This is a rush transcript of "Special Report With Bret Baier" from April 27, 2010. This copy may not be in its final form and may be updated.
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UNIDENTIFIED MALE: The bill reaches into every nook and cranny of American bu siness. I thought and I think most Americans thought this was all about Wall Street. But as you look at the bill closer and closer, you see that it is mostly about Main Street.
UNIDENTIFIED MALE: The consumer agency part of this bill section would be one of the most intrusiv e and sweeping pieces of legislation this country has ever seen.
UNIDENTIFIED MALE: Our bill protects consumers from a Wall Street that is run wild, cracks down on big bankers, reckless risk-taking, and holds accountable those who gamble away family's life savings.
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BRET BAIER, "SPECIAL REPORT" HOST: There you hear some of the back-and-forth today. The Senate voted again for the second day in a row to block this bill from moving forward, the financial regulatory overhaul.
Just a few minutes ago, as we look live now in Iowa, President Obama wrapping up a town hall there. He is shaking hands as he's leaving. Just a few minutes ago he talked about this, saying "Today for the second time the Senate blocked to even debate. So they won't even allow it to the floor to oppose even talking about. That's not right."
He blamed the GOP. There was, however, again, one Democrat, Ben Nelson from Nebraska, who also voted to not move the bill forward.
So what about all this? Let's bring in our panel, Tucker Carlson, editor of the dailycaller.com, A.B. Stoddard, associate editor of The Hill, and Charles Krauthammer, syndicated columnist. Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, look, I think what is going on here is there is this conceit because Wall Street didn't get it therefore the government ought to regulate.
That is non-sequitur. It's true Wall Street was reckless and didn't see what was coming, but the government didn't either. The SEC didn't see it, the Fed didn't see it, the chairman of the Fed didn't see it.
Fannie and Freddie, which were protected by especially the Congress and Democrats in the Congress, added fuel. They are arguably the most culpable of this entire affair.
And the transfer of power to the feds is what the bill is all about. Democrats as we heard Reid say are promising he would do "x," "y" and "z," all of that is speculative. It's increasing a lot of power, but not only in Washington, but also the treasury.
It assumes that somehow they'll have superior wisdom next time around. I think that is questionable.
And the Republican argument at least let's look at how much power is being increased. If you do the consumer protection so-called, you have to provide enormous amount of information about transactions, individual ones, to the government and hope it will not end up being disclosed.
That is a big hope. And normally I expect people on the left, civil libertarians, opposing this, but they have rolled over on this because it's Democratic proposal.
BAIER: A.B., to hear Senator Shelby from Alabama talk about it, and his is the chief negotiator for Republicans, they're close, but the consumer part is a big hurdle. He calls it the most intrusive and sweeping pieces of legislation this country has ever seen. That is a bold statement.
A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: It is. The list of problems that the Republicans have with the bill is growing. It's not shrinking, even though everyone is talking about how a deal is imminent, and Dodd and Shelby both went on the Sunday shows and said we're going to see a deal.
Their staffs have not met in over a week, so no one is getting together to rewrite the bill. So there are concerns on the Republican side about the consumer protections and concerns about the so-called orderly liquidation fund and concerns about the costly bureaucracy and too much regulation. The list is actually quite long.
And actually getting to a bipartisan deal will be a bit of a lift. And so what you see now is Democrats decided to do this procedure vote strategy, or cloture vote strategy, where they hope to keep repeating this vote, and they'll be raising lots of money on the Democratic National Committee website and make good commercials.
But they hope some Republican will drop off and finally join them and they will be able proceed to the vote. That leads to a partisan bill. I don't think they want a partisan bill. If the economy goes off the cliff again they will be the ones holding the bag.
And I think the problem is those moderates they hope to pick off are now getting really furious about the politics they see in the process. So I think that the strategy that looked good 48 hours ago is not looking so great anymore.
BAIER: And Senator Reid today, Tucker, essentially said he really is upset that this is not transparent, that this negotiation is happening behind closed doors. Of course, after the healthcare back and forth, people raised their eyebrows.
