This is a rush transcript of "Special Report With Bret Baier" from December 8, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: The assistance to banks, once thought to cost taxpayers untold billions, is on track to actually to reap billions of profits for the taxpaying public. So this gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street.

HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: This makes me so angry. I was there, all right. I know all about TARP. First, it was never intended that all of this money would ever have to be spent. But any money that wasn't spent was to go to the deficit. And the idea of taking this money and spending it is repulsive.


BRET BAIER, HOST: The president today launching a new jobs package. Not a lot of details about how much it might cost, but one of the portions he wants to use to finance it, the TARP, the $700 billion bank bailout, the unused portions of that. He wants to use that and the Republicans, as you heard, are calling this "Stimulus II."

What about all of this? Let's bring in our panel: Steve Hayes, senior writer for The Weekly Standard; Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.

Mara, the things that the president is calling for, additional infrastructure spending on projects that are now shovel ready, tens of billions in loans or tax credits for small businesses to create new jobs, and some tax incentives for hiring — a lot of that, some of that was in "Stimulus I."

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: Some of it was. Some of the tax cuts weren't. There were some tax credits in "Stimulus I" but this is more of them.

The president is trying with his limited resources because he can't spend a lot of money. There is so strong sentiment against doing that. He is trying to throw the kitchen sink at the problem and do everything he can within the limited resources that the government has to do that.

I think politically, he is probably correct to do that. The economy is still really bad. People are angry about it and he needs to do everything he can to turn that jobs picture around as fast as possible.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, it proves, as if you needed any extra evidence, that Democrats have a congenital inability to claim an unclaimed pot of money and not seize it and then spend it.

Everyone knows how this money was to be used. It was not intended for spending. It was supposed to be a loan. It was supposed to be a dire emergency when the banking system and the economy was at risk. It was money that was going to go out and a lot of it, most of it would be returned.

And now, as it is returned as the banks are getting healthy, the Democrats want to spend it.

Now, I said last week that the Democrats would be completely unable to resist any temptation in this regard, a, because it will allow a "Stimulus II" and it will look as though it will not increase the deficit, and secondly, because as we saw in that bite from Obama, they will be able to portray it as the perfect populist way: Money intended to go to Wall Street will end up because of our munificence on Main Street.

It is a perfect political ploy. The Democrats will not resist it. And even though it is against the law as written in the TARP law and supposed to be returned, today the Democrats are the law and they will change it if necessary.

BAIER: In other words, Congress has to act in order for that to happen.

Steve, there are some things in this proposal that Republicans have to like a lot, for example, capital gains being taken to zero for one year. Republicans have been talking about that for a long time.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Sure, why not do it across the board? Why not do it for everybody and why not do it permanently? You could do all sorts of things that would be far more stimulative than these short-term, sort of targeted fixes.

BAIER: My point is there are a lot things that the Republicans have been talking about that the president adopted in this.

HAYES: Right, right, he's owning it. And some of it were things too that he ran on back in the day that he hadn't gotten around to implementing.

I thought the most interesting passage in the speech came when the president, who has pushed a $2.5 trillion health care reform and singed a $787 billion first stimulus, talked about, there was this moment where he said, you know, the people responsible for high deficits are really audacious in now trying to claim the mantle of fiscal responsibility.

And I thought for a second that this is unbelievable candor. The president is about to fess up with his spending orgy. And then I realized that he wasn't actually talking about himself and that this was blaming the Bush administration for this.

Look I think it's, in a way, it is a clever political trick. I think he's trying to — he's obviously trying to claim the mantle of Wall Street. He has done this before. A couple months ago he gave a speech in Maryland, talking about what he was going to do for small businesses, the day after, I believe, taking on Wall Street and the big banks. So he's trying to sort of ride this populist anger. It is not going to work, though. People can see what he is doing every single day.

BAIER: Mara, he has not stopped attacking the Bush administration in these speeches, whether it be Afghanistan or other speeches. Just one little phrase here. Let's take a listen and then look back.


OBAMA: Launched hastily, understandably, but hastily under the last administration, the TARP program was flawed, and we have worked hard to correct those flaws and manage it properly.

THEN-SENATOR OBAMA: There may be other plans out there that had we had two or three or six months to develop might be even more refined and might serve our purposes better. But we don't have that kind of time, and we can't afford to take a risk that the economy of the United States of America and as a consequence the worldwide economy could be plunged into a very, very deep hole.


BAIER: So then-Senator Obama really wanted to move it fast.

LIASSON: In the heat of the campaign, he came back and did show leadership. He came back and campaigned in the Senate for the TARP. And as he says now, we did it in haste, and he said on the floor —

BAIER: But it's not "we." He doesn't say "we." He says the Bush administration did it in haste.

LIASSON: He keeps forgetting he was part of that, too.

The problem is that there is some kind of political statute of limitations on how you get to blame your predecessor and have it work. I think at this point, we're probably there. In other words, I don't think people still in polls show that people don't blame him for the original problem, the recession itself, but they do hold him accountable for the solution, and he is going to be responsible for the solution.

I don't think it's going to get him that far to say it was all somebody else's fault.

KRAUTHAMMER: But there was also somebody else in the collateral damage of his attack on Bush. Who, after all, was at the center of the TARP in the Bush years? It was Geithner, his own treasury secretary.

So if he's going to attack the program administered under the previous administration, he is attacking his own treasury secretary, in the same way that when Obama attacked the Bush administration over the supposed lack of troops that were requested at the end of the second Bush administration, well, who was in charge of the Defense Department at the time? Who, if Obama is correct, had hurt his country in denying the request of the release of commanders? The Secretary of Defense Bob Gates, who is the secretary of defense today under Obama and who was under the Bush administration.

