Democratic Presidential Race Gets Even Nastier and Should Homeowners Be Bailed Out of the Mortgage Mess?

This is a rush transcript from "The Beltway Boys", March 29, 2008, that has been edited for clarity.

MORT KONDRACKE, FOX CO-HOST: Coming up on "The Beltway Boys," the Democratic presidential race got a whole lot nastier this week. And there's no sign it will end any time soon.

BILL SAMMON, FOX GUEST CO-HOST: So does this mean that John McCain will come out the victor in Obama-Clinton fight? That's what Democratic Party leader fear.

KONDRACKE: To bail out or not to bail out? That's the questions the candidates will try to tackle in the mortgage miss.

SAMMON: And from Snipergate to David Paterson's confessions, late- night comedians are having a field day.

KONDRACKE: "The Beltway Boys" are up next after the headlines.



SEN. HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: I think, given all we have heard and seen, he would not have been my pastor. You know, we don't have a choice when it comes to our relatives. We have a choice when it comes to our pastors and the churches we attend.


KONDRACKE: I'm Mort Kondracke.

SAMMON: And I'm Bill Sammon, in for Fred Barnes, and tonight we're "The Beltway Boys."

KONDRACKE: Well, the first top story is scorched earth. Hillary Clinton had refrained from commenting on Barack Obama's pastor problem until she had to. And she had to because she wanted to change the subject from what you lovingly call Snipergate.

SAMMON: I copyrighted that term.

KONDRACKE: Which we'll get to in a minute.

Look, she's behind in delegates. She's behind in the popular vote. Some media mathematicians say there's no way she can catch up. And some party pros in the DEMOCRATIC PARTY are sort of hinting that she ought to get out of the race, lest the fighting elect John McCain. Is she buying any of this? Here's her response.


CLINTON: The common thing the people say to me — it happened here, it happened last night, it happens everywhere now — is don't give up, keep going, we're with you. And I feel really good about that because that's what I intend to do.


KONDRACKE: Now face it, the presidency is what she's been living for, for years and years and years. She put up with a lot of guff in order in order to get where she wants. She is not quitting until she is absolutely defeated by Barack Obama. And I don't even know if she's going to go out all that pleasantly at that point.

And as to this contest getting too nasty, here's what her husband, Bill, said, quote, "Saddle up. If a politician doesn't want to get beat up, he shouldn't run for office. If a football player doesn't want to get tackled or doesn't want the risk of an occasional clip, he shouldn't put the pads on."

Barack, it's going to be tough.

SAMMON: Translation: Barack is a sissy. That's what Bill Clinton is essentially saying. You talked about Snipergate. Let's take a listen to what Hillary Clinton actually had to say about Snipergate.


CLINTON: I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport but instead we just ran with our heads down to get into the vehicle to get to our base.

You know, look, I made a mistake. And you know, I had a different memory. And my staff and others have, you know, all kind of come together trying to sort out — so I made a mistake. That's happens. It proves I'm human, which, for some people, is a revelation.


SAMMON: I spent a lot of time at Tuzla Air Base. I actually lived in Tuzla. I had an apartment there. I went there for the first time in July 1995 to cover Srebrenica, which of course was the worst massacre in Europe since World War II. And the reason I was there, Mort, is because they herded the survivors from Srebrenica to Tuzla because it was a relatively safe place. I used to play basketball outside at the courts on the Tuzla Air Base. There were never any snipers firing at us.

This was a complete fabrication on Hillary's part. It hurts deeply her — politically. And it's just one component of a perfect political storm that is tearing the Democrats apart.

This about this, less than a month ago, John McCain clinched the Republican nomination. In that short period, you've got Snipergate hurting Hillary, you've got Pastorgate hurting Barack Obama, you've got racial polarization of the Democratic Party. And you've got at least another month of this to go, maybe two months, and possibly up to five months. That's why people like Howard Dean and saying, look, enough is enough. We have to end this by the end of June. But the longer this goes on, the more it hurts the Democrats.

KONDRACKE: Yeah, and they can't figure out how to end it. I mean, everybody says let's end it but nobody's figured out exactly how.