CARLSON: The Democrats think this is good for them and they can put the Republicans in a position to defending the big, bad bankers. I think A.B.'s analysis is absolutely right. There are a lot of Democrats, in fact, who are squirrely about this, who aren't excited to vote for something along party lines for legislation that frankly no one really understands. How many people do you know what is in the legislation and fully understand it?
BAIER: Again, we're over 1,500 pages again.
CARLSON: The bill is more complex than the healthcare bill. If you want any evidence this is primarily a political process, check your TIVO for the hearings today where the Goldman execs were grilled. Watch Senator Kaufman get up there and say things like it was obvious that the subprime mortgage thing wasn't going to work out.
Really? It wasn't obvious to anyone else. And someone pointed out, Kaufman owns Moody's stock which rated the Abacus deal for Goldman and give it a AAA rating, and he owned the stock. He was long on Moody's. It's insane. It has nothing to do with reality, pure politics.
BAIER: Great transition. Take a listen to this exec from Goldman Sachs. Take a listen.
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UNIDENTIFIED MALE: On 2-22, is the date of this e-mail. "Boy, that timberwolf was one (expletive) deal. How much of that (expletive) deal did you sell to your clients after June 22, 2007?"
UNIDENTIFIED MALE: Mr. Chairman, I don't know the answer to that, but the price would have reflected levels that they wanted to invest —
UNIDENTIFIED MALE: They don't know — you didn't tell you thought it was a (expletive) deal?
UNIDENTIFIED MALE: I didn't say that.
UNIDENTIFIED MALE: No. Who did? Your people internally. You knew it was a (expletive) deal and that's what your e-mail showed. You're trying to sell a (expletive) deal and it's your top priority. Come on, Mr. Sparks.
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BAIER: Well, that was one exchange. Charles?
KRAUTHAMMER: When the Incas had a crop failure they would take someone up on the hill and they would execute them. This process is the same expect it has a little less dignity. I'm sure the language was cleaner in the Inca process.
And the idea that somehow this is all Goldman Sachs, and what you had in the Goldman Sachs deal was sharks trying to outsmart other sharks. These were not securities sold on the street to individuals you and me. It was one institution holding a security that it thought was not good. Therefore it sold it.
When you sell a house or a car, you have your reasons. You may have a moral obligation, but nobody expects you always to disclose every single reason why it's being sold. Apparently if Goldman didn't, it's a crime of some sort.
This is absurd. Congress is as culpable as is Wall Street and this whole exercise is a way to imply it's all big bad bankers in Wall Street and not Congress, which is hugely responsible for the entire collapse.
STODDARD: In the end, unfortunately perception is reality and no one is going to read the bill. The mail I get says Republicans and Democrats need to come together and beat up the big banks.
What people will watch tonight is watch the Goldman hearing and be mad at Goldman Sachs and the Street, and after a period, if you look at polls today, on Tuesday, the polls show Obama with an advantage over Republicans on this issue. And it will be interesting where the polls will be a week from now.
But at some point it will be tough for Republicans to hang on regardless of substance.
BAIER: Last word.
CARLSON: Charles Krauthammer is my hero with the Inca analogy. I can't top that and I won't try.
BAIER: The Inca transition. It's not often we have to beep senators.
OK, go to the homepage at FOXnews.com/specialreport for a new report. Senior correspondent Eric Sean looks at the dispute over what used to be a private beach in the Florida panhandle. Next up here, immigration politics.
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UNIDENTIFIED MALE: That law is an unfortunate one. I think that it is, I fear, subject to potential abuse.
UNIDENTIFIED MALE: I know that border, I think, as well as anyone.
UNIDENTIFIED MALE: Do you think it's secure?
UNIDENTIFIED MALE: And I will tell you it is as secure now as it has ever been. The message sent from Arizona was that movement needs to occur and this issue should not be allowed to languish.
