This is a rush transcript from "Special Report With Bret Baier," September 8, 2010. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: We should not hold middle class tax cuts hostage any longer.
We are ready this week, if they want, to give tax cuts to every American making $250,000 or less.
SEN. ORRIN HATCH, R-UTAH: Taxing small businesses the way he is planning on doing it, 750,000 of them will be impacted, 20 million small business workers will be impacted. You know -- that's not the way to increase jobs. That's not the way to firm up the economy. That creates more uncertainty.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: President Obama today laying out his plan to let the Bush tax cuts on the top tier -- above $250,000 -- expire. Saying that it's not to punish folks who are better off, it's just a concern over the $700 billion cost.
Now, his former OMB Director Peter Orszag this week, as we mentioned yesterday, wrote in The New York Times calling for a two-year extension of those -- of all of the Bush tax cuts, saying it's important for the economy and that is getting cited by many Republicans.
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.
OK Steve, first about the policy announcements, the proposals put forward in Ohio today by the president.
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think the most important thing to take away from where we are today is that the president three months ago and his White House making the argument that the stimulus succeed, that this was going to continue to be period of recovery. Now you are seeing them say in effect it hasn't succeeded. They're not acknowledging that openly of course, but they're tacitly acknowledging it by the policies. It hasn't succeeded, and we have to put forward a plan, a bit-by-bit plan adding up to $350 billion to do essentially the same thing we try to do the first time that didn't work.
Virtually nobody believes that this will have any significant economic impact in the near term. Some people think it will help encourage businesses to move payments that they might make later forward. It allows them to recalculate how they are going to count their withdrawal -- their deductions on spending for equipment, things of that nature. But in terms of how it's going to affect business spending, business behavior, it's not going to happen now.
The real debate, of course, is about the extension of the Bush tax cuts. And as you said, Peter Orszag made an argument yesterday in The New York Times that President Obama himself made a year ago when he said basically it's a bad idea to raise taxes in a recession and doing so would suck demand out of the economy. The two used almost exactly the same phrasing to make the same argument: Orszag arguing in favor of extending the tax cuts for everyone; Obama, at that time, saying that he wouldn't raise taxes in a recession.
BAIER: Erin, there are some Democrats who have weighed in on this saying perhaps it's a good idea to extend it all for a long time beyond Orszag, lawmakers on Capitol Hill.
What about the prospects of getting this all through Congress in the short time they'll come back this September?
ERIN BILLINGS, DEPUTY EDITOR OF ROLL CALL: Well, I think it will get through, I don't know if it's going to get through in September or in a lame duck, but they are at least going to have the debate, they have to. Democrats have to look like they're addressing this. They know that this is important to the electorate. No one wants a tax increase come November 2, so obviously, they're going to have to have the conversation.
I think what is going to happen, teeing off of what Steve said, is the Democrats will probably take components of what Obama is pitching now, whether the $50 billion stimulus which I don't think will go anywhere, but pieces of the tax cuts or the tax credits and try to tack it on and try to move some of the components onto the tax, the Bush tax cut, so they can try to force Republicans to say no.
I think that's part of Obama's mission here is to try to paint the Republicans as the party of no by forcing their hand on the tax cuts.
BAIER: But it is a bit risky in that if Congress doesn't move, the Bush era tax cuts, all of them expire in January, 2011.
BILLINGS: I think it will be addressed this year. And frankly at the end of the day I think they will extend them for everyone, because there were enough moderate Democrats, there are at least three moderate Democrats that support extending it for all.
And I think at the end of the day, the president is not going to try to veto any kind of tax extension. If they push, you know, the full on tax extension for all, Obama is no fool. He does not want to veto that. That would be political suicide in this election year.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: His speech today, like the policies he's advocating, look like desperation. I mean as an aside, it really isn't very presidential. The slash and attack on Republicans on the future speaker of perhaps Republican future speaker is the kind of thing you expect the vice president to do, not a president.
He brings out all the old stuff he used in '08 at a time when it was at least believable -- hope and change, the past versus the future, all that. Well, he got elected on that, and people are not very happy with him. The numbers are down and the economy is stalled.
So what does he propose? A mini-stimulus that is merely risible. Nobody buys it, even the Democratic candidate in Colorado for the Senate, the one he backed himself, is opposing it. There's no way it will pass. He knows that. It looks if it's just the way he says construction unions, well, I tried to get you a couple of jobs.
And on these accelerated depreciation schedule, it's only for 2011. It's time shifting. It's exactly the money he wasted on the clunkers program and on the credit for first-time home purchasers. It stimulated the demand early. It stole demand out of the future. It had no impact on the economy in the end. It cost billions of dollars. And that's exactly what he is proposing on this accelerated depreciation. It's not going to help them in the long run. I think all of this is going to go down in flames.
BAIER: The president apparently told ABC, we're getting word, that if the midterm election is a referendum on the U.S. economy, Democrats will not do well. Not a surprise there what we're getting from the ABC interview.
Here's what the president said in March of 2009, about the stimulus package back then, Steve, and today.
(BEGIN VIDEO CLIPS)
OBAMA: Through the Recovery Act we will be investing $28 billion in our highways, money that every one of our 50 states can start using immediately to put people back to work.
That's the reason we're here today. That's the purpose of the recovery plan. That's the cause of my presidency.
So this week I proposed a six-year infrastructure plan to start putting Americans to work right away.
(END VIDEO CLIPS)
BAIER: OK, so March, '09 and then the statement today. Here is the graphic about the stimulus money spent from the first stimulus package in February of '09 -- $512 billion in stimulus money has been spent. That's about 65 percent of the total amount. There is still a lot on the table that has not been doled out as of yet. Steve?
