This is a rush transcript of "Special Report With Bret Baier" from March 24, 2009. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
TREASURY SECRETARY TIMOTHY GEITHNER: The U.S. government as conservator or receiver would have additional powers to sell or transfer the assets or liabilities of the institution in question, to renegotiate or repudiate the institution's contracts, and prevent certain financial contracts with the institution from being terminated on account of conservatorship or receivership.
HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: This is an unprecedented grab of power. And before that occurs, there ought to be a real debate about whether we should give that authority to the treasury secretary.
(END VIDEO CLIP)
BRET BAIER, HOST: Treasury Secretary Tim Geithner up on Capitol before the House Financial Services Committee today, asking lawmakers for new power — unprecedented power — to regulate non-bank companies like AIG, an insurance companies, whose collapse could endanger the broader economy, systemic risk.
What about this? Let's bring in our panel: Fred Barnes, executive editor of The Weekly Standard, Nina Easton, Washington bureau chief of Fortune magazine, and Juan Williams, senior correspondent of National Public Radio.
Nina, let's start you with.
NINA EASTON, WASHINGTON BUREAU CHIEF, FORTUNE MAGAZINE: First of all, I think the Republicans, in the case here of John Boehner, are making political hay out of this, on trying to score a lot of political points, because this is an idea that's been around for at least a year.
Hank Paulson, the former treasury secretary under Bush, was proposing it. The problem is — and the idea was how do we avoid these ad hoc, chaotic and expensive bailouts of these huge financial institutions?
AIG was regulated as an insurance company. It's mostly regulated by the states. There was nobody overseeing a lot of these instruments that caused the problem at the end of the day.
So it's not — yes, there should be debate, and it shouldn't be rammed through, which I think the White House is trying to do with a lot of this stuff. But it's not that much different. And again, when you say unprecedented, it's not that much different than the FDIC can go in and take over banks and sell off those assets.
What they're trying to extend that to other, non-bank, but financial institutions that pose a systemic risk. It's definitely an idea worth looking at. I don't think it is a Geithner power grab.
BAIER: We should point out there were some Democrats in both the Senate and House side that had concerns about it today as well. Fred?
FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I agree it's an idea worth looking at and then killing. It's a terrible idea. There is no need for it.
And, look, to give these people — it's not that they have handled the power they already have so well. They have done a terrible job so far.
And the stuff they want to do — you know, they seize a couple of phrases, "too big to fail" and "systemic risk," and say because of these, we have to go in and regulate investment banks and insurance companies and hedge funds and so on.
The truth is banks are different. Banks, the federal government guarantees the deposits of all the people who have money in the banks up to a certain point.
Look, the money the people invested in hedge funds are not insured by the government. And if there were some — if they could point to some evidence of why they need to do this — look, Lehman Brothers failed. There was no systemic risk there. It sort of froze credit for a while.
But a systemic risk would mean if one institution fails, than others will. There will be a domino effect. It didn't happen with Lehman Brothers. I think they could have let AIG fail, stripped off the financial stuff. The insurance company was sound and done that.
But here they are, once again, using the whole economic and financial problem that we have, trying to seize all this power that they don't need.
One more thing: If you really want to do something, worry about these outfits getting too big to fail, all you have to do is apply higher capital requirements as they get bigger or penalties if they don't meet the capital requirements. That's all. You don't need to jump in and set the pay for the CEOs, which is another thing they want to do.
EASTON: Just one quick point: The taxpayers ended up guaranteeing in the case of AIG.
BARNES: But they didn't have to bail out AIG. Of course they did. I think that was a mistake.
JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: But they did and it wasn't Democrats who did it at the time. It was the Bush administration.
WILLIAMS: So from my perspective — what I'm saying is that this is not a partisan power grab.
BARNES: I didn't say it was. I just said it was a terrible idea.
WILLIAMS: The reason I think it's a good idea is, look, the taxpayer is the guy that keeps getting stuck with the bill in this game.
And here you have an opportunity for someone who is representing the taxpayer to say "We are going to now take a look early on. And we are going to look not just at the banks. We're going to look at the investment companies, the insurance companies. And if you are on the verge of some kind of catastrophic collapse that is going to endanger — domino-style — the rest of the economy, we are going to intervene."
That seems to me to be prudent. It doesn't seem to me to be a power grab.
BAIER: Isn't there a lot of trust inherent here in how the government handles this stuff?
WILLIAMS: Tremendous. And without a doubt, it opens the door, and we saw it today with Michelle Bachmann and others saying "socialism, this is socialism. What's going on here?" And John Boehner said this is beyond the pale. But the fact it —
EASTON: You already have this in ad hoc form. This is already happening. It has already happened. What this does is set it up and make it a much more predictable and, in some way, transparent form, because this is — look, this is how we're going to intervene. This is the means by which we're going to intervene instead of this ad hoc — this is going to cause a crisis but—
BARNES: If these people had done so well in the area that they are already regulating, which is banks. They already have the power. Do you think they couldn't have recognized the systemic risks there?
