'Special Report' Panel on President Obama's Trip to Capitol Hill, Interview With Al-Arabiya

This is a rush transcript of "Special Report With Brit Hume" from January 27, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I don't expect 100 percent agreement from my Republican colleagues, but I do hope that we can all put politics aside and do the American people's business right now.

REP. MIKE PENCE, R-IND.: As grateful as we are for the president's spirit, as I told him personally, House Democrats have completely ignored the president's call for bipartisan cooperation.

(END VIDEO CLIP)

BRET BAIER, HOST: President Obama up on Capitol Hill today talking to congressional Republicans about that $825 billion economic stimulus package. They call it a "recovery and reinvestment package." You just heard Republican Congressman Mike Pence expressing some disapproval of all of that.

Some analytical observations about all of this from Fred Barnes, executive editor of The Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer — FOX News contributors all.

Fred, your thoughts about today's push by President Obama, and the fallout?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Smart by President Obama. He has talked about bipartisanship, and a part of it is at least listening to your partisan opposition. And going up to see Republicans — he has invited them into the White House. It makes a lot of sense.

Republicans, on the other hand, would like to drive a wedge between Obama and congressional Democrats. You can see that from the statement by Mike Pence.

In other words, they want to use the promises and words of Obama against congressional Democrats, who certainly have been not bipartisan at all in their dealings with Republicans on this stimulus package.

And then, I don't know, maybe something — it will be up to Obama to decide if he's going to indulge in real bipartisanship. And he's not going to get 100 percent of Republicans. He used the figure — he would like to get 80 percent of congress, which would mean half or 55 percent of Republicans, as well as all the Democrats.

He can get them, but he has to give them something. He can't do it just by listening or talking or being nice. He has to give them something.

And they haven't asked for much. You know, they want reduced or lower tax rates, this 20 percent exemption for small businesses, and so on out of their income — I mean, are relatively small thing.

But you have to give them something. You have to give them some serious, permanent tax cut. And if he does, a lot of Republicans will vote for it.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: The White House does have to decide what level of Republican votes they need. They don't need any, actually. They will get this through both houses of Congress.

But I do agree with Fred — 99 percent of life is showing up, and he set a tone just by going up there. Tonight at the White House Rahm Emanuel is inviting another small group of Republicans to come and talk.

The big question is what is he willing to do differently? I think the White House feels they already put in almost $300 billion of tax cuts in order to woo Republicans. They certainly aren't willing to change at least the refundable tax credit that some Republicans have such a big problem with.

I think if there is going to be any give and take, it will be in the Senate, where they have higher hopes of getting more Republicans, and then in the conference. But the way Republicans are treating this president reminds me a little bit of Democrats and Ronald Reagan. He is personally popular. They don't want to take him on frontally. They are aiming all their fire at the House Democrats as if it is the House Democrats' bill and it's not Obama's. It is Obama's bill —

BARNES: Except they wrote it!

LIASSON: Yes, but he's guiding it, and if he didn't like something in it, as he didn't like the money for contraception, he would tell them to take it out.

BAIER: Hold it out.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: There might be a tax cut that the Democrats or the president could throw in that would attract enough Republicans to give him a broad base of support, but I think that would be a mistake on the part of Republicans.

I think they ought to oppose the bill on a matter of principle. And the principle is that this is the largest and the most rapidly run through stimulus spending package in American history, and a lot of it is simply not stimulus.

The president has talked about having three-quarters of it spent in the first two years. Well, if it's not spent in the first two years, it's not stimulus. It shouldn't be in the bill. It should be in the regular appropriations.

You've got almost half a billion for the study of climate change. Well, that could be a worthy cause, but it doesn't stimulate the economy or create jobs. It ought to be in the regular appropriation process, which has served us rather well over the 200 years.

The stimulus is supposed to be a response to a national emergency. That's why it's a huge amount of money being quickly legislated on way ahead of any other schedule. So that has to be stimulus.

I think Republicans ought to insist not that three-quarters happen in the first two years, but all of it. And, otherwise, vote no.

BAIER: There is a lot of focus, Fred, on these congressional budget office projections about when the money would really impact the economy. When you look at the new estimates, really, the biggest impact is from the tax cuts at the front end, tax cuts that many Democrats opposed, right?

BARNES: You mean the Republicans opposed? You mean the one that will go to — the refundable tax credit that will go to people who don't pay any taxes at all, or at least any income taxes? Sure, that money can get out pretty quickly.

