The Lame Duck Congress Lives Up to Its Name and the Clintons Are Back
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This is a rush transcript from "The Beltway Boys", November 22, 2008, that has been edited for clarity.
FRED BARNES, FOX CO-HOST: Coming up on "The Beltway Boys," the lame duck Congress lives up to its name: lame.
MORT KONDRACKE, FOX CO-HOST: No bipartisanship, no money for auto makers and no progress on a second stimulus. We'll tell you what happened, what didn't happen, what happens next, and if President-elect Obama could be doing more to push the process.
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BARNES: The Clintons are back. It may be Obama's White House, but the Clintons are making their mark on the new administration.
KONDRACKE: And we'll tell you what's got left-wing bloggers so hot and bothered.
BARNES: That's coming up on "The Beltway Boys" right now.
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I'm Fred Barnes.
KONDRACKE: I'm Mort Kondracke. We're "The Beltway Boys."
Well, the hot story of the day is "on hold." That is, waiting for Obama.
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It looks like Barack Obama finally is going to name his key members of his economic team, Treasury Secretary Tim Geithner and Commerce Secretary Bill Richardson maybe on Monday. All I've got to say is about time.
What Obama's been doing is following the FDR model from the Great Depression. What FDR did was to wait until he became president of the United States before taking any action and seeing to it that Herbert Hoover got the blame for the Depression.
Well, it's established. This is George Bush's depression, right? We don't have to go there. But Obama ought to be getting into — since he knows what he wants to do, FDR didn't. FDR sort of made it up as he went along, and Obama will have to do some of that. But Obama basically knows what he wants to do here. He ought to be intervening right now. The — having the economic team named is fine, but the team has got to get on the field. And this is especially the case when Obama has a Congress of his own party, which he could be telling what to do, especially in this dire set of circumstances that we're facing.
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BARNES: Mort, well said, except that George Bush's depression? Please, come on!
(CROSSTALK)
BARNES: But, Mort, give it up. That's just not right. You don't even believe that.
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But you're right about the FDR model. It's the wrong one to follow now. Financial markets don't wait, particularly now with the global economy and everything so speeded up. They've been setting financial markets which have sinking like a stone, including stocks that we own, and hurting middle class Americans, who have been losing their retirement and their asset values in general. But they don't wait like they used to. And they've been looking to Obama, waiting for Obama for some signal about what he's going to do. All they've gotten is uncertainty.
This will help. Tim Geithner as treasury secretary is a terrific choice. Bill Richardson as commerce secretary makes no difference at all. He's a Hispanic and — look, right now, Congress doesn't matter much.
KONDRACKE: You mean he's a token.
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BARNES: A token, yes.
KONDRACKE: There's nothing wrong with being Hispanic.
BARNES: Obviously, Mort.
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KONDRACKE: Because you'll get mail.
BARNES: Probably will. I probably will get mail.
But, look, Obama needs to do more than that. I wondered why — it's fine to let everybody know that Hillary Clinton's going to be your secretary of state. Important position. Not much impact on financial markets, which in the financial crisis is the big thing going on now in America and around the world.
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But, you know, do we really need to know that Tom Daschle's going to be the secretary of Health and Human Services or Janet Napolitano, the governor of Arizona, will be head of Homeland Security? You decided on those ahead of treasury secretary, the single most important nominee you'll have right now?
In any case, I think we need more from Obama given the particular financial situation we're in. That's not just who's going to be his treasury secretary but hint on where he's going to go. For instance, on trade, is he going to be a protectionist, as he was in the campaign, or is he going to push free trade as the rest of the world would like him to do. What about taxes? Could he step forward and say it's about economic situations. I'm kind of leaning towards not raising taxes in my first year in office. Then, of course, there's the auto industry, which I'd like to hear from him on that.
KONDRACKE: Well, let's go through the — item by item on some of the things you mentioned on what didn't get done in the last week.
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First of all, is the auto bailout. The auto executives were up on the hill pleading for a bailout for a bridge loan in order to tide them over. And Congress couldn't deliver on it.
Here's Harry Reid talking about that. Watch.
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REP. HARRY REID, (D), SENATE MAJORITY LEADER: The stock markets, the credit markets are having a lot of difficulty. What kind of a message do we send to the American people by having a bunch of failed votes here? We do not have the votes. What happened here in Washington this week has not been good for the auto industry.
