Published November 10, 2008
This is a rush transcript from "The Beltway Boys", November 8, 2008, that has been edited for clarity.
MORT KONDRACKE, FOX CO-HOST: Coming up on "The Beltway Boys," President-elect Barack Obama sheds light on how he'll tackle the number one issue facing his administration, the faltering economy.
FRED BARNES, FOX CO-HOST: We'll tell you what is on his to-do list in the transition, who is on his team so far, and preview the big meeting next week with President Bush.
KONDRACKE: The Republican Party looking for new leadership after Tuesday's losses. We'll tell you who we think are the rising stars.
BARNES: And it was a devastating election day for advocates of gay marriage. We'll tell you why.
KONDRACKE: That, straight ahead on "The Beltway Boys," right now!
(BEGIN VIDEO CLIP)
BARACK OBAMA, (D), PRESIDENT-ELECT: Immediately after I become president, I'm going to confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity.
(END VIDEO CLIP)
BARNES: I'm Fred Barnes.
KONDRACKE: And I'm Mort Kondracke. And we are "The Beltway Boys."
Well, the first hot story is stand and deliver. But not yet. With unemployment now at 6.5 percent and 240,000 people newly unemployed in the month of October, I think that the markets expected that Barack Obama was going to say something decisive about what he's going to do about the economy in the press conference on Friday. Instead, he said he's going to wait until after January 20, because we only have one president at a time. And the market fell almost 120 points while he was speaking, you know.
BARNES: I know because you were counting.
KONDRACKE: Yeah. So, he has moved quickly on the transition. He had a transition team up and running weeks before the election. That was good. He's moved to name his White House staff.
Frankly, I think he should have named a treasury secretary Friday to build confidence that he was getting his arms around the economic crisis right away. Instead here's what he said. Watch.
(BEGIN VIDEO CLIP)
OBAMA: There's no doubt that I think people want to know who is going to make up our team? And I want to move with all deliberate haste, but I want to emphasize deliberate as well as haste.
(END VIDEO CLIP)
BARNES: You are right, Mort. I think he should have named a treasury secretary. He has a lot of good people to choose from. Look, he may be very liberal but his economic advisers and the financial leaders who he has called in for advice are all mainstream, almost all very mainstream.
And look, the stock market has dropped like a stone. It didn't just drop during his press conference this week. It dropped something like 900 points before that on Wednesday and Thursday. and what is the reason? The reason is uncertainty. The markets don't know what Barack Obama is going to do when he becomes president. I think they are responding to that. he didn't help when asked whether he would stick with his tax plan that would raise taxes on those making over $250,000. And he said well his tax plan was good but he's going to look at data again. In other words it is good but I might change it. We don't know.
I thought, in addition to picking his treasury secretary — Larry Summers would be good, who was once treasury secretary, Tim Geithner of the New York Fed. For heaven's sake, Paul Volcker is old but he would be reassuring if he said he would step in for six months or a year.
The other thing I wish he would have done is announce that he wouldn't raise the capital gains tax rate. I realize that would be heresy among a lot of liberal Democrats but that again would calm markets, I think in a dramatic way. I wish he had done that. I wasn't expecting that but I was expecting that he would name a treasury secretary, even though they said he wouldn't beforehand. I know he's not president yet but he could help.
KONDRACKE: So you are blaming him for the stock market and unemployment rate
BARNES: No, no. But he can — at the very least, he can have a positive effect.
KONDRACKE: I know. I'm kidding you. I know that you think that transitions are a process and are very boring.
BARNES: They are.
KONDRACKE: But they are important because...
BARNES: Mort, wake me when it is over.
KONDRACKE: You remember in past administrations, when it has taken forever to get top officials pointed, cleared and in place, weeks and months in some cases. In this case, during wartime, it is essential that the top officials get named and get their briefings and there's not games being played with records and computers and all that kind of stuff, like there was at the end of the Clinton administration.
The person most responsible for getting this transition organized well is Josh Bolten, the White House chief of staff. Here's what he had to say about it. Watch.
(BEGIN VIDEO CLIP)
JOSH BOLTON, WHITE HOUSE CHIEF OF STAFF: The national and homeland security areas in particular require that we do this like a relay race baton hand-off, that the next runner needs to be running already when this White House hands off the baton.
