This is a rush transcript from "Special Report," December 6, 2010. This copy may not be in its final form and may be updated.
BRET BAIER, ANCHOR: President Obama from the Old Executive Office Building just adjacent to the White House announcing what he called a quote "Framework for a deal."
Here is how he structured it in a graphic, a possible deal earlier. He is saying that this could be the deal that comes to pass -- a two-year extension of all the Bush era tax cuts. That means the tax rates stay the same for two years, a 13-month extension of unemployment insurance starting right now in December, a temporary two percent reduction in federal payroll tax for one year, and an estate tax compromise, two years at 35 percent with a $5 million exemption.
That's going to be tough with the Democratic caucus, that's why it's a framework for a deal. And just moments ago, a very senior GOP aide e- mailed saying, "Finally, President Obama is using the bully pulpit. It's about time, though it's ironic and somewhat amusing he's having to use it against his own Democrats." So there you see some of the early reaction to the president's words.
Let's bring in the panel for some reaction, Jonah Goldberg, at large editor of National Review online, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer.
Charles, your thoughts?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I was struck by the tone and by the audience. This is ostensibly a speech to the American people. It was actually a speech addressed at the Daily Kos, The New York Times, and Moveon.org. This was a speech that was rather partisan.
Interestingly, it's about the first agreement and supposedly the first step in a new era of comity in Washington, but it was quite partisan. He attacked the Republican ideas and said he disagrees with them strongly but he had to compromise.
This speech was aimed to appease the left, which is extremely angry over this, and it laid out and the details of the agreement. We came many a few seconds left, a few second after it started, but generally when you get a deal like this, he mentions the opposition and the leaders and he thanks them, and he says how wonderful it was entering in the negotiate and reaching the agreement. I didn't hear any of that, which is odd for the first step on a new kind of tone in Washington.
BAIER: A.B., Jonah, this is all about the economy and we have to pay some bills since we went to the president live. Right after the break, we'll continue this discussion with the panel and talk about the politics around this whole thing.
Stay with us here on "Special Report."
BAIER: We're back with the panel to react to President Obama's announcement of a framework of the deal that he needs to sell the Democratic caucus on extending the Bush era tax cuts and unemployment insurance. A.B., I cut you off so rudely before, so what are your thoughts?
A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: It's very rare for the president to run to camera to announce a framework of a deal. This is just not something we normally see. I think he's trying to seize control of the debate and I think he's trying to look presidential and trying to be a leader.
And I didn't see what Charles saw. I think he was actually scolding the left, not appeasing the left. And in announcing that he must cave, he reminded Americans, particularly those who voted for him, that he was essentially breaking a campaign pledge because he had to. He said this is essential step on the road to recovery and it's not a time to play politics. The American people want us to solve problems.
He knows he doesn't have the votes. He wants to move on. He actually has the votes for "don't ask, don't repeal." And there is an outside chance he has vote to ratify START arms control agreement. If this is off the table there is enough time to get other wins here in the days to come.
BAIER: Is there still "if" with the Democratic caucus, or is this it?
STODDARD: This is the problem. As of today, he was supposed to meet with the Democratic leaders and no deal was supposed to be announced until they presented it to the House caucus tomorrow night, Tuesday. So all of a sudden there is a framework. I don't know what the House caucus feels about it.
JONAH GOLDBERG, NATIONAL REVIEW ONLINE: I'm guess I'm more in Charles' camp. I thought it was shockingly angry thing that Obama just did now.
BAIER: When you check the transcript, there was no platitudes at the beginning.
GOLDBERG: Normally when you strike a big deal with the opposition party, especially when you claim to be a bipartisan guy, you are supposed to be excited to reach across the party lines. Instead he made it seem like Republicans were villains for striking a deal with him.
And there is a lot of talk about how Obama was going to be the liberal Reagan. This was not a happy warrior. This was not a guy declaring a victory. This is a guy made to eat spinach. I know what he is trying to do is make himself seem as if he's fighting for middle class tax cut and got rolled. But that's not as presidential as A.B. made it sound.
