think, though, the Russians would be crazy to jeopardize their relationship with the seven other countries in the G-8, these countries which really decide, to some extent, economic policy for the world. Do the Russians really want to jeopardize that relationship?

HUME: Do you agree with that expert who said it is largely symbolic?

BARNES: It is not just symbolic, though. They do throw their weight around.

KRAUTHAMMER: They're selling arms to Syria and Iran, a lot of bad guys. The exercises with the Chinese—is beyond symbolism. And they are putting pressure on the eastern Europeans.

What Putin wants is to reconstitute the old Soviet Empire in a non- communist Russia. And that is dangerous.

BIRNBAUM: That's right. And to associate, especially to make a connection with Iran. Ahmadinejad was present for some of those war games. And, among other things, the Russians are selling supposedly peaceful nuclear equipment for peaceful use in Iran. We can be skeptical about that, and that could also be very dangerous.

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