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May 02, 2006

Special Report Roundtable - May 2

FOX News Special Report With Brit Hume

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D) CA: What I have to say is that sadly we are living in a new era of robber barons. The American consumer is paying record prices while oil companies make record profits and make record contributions to the Republicans.

REP. DENNIS HASTERT, (R) IL: Anybody can go to the market and buy what they have to do. So it's disconnected from supply and demand. We need to know why that's happening. And if somebody is manipulating the market or the futures market to make sure those prices go higher and higher we need to be able to stop it.

(END VIDEO CLIP)

HUME: Folks, did you hear that? Dennis Hastert was a wrestling coach in school and presumably a teacher as well, presumably -- well, I'll ask the panel here. Fred Barnes, executive editor of "The Weekly standard," Mort Kondracke, executive editor of "Roll Call" and Mara Liasson, national political correspondent for National Public Radio, Fox News contributors all.

Hastert says that the oil prices now or gasoline prices are disconnected from supply and demand and he's worried whether somebody's manipulating the market. Nancy Pelosi says she knows who's manipulating the market, it's the robber baron oil companies. Where are we, ladies and gentlemen?

FRED BARNES, "WEEKLY STANDARD": We are in the absence of evidence. Since there isn't any evidence. Even President Bush, I'll say, to his credit, two days after he had ordered an investigation to see if there were gouging and manipulating of the market by oil companies said at his press conference on Friday, in truth he didn't think there was any but he was still checking it out. And of course there is no evidence of this because that's not what's happening. How many times do you have to remind people of supply and demand, that it does work. Demand is way up. Supply hasn't gone up.

HUME: As much.

BARNES: As much. It's gone up some but not nearly as much. And when you have such a tight market, also speculators have some impact. But they're in Rotterdam, they're not wherever the Exxon headquarters is.

MORT KONDRACKE, "ROLL CALL": Yeah, look. I completely agree. The good news is, at least as the administration sees it, both the Energy Department and the private forecasters are indicating that supply is going to increase supply of gasoline will increase because there's lots of crude oil around in the world market. What's tight is refining capacity in the United States because the maintenance that was supposed to be done last fall wasn't done because of Katrina. It was done this spring. And so the plants have been down but those plants are going to come back online and they're figuring that by June the price will be down to from $2.95 to $2.60. That's not two dollars or it's not one dollar but at least it's headed in the right direction. So they're reasonably optimistic. If that happens, if the price starts going down the argument for supply and demand, it seems to me, will be stronger and this nonsense will quiet down.

MARA LIASSON, NPR: Yeah, I don't understand what Hastert means when he says it's disconnected from supply and demand. I am not sure what he was trying to say. But I can say this, six months until an election and there is nothing that anybody can do in the next six months to change this situation.

HUME: Let's talk about -- there's something that Congress can do. Congress can start giving out money.

LIASSON: Well, yes. Not to bring the price of gas down.

HUME: Republicans have proposed that there be $100 rebate to every taxpayer or $100 payment -- whether it's a rebate I guess remains to be determined. And Democrats are saying, no, we need a holiday from taxes that will last several months and they're arguing with each other over whose proposal is bigger. And - this is Senate Republicans. In the meantime House Republicans, their leader, John Boehner has emerged to say this about the Senate Republicans' plan for the $100 rebate.

"The really insulting part of this whole proposal is the fact that someone would offer $100 to every American family over this. It is not going to solve the problem. Over the weekend I heard about it from my constituents a few times. They thought it was stupid."

BARNES: It is stupid. It's not only a bad idea. It will make things worse. I mean, the truth is we want price to reach a level that it will discourage some people from buying gas so you'll reach an equilibrium. Otherwise you're going to have gas lines. You want gas lines again? Those were horrible when they happened. Mainly during the 1970's.

HUME: This proposal doesn't knock the price down. It simply gives people money.

BARNES: I know, but it's more money to spend for gasoline.

LIASSON: Well, I think the most interesting thing about this is when Boehner says, someone would offer -- guess who that someone was? It was his fellow Republicans in the Senate. This party can't even get straight on how it's going to pander. I mean, at least they can pander in unison. But .

BARNES: They had a panel (ph) hit the Senate to find out where the proposal came from.

HUME: Oh, really?

BARNES: Oh yes they did.

HUME: Well, Bill Frist was for it.

BARNES: Bill Frist was for it. How did he get the idea? They finally figured out it was a staffer but nobody will admit to it.

HUME: I'm looking out the window to see if anybody is hanging from a tree over there.

LIASSON: The conservative talk show hosts have been up in arms about this. Boehner said he heard from his constituents. He didn't make this up. This is not a popular proposal.

KONDRACKE: This is beyond pandering. This is trying to buy off directly with a check.

HUME: The Democrats have their own giveback proposal.

KONDRACKE: Them too.

HUME: Pandering too?

KONDRACKE: Yes of course.

LIASSON: It's universal.

KONDRACKE: And the -- I mean, the $10 -- I don't know which is more insulting. They're both just a check that they're trying to give people in order to buy down their anger and it's not going to happen. It's not going to work. The only thing that is going to work is real -- now there is an idea, for example, to -- which will be voted on in the House to allow more imports of ethanol from brazil. We're short on ethanol. There's a requirement that cars be -- they have an ethanol -- certain ethanol -- we don't have enough. It's a congressional mandate.

