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Special Report

'All-Star' Panel on Obama's Handling of Economy; Accusations Against DOJ Over New Black Panther Party Voter Intimidation Case

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PRESIDENT OBAMA: Most of our friends in the other party are planning to vote against this reform. The leader of the Republicans in the House said that financial reform was like, and I'm quoting him, using a nuclear weapon to target an ant. That's what he said. He compared the financial crisis to an ant. He can't be that out of touch.

HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO,: The American people want the president to focus on the economy and getting jobs back in America. And he ought to act like a leader not like some child practicing partisan politics.

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BRET BAIER, "SPECIAL REPORT" HOST: Talking about the financial regulation overhaul legislation and the House minority leader charging that the bill as it is overregulated Wall Street and does not deal with mortgage giants Fannie Mae and Freddie Mac. That's what he says about the statement. The president meantime is going on the attack on the economy as an issue on this, a day when the Congressional Budget Office said that deficits are hitting 62 percent of the gross domestic product scheduled to go up to 90 percent by 2020. That's the picture. Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Erin Billings, deputy editor of Roll Call, and syndicated columnist Charles Krauthammer. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: When you hear the president argue like that, Republicans should be careful. They have all the facts, they have the public opinion on their side in the election, and they make mistakes.

Last week, it was the ranking member of a committee, a Republican, who apologized to BP. And now you get John Boehner using an unfortunate analogy, he did not have to use it. He could have said that the bill the president is proposing is, instead of attacking specific problems we can solve, as a government takeover will make it worse. On the other hand the president is showing in his response and style a demonizing and delegitimizing the opponents' arguments and pretends he is a professor who deals in a Socratic way and recognizes the arguments and deals with them. This is dishonest. The Republicans he charged in that speech oppose the reform on finance entirely on political grounds. There are obvious arguments that all claims that the president has made that it will ensure that we're going to have a bailout in the future and all the others are not true. There are a lot of independent economists who say it will increase the chance of a bailout. But he doesn't engage on the issues. He accuses opponents of ill motives always as a matter of politics. He is acting in the national interest and the others are acting for base political motive. He did that in the encounter with Republicans on health care. Someone would raise an issue and he would dismiss it as a talking point instead of being honestly engaged in argument, which he doesn't like to do.

BAIER: He did that at the end of the G20 at a press conference at the end of the G20, asked of the issue of deficit and the debt. Here is what he said.

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OBAMA: Because next year when I start presenting some very difficult choices to the country, I hope some of the folks who are hollering about deficit and debt step up, because I'm calling their bluff.

And we'll see how much of that -- how much of the political arguments they are making right now are real and how much of it was just politics.

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BAIER: He is calling their bluff next year.

KRAUTHAMMER: As usual, attacking the motives. The irony here is that you have to ask, why is he proposing cuts next year and not today? The answer is he is waiting until next year's election is behind him so he admits that he is acting as a politician for party reasons while in the same sentence accusing the Republicans of doing that.

BAIER: Erin?

ERIN BILLINGS, DEPUTY EDITOR, ROLL CALL: Well, calling out the bluff, Democrats are getting tired the deficit responding too. There are fiscal conservatives in the House and Senate and in the Senate moderate Democrats are saying we don't want do go this way either. It is an election year and that is why we hear it from both parties.

But I think it is interesting the rhetoric he is using now. And I think that getting back to his speech earlier, he is in campaign mode and we all know it. I don't think anyone is denying it.

But what I think is interesting is yesterday he brought all the senators to the White House and said can we still try to cut a deal on energy reform? And the next day, by the way, Republicans are preventing change, they are not working with us, slam, slam, slam. So, a lot of mixed messages are from the president.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Political hack work today, that is what the speech was. This is something you would expect from the chairman of the DNC, not from the president of the United States who has been known to take liberties and short cuts in the past using straw men, misrepresenting his opponents and occasionally getting something wrong. But he did all of this today and he did it in every sentence. It really was amazing.

Some stuff is so easily disprovable. He said every economist who has looked at stimulus says it is working. The lead editorial in The Wall Street Journal today, Alan Meltzer, PhD., economist -- "The administration's stimulus program has failed." This is not hard. There are hundreds like Alan Meltzer who think the stimulus has not worked.

The problem, part of the problem is, where's the rest of the media? Where is the mainstream media? George Bush would say, he'd open a speech and say it is a beautiful day out, and you would have a front page above the fold, fact check, the next day, in the Washington Post and New York Times saying some say it wasn't actually "beautiful," but that is his perception.

These are basic fact checks that are not being done on the president.

BAIER: There is a messaging issue here, and here is another example, something from today and something from his senior adviser.

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OBAMA: The truth is from the day we walked into the White House we knew the crisis we faced was so severe was going to take months and maybe even years to fully heal, to dig ourselves out of one of the worst recessions in our history.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: We did not know the extent of the economic problems which occupied us. The recession occupied us for the first several months in ways nobody could have anticipated.

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HAYES: Steve, do you see a difference there in message?