(END VIDEO CLIP)
KONDRACKE: By the way, the person who put the idea in Josh's head was Norm Ornstein of American Enterprise Institute who has been fighting for fast transitions for a decade. Anyway...
BARNES: Mort, are there any more of your friends you want to give a boost to. Go ahead.
KONDRACKE: You do that occasionally too.
Here's what we think President-elect Obama needs to accomplish in early days. Number one, fill key posts. He did name Rahm Emanuel as White House chief of staff. It's a great appointment. Rahm is a very tough guy, usually has been highly partisan, but not ideological. Judging by what Rahm said in his initial statement, Obama has got it into his head that he's supposed to work with Republicans and not try to kill them, which is what Rahm usually does.
BARNES: I know. Look, I was kind of negative when I first heard he was going to be the White House chief of staff. I changed my mind. I think it was a good pick, smart pick.
KONDRACKE: Yeah. Then after treasury secretary, he has to name secretary of state, defense and so on. I hope he doesn't name John Kerry secretary of state. That is my only advice to Barack Obama.
Number two, manage the stimulus package. Here's what Obama had to say about that on Friday. Watch.
(BEGIN VIDEO CLIP)
OBAMA: I want to see a stimulus package sooner rather than later. If it does not get done in the lame-duck session, it will be the first thing I get done as president of the United States.
(END VIDEO CLIP)
KONDRACKE: I think he should be playing a role. He's a member of the Senate after all. Nancy Pelosi already has ideas about what the stimulus package ought to contain. She wants a $50 to 100 billion as a first step on that and it is all, you know, liberal stuff. There's no tax cut in the first step of it, I think. Although she did make some mention about adjusting withholding tables to put money into people's pockets, which is not a bad idea.
But I just think that the president-elect with his own party in Congress should have some influence on what this package looks like. And it should contain a pledge not to raise taxes in the middle of a recession. That would help markets. You are absolutely right.
BARNES: Look, Nancy Pelosi said a few days ago that we have to govern from the middle, govern from the center and the spirit of bipartisanship —
KONDRACKE: You don't believe her.
BARNES: ... will be corresponding through her veins. Of course, I don't believe her, she doesn't believe that. But you know the person that made it — Mort, you have written about this. You've said this over and over again. You've driven me crazy with this stuff about the most important thing that Obama has promised and convince the nation — his biggest promise bring bipartisanship, bring the country together, unite the people, get rid of...
KONDRACKE: I convinced you.
BARNES: Get rid of polarization. You convinced me it was a big deal. I think the entire voting public in America understands that's what he is calling for. Nancy Pelosi has a horrible stimulus package in mind that won't stimulate anything. One thing you have to do is stir investment. I'm sorry, but lower middle class people aren't the investors. It is people that have more money. They are the people who need tax cuts now. And give them to them so we can get recession. They will invest. That's what creates jobs. Middle class people, just because they pay a little less tax, it's good for them. It's an incentive, but not a big job creator.
Here's the test. You talked about tests for Barack Obama. He's the guy for bipartisanship. Why shouldn't he step in — you're going to agree with this. Why shouldn't he step in and tell Nancy Pelosi, look, this stimulus package is a good place to start to show we are really bipartisan. And let's bring Republicans in. Let's get input from them. It would be good input. But he's not going to do that. It doesn't look like it anyway.
KONDRACKE: It doesn't look like it, but I hope you are right.
Third, Obama needs to control expectations, something he tried to do hours after his election Tuesday night in Grant Park in Chicago. Watch.
(BEGIN VIDEO CLIP)
OBAMA: The road ahead will be long. Our climb will be steep. We may not get there in one year or even in one term. But America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people, will get there!
(END VIDEO CLIP)
KONDRACKE: I thought that sounded like he was declaring for reelection, you know, that he's not going to finish in one term. But seriously...
BARNES: Put off card check until the second term.
KONDRACKE: Seriously, one thing he has to avoid is a Clinton-like gays in the military snafu. And that card check could be his issue. He starts getting asked about card check and makes a position on that, there will be a battle royale.
BARNES: Here's one more bipartisan thing he could do. He's not for the fairness doctrine. He has said he's not re-imposing that doctrine. Why didn't he say so? It would thrill Rush Limbaugh, among others, and me.
KONDRACKE: Lastly, Obama needs to deliver on his promises. The one we talked about, by and large, which George Bush failed to do. He said he was going to be a uniter not a divider. He was the greatest polarizer. Barack Obama has the chance to be the great unifier.