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KONDRACKE: This was a bipartisan failure I might say. Neither Republicans nor Democrats wanted to give them a bridge loan under present circumstances.
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BARNES: Who's in charge? Democrats.
KONDRACKE: OK. But, nonetheless, in any event, what might have passed the Senate we do not know because the Republicans still have filibuster power.
Anyway, what ought to happen here is perhaps a bridge loan, but as part of a structured package that's like a bankruptcy, either a Chapter 11 or the functional equivalent of it, where the UAW has to reduce its basic overall compensation package to the level of the Toyota plants and the other foreign plants in the United States. Which is to say, down from something like a 75 percent — $75 an hour pay package down to either the $40s the way Toyota has. And, also, the management of at least some of these companies has got to go, especially General Motors, which has been in there long enough to demonstratively failed.
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BARNES: I thought about this some and last week I talked about, well, maybe you can do — achieve exactly the things you're talking about without a bankruptcy. but you probably can't do them without Chapter 11 because then somebody can go in and fire the executives that should be fired and open up the contracts and all the dealings with the G.M. and all these companies have too many dealers and there's state laws involved. Through bankruptcy they can change all that. But, essentially you're correct, something needs to happen.
Look, it's not the end of the world if these companies have to declare bankruptcy. That doesn't mean they go out of existence.
KONDRACKE: That point has to be made clear.
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The second thing I hold is a second stimulus package. My new economic guru is Martin Feldstein, who is a conservative economist from Harvard. He's calling for a huge stimulus package, $400 to $500 billion, including infrastructure spending, because this is going to be a long recession, not a short one. Therefore if it takes time for infrastructure to get going, which has been your objection, they'll still be a need to employ people.
BARNES: One of my objections.
KONDRACKE: OK. There should be an indication from Barack Obama that he's not going to raise taxes in the middle of a recession. That will help stimulate the economy.
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And there are other aspects to this as well, that, you know, there will have to be help for homeowners. And Feldstein's got an idea on how to structure that in order to prevent massive defaults in the housing market.
BARNES: I like Marty Feldstein too. Look, there's got to be something else and that is tax cuts that produce investment. What gets us out of recessions or depressions? It's not infrastructure. All that stuff, short of serious tax cuts were are tried during the New Deal. And you wound up with Franklin Roosevelt at the end of the '30s. The economy and unemployment was as bad as it was the beginning of the '30s. You need serious tax cuts that will promote investments and create jobs. That's the way it works.
KONDRACKE: Finally, the Columbia Free Trade Agreement is dying on the vine and it ought to be resuscitated.
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Look, every college student used to at least — I don't know what college students learn about now — is that protectionism made the world depression deeper and longer. Right now there is a fear that everybody will tend to his own market and not trade.
What we need — what Barack Obama needs to do right away is to say to foreigners we want your product. We want to sell our products to you. We want to keep the world economy going. And the first symbol of that would be to lift his objections to the Columbia Free Trade Agreement and it would be a statement of confidence in world trade and prevent the bottom from dropping out.
BARNES: Mort, I agree with you, but what do you think the chances of that happening are?
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KONDRACKE: I'd like to think they're good.
BARNES: No, not that you'd like to think they are, but do you really think they are?
KONDRACKE: I'm going with hope.
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BARNES: This is a triumph of hope over experience.
Anyway, Mort, I want you to listen to a couple things because I think both Rahm Emanuel and — well, let's start with Rahm Emanuel, the new White House chief of staff. Watch.
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RAHM ENAMUEL, (D), OBAMA CHIEF OF STAFF: I've had about 20 plus phone calls with members of the Republican conference. This is all an attempt, because President-elect Obama has repeatedly said, the challenges for the country are large. The problems we face are of a serious magnitude, that there is enough area and enough good will for ideas from both parties to solve those challenges.
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BARNES: OK. He's talking bipartisanship.
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Now Senate Republican Leader Mitch McConnell. Watch.
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SEN. MITCH MCCONNELL, (R), SENATE MAJORITY LEADER: This is an opportunity to tackle big issues and to do them in the middle and it would not be a good idea for the new administration, in my view, to go down a laundry list of left-wing proposals and try to jam them through the Congress. I think that would not be a great way to start.
