This is a rush transcript of "Special Report With Brit Hume" from November 6, 2008. This copy may not be in its final form and may be updated.


GEORGE BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: This peaceful transfer of power is one of the hallmarks of a true democracy. And ensuring that this transition is as smooth as possible is a priority for the rest of my presidency.


BRIT HUME, HOST: And the president went on to tell his staff that he expected that they will behave in the professional way that they always have. There was a huge crowd there of administration people, appointees who will leave when he leaves, on the south lawn of the White House.

He obviously was hoping that there would be none of the kind of goings on that went on when the Clintons left and took some of the furniture, and allegedly plucked W keys off the keyboards, and so on.

Observations on this from Fred Barnes, executive editor of The Weekly Standard, Mara Liasson, National Political Correspondent of National Public Radio, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Obama has named his chief of staff, we know it will be Rahm Emanuel. His spokesman, White House press secretary is apparently going to be Robert Gibbs, who was a major figure and spokesman in his campaign.

The president is going to meet with — the Bushes are going to meet with the Obamas soon, and the first-classified briefing was held.

It seems to be moving quite quickly. The president seems committed to making it smooth. What are the pitfalls? What are you thoughts about this, Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I have one thought, and that is one thing that Barack Obama needs to do as quickly as possible, and that is name a Treasury Secretary.

We have seen the stock market go down over 800 points the last two days. There is great uncertainty out there about his policies. We talked about it here. Is he going to be as liberal as his record was? Is he going to be a more centrist president? What's he going to do on trade, taxes, all these things?

He can answer a lot of these questions by naming a Treasury Secretary, and calming markets.

Look, you can say this is unfair, he's not even elected yet. But the stock market is a bet on the future-

HUME: (INAUDIBLE) he is elected by the electoral college.

BARNES: Well, he hasn't been inaugurated yet.


BARNES: But he is not president yet is what I was trying to say.

But the fact is he does have an effect on markets because it has raised a certain amount of uncertainty on a market that was already weak.

Now, there are a couple of guys who are supposedly at the top of his list. One of them is Larry Summers, a former Treasury Secretary in the Clinton administration, and the other is Tim Geithner, the head of the New York Federal Reserve.

Both would be greatly reassuring to financial markets, to Washington, to opinion elites around the country, and so on. And I think he needs to move very quickly on this.

HUME: Larry Summers is probably a Democrat.

BARNES: Yes, he's a Democrat.

HUME: What about the other guy?

BARNES: I think he's a Democrats, too. But that's not the point. You can be a Democrat and somebody that will have this impact —

HUME: I understand that. What I mean, though, is would he be eligible to become Treasury Secretary? He wouldn't be ruled out because he is a Republican, right?

BARNES: No, I don't think so.

And then there is Paul Volcker, of course, who is older, an advisor, who would also have a calming effect on markets, encouraging people to believe that there not going to be some huge, radical change or shift to the left when Obama actually is sworn in.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I think that, Fred, you're not going to have to wait too long. Fred's wishes will come true. I think that's one of the first appointments he will make. I think the short list already is reassuring. He just has to pick one of them.

Tomorrow in Chicago, he is going to have a meeting —

HUME: Apart from those that Fred mentioned —

LIASSON: Well, Robert Rubin was mentioned, but that wouldn't happen. Jamie Diamond, who is a Wall Street titan, maybe. But the short list that Fred mentioned are the top candidates I have heard about.

Tomorrow in Chicago he is going to have a meeting with his economic transition team, not just his transition team, his economic transition team, including a lot of the people that Fred mentioned. They're all going to be on a conference call or with him — Warren Buffett. Those are reassuring figures.

Right after that, he will have his first press conference.

One thing that has marked this transition so far is he has hit the ground running. He has moved very quickly. You and I remember Clinton didn't even name his top White House officials until five days before he was inaugurated. It was January 15.

HUME: I covered the Clinton transition down in Little Rock. He was kind of a come-day, go-day dig down there. It was kind of strange.

LIASSON: But he is moving very quickly to do this. I think he understands how important it is to get this underway.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And the Bush administration has been for over a year extremely conscious of how delicate and important the transition is. They hadn't anticipated the economic meltdown, but certainly with two wars they wanted to be very careful.

And I thought the president was extremely sincere. He brought his entire — practically everyone from the White House outside today and giving them orders to cooperate. And they certainly will.

I would agree that the Treasury Secretary will certainly be the first appointment and is the most important. It will be an important signal.

But I think the Rahm Emanuel appointment is also interesting. It has been interpreted as the man who promised transcendence in reaching across the aisle is getting an ideological and a partisan pinnacle.

But I think that's missing the point. The real ideological struggle in the first year of this presidency, maybe two, is not going to be between the Democrats and Republicans.

It is going to be between a president whose ideology is essentially unknown, and the grandees in the house and Senate and their allies in the interest groups, the unions, the teachers, the trial lawyers —

HUME: The green movement.

