This is a rush transcript of "Special Report With Brit Hume" from September 30, 2008. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: I call on everyone in Washin gton to come together in a bipartisan way to address this crisis.
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(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: To the Democrats and Republicans who opposed this plan yesterday, I say step up to the plate. Do what's right for this country.
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BRIT HUME, HOST: Well, the two candidates agree on that, and they agree on one more thing, and that is the increase in the Federal Deposit Insurance Company (FDIC) insurance ceiling on bank deposits from $100,000 to $250,000, which seems to be in the works.
Some further thoughts on all this now from Bill Sammon, FOX News Washington deputy managing editor, Mara Liasson, National Political Correspondent of National Public Radio, and the FOX News contributor and syndicated columnist Charles Krauthammer.
All right, you still have some resistance among members of the house, and some elsewhere in the financial community as well, that say, look, this thing, a great big package like this, $700 billion, whether it's done over time or not, is really not what is needed, and, in fact, it's dangerous. I wonder who's right about that.
Bill, your thoughts?
BILL SAMMON, WASHINGTON DEPUTY MANAGING EDITOR, FOX NEWS: Well, also the public doesn't obviously think this is a good idea. It has been overwhelmingly against it.
And I think fundamentally we are still are a center-right nation, and people don't trust the government for an intervention of this magnitude. They would rather see maybe the power of the market unleashed, in a way, to help this thing, whether it's through...
SAMMON: Well, capital gains tax reduction, corporate tax reduction, the suspension of the...
HUME: Is there any chance in your judgment that any of that could pass?
SAMMON: Well, obviously the Congress is controlled by Democrats. The first iteration of the bill didn't pass, so it has to change. It can go either go leftward, where they can put this ACORN stuff and the union stuff...
HUME: Which would wind up being what?
SAMMON: Well, the ACORN is a controversial left wing group that is involved in voter registration-
HUME: It would have been eligible under some provision in this bill to get money from the proceeds of the sale of these assets eventually, right?
SAMMON: And the union stuff-they wanted unions a seat in the board room, force them into the boardrooms of some of these organizations...
HUME: And that stuff got thrown out.
SAMMON: That stuff got thrown out. So it could either get back in there, which would attract more Democratic votes. But for every Democratic vote you pick up, you lose a conservative.
The other way we could go, we could make it more of a conservative bill by putting in a cut in corporate tax rates, by putting in a cut in the capital gains, by getting rid of this market to market accounting rule which has been so troublesome. That's less likely.
One last thing--the other way is to do a fig leaf, which is this let's both agree to raise the FDIC insurance from $1,000 (sic) to $250,000 and call it a day and pass this thing. And that may be what happens.
MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I think of that wish list, the only likely one is mark to market and maybe an FDIC. I think the fig leaf--
HUME: In fact Jim Angle reported tonight--we didn't have a chance to get to it--that the Securities and Exchange Commission is working on a way to partially suspend the mark to market.
Those are the accounting rules in which these assets--the market for which it is basically frozen, although they have value, they are forced to value them way below what they are probably worth.
LIASSON: Which makes them look a lot worse -- their balance sheets.
HUME: It also makes the balance sheets of banks look a lot worse and restricts the amount of money they can lend.
LIASSON: Look, I think that If Democrats continue to insist on having a certain number of Republican votes, which they are, they will have to do something, some kind of fig leaf to get those extra 12 votes that they need.
Some will have to come from the Democratic ranks of the no voters and some will have to come from Republican ranks, and that's what I think is likely to happen. Although, of course, all of us thought that it would pass yesterday, too.
But this was a huge failure of leadership all around. And they thought they had the votes and they didn't. They will have to go back and get them.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, I'm in favor of a fig leaf, because if that's what it takes, that's OK. The raising of the limit on the FDIC-insured deposit is a fig leaf. It's not a big deal, but it will look good. It had the endorsement of the two presidential candidates.
HUME: It may prevent runs on banks.
KRAUTHAMMER: Well, almost everybody who's got money in a bank -- that has money in the bank splits it up and doesn't have it over $100,000...
HUME: A lot of businesses do, though, Charles.
KRAUTHAMMER: But, also, when the S&L's had failed, there was a lot of leeway given to people who had over $100,000. There is always the understanding that ultimately it will be supported. That's why I think it's a fig leaf. It's going to be official even though it's unofficial.
You look at the market today, which rebounded hugely, and you can say either it's because the doomsday scenario was wrong, and the markets in Europe nonetheless went up and the sun came up in the east in New York, and people thought it was OK if you don't have a package.
Or you can argue that the reason it went up is because everybody on Wall Street assumed after hearing the president and Democrats and Republicans and Mitch McConnell and others say we will have a package. It will be changed in some way, but we will have a package. Everyone on Wall Street believes we will have a package.
I believe the second theory is right and the first is completely wrong.
HUME: But the futures were up last night before anybody said any of this.
KRAUTHAMMER: The problem is that--the thing that Jim Angle had talked about, which is the spread on the lending, the seizing up of the credit markets, even if the stock market holds up a day or two or three, if no one is lending and no one will lend at six and seven percent overnight, nobody will lend, no one is going to have any money and the economy is going to be in a crushing collapse.
