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Special Report

'Special Report' Panel on House Passage of Economic Stimulus Package

This is a rush transcript of "Special Report With Bret Baier" from January 28, 2009. This copy may not be in its final form and may be updated.

BRET BAIER, HOST: You're looking live at Capitol Hill, where the House just voted 244 to 188 to pass the $819 billion e conomic stimulus package. All Republicans voted against this plan, 11 Democrats defected and voted against the package, but it has passed.

And the president just released a statement a few moments ago:

"I am grateful to the House of Representatives for moving the American Recovery and Reinvestment plan forward today. There are many numbers in this plan. It will double our capacity to generate renewable energy, it will lower the cost of healthcare by billions and improve its quality.

"It will modernize thousands of classrooms and send more kids to college, and it will put billions of dollars in immediate tax relief into the pockets of working families.

"The plan now moves to the Senate, and I hope we can continue to strengthen this plan before it gets to my desk."

Now some analytical observations about all of this from Fred Barnes, executive editor of The Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and Mort Kondracke, executive editor of Roll Call — FOX News contributors.

Mort, your reaction to this vote and the fact that no Republicans signed on.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: I think it's going to change, the package will change. And what you had, basically, was a party line vote, with everybody adhering to their basic ideology.

I mean, let's see what happens when the bill goes through the Senate and then a conference committee. And some Republicans may join aboard if, in post partisan fashion, it gets changed.

And it ought to get changed. There ought to be less in the way of non-stimulative spending — and the Republicans complained about a lot of stuff, like sexually transmitted diseases and National Endowment for the Arts funding, and stuff like that that seems to be just Democratic spending.

And there ought to be more tax cuts. There are some good ideas that the Republicans have come up with in terms of tax cuts, like a Senate proposal to give a 15 percent tax credit for new home buyers, and stuff like that. But the basis of this — this tax cut that's in this bill, however, is bigger than George W. Bush's tax cut was in 2001 and 2003. The two-year spend out for that was $100 billion. This is $235 billion.

BAIER: Mara?

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: Everything is bigger in this than we've ever seen before.

Look, there was no doubt that this was going to pass. The only question was how many Republicans was he going to get. And I am surprised he didn't get a single one, and that he lost this number of blue dogs, moderate to conservative Democrats.

Obviously, the real bipartisan action, to the extent that there is going to be any, will be in the Senate. He seems to have willing partners there, like Judd Gregg of New Hampshire. And, as President Obama said in his statement, this bill is going to change.

He laid down a marker. He tried. He went up there. He met with Republicans. They all lauded him for showing up. But he didn't convince any of them to come onboard, and he's not going to be able to unless this bill changes.

Now, obviously, Republicans have made a political calculation. They risked absolutely nothing by voting no at this point. I do think that in the end, the final package out of conference, there will be more House Republicans voting for it.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: There will be.

And he didn't exactly promise change. What he said we will continue to strengthen —

LIASSON: Strengthen this —

BARNES: I don't know why he said continue, because they haven't started yet.

LIASSON: Sure. They have dumped some things out of it.

BARNES: I know. But those were things — they took out things that were embarrassments to Democrats — re-sod the Mall. And even that was defended at the White House by Press Secretary Robert Gibbs, saying well, it will create jobs. And, Mort, it is not the dollar amount of tax cuts. It's what they do, whether they provide incentives for investment, which is something you always need. Private investment you always need to get us out of a recession.

What's wrong with this package is — you can read Nancy Pelosi's statement about the things it does, and even President Obama's. She's talking about it will reduce climate change, harness the sun and wind and soil to fuel our economy and run our factories.

Well, that's great, but the fact is now we have a contracting economy. We have a recession that could get worse, and they're talking about this long-term spending that's not going to help in any way right now.

And, Mort, I know has talked about and written about the kind of tax cuts you can have in here. You get Republican votes. You get money out in a hurry.

Now, there are a couple of ways to do it right away. One is to have a holiday on the payment of FICA tax, Social Security tax. That helps businesses, that helps individuals, and so on.

There are many tax cut ideas. Democrats need to adopt some of them. President Obama needs to adopt them, particularly for this reason — if he's going to be the transformative, bipartisan president that he has said he would be, he has to do that. Just the old party line votes is the old politics.