The question is whether Obama wants to give Republicans something that's not a tax cut that's welfare, but something that will actually help him and the economy.

Remember what happened in the New Deal. After four or five years of all the infrastructure and all the projects, which can put people to work, FDR cut back.

And what happened? There was not a strong, robust private economy to step in and take over because he raised taxes on wealthy people and the attacked corporate America and so on, and didn't produce what Obama — what is lacking in this bill.

Obama needs, after a couple of years of stimulus, he needs a strong private economy. He's not going to get it from this bill.

LIASSON: No, but this isn't the bill that is meant to do it —

BARNES: Yes it is!

LIASSON: The TARP is meant to do it, and the financial package to shore up the banks, and to do re-regulations, that is what is supposed to do it.

BARNES: Then why do they call it a stimulus? It is supposed to stimulate the economy.

BAIER: Last word here.

The president gave his last formal TV interview to an Arabic channel based in Dubai. The panel will analyze what he said after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: What we need to understand is that there are extremist organizations, whether Muslim or any other faith, in the past that will use faith as a justification for violence. We cannot paint with a broad-brush a faith as a consequence of the violence that is done in that faith's name.

(END VIDEO CLIP)

BAIER: President Obama in his first formal television interview with Al-Arabiya, the channel based in Dubai. That question he was answering about the war on terror. And the phrase "War on Terror" and also "Islamic fascism," he said the language we use matters. He struck a conciliatory tone throughout the interview.

We're back with the panel. Charles, your thoughts on this interview?

KRAUTHAMMER: Conciliatory, but also apologetic and defensive, I thought needlessly. We heard him say that he we shouldn't paint Islam with a broad-brush. Who does? That's a straw man. Did the Bush administration do so?

Obama said "My job is to communicate from the American people that the Muslim world is filled with extraordinary people who simply want to live their lives."

Well, where is the American heartland which is arguing otherwise?

Look, if he wants — dare say, "I have Muslim relatives," as he did in the interview, "and I lived in a Muslim land," as he did in the interview, "and thus I have a special appreciation of Islam," that's OK.

But somehow he is implying that somehow the Obama era is a break with the American past. Somehow it is undoing a disrespect of Islam that had somehow occurred under the previous administration.

One week after 9/11, the president of the United States, George Bush, showed up in the Islamic center in Washington and declared Islam is peace and extended a hand of tolerance and generosity. There were no anti-Muslim riots in America. There was a spirit of generosity and tolerance.

And, in fact, over the last 20 years, the United States has been engaged in exactly five military engagements in the world, two in the Balkans, Iraq, Afghanistan, and Kuwait, all of them liberating Islamic peoples.

We have no need to apologize. Extend a hand, yes, but to imply that there was a disrespect of Islam in the last administration, I think is unfair and fictional.

BAIER: Mara, he was asked will the United States ever live with a nuclear Iran. He did not say, as he did on the campaign trail, that nuclear weapons would be unacceptable. He danced around a little bit and talked about the relationship with Iran. What about that answer?

LIASSON: Look, I think that they are planning to have some kind of direct talks with Iran — not right away, but eventually.

And I think part of their think something that even if it doesn't achieve some spectacular results, they will at least be able to show our allies that we tried and we went the extra mile, and that, hopefully, that will get the Europeans on our side when we call for stricter sanctions, or whatever it is we're going to do after those talks fail.

I think this was a smart move on the part of President Obama. It's his very first television interview after being elected president. It was to an Arabic channel. I think he said all the right things. He was trying to leverage his own Muslim heritage, his middle name, the fact he lived in a Muslim country.

And I think as far as Charles' criticism, every president makes a straw man out of their predecessor in order to underline the change that they're bringing.

And I don't know if this kind of interview in and of itself will change things, but it allows him to lay the groundwork for what he wants to go next.

BARNES: I know whether it will change things or not — it won't.

If there is one rule of thumb that I have when you're dealing with the Middle East or with the Iranians, and particularly in regard to Arabic and Iranian, their approach to Israel, nice guys finish last.

President Obama was trying to be nice with this ridiculous understatement about, you know, saying the Iranians, their building a nuclear weapon. They've threatened to liquidate Israel. They're supporting Hamas and Hezbollah. That's not helpful. That's not conducive to peace.

I wonder what the Iranians think? I think the Iranians suppose, this guy, we're going to say, oh, we love this great new tone from Washington. They will pocket that. And what will Obama get in return? He'll get nothing.

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