'Special Report' on infrastructure spending proposals

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White House advertises spending package as 'historic' amid negotiations

Fox News White House correspondent Jacqui Heinrich joins 'Special Report' with the details

This is a rush transcript of "Special Report" on October 25, 2021. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: These bills are going to change the lives of millions of people in areas and hundreds of millions of people across the country for better and for years to come. You hear these numbers, $3.5 trillion or $1.75 trillion. We pay for it all.

REP. RO KHANNA, (D-CA): The president looked us in the eye, and he said I need this before I go represent the United States in Glasgow. American prestige is on the line.

REP. NICOLE MALLIOTAKIS, (R-NY): It's quite possible they will try to jam something down our throats this week. It's hard to say what exactly will be in this package. We can tell by what they have been saying that it's not going to be good for this country and it's going to put us on a path toward socialism.

(END VIDEO CLIP)

BAIER: Massive legislation, the sausage process on Capitol Hill, and a lot happening in the final moments, changing the whole dynamic of the thing. We have seen this before. And this as polls, including our latest FOX poll, show on the economy the president is under water. As you see there, 39 percent. And then if you break it down by affiliation, independents, he is losing exponentially. It's not just our poll, it's other polls that show independents leaving President Biden in droves as this legislation has churned up on Capitol Hill.

So let's bring in our panel, FOX News senior political analyst Brit Hume, Mollie Hemingway, senior editor at "The Federalist," and Charles Lane, opinion writer for "The Washington Post." Brit, it's interest to see all of the machinations up on the Hill, but they're trying to make this deadline that something passes before he leaves for the climate summit in Glasgow. And I'm not sure everybody is playing the same game.

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Well, it's also the case, Bret, that I don't think the public care as fig about this Glasgow summit and whether the president has his package. I don't think it will make a particle of the difference to the outcome of that summit whether he does or not.

It's also not clear either, Bret, that he is going to improve his standing with the public if he is able somehow to ram this bill or something, this package, this new spending through, or something close to it, because we have had all this spending so far. The public is worried about spending, and it's certainly worried about deficits. But even more so, it's worried about inflation. And I think people generally believe that government spending with a cause of inflation. So they may be able to get something done, but it's not at all clear to me it's going to work out for them politically if they do.

BAIER: And the pay-fors, when we say pay-fors, how they are going to raise taxes to pay for what they are proposing, here's the treasury secretary and Senator Romney on this show.

(BEGIN VIDEO CLIP)

JANET YELLEN, TREASURY SECRETARY: It would impose a tax on unrealized capital gains on liquid assets held by extremely wealthy individuals, billionaires. I wouldn't call that a wealth tax.

SEN. MITT ROMNEY, (R-UT): It's not a good idea to tell billionaires don't come to America, don't start your business here, to tell the Steve Jobs and the Bill Gates and people like that, this isn't the place to begin your business. Go somewhere else. That's a bad idea.

We depend upon people of means to invest in enterprises, to invest in the stock market.

(END VIDEO CLIP)

BAIER: Chuck, for the longest time the pay-for was going to be an increase in the corporate tax rate, an increase in the individual rate. But now it's essentially a tax on unrealized capital gains for 700 billionaires.

CHARLES LANE, OPINION WRITER, "WASHINGTON POST": Well, what happened was Kyrsten Sinema said she didn't want to vote for anything that raised the capital gains rate or the corporate tax rate or the individual rate. Incidentally, this wasn't even Joe Manchin's objection. He was willing to raise the corporate rate, although he objected to a lot of spending.

What strikes me is the enormous disconnect between what seems to be emerging from all of this and where the president started in his campaign and what he promised to do with the tax code, which was essentially undo a lot of the Trump tax can you say in 2017. With the exception of corporate minimum tax and this proposal on billionaires, which has got a lot of details left to be worked out, to put it mildly, that all seems to have gone out the window now, and that when all is said and done, the individual tax rates may remain from the Trump system.

