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


PRESIDENT OBAMA: I recognize that there are still some differences around th e table and between the administration and members of Congress about particular details on the plan. But what I think unifies this group is the recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly.

HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: You go through a whole host of issues in this bill that have nothing to do with growing jobs in America and helping people keep their jobs.


BRET BAIER, HOST: There you see President Obama while meeting with congressional leader talking about the economic stimulus package, and afterwards House Minority Leader John Boehner reflecting on some real problems with the proposal now on the table.

What about this? Some analytical observations from Fred Barnes, executive editor of The Weekly Standard, Juan Williams, Senior Correspondent of National Public Radio, and syndicated columnist Charles Krauthammer — FOX News contributors all.

Charles, the president said he recognizes there are some differences. That may have been putting it mildly.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: There are huge differences of principle. It's not details.

Look, this is one of the worst bills in galactic history. It's not only on the timing of it — as we saw from the Congressional Budget Office, more than half of the infrastructure stuff with the bridges and roads will not be spent until two years hence when the recession will be likely over or coming out of it, and it will only add to inflation, not jobs.

And it's the content of this. We heard earlier in Major's report, a third of a billion for contraception, a billion to states to help them collect child support, nursing training — all this is worthy, but it ain't stimulus.

If you look at what was left behind after last year's stimulus, $160 billion, it didn't have any effect on the economy. It left nothing behind.

This bill has a fifth of a billion for grass at the Jefferson Memorial. FDR left behind the Hoover Dam and Eisenhower left behind the Interstate Highway System. We will leave behind, after spending $1 trillion, a dog run in East Potomac Park.

BAIER: Juan, Leader Boehner referenced $300 million set aside for contraception and prevention of sexually-transmitted diseases today. What about the fact that there are a lot of things in here that there are questions about how they will be effective to the economy?

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: Well, I think, again, it comes back to my mind to something Charles said, which is that there is a principled argument at stake here.

The principled argument is one in which the Obama administration says we've got to deal with infrastructure and needs that have been unmet, not just in terms of the bridges and the roads and the like, but in terms of the needs of the American people. And part of that argument, then, extends to things like contraception, things like social programs.

And I think you're seeing this go overboard in terms of some of the Democratic efforts that are being pursued now in the House, and they are interpreted as pork by Republicans, who say "Wait a second, this is not your Christmas tree, which you're going to hang ornaments on. What we're talking about here is the need for short-term spending that is proven in terms of its stimulative ability." And that's where the problem comes.

Now, the White House, in the form of Peter Orszag, who is the director of the Office of Management and Budget, OMB, has said "Hold on, gentlemen. We promise — we are committed to spending 75 percent of this money in the next two years — 75 percent."

That sounds to me like the Obama administration is trying to get it going, and trying to make it clear they are willing to play ball with Republicans.

But what we saw today and what we have seen over the last few days, actually, Bret, is really a partisan split on this package. You look at the House Ways and Means Committee, party line vote, look at House Appropriations, party line vote. I don't know how it is going to go in the Senate, but right now it looks like another party line vote.

Obama wants 80 votes. He wanted consensus. And his argument today at the White House was we all agree that the nation is in economic crisis and we have to act rapidly. But it's not the case he has been able to convince the Democrats or Republicans on the Hill to play together.

BAIER: Fred?

BARNES: Let me unravel the flaws in what Juan said.

Look, Obama can easily get 80 percent. All he has to do is give Republicans a little bit. He doesn't have to give them a lot. They know he won.


They know Democrats control the House and the Senate. But he's the guy for bipartisanship, and he's the guy that wants 80 percent of the vote. He wants this package to come flying out of Washington with the nation being happy about it. But you can't do that if you stuff Republicans, if you dis them, if you ignore them, if you vote down any proposals that they want to add to the bills. And that's what Democrats have done.

But there is one person who intervene here, who can step in and say, look, Republicans have a couple of pretty good ideas. We like this 20 percent deduction from all income of small businesses. That would really provide some incentive. Or, I like reducing the lowest tax rates from 15 percent to 10 percent and from 10 percent to five percent, any of those things. And he can get Republicans' to vote for it. But he has to act.

He is the guy for bipartisanship, President Obama is, and Democrats on Capitol Hill snub their nose at Republicans. They have been more partisan this year than before — look at the S-chip bill. So, it's really up to Obama.

And this 75 percent stuff — here is what is wrong with this 75 percent over the next 18 months. The only supposedly stimulating, job-creating things is the infrastructure part. When you send $166 billion to the states, that doesn't stimulate anything. That just subsidizes overspending by the states.

And so it's infrastructure stuff that has to get going according to Democrats. It's never worked before. It didn't work in the New Deal and Japan, but at least they claim it's stimulative part.

WILLIAMS: But, Fred, if the states are in fault, it the states can't hire people, if they're having budget shortfalls and they are having to increase taxes at a time when the country is in recession, that's not good. And Obama wants to prevent that.

And let me just say one other thing. Who invited the Republican leadership over to the White House today? That's an example, I think, that Obama is trying.

BARNES: It's a good example. Of course he's trying. But, look, it's one thing to talk to them. It's not bipartisanship if you don't actually give them something substantive. He doesn't have to give them much, but he has to give them something. And he is the only one who can demand it.

