Will Washington's Spending Spree Jump-Start the Economy or Just Make Matters Worse? Change Has Come to the National Security Arena. And GOP Presidential Hopeful Bobby Jindal Makes His Debut on the National Stage

This is a rush transcript from "The Beltway Boys", February 28, 2009, that has been edited for clarity.

FRED BARNES, FOX CO-HOST: Coming up on "The Beltway Boys," while Americans are forced to cut back and Washington is spending money like a drunken sailor. Will it jumpstart the economy or make just matters worse?

JUAN WILLIAMS, FOX GUEST CO-HOST: Change has come to the national security arena as the Obama administration drops the phrase "war on terror" and announces an end to the war in Iraq.

BARNES: GOP presidential hopeful Bobby Jindal makes his debut on the national stage, and gets mostly negative reviews.

WILLIAMS: Bill Clinton actually helping President Obama? Weird, but true.

BARNES: All that's coming up on "The Beltway Boys," right now.


REP. JOHN BOEHNER, (R), HOUSE MINORITY LEADER: The era of big government is back and Democrats are asking you to pay for it.


BARNES: I'm Fred Barnes.

WILLIAMS: I am Juan Williams, in for Mort Kondracke. Tonight, we are "The Beltway Boys."

BARNES: Tonight, the hot story is spending spree. How did you like that sound bite from John Boehner?


Look, I could see he is a partisan figure. He's the leader of the House Republicans, but I think what he said about this spending spree that taxpayers are going to have to pay for it, is backed up by the numbers. Here is the budget that President Obama just released on Thursday. It's for 2010. Is 3.5 — I was going to say billion, it's so hard to say trillion. I can't get the "T: word out. $3.5 trillion. It's an additional $600 billion added to it for Obama programs. On top of that there are hundreds of millions in the stimulus spending in this budget. And it's a $1.2 trillion deficit after a $1.75 trillion deficit this year, 2009.

After all that, that spending, President Obama has the audacity — not the hope — the audacity to claim that he is the personification of fiscal prudence.

Watch this.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I refuse to leave our children with a debt that they cannot repay. And that means taking responsibility right now in this administration for getting our spending under control.


BARNES: What do you think there? Here he is, he's acting like it's under control. I want to make three points in the first one is, there are no controls. The budget is simply that there is no fiscal restraint. I think we see that. The second point is there is no setting of priorities. What Obama wants to do, and it may be a good political strategy for seizing the moment here, but he wants everything. They want to clear out the whole liberal covered proposals that have been sitting there for years and enact them all. They're going to try to do it right away this year, seizing this opportunity of everybody's unease about the economy. And number three, there is no credible way to pay for this. In his budget, the so-called spending cuts are microscopic. And when Obama and Democrats talk about savings — savings are usually what you get when you cut spending. But not for Obama. Savings are tax increases. There are all kinds of those in there. And they claim they will raise fresh revenues. But it's based on the economy growing a lot faster than it is actually going to go.

Now, Obama announced on Friday, they're pulling troops out of Iraq. They're planning $60 billion in savings just for removing troops from Iraq in 2010. They will ever get that much. It's as simple as that.

WILLIAMS: Fred, when I hear you talking about big spending, and you are alarmed, my god, your indignation, Fred Barnes at deficit spending, I think, were you around for the George W. Bush administration? Did you miss that period of American history?


WILLIAMS: When he came into office, we had a surplus — this nation had a surplus left by a Democratic president, Bill Clinton. And when he left office, we had a $459 billion deficit. That's a huge difference, Fred. And that happened during a Republican administration.

What we get here, it seems to me, is a sense of the tremendous anxiety for the economic crisis were in. and American people understand that. Let me tell you, polls show that two-thirds of people who heard President Obama speak on Tuesday night before that joint session of Congress, when he spoke almost entirely about the stimulus package, two-thirds came away saying they felt good about the speech. It addressed their primary concern as America's. They didn't have only saying this is unnecessary, this is a bunch of part. They said this is necessary.

The second thing is 85 percent of those who watched the president on Tuesday night said they felt more optimistic about America's capacity to deal with this crisis and go forward. They thought he had real plans and was taking some real concrete steps, necessary steps to get us moving forward in terms of economic progress in the country again.