BAIER: The longer this is delayed, does opposition gain some ground here? The fact that no Republicans signed on to this, and the president clearly was trying to get Republicans on Capitol Hill to do that, the longer this is pushed back in the Senate, does that delay the bill?

KONDRACKE: I think it depends, as we discussed, on what the package looks like when it comes out of the Senate. And the Senate is a much more bipartisan place than the House is.

The problem for Republicans is that Barack Obama is very popular, they are very unpopular. He says let us put politics aside. And for every single Republican to vote no, not one Republican vote, looks like the same old politics. And that's not good for the Republicans.

BAIER: Mara, one congressman said today, this bill shelters the homeless, it heals the sick. That's a lot going on on Capitol Hill.

LIASSON: There is a lot going on on Capitol Hill.

I disagree with Mort. These Republicans made a decision. They made a calculation that they're not risking anything at this moment to vote no even against a president that —

KONDRACKE: I'm talking about sustained opposition. If they keep voting no, they're going to suffer.

BARNES: Obama gave them nothing. If Obama gives them a few tax cuts, they will vote for it. It's easy for Obama. And it's important for the way his presidency is going to be understood and written about.

BAIER: Coming up, the president heard from his military advisers today about Iraq and Afghanistan. We'll talk about what he should do, when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: We are going to have some difficult decisions that we are going to have to makes surrounding Iraq and Afghanistan, most immediately.

Obviously, our efforts to continue to go after extremist organizations that would do harm to the homeland is uppermost on our minds.

(END VIDEO CLIP)

BAIER: President Obama today talking after a meeting at the Pentagon. According to our team at the Pentagon, the meeting lasted about two hours and was at a strategic level — not a lot of talk about deployments or timelines for Afghanistan, no significant time spent talking about force levels or movement of troops.

But it does come on a day when at least one story talked about a tougher line in Afghanistan by this administration that will put more emphasis on waging war than on development.

We are back with our panel. Fred, what about the Afghanistan policy of this administration?

BARNES: I don't think it is a difficult choice there, nor in Iraq. In Iraq, of course, you have your status of forces agreement that means that all American troops will be out by the end of 2011. That solves that problem pretty much.

But Afghanistan is a different problem. It is not a winnable war, because Afghanistan is not really a country. I think President Obama got great advice in that testimony from Bob Gates, the Defense Secretary, who said, look, the one thing we have to achieve there is to keep Afghanistan from being a place for terrorists.

And that can be achieved. You do not need 500,000 troops to do it, either. You can achieve that. Afghanistan is never really going to be a real democracy. You are going to have to make deals with warlords and tribes, and so on. And you may have to pick some tribes to deal with, and some will become the enemy.

But lowering the goal there is what Gates did, and I hope President Obama agrees with him.

LIASSON: President Bush did have a vision of a Democratic Afghanistan, kind of similar to the one in Iraq. It is much harder. It is a tribal country. It does not even have the basic institutions that Iraq had to work with.

And I think what Secretary Gates, and I think he is speaking for President Obama, is saying we have to forget about that part and just get basic security there so that it is not a base for terrorists.

The other thing down the line, down the road — does this mean making a deal with some kind of moderate, Taliban-like entity? We don't know. There are going to be some non-negotiable criteria on our part, like girls have to go to school, and women can't be stoned.

But I do think that Gates is lowering expectations. So will Obama. We're talking about stability there, not nation-building or democracy.

KONDRACKE: Yes, but, look, Obama is going to put more troops in. Gates is in favor of putting more troops in. Obama has got to use his international popularity to get the NATO allies to contribute more troops and to get themselves organized.

And one crucial thing that we need to do is to work on the poppy crop. The Taliban makes $500 million a year on poppies. Something like 90 percent of the opium in the world comes from Afghanistan.

If you do what we did in Columbia in the way of destroying poppy crops, you could do a lot. And that does not really take all that much troops. You do have to fight the Taliban and the warlords that are controlling it, but you can do that.

BAIER: So a tougher line on the Afghan President Hamid Karzai?

KONDRACKE: I think that Karzai is probably corrupt himself. So I think that we have got to push him. But we also have to help Pakistan economically.

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