HAYES: It's a direct contradiction. That shows, those two clips, and the president's speech, his aggressive speech, suggests that the White House is flailing. The president's numbers have been declining, and he is getting beaten up on the oil, the economy is not improving, and people are worried about job numbers and I think they are failing.

BILLINGS: I'm sorry. I also think he is hearing from Democrats because they want the president to step up because they have to stand on the ballot in November. He doesn't. And he promised he would be out front and championing the economy, and he has not done that to their liking. And so I think that is what is going on.

KRAUTHAMMER: We see here conditional truthiness. The administration needs to say we knew how bad it was, and it needs to say we had no idea it was so bad. It depends of what it needs, and it will invent a new truth.

BAIER: You can log on right now to our homepage at foxnews.com and get ready for the "Special Report" online show and vote in our first topic. Next, a former Justice Department lawyer accuses the general attorney of racial politics.

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UNIDENTIFIED MALE: That's all I'm doing. I'm with the University of Pennsylvania.

UNIDENTIFIED MALE: One of them brandishing a nightstick standing in front of the door. As I walked up they closed ranks next to each other. I am an army veteran so that didn't scare me. I went inside and found the poll watchers who said they had been there for about an hour and they said not to come outside because a black man would win the election no matter what.

J. CHRISTIAN ADAMS, FORMER JUSTICE DEPARTMENT ATTORNEY: They said "You are about to be ruled by the black man, cracker," and they called people "white devils," they tried to stop people from entering polls.

MEGYN KELLY, FOX NEWS ANCHOR: Is there any question that violates law?

ADAMS: No, nor anyone who worked on the case. It's the easiest case I have ever had at the Justice Department. If this doesn't constitute voter intimidation, nothing will.

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BAIER: Jay Christian Adams in an eye opening interview with our own Megyn Kelly today on "America Live," charging that the Justice Department dropped in large part this case of voter intimidation against the Black Panthers in Philadelphia largely because of politics.

The one man with the nightstick received basically a slap on the wrist saying he could not appear at polls in Philadelphia for the next two years. The U.S. Commission on Civil Rights has opened an investigation into all of this and there is a hearing next week.

We're back with our panel. Steve, what about the case?

HAYES: There are two issues. The first is, why the Justice Department, why the political appointees at the Justice Department decided to reach down, take a case that had already been won, and reverse it or dismiss it.

And there are real open questions. This is on video. A clear-cut case, there is no question that there was voter intimidation. So that is the first issue.

The second issue is, in response to letters from members of Congress, the Justice Department has said that political appointees were not involved at any level. We now know because of documents that have come out through the Civil Right Commission investigation that is not true. That, in fact, there were political appointees involved in this, two political appointees directly involved.

And Eric Holder was at least -- this was made known to him. And, a third ranking Justice Department official was also in on the decision. So there are two big questions and they have taken what should have been an easy prosecution and made it into what I think is a growing scandal.

BAIER: Adams said he resigned because of this and he will testify or will be subpoenaed to testify in front of the commission hearing.

Here is what the Department of Justice released today when asked of the allegations: "It is not uncommon for attorneys when the department to have good faith disagreements about the appropriate course of action in a particular case, although it is regrettable when a former department attorney distorts the facts and makes baseless allegations to promote his or her agenda."

BILLINGS: I want to see the hearing next week. I think this is interesting. I don't know what went on in the Justice Department but Steve says there are a lot of questions. And I have a lot of questions. Is this a case of sour grapes? Is this a genuine whistle blower?

I don't know, but I do think the hearing will be interesting and maybe, hopefully, a lot of the questions will be answered. But moreover there will be more criticism of Eric Holder who already has many critics, and this will fuel them.

BAIER: Charles, in the big picture, first this case and then the big picture, problem, potentially for the Justice Department?

KRAUTHAMMER: It is as much the real question, why would you do this? Why, as Steve says, reach down on this particular case to rescue people who you can see on tape are doing something really bad, and obviously, illegal?

The one guy who got a slap on the wrist, holding the baton, he got two years you have to stay away from the polls in Philadelphia. That means he will be ready in 2012 in the presidential election. That is absurd. It makes no sense politically. Why raise -- it is such a small case from the point of view of justice, why not let it run its course?

And one of the reasons that the attorneys that we just saw resign is because while he was in the department, the Justice Department would not allow him to answer the subpoena that came from the Civil Rights Commission which wants to ask, what happened, was there a distortion or obstruction of justice here?

Now he is out he can do that, and it will be interesting. He will be under oath and putting a lot on the line.

BAIER: Steve, for Eric Holder is this a bigger problem, considering he raised eyebrows when he said this statement. Take a listen.

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HOLDER: This nation has proudly thought of itself as an ethnic melting pot. In things racial we have always been and we, I believe, continue to be, in too many ways, essentially a nation of cowards.

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HAYES: I think that is a big problem. When you look at the questions that are raised and the kinds of evidence that is likely to come forward in documents and e-mails people have, people are going to be questioning him directly.

BAIER: That is it for the panel. Watch the second part of that interview with Megyn Kelly tomorrow at 1:00 p.m. Eastern Time.