Here's my thoughts, Fred. Three things I want to say to you. You have to do something. The American people know we have to do something at this moment to deal with our economic crisis. We can't just sit around and pretend everything is hunky-dory. Second, some economists, both Republican and Democrat, will say we should do more. We should be spending more money if we really want to get this economy ginned up at this moment.

Finally, Fred, let me ask you this. What's wrong with sacrifice? What's wrong with responsibility? What's wrong with people who make more than $250,000 — in other words, the top 2 percent of earners in the country — making some sacrifices, because I think they should feel blessed to live in this country and have the economic opportunities that are made available in America. And I would say America has been doing this for generations and has lifted generations to that point. Why are those people — why would you say, oh, they're going to rebel against President Obama? No, I don't hear that so far.

BARNES: People pay their taxes. But it's counterproductive to ask for sacrifice. And of course, what Obama and Democrats — you know what they mean by sacrifice? You have to pay more taxes, people. That's what they main. What you're doing is taxing the people who work hard, save, invest, create jobs. And you're taxing them and you're going to hurt the economy. You're not going to help it.

Look, we are blessed too. I'm all in favor of sacrifice. Obama wants to tax people. But what about the 95 percent, I think you mentioned this, who he is giving a tax cut to?

WILLIAMS: That's the middle-class.

BARNES: What about the sacrifice for them?


BARNES: Wait a minute. I have to make another point here. President Obama said, now this is a time where, if you plan to redecorate your house, maybe you should stop and think it's not a good time. Now what is he and his wife, Michelle, doing at the White House? They're highly decorated to commend redecorate the place. I think there's a little bit of phoniness there, don't you?

WILLIAMS: Look, here's what I think. 95 percent — I'm glad you said it — tax cuts for them. We're talking about the 2 percent at the very highest end. Here are where the cuts come in the Obama budget. Cuts to agribusiness where they make more half $1 million a year, higher capital gains taxes, Fred, not repealing the estate tax.

BARNES: That's a tax.

WILLIAMS: Of course, it's a tax. It's a tax on people who make that money. It's a savings to the American people, into the budget. No more shields, Fred, on taxes for people making profits overseas. And, from this point on, people who are involved in the hedge funds and private equity funds, they're not going to be taxed at capital gains rates, but income tax rates just like their secretaries.

Now, Fred, those people, they should make a sacrifice. We should be entering an era of responsibility. And I think that's what President Obama is asking for.

BARNES: All I'm going to say is when you take way their money — savings are when you cut spending.

Anyway, Juan, we will argue this later.

Coming up, Bobby Jindal's national video. And Harry Reid and Nancy Pelosi tell President Obama who is boss when it comes to earmarks.



BARNES: Welcome back to "The Beltway Boys." It's "Up and Down" time.

Up, Harry Reid and Nancy Pelosi. The Democratic leaders keep slipping in earmarks, those controversial spending bills, into major legislation. President Obama is letting them get away with it.

Senator Reid even says it's his duty. Watch.


SEN. HARRY REID, (D), HOUSE MAJORITY LEADER: We are a separate branch of government. And since we have been a country, we have had the obligation as the Congress to help direct spending.


BARNES: I laugh when I hear that kind of an explanation or justification for these earmarks. But you know, I heck a lot of Republicans — all the Democrats practically, and a heck of a lot of Republicans, agree with Harry Reid on that.

You know it was clever was Obama hiding — hiding of the fact that he has been rolled by Pelosi and Reid on earmarks in the 2008 omnibus bill left over from last year that was just passed by Congress.

Watch this. This is from Obama's speech to Congress. Watch.


OBAMA: I am proud that we passed a recovery plan free of earmarks. And I want to pass a budget next year that ensures that each dollar we spend reflects only our most important national priorities.


BARNES: Notice something missing in that? We have the recovery plan and we have next year's budget. In between was on this omnibus bill, 8500 earmarks. He neatly skirted around that.

WILLIAMS: You know what, Fred? He avoided an argument with Pelosi and with Reid over the big issue because he — of earmarks, because he doesn't want to take attention away and energy away from dealing with spending. And that's what he's up against in this big stimulus package, and that's where his fight is, that's where his heart is.

But let me just say this to you. 40 percent of these earmarks are put in place by Republicans.

BARNES: Indeed.

WILLIAMS: Republicans. And Republicans have been in power. Think back to the 90s, they had control of both houses. They didn't do away with earmarks. They often see political advantage in maintaining these earmarks.

