Special Report Roundtable - July 28

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The temptation is to say it's too tough, let's try to -- try to solve it quickly with something that won't last. Let's get it of the TV screens, but that won't solve the problem and it's not going to help the Lebanese citizens, have a life that is normal and peaceful.

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WILSON: The president today talking about the situation in Lebanon along the Lebanese-Israeli border. He was there with British prime minister, Tony Blair. It's time for some analytical observations from Fred Barnes, executive editor of the "Weekly Standard"; Mort Kondracke, executive editor of "Roll Call"; and syndicated columnist, Charles Krauthammer, all, of course, are FOX News contributors.

Well, let's start, if we could, with what happened in the White House. Blair comes over, they don't call for an immediate cease-fire, but they are going to try to move toward getting a multinational force in there -- Fred Barnes.

FRED BARNES, "WEEKLY STANDARD": Well, they agreed more than I thought they would, actually or more than I thought Blair would agree with Bush, that you really do have to lay down some conditions in a cease-fire, otherwise, you're going to be -- you'll have the same situation pop up again, unfortunately, there's no reason to believe that disarming Hezbollah is one of the conditions. I mean, I think the only people who could have done that were the Israelis and they haven't made an all-out assault on the Hezbollah area, and so I think we're going to have a Hezbollah that's still going to be armed and they may not be rearmed by the Syrians and the Iranians, but -- and they may be cordoned off from the border, but Hezbollah will exist.

WILSON: Charles, let me come to you on that point, because James Rosen, my colleague, has reported today that inside the Israeli cabinet meetings there has been a dispute about what should happen. Should they be more aggressive? There seems to be some disappointment of what the military has accomplished on some levels within Israeli government. What do you hear?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, the fact we're even discussing that in public, tells you what kind of disarray the Israeli (INAUDIBLE) is in. In the middle of a war, you don't want leaks out of the war cabinet, you don't want anyone to know there are divisions, either in assessment and planning. But apparently there are. It looks as if the president and the secretary of state intended, at the beginning, to give the Israelis running room to destroy Hezbollah or disarm it. And it looks as if the knew prime minister, Ehud Olmert, just decided he's going to stand at the line of scrimmage.

I can understand the hesitation. Obviously the Israelis don't want to lose a lot of soldiers and obviously they're taking a tremendous amount of abuse and heat from the rest of the world, no matter scrupulous they are in conducting the war.

Nonetheless, if Olmert had decided that the provocation of the kidnapping would require a response that was a serious one -- I mean, he could have just done a small tit-for-tat, kidnapped a few Hezbollah, had a trade, but he didn't, he decided to attack heavily. Well, either you're going to do it or you don't. And to go halfway, as he apparently is, leaves America in a quandary, because it looked as if you would have an opportunity to change that region and disarm an ally of Iran and to give Iran a black eye. It looks as if it's not going to happen.

WILSON: Mort.

MORT KONDRACKE, "ROLL CALL": I completely agree with that. The fight seems to be between the air force and army. Now you have Olmert and the rest of his top echelon are not experienced military people, as previous leaders of Israel have been. So, the air force comes along and says we can do this from the air and the army...

WILSON: As air forces always do.

KONDRACKE: The army, apparently, has been arguing that you can't do it that way, that you've got to invade in force and clean out Hezbollah and capture the rockets, neutralize them and so on, and Olmert has decided, evidently, because he doesn't want to risk the casualties and the causalities would be high, the Israeli casualties would be.

WILSON: And the time that they have gone in they found the fighting to be a lot more fierce than they expected.

KONDRACKE: Absolutely. Absolutely. But, you know, it's the only way it's going to work. But the net result is that the monsters of the world are going to win. You know, this is Hezbollah, which is allied with Iran, Iran is working on a nuclear weapon. Nobody's stopping Iran from doing that and one of these days, we're going to have a catastrophe as a result of all this. And I don't know whether -- it may be too late. If Iran gets a nuclear weapon, they will be able to use that to prevent any -- to deter any kind of action on the part of any of us in the civilized world, and that's going to be terrible.