Everybody understands that. The reason that Bernanke and Paulson are running around with their hair on fire is because they're looking at those overnight lending numbers, and those are real. That's what's going to happen.
That's why I think the markets reacted, assuming there is going to be a package. If there isn't a package, I think there is going to be a collapse that will make yesterday look like a picnic.
SAMMON: The other person who is hurting, of course, is John McCain.
HUME: We're going to talk about that in the next segment.
HUME: In fact, we will have a chance to talk about that as well as the Sarah Palin debate preparations. We'll be right back.
(BEGIN VIDEO CLIP)
SEN. JOE BIDEN, (D-DW) VICE PRESIDENTIAL NOMINEE: I never go into any debate thinking about what I have to do to the other person I'm debating.
I'm so accustomed to debating really competent women senators and governors. Try debating, as we both did, Hillary Clinton.
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(BEGIN VIDEO CLIP)
GOV. SARAH PALIN, (R-AK) VICE PRESIDENTIAL NOMINEE: I do look forward to Thursday night and debating Senator Joe Biden.
I have to admit, though, he is a great debater and he looks pretty doggone confident, like he's sure he's going to win.
(END VIDEO CLIP)
HUME: Well, Sarah Palin obviously doing everything she can to sound confident and lower expectations at the same time. Senator Biden saying, you know, "I'm an old hand at this. I debated Hillary Clinton, after all."
What about this, Charles? What's going on here?
KRAUTHAMMER: Well, she's had a rough couple of weeks, and the blame has been put on her handlers. I think that's a mistake. I think it's about her.
Look, she knows a lot about a lot of stuff. She knows about energy, about taxes, about social issues. But she knows very little about stuff like foreign affairs, which is a very large area.
And she embarrassed herself when she was asked not only about Russia but about Pakistan, where she showed she has a fundamental lack of understanding of what the issues are in that area.
Now, that's not--she's not a stupid woman. She's smart, adept, but she has not been spending her life on these issues.
Obama also was a newcomer, but he has had 18 months on the trail in which he has marinated himself in these issues, and he showed that over this amount of time he has a grasp of them as he showed in the debate last week on foreign policy.
Her problem is a lack of knowledge in large areas. And that's why she's cramming, and she has to.
People are saying "let her be Sarah" and not have this crash course. She has to have it. There is stuff you have to know, elementary stuff.
On the financial crisis, her answers were also unsure. All of us on the panel didn't know anything about all this financial stuff, but we read about it over the last weeks, we looked at it, studied it, thought about it, and we're at least coherent if not insightful on it. And she has to do that.
Her problem is she only has a matter of days learning about a lot of stuff. And if she does well on Thursday, it will be a tribute to her.
HUME: To an all-nighter, right?
KRAUTHAMMER: A lot of all-nighters, and assimilating a lot of stuff in a matter of time that not a lot of us would be able to do.
LIASSON: Yeah, look, this debate is all about Sarah Palin. I think that you will see Joe Biden not disappear, but he is not going to engage her. Somebody said he is not going to "moose bait" her.
He is going to, I think, be extremely careful. Joe Biden has his own problems to watch out for, and I don't think he is going to be aggressive.
HUME: But he can say, he's prone to say anything.
LIASSON: That's what I'm talking about. He has to watch out for himself. He doesn't have to worry about going after Sarah Palin.
I think the feeling inside the Obama campaign is that she's doing fine just by her very own self, in other words, doing poorly. And he doesn't have to help her along.
HUME: Does it seem to you, Mara, that Joe Biden has been since nominated a virtual gaffe machine in terms of the number of fluffs and mistakes and things that he has said, and Palin has made her share, but hers are bigger and more important and newsworthy than his?
LIASSON: First of all, we already knew this about Joe Biden. And there is an element that the first three letters of news is "new," and we always knew he would make a lot of gaffes, and he has. Now, he hasn't--
HUME: But these gaffes were new gaffes.
LIASSON: These were new gaffes, and they have been reported on, especially Franklin Roosevelt in 1929 going on television, being at odds with Barack Obama on clean coal, on all sorts of things.
They haven't been the kind of deep, character revealing gaffes that he made early in his career, the real famous ones--plagiarizing Neil Kinnock the labor leader, falsifying his law school record. Those are the kind of gaffes that loom really larger. And, you know, that's what he has to watch for on Tuesday (sic).
But, otherwise, he will do fine, she will do fine. I think it will almost be like two parallel interviews with Gwen Ifill.
SAMMON: Part of it is the media double standard, dare I say.
But the other part of it that when Joe Biden makes a gaffe, he is still avuncular and smooth, and you know, he schmoozes, and he's gaffing all the while.
Sarah Palin has a demeanor problem, where she freezes up and looks like a deer in the headlights. And I think conservatives are almost ready to say, look, you know, loosen up and relax. If that means even making a substance error, we would almost be reassured if you could demonstrate that you can parry and deflect and finesse tough questions.
There is a certain skill set involved there that she doesn't seem to have. Whether that's because of nerves or because they have over-scripted her, or whatever, she has gone from a spectacular rollout at the convention, which was scripted-she was reading a scripted speech, to this perception that is gradually congealing that she is a Dan Quayle.
I think it's unfair, and she is going to have to get out of that on Thursday night.
HUME: That is it for the panel.
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