This is a rush transcript of "Special Report With Brit Hume" from December 3, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

RICK WAGONER, GENERAL MOTORS CEO: We're here today because we made mistakes which we're learning from, because some forces beyond our control have pushed us to the brink, and most importantly because saving General Motors and all this company represents is a job worth doing.

(END VIDEO CLIP)

CHRIS WALLACE, GUEST HOST: That was General Motors CEO Rick Wagoner asking Congress for billion in a government bailout to keep GM going into next year.

It's time to hear what our panel thinks, FOX News contributors Fred Barnes of The Weekly Standard, Mara Liasson of National Public Radio, and Mort Kondracke of Roll Call.

Well, they say, in the old cliche, is you never get a second chance to make a first impression, but Fred, the big three auto executives did get a second chance today. How did they do?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well, they made a better impression than they did before.

But I don't think they were the key players here. The key players were this economist from Moody's, Mark Zandi, who the Senate Banking Committee paid a lot of attention to. And, of course, he said, look, they're going to need more money than this $34 billion. That may take them through some months but you-

WALLACE: He talked about —

BARNES: Yes, $125 billion. But he said this, he said, look, give them some money now and get them through, say, the end of March. But you apply benchmarks and enforce benchmarks. And if they don't meet them, you don't give them any more money.

The other person, by far the senator who was the best, no question about it, was Bob Corker of Tennessee, who knew more than anybody else there. And he had a solution, and it made sense.

He said let's do that, let's have some benchmarks. The benchmarks — one thing, you have to clear your balance sheets, so you get rid at 30 cents on the dollar, this $28 billion in bonds, which is better for the bond holders than they get right now, and you have to get the UAW to accept its stock half of the money that owed their pension fund, which would be about $10.5 billion.

And, thirdly, and here is the hard one, to get the UAW to accept the same wages and benefits that are paid to workers in auto plants in those transplants, you know, the Japanese and German companies that build cars in the south.

It will be hard to get the UAW to do that, but if you met those, by the end of March, you could have viable companies that could probably attract investment on their own.

WALLACE: Mara, there were even more ideas throughout. One senator, I think it was Bennett of Utah, said "I think GM and Chrysler should merge," because obviously Chrysler is the company that seems in the most danger. Others talked about a pre-packaged bailout.

Did you get the sense that some of those alternative ideas of Corker's got more weight, one, from the members of Congress who are going to have to approve the money, and, two, from the players in Detroit?

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I think that something is going to — there is going to be a workout. You might call it a bankruptcy, although it might not be technically a bankruptcy. These companies will not look the same when they come out of this.

I do think the Obama administration is inclined to do something for them and to make sure the big three don't disappear. But there may not be three of them when they're done. and they will look a lot different and they will be smaller and they will have to have lower labor costs.

And the UAW will have to make concessions, which they say they're willing to do.

WALLACE: Mort —

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: GM may not last until the Obama administration comes in. They are running out of money right now. So the best idea I have heard, and I agree with Fred, was the Corker idea, and Fred explained it very well.

WALLACE: Are they on the hook in the Corker idea, and they on the hook just for the $34 billion, or are they saying, yes, we are going to pony up $75 billion to $100 billion?

KONDRACKE: This was designed specifically for GM, and it would get the money. And if it did not do all the reforms that Fred enumerated, that they would have to go into bankruptcy by March 31st, that there would be a deadline on this.

And, as you said, the deal that corporate was laying out is better for both the unions and the creditors than bankruptcy would be. And clearly, if GM went out of business entirely, then everybody would lose everything, including the workers their jobs.

WALLACE: Fred, it sounds as if the ideas, the business plans that Detroit came here with such fanfare were just thrown out in the sense that Congress will come out with its own set of conditions, its own structuring for the money that it gives them.

BARNES: That was a problem. And what members of Congress want is something that can be enforced. And that's why they follow the Corker plan, say, you would pass legislation that says you have to meet these benchmarks or you don't get any more money.

And he did ask Rick Wagoner of GM if he would accept money now and accept those benchmarks to get more money, and Wagoner said yes.

LIASSON: They're willing to take oversight, willing to take an auto czar.

WALLACE: Everything except step down from their jobs, thought.

LIASSON: But, look, these auto companies are no longer in charge of their own fate. Congress is and the taxpayers are.

WALLACE: Let me just ask you real quickly — we have about 30 seconds left in this segment. I'll start with Fred and move down. Is Congress going to do something before they go home, or is this going to have to wait for the new Congress and the new president?

BARNES: That's a good question. I think they will give them some money now, but impose benchmarks for more.

WALLACE: Mara?

LIASSON: I think the big restructuring will come in the next congress.

WALLACE: But they are going to give them some money now?

LIASSON: They will give them something now, yes.

KONDRACKE: They have got to give them some money now, because otherwise GM will go out of business. And if GM goes out of business, you lose a million workers or so.

WALLACE: You heard it here.

