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Special Report

'Special Report' Panel on McCain's Campaining Weaknesses and What's Holding Up the Housing Bill

This is a rush transcript of "Special Report With Brit Hume" from June 24, 2008. This copy may not be in its final form and may be updated.

BRIT HUME, HOST: Well, the latest Gallup tracking poll that we watch every day has the Obama-McCain race even. But let's ta ke a look at an average of all the current polling between Barack Obama and John McCain. This is the average complied the political website realclearpolitics.com.

And as you can see, Barack Obama enjoys about a six or seven point lead there over John McCain. His lead has bulged by the fact that there have been a couple of polls, one in the L.A. Times and one from Newsweek, that had Obama with a double digit average. But, as I mentioned, the Gallup tracking has it even. So that gives you a sense of it.

Some thoughts on the race now from Fred Barnes, Executive Editor of The Weekly Standard, Mara Liasson, National Political Correspondent of National Public Radio, and Morton M. Kondracke, Executive Editor of Roll Call. All these chaps and ladies are FOX News contributors.

And let's begin with you Mara. Where do you think the race is, and what do you think in the ebb and flow of things that either of them is gaining ground or losing ground, or what?

MARA LIASSON, NATIONAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I do think Obama has gained some ground. He has a little, teenie, post-Hillary dropping out bounce, I guess you could call it, not a huge one. The electoral map polls also show him doing pretty well.

HUME: These are the electoral maps where you assign a state depending our where the local polls, such as they are, show who is ahead.

LIASSON: They're not very good —

HUME: But It's something. And it shows him significantly ahead.

LIASSON: I also think that this is a race that is going to tighten. The Washington Post poll has Obama above McCain by the exact amount, six points, that John Kerry was above George Bush in 2004 at this exact moment.

But I think the more interesting important things are the internals of this poll both in the L.A. Times — Bloomberg, and in some of these other polls. The enthusiasm gap is huge — something like 81 percent of Democrats are excited about their nominee, and something like, I don't know what it is, 64 or lower are excited about McCain. That is a problem.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: Well, Karl Rove's maps get Obama up to — leading in states with 269 electoral votes.

HUME: One less than needed.

KONDRACKE: One less than needed. And McCain only has 191, he is way behind.

Everything can happen between now and then. We're going to have debates. We're going to have ups and downs, and things are going to happen, and all that sort of thing.

I talked to one really experienced Republican operative, who will go nameless, who says that the McCain problem is one of organization, that McCain is used to gorilla tactics of living off the land and all that kind of stuff. And he's now got to be the commanding general of a national army, and he's not organized to do it yet.

I said, does McCain have a prayer? And he says McCain has a prayer, indicating that he better get busy or his prayers are not going to be fulfilled.

There is progress in that McCain has got Meg Whitman, who used to be the CEO of E-bay, on his side. She is a good organizer, although she is not an experienced national politician.

So I think McCain has got a long way to go to catch up.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I don't think it's tied.

Look, I like Gallop, they're the best pollsters, but they don't doctor the numbers or say we don't have enough Democrats and we'll weigh them more. They just give you the results of the sample they take, and I'll bet tomorrow it will be Obama ahead, because I think if you look at the race, you don't need a poll. He is ahead.

HUME: It has been a single digit lead, no more than about six —

BARNES: He is not ahead by 15 or something like what Newsweek had. And Newsweek, of course, is most remembered for having the only poll in 1984 in which Mondale beat Ronald Reagan. And now they've got Obama 15 points ahead, that's ludicrous. The L.A. Times poll was another one that is not right — 12, 13.

HUME: Twelve.

BARNES: But the truth is McCain has run a terrible campaign. One of the reasons is his organization. I don't know whether Meg Whitman can straighten it out or not, but somebody needs to.

But even that isn't the biggest problem. His campaign is not focused at all on issues that might help him.

And I think also in McCain's case — look he's running a center-right campaign, but he's only focusing on the center, and still going out to Santa Barbara and talking about ideas which I think are increasingly discredited, ideas like cap and trade as the part of a climate change bill.

He is alienating conservatives when there are issues like Iraq and judges and energy on which he is compromised because he has had so many different crazy ideas. I think he needs to stir the kind of enthusiasm, or some of the enthusiasm among conservatives, because they're the ones who are going to turn out and vote.

LIASSON: I don't know if the solution is for him to be more to the right and less to the center. What he needs to do is put together all the pieces which he has in his record into a reform Republican package. And he hasn't been able to do that. Somehow, he needs to become the 21st century Teddy Roosevelt, and I think he could.

HUME: Let me ask you a question. I have argued that this race will not be about McCain. This race will be about Obama, and McCain will be seen by most voters, as they get worried about Obama, as a safe alternative choice — not an extremist of any kind, somebody that they know very well for a long time — and that this will all come down not to how well McCain runs his campaign but as to how well Obama survives such scrutiny he gets throughout the course of the campaign.

The question I have about it is will the scrutiny come, and will McCain make an effort to generate it?

KONDRACKE: That press conference today in Chicago was a joke. There were no hard questions —

HUME: To Obama.

