This is a rush transcript from "Special Report With Bret Baier," September 20, 2010. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm exhausted of defending you, defending th e administration, defending the mantle of change that I voted for and deeply disappointed with where we are right now.
I have been told that I voted for a man who said he was going to change things in a meaningful way for the middle class. I'm one of those people. And I'm waiting, sir. I'm w aiting. Mr. President, I need you to answer this honestly. Is this my new reality?
PRESIDENT BARAK OBAMA: My goal here is not to try to convince you that everything is where it needs to be. It's not. That's why I ran for president. But what I am saying is that that we are moving in the right direction.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: Town hall in Washington, D.C., some upset questioners during that town hall. Here is how the New York Times described this meeting that lasted an hour. It was billed as investing in America, a live televised conversation between President Obama and American workers, students, business people and retirees on the state of the economy, a kind of Wall Street to main street reality check.
But it sounded like a therapy session for disillusioned Obama supporters. And of course, the RNC piped in immediately. Michael Steele releasing this quote, "Once again President Obama trotted out the same old warn-out reassurances on the economy, but Americans are still waiting for the promised recovery that never arrived."
So what about what was said, what was talked about and the economy? Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Judith Miller from the Manhattan Institute, and syndicated columnist Charles Krauthammer. Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, if that is what you get when a group of hand-picked members of an audience, I can imagine what you would have got with a random selection of audience. It would have been rather more raucous. But clearly is not something that helped him.
I was struck by the fact that there was nothing new that came out of it. But there was one statement that is classic Obama that appears over and over again. He says my challenge is I'm thinking about the next generation, and there were a lot of folks out there who are thinking about the next election. This is the trope he uses all the time.
The folks out there, meaning the Republicans, are thinking only about power, winning election, and all that. And I, the father of our nation, stand above all this and act only in the national interest looking at the next election.
What is so grating about it is that it is so obviously false. He wouldn't have been in the meeting in that instance in the first place if he weren't electioneering. He knows the polls are showing that people have a sense he's aloof and he doesn't understand the ordinary American. That's why he had a meeting to rub shoulders with ordinary Americans.
He shows up at church, which is a lovely thing. But as you know, it was the first appearance sense Easter. Why does he do it? Because he is electioneering with an election coming up and a large number of Americans think he isn't a Christian.
It's the same with the extension of the tax cuts, but not for the upper income, which every economist will tell you is a mistake, but he's doing because he wants to frame an issue. Why? Because we have an election.
So when he says I'm the one who acts hovering above this in the national interest, either he is delusional or supremely cynical. I like to think it's the second.
JUDITH MILLER, MANHATTAN INSTITUTE: I think he just doesn't want to get in the way of the Republican Party as it commits suicide. I think if you have a line, and the line is it's been a decade that it took us to get into this mess -- two unfunded wars, two unfunded tax cuts -- I have started to move things, turn them around. Stick with the hopey-changey thing. I think that he wants to just --
BAIER: You think he is selling it well in this environment?
MILLER: I thought today, especially, was very, very effective, because even though he was on the defensive, he was relaxed, and he also made excellent points about the need to invest in infrastructure. He talked about the middle class. He said "I'm not anti-Wall Street," which he needed to do, because coming from New York, up there, we think he's anti-Wall Street.
BAIER: And I've been in that position, and I felt for John Harwood, the moderator trying to pin him down for specifics without interrupting him. And he tried to say is he for a payroll tax holiday? There was not really an answer there. What specifics is he going to do, and there weren't too many specifics that he laid out in this town hall, the hour long town hall.
MILLER: I don't think he needs to really talk about specifics. What he needs to talk about the thrust of where he is going and the fact he is the voice of the average American. He is the left wing populism. He would never use the word "left," but he is the alternative to the Tea Party. And without attacking the Tea Party, he was careful about that today.
BAIER: We'll get to that. Steve, I'm sure you have a different view.
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think this is fundamentally much simpler. He is selling something the American people aren't buying.