We have to take a break here, but when we return we will take and in depth look at Eric Holder, President-elect Obama's choice for attorney general.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT BARACK OBAMA: Eric Holder has the talent and commitment to succeed as attorney general from his first day on the job, which is even more important in a transition that demands vigilance.

(END VIDEO CLIP)

WALLACE: President-elect Obama's pick of Eric Holder as attorney general is one of his few choices that has brought negative reaction from some Republicans.

And there has also been some media criticism of Holder's actions as deputy attorney general under President Clinton.

So what did he do wrong, and is this nomination in any trouble? Let's get some thoughts from our panel. Mara, there are basically two knocks against Eric Holder. Why don't you briefly explain both of them?

LIASSON: One of them is his role in the Marc Rich pardon, a very infamous late, very late in the Clinton administration, pardoned Marc Rich, a fugitive financier, and Eric Holder approved it.

WALLACE: This is a fellow who was on the lam and evaded prosecution?

LIASSON: He was living in Switzerland.

And he has at times played down his role in it, but, in fact, it turns out not only did he say he was neutral leaning toward positive, but also we hear that a PR executive who was friends with Rich said that he stood next to him at a dinner party and even suggested a lawyer who ended up being hired and who did the pardon.

The other is the FALN, which was a group of Puerto Rican terrorists who got clemency.

WALLACE: Sixteen members of FALN got clemency.

KONDRACKE: Yes.

First of all, his nomination is not in trouble. I think we should just say that. I think the Obama camp made sure, they went up to Capitol Hill and made sure he could get through. But I would say of all the cabinet members, his is going to be the most contentious. And it is not just Eric Holder who is going to be on the hot seat up there, it will be Bill Clinton, because this will be a chance for the Republicans to reveal the Marc Rich pardon.

And if Democrats want to help Eric Holder get confirmed, they will have to put the blame on Bill Clinton.

WALLACE: Mort, The Wall Street Journal in an editorial today said that for all the criticism of the Bush administration politicizing the department of justice, especially with the firing of those eight U.S. attorneys, that what Eric Holder did in the Clinton administration, the Clinton justice department, was much more and much worse.

Fair or not?

KONDRACKE: Well, no, I don't think so. I mean, we have the one case of Marc Rich, which is the case of cronyism, and—

WALLACE: We should point out, Marc Rich's ex-wife gave lots of money to the Clinton —

KONDRACKE: — to the Clinton Library and to Hillary Clinton's senatorial campaign and to the Democratic Party, and so on. So there is a lot of hand washing here and maybe influence peddling.

There is one other area of questioning that I think will be fascinating of Eric Holder. On the left there is a big movement to impanel a grand jury to investigate terrorist surveillance renditioning of prisoners around, grabbing them on foreign shores and stuff like that, and interrogation methods.

Will the Obama justice department go for a grand jury in those cases? I hope the answer is no, because if it did, there would be hell to pay in the intelligence community.

WALLACE: Fred, one of the weapons that Republican critics have against Holder is the fact that back when particularly the Marc Rich pardon happened in 2001, a lot of Democrats went on the record criticizing what Holder, what Clinton, what the justice department had done.

Chuck Schumer, fellow New York Senator to Hillary Clinton, said there could be no justification for pardoning a fugitive for justice. This is a mockery of justice.

Somehow I think that quote will be repeated.

BARNES: It will be repeated.

I disagree with Mara. I think this nomination could be in trouble, because hearings are going to bring all this out. And they're going to be well publicized, because these are the biggest ones, because he is the most controversial nominee so far, at least, and it is a big job being attorney general.

And I think both Mort and Mara have left out one thing that is very important about the Marc Rich corrupt pardon. "Corrupt" is the right word. Holder steered it around the Justice Department so it went right to President Bush (sic).

And so the prosecutors in this case, and it obviously never came to trial because Rich fled to Switzerland, the prosecutors never got to send in their word, their view, which is a part of the very rigorous justice department pardon process. He allowed that step to be evaded.

WALLACE: Mara, in the interests of being fair and balanced, briefly tell us why Eric Holder is a good choice for attorney general.

LIASSON: As somebody said to me, everybody has the right to make one mistake. Other than this blot on his record, Eric Holder has been a stellar member of the legal community, and he's been a prosecutor and U.S. attorney —

WALLACE: Former judge.

LIASSON: — former judge. The guy is otherwise eminently qualified to be the attorney general.

I disagree with Fred. I think that the Senate is inclined to give deference to a president on his cabinet appointments, and they will. Again, I'm not saying the hearings won't rake him over the coals, but in the end he will be the attorney general.

BARNES: — corruption —

WALLACE: Let's go down the line. Fred, will he get confirmed or not as attorney general?

BARNES: I think he will get confirmed, but these will be very embarrassing hearings for Holder and for the president elect — not Bill Clinton.

LIASSON: Mara?

KONDRACKE: He will be confirmed. But he will get a grilling beforehand.

WALLACE: Oh, goody!

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