RNC Chair Steele on Where Washington Stands as Year Comes to Close

This is a rush transcript from "Hannity," December 16, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: There is high drama on Capitol Hill this hour now. Just a short time ago, Senator Harry Reid pulled the pork-filled omnibus bill from the floor of the U.S. Senate. Now, that means the controversial piece of legislation is now dead. And that is some major win for Senate Republicans.

Now, meanwhile, the House is expected to vote tonight on extending the Bush tax cuts. And it has been a rollercoaster day for Democrats. Now, the tax bill -- a number of significant road blocks thanks to some on the left who attempted to derail the president so-called compromise.

And all of this action appears to be driving some Democrats absolutely crazy. Illinois Congressman Mike Quigley told Fox News, quote, "my brain is going to blow up after this" and he apparently was not alone."Oregon Representative Peter DeFazio who is behind much of the opposition of this bill, he joined the chorus as well.

(BEGIN VIDEO CLIP)

REP. PETER DEFAZIO, D-ORE.: That I don't know. My brain is fried, sorry. My mind just stopped working.

(END VIDEO CLIP)

HANNITY: Now, at this point, liberal Democrats agree with "The Anointed One" on just one thing, that the fate of his presidency rests with this deal. Now, last night, Congressman DeFazio said, quote, "the president is making phone calls saying this is the end of his presidency if he does not get this bad deal. I think this is potentially the end of his possibility of being elected if he gets this deal."

So, on the one hand, DeFazio says, "The Anointed One" is telling Democrats that his presidency rests on the passage of this bill, on the other, liberal Democrats say, the bill's passage could mark the end of Obama's political prospects.

Either way, Mr. President, your future does not look bright this Christmas season.

And joining me now with analysis on where the president stands right now is the RNC Chairman Michael Steele who by the way just announced this week that he will seek another term in that position. Mr. Chairman, thanks for being back. I appreciate you being here.

MICHAEL STEELE, RNC CHAIRMAN: Good to be back with you, man.

HANNITY: All right. You know, so the Wall Street Journal refers to this as the worst Congress in modern history. Here we have, I'm not sure what to make of this omnibus deal in the Senate. It looks like this is good news but this was the bill with, you know, 6,600 earmarks in it.

STEELE: Yes. Eight billion dollars worth of earmarks. And I really want to send a great shout-out and applause and thanks to Mitch McConnell and the Senate leadership for drawing a very, very bright line up there on the Congress and saying, stop the spending. We don't need to do this right now. The nation is trying to heal itself economically. Let's keep these Bush tax cuts in place. Let's not see a massive increase in taxes on the American people, coupled with additional spending that they can't afford in 2011.

And so, I applaud the Senate leadership for really drawing a bright line here and standing firm. And so, now we look to the House, on the tax bill to make sure that that gets passed so there is not a massive tax increase on the American people. So, the work still needs to be done.

HANNITY: All right. Let's go through this one by one. Do you think this is because in the Senate that all the Republicans then held firm? In other words, the House passed the continuing resolution as I understand it.

STEELE: Right.

HANNITY: So, if it is a continuing resolution, in other words, they will take this up in the next Congress.

STEELE: Right.

HANNITY: You think the likelihood that this happened is, the Democrats just caved in on the earmarks? Did they cave on pressure from the public or they didn't have the votes?

STEELE: I think it is a combination of all three. I mean, when you look at it, Sean. The reality of it is the 2010 elections mattered. And people realize on the hill that they could not go back to the states and justify a massive $8 billion-worth of earmarks.

And I think that the reality set in very hard that the Majority Leader Harry Reid recognized that he did not have the votes and, you know, those folks were up in 2012 did not want to have this sort of (INAUDIBLE) hanging over their heads as they have to deal with other parts of the Obama agenda that are still to come in 2011. So, I think that saner heads prevailed here. The Senate majority leader recognized that the minority leader got it right and pulled the bill.

HANNITY: Well, it's interesting because the House today had to stop movement because they couldn't get through the rules committee on the issue of the tax cut bill. So, they are having trouble there with that bill and again, this is their Congress. It is Speaker Pelosi, it's Majority Leader Harry Reid.

What do you make what is happening here? This omnibus bill with earmarks. This tax cut bill with $200 billion in new spending. They are trying to bring up START, "Don't Ask, Don't Tell," the Dream Act. What do you make of this flurry of activity in the waning days in this 111th Congress?

