This is a rush transcript from "Special Report," October 19, 2010. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)CHIP CRAVAACK, U.S. CONGRESSIONAL CANDIDATE R-MINN.: What this healthcare bill has given us; it’ s going to put a very large cost increase on our employers. It's also -- it's going to put a large -- and it’s going to be a job killer.
JIM OBERSTAR, CONGRESSMAN D-MINN.: We have the best healthcare in the world and we're just going to make it better with this system. I t's not going to cost you more. It's not going to cost more money.
(BOOING)
That is phony argument put out by the Heritage Foundation and they're dead wrong.
(YELLING)I read the bill.
(END VIDEO CLIP)
BRET BAIER, HOST OF "SPECIAL REPORT": Eighteen-term Congressman Jim Oberstar against Republican Chip Cravaack, and you saw that debate this week. It's pretty heated. According to some local polls this could be a tight race for this long-time committee chairman in Minnesota.
As you look at what Republicans need to do in the balance of power, we showed you there on the big board a couple of times, you need to pick up 39 seats to win the majority. There you see the breakdown.
So what about the house races folks are watching? Lets' bring in our panel, Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Let's start with that Minnesota race. It's pretty heated Steve.
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: The first thing to say is if this district is close, it tells you something about the size and the wave we might be seeing on November 2nd.
You saw in that debate something very interesting. I think Jim Oberstar is feeling the heat. He understands that the race has tightened quite a bit. If you talk to people on both sides and both political parties, they will tell you that the race tightened quite a bit. I think the general expectation is that Democrats come home for Jim Oberstar; it's a district that leans Democratic. But this Chip Cravaack makes good arguments. And one way that he can negate the coming home to Oberstar is by appealing to unions. He’s doing this in a new ad. He says "I was a Northwest pilot. I served in a union. I was proud to be part of a union," and he is trying to chip away at what I think most observers believe will be this return to Oberstar, particularly from union members.
BAIER: A.B., are there canaries in the coal mine on election night that we could see how the wave is going depending on these races that shouldn't be close?
A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Jim Oberstar won with 68 percent, and 64 percent and 65 percent of the vote in the last three cycles. Obama won this with 53 percent of the vote. John Kerry and Al Gore won this district. This is not a democrat who is supposed to be worried at this point.
And this is a sign of the kind of massacre that could be on its way. Again, the polls -- the votes have not been counted, but if Democrats are apathetic and those angry voters that debate actually that we just saw got a huge crowd a huge turnout.
BAIER: It sounded like a town hall.
STODDARD: It was also packed in the room. It did start to sound like a town hall. And I think that Jim Oberstar could be in real trouble. And if he is, then almost everybody is.
BAIER: Speaking of everybody, financial services committee chairman Barney Frank in Massachusetts, he is facing a race. He just loaned his campaign $200,000, up against Republican Sean Bielat. We'll play the video; we won't have to play the sound, of Barney Frank's partner apparently heckling Bielat after the last debate.
What about this race, Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: If Oberstar is a canary in the coal mine; the Frank race is a parakeet in the coal mine.
BAIER: Here’s the video of the heckling as you're talking.
KRAUTHAMMER: It shouldn't be a close race. In the Frank district it shouldn't be competitive race. He ran unopposed in ‘06. He is in a district that went two to one in every presidential cycle, the Gore, the Kerry, and the Obama cycles.
However, the first warning sign occurred in January when Scott Brown ran and he carried this very liberal district. Now, the problem from that Frank is facing he has an opponent, who’s young, attractive, 35, former marine, a businessman.
And the fact that as you mentioned, he is lending his campaign $200,000, which if you check the finance reports that Frank has done in the Congress is about 20 percent of his net worth, that means he’s worried about something.
Now, the internal polls on the Democratic side show him with a 20-point lead. But there are recent internal polls on the Bielat side that show ten points or less. The Charlie Cook report had this as a solid Democrat. Now it's leaning Democrat.
The one thing about this race, which I think in the end Frank will pull out, is that there’s a moral victory here somewhere in that Frank is not a guy who would admits error. He doesn't only think he is the smartest guy in the room, he thinks he's the smartest guy in the continental United States.
But he's admitted that on Fannie and Freddie he made a mistake when he said in the early years of this decade it was not in the situation of a crisis. He admits now he missed it, he missed all the signs and that in and of itself is a moral victory.
BAIER: And Massachusetts-4 is a district that Scott Brown, Republican, won in his race for the Senate. A.B., let's turn to Michigan-15. Again, another big- time Democrat. Of course, John Dingell facing Rob Steele, a Republican.
STODDARD: John Dingell is the longest serving member of the House of Representatives. He is in a seat only he and his father have held since 1933. He is working hard to keep it. He is another person who has won 71, 88 and 71 percentages in the last three cycles. This is staggering political safety and security.
He raised half of what he raised in the '08 cycle. Talk about taking one for the team. This is a guy that has gone against the leadership when he had to, to protect the auto industry in Detroit. But he voted for stimulus, health care, and cap and trade, which he called a large tax.
He is being hit up by Rob Steele, who’s a cardiologist, particularly on healthcare. Obviously the cardiologist is the outsider. Longevity is not in fashion this year and he is the ultimate long-time incumbent.
BAIER: We're picking top Democrats. Another one in South Carolina, the fifth district, the budget chairman John Spratt against Mick Mulvaney, the Republican. Steve, this one looks close.
