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Special Report

Tax Bill Caught in House Rules Fight

This is a rush transcript from "Special Report, “December 16, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, SENATE MINORITY LEADER R-KY.: They want to ram this gigantic $1 trillion bill through Congress and they're using once again the Christmas break as an inducement to vote for it. Now look we all know that this is not the way to legislate.

SEN. DICK DURBIN, SENATE MAJORITY WHIP D-Ill.: Many of the same senators who are criticizing congressionally directed spending, or earmarks, have earmarks in the bill. That is the height of hypocrisy, to stand up and request earmark, have it included in the bill, and then fold your arms and piously announce I'm against earmarks.

(END VIDEO CLIP)

BRET BAIER, HOST OF “SPECIAL REPORT”: The omnibus spending bill, $1.1 trillion, is going to be considered, in fact, in 20 minutes. The Senate, a Senate clerk will start reading the 1,924-page bill.

As we take a live look on the floor, right now that is Senator Kerry talking about the ratification and START treaty with U.S. and Russia, but eventually they will get to the omnibus bill.

In there, as we mentioned, more than 6,500 earmarks. Here's a list of the top earmarkers in this bill. The top two are Republicans. Senator Cochran from Mississippi and Wicker. There you see the amounts, the number, the amount of money, and the number of earmarks solo or with other members.  Senator Inouye from Hawaii is next. Senator Feinstein from California. Next is Senator Murray from Washington. Those are the top five. Then Senator Reid is number seven. He’s the Senate majority leader, he has 166 earmarks, $237 million, and Senator McConnell, minority leader is 48 at $112 million.  So what about all of this? We'll start there. Let's bring in our panel, Chris Stirewalt, FOX News politics editor digital, Juan Williams, Fox News contributor and syndicated columnist Charles Krauthammer.  Let's start with the omnibus bill. Chris, where are we? What's happening?

CHRIS STIREWALT, FOX NEWS POLITICS EDITOR DIGITAL: Well, the inclusion of all those Republican earmarks that you just listed was done by Democrats inside in what the Republicans decry as behind closed doors secretive process. They were included for one of two reasons, either as an inducement to get Republicans to support this bill, because these were preexisting earmarks. They had been around in previous appropriations bills.  Some Republicans in the senate think there included as an inducement, or as one described it to me, as blackmail, that it was an effort to say if you raise a stink over this bill, we're going to be able to go to the floor and say, well, it's loaded with your earmarks, so how can you possibly oppose it?

BAIER: Which has happened.

STIREWALT: Which is precisely what has happened. But the Republicans said we're opposed to the bill even if it includes goodies for our state, because we kicked the earmark habit and we're not doing it.

BAIER: Juan, Senator Reid, there’s some question of whether he has the votes to pass this spending bill. If he does, the president has a decision whether he will sign it. Here is what the president said back in March of last year.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I expect future spending bills to be debated and voted on in an orderly way and sent to my desk without delay or obstruction so that we don't face another massive, last- minute omnibus bill like this one.

VICE PRESIDENT BIDEN: If in fact this omnibus bill negotiated by Republicans and Democrats, not by us, Republicans and Democrats passes, the president will support it.

(END VIDEO CLIP)

BAIER: The first sound bite was from March of 2009 and the second sound bite from the vice president was today.

WILLIAMS: Right. And I think right now the battle is over whether or not you give continuing resolution, which is what the Republicans favored, something that is a patchwork that would extend the game, this game of chicken going on involving not only the Christmas holidays and new year and possibility of having a session after Christmas and week between Christmas and new years, but obviously the Republicans hoping that things will lay over and they'll have more power in the new Congress.

But form the Democrats point of view, there is no incentive for it, and the president wants an omnibus bill to sign. He wants the whole deal.

BAIER: Despite what he said in March?

WILLIAMS: Absolutely. He and the White House wants something right now that’s their own. And they are delighting in poking the Republicans saying many of you have earmarks in the bill.

BAIER: Couldn't this be a seminal moment for President Obama if he came out and said you shouldn't do it this way. We should pass a continuing resolution to get to February and try the process the way we said we'd do it.

WILLIAMS: I think you know President Obama as well as I do. He signed the last one with all the earmarks after he condemned earmarks in the campaign. The big issue here is all the political posturing.

The reading of the bill on the floor, that’s intended by Republicans to make it clear to the American people not only how many earmarks and how much pork and waste is in the bill, but it then just push the Christmas deadline up against the wall for Democrats.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think the reason that the president wants to sign this and the Democrats are insisting on passing the omnibus bill is all about power. It sounds arcane and continuing resolution on the one hand. McConnell held it up, a single page, versus an omnibus -- it sounds all complicated.

But it's really about who controls the future. Continuing resolution is a way to say we're going to legislate for a couple of weeks in the bill here. We'll extend the government's running for a couple of week, and then the new Congress will take over and decide what to do in January.

With an omnibus, what the Democrats are doing, it's a way of the past reaching to the future. The omnibus is way for 111th Congress which has been repudiated, voted out, Democratic influence and control what happens next year because the omnibus directs trillion of spending up until October 1 of next year.

So it's the dying 111th controlled by Democrats constraining what the Republicans in 112th which they will largely control and will be able to do.  The one example we mentioned last night is $1 billion in it to implement Obamacare. That is in the, it's in the omnibus. It would constrain the Republicans could act in trying to repeal Obamacare next year.

But of course it isn't in any continuing resolution. It's all about who controls the future.

BAIER: OK, let's go over to the House side, which is equally confusing and stalling.