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BARNES: No, it would not be a great way to start. Democrats have to realize — Mort, you'd be a good one to tell them — the bipartisanship is going to require bucking from time to time special liberal interest groups. Barack Obama's never done it. Doesn't look like this Congress wants to do it. But they have are going to have to do that if they're going to achieve any bipartisanship.
KONDRACKE: Hey, what I heard is Rahm Emanuel reaching out.
BARNES: I know...
(CROSSTALK)
KONDRACKE: And Mitch McConnell saying, watch out, don't go too far to the left.
BARNES: No, no, no.
KONDRACKE: Of course, he's right. But I haven't heard of Mitch McConnell stimulus package.
BARNES: Oh, yes, but there certainly was an auto industry bailout package.
KONDRACKE: Coming up, Hillary may have lost the election but both Clintons will have a major impact in the Obama administration. We'll tell you how, next.
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BARNES: Welcome back to "The Beltway Boys." It's "Up and Down" time.
"Up," Bill and Hillary Clinton. He has agreed to series of concessions requested by the Obama transition team, clearing the way for her to become the next secretary of state, the job she's now accepted, Mort. And the Clintons, if nothing else, are resilient, aren't they. And it's not only the Clintons. Bill, they'll find something for him. Maybe you know about that. But she'll be secretary of state. And a lot of the Clintonistas, like Rahm Emanuel, worked in the Clinton White House, now he's back as White House chief of staff. They're all getting back in. They're all Democrats. They do have that in common.
You know who will be happy among Democrats about Hillary going to the State Department, and that is Democrats in the Senate. We share this expression she sucks all the oxygen out of the room in the Senate for Democrats. Yes, because maybe she gets media attention and they want to have it.
You were probably surprised to hear a lot of conservatives say a lot of things nice about her and what a superior choice. I think among his people who he might have picked, she is a good choice.
KONDRACKE: Compared to the alternatives.
BARNES: Exactly. She's tough. She's smart. She's got experience around the world. You know who is the unhappiest person of all? Vice President Joe Biden, in that job. He thought he'd have a big role in foreign policy. She will squash him like an ant. He won't have that role, and thank heavens.
KONDRACKE: Look, all that's true. And I think she is a tough realist. She is a liberal and she believes in negotiation, but she also believes in using leverage and power when necessary. I think this is two for the price of one. I think Bill will be used for special missions. He could end up being the chief Middle East negotiator. Heavens knows, he knows the field. And he got burned the first time around.
BARNES: Burned.
KONDRACKE: And he presumably won't get burned the second time.
"Up," California Democrat Henry Waxman. The liberal ally of Nancy Pelosi successfully ousted John Dingell as the chairman of the powerful House and Energy and Commerce Committee.
This is big. And this is bad for the auto industry. John Dingell was for years and years the great defender of the auto industry, doing it no favors. Protecting it against the kind of pressures that it would have taken to become like Toyota and the foreign auto makers who are now succeeding in America. But GM didn't modernize.
Now, the environmentalists are full in control. And the danger would be they will try to close down America's carbon economy before we have the technologies that can successfully succeed it and have the economy still grow.
The other significant thing is Nancy Pelosi is in charge. She is the boss. And Barack Obama's going to have to deal with it.
BARNES: Yeah, that's for sure. And in which direction, Mort, do you think she'll be pushing him.
KONDRACKE: To the left.
BARNES: To the left. That's for sure.
You know what? Henry Waxman, chairman of this committee, it's bad for every industry in America, because he basically distrusts corporate America probably as much as anybody in Congress. I have to say he's a very smart guy. Holds hearings that are really pointed to make industry after industry look bad, and particularly the auto industry.
KONDRACKE: Drug companies.
BARNES: And so — drug companies, you know. He'll really go after them.
And John Dingell, he did stand in the way — I don't think the auto company didn't need John Dingell to steer them in the wrong direction. They were killing themselves, the American auto companies.
But John Dingell stood in the way of the environmental extremists, who now, I think, he's shoved into a minor position, will be in a much stronger position than they were in Congress.
And, Mort, I know you're fond of saying Republicans and their leadership in Congress has moved too far to the right. Waxman moves the Democrats way to the left. I would say Democrats are more to the left in Congress, I'm talking about the Republicans are to the right.
KONDRACKE: That's debatable.
BARNES: Coming up, congressional Republicans try to regroup after big losses this fall. We'll tell you if this is the team to get the GOP back on track.