So here's my thought, Fred. If you have transparency, if people know what you're doing him, it may be the earmarks aren't the bad boys, the demons everyone makes them out two be this time of year. And Republicans are hyped up about spending. My argument is, a lot of earmarks go to health care institutions, go to schools, go to worthy causes in the districts and they are directed by people who know the district, as opposed to getting locked up in the appropriations process that would take forever, and might end up with more spending that wasn't sufficiently targeted.

BARNES: We get things like Congressman so-and-so hospital as a result of that.

WILLIAMS: All right.

Down, Louisiana Governor Bobby Jindal. The GOP presidential wannabe hopes to get a second chance at a first impression after a less than stellar performance Tuesday night.

Here's a sample of his response after President Obama's speech to Congress. Watch.


BOBBY JINDAL, (R), GOVERNOR OF LOUISIANA: Republicans want to work with President Obama. We appreciate his message of hope. But sometimes, it seems like we look for hope in different places. Democratic leaders in Washington, they place their hope in the federal government. We place our hope in you, the American people.


WILLIAMS: Fred, I hope you weren't putting their hope in him to be your next presidential candidate, because that was a dreadful performance. Rush Limbaugh said he is the next Ronald Reagan. I think he looked more like Chicken Little running around there. He wasn't quite sure what was going on, what to do. He looked geeky. and he didn't have any alternative to the Democratic or postal. He looked out of step.

Obama had really pushed the whole notion of optimism, recovery, we can do it. Bobby Jindal was a step behind. And just the way he looked, he looked like he was a guy who was robotic and stiff. It didn't work for him. He's a good governor and a smart man, but just not his night.

BARNES: Juan, what did you really think?


You obviously sugarcoated that. Look, compared to Ronald Reagan, the new Ronald Reagan, as Bobby Jindal has, is the worst thing that can happen to you. It's like some young Democrat coming along and being told he's the new John F. Kennedy. They can never live up to that.

Bobby Jindal is one of the smartest young politicians I've ever met. He is very impressive. And he'll easily recover from this — in this bad night — I would recommend, for the next couple years, maybe he let somebody else do the response.


WILLIAMS: Fred, you're being nice. You're being nice.

Coming up, Bill Clinton lends a helping hand to President Obama. And the new homeland security chief raises eyebrow, not for what she did say, but what she didn't say.


BARNES: Welcome back to "The Beltway Boys." We continue with our "Ups and Downs."

Down, Homeland Secretary Janet Napolitano. It was two hours before she finally mentioned fighting terrorism in her first congressional testimony this week. And forget about the phrase "war on terror." Napolitano's choice of language prompted a comparison for prepared remarks with those of her predecessors, Tom Ridge and Michael Chertoff. While Ridge and Chertoff made multiple references to terrorism and attacks, Napolitano made virtually none,

Juan, just so you understand this, that's zero.


WILLIAMS: All right. Let me just tell you, there's an interesting precedent here because, if you watched on Tuesday night, you remember what happened in President Obama's remarks to the joint session of Congress.

Take a look. Here's President Obama.


OBAMA: With our friends and allies will forge a new and apprehensive strategy for Afghanistan and Pakistan to defeat Al Qaeda and combat extremism.


WILLIAMS: That's the one time he mentioned that whole topic in a speech and it came at the very end, Fred. So my thought is, wait a second, he is speaking to economic anxiety. I think he delivered the right speech to America at this moment.

When you talk about Janet Napolitano and Homeland Security, again, I think it's not that she has a blind eye to terrorism and the potential for attacks in the country, it's more the case that she is saying, here's a new structure we have in place to shore up Homeland Security to make sure that every bases covered, but she doesn't have to give a speech like Tom Ridge did after 9/11. At that moment, America was in the transition. She doesn't have to give a speech like Michael Chertoff because Chertoff was coming in and people were concerned about the transition. Could he handle that? Could the department handle all the challenges of preventing another attack?

Believe me, Democrats are worried to no end about not having another attack, because imagine the crushing amount of criticism that would fall on them for being lax in any way on this subject. But I think it was striking. I remember watching and thinking to myself, boy, this is a different kind of speech, both from President Obama and the Homeland Security secretary.