So he has a way of attacking everybody even if they are serving him today simply because of the tic he has about attacking President Bush.

BAIER: The unemployment numbers are high and the president's approval numbers are getting lower, at least the latest ones. We will look at latest poll numbers in three minutes.


BAIER: We always look at the presidential approval polls. Yesterday, this was the daily Gallup poll, the tracking poll that had the president's approval rating at 47 percent, disapproval at 46 percent.

The White House press secretary was asked about that and here is what he said: "If I was a heart patient and Gallup was my EKG, I would visit my doctor. I'm sure a six-year-old with a crayon could do something not unlike that. I have not put a lot of stake in, never have, in the EKG that is daily Gallup trend. I don't pay a lot of attention to the meaninglessness of it."

Frank Newport, the Gallup editor in chief, responded: "Gibbs said that if Gallup were his EKG he would visit his doctor. Well, I think the doctor might ask him what is going on in his life that would cause his EKG to be fluctuating so much. There is in fact a lot going on at the moment: The health care bill, the jobs summit, the Copenhagen climate conference and Afghanistan."

Frank Newport saying he's heard criticisms before. It's usually when the polls are low.

We should point out that today's daily tracking poll has the president back up to 50 percent. We are back with our panel. Steve?

HAYES: The reaction from Gibbs is priceless, because it's like a man with a high fever getting angry at the thermometer. It doesn't make any sense, because it doesn't address the underlying issues, as I Frank Newport makes clear.

Look, I will defend the Obama administration just momentarily: It is not quite as bad as some have suggested, because they said that this is unprecedented level for president going back to Harry Truman. Gerald Gord was actually at 52 ten and a half months in, but it was as a result of a temporary blip because of the attack on the Mayagez.

So it's now as bad — he is not the single lowest president at this point, but it is not good news for the president.

BAIER: Mara?

LIASSON: It's not good news, but the one point that is valid, what Gibbs is saying, is that it matters what happens over time. If this is his low point and he keeps on going up from here, great.

BAIER: Although, I'll point out that the Obama campaign pointed to Gallup many times.

LIASSON: Every politician does this. If the polls help them they will tout them as the gospel truth.

The one thing that is interesting in this, I think this number is about the economy — almost completely about the economy. Afghanistan — Frank Newport did mention that — Afghanistan is a good point for the president since he gave that speech at West Point last week. The Quinnipiac poll shows that his support went up. It's now 58 percent are in favor of his announcement and his policy, 35 percent opposed, flipped from what it was earlier in the month.

So I think that's pretty interesting. The public supported him. He gave a sober defense of escalating war in Afghanistan and all of a sudden his handling of Afghanistan looks better to the people.

So it does show you these things are fickle. They are going to change a lot. But what matters is where, what direction they're going when we get close to Election Day in November.

BAIER: Charles, even on Afghanistan there is a little bit of a rhetoric confusion from what we're hearing from the White House and what we're hearing from the Pentagon as far as winning and success and these timelines. But you're right, the polls have gone up.

KRAUTHAMMER: Well, they have gone up slightly on that one issue, but I think it's not a salient an issue among the conservatives and independents whom Obama has lost as we saw in the elections in November when there was a huge swing in Virginia and in New Jersey against the Democrats.

But among his left, his base, I think, there was a lot of anger over Afghanistan. He's not going to lose his base, but I think there's a lack and decrease in the enthusiasm and slavish adoration of him as a result of Afghanistan.

And also as a result of the fact that on some of the social issues that the left feels is important, for example on gay rights, they have a sense, and Guantanamo and other things, that they have a sense of an administration that has not lived up to their expectations.

So I think a very, very small slice of this a peeling away of a small, small middle-left. But largely it is a general disaffection of a) by independents and conservatives over how hard left he is in a center-right country.

And secondly, I think Mara is right: This is a result of the economy. The only other president on this list in the last 50 years who is under 50 percent is Reagan. That's because he was also in a recession as deep — the deepest since the '30s; unemployment at 11 percent.

And he, and Reagan in the end did OK. So I think it's a function of the economy, more than anything else. And Reagan had a sharp rebound as the economy did and he won easily. Obama is hostage to a much more sluggish rebound and it's not clear he will have the benefits that Reagan did.

BAIER: Mara, quickly let me get your assessment of the health care debate, where we are. Tonight in the Senate this abortion amendment failed. This was put forward by Senator Ben Nelson.

LIASSON: They're going to have to come up with something on abortion, whether it's in the Senate or in the conference committee. But I don't think a final bill can pass without something like Stupak. I'm not saying it has to be identical, but prohibits federal funding to be used in the exchanges.

They are going to have to come up with something. I mean, it might not be exactly what the House language is, but I think in the end they have to come up with something.

HAYES: But what this has done is given cover to the 54 Democrats who voted in effect against it. They can say, look, I voted for this, and if it rears its head in some kind of a compromise, they can say I'm on record of having opposed it, but I couldn't oppose health care reform.

BAIER: Somehow you have to rectify the Senate bill with what the House passed.

LIASSON: And they will. Just like Harry Reid wrote his own version of this to get it to the floor, he and Nancy Pelosi will have to do that.

BAIER: Still on track, Charles?

KRAUTHAMMER: Yes, I think in the end the left will give up on its objections because it knows it is an historic occasion in which the government will seize control of health care, and they won't allow it to die over small details or smaller issues.

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