KRAUTHAMMER: Exactly — who are going to demand immediate results with risky immediate actions, as, for example, card check, which is the abolition of the secret ballot in unions.

We could have — and I think Emanuel is not only smart enough that that he will avoid this, but I think he remembers what Jim Angle had mentioned in his report, that Clinton got sucked into a sideshow of a sideshow on gays in the military and it destroyed his honeymoon.

HUME: To be followed by two unfortunate-

KRAUTHAMMER: Appointments that were rejected.

HUME: That's right.

KRAUTHAMMER: And I think you remember that — Emanuel will protect Obama from the ideologues in the party who have a lot of port and who want to push him around.

LIASSON: And there's another thing. Emanuel in the Clinton White House pushed for welfare reform and free trade. He really angered people back on the left-wing of the party back then.

HUME: So what was the message from the electorate now that we have had a couple of days to think about it? Some thoughts next.



MIKE DUNCAN, RNC CHAIRMAN: People voted for Barack Obama. It was something of a shakeup, something of a change. But their core beliefs are still center-right.

HOWARD DEAN, DNC CHAIRMAN: We don't think this is a particularly conservative country. We think this is a country that is pretty much right down the middle and very, very moderate.


HUME: Well, so which is it, and what was the message from the voters? Center-right, center-left or center-moderate, or whatever Howard Dean was saying. He is always hard for me to decipher.

But there is this from the exit polling from the last two rounds. These are the margins by which these two candidates carried the moderate vote, the votes of people who were self-described moderates. Obama won that over John McCain by 21 percent. John Kerry won it over George W. Bush by only nine percent. So perhaps that says something.

Charles, your thought about what the overall message of this election is?

KRAUTHAMMER: Well, that number tells us about the resentment and resistance to Bush and Republicans as a party and as president. It doesn't answer the ideological question of what do you think about the role of government?

And the polls actually had that question, and there was an increase in the number of people who believed the government ought to be doing more. It went up by five points to actually a majority, 51 percent.

Now, that, I think, is the defining question which divides liberals and conservatives. Should you have an activist, protectionist government protecting the people, or do you want a government that is at a distance, that gives freedom, and allows risk? That's a way to generalize what the debate between the left and right is.

So in this election you got a significant increase. But the issue is this is happening at one point in time six weeks after a financial collapse in which the great banks, the investment houses, the auto companies and insurance, everyone sought shelter in the government. If they do, why not the individual?

So it is all explainable as a result of this crisis. It doesn't answer whether that answer of government ought to do more is going to remain a belief in two years or three or five.

HUME: Was the question, as you are citing it, asked in connection with more government services, higher taxes, or less government, lower taxes?

KRAUTHAMMER: No. It was simply should the government do more.

HUME: I got it, OK.

LIASSON: More as in benefit, more for me.

Look, I think Howard Dean was very clear, and I thought it was interesting. He didn't say that this election proves that the country is more liberal, more Democratic. He said it's more moderate.

And I think that is one of the many signs that you're getting out of the newly-empowered Democrats, that they are not going to rush to the left as many on the left would like them to do.

And I think that how they interpret this election, whether they think it's a mandate for them or merely a chance to make the case to the American people and prove they can govern, will make a huge difference.

But I think that, you know, moderates did go to Obama. I think Charles is absolutely right — in a time like this, the government is seen as an entity that can help people, and that's what you saw.

And also, look, just even in voter ID. The number of moderates is growing, the number of liberals shrinking over time, not just in this election.

BARNES: And the number of Democrats has grown and the number of Republicans has shrunk some since 2004. I think there is no question about that. The country's a center-right country, but more centrist than right. More than in 2004, for instance.

And Republicans are going to have to adjust to that. They're also going to have to adjust to the notion about government.

And I wonder sometimes about small government conservatives who harbor the idea, one, that Ronald Reagan was one of them, which he really wasn't except rhetorically, and that, two, that we can really significantly reduce the size of government.

That's where I think the smarter conservatives are for reforming of all these government programs like Social Security and Medicare and Medicaid and so on, where individuals will have more control and government will have much less, but the programs are still there.

HUME: Right.

But I have a thought about this in terms of liberal versus conservative. We will know that the country has turned to center left or left when "liberals" start calling themselves liberals again instead of calling themselves "progressives" or whatever else they like to call themselves.

And they haven't said that for years. You know that a movement is in trouble when it has to change its name to make it sound more palatable to the public.

KRAUTHAMMER: But if you sell the idea of government as protector of last resort, and people buy it, the name won't matter. You become a liberal country.

And that's what, if Obama is successful, he may do it. But if you want to generalize off of this week's election, it's a mistake.

It will depend on how long our recession is. If it is a decade as in Japan and nothing happened, it won't have any effect. If it is a decade and FDR was seen as having helped, is how he was perceived, it will change the country and cause a realignment.

HUME: That is it for the panel.

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