Coming up, leading the party out of the political wilderness, a look at the upcoming stars in the Republican Party. Hot story number two, straight ahead.
(FOX NEWS BREAK)
BARNES: Welcome back to "The Beltway Boys."
Hot story number two, loyal opposition. I'm talking about the Republicans who took a whipping, as George Bush might say. If they can avoid, and they should avoid their worst tendencies. One of them is a circular firing squad, the blame game. I mean, it's just crazy.
BARNES: Losers do that when you lose an election. Remember after Hillary Clinton lost, even before she lost the Democratic nomination, it happens. Anyway, it makes you appear small because you are acting small and petty.
The other thing they have to realize, Republicans need to realize, there is only one big story now and its name is Barack Obama. They are going to get lavish coverage that will drive Republicans crazy. They are stuck with that for a few months. Taking little nicks at Barack Obama here and there is not going to serve them in any way. What they need to do is hold their fire, just wait until the Democrats in Congress and Obama get to the worst parts of the liberal agenda. And there are a lot of them.
And I mentioned card check, which would allow unions to organize without allowing a secret ballot among people who may or may not want to be in a union. That's when Republicans will have a field day. That may not come until the spring. but it will be there. Then we'll see particularly whether Mitch McConnell, the Republican leader in the senate, can put together filibusters again.
KONDRACKE: But, look, the Republican Party needs more than to just wait and hope that the Democratic Party fails. And you know, goes off to the left...
BARNES: I didn't say...
KONDRACKE: Look, the Republican Party needs to reshape its message and its identity. and one thing that it definitely has to do is stop being the old white people's party and start appealing to young people who, after all, are the future of America, and also to Latinos, who they used to get support from, and kicked it all the way. And John McCain, who had some right to expect that he could appeal to Latinos, didn't pay any attention to them. So that's what they've got to do.
BARNES: Of course, I agree with that. And they need to pay attention to winning seats back in moderate districts in the northeast, in the rust belt, urban areas. They lost in Cincinnati. They lost even in the — where a lot of professionals live in the suburbs of Washington and so on.
But, but, as bad as the election was for Republicans, they still have a few stars some of whom — who have just come out of this election. One of them, the governor of Indiana, Mitch Daniels, who won in a landslide in Indiana while Indiana was going for Obama
KONDRACKE: Not a very charismatic man, but very imaginative and gutsy. And I would love to see him on a ticket sometime, nationally.
BARNES: Secondly, Bobby Jindal, the governor of Louisiana, not just a talker, but a doer.
KONDRACKE: Right. I would love to see Bobby Jindal, who is rebuilding Louisiana and New Orleans. I would like to see him on a ticket sometime too.
BARNES: Paul Ryan, the congressman from Wisconsin, under 40, the real thinker, reform thinker in the Republican Party.
KONDRACKE: I'd like to see him identify himself as a reformer and not right winger and identify himself as mainstream, which he could be.
BARNES: Mort, you have not been paying attention he has done that before.
A blast from the past, Jeb Bush, who I thought, when he was governor of Florida, was the best governor in the country, has been out of sight for a while but he's still hovering.
KONDRACKE: Three Bushes in the White House. It is going to be an uphill climb. If this one came to the White House, he might be the best.
BARNES: Sarah Palin. Sarah Palin is a star, no question about that. She has been taking a lot of flak from people who worked in the McCain campaign, scapegoating her as if she was responsible for McCain losing the election to Barack Obama. Really mean stuff that doesn't help her, doesn't help the people who did that.
Here's her response. Watch this.
(BEGIN VIDEO CLIP)
SARAH PALIN, (R), GOVERNOR OF ALASKA: It has been an honor and I just feel like it has been such a blessing to have the opportunity to represent some women who work hard all across this nation every single day. And whatever happens for me in the future, especially in terms also of being able to help progress the women's movement also, I'm not going to let women down. I'm going to keep working hard.
(END VIDEO CLIP)
KONDRACKE: Look, some news organization, maybe the "Weekly Standard" has got to do the definitive investigative report on this firing at Sarah Palin. Did she — was she responsible for the $150,000 or more on clothing?
BARNES: We've already done that. No, she wasn't.
KONDRACKE: No, she wasn't. Does she know where Africa is, that is a continent, what North America is, and all rest of it needs to be sorted out as to what she did and what she didn't — is she a diva? I don't know the answer. maybe you do. I know what you think. But I'd like to see some reporting.