BARNES: And they let Citicorp get to the stage it's at?
WILLIAMS: Lack of oversight, Fred, lack of regulation.
BARNES: Look, they failed there. Regulation didn't work. So now you want to apply it to all these other outfits? It's just not necessary. There's no reason for it, except they want more power, particularly over these companies and to do all the things they want to do, like set CEO pay.
BAIER: Last word.
The Obama administration rolls out its security plans for the southern border. The all-stars react, coming up next.
(BEGIN VIDEO CLIP)
HOMELAND SECURITY SECRETARY JANET NAPOLITANO: Just from my department alone, within the next few days, there will be 350 more agents sent to the border from where they currently are. And then we'll judge the situation on a day-by-day basis. If we need more, we'll send more.
REP. LAMAR SMITH, R-TEXAS: I would have a real concern if they were coming from the interior, where they need to be enforcing other immigration laws.
We have an administration that is spending hundreds of billions of dollars. They don't need to short change enforcing some immigration laws to better address the problems at the border. They can do both.
(END VIDEO CLIP)
BAIER: The administration rolling out new plans to address the situation along the border. Secretary of State Hillary Clinton traveling to Mexico tomorrow to talk about those efforts to fight Mexican drug cartels and to stop the violence from moving into the U.S., although some people say it's already happening.
We're back with the panel. Juan, what about this plan?
WILLIAMS: Well, look, the option is you nationalize the borders and put American troops there to protect, because the cartels are out of control. I mean, that is a terrorist activity that is basically, I think, sweeping parts of Mexico and threatening that border.
And so how do we protect our border without militarizing it? And I think this is the logical step. Let's hope it's not intermediary. Let's hope that it is something that can resolve the issue.
EASTON: And it's proactive. I don't think you can be criticizing the suggestion that they are going to let things slide on other parts of terrorism or —
BAIER: Or immigration.
EASTON: Well, that's one thing I do worry about with this administration. One of the concerns you are going to have out of all of this is a refugee problem. Will all this violence on the border create a new flood of refugees?
Unless you stop it, it will, and this administration has suggested it's going to be less tough on enforcement, I think, than the previous administration. So that is a concern.
Illegal immigration has actually dropped in recent months or over the past year. So I hope that this administration, you know, considers that a real problem.
One other thing on this program, though — I liked the emphasis on intelligence operations, because what we're seeing on the fence that hasn't been completed there is that the drug smugglers are basically using it like their own demolition derby. They are building ramps over a lot of this stuff and going under in tunnels and destroying it.
And U.S. agents are having to come back and rebuild that stuff. So I'm not sure that that's showing itself to be the answer.
BARNES: I guess it's not. I think it's a legitimate concern about our border with all this violence going on. And some things are being done to help President Calderon in Mexico, who is bravely fighting the drug cartel.
That is why there is all the violence, because he has cracked down on the drug cartel in a way that no other Mexican president has and they're fighting back. There are billions of dollars at stake. And the outcome is up in the air.
What I would say is that it's fine what we are doing on the border. We ought to do that and maybe more. But we need to provide more support, whether it's financial or whatever, than is being offered to President Calderon. Not just Nancy Pelosi saying I salute him, as she said today, or more of the president and Hillary Clinton going down there, but real resources to help him win that battle.
BAIER: I want to go down the line quickly about the press conference tonight, the president's second solo news conference. What are you are looking for, Fred?
BARNES: I hope there are no more of these five-minute answers. It is hard to stay awake.
EASTON: Hard to follow that one.
He is going to have to defend AIG bonuses again and so on. But I think that the other issue that is going to come up again is spending and the spending levels that he has proposed.
BAIER: And he is going to spend a lot of time on pitching this budget again at the beginning.
EASTON: That's right.
WILLIAMS: So I think it's budget. Picking up on Fred's comment, I guess no teleprompters, so everyone will be watching to see if there are goofs, any flaws.
BAIER: Wait a second — there is a teleprompter at the beginning.
WILLIAMS: I know.
BAIER: For the opening statement.
WILLIAMS: Responding to questions.
BAIER: Oh, yes.
WILLIAMS: They practice, and all the correspondents are writing down questions and they're practicing. But the president is practicing, having run through with his aides today.
So I would imagine what they are practicing him on AIG and the bonuses and did you get overwhelmed and are you convincing America that Main Street is tied into Wall Street. And then talking about Geithner, should Geithner stay?
I would be surprised if they don't get to some international affairs like Iran, what is going on with his video message to Iran.
BAIER: What about that teleprompter at the beginning for the opening statement at a news conference?
BARNES: Never seen that before.
The truth is President Obama has gotten a lot of criticism for using a teleprompter so much and it is kind of a crutch.
BAIER: Nina, you agree?
EASTON: It is a crutch, obviously. I think the danger is that it becomes a crutch, and then in these more free-flowing situations when reporters are asking questions, there is a more of a chance to mess up.
WILLIAMS: It has become a metaphor for his critics.
BAIER: We'll see.
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