HUME: What is it in service of?

KONDRACKE: That the corn manufacturers in the Midwest.

HUME: What is the reason for it, what is the argument for it?

KONDRACKE: Well, the argument for it is to make cleaner burning fuel and also -- and to achieve energy independence by not having to import as much foreign oil in the long run.

HUME: What we're going to do instead of import foreign oil is import foreign ethanol.

LIASSON: And eventually there is other sources of ethanol you could make. George W. Bush has recently gotten religion on CAFE standards, which could help in the long run.

BARNES: Is that religion? What religion is that?

LIASSON: He didn't like them before but likes them now.

BARNES: Doesn't like them now.

It's hard to figure out whether the whining by the public about the high gas prices is worse than the pandering by the politicians on Capitol Hill. And I think -- I think the politicians are winning.

HUME: When we come back, Democratic Senator Biden says dividing Iraq into three self governing regions. Good idea? Well, we'll ask the panel.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D) DE: The idea is to maintain a unified Iraq by decentralizing it and giving the Kurds, Shiites and Sunnis room to run their own affairs. The central government would be left in charge of the common interest of the country.

(END VIDEO CLIP)

HUME: Well, that is a serious proposal one presumes from a serious man, the ranking Democrat on the Senate Foreign Relations Committee a man who sees himself as potential president, Senator Biden. It is something -- it's accompanied, by the way, with a phased withdrawal of American forces. What about this idea, and does it, in fact -- how different is it from what's being done?

LIASSON: It might end up what's being done. We are not quite sure. There is some interest among the Sunnis and the Shias and the Kurds to have some level of autonomy.

HUME: Don't they have that under the current .

LIASSON: They have a certain amount and the big question all along is, how much more do they want and how much more they will get and how will the Sunnis like it since they happen live for the most part in an oil poor region, relatively compared to the south and north where the Sunnis (sic) and the Kurds are? In Biden's proposal which is a serious proposal. It might not be the best way to solve the problem but he's clearly thinking about it. He says that the central government should control border defense, foreign affairs and oil revenue, which is what they're fighting over in any federalism debate. But I think it's an important entry into the debate about Iraq.

KONDRACKE: Well, it is up to the Iraqis to decide. We have basically -- It's their constitution, it's their government. It's barely formed yet. The parliament really hasn't gotten working yet. They are supposed to revisit these issues of federalism and maybe they'll come to this decision. But I don't think it's our business to force it on them one way or the other.

The Iraqis claim -- at least a number of them - that they believe in an Iraq. You know, not three different countries. One of -- one other problem with this proposal is that internal security, under his proposal, would be left to the regions which suggest that the Shiites would have their one army, the Sunnis would have another, the Kurds will have another. How would they mix?

Furthermore in the central region you have a lot of mixing of population. I mean, what happens? Do the Sunnis then feel - do the Shiites in the central region feel that they're dominated by the Sunnis, that they are going to be oppressed by the Sunnis, that they're going to be killed by the Sunnis in which case you have an India Pakistan kind of sorting out, ethnic cleansing? That's not good.

BARNES: I can't imagine that the new federal government, central government in Iraq is going to want to spin off their own power. Now the Iraqis -- rather, the Kurds, already are fairly anonymous in the north .

HUME: Autonomous.

BARNES: Autonomous. But you have the huge problem in the city of Kirkuk around which there is a lot of oil. Saddam Hussein had thrown out a lot of Kurds and sent in all sorts of Sunnis to take over a lot of the city. He colonized it. The Biden proposal doesn't solve that at all.

Here would be my single biggest worry about it. If you make an autonomous Sunni region, as he said in his speech, the insurgents can't win but they could win in a Sunni autonomous region. That's where their strength is. He you could a little mini-terrorist state inside Iraq that would be exporting terrorism obviously to other parts of Iraq. I think that would be a significant worry. At least would be for me.

KONDRACKE: And if it's internal security, is the business of the Sunnis who are in charge of it, the insurgency will presumably dominate. You would have to only Sunni forces fighting against insurgent Sunnis. You wouldn't have any Shiites.

HUME: How does Senator Biden imagine this idea of his would come about by .

LIASSON: Well, it might come -- the worst way for it to come about would be for some kind of civil war. I mean, right now, this is a country, as Mort said, that is struggling to put together its government.

HUME: He's not proposing there be a civil war.

LIASSON: But I'm just saying .

HUME: Let's assume his best-case scenario, how does -- let's assume he's President Biden and he wants this to happen, what does he do, tell the Iraqis .

LIASSON: First of all, he can't tell the Iraqis to do it. But the fact is there are tremendous forces -- I don't know if they're centrifugal or centripetal, but the point is there are forces in Iraq that are already pushing for something like this. I mean, the Kurds enjoy the autonomy they have and they would like more and the Shiites would like more autonomy in the south. I think there are .

BARNES: No, no. The Shiites don't want a lot more autonomy. They are a majority. They want an Iraq. They are going to be people running it, for the most part. They would like all of it.

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