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KONDRACKE: Welcome back to "The Beltway Boys." We're continuing with our "Ups and Downs.
"Up," John Boehner. House Republicans reelected the Ohio congressman as minority leader. But it's tough times from the GOP and Boehner will have his work cut out for him as he deals with the aftermath of losing 20 House seats.
BARNES: Mort, I didn't think he'd be able to hold on to his job. Losing this many House seats after the Republicans lost 30-plus House seats in 2006. Yet, there he is. He's the House Republican leader again.
Now, conservatives were the ones who tried to get somebody to run against him and finally Dan Lungren of California did run. And that was a brave thing on his part. But there was no chance of knocking off Boehner when Paul Ryan, the very popular Congressman from Wisconsin, said he wouldn't run. Ryan didn't run, one, because a guy who legitimately wanted to spend more time with his family, but he didn't want the job. He wants to be House Ways and Means chairman sometime.
Mort, I read that excellent column of yours in Roll Call about what Republicans need to do, and except the vicious attack on Rush Limbaugh, Sean Hannity.
KONDRACKE: Laura Ingraham.
BARNES: And Laura Ingraham, it made a lot of sense, particularly as you always pointed out — this is one of your hobby horses — that Republicans or Democrats, for that matter, if they're in minority, need to present alternative policies. That's what Paul Ryan is so good at. He's a guy — they need to pay attention to him. Remember his reform package on taxes, Medicare, Social Security and all these things, remember when Republicans did this well — that was in the late '70s — with Jack Kemp's tax cut, which later became the Kemp-Roth tax cut and then embraced by Ronald Reagan. They got a lot of mileage out of that. Republicans need to follow that model, which I think you pointed out.
KONDRACKE: Yes, well, Paul Ryan is a good idea man. I'm in favor of ideas. It wasn't a vicious attack on Rush Limbaugh and the rest. All I said was Republicans should not allow them to be their intellectual bosses, as in immigration, where they lost the Hispanic vote, right?
So what the Republicans — I mean, it's going to be very hard. They're down to 170-odd members of whom 165 are from the most conservative districts in the United States. And they're very subject, in those districts, to haranguing from the likes of Rush Limbaugh. The result of that is the tendency will be not to think, but to just go right, right, right, right, and say no, no, no, no, that is not the road back.
BARNES: Well, that isn't the road back, but I don't think they'll follow that anyway. That's a figment of your imagination.
"Up," independent Democrat Senator Joe Lieberman, despite supporting John McCain during the presidential election, Senate Democrats decided not to strip Lieberman of the chairmanship of the Senate Homeland Security Committee. It was a decision slammed by left-wing bloggers.
Here's a sample through the Daily Kos, "I think we've now learned that Joe Lieberman is the smartest politician in Washington. He knew Democrats were spineless capitulators who would case at the merest threat. In a city known for tone deafness, there clearly isn't a more tone-deaf group than the Senate Democrats. I'm done with Reid as Senate leader."
I'm sure Harry Reid's quaking, right?
KONDRACKE: Well, Harry Reid has quaked in the face of the bloggers. The bloggers are as bad an influence on the Democrats as the right wing talk show hosts are on the Republicans. If they listen to the like of Daily Kos and they're running the show, God help the Democrats.
Look, it was Barack Obama who basically saved Lieberman, and more power to him.
BARNES: All right. I think you're right about that. Smart move by Democrats, by the way.
Hang on to your seats! "The Buzz" is coming up next.
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BARNES: What's "The Buzz," Mort?
KONDRACKE: Ben Bernanke and especially Hank Paulson, the treasury secretary, deserve credit for improvising to avoiding an economic collapse. But it looks as though Paulson made the wrong decision to not buy toxic assets from banks, but rather inject money into them, because the banks are not lending that money out. What's more, they've still got the toxic assets on their books and therefore their stocks are plunging.
BARNES: It was a questionable decision. The Minnesota and Senate race is undecided. Minnesota, going into a full recount. Norm Coleman, the incumbent, is ahead of Al Franken, which means he will probably win. Hard to overcome even a couple hundred votes, which he's ahead. By Georgia, election runoff January 2nd. Because there won't be as big an African-American vote, Saxby Chambliss, the Republican, should win.
KONDRACKE: That's all for "The Beltway Boys" this week. Join us next week when the boys will be back in town!
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