And I must say that, from a progressive or a liberal point of view, that's a very murky kind of an outcome. Yes, sure, it's great to nick the billionaires a little bit more. But there's a lot of millionaires and hundred millionaires and whatever who are still going to be racking up huge capital gains.

BAIER: And Mollie, I said over the weekend on FOX NEWS SUNDAY that it's legislative Jenga. You pull out a block, and then you pull out a block here, and the thing could tumble down. Who is to say that moderates are OK with all of this? So far Republicans are holding the line here. It's not a done deal by any way, shape, or form.

MOLLIE HEMINGWAY, SENIOR EDITOR, "THE FEDERALIST": Think about how there is no Republican engagement with this because of how extreme it is. So we have the variation from super progressive folks to so-called moderates who are still willing to have trillions of dollars of additional spending. And this is pretty radical. It's very different from what President Biden promised in his campaign. Chuck is talking about what he talked about the tax code, but he also said that he would be a moderate and a centrist, that he would unite the country. And he's pushing through a far left agenda.

And it does seem like there is not a lot of thought going into it. I understand transportation funding is about to run out and they want to get the infrastructure bill passed. But it's also true that this scheme of having a few hundred billionaires is probably not the most effective way to handle it, because nothing like this has been done before, so we don't know what the effects of it would be. Mitt Romney talked about how this could cause people to move offshore.

Wealth inequality is a big problem. But taxing the rich more is a less effective way than making sure that the middle class, which has suffered so much since the 1970s, could grow and expand.

BAIER: Not only that, Brit, but are you going to get enough money, are you going to get enough revenue?

HUME: And one more thing about that, Bret. That tax on unrealized capital gains is, I think is a wealth tax no matter what Janet Yellen says. And this morning, the Constitution authorizes the government to tax income. Well, unrealized capital gains, I'm sorry, are not income. So it's not even clear this would be legal, would be constitutional if they were able to do it. And I guarantee you it were to pass and if it were to stand, it would never raise the amount of revenue they project because behavior would be changed to avoid the tax.

BAIER: Right. And I mentioned with Senator Romney, Chuck, that the AMT started out very, very narrow, the Alternative Minimum Tax. But then suddenly broadened as the need for more revenue increased.

LANE: Well, I tend I tend to thin think --

BAIER: Go ahead.

LANE: I'm sorry, my audio went out. I just want to say quickly, I tend to think that even the projections that I have heard for this are not very substantial, $250 billion over 10 years isn't a whole lot of the $1.75 trillion they are now talking about. And President Biden has emphatically said this would be 100 percent paid for. And I think those words may come back to haunt him.

BAIER: We'll follow it. OK, panel, when we come back, tomorrow's headlines.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a look at tomorrow's headlines with the panel. Chuck, first to you.

LANE: Well, the World Food Program declares Afghanistan the world's most serious humanitarian crisis. The collapse of the Afghan economy is a real sleeper issue following the withdrawal of U.S. troops, and hunger is spreading in that country.

BAIER: All right, Brit?

HUME: It finally begins to dawn on Trump supporters that the Democrats' current use of Donald Trump as their best issue may be a sign that Trump may not be the Republican's best hope for returning to power in 2022 and 2024.

BAIER: And the tweets go to @BritHume. OK, Mollie?

(LAUGHTER)

HEMINGWAY: In response to Democratic pressure, Major League Baseball moved their All-Star Game from Georgia earlier this year because Georgia ask voters to have identification when they vote. And now the World Series will be held in two voter I.D. states, Georgia and Texas.

BAIER: That is quite something, after all of that. Panel, thank you very much.

Tomorrow on SPECIAL REPORT, we will talk about tensions between the U.S. and China with Arkansas Republican Senator Tom Cotton.

Thanks for inviting us into your home tonight. That's it for the SPECIAL REPORT, fair, balanced, and still unafraid. "FOX NEWS PRIMETIME" hosted this week by the man, Brian Kilmeade, starts right now.

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