'Special Report' Panel on Pelosi, Congress and the Failure of the Bailout Bill; Role of Candidates in Financial Crisis

This is a rush transcript of "Special Report With Brit Hume" from September 29, 2008. This copy may not be in its final form and may be updated.


REP. NANCY PELOSI, (D-CA), HOUSE SPEAKER: For too long this government, for eight years has followed a right wing ideology of anything goes, no supervision, no discipline, no regulation.



REP. ERIC CANTOR, (R-VIRGINIA): Right here is the reason I believe why this vote failed, and this is Speaker Pelosi's speech that, frankly, struck the tone of partisanship that, frankly, was inappropriate in this discussion.



REP. BARNEY FRANK, (D-MASS.) HOUSE FINANCIAL SERVICES COMMITTEE CHAIRMAN: We don't believe they had the votes, and I think they are covering up the embarrassment of not having the votes.

But think about this. Somebody hurt my feelings, so I will punish the country. It is hardly plausible. I'll make an offer. Give me the 12 peoples' names and I will go talk uncharacteristically nicely to them.


HUME: What he's talking about there, of course, is Barney Frank is the fact that if you turn around 12 votes when you have lost by, what, 23, you reverse the outcome. And the blame being placed there by him, of course, is on, he believes, 12 Republicans.

Some thoughts on all this now from Fred Barnes, executive editor of The Weekly Standard, Jeff Birnbaum, managing editor digital of The Washington Times, and Mort Kondracke, the executive editor of Roll Call, FOX News contributors all.

Well, this financial rescue plan, $700 billion, or at least it could be up to $700 billion in the initial outlay by the government over a period of time, is down and done. And I guess they have to start over.

But the blame game got kind of interesting this afternoon. You heard—the remarks that we just showed you from Nancy Pelosi were before the vote. And you heard Eric Cantor of Virginia after the vote saying that he thought that her comments were inappropriate and, therefore, responsible. And then you heard Barney Frank ridiculing that.

Fred, your thoughts?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well, if some Republicans actually were going to vote for the bailout and changed their mind on the basis of what Nancy Pelosi said, that's pretty pathetic.

On the other hand, what was she thinking? She knew there was a fragile majority at best. On Saturday she called Republicans "unpatriotic!" That doesn't seem to me the way to put together a bipartisan majority, and it obviously didn't succeed, particularly on this bill.

Look, the market voted twice today. We knew the bailout package had been agreed to and we knew what was in it. And so what happened when the stock market opened in its first three hours? It went down 300 points! And, meanwhile, there was no indication that the credit markets were going to loosen.

Well, then, after the vote, of course, it went down nearly 800 points.

So — I mean, that sort of captures the problem here and the way it was sold. It said, look, there is only one thing worse than voting for this bill, and that is if you don't vote for this bill. And you know, that kind of argument didn't fly.

And of course, the public reaction of this was very negative.

HUME: To the bill itself?

BARNES: Yes, to the bill itself.

The interesting thing was, particularly among Republicans, all of those who are retiring, they all voted for it. But all of those in tough races for reelection, they generally voted against it.

JEFF BIRNBAUM, MANAGING EDITOR, DIGITAL, THE WASHINGTON TIMES: I think there is a real crisis of leadership that was demonstrated here today.

I think around this table, the leaders, both Republican and Democratic and on the Hill, have been criticized. Now I think we have real reason to be correct in that criticism.

I don't think either Nancy Pelosi and her team or John Boehner and his team, the Democrats and Republicans, I don't think they did their job here. I think that Pelosi didn't push hard enough on the floor to get enough votes.

There werefive Committee Chairman who voted no on this issue.

HUME:That's part of the leadership.

BIRNBAUM: Part of the leadership.

There were many senior Democrats that should have been persuadable. There were more than five Californians who were supposedly close to Nancy Pelosi, and they voted no here.

On the Republican side, losing two-thirds of the membership was something that the leaders should never have been able to tolerate.