STEELE: This is called the jamming in of the agenda before the change of control begins next year. Even in the Senate where the Democrats will keep the majority, we've seen a pick-up of Senate Republicans there. And so, that enhances the ability of Minority Leader McConnell to negotiate and to navigate a little bit more effectively and efficiently on behalf of common sense policies. So, I think they are trying to jam it in right now. They're trying to find a whipsaw those Democrats who lost in November saying "What do you have to lose, vote for the bill, get it out of the door, you know, it's part of the legacy of Obama, it's part of the liberal agenda." And they just can't stomach it because the weight of it is too great for the American people.

HANNITY: You know, I am a little aggravated with six Republicans in the Senate that had an opportunity to support Jim DeMint and making these tax cuts permanent. They didn't do it. I named their names last night. And we had nine republican senators allowed this -- what I think is a really bad START Treaty debate to begin. And by the way, it included Lindsey Graham and included John McCain. Are you concerned about some of those votes?

STEELE: Well, I'm not concerned about those votes so much as I understand the dynamics of what is going on in the Senate right now. Both on the economic front as well as the national security front. And I think the American people can appreciate this as well. You know, while you are talking about START Treaty, while you are talking about any other aspect of our economy, there's got to be a balancing act that you know, all the members who represent very diverse states and have very different interests that they have to consider in coming to some agreement and arrangement here in order to move forward.

I think that's what you are going to see a little bit more of. I think both for Democrats and Republicans, the dynamics have changed as a result of the November elections. And so, I appreciate what are saying about, you know, how the votes were cast. But there's a lot more behind that vote than the casting of it. And I think that those are the things that we need to wait to hear from those senators and the leadership as to what else is involved here on both those subjects.

HANNITY: I noticed Mr. Chairman that you do have some opponents and pretty much you have had them since the beginning of your term.

STEELE: Yes.

HANNITY: I noticed the couple of left-leaning political stories that have come out and some people express concerns about the amount of money you raised or gaffes that you may have made as chairman.

STEELE: Yes.

HANNITY: You announced that you are going to run for re-election. What do you say to those people that have spoken out to the political or elsewhere against you?

STEELE: Well, you know, I say the job isn't done. You know, we removed Nancy Pelosi from the chair. And now we need to take the White House in 2012. And I think that is important that the party continue its grass roots movement upward. In other words, from the bottom up making sure that people are engaged. And, you know, I don't believe in quitting the fight. And I think that's a lot that we've done, we've raised close to $190 million since 2009. We put that money out into the streets of America in over 360 victory centers around the country that enabled us to contact 44, 45 million voters. And we saw 44 million of them actually go out and vote Republican this year.

So, we are very excited about the progress that we've made. I'm so proud of our state parties, our chairmen, our national committee of men and women around the country have done a phenomenal job, Sean. We can't stop now, we have to keep along. And I want to be the leader that gets us there.

HANNITY: I have to be honest, it's a little odd to me, this is the best midterm election in 70 years and there is still infighting, a little perplexing.

STEELE: Well, the infighting needs to stop because the focus is not on each other, the focus is on the Obama agenda for the next two years. We've already begun to see the machinations that they are willing to go through to push through and force through legislation. It will get worse next year even with the leadership in the Senate.

HANNITY: All right. Last one. Are you at all concerned about the spending in the tax cut bill? In other words, the $200 billion, the extension of unemployment and this extra money? Are you at all concerned about that aspect of the bill?

STEELE: Absolutely. I mean, you cannot go forward necessarily and say, we are going to keep these tax cuts in place and then have the Democrats come behind you and whipsaw in more spending. So, the reality of it is, is I think Republican leadership has been very consistent on this, whether in the Senate or the House, that whatever we do, we have to first make sure these tax cuts are locked in, are permanent. So that the business class has a security, if you will, in knowing how we're going to move forward. And then the nation can begin to address those issues that relate to spending, bring it under control, so that you can revive the health of this nation and this economy.

HANNITY: Mr. Chairman, good to see you. Thanks for being with us.

STEELE: Thank you, buddy.

HANNITY: And we'll talk to you in the new year. Happy New Year, Merry Christmas.

STEELE: Merry Christmas, Happy New Year.

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