SEN. JOHN MCCAIN, R-ARIZONA: This law is a response to the president's and the administration's failure to secure our borders. Our borders are broken. It's worse than I have ever seen it.
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BAIER: They're talking about the new law in Arizona, a tough law on immigration and how it translates to immigration legislation on Capitol Hill.
The senate majority leader saying late today in a Q&A session with reporters, Senator Reid saying energy and immigration are vitally important to our economy and national security. He wants to do both this session. But the energy bill is ready, he says. And we'll move first to that one instead of immigration.
We're back with the panel. A.B., translation?
STODDARD: What this means is that he heard from the Senate — the Senate majority leader heard from many of his fellow Democrats who do not want to do immigration before November 2 and put their foot down. They have taken their last big vote on healthcare.
More importantly actually is the fact that Lindsey Graham, the Republican senator from South Carolina, continues in this highly polarized environment to step out and provide bipartisan leadership on several very contentious issues.
And he said on Monday after working on immigration and energy with Democrats that he saw politics at play and he was out of the deal. And the administration wants Lindsey Graham in the deal.
And so the combination of the pressure with his own caucus and the pressure to move forward with a bill that's much more ready and has a coalition of environmentalists and business interest at the table, maybe not happy with each other but at the table, makes immigration perfect candidate to go back of the stove.
BAIER: But clearly, Tucker, some Democrats feel, including perhaps even the White House that this issue is one that really stirs up their base to get out for the midterms.
CARLSON: That is exactly what it's all about. We knew a month ago — we knew a year ago, but certainly a month ago with the passage of the healthcare bill that there was never going to be immigration reform this year. Not one knowledgeable person in Washington, not one, including the president, believed it was possible, and it wasn't.
So why bring it up? For the reason you suggested, to whip the base into a frenzy, and a very specific part of the base, the Hispanic voters. And you heard echoes of this in the president's radio message —
BAIER: I'll play it here. Take a look.
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OBAMA: It will be up to each of you to make sure the young people, the African-Americans, Latinos, and women who powered our victory in 2008 stand together once again.
CARLSON: How is this different substantially from the Nixon's southern strategy? What he is doing is saying you have reason to fear on racial grounds, therefore vote for me. I think he is using racial anxiety for political gain. And leaving aside any moral judgment about it, I happen to think it's wrong, it's a dangerous thing to do.
KRAUTHAMMER: It is all about election politics. The base is what he needs if he is going to get, if he is going to avoid a disaster in November. The base is not happy with him, African-Americans, young people, Hispanics are not enthusiastic. He is hoping that this will drum up support.
I think it's actually a mistake and it will fail. The most revealing statement we saw today was what the secretary of Homeland Security when asked if the border was secure. And her answer is it's secure as it ever was, which means it's completely insecure. It's as insecure as it ever was.
And that's the travesty here. The federal government is pretending that Arizona is acting completely irrationally in trying to aptly protect its borders when the federal government which is supposed to do it and has the means to do it has left it essentially open.
And there is no movement whatsoever on the part of the administration to step up enforcement of the border and to do what obviously has to be done.
Instead all they're doing, as we heard, is to use it as an election issue, knowing it's not going to actually become law, but just as a way of stirring up. I think you're right, it's a divisive issue, and it's been made more divisive by the way the Democrats are playing it.
BAIER: We were just told, A.B., that the president in town hall said if they don't act on immigration that more bad laws like Arizona's will happen.
STODDARD: That makes the pro-immigrant group happy, but what they will tell you on that side of the issue is they desperately don't want this to be brought up and have it fail because then they think they won't have another chance for years.
And I think Charles is right. I think those groups know the chances are slim this year, that it's not — that the Democrats will fail. They will get a couple of procedural votes on it, but that doesn't excite the base. That's just a failure. And it will help the Republicans in the midterm.
After the midterms elections when you look into 2011 when there's more Republicans in the Congress, it actually doesn't help the Republicans going into a presidential season and it is much better for the Democrats to put it off until then.
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