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Special Report

What Direction Will Reince Priebus Take the RNC?

This is a rush transcript from "Special Report," January 14, 2011. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, FORMER RNC CHAIRMAN: I really thank you for the chairmanship of this party, for the two years that I’ve had. And at this time, I will step aside for others to lead. But in so doing, I hope you all appreciate the legacy we leave.

(END VIDEO CLIP)

Michael Steele stepping down as the RNC chairman. The election held today on the seventh ballot. Reince Priebus won. He is the new Republican National Committee chairman.  He is a former head of the Wisconsin Republican Party.

BRET BAIER, HOST OF "SPECIAL REPORT":Here is what the speaker of the House said about this, quote, "I'd like to congratulate the members of the Republican National Committee for selecting the next chair. With the Senate and the White House in play, house majority to defend, Republicans will face great challenges in the upcoming campaign.

Reince can count on my support as we work to ensure that Republican candidates have resource and the ground game needed to win the battle of ideas with President Obama and his Democratic allies.”

We will start there with the panel.  Let’s bring them in, Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. A.B., seven ballots, Reince Priebus is the winner.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: He was ahead all along, but it's fascinating to see how divided the membership was of the Republican National Committee that the anti- Steele faction could never really unite seven ballots to get behind somebody who was never really a consensus candidate. They're in trouble. They're in over $20 million in debt. They have a lot of challenges to meet.

But it's interesting that he starts out in weakness because he was not the consensus candidate. There’s a lot of work to be done and they want to reposition the RNC as they try to take on Barack Obama in 2012.  And he has a big job ahead of him. But Michael Steele did not make it.  I think when we all woke up this morning we knew he wasn't going to make it.

BAIER: Steve, for folks who don't know Reince Priebus, give a little filler.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, he was the chairman of the Wisconsin Republican party and presided over a successful tenure in Wisconsin. Look at the last election and Ron Johnson winning the Senate campaign against Russ Feingold. Johnson was somebody who was not well known, came from out of nowhere through the Tea Parties. Priebus had reached out to Johnson and by Johnson's own accounting, really helped get him into the race and helped send him off in a way that allowed him to challenge Russ Feingold.

BAIER: But he’s a guy that works behind the scenes much more than in front.

HAYES: He’s a behind the scenes guy. He is not flashy. You might see him do some media interviews, but he's not going to be an out front guy like Michael Steele was. I think what makes him potentially in a unique position to really turn things around is that he was there under Steele. He was loyal to Steele while he was there. But at the same time, he knows where the problems were and tried to solve them I think from inside, now will have his own team to try to solve them.

BAIER: Charles, it is interesting when you look at the finances that the RNC is in a bit of a hole, a big hole. But yet they had such huge wins this past election cycle.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, in part because of others on the outside of the RNC who raised a lot of money.

BAIER: The Republican Governor's Association among them.

KRAUTHAMMER: And the Karl Rove operation, a couple of sort of private operations which raised money on the outside and helped a lot of candidates. So it's hard to attribute the victory to the RNC.

And there were people in the RNC who were so upset with Steele and some of the gaffes he made; that they sort of were holding the money back, and giving through other means.  So I'm not sure it will have a large effect. I think Steele was gracious in resigning, throwing his support to another candidate who didn't win. But people appreciate he tried. He's a good man, a good Republican, and a great politician, but in the wrong job. This is behind-the-scenes job. It's now in the hands of someone who work behind the scenes, and the main issue is money and that is what he’s going to work on.

BAIER: Speaking of money, then Senator Obama ran campaign with $745 million in 2008. Now the projection is that it’s going to take $1 billion to win the White House in 2012. One of the things that people are talking about are statements like this President Obama has made out on the stump.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: We didn't become the most prosperous country in the world just by rewarding greed and recklessness. We didn't come this far by letting the special interest run wild. We didn't do it just by gambling and chasing paper profits on Wall Street.

(END VIDEO CLIP)

BAIER: Now business folks would say listen, it's been a couple of years and now you're going to ask me for money, big money for this reelection bid, A.B. Bill Daley, chief of staff, changes the dynamic a bit, but is it going to be hard for the Obama administration to raise a lot of money?

STODDARD: Very hard. They are expecting a minimum of $500 million to come from the outside group to help the Republican candidate. They look at disappointment among the unions and the groups that rally to the cause. The business community will not give to Barack Obama the way they did in 2008. He will see a diminished performance in the record-breaking small online contributions. The excitement is not going to be there, it’s not going to be the same.

So he is looking at what he thinks is a $1 billion election and he is seeking to raise money from dispirited base. And the deep pockets in the business community won't give to him the way they did before.

BAIER: Charles?

KRAUTHAMMER: In fact, in 2008, the Wall Street community, big money they had given him over $40 million. He’s not going to get that. Some will end up in the hands of Republicans. People who have been life-long Democrats are going to switch over as a result of the kind of rhetoric that we just saw Obama talking about Wall Street in pretty negative terms, and the policies.

I think these are people who are looking at as you mention, the Bill Daley appointment, the banker, and they won't be fooled. This is two years where Obama will play the centrist, but people on Wall Street are the people who have to make predictions and their livings depend on it. They know if Obama is reelected he will be the Obama of 2009/2010. When he's unleashed and has no check on him in terms of another election.

So I think they understand that this is a repositioning that is not actually going to be serious and he will be anti-business.

BAIER: We may see more in State of the Union on the 25th. After that, he visits the Chamber of Commerce on the February 7th. Steve?

HAYES: Yes, it will be interesting. I think Charles is right.  Business will be more wary of President Obama and the promises he make. I don't think however that businesses and corporations and the big dollar donors give for ideological reasons. If they did we wouldn't have seen them give to President Obama in the first place. They give for access.

And while there may be some falloff in the money he gets among small donors, I don't think he will fight an uphill battle on funding.

BAIER: Even with all the regulations that have come out of healthcare and financial reform?

HAYES: No, because people want access to the person they think might be in power. If he shows that he might remain in power, people will want a piece of that.

KRAUTHAMMER: It's not abstract ideology. It's regulations that the government will impose on them and on their livelihood. I think it impacts them directly. People will use their money to support other people in government who are not going to cut off their livelihoods.

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