This is a rush transcript from "Special Report," August 2, 2012. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESITDENT BARACK OBAMA: By the way, Florida, just like we tried their way, what I'm talking about, we tried too. All I'm asking is that we go back to the rates that were paid by wealthy individuals under Bill Clinton. And if you remember, that is when our economy created nearly 23 million new jobs.
OBAMA: We created the biggest budget surplus in history. And here is the kicker -- it was good for everybody.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: President Obama on the stump talking about "Our" plan, the "Our" plan, the Democrats plan, by referring back to President Clinton and his economy and his budget when he raised taxes on the higher earners. It was a different time.
We're back with the panel. Kirsten, you know, back in the Clinton economy it was the economy was on fire. There was a high-tech boom. Growth was at four percent, or 3.5 percent. Unemployment rate was down to four percent. Revenues were pouring in. This is a different environment. But the president is clearly running on the Clinton economy.
KIRSTEN POWERS, COLUMNIST, NEW YORK POST: It is a different environment. But when the president raised taxes it was 1993. And I think technically, the tech boom took off around '95. But it was actually a little bit later. So -- and the reason President Clinton did that was because of the deficit. He really did not want to raise taxes, and then he looked at the deficit and he said we need to raise taxes.
What Obama is doing a clear political ploy, which is to basically align himself with Clinton. Though what he is saying is completely true. It is just taking us back to the rates of the Clinton-era, which were not terribly high.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is a guy who has been in office for a full term. The plan as I remember it, the Obama plan, was cap and trade, trillion-dollar stimulus, and ObamaCare. That was the plan. Regulation Wall Street, all kinds of regulation, hyper-regulation of energy, that is the plan. No Keystone. That is his plan.
And obviously it's been a catastrophe. That's why he won't talk about it. So now he pretends his plan is something he was not even involved in, that happened in the '90s, which was an extremely unusual era in our history. It wasn't only an explosion of the economy on account of the tech boom. It was also the decade of the peace dividend. Between 1991, the collapse of the Soviet Union and the end of the Cold War, and 2001, the beginning of the War on Terror, we had 10 years of unprecedented peace and prosperity as the result of an accident in history which allowed a huge reduction in spending on defense and spending it either for debt reduction or social programs. That explains -- the idea that it was spurred by a four percent change, difference in the rate of income tax on two percent of the population is risible. It's a joke. And he is running on this? This is his platform?
POWERS: But that is not his claim. He is not claiming that it caused the growth. He is saying that we had growth even though the taxes were this rate. It's an argument against the argument that the Republicans are making which is if you raise taxes to this rate, oh my gosh the world's gonna end.
KRAUTHAMMER: But that would be true if he hadn't used the word "plan." He says that was our plan. The tax rates, it was Clinton's plan, it's now our plan, the Democratic plan, and it is going to work. It's preposterous. It's not his plan. And it had nothing at all to do with the boom that we had in the 1990's, nothing.
BAIER: Pat, this line is now in every speech.
PAT BUCHANAN, SYNDICATED COLUMNIST: Look, I don't think it's a winner. At best, what Barack Obama is saying is utterly irrelevant to the problem this country has got, which is the economy is not moving. It's going into a stall. You have got 8.2 percent unemployment. Under what economic theory – Keynesianism, monetarism, supply-side -- do you hit that economy right in the head with a major tax increase? There is no theory. I haven't read Marx and Engels lately. It might be in there.
But this is really an absurdity on the part of the president, quite frankly. And it is obvious, this is sheer ideology. He has a real hostility against the rich and the successful and the others. He wants to go after them. That is the keystone of his campaign. It is demagogic. I don't think that one is a seller.
BAIER: But even though when you ask in a poll, no matter how you ask it, it comes back yes, you know what, tax the rich.
BUCHANAN: Alright tax the rich, but does anybody think that will -- ask them, will that really make the economy grow? And the Republicans have an argument. OK, Bush didn't work that well. Ronald Reagan, how did the tax cuts work in the Reagan era? You get to '82 and '83 you're going at six and seven percent growth.
BAIER: Kirsten, it is interesting that this president is now running on this on the stump, when in 2010 at a growth rate of 2.3 percent he said, you know what, the growth is too slow to raise taxes. We've got to be careful with the economy. Now the growth rate is at 1.5 percent and it's OK.
POWERS: Yeah, I can't explain that. Because I don't agree that, you know, that raising the taxes -- raising taxes is going to harm the economy. I think we're looking -- the biggest problem we face right now is our out-of-control deficit, the debt that is mounting, and it has to be paid down. That's a reason to raise taxes. It's not -- I don't think any of these other arguments really matter.
And you are right, every single poll, even among Republicans is raise taxes on the rich. Nobody has a problem with that. These people are not socialists or demagogues. They just think that we need to pay off our debt.
KRAUTHAMMER: But if the idea is to pay down debt, this tax increase is a joke. It's $80 billion at most, at most, out of a $1.3 trillion deficit.
POWERS: Yeah, it needs to be higher.
KRAUTHAMMER: So it means that instead of $1.3 trillion of deficit added on every year, we're simply going to add on $1.220 trillion. The idea that it reduces our debt is preposterous. It's five cents on the dollar of our debt. The real way to reduce debt is entitlement reform which Obama won't go near. In fact, opposes it, he demagogues anything the Republicans will say on that. And tax reform which he talks about always in the future but never speaks about it in the present.
BAIER: Yeah, I talked to a number of business leaders and business owners, they actually say, listen, I'll pay the extra taxes. But I don't want to see the Solyndras and the GSAs and the waste in Washington, and that seems to get to it too.
POWERS: Right, but of course, nobody is saying that it's just raising taxes. It has to be part of a broader plan, it has to be all of that.
BAIER: That is it for panel, not it for this topic. We'll be back to it, I'm sure. But stay tuned for more efforts to find that perfect slogan.
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