This is a rush transcript of "Special Report With Bret Baier" from March 23, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: — will allow banks to take some of their bad assets off their books, sell them into a market, but do so in a way that doesn't just obligate taxpayers to buy at whatever price they're willing to sell these assets.

Instead, it involves a public/private partnership that allows market participants who have every interest in making a profit to accurately price these assets so that the taxpayers' share of the upside as wells the downside.


BRET BAIER, HOST: That was the president talking about the new plan to buy up toxic assets. They're calling them "legacy assets" now. It's a plan that essentially puts billions of dollars to work to try to get this off the bank rolls.

What about this plan? The market seemed to like it, up almost 500 points today. Let's bring in our panel: Fred Barnes, executive editor of The Weekly Standard, Juan Williams, senior correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.


CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: When you get some very smart economist saying it won't work and another smart economists saying it will, that occasions in me what is a rare experience. It's a moment of humility.

And the way I look at it is that the logic of the plan is there, but the problem is the execution. The logic makes sense. The reason the assets are toxic is because they carry a huge amount of risk and uncertainty.

The government by lending at very favorable terms to private investors and guaranteeing huge amounts of losses is taking a disproportionate share of the risk and the uncertainty out. So it creates a market and creates a chance of the banks offloading these assets.

The problem is the execution. After the performance of the president and the administration and the House and the Senate last week on AIG, it's hard to imagine anybody is going to want to be a partner of the government.

There's going to be either huge upside in these investments, or huge downsides. Either way, you can see the headlines attacking the vultures who made the money or the vultures who lost the money.

You can see Congress acting the way it did right now with the retroactive bills of attainder, punitive taxation and notoriety that these people would inherit.

That doesn't mean nobody will join this, but it reduces the number of people who will. If you reduce the number of partners, that means the government is going to have to assume a lot more risk and give away a lot of the profits than it otherwise would had we not had the AIG hysteria.

BAIER: Juan?

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: It seems to me Wall Street's reaction is very positive. Money will bring lots of people to the game, Charles.

And even by your own assessment, the government is putting up an exorbitant — if not extraordinary — amount of money to bring people, to attract people to the pot. It could go as high as a trillion dollars. So that's the reason this program, so far, has this positive response from Wall Street.

Now, I would point out that when the Bush plan was introduced, it also generated an initially positive response from Wall Street. So we'll have to see down the road how this plays out.

Now, I will say one added point, that Geithner is a part of this, that lots of people feel he is feckless, that he does not inspire the necessary confidence, even to this point with the unveiling of a plan that has had a positive reaction.

So any kind of bump in the road that we see down the way is going to really have larger impact, because people are going to say, "Oh, no, it's Geithner again. We're not sure about Geithner."

The key here is: What do the banks do with the money? And I don't think the Obama administration has made the American people feel comfortable that, in fact, if you give this gift of American taxpayer dollars to the banks, that the banks are going to do something that's going to impact Main Street wealth.

I was talking with administration officials, and they said "We have to make it to the American people it is just not about rage. They have to understand the connection between Main Street and Wall Street.

Main Street right now says "Hey, Wall Street is getting all the money, and they're not helping us."

That's the problem.

BAIER: Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: That's the problem. That's one of the hurdles of this plan, which I think is a reasonable plan. It is one obviously Secretary Geithner should have come up about a month ago.

And the market reaction today, I mean, one day doesn't mean that much, but it's not nothing. Just think if the market had gone down, we would all be saying it has been rejected out of hand. That certainly wasn't the case.

But look at hurdles that are ahead. One, you do have to attract the private investors. And they have certainly been scared off by the whole AIG thing, and what Juan is talking about could scare them off more, the banks.

One of the things that has to happen is the banks and these five public/private funds that are set up, they have to agree on a price for these toxic assets. If the banks think, well, gee, when we get paid, we're going to — all our money will go somewhere the government tells us, then they're going to hold out for a higher price.

And then there is the whole problem of Congress. We saw how Congress weighed in on the AIG bonuses.

Look, this is heavily tilted, the risk is heavily tilted to the taxpayers and Republicans are already complaining about that.

BAIER: Right now, the down payment comes from the TARP money that has already been approved, so the administration doesn't have to go back to Congress, at least now. But as this program expands, is there the political will to expand it?