BAIER: Charles, a big debate has been over income tax cuts, over payroll tax refunds. Reportedly, according to Major Garrett's reporting, Virginia Republican Eric Cantor was talking about this, and president Obama said that line "I won." Essentially the debate is over here.

KRAUTHAMMER: I thought he once said we are not red states or blue states. We are the United States of America. We are not Republican or Democrat.

Look, he won as the man who reaches across. But here is an example in which he says "I won, you lost. It's my way." He listens, but unless he gives something, it's all a sham.

BAIER: Last word — Juan?

WILLIAMS: Well, he has to make a decision.

And the problem, I think, with the Hill is that the Democrats for the longest time feel as if they have been shut out by the Republicans, and they are still acting in a reactionary form.

I think Obama is trying to bring it together, but in this environment, it's very hard to break the partisan gridlock.

BAIER: Coming up, the stories we missed or could not get enough of. The Friday lightning round is next.



GOV. DAVID PATERSON, D-N.Y.: She is dynamic. She is articulate. She is perceptive. She is courageous. She is outspoken.

I'm looking for a sort of new generation of leadership, someone who lives upstate but knows a lot about downstate.


BAIER: New York Governor David Paterson today introducing the next U.S. senator from New York, Congresswoman Kirsten Gillibrand, who is now Senator Gillibrand. She is from upstate New York. That puts an end to the debate about who was going to fill Hillary Clinton's seat in New York.

This is the lightning round. We will hit a number of topics. It's Friday. Fred, first this one.

BARNES: Well, she wasn't Caroline Kennedy. And I will have to say this congresswoman will be better at politics than Caroline Kennedy was, and she won't feel entitled.

But, look, this is going to provoke in 2010 a huge Democratic primary. Republicans may jump in with a stronger candidate than usual. And I rather doubt if Congressman Gillibrand spends more than two years in the Senate.

BAIER: She is not a big city liberal — Juan?

WILLIAMS: She's not, especially on gun issues. And so you can imagine the reaction that came not only from Mayor Bloomberg in New York, but from Representative Carol Maloney, whose husband died in that massacre when a madman had a gun —

BARNES: McCarthy.

WILLIAMS: McCarthy. And so this is really setting off kind of a New York liberal set versus upstate.

On the other hand, if you think about what is going to come in 2010, you're going to have a ticket with Patterson, Andrew Cuomo, now the attorney general, and then Gillibrand. And, you know, that's a pretty powerful ticket that Paterson thinks in his political best interest.

KRAUTHAMMER: The most important thing about her is not upstate or downstate, guns or no guns. It's the fact that she is not a Kennedy.

My only regret is that Caroline diminished herself unnecessarily and was actually humiliated in a way that was unfortunate. She is not an unworthy person, and it was all self-inflicted.

But, on the other hand, I am happy to see at least one instance of the reversal of a trend into dynastic succession, which we have a lot of in this country.

BAIER: Next topic — this week, obviously a historic week in Washington. But there were a few sour-notes — Charles?

KRAUTHAMMER: A slight excess of security at an otherwise wonderful inaugural.

Thousands of people were herded into the Third Street Tunnel who had tickets, and spent miserable cold hours in there, and who missed the ceremony.

We had at this inaugural 58 security agencies. Who can name more than seven of them? We had 40,000 security personnel, which is more than we have soldiers in Afghanistan.

This security had all the subtlety of a Panamanian coup, with the exception of the absence of tanks on the South Lawn. If it keeps up, we will have tanks on the South Lawn at our next inaugural.

BAIER: No arrests, though. Juan?

WILLIAMS: I just think the canned music was unbelievable. It comes out that, in fact, you didn't have Yo-Yo Ma and the others playing. They were playing all right, but they were playing to themselves. And what America was listening to had been pre-recorded and had been broadcast out to the world as if it was real, but they were worried about broken violin strings in the cold weather and the sour-notes comes from the reeds.

I am a little stunned. I remember being at Olympics, and when the Chinese did this, the world said more evidence of some kind of crazed regime. I don't know what was going on here.

BAIER: Fred?

BARNES: Those are pretty sour-notes, but so was the one, that reported snub by Jimmy Carter of Bill Clinton. This was before they went out for the inauguration.

I know they he had an excuse that, well, they had been talking together ahead of time. But look at that. That looks like a snub to me. And they didn't exactly — remember when they were at the White House with the four ex-presidents and President Obama? It doesn't look like Clinton and Carter are ready to be chums. That's for sure.

BAIER: Quickly, president Obama gets to keep his BlackBerry. The Secret Service is going to supe it up. Good idea, bad idea — Charles?

KRAUTHAMMER: Good for him. Harry Truman would walk outside the White House and stroll. Well, you can't do that. You have got to protect the body, so let the mind wander.

WILLIAMS: I think it's pretty funny. People waste a lot of time on their blackberries on these silly things. All kinds of offers from Nigeria come over for quick money deals come over. Maybe that will help him.


BARNES: I thought I was getting some there!

BAIER: Good or bad?

BARNES: I think it's good. And, also, occasionally, maybe once or twice a day, let the guy have a cigarette.

BAIER: All right, Fred with the last word.

Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.