This is a rush transcript of "Special Report With Brit Hume" from November 14, 2008. This copy may not be in its final form and may be updated.


GEORGE BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: We must recognize that government intervention is not a cure-all. While reforms in the financial sector are central, the long term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.

HENRY PAULSON, TREASURY SECRETARY: The financial system has been stabilized. We never promised that this rescue package was going to solve all ills of the economy or that the government could push a button and do that.


BRET BAIER, HOST: There you see Treasury Secretary Henry Paulson defending what so far the Treasury Department is doing with the $700 billion rescue package. And you saw President Bush, or heard him from his weekly radio address, warning ahead of this global summit about possibly instituting too many regulations, and how that wouldn't be a good thing.

What about this summit and some of the ideas that the world leaders are bringing with them? Some analytical observations from Fred Barnes Executive Editor of The Weekly Standard, Jeff Birnbaum, managing editor digital of Washington Times, and syndicated columnist Charles Krauthammer, FOX News contributors all.

Heading in, Charles, British Prime Minister Gordon Brown today said that he is pushing for a coordinated effort, a global regulator for financial markets. And the Treasury Secretary said today, frankly, that's just not a good idea.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: No, it doesn't have a chance. The Europeans have talked about this in a meeting in Brussels a week ago. It's not going to happen.

Look, we can't even regulate our national markets either here or in Europe successfully, and all of a sudden we're going to have a new structure imposed on all of this? With what authority? Who is going to be obliged to obey it? It is a nonstarter.

The one area in which you can get coordination that would be important is in monetary policy. If the countries are reducing or raising rates in a staggered way, it causes unexpected flows of capital.

So if you can have the banks do it together, as has happened on occasion where the Europeans, the Japanese, and we change our rates in coordination, that helps and it reduces a lot of the instability.

But other than that, all of this stuff about a large regulator or other coordination, and taxes and other policies are utterly impossible.

The only good that will come out of the meeting will be that you'll including a bunch of countries who are newly important — the Indians and Chinese and others who have a stake in the system beyond the old G-7, and that, I think, is good.

But no substance will come out of the meeting on the weekend.

BAIER: Jeff?

JEFF BIRNBAUM, FOX NEWS CONTRIBUTOR: I think the new world order will be declared out of order in this summit. There will be as many voices as there will be seats at the table. And it's very unlikely that anything major will be agreed to.

In addition, it's not clear, really, that the most important person at the table, President Bush, will have the ethical or moral authority to make a deal, because he's basically out the door. He's a lame duck.

And Barack Obama, while he will have two observers at this event —

BAIER: Former Secretary of State Madeline Albright and Jim Leach —

BIRNBAUM: Jim Leach, the former Republican congressman from Iowa who spoke at the Democratic National Convention for Barack Obama. They will be there, but as observers.

Really, the person who needs to be there, Barack Obama, is keeping himself apart, and I think that will limit whatever this group can do, even if they come to some minor — they may come to some minor agreements, but major ones, I think, are not possible.

BAIER: Fred, what about — Gordon Brown also today said there should be a coordinated tax cut for all countries involved. How about that?


The one thing they can do is monetary policy, and they have, as Charles said, they have coordinated rate cuts, and they had one a few weeks ago, as I recall, that can help.

But I don't know how you're going to — I don't know how you're going to do a tax cut. And I think he knows that.

I agree with Jeff that they are going to make any big decisions here. One of the major decisions they have to make is when is the next meeting going to be.

And when they're assigning most of these things to working groups that will come back and so on — I think that Secretary Paulson is right, that financial markets have to stabilize. That doesn't mean the economy is strong, but they have been stabilized, so the urgency is gone.

BAIER: I want to ask you, Jeff, about the status of the possible other loan for automakers on Capitol Hill. We had a report tonight that it doesn't look like it's moving forward because it will be blocked by Republicans.

BIRNBAUM: That's right.

I think the lame duck session of the Congress next week will be lame indeed. It will not produce enough votes in the Senate to move the extra $25 billion for automakers or a new stimulus package. That will be stopped.

And the president, even if it did get out of the Senate, and the House miraculously came in and passed it, too, the president would be likely to veto it.

So I think it's almost all politics, Democrats trying to steal the popular issue that will cement the Midwest for them and make their basic constituency, labor, happy.

BAIER: Last word?

KRAUTHAMMER: That's a temporary political success, because in January they are going to be in control of the White House and the Congress, and then they will either have to abandon Detroit, or support with Lenin socialism, and they will suffer for decades if they try that.