KRAUTHAMMER: It's smart to start a program today when nobody will give the money in Congress that requires no money up front and only down the line.

WILLIAMS: The thing is that the private sector sets the value of the assets. And so we'll see how it plays out.

BARNES: The bank has to agree to them, though. And that has been a problem up till now. The banks want more and private investors don't want to pay that much.

BAIER: President Obama called it "gallows humor," but should we be laughing about the economic crisis? And what about the rest of the "60 Minutes" interview? The FOX all-stars play it straight after the break.


BAIER: Looking live at the White House. A lot of talk today about that "60 Minutes" interview President Obama did, aired last night, in which he laughed numerous time about question about the economy.

"60 Minutes" Steve Kroft said, "You're laughing — what about that?" The president said there has to be a little humor, gallows humor, to get you through the day.

What about that interview, that part of it, and the rest of it? We're back with the panel — Juan?

WILLIAMS: I think he's on a charm offensive right now, and he's going big guns on "60 Minutes. We have the press conference coming tomorrow night. And he does pretty well, teleprompter aside, right there.

And I think he wants to appear relaxed and confident. But the problem is that right now he doesn't have plans, and the performance is absent. We don't know and we haven't seen any evidence yet. So when people are looking at him, they're wondering exactly what is he doing? Why is he out there so much?

It helps with the numbers. I think he's very good at it, but it is a depreciating commodity in this sense — he can't do it this any more time. The next time around, people will say he's back. Where's the performance? Where's the package?

BAIER: Too much about the laughter today?

WILLIAMS: I think his goal was to appear relaxed. And I think it was a very studied and very intentional step by him — I'm going to be comfortable.

BAIER: Charles?

KRAUTHAMMER: He has an easy laugh and one of the great presidential smiles of all time, so why not deploy it. I found that OK.

What I found interesting is when he asked about governing, how he likes to govern. He says he likes it and it comes naturally to him.

Well, I'm glad he thinks so. There are 299 million other Americans who aren't quite sure yet eight weeks in. I hope it's natural, because he has no experience at all. He has never managed a candy store.

But it tells you a bit about him. He is the man who does not lack for self-confidence. There is always the issue of hubris. That was always an issue in the campaign, and it remains so.

In the interview, he tried to offload a lot of his problems onto George Bush, but after you pass a stimulus, a budget and a Geithner plan of over $2 trillion, you now own the economy, so that's not going to work.

And despite all the foibles and the gaffes and the missteps, everything is going to hinge on the Geithner plan. If it succeeds, he succeeds. If it doesn't, he fails.

BAIER: Fred?

BARNES: Juan was right that a president going on television, giving speeches, and so on, is a depreciating asset. And he is not the first one, Juan, who I think is going to find himself in a problem where the public gets a little tired of him and doesn't pay that much attention and doesn't tune in as often as they did.

Other presidents have done this, too. They never seem to learn that they have this precious asset, and that's themselves, in public and in speeches and so on, and I think he has depreciated that.

On the other hand, I thought that question about being "punch-drunk" was extremely disrespectful and rude and insulting. And that's not the question somebody should be asking a president. He is president of the United States.

But —


— when you're out campaigning like that, everybody is not Jay Leno, who always makes his guests look wonderful.

BAIER: But if you're interviewing him about the economy, and you get a chuckle almost every —

BARNES: Oh, come on.

BAIER: I'm just asking. What do you ask?

BARNES: Do you think he really thought in asking that question whether I am going to get a yes or no on whether he is punch-drunk or not. Come one. That was over the top.

BAIER: More delicate questioning with your questioning, I understand. OK.

BARNES: Very delicate. But he really needs to worry about people seeing him as a guy who is just campaigning again. He doesn't need to convince people, Juan, that he's charming. He is charming. He is likable. He doesn't need to win that.

WILLIAMS: And he's brilliant.

But let me say, I do think he needs to convince people to be confident in him, that's he in control.


BARNES: — and you don't do that on "60 Minutes."

WILLIAMS: And then he said in response to that Kroft question about could the economic system implode — "Yes." Well, wait a second, what was that about?

BAIER: That's not a chuckle.


KRAUTHAMMER: I thought if governing comes naturally to him, it shouldn't implode if he's that good.

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