This is a rush transcript from "Special Report," August 8, 2012. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
MITT ROMNEY, R - PRESIDENTIAL CANDIDATE: If they vote to re-elect President Obama, they've got a pretty good idea what is coming. And it will be chronic high levels of unemployment as far as the eye can see, stagnant wage growth, and the potential for economic calamity given the massive debt and unfunded liabilities that this country has. Now I have a very different view about where America can go.
PRESIDENT BARACK OBAMA: We have to keep building an economy where no matter what you look like, or where you come from, you can make it here if you try.
(APPLAUSE)
OBAMA: And you can leave something behind for the next generation. That's what's at stake right now, Colorado.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: President Obama and Mitt Romney on the stump today talking of course, about the economy. We're back with the panel. Melissa, as you look at the economy now and how it plays politically, what is your sense of things?
MELISSA FRANCIS, FOX BUSINESS NETWORK: It's stalling, and there is no way to deny that. When you look at the GDP numbers, I mean we have stalled from 4.1 percent to 2, all the way down to 1.5. Unemployment is running in the wrong direction. It ticked up to 8.3 percent. The White House tried to spin that it saying on their own website that it's really 8.5254389 percent, or whatever it was, saying your pain is my rounding error. And I don't think that's playing well. It's getting worse.
BAIER: So is President Obama hitting a chord, Paul, with these fairness statements in the wake of numbers that don't really line up in his column --
PAUL GIGOT, WALL STREET JOURNAL: He is raising doubts about Mitt Romney with them. I don't think there is any question about them, particularly the Bain attacks and some of the -- not so much his wealth but Bain and the outsourcing. I think if you talk to the Romney campaign they'd say some of that has hurt. Because it's hurt perception of Romney's empathy and really his image as a job creator. So some of that has hurt.
However, the problem for the president is, he can't do anything about the underlying fundamentals that Melissa mentioned. And that is what is defining this race most importantly for him. And he can't really overcome that. So he has to change the subject. And that's what he is trying to do to Mitt Romney. Mitt Romney's challenge is not so much to sell the American public that the economy is bad. They've kind of got that. It's what am I going to be able to do about it or how am I going to be able to make your life better?
So Jim, the Obama campaign's bet is that they can show some progress to tell people I'm on the right track. But if you look at the right track/wrong track numbers and it's upside down.
JIM RUTENBERG, NEW YORK TIMES: Yeah, I think that that's their trick is to show progress. In the meantime, what they have been telling us now for a year is that they're going to keep the subject not about always the economy here and now but the economy in the future, what will Romney do, compared to what will the president do. So it's the choice versus referendum argument. And they pulled it off a lot during July, surprisingly. Because it's hard, it's a high wire act.
GIGOT: It's almost like an alternative universe of what the economy will be like as opposed to what it has been like and is like. If he can pull that off it's going to be one of the greatest conjurer's tricks in politics.
BAIER: Melissa, there aren't a lot of arrows in the quiver. Even if the Fed gets engaged there is not a lot of people out there who think the economy's going to move dramatically.
FRANCIS: No, no and when you talk to CEOs they just say that there isn't confidence out there. They don't want to hire another new person because they don't know what kind of taxes they're going to have to pay on that salary. They don't know what the health care is going to cost. They don't know what the economy looks like. So even companies that are sitting on money don't want to deploy their resources. And when you ask them time and again what would change that? They say, I don't know, maybe we need a new administration, a new direction. I hear that from Democrats all the time. There is just no confidence out there.
GIGOT: She makes an important point. Because I think what you're seeing is the president's own political strategy, which is to say I'm going to raise taxes on the wealthy, which means a lot of small businesses, there is this hanging over the economy in January. That has created more uncertainty and has made people who you talk to say, you know what, I'm just not going to invest, I'm going to hold off --
FRANCIS: I'm going to hang on to everything I have.
GIGOT: -- wait.
BAIER: Jim, I was just in Ohio. And the unemployment rate there has gone down to 7.2 percent. So some of these key battleground states, the economy there also factors into the equation.
RUTENBERG: Yeah, in a lot of states, Iowa as well. What interests me is that the polls are all over the place on that question. Once you get -- wrong track, no question, it's a bad number for the president. But you look at some of these policy questions, and some lean Romney's way. He is more trusted on the economy in some of these polls. Some lean Obama's way, on his more populist tax arguments resonate with majorities sometimes. So it's very -- it's a lot of confusion out there.
BAIER: Unemployment is -- quickly, Melissa, are we expecting these numbers in these months leading up November to tick up?
FRANCIS: To tick up or stay flat. I don't see any way they get better. I mean we all know since the dawn of time, since dinosaurs roam the Earth, no one has been re-elected with unemployment numbers like this. And I don't know how you turn that around at this point in the game. Month after month we've watched it sit right at this level and you have this sense that everyone in Washington is doing everything they can to bring it down and it's just not working.
BAIER: Paul, Melissa, Jim, thank you very much for being on the panel. That's it for this panel, but stay tuned for continued speculation on the choices for vice president.
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