Look, the upshot of all this is that, according to the Gallop poll, 28 percent of Clinton's supporters say they would not vote for Obama if he got nominated. They would vote for John McCain instead. And 19 percent of Obama supports say they'd vote for McCain over Clinton.

My suspicion is that the 28 percent represents Clinton's redneck base. You know, people who would never vote for an African-American. And the 19 percent are more young people as opposed to African-Americans. African- Americans seem to vote Democratic no matter what. They don't play as a swing constituency.

And Hillary Clinton's positive rating is now at a new low, 37 percent. Her negatives are 48 percent. Obama's positive ratings slipped a couple of points since the beginning of the month, but his negative ratings have jumped four points during that same period.

And the last point is that McCain, in spite of all the stuff we've been talking about, is not a shoe-in. The latest polls shows, in a head- to-head matchup with Clinton, he only beats her by two points. And in a race with Obama, McCain trails by two.

SAMMON: You know, you mentioned the so-called redneck vote. We had a columnist at the "Washington Examiner" that did a column this week called "Hillary's Hillbilly Firewall." And he was talking about these parts of the Appalachian regions through Kentucky, West Virginia, parts of Pennsylvania, even into part of Indiana, where you have rural whites that, you're right, are going to have a problem voting for a black guy. This is very bad news for the DEMOCRATIC PARTY. The bitterness that is being engendered now is ultimately going to hurt John McCain.

And essentially, what they are doing, Mort, is Hillary and Barack Obama are doing McCain's dirty work. They are defining each other negatively. That's usually what the Republican does in a general election.

Hillary is defining Barack Obama as somebody not ready for the job. Obama is defining Hillary as somebody who is untrustworthy. Meanwhile, John McCain's numbers are rising and the two Democrats' numbers are falling. So this is very bad news. The long this goes on, again, the more it hurts the Democrats.

KONDRACKE: Yeah, and the rednecks are not confined to rural areas. There are a lot of them in cities. I mean, the west Pennsylvania vote and Youngstown, places like that, there's just a lot of people out there — and I think the Clinton campaign has stirred them up — who simply will not for an African-American. It's pretty sad.

Coming up, beyond all the political sniping this week, real differences have emerged among the candidates in how to deal with the mortgage mess. More on that next.


SAMMON: Welcome back to "The Beltway Boys." I'm Bill Sammon, in for Fred Barnes.

Hot story number two, panic button, or at least that's what the Democrats would have us do about the economy, Mort, panic. In recent days, all three presidential candidates have given major speeches laying out their economic proposals, with a special emphasis on what they would do about the mortgage meltdown.

Let's take a listen to what John McCain had do say.


MCCAIN: I will not play election-year politics with the housing crisis. I will evaluate everything in terms of whether it might be hurtful or helpful to our effort to deal with the crisis we face now. I've always been committed to the principle that it's not the duty of government to bail out and reward those who act irresponsibly, whether they're big banks or small borrowers.


SAMMON: And here's how Hillary and Barack Obama responded to that.


CLINTON: It sounds remarkably like Herbert Hoover. And I don't think that's a good economic policy. I think that inaction has contributed to the problems we face today. And I believe further inaction would exacerbate those problems.

OBAMA: John McCain recently announced his own plan. And unfortunately, it amounts to little more than watching this crisis unfold. While this is consistent with Senator McCain's determination to run for George bush's third term — (APPLAUSE) — it won't help families that are suffering and it won't help lift our economy out of recession.


SAMMON: You know, Mort, I think John McCain's biggest vulnerability on the economy is the fact that he has stated publicly that he doesn't know much about the economy.

Now, I understand that McCain has this candor that's very refreshing. He's very blunt. But I think a little of that goes a long way. I think he actually goes too far. He's got almost a compulsion to point out his mistakes, his faults, his shortcomings, to the point where, you know, here's a guy running for president in an election cycle where the economy is the number one issue, and he's on record saying I don't know much about the economy. You know the Democrats are going to drape that around his neck every day from here until November.

But if he can get past that and get to the substance of the economy, I think he'll have a fair shot because essentially it comes down to — aside from the mortgage stuff — John McCain wants to keep taxes low. And the Democrats both want to raise taxes.

