This is a rush transcript from "Special Report," November 16, 2011. This copy may not be in its final form and may be updated.


REP. WILLIAM LACY CLAY, D - MO: I'm mystified as to why these so-called achievements should entitle executives to million-dollar bonuses, and they either have nothing to do with the actions of Fannie and Freddie, or they appear to reward a continuing downward spiral in our housing market.

EDWARD DEMARCO, FEDERAL HOUSING FINANCE AGENCY: I am trying to encourage these people to stay and continue to mitigate losses and keep the current infrastructure of the country's housing finance system operating.


BRET BAIER, ANCHOR: An interesting hearing today on Capitol Hill. We heard from Chairman Issa earlier in this show talking about these Fannie and Freddie executives received bonuses despite the fact that both of those mortgage lenders are asking for billions in taxpayer money, some $14 billion additional dollars. The White House not had much to say about this at all. Last time this was the answer to a question.


ED HENRY, FOX NEWS CORRESPONDENT: Does the White House feel any sense of outrage about Fannie and Freddie still getting these big, big bonuses?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Well, let's be clear about one thing just for the viewers here and those reading the transcript that these organizations, these entities are independent, and therefore they are independent decisions. The White House is not involved.


BAIER: Chairman Issa played during the hearing President Obama with some words about AIG bonuses back when they happened. We're back with the panel. Juan, how does this play out and does it hurt the administration in any way?

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Well, I think it hurts the administration from the conservative perspective when you say, hey, you are hammering Wall Street over these bonuses and over their excesses. Why aren't you paying attention to this government controlled entity that you have some say over?

And why is it that Ed Demarco, who's the acting director of the Federal Housing Agency says there is not going to be any payback coming from all the money that has been lost by Fannie and Freddie. I mean they lost in the third quarter $10 billion. They are asking now for $13 billion in additional money from the government. And then on top of that, they are saying we're going to give these huge bonuses to people and we have to give it to them because they are so expert. Well, if they are so expert, why were we losing all this money?

I just think that it's one of these very frustrating situations. Does it have negative impact on the president in particular? I can see the Republican complaint to some extent be evenhanded in your criticism. But overall, I think it's just pox on all of their houses. This thing has been supported you know, by the ownership society of the Bush administration and by Democrats through time.

BAIER: Bill, it's easy to tap into the anger about this whole thing, and Congress often does that well. But is there an argument to be made about brain drain and keeping the right people at the helm even as they're trying to unwind all of these complicated loans? Is there a fair argument to be made by those executives?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: Sure. I am not competent to judge whether these bonuses are necessary or whether they're comparable to the bonuses being paid at other similar trillion-dollar organizations, but yeah, it's a reasonable argument. And I don't think there is accusation of political cronyism, that people getting the bonuses aren't President Obama's best friends.

I think it's a mistake for the Republicans in Congress to scream about this. We have actual crony capitalism going on with Solyndra and with other actual Obama administration programs that are benefiting supporters and donors to President Obama. This is - I mean it may be foolish, it looks bad because they were bailed out and they're still losing money, but there is no evidence that President Obama or anybody else weighed in here to help these guys, these executives get bonuses.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Whether or not Obama intervened, I can't join the outrage and I can't join the mob even though I enjoy a mob as much as anybody.

I mean, on this, these people if they were paid on the federal scale they would be getting about a tenth of what people in the private sector are getting. These people are not the ones who brought down these agencies. And these people are not the ones who decided that it would be us, the American people who would own these collapsed agencies that hold $5 trillion in loans. If you're holding all of that, you want the best people who are gonna try to unwind it while at the same time issuing huge numbers of news loans. And if these people aren't doing a good job, fire them. But then hire people at the same pay scale, at the same level of skill as people in the private sector. After all, there is a huge amount of money which is ours, the American people's at stake, and you want the best people. It makes no sense to me to want to hire people who are mediocre at a much lower pay which is what you are going to get if you impose a low pay scale.

WILLIAMS: Allow me to speak for the mob, but you have to pay somebody $1 million signing bonus before they have done anything? You can't get good people? I find this hard to believe, and especially since the decisions are made by the same guys that ran us in to this problem.

KRAUTHAMMER: These aren't the people who ran us in to this problem. These are the new people. And if you want people with any skill who are going to manage this amount of money, your money and mine, you want the highest skill and you pay them whatever the scale requires.

BAIER: Ten seconds, Juan. Don't you think it's interesting, though, in this Occupy Wall Street environment that this White House has not weighed in more forcefully on this issue if you accurately say, that it is so populist?

WILLIAMS: I would agree. I think the administration -- Occupy Wall Street people aren't crazy about Obama, but they're not crazy about Obama because he helped with the Wall Street stuff. And maybe this will add to their anger at him.

BAIER: That is it for the panel. But stay tuned to hear a president that may be getting a little frustrated.

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