HUME: The leaders said, by the way, that they had 80. And they ended up with, what, 66 or something like that?

KONDRACKE: Sixty-five.

HUME: Sixty-five. But if 12 of those 15 had been able to turn around, that would have changed the outcome.

BIRNBAUM: They should have been able to persuade —

HUME: They, of course, were arguing that Nancy Pelosi ran them off.

BIRNBAUM: Right. That's hard to believe, though her remarks were really ill-timed and ill-suited to the occasion without any doubt.

I think that this is ahugely important vote. This is not a small vote. And the Bush administration will not be able to allow this to stand. I expect that there may be some executive decision to infuse the market with more money in the absence...

HUME: But something $630 billion has been pumped in already?

BIRNBAUM: But some specifically for this purpose, because the markets will really be chaotic around the globe because of the failure of the House of Representatives.

HUME: It's interesting, Mort, that these—Jack Kemp was in here today, and he pointed out that these Republicans—of course, Jack Kemp is a conservative on economics if there ever was one, and he said "If these conservatives in the House are so concerned about the free market system, then why don't they listen to what the free markets are saying?"


Jeb Hensarling, the arch-conservative, says this is the slippery slope...

HUME: Republican of Texas.

KONDRACKE: Yes. ...the slippery slope to socialism.

If there was cratering, if we go into a deep recession, close to depression, and the Democrats take over, which they would in that kind of situation with a big Democratic majority, you will see legislation that Jeb Hensarling will not like, and it will be a lot closer to socialism than this being managed by Republicans.

But, look, the idea that Nancy Pelosi, odious though her remarks were, and I got to say that, chased off a bunch of Republicans is nonsense.

When I talked to Republicans a couple hours before her remarks, and they were saying the best we're going to get is 70, so they ended up with 66. So maybe she scared off four, but that's about as much as she scared off.

HUME: What about this idea, Mort—the Democrats control the Chamber. They have more than enough votes to pass this bill without a single Republican vote, and in a moment of national emergency, it is up to them, regardless of whether they get help from the minority or not, to come through.

KONDRACKE: Look, I think that's a good argument. However, you know, it's not enough. I mean, they wanted the cover because—

HUME: They are being asked to do something hard in a political year?

KONDRACKE: Yes. The public is 80 to 1 against this according to the mail that the members have been getting. And nobody could convince the public that Main Street was involved in this.

And some people tried very hard. I've got to say that the best speeches on the floor today were from Steny Hoyer from Maryland, Democratic majority leader, and Paul Ryan, a Republican, who said...

HUME: A rising store in the party.

KONDRACKE: Yes, who said "This is a Herbert Hoover moment." If that isn't enough to persuade you, I don't know what would be. But it wasn't, you know? Because the public just doesn't trust them.

HUME: Knowing Congress as you do, don't you sense that at some point they're going to get this done?

KONDRACKE: I thought that they were going to get it done.

HUME: Well, I know. So the answer is "no," you don't think so?

KONDRACKE: Well, I pray so.

BIRNBAUM: Without question. There's going to be rescue package two, but it can't possibly come until later this week when a lot of damage will be done in the markets. So, yes, there will be another one.

BARNES: It won't come without exactly what you talked about, Jeff, and that's without leadership.

Who's going to lead here? Hank Paulson failed. The president failed in his speech. Nancy Pelosi wouldn't even whip her Democrats on the floor the way she will on some vote that favors organized labor.

HUME: And the Republicans leaders didn't deliver either.

BARNES: Wellt they didn't deliver either.

John McCain tried to come and help, and Democrats literally told him to get out of town.

I don't know where the leadership is going to come from. Obama is way behind on this.

HUME: Speaking of that, we will discuss how this affects the presidential campaigns when we return after a brief break.



SEN. BARACK OBAMA, (D-ILL.) PRESIDENTIAL CANDIDATE: They are still trying to work through this rescue package. And, obviously, this is a very difficult thing to do. It's difficult because we shouldn't have gotten here in the first place.