And you saw it in his answer to the first woman who asked the question. She said she's disappointed and described the state of the economy. Then he goes on about student loans. Here is what the government is doing for you.
And much of the presentation today was given over to making exactly that argument. You might think I'm not doing that much. Here's what the government is doing for you.
But poll after poll after poll says that the American people are saying stop. Don't do anymore. We're done with it. We don't want anymore. So he's trying to sell something that people fundamentally aren't buying. I think that's what we're likely to see November 2.
BAIER: Charles, one thing we did learn is that he patted on the back, Larry Summers and his Treasury Secretary Tim Geithner didn't say how long they'd be in their current jobs, but he did mention them, saying they are doing outstanding job and the tough work that they're doing.
KRAUTHAMMER: Well, if he said anything different it would have been a headline story and heads would be rolling and people would be looking at the employment pages of the classified ads. So he didn't want to make news.
I suspect if you get a real landslide in the election like the Republicans had in 2006 where the secretary had to change the secretary of defense as a result of the unhappiness with policies in Iraq, that if you have a landslide election in November, the president always has to find a sacrificial lamb or two. It's the way in which he deflects the loss from him.
And I wouldn't be surprised if it was one of his advisors on the economy os a way to say, it's not me, and we will have a change. So I think if the election is really a landslide, he will have to change. But it's not something he would even hint at today before an election.
BAIER: So final word on this, Judith. You think Democrats, even moderate Democrats, would be encouraged by today's town hall?
MILLER: I think so, because he definitely reiterated the themes that they think will carry them through November. Look, I think they are anticipating losses. How big will the losses be? That's the key issue here.
KRAUTHAMMER: It's whistling in the dark.
BAIER: Up next Democrats and the Tea Party. You can log on to our homepage at Foxnews.com/specialreport and tell us how effective you think an ad campaign against the Tea Party might be. We'll be back after a quick break.
(BEGIN VIDEO CLIP)
FORMER U.S. PRESIDENT BILL CLINTON: There is a general revolt against bigness, which in the case of the Republicans is always directed more against the government than the private sector. It's totally understandable. I don't know where they stand, but I get why they're popular.
OBAMA: The challenge I think for the Tea Party movement is to identify specifically what would you do? It's not enough just to say get control of spending.
(END VIDEO CLIP)
BAIER: Former President Clinton and the current president talking about Tea Party movement, this on a day when the New York Times had a front page story that the White House was considering running a national ad campaign against the Tea Party movement.
The New York Times is sticking by that story. The White House says it's not accurate. What about Democrats versus the Tea Party movement, the strategy. We're back with the panel. Steve?
HAYES: Well taking on the Tea Party frontally like that I think would be serious error in judgment. If you remember, Democrats haven't known how to handle the Tea Party since its inception because initially it was this crazy radical fringe made up of just nuts and nobody needed to pay attention to them.
And then there were a series of polls, including one by CBS News and The New York Times that found after all it's not such a fringe. It's actually 25, 30, 40 percent of the American public, with even greater numbers identifying with the things that the Tea Party finds the most important.
So then you had Nancy Pelosi come out and say, well, actually, I have a lot in common with the Tea Partiers. And now it seems like we've gone full circle and now we're back to trying to describe the tea partiers as fringe.
I just don't think it will work, primarily because more American Americans than not are identifing with the things that the Tea Party have come to represent.
MILLER: I think the Tea Party is still going to hurt Republicans more than it hurts Democrats, or as much as it Democrats.
Look, the interesting poll was Doug Schoen's poll of 1,000 likely voters. That struck me as interesting because they're independent voters. And even though most of them, 54 percent, had voted for Obama in the last election, they're now leaning in favor of the GOP. But they are not Tea Party people. In fact, they don't have a positive impression, they said, of the Republican Party. They're not even that sympathetic. Only 38 percent said they were sympathetic to the Tea Party.
Look, when Bill Clinton --
BAIER: It depends on the poll you're look at. There are other polls say 70 percent of the population identifies with the ideas and the issues that the Tea Party is founded on.