BARNES: This is my concern. The speech by both President Obama and the testimony by Janet Napolitano reflects something. That there's really not as much concern, because we have not had a terrorist attack since 9/11, with another terrorist attack in the United States. I think we need to talk about it. Not sow fear, over the country, but to recognize it and have people be aware that there could be another attack, that we're not out of the woods yet. I think neither Obama nor Napolitano reflected that.

WILLIAMS: Up, Bill Clinton. During the primaries and general election, you could say the former president wasn't exactly helpful to Candidate Obama. But now that he is President Obama, Clinton is coming to his aid on matters of both style and substance.

BARNES: The fact that we're getting Bill Clinton an up arrow ought to be encouraging to Bobby Jindal.


Here's a guy, was a peach that he's back and given an up arrow, and giving good advice to Obama. He said quit being Dr. Gloom and doom. People don't want to hear that. You have to give the American people some reason to be hopeful we can get past this economic crisis. That's exactly what he did in his speech on Tuesday, Obama did. And then, he also, in a TV interview, Clinton warned against nationalizing the banks. And I think he's right about that. There are other things you can do. You can get their toxic assets or you can — one thing that the Obama administration doesn't seem to want to do, and that is, if the bank is hopelessly insolvent, shut it down.

WILLIAMS: A quick note to you, the White House people were not thrilled with Bill Clinton offering advice. They didn't think they need it.

BARNES: One more thing.

Up, president's residents. We have a president in Washington, D.C., but this is the residents of Washington, D.C., who are up. After nearly two centuries of taxation without representation, the capital city is this close to finally getting a vote in Congress. The senate gave their go- ahead this weekend houses and to follow, but the fight is not yet over.

I turn to you, Juan, as a resident for many years now of the District of Columbia, who can not elect Senators are, in the case of this bill, a member of the House of Representatives.

WILLIAMS: The fight is not over because there are provisions that have to do with gun-control. They would be part of the deal. Now there is some fight I think that will come down the road on this. But the big problem, Fred, is the Constitution, because I think this will end up in the Supreme Court, and I think the Supreme Court is going to say the District of Columbia was created as a federal reserve, and it wasn't supposed to be a state. It wasn't supposed to have a vote in the Congress, because that right is reserved for states. Most residents of the District of Columbia would like to have a voting member in the House of Representatives. In fact, they would like to have two senators.

But you know what I think, and I am way, way, way outside the mainstream here, but I think the District of Columbia should be retroceded, if you will. What that mean is give parts of it that were taken away from Virginia and Maryland back to those states for purposes of voting representation. The problem is that Maryland and Virginia don't want any part of the District of Columbia with all its financial, educational troubles and high taxes. So that's not happening. But that would be the normal and proper way so that every American has proper representation in our Congress.

BARNES: Juan, you're going to be in so much trouble with most residents in Washington, D.C.

WILLIAMS: I won't be able to go home.

BARNES: That's the minority view. That is — even worse, that's the Republican view. But you are right. It's the Constitution that is the big problem. It was consider giving representation to members of the District of Columbia back when the Constitution was written and they decided not to. It said only from a state. And the District of Columbia is not a state.

WILLIAMS: So the only option is statehood. And I don't think you'll get that or a constitutional amendment. And I don't see it happening. The story is far from over.

BARNES: Juan, if you are really in trouble, you'll be safe in my house in Virginia.

WILLIAMS: I can get a visa.

Don't go anywhere. "The Buzz" is coming up next.


BARNES: Juan, what's "The Buzz"?

WILLIAMS: This week, Dick Durbin, the senior Senator from Illinois, said maybe, Roland Burris, you should resign. You should leave. That would be the proper thing to do. The thought was Roland Burris was maybe getting signals from the White House or elsewhere that he has a reason to stay even from his home state, in Illinois, and in Chicago. But black ministers there are rejecting him. And at the White House, what I'm hearing is they won't do anything to help Roland Burris.

BARNES: What do you think? Will he stay or will he go?

WILLIAMS: His ego is very large, but if he had any dignity about it, he would be gone.

BARNES: I remember — Juan, you remember in the campaign when Barack Obama sort of said he would like to be, in a sense, like Ronald Reagan was as president, transformative. I laughed at that. Now with everything he proposed in his new budget just this week, if he gets all that passed, he will be a transformative president like Ronald Reagan. No question about it.

That's all for "The Beltway Boys" this week. Join us next week when the boys will be back in town.

Watch "The Beltway Boys" Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

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