BAIER: Coming up, is President-elect Obama operating under the idea of keeping his friends close and enemies closer? What's behind the meetings with John McCain and Hillary Clinton? Some breaking news about that after the break.



SEN. HILLARY CLINTON, (D-NY) FORMER PRESIDENTIAL CANDIDATE: Let me just say that I'm not going to speculate or address anything about the president-elect's incoming administration. And I'm going to respect his process, and any inquiries should be directed to his transition team.

BOB BECKEL, DEMOCRATIC STRATEGIST: What does she want to do? Does she want to spend the next six years getting post offices in the finger lakes of New York, or does she want to go around to the European capitals and go to China? This is a big deal.


BAIER: Democratic strategist Bob Beckel with his own unique view of the meeting in Chicago where President-elect Obama talked to Senator Hillary Clinton about the possibility of the job of secretary of state.

According to the reporting of Jim Angle, that job is on the table. Senator Clinton has yet to accept it, but there are a number of Democrats who believe she should, or would.

We're back with the panel. Fred, Secretary Clinton, what do you think about that possibility and about the move?

BARNES: I think it is a smart move by President-elect Obama, and I think Hillary Clinton is bound to take it. It is a great job. This is not ambassador to Sri Lanka. This is Secretary of State of the United States. It's a huge job.

I'm surprised that we have gotten into a situation where I happen to think that she is by far the best person he could pick of all those that are out there.

This is going to make John Kerry completely bonkers since he was the guy — remember when Obama first became a rock star in politics, it was at that speech at the 2004 convention, Kerry's convention, when he was being nominated for the Democratic presidential nomination in Boston, and he is the one who elevated Obama.

Kerry wants to be secretary of state. I think Hillary Clinton would be much, much better. She's smarter. She's tougher. She knows a lot of these world leaders, or at least some of them. She was in the White House for a while.

I don't know what will happen to Bill here. Maybe he will be ambassador to Sri Lanka.

BAIER: Jeff, politically smart move?

BIRNBAUM: I think it's a very smart move.

As you pointed out, as the old adage goes, you want to keep your friends close and your enemies closer. And by bringing in Hillary Clinton, he keeps an eye on Hillary Clinton. In fact, she has to work for him.

This is very much like another president from Illinois, Abraham Lincoln, who filled his cabinet with rivals, as Doris Kearns Goodwin wrote in her recent book, a book that Obama has said he really admires. So I think he really is taking a page from that.

BAIER: Any reason she wouldn't take it?

BIRNBAUM: I can't imagine it. And she gets a better deal than the one her aides said she wanted, that is as vice president. I think secretary of state is a much better job.

BAIER: Even under a vice president Biden, who is active in foreign policy and will be engaged on foreign policy in this administration?

KRAUTHAMMER: If she is secretary of state, he won't be. That's how the Clintons operate, I'm sure. If she accepts the job, it will be under those terms. She is not going to split the job with the sage of Wilmington.

What's really ironic here is, if you remember, for about half a year, she was touting her credentials in foreign affairs, and Obama was ridiculing them. And remember there was this little episode about her being shot at in Tusla?

But I guess change has come to America, and now all of that is behind us.

I would agree with Fred — she is a reasonably good choice. But what is so cynically brilliant and impressive about this is that with her out of the way, Obama is not going to have to show up in Iowa or New Hampshire in 2012. He has now cinched the re-nomination.

In the Carter administration, Kennedy challenged him as his presidency weakened. The Clintons have owned the party for 16 years, and it's now Obama. He knows that if he weakens and if he ever has a challenger, it would be her. And now, if she accepts, it won't be her.

BAIER: And then even in the Senate, on the healthcare issue, for example, perhaps a cleaner move for an Obama administration to get things through without a Senator Clinton on healthcare, Fred?

BARNES: I don't think he would have that big of a problem with her, not the problem her husband Bill Clinton had with Senator Pat Moynihan from New York back in 1994, in particular. And Moynihan wasn't crazy about the healthcare bill.

But, look, I don't know how Charles knows what's going to happen in 2012, but I certainly don't. and I wouldn't write anybody out of anything. The Obama presidency hasn't begun yet. Anything can happen.


KRAUTHAMMER: You can hold me to it if I'm still around!


BARNES: If you make a prediction, if it's far enough in the future, though, nobody will remember it and you won't be accountable.

BAIER: We have the tape.

That's it for the panel.

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