MILLER: But the Democrats are trying to draw them out. Where would they make the $250 billion worth of cuts that Obama says he has identified as discretionary spending? Where will they close the tax loopholes?
I don't think they have answers to those questions, and I think that the Democrats like Harry Reid will be thanking their lucky stars for candidates like the Tea Party candidates.
BAIER: Interesting. Charles?
KRAUTHAMMER: I think it's completely wrong. I think they are injecting tremendous energy. As we heard earlier in the show, the turnout for the Democratic primary was the lowest ever recorded, and on the Republican side it was the highest since, I believe, 1970.
Enthusiasm, energy, and there was a chance that it could have ended up a third party, like Ross Perot, which hurt the Bush candidacy in '92 and probably sunk him. And the fact it's inside the tent of the party is extremely healthy, it's injecting all this energy.
Yes, in some states, they are going to have their candidates. Why shouldn't they. They are part of the coalition. And like African- Americans in the Democratic side, who often feel that they are taken for granted, I think that sentiment also exists on the Republican side.
So I think it's good to inject their energy and have some of their candidates -- some are stronger and some are weaker. But if the Democrats want to make this the issue in the election, it is a huge mistake. It will nationalize an election where the only chance any Democrat has is to localize his election, as happened in the Murtha seat. And that is an example how to win if you're a Democrat.
If it's national election on state of this economy, state of our foreign policy and the size of government, the Democrats are going to lose and lose very badly.
BAIER: Lisa Murkowski, the Republican senator from Alaska who lost in that primary to Joe Miller, the Tea Party express-backed candidate, has just told the Associated Press that she knows that "D.C. is far too partisan right now, and we allow numbers to dominate over quality. I don't think that helps us."
As far as the Tea Party supported Joe Miller, she says she will continue to fight with the write-in campaign. Steve, we talked about this race last week.
HAYES: It is so pathetic. That sounds like the words of a complete loser. She has no chance of actually winning as a write-in candidate. Virtually nobody thinks she does. I suspect that she probably understands that she can't. But she wants to play the spoiler because she's angry she lost to an energetic Tea Party backed candidate like Miller. It is fruitless for her to be doing this.
BAIER: Christine O'Donnell in Delaware is raising a lot of money. Judith, she is raising a lot of money on the web. She has responded this weekend. She did not show for a Fox News Sunday interview but she responded to a statement in 1999 about dabbling in witchcraft. Here is what she said. Sound bite, please.
(BEGIN VIDEO CLIP)
SENATORIAL CANDIDATE CHRISTINE O'DONNELL, R-DEL.: That witchcraft comment on Bill Maher, I was in high school. How many of you didn't hang out with questionable folks in high school?
But no, there has been no witchcraft since. If there was, Karl Rove would be a supporter now.
(END VIDEO CLIP)
BAIER: Diffuse the issue there?
MILLER: I don't think it did because she has said so many wacky things that this is just going to be one in a series of bullets that are shot at her. I think she is a very weak candidate, and I think that even trying to look like Sarah Palin is not going to help her in the long run.
BAIER: Although her supporters and others say Chris Coons, the Democratic nominee, has said some pretty wacky things in his career as well.
MILLER: Yes, we heard that this weekend, too. So look, this is, this is politics. Is this really an accurate test of where the Tea Party is going to make the difference? Is it the Christine O'Donnell or a state like Nevada or a state where you're going to have a lot in play?
BAIER: Charles, I know you're chomping at the bit to get in on this conversation.
KRAUTHAMMER: Yes. I profited mightily on my stance on Christine O'Donnell. Look, I thought she deflected that extremely cleverly. I thought that she showed some congeniality and charm in the way she answered it. I think the witch issue now is dead and deflected.
She has others. But it's odd that this is an election where witchcraft becomes an issue in an campaign. I'm not sure its going to have any effect. And that was a good start for her. I hope -- I think her chances are very, very long, maybe Detroit Lions long, but I hope she wins.
BAIER: There you have it. That's it for panel.
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