This is a rush transcript of "Special Report With Brit Hume" from September 24, 2008. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, PRESIDENTIAL CANDIDATE: I will suspend my campaign and return to Washington after speaking at the Clinton global initiative.
I have spoken to Senator Obama and informed him of my decision, and I have asked him to join me.
(END VIDEO CLIP)
BRIT HUME, HOST: So starting tomorrow morning, says McCain, no more ads for now, no more fundraising, no more politicking. He is coming back to Washington to work on this financial rescue plan, which he says is in trouble on the Hill.
Not only that, he wants the debate, scheduled for Friday night in Mississippi, postponed. Obama was not enthusiastic about that part of it.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: It is going to be part of the president's job to deal with more than one thing at once. I think there is no reason why we can't be constructive in helping to solve this problem and also tell the American people what we believe and where we stand and where we want to take the country.
(END VIDEO CLIP)
HUME: Some thoughts on this now from Mort Kondracke, executive editor of Roll Call, Jeff Birnbaum, managing editor digital of The Washington Times, and the syndicated columnist Charles Krauthammer — FOX news contributors all.
Mort, your thoughts?
MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: On the basis of the evidence, it looks as though John McCain pulled a game of one-upmanship here. Obama reaches out to McCain to try to get a joint statement together, then McCain calls him back and says "I might go to — might suspend campaigning and might cancel the debate."
He says that he made a definite, but his campaign put out a tick-tock statement, a blow by blow of this, which it does not mention that he specifically informed Obama that he was not going to do the debate.
HUME: He says he did, however.
KONDRACKE: Well, he says he did, but his campaign put out a statement-
HUME: Who do you think knows better?
KONDRACKE: Look, that has become an item of disputes. So I do not know what the absolute truth is, but, clearly, McCain is trying to leap into the middle of the situation and make himself look like the leader who is seizing the opportunity to do something here and leave Obama behind.
There is politics in this. The problem is —
HUME: Is there? Mort, how can you say that?
KONDRACKE: No, no. It is being represented, though, as a bipartisan gesture to solve the nation's problems. It is not simply that.
And Harry Reid, of course, is contributing to the difficulty of this holding by slapping McCain away.
HUME: Having yesterday heard that McCain may be part of the solution, right?
KONDRACKE: But one last point — it seems to me that McCain could telephone or visit a lot of House Republicans and also get on a plane and be in Oxford, Mississippi on Friday for a couple of hours.
HUME: Let's assume for the sake of discussion, Mort, that the deal is not done and is still in jeopardy. Should McCain then says I am going —
KONDRACKE: He will be in there in the thick of things, writing laws and writing codicils and all that kind of stuff, and paragraphs and whereases — I do not think so.
JEFF BIRNBAUM, FOX NEWS CONTRIBUTOR: I think that this is the second time in recent vintage that McCain has taken a bold step, and he hopes it will work.
The other time that he suspended his campaign — in effect suspended his convention — was for hurricanes Gustav, you might remember. Now he is suspending it for hurricane Bernanke.
HUME: Hurricane Fannie.
BIRNBAUM: Hurricane Fannie, or Freddie. And it worked the first time. Taking a day off of the convention showed him to be above politics, and it was the basis, the launching pad for what was a real bump in the polls for himself and his other bold step, which was Sarah Palin.
In this case I think it may not work as well because it is a little transparently too political. I know it is shocking that politics is involved here. But what it did at least was allow him to get off of the escalator downward that he was on —
HUME: — show that.
BIRNBAUM: Clearly the polls show that he was going down, and I think he was at least able to sidestep it, get off it for a moment, and try something different, show leadership rather than emphasizing the economy, at least showing that he is a leader out of this mess rather than being blamed for it just because he is a Republican.
So it may have stopped the damage. It may not have the same launching effect as the hurricane Gustav move.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: When I heard this, I thought "how many Hail Mary's can one guy throw in one game?" He goes with the surge and Petraeus scores a touchdown. He goes with Palin, an unbelievable choice, and she catches it in the end zone.
On this one, I'm a little skeptical. I thought Obama's retort, a president ought to be able to do a couple of things at once, was pretty strong. And the undertone is the age issue. I can get on a plane and show up in Mississippi even if I am doing other things.
The other problem is the actual substance. If McCain heads into Washington to get this thing done, what is his role going to be? His role will be to get the conservatives on the Republican side into this.
There is huge resistance on the part of his people, his core, his base, who see this as a loser. The constituent reaction and the reaction of the public is extremely negative.