BARNES: ... see some reporting.
KONDRACKE: Yes, some of it I do.
BARNES: Oh, geez.
Coming up, big three auto execs hit Capitol Hill looking for their own bailout money. And proponents of gay marriage handed big time losses on Election Day. We'll tell you why, next.
KONDRACKE: Welcome back. Let's check out the "Ups and Downs" for the week.
Down, the big three automakers. Executives from Chrysler, Ford and G.M. met with House Speaker Nancy Pelosi this week to lobby for more financial aid. This, after the Energy Department said that automakers could apply for $25 billion worth of low-interest loans as soon as next week.
Look, I think it is a perfect disaster if we start bailing out one industry after the other. We've already done it with the financial services to keep the economy from collapsing. But the idea that we're going to bail out the automakers is meant for trouble. These companies ought to go into bankruptcy. They will not cease to exist like airlines. They will continue to operate. But they can be restructured. They can get new management. And lord knows, they need new management, especially General Motors.
BARNES: Mort, you're pretty good on this issue. Congratulations.
Look, a bailout, they want cash, billions in cash, would only subsidize incredibly incompetent management. And these lavish labor contracts which the auto companies never should have gotten into.
The auto industry is thriving in America but it's not thriving in high-tax union states. It's thriving in Georgia, Alabama, Mississippi, other states that are low tax and right-to-work states. So no automaker from Japan or anywhere else in their right mind is going to open a plant in Michigan. That's for sure.
All right, down, gay marriage. Advocates served a blow Tuesday when three states, including California, passed propositions to ban gay marriage.
KONDRACKE: Look, I understand why gay people want to have every right that straight people have, including the sanctity of having their unions bless by the word marriage. But, America is simply not ready for the "M" word to be applied to those unions. And I think the gay rights movement should go for full civil union rights, including Social Security benefits and all that. Eventually, the young people who voted for Obama are going to become — are going to run the country. And when that happens, gay marriage will happen too.
BARNES: Yes, that makes sense as a tactic or as a strategy to not make the perfect not be the enemy of the good.
Look, I think there's a disconnect between the argument that is being won intellectually in favor of gay marriage. Hadn't been won with me, but it is being won. It just hasn't shifted down to these referenda in states, particularly among African-American voters in California, 70 percent of them voted for the ban on gay marriage.
KONDRACKE: OK, down, speaking of California, Governor Arnold Schwarzenegger. Not only was his help to John McCain too little and too late, he's facing a staggering budget deficit in his state and is looking at both massive tax increases and budget cuts to close the gap.
BARNES: California spending is completely out of control, taxes are so high. California, you know what it produces the most? Migrants to Arizona, Nevada, Colorado, all those places. Arnold was for John McCain but he only made one appearance in Columbus, Ohio, a week ago when Arnold was already there. But you know what, he was really good, watch this.
(BEGIN VIDEO CLIP)
ARNOLD SCHWAZENEGGER, GOVERNOR OF CALIFORNIA: He needs to do something about those skinny legs. We are going to make him do some squats. Then we're going to give him some biceps to beef up the scrawny little arms. But if we only could do something about putting some meat on his ideas.
(END VIDEO CLIP)
BARNES: Mort, guess who he was talking about?
KONDRACKE: Yes, I know, Barack Obama. Listen, Barack Obama is lean. He plays basketball. And what Arnold and Barack ought to get together on is fighting obesity in America. Fat people are getting fatter and fatter. and they are killing the economy as well as themselves.
BARNES: Don't harangue us. Don't harangue us.
Hang on to your seats, "The Buzz" is coming up, next.
BARNES: "The Buzz," Mort, what is it?
KONDRACKE: One of the most important jobs in the new administration is going to be education secretary. And my candidate, you can do no better, is Joel Klein, the very reformist schools chancellor from New York City.
BARNES: I second that. The conservative revolt against John Boehner as Republican leader of the house fizzled. First, because Eric Cantor of Virginia decided to run for whip, the number two job. And then Paul Ryan from Wisconsin, we talked about earlier, wouldn't run at all. So you wind up with — oh, and then Boehner made a deal with Mike Pence, who is going to be number three. That cinched it.
That's all for "The Beltway Boys" this week. Join us next week when the boys will be back in town.
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