SEN. JOHN MCCAIN, (R-ARIZ.) PRESIDENTIAL CANDIDATE: Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It's time to fix the problem.


HUME: Well, certainly John McCain threw his chestnuts into the middle of the fire when he came back last week and tried to rally Republicans in one way or another, and tried to get provisions that they were concerned with inserted into the bill.

And he was pretty harshly criticized for his efforts, and as Fred suggested earlier, was encouraged not to stick around and not to be a part of this. And, certainly, the failure of the bill does him no credit.

But the question arises, what exactly has been the role of Barack Obama in this? What has he been trying to do, if anything, and what is he really saying to us? Jeff?

BIRNBAUM: Obama has, I think, been trying to have it both ways in many ways. He wants to say that certainly something needs to be done, but to mostly stay on the periphery and to criticize the reason we got here.

HUME: And yet we know that when the famous meeting occurred at the White House after the deal had blown up and they had a contentious meeting at the White House, this was the so called "deal" that really wasn't a deal last Thursday, and they went down to the White House to the meeting, the person nominated to speak for the Democrats at that meeting was Barack Obama.

So where does he stand in all of this?

BIRNBAUM: I think he declined the nomination to be the spokesman on that one.

HUME: Well, maybe so, but he did speak first and at some length apparently.

Mort, I guess Obama kind of skates past this, no runs, no hits, no errors? Is that the idea?

KONDRACKE: Well, you know. Yes. He has not gotten in with both feet, that's for sure. Although he did say today, in addition to what we had him playing, is that they have to get it done.

And so now that—I don't think either one of these guys actually now wants to be the person who is presiding over the Great Depression, or whatever it is, the great recession.

And so it is suddenly occurring to them now—neither one of them expected this thing to fail. John McCain thought that he had, and he had — helped the House Republicans get into the game, because they had been frozen out of the game, so he got them into the game. And then he left town and didn't finish the work.

And he was on the phone with some House Republicans. The Obama campaign says that Obama was on the phone with House Democrats today as well. I don't know anything about the numbers.

But maybe now, now that we're facing the brink of disaster, they will get into the act with both feet.

BARNES: McCain left town because he went to the debate in Mississippi. That's why he left town. It wasn't that...

HUME: Well, he came back, though.

BARNES: Yes, he came back, and he was here over the weekend, and he was on the phone, and he did help a little, because Republicans got a few things in the bill, obviously not enough.

McCain didn't convince enough Republicans to vote for it. He needed 12 more who voted against it to vote for it, and it would have passed. Of course you could have had 12 more Democrats as well.

The problem you didn't show Brit, Obama's statement, there was another one about it's time for everybody to be calm and markets to calm down and people to just — you know, take it easy here while we rethink this.

I mean, that's about at least a day behind. Look, the markets are in total turmoil. People are going hysterical. You need to get up to speed, and I think he does. I think he can help.

The problem is Democrats aren't going to let McCain lead, and I rather doubt if Republicans now are going to let Obama come back and be a leader in this...

HUME: Yes, but the Democrats can't keep McCain from leading Republicans, and Republicans can't keep Obama from leading Democrats.

BARNES: Well, that's true, but I think McCain was a little burned by the way he was treated last week, particularly by Democrats and by the media a lot.

HUME: What about the Republicans, none of whom followed his lead, or not enough?

BIRNBAUM: Both presidential candidates are afraid to put their— to walk too far out in front, because...

HUME: McCain stuck his neck pretty far out on this. Don't you think he is taking a hit on this?

BIRNBAUM: Yes. I think he took a hit because he suspended his campaign to get what he thought was a done deal done. But it's not done.

HUME: He suspended his campaign because he said the deal wasn't done.

BIRNBAUM: Right, and that he wanted to help make it happen. Now he's not so eager to be that far out, I don't think.

HUME: That's it for the panel.

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