(LAUGHTER)

Let's take a live look at the House floor. Right now they are still on the rule to get tax rate compromise moving, the debate moving forward.  There was a hiccup today to put it in short-hand; they put out this blueprint for how the debate was going to go. And they realize that it didn't have the time for opponents to speak out against the tax rate compromise bill. So they had to go back and try it again. So that’s where they are right now. It's delayed. Listen to the back and forth today.

(BEGIN VIDEO CLIP)

REP. PETER DEFAZIO, D-ORE.: A few hours ago I was giving interviews where people said it was a done deal, how do you feel about it?  Now it's not a done deal. We have rekindled the faint flame of hope.

REP. ANTHONY WEINER, D-N.Y.: It seems pretty clear; the handwriting is on the wall. This is going to pass.

(END VIDEO CLIP)

BAIER: You pull a congressman over and get a different perspective on the thing. Chris, where are we on this? Is it in trouble vote wise, the compromise on the House floor?

STIREWALT: I don't think so. I think what is interesting here are two things. One, it's not just that they had a procedural hiccup and it was some abstruse Congressional Legalistic problem. It was also that the White House let it be known to Democrats, this is what I'm told by the Democratic staffers, that it was made to be known to the House Democrats that vote on an amendment that would have changed the legislation would be deemed about against the bill and against the president. If they were casting vote against it, to change the death tax, small change in relatively small tax --

BAIER: But the Senate Republicans said if you change it, it falls apart.

STIREWALT: Exactly. And the White House let it be known you for this you are voting against us, and you are repudiating the president. That's significant, and that's more of what backed them off than anything else.

BAIER: Juan, this is sticky for Democrats, some of them.

WILLIAMS: Yes. But I think right now what you are seeing is people that are frustrated and feel as if they're ignored and locked out of the process. This is their payback and moment before they feel the Republicans come in and take further control. This is their moment to make a show.  They are going through the procedural steps, but I don't think there is a threat to actual passage of the legislation.

KRAUTHAMMER: I agree. It's all making a show, allowing liberals on the floor to posture. I love the phrase "rekindling the flame of hope."  It sounds like a Hanukkah story.

(LAUGHTER)    

Maybe DeFazio is Jewish. Who knew?

(LAUGHTER)BAIER: Should Republicans force government shutdown over the omnibus spending bill? Tell us what you think on the online poll, FOXnews.com/specialreport. Next up, the Afghanistan War review.         (COMMERCIAL BREAK)    

(BEGIN VIDEO CLIP)       

OBAMA: This continues to be a very difficult endeavor. But I can report thanks to the extraordinary service of our troops and civilians on the ground, we are on track to achieve our goals.

HILLARY CLINTON, U.S. SECRETARY OF STATE: We think on the one hand we're making progress and on the other hand we have a long way to go. I think we're very clear-eyed and realistic.

ROBERT GATES, DEFENSE SECRETARY: While our progress in Afghanistan as both the president and Secretary Clinton has said is fragile and reversible, I believe we will achieve key goals laid out by the president last year.

(END VIDEO CLIP)

BAIER: The president and his national security team talking about the Afghanistan War review, saying the surge of 30,000 troops has reduced the influence of the Taliban and that they are disrupting, dismantling, and defeating Al Qaeda. But as you heard, there are question marks on the way ahead. Back with the panel. Chris?

STIREWALT: Well, one thing that can be certain, this is the most risky political position that the president has. I will leave it to the trigger pullers and the war fighters to talk about the merit of the plan.  But politically, I know this is the hardest thing that the president has on his plate because it is very unpopular with his base.

It is -- he gets credit from the right. He gets credit from the con seventies and Republicans for staying the course in Afghanistan. But, it's very unpopular with his base. And he has pushed the deadline back so he will be running for president against Republican who favors fighting the war, no doubt, and with a Democratic base not happy with his position.  It's tough.

BAIER: Juan?

WILLIAMS: You know what I thought was missing in the dog that didn't bark in the presentation today was really addressing the problem of lagging Afghan support for the war. Now forget the fact that this is not a popular war in the United States. The president was making the case and he did this at the top that we have got to defeat Al Qaeda. We've got to stop them from having secure base for future attacks against the United States.

But he didn't speak about the fact that Hamid Karzai has not been a good partner. He didn't speak about the corruption or the fact that he is telling General Petraeus these nighttime raids, which have been I think the special operations success of the last year in terms of pushing back Al Qaeda, that Karzai said this is a bad idea and wants them to stop.

So the good news is in a sense that the president remains committed.  Secretary Clinton said we won't willy-nilly withdrawal. It's going to be based on conditions on the ground. But I wonder if it's whistling past graveyard at this point and hoping for best.

BAIER: Secretary Gates said as far as pulling troops out this July 2011 has gone out the door. They say it's all going to be conditions- based. And the answer is we don't know at this point.

KRAUTHAMMER: I think that is a key element of the announcement. The review, it's purpose was to signal retreat on July 111 withdrawal, interpreted when it was announced last year as something hard and fixed.  It obviously is very flexible. They'll pull a couple of troops out of an area that is extremely secure. But what he is saying the deadline has we heard at the NATO summit in Portugal is 14.

I thought it was modest portrayal of progress and modesty is well- earned. In the long run, everybody understands there is a Karzai problem, a corruption problem, a Pakistan problem. However, on the ground, I believe them when they say Petraeus is saying there has been improvement.  They are widening the circle and area of control outside the Taliban.

This is a country opinion polls show that Taliban has something like six or eight percent support, Pelosi levels essentially. And if the problem is the fear that people have of them, that is a problem you can handle with the military. You do surge in Iraq and give them protection.  As long as it's not trying to change ideology but make them have a sense of security, it's in principle doable. That's why there is some optimism.

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