And the Republicans in the House and Senate saw an opportunity to let the president take the fall — after all, he is a lame duck — and they will go back and either vote against it or abstained or reluctantly accept.
If McCain is in there, he will have to drag his guys into what-
HUME: Suppose he does it feel?
KRAUTHAMMER: It will be like immigration, also unpopular, acting in the name of the nation. I think it will hurt him with the base, and I do not know how much credit he will get. This is a huge risk for him.
BIRNBAUM: It is a very big gamble, and it does put both feet in favor of this bailout, which is not where Obama is.
KRAUTHAMMER: Which is extremely unpopular.
BIRNBAUM: A bailout. And if it works —
HUME: He is against this bailout.
BIRNBAUM: Right. And the provisions that he wants added are very similar to what Obama wants. But he may get credit for what could be a huge increase on the market, for example, a rebound in the Dow Jones.
HUME: Let's suppose, for example, he comes back, works with his colleagues, gets these things into the bill, the thing passes, Obama is still traveling the country running television ads. Does it work out as badly as you think, Charles.
KONDRACKE: McCain wins. I think under those circumstances, if he prevents the market from crashing, and he is seen as the person who delivered the Republicans, then I think he wins.
HUME: Of course, the president obviously will have some roll in that. We will be hearing from him later. It will be carried right here, and these three gentlemen will be joining me afterwards.
In the meantime, let's talk about how much this — how much will this economic rescue plan, as it's constituted, actually cost? We will talk about that next.
(BEGIN VIDEO CLIP)
REP. JIM SAXTON, (R) NEW JERSEY: Asking Congress to authorize the expenditure of $700 billion is, I think by anyone's account, a heavy lift. It is almost five percent of GDP.
To bail out financial institutions — to use this money to bail out financial institutions is controversial, to say the least.
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We do not know exactly what the long-term cost or benefit may be, but it is certain, to my mind, that if there is a loss, it will be much, much less than $700 billion. It will be some percentage of that.
(END VIDEO CLIP)
HUME: Nonetheless, ladies and gentlemen, the words "$700 billion" has stuck in the taxpayers' mind, and a lot of people are upset about it and think that it could be much worse than $700 billion, Mr. Bernanke to the contrary.
So who is right here? The people who are worried that it will cost more, or the people who are sure it is likely to cost less-Mort?
KONDRACKE: On the basis of history, it could cost a lot less. The Mexican bailout — I forget what year it was, but in any event, it ended up netting money for the Treasury.
And, in this case, the idea here is that this is not really spending. This is like an investment, where you take these securities, and eventually the value of the securities would rise, and they would be resold by the government. The government might even make money on it if it works.
The question is — everything depends on what the purchase price is and what the sale price is. If the purchase price is low and the sale price is high enough, then the government makes out like a bandit. If it's the reverse, then it's bad.
HUME: I do not remember the estimated cost of the Savings and Loan bailout was-
HUME: — the estimated cost was staggering, as I recall, and it ended up being $124 billion, which, given the immensity of that crisis, was not that much.
Jeff, your thoughts?
BIRNBAUM: I think there could be a real short-term cost that we will see in a ballooning federal budget deficit for the next fiscal year. By some estimates, it could be as high as one trillion dollars, which is more than double what is the previous record for an annual budget deficit —
HUME: That assumes they will push all the money out the door the same year.
BIRNBAUM: No. That assumes there will push out about $500 billion of the $700 billion in the first year-
HUME: Most of the money.
BIRNBAUM: Most of the money.
But the question is how much will it cost when the now illiquid, unsellable bonds are sold by the federal government? And there is reason to believe that it could be sold at maybe 75 cents on the dollar. So the actual cost will be much, much less than the $700 billion or the initial $500 billion.
The whole notion of thinking of as $700 billion over the long term is a real mistake. It would be much less than that.
KRAUTHAMMER: Bernanke is not only smart guy, he is an honorable guy. And he says it will be less because he believes and he knows history. The Chrysler bailout, the government came out ahead. On some accounting with the Savings and Loans, the government actually came out ahead. It depends on how you do those numbers.
The fact is nobody knows what the ultimate price of this stuff will be when we sell it, but it will undoubtedly be higher than it is today because there isn't market today.
HUME: It seems to me the minute this is agreed to in some measure, that these assets will go up in price immediately because it unfreezes the market.
KRAUTHAMMER: Right, which is why some suggestions of having not a closed option, meaning an auction in which only the Treasury is a buyer, but having an open auction in which other private enterprises can bid would be a good idea, because some of those can be unloaded in the private sector.
HUME: That's it for the panel.
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