And if you read instant reaction on twitter and all of these things from the Democrats, it's pretty hilarious. A friend of mine tweeted "Who wants to see bet who is the first Democrat to question Obama's birth certificate is going to be?" They are in open revolt right now.
BAIER: Is part of that reaction, quickly before we take a break, because of the tone of the left over the weekend?
KRAUTHAMMER: I think so. I think they're feeling the backlash. It's added up to other issues like "don't ask, don't tell" and Guantanamo and rendition, et cetera. But I think this is unwarranted. The president given how weak a hand he had and how much this was forced, he got a lot out of this.
BAIER: OK, another quick break and we'll wrap up the politics of all of this on "Special Report." Breaking news -- a busy night.
BAIER: Here is the framework of the deal the president has talked about -- a two-year extension of all the Bush era tax cuts, keeping rates the same, 13 months extension of unemployment insurance, temporary two percent reduction in payroll taxes, and an estates tax compromise. We were talking about tone earlier. Charles?
KRAUTHAMMER: Look, for a president that shellacked an election last month he did well. In return for one thing, he gave away two-year extension of the upper income cuts. It's temporarily thing.
BAIER: And potentially estate tax.
KRAUTHAMMER: Well, the estate tax is something that I think ended up where it would have in any regular Congress. It was shoved in now because it's due to expire on January 1st.
But he gets extension of the unemployment for a year, which is really a lot considering until this recession was only a total of six months. And he gets extension of all of the breaks and credits and tax cuts that he offered in the stimulus, his stimulus, which would have expired at the end of this year. And he gets a two percent reduction in the payroll tax.
This is a huge amount of money shoved in to the economy, which is sort of a stimulus package that is going to help him in 2011. It is going to be a huge also increase in debt as a result of this.
BAIER: Now, A.B., I asked you before, but can the Democrats swallow this pill?
STODDARD: We really don't know. At this point, they don't like to be left out of any of this. They were really convinced he was caving to Mitch McConnell over the weekend. This might be a big enough package, very important what Charles said. If there is a making work pay tax cut to 95 percent of Americans, $800 a year, $150,000 for couples and 75 for individuals in the stimulus, and the without that, that would have been a tax hike that the Republicans could have blamed him for later on. The Democrats said they had to be in the package.
I think there are some things, particularly the extension of the unemployment insurance, that will make them happy but they felt like they were left out of the negotiations to a large extent.
GOLDBERG: Policy-wise I think Charles is a little off. I think the two percent payroll cut is victory for conservatives and something that a lot of Democrats and liberals could have done a long time ago and didn't. It would have been a much better stimulus. So it's more of a victory to the right.
More important, I think what's fascinating here is we may have a liberal version of Papa Bush who's "read my lips" pledge break destroyed his presidency. He said if you don't raise taxes it will destroy yours. That will be an interesting fight.
BAIER: That's it for this panel -- but hold on, one more thought. We can't let them go yet. One more thought from the panel after the break.
BAIER: Well, it's been a different-looking "Special Report" because of tonight's top story, President Obama announcing what he calls "the framework of a deal" extending Bush era tax cuts and unemployment benefits.
One final thought from the panel, quickly. Jonah?
GOLDBERG: I think the winner here is Boehner and McConnell. They kept their promise in the campaign. They had the high hand and they can claim a victory even before they are really in the leadership.
BAIER: Winner or loser?
STODDARD: I think the president is acting like a hostage. But I will say this, when the public is angry Republicans win. He needs to spend every minute until the state of the union address racking up accomplishments that he can walk in and boast. And he can't give into anyone in between now and then.
KRAUTHAMMER: The big winner is candidate Obama in 2012. He has just negotiated a huge fiscal stimulus in 2011 that's going to help and pump the economy in 2012, and he will need it.
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