KONDRACKE: To Obama — no substantively hard questions at all. So as far as the media is concerned, I don't see the scrutiny coming.

LIASSON: If you agree with that, that this is a referendum on Obama, that means that the only way McCain wins is if Obama is undermined. And he is going to do some of that himself. He is going to have to attack Obama. It will be a tough, ugly race. I don't know if he will —

HUME: Will he do that, Fred, in your view?

BARNES: He has to do it on issues like energy and judges and the Supreme Court and detainees and terrorists.

HUME: By the way, both candidates disagreed with the Supreme Court decision on the use of a death penalty in cases where a child is raped. Both are to the right of the court on that.

When we come back, we will look at what's holding up the Housing Bill and the bailout, as some are calling it, and whether it is a good thing and whether it might ever pass. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD, (D) CONNECTICUT: We're this close to doing it, but because I can't even offer an amendment today, or invite members to come here to resolve their differences, because one United States Senator has decided we shouldn't do anything but his Bill. And, unfortunately, that's the way this institution works too often.

(END VIDEO CLIP)

HUME: That is the chairman of the Senate Banking Committee who would like to pass a measure that would bail out a lot of borrowers who were in trouble in the housing crunch. And he is frustrated because the Senate is acting like the Senate.

Republican Senator Ensign of Nevada is holding things up because he has a measure that he wants to add in that has to do with renewable energy or something like. That that's the way the Senate is.

So this is a Bill that has passed the House and is making its way through the Senate. It may well eventually pass. It is stalled for the moment. The question is — the president has a veto threat out on it. Some people don't think he will veto it. What about it? Should it pass? Should it be vetoed? Should it become law? If so or not, why not — Mort?

KONDRACKE: I quote from Larry Lindsay in "The Weekly Standard."

HUME: Who is Larry Lindsay?

KONDRACKE: Larry Lindsay used to be the Chief Economic Advisor to President Bush. And he says "As former chairman of the Neighborhood Investment Corporation, I have seen the damage done to neighborhoods by vacant homes. They are never maintained adequately, depress surrounding — "

HUME: So what about this bill?

KONDRACKE: I think it ought to be passed because what you want to do is you want to diminish the number of houses that are left empty —

HUME: Why do you say they are going to be empty? You mean new houses are left empty.

KONDRACKE: No, no. If a property owner decides that his mortgage is more than the value of the house, often he leaves.

HUME: And the house goes on the market.

KONDRACKE: And the house stays empty because there is not a drawdown in the housing inventory.

BARNES: Did you read the part where Larry Lindsay —

KONDRACKE: He endorses this bill? In principle he endorses the bill.

BARNES: Where is that in there? He didn't endorse the bill.

KONDRACKE: Yes, at the very end.

HUME: Hold it. All right, Fred.

BARNES: This is a terrible Bill. It doesn't just bail out borrowers. It bails out lenders. It is going to dump on the Federal Housing Administration, which it lost about $5 billion last year. About a million- and-a-half of the worst high-risk loans around — look, they are dumping this on the taxpayers.

And, meanwhile, the FHA is raising — while all lenders, private lenders are running away from subprime loans, they're making them easier. Now they're raising their limit on loans at the FHA when they are losing all this money, they're going to get all these horrible loans.

And we have this problem with Senator Dodd and Senator Conrad because of Countrywide. Many of these loans are going to come from Countrywide, a mortgage agency, from whom they got sweetheart loans.

Now, I think that needs to be looked at, and a lot of other things, before they pass this bill. I think this is Congress at its worst. There is a housing problem. We have to do something. Does it have to cost $300 billion? I think not.

KONDRACKE: It doesn't cost $300 billion. It's $300 billion in loan guarantee authority. You're acting as if the federal government is going to lose all that money on these loans. It's not going to lose the money on the loans. When the market finds a bottom, the loans will be paid off.

BARNES: Mort! Yes, by the taxpayers!

KONDRACKE: Oh, please.

HUME: Mara, will this thing pass?

LIASSON: Yes.

HUME: And will the president veto it?

LIASSON: No. the president has softened his veto language. He wants to make a deal. Dodd, apparently, if he ever gets the Bill through, is willing to negotiate with the White House on its objections.

I think Congress and the president know that they have to do something about the housing crisis, because it's a big political problem.

BARNES: They don't have to. They want to. It's just like the so- called stimulus package — a waste of money for something that is going to have practically no effect.

HUME: Obama wants another one, by the way.

BARNES: You know why it is guys come to Congress, and it's true not just of Democrats but Republicans as well, particularly in the House but also in the Senate? They come for one reason — to spend. And it's not their money, it's other people's money, but they just want to spend it. They do.

KONDRACKE: Look, the markets are roiled, and it is largely because of the housing crisis. And if you don't achieve a bottom to the housing market, who knows what is going to happen to the economy.

We bailed out the S&L's to the tune of like $235 billion, which was real money. This is only loan guarantee authority figured at $1.7 billion in cost.

BARNES: Mort, your defense is when we did something bad and costly before — that is not a great defense of doing it again.

KONDRACKE: What about Bear Stearns, was that a good deal?

BARNES: That was a good deal.

HUME: All right!

That's it for the panel.

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