KONDRACKE: Well, as I've said before, I think John McCain has to not only learn economics, but he's got to teach it. And that's especially true in troubled times. We may be heading into a recession. Gasoline and food prices are sky high. The financial markets are in a panic or else the Fed wouldn't have had to bail them out and so on.

Now, I thought actually in his speech he gave this week, there was a pretty sophisticated explanation of how we got into a housing bubble and why it's burst. The problem was that the only quote you ever saw in the papers or on TV was the one that we saw, right there,that sounded like he was in favor of doing absolutely nothing.

In fact, he is in favor of some sort of temporary help for borrowers. He's in favor of regulation to see that this doesn't happen again, to make sure that securities are transparent and that investment bankers are accountable if they're going to get federal bail outs. And he is in favor of the federal intervention to save the financial system if that's necessary. All that's very activist, and he's not getting credit for it.

Hillary and Obama are obviously putting forth much more interventionist economic plans.

SAMMON: Big government.

KONDRACKE: Which is all the reason why McCain has got to step up and explain why their plans are bad, in detail, make people understand it and why he are good.

SAMMON: You mention the importance of teaching the economy. Well, maybe this can be a teachable moment. We are technically not in a recession. In fact, it's technically impossible for us to be in recession because a recession is defined as two consecutive quarters of gross domestic product in a negative direction. The last quarter of last year, we had growth. We're only in the first quarter of this year. So we'd have to get through at least June and then look back on those six months to see if we were in a recession. So we can't be in a recession.

Democrats have a vested interest in talking it up like we are in a recession so that we can go back to 1992 when they successfully made it look like we were in recession for the other President Bush.

The bottom line is that the government can't get us out of the housing crisis. But the government can set tax rates. And McCain will have lower tax rates. The Democrats will have higher tax rates. Including, Obama said the other day, that he wants to raise the capital gains tax from 15 percent to perhaps 25 percent. A lot of ordinary Americans own stocks and they would be subjected to that higher rate. If that is pounded home to the American people, that will hurt the Democrat side.

Coming up, John McCain's kinder and gentler foreign policy vision.

And the political silly season is providing plenty of material for the late-night comics. We'll show you, next.


KONDRACKE: Welcome back to "The Beltway Boys." Let's take a look at the "Ups and Downs" for the week.

Up: John McCain. This week, McCain gave a foreign affairs speech in California, making some pretty drastic statements to prove his presidency would not be Bush's third term, like this. Watch.


MCCAIN: Our great power does not mean we can do whatever we want, whenever we want. Nor should we assume that we have all the wisdom and knowledge necessary to success. We need to listen. We need to listen to the views and respect the collective will of our Democratic allies.


SAMMON: You know, Mort, what struck me about that speech is that there was something in it for anyone, no matter what your ideology. That section we just heard now made moderates feel good because McCain was talking about reaching out to our allies and reestablishing good relationships, as if Bush as completely trashed all our relationships around the world.

If you're a liberal, you liked the part where McCain talked about closing down Gitmo, treating terrorism suspects more humanely than the Bush administration has treated them, railing against global warming.

But if you're a conservative, there was some material in there to make your day. One is no one is more hawkish on Iraq than McCain. He's obviously more hawkish than President Bush on Iraq.

And another section that I don't think got as much attention as it deserves, McCain was very tough on Russian, much tougher than George Bush. George Bush has a tendency to accommodate Russia, even as it has gotten kind of ornery in the last few years. McCain came out with both guns blazing, saying, look, when I'm president, I'm going to throw Russia out of the group of eight industrialized nations because they're backsliding on democratic reforms. He accused them of nuclear black mail, of cyber attacks, et cetera.

You know, no matter who gets to be president in November, I think there's going to be at least a slight pooling of U.S.-Russia relations. But if it's McCain, I think we're in for a deep chill.

KONDRACKE: Yeah. Well your friend, Rush Limbaugh, who I heard talking about the speech, was apoplectic. He said that McCain is now siding with our enemies. Guess who are enemies are? The Europeans that we fought all these wars alongside.

Look, I liked the speech. And it indicated that McCain plans to be different, in tone at least, from the Bush first term where Cheney and Rumsfeld were basically sticking their elbow in every country's eye and pretending that we could rule the world by ourselves, which they can't.

SAMMON: Only old Europe.