HAYES: I think this shows, as Charles suggests, this shows their desperation. They're trying the same thing over and over again because they didn't like the results the first time they tried them.
But the problem I think the president has, as Erin points out, is that they have to have some sort of positive agenda to run on. There have to be things that Democrats in competitive districts can say we're doing this, we're doing this, we're doing this to help the economy. I think the problem they face is that a lot of it involves spending and it involves government intervention or government sort of -- an aggressive paternalism from Washington that is precisely what's being rejected in this upcoming election.
BAIER: Much more on the politics of this coming up.
For more on the president's economic proposals, visit the Show Notes section of our home page at foxnews.com/specialreport.
Up next, the panel discusses the potential impact of today's announcements on the November midterms.
(BEGIN VIDEO CLIPS)
OBAMA: There were no new policies for Mr. Boehner. There were no new ideas. There was just the same philosophy that we had already tried during the decade that they were in power, the same philosophy that led to this mess in the first place: Cut more taxes for millionaires and cut more rules for corporations.
HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: Here is the White House worrying about what I've to say instead of working together to get our economy going again and to get jobs back in America.
(END VIDEO CLIPS)
BAIER: Well, President Obama in Ohio today mentioned House Minority Leader John Boehner eight times in that speech, specifically pointing to a speech he made, Boehner made, in Cleveland just last week.
Here the latest poll from Washington, The Washington Post and ABC, which political party do you trust to do a better job handling the economy? There you see 43 percent for Republicans, Democrats at 39 percent.
What about all of this, the politics as we head to the midterms. We're back with the panel. Charles?
KRAUTHAMMER: Well, any time the president of the United States puts himself at the same level as member of the House eight times, he loses, no matter what the content of the argument is.
I don't understand. Here is a man who had a golden touch in 2008 and it looks as if he's lost it. He tries it all over again and it won't work. He now is the president. And as you just said, if he said this is a referendum on the American economy, the Democrats are going to lose.
I remember Charles De Gaulle I think it was 1968 held a referendum on his presidency. It wasn't an election, he just held a referendum. Well he lost, he went home. I never said this before, but perhaps we could learn from the French a few things.
Look, he understands if it is a referendum -- Obama understands if it is a referendum, he loses. And that's why he wants the narrative to be a choice. And the choice is the only one he has.
It's not a choice on whose plan is better, because he loses on this plan. It's been tried, spent on the stimulus and the economy is stuck. It's a referendum on class war. It's we're for the poor, the middle class, and the Republicans favor Wall Street, special interest, and the rich.
That's why despite the protests of moderate Democrats who want an extension, like Peter Orszag, of the entire tax cut the Bush administration had initiated, he wants to split it between the middle class and the top two percent, even though it will really hurt the small business.
That's all he has. That's his narrative. It's his only shot. That's why he insists on it.
BAIER: On the infrastructure spending, Erin, two hours before the president's speech, Charles mentioned this, Senator Michael Bennett from Colorado put out a statement about his lack of support for the president's proposal.
And this is what he said -- "I will not support additional spending in a second stimulus package. Any transportation initiatives can be funded through the Recovery Act" -- that's the first stimulus package -- "that still contains unused funds. We must make hard choices to significantly reduce the deficit."
He is in a tough race in Colorado, obviously, but he is also a Democrat who the White House supported in the primary. And he has a statement before the president even gets to the podium in Ohio.
BILLINGS: And yesterday, we had Steny Hoyer, the majority leader in the House and Chris Van Hollen, the head of the DCCC, the Democratic Congressional Campaign Committee, saying we're not taking this up before November 2.
"Stimulus" is a bad word around Washington right now, and frankly across the country. No one wants to hear it and be near it, and certainly no one in cycle wants to touch it. So, yes, $50 billion isn't going anywhere.
I want to mention one thing about Boehner. What I think is really interesting is that in a lot of ways the president is legitimizing Boehner. He obviously is running for speaker and wants to be speaker, is confident that he's going to get either close to being speaker or going to be speaker.
And I find it very interesting that the administration is giving some legitimacy to him. And it makes me wonder if the administration doesn't perhaps want the House to flip so that come 2012 they'll have some fingers to point in the other direction.
BAIER: Wow, very conspiratorial, here Erin on the panel.
BILLINGS: I'm just throwing it out there.
KRAUTHAMMER: Steve and I are in charge of the cynicism here.
It's really unbecoming.
BAIER: What about the charge from Democrats, president included, there aren't specifics from Republicans? We heard Congressman Boehner today saying there should be a freeze on spending back to 2008 levels and that all the Bush tax cuts should be extended. He did get those two specific things out today.
But Democrats charge the Republicans haven't really laid out how they're going to govern differently than they did after they were in control of Congress.
HAYES: It's actually not true. You've had House Republicans in a leadership soliciting ideas from the country adopting them, putting them out of their own specific spending cuts.
You have Paul Ryan's roadmap, of course. You have John Thune who last month put out a budget reform proposal that would bring down the level of spending, require cuts in spending of GDP, 10 percent of GDP every year.
There are plenty of Republican ideas. It's just easier for White House not to talk about them.
What I don't understand why they don't use some of the ideas, pick up on some of them other than Social Security, and try to attack them. I mean, go against them one way or the other.
It's clear that they want a villain, this is what they are trying to do with John Boehner. They are trying to create a villain so they have someone to run against. And the theory, the oldest political trick in the book -- we might be bad, you may not like us, but have you seen these guys? That's the argument. That's exactly what Harry Reid is trying to do to Sharron Angle in Nevada with some success, I think.
The Democrats are trying to do this nationally with John Boehner but they are not seizing on issues. And until they seize on issues, I don't think they will have much success.