HAYES: It does. And if there was a race that epitomizes what we've seen in the 2010 election cycle House race, this might be it. John Spratt, well-liked, moderate chairman of the budget committee, has served as a moderate for most of his career, being challenged by this upstart young conservative businessman Mick Mulvaney.
Spratt is someone who voted also for healthcare and for stimulus and is defending those out on the campaign trail. They are not popular in his district. It's a district that leans Republican, probably plus eight, plus ten. And Mulvaney interestingly is a candidate who was initially recruited back in 2006 by Jim DeMint who has obviously played a huge role energizing conservative and tea party candidates this time around.
DeMint is sort of a mentor to Mulvaney and has pushed him and helped him in every conceivable way. I think this race; prognosticators have it at about a dead heat. I've heard internal Republican polling show that Mulvaney is starting to pull away over the past couple days. And this is one of the races that the Republicans will be the majority have to win.
BAIER: We have 13 days to go. A lot can change. Some of these Senate races are closing and that could affect the other races on the ballot. Down the road here, predictions on numbers. Larry Sabato has it at 47; Rasmussen has it at 55, Wall Street Journal at 53 for Republican pickups. Where are we?
HAYES: 65.
STODDARD: Mid-40s.
KRAUTHAMMER: 50.
BAIER: There you go. Up next, austerity protest in Europe. And could the same thing happen here?
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DAVID CAMERON, BRITISH PRIME MINISTER: We are not doing this because we want to. There is no ideological zeal in doing this. We are doing this because we have to.
UNIDENTIFIED MALE: It's outrageous. The guy has not been there five minutes and all of a sudden they putting the world right.
(END VIDEO CLIP)
BAIER: Great Britain announcing the biggest budget cut since the 1920s. Now you're looking at France, another day of violence in France, protesters writhing in the street, union members blocking airports. All of this in response to President Sarkozy's effort to hike the minimum retirement age to 62.
(BEGIN VIDEO CLIP)
ERIC GILLY, UNIONIST (via translator): We want to stop work at 60 because it's something our parents, our grandparents and even our great grandparents fought for. And over the years, even before Sarkozy, you can see we're losing everything they fought for. And that's unacceptable.
(END VIDEO CLIP)
BAIER: Great Britain, France, austerity. Could it happen here? We're back with the panel. Charles?
KRAUTHAMMER: Is that what the Second World War was about? I thought it was about something else.
This is a perfect example of what happens when you get the bloated, social democratic state that you have in Europe. Two effects. The first is economic. It's unsustainable as we see all around Europe and you get the result that we saw. In England the government has to have absolutely radical cuts, the largest cuts in government handouts essentially in 70 years, very, very major. Nothing is spared, including the military.
But at least it's a realistic approach. If you look at what happens in France, you see the second effect of generation after generation of a nanny state which provides all of one's needs. It's essentially a spiritual collapse.
A government, a country in which you’ve got millions in the streets rioting, tax on police, shutting of the refineries over the raising of the retirement age from 60 to 62 is a country you only describe as decadent. That after all the years of being infantilized it doesn't have the spirit to actually rise and say there are things that we have to do.
And that I think are the two effects that people living here see abroad. In the end, the social democratic state is unsustainable because the public sector being parasitic is too large and the private sector is unable to sustain it. And secondly, it changes the spirit of the people in a way in the end can be irreversible.
BAIER: They’re talking about 60 to 62 for retirement age. In the U.S., if we talked about 65 to 67, would there be equal backlash from unions and other folks across the country?
STODDARD: That's -- fuel shortages where planes can't take off from the airport, and -- I mean, I don't think we know what we're in for. I mean these are very sober warnings about what the reaction would be here.
We’re now awaiting a power shift in our own austerity plan on its way. We know that the narrative, the political narrative of 2010 was all about cutting government spending and reducing the deficit. Once we're on a path for actually cutting military spending and reforming Social Security and our own pensions, I have no idea in 18 months from now how Americans would react.
We saw Tea Partiers at town halls, angry over the healthcare bill. They want government out of the Medicare but they wanted it preserved. We just don't know how used to the government people have grown in this country.
We can imagine and talk about it here, but we don't know until the cuts come. It will produce hardship and there will be a backlash. I don't know if there will be riot and fuel shortages, but I'm sure there will be a response.
BAIER: Steve?
HAYES: I haven't been this optimistic about politics in years. To see what David Cameron did, who, by the way, is a moderate running a coalition government is doing with these kind of across the board cuts.
I'll differ with Charles in one respect. It's not that nothing is spared. The only thing spared is the healthcare system, which I think is a problem unto itself. But he's making cuts. They were supposed to be 25 percent. It looks like they will be 19 percent.
These are serious cuts, though. This isn't actually just slowing the growth. These are real cuts that will have a real impact. And I think in a sense, we’re looking at what we could be seeing, the choices we could be seeing our government have to make years from now.
And we're going to make a choice as a country. We can do this voluntarily through the ballot box and do it in a relatively less painful way, or we can do it, forced on us when we are on the brink of insolvency. And that's why I think it is encouraging to see that there are politicians overseas, some of them here, too -- Chris Christie I would say -- doing these kinds of things here to give me some amount of optimism.
BAIER: Quickly, Charles, with the president's umbrella cover of the deficit-debt commission that will come out December 1st, despite that, will he have the fortitude to do major cuts on his own depending on what happens in this mid-term?
KRAUTHAMMER: He won't, although, there is one area. Social security I think you can get a national consensus including a gradual raising and indexing of the retirement age. That's doable in America, and I think it's the one area you might have a consensus on entitlement reform. Not going to happen on healthcare, but it could happen on that.
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