KONDRACKE: Well, whatever. But they were not interested in cooperating because they thought the United States was the hegemon, as our enemies call them.

Anyway, still, the major issue of this campaign is going to be Iraq. The Democrats want to get out, he says precipitously. He says that it's unconscionable to abandon our allies. He's right about, of course. And that's going to be the terms of the debate. And if Iraq is going well, he's got a chance to win. If Iraq is going badly, he's in trouble.

SAMMON: Also up: late-night comics. While we news pundits debate which gaff this week was the worst in politics, the late-night comics are getting material right and left and proving to be equal-opportunity lampooners to both parties. Here are some recent examples.


JAY LENNON, HOST, "THE TONIGHT SHOW": Hillary Clinton was supposed to be our first guest tonight, but she got pinned down by sniper fire and was not able to come in. Who would have guest that Hillary would have more war stories than John McCain. Did you every think you'd see that?

And Democratic frontrunner Barack Obama vacationing now in the Virgin Islands. It's been a while since anyone's used the word Democrats and virgin in the same sentence. You just don't hear that these days.

DAVID LETTERMAN, HOST, "THE LATE SHOW": Speaking of old guys, how about that John McCain, huh? I like John McCain. He looks like the guy who gets frisky with a new waitress at IHOP, you know? How you doing?

He looks like the guy who watches his Cadillac go through the car wash.

He looks like the guy at the supermarket yelling into his cell phone, I'm in aisle three, Marge. I can't find the brownie mix.


KONDRACKE: Those are good.

Look, I mean, this humor is all based on stereotypes that are familiar to people. They're exaggerations of things people already think — McCain, old; Hillary, untrustworthy, slippery; Bill Clinton, horn dog, right? I don't think the comedians have exactly figured out how to handle Barack Obama. It may have something to do with the fact that he's African- American and they don't want to be politically incorrect.

SAMMON: I think you're right. You know, the joke about Democrats and virgins was obviously a reference to the recent spate of sex scandals involving, not only former New York Governor Eliot Spitzer, but to his successor, Governor David Paterson, and the Detroit mayor, Kwame Kilpatrick. You know what you call that, Mort? You call that a trend, a trend of sex scandals. And remember, that hurt Republicans when they had a trend of sex scandals — David Vitter, Larry Craig, Mark Foley. These can have political ramifications when all the laughter dies down. So that can be a problem as well.

Now finally, down: the U.S. voting system. Following the recent flack over the Michigan and Florida Senator Bill Nelson of Florida calls for a sweeping overhaul of the entire system.

And we're going to show some of the proposals that he has up there, Mort. And I've got to tell you, some of these proposals are quite radical, which goes to tell you just how badly the Democrats are hurting in this election. This election is a train wreck. They want to change things radically.

Some of his proposals make sense. For example, who could be against regional rotating primaries? We could get different parts of the country involved, instead of just Iowa and New Hampshire all the time. But he's also proposing abolishing the Electoral College. That's not going to fly. You have to have a constitutional amendment to get that passed. We heard some talk about abolishing that after the 2000 election. In fact, Hillary Clinton wanted to do it. It's never going to happen.

KONDRACKE: And it shouldn't happen. If you had to have a recount like in 2000, you'd have to recount every precinct in the entire country, not just the precincts in Florida.

I think the most important of anything to do is to have a dependable election machinery, that is, voting machines that are like ATMs. I mean, people use ATMs millions of times every day — no mistakes. I don't know why we can't have voting that way.

Don't move a muscle. "The Buzz" is up next.


KONDRACKE: What's "The Buzz," Bill?

SAMMON: Tennessee Governor Phil Bredesen has proposed a superdelegate primary in June or July to wrap this thing up. It'll fizzle just like all the other Democratic suggestions because they can't agree on anything.

KONDRACKE: Two new McCain Veep ideas — first, he should offer the vice presidency to Colin Powell, who may well not take it. If not Powell, then Christy Todd Whitman, former governor of New Jersey. Rush Limbaugh will go Krakatau, but Independents will like it, women will like it and so will African-Americans, the whole package.

That's all of "The Beltway Boys" for this week. Join us next week when the boys will be back in town, with Fred.

Watch "The Beltway Boys" Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

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