WILSON: Fred, what about this idea when we heard the president say, as we came into this segment, look, it's unpleasant to watch, it's on the TV screens, and there's always a feeling that we should try to do something to stop violence when people are getting hurt. But he's still standing strong that, you know, we don't immediately call for a cease-fire.

BARNES: And that has been consistently the position, as Charles said, it was to give the Israelis running room they could cripple or destroy Hezbollah. And now we know that's not going to happen, despite the running room, and so they're going to, you know, lesser measures taken in some kind of a cease-fire that may go into effect as early as late next week. But, you know, I think Americans have to realize that this is what we see there, Hezbollah is the front line -- fighting the front line battle for Iran and Islamic extremism and it's a battle against the West and the United States, as well. If Israel doesn't win there, then neither does the United States.

WILSON: Quickly.

KRAUTHAMMER: What you saw at the press conference was America and Britain accommodating themselves to the new reality on the ground, meaning Israel is going slow. And secondly, giving Blair some cover in the call for a cease-fire.

WILSON: Got to leave it right there. When we come back with our panel, the minimum wage has been five bucks and change for nearly a decade. Should it go up? Back in a second.

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PELOSI: So we have an issue of fairness to the American worker, we have the republicans with a political stunt, because we have made the issue too hot to handle, and we have a process that will be dead on arrival in the Senate, most unfortunate.

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WILSON: House minority leader, Nancy Pelosi talking about the attempt to raise the minimum wage but tied to other things the republicans want. We're back with our panel to discuss that.

Look, $5.15 an hour in today's economy doesn't seem like a lot of money, but every time you talk about raising the minimum wage for working people on the lower end of the economic scale, it gets very complicated -- Fred.

BARNES: Yeah well, $5.15 isn't that much and of course, few people are paid that. You know, Wal-Mart, all the chains, McDonald's, they don't pay that, they pay $7.25 or more. You know, who this not going to help, it's not going to help a single mother, poor single mothers, it's not going to help poor African-Americans. You know who it helps? It helps second and third earners in families that are no where near the poverty line.

I talked today to a guy who's done a study on this, Richard Burkhauser at Cornell University, an economist who's studied the minimum wage for a number of years and he along with all the other studies, or at least most all of them, have found the same thing. The people who lose, who lose their jobs or where jobs aren't created are teenagers, high school dropouts, and African-Americans under 25. It is for liberals, this is a theological issue. They're in favor of raising the minimum wage, even if it's harmful. It's like, you know, raising the tax on capital gains even if it harms the economy, they're for it. It's a theological matter.

WILSON: Mort.

KONDRACKE: Look, we've got full employment, right? And it's not as though workers are going to get fired if they're paid more.

BARNES: Yes they are.

KONDRACKE: Oh no, they're not. Fred -- all right, better go out and look for illegal aliens then and pay them under the table. Look, this minimum wage has not been raised for almost 10 years. CEO pay at the biggest 100 corporations goes up 25 percent a year, and you know, it is -- and they -- what the republicans are trying to do is cover themselves here. Their trying -- the House republicans want to go home and say we voted for the minimum wage, knowing full well that it's tied to this estate tax, which is an obscenity unto itself, elimination. That's for the very highest, richest, fattest cats in the world, and they know that that won't pass the Senate, so it's a fraud. It's a political fraud. And the republicans ought to be ashamed of themselves.

KRAUTHAMMER: I was going to take the reasoned position.

WILSON: Which is?

KRAUTHAMMER: .between the two extremes, but after hearing Mort, I guess I'm just going to have to attack him on this.

(LAUGHTER)

KRAUTHAMMER: Look, the minimum wage -- estate tax first of all, penalizes a lot of small businesses and the reason republicans are trying to match a minimum wage hike with a state tax relief is that it says to a small business owner, yes, you're going to be hurt if the minimum wage is raised, but we're going to try to help you on the back end when you die so your heirs are at least going to have something to inherit and not nothing. SO, I think it's a reasonable combination of those two. You want to raise the minimum wage but if it's not economically determined, if it's not as a result of increased productivity, it will be -- it's going to harm business and it also is going to also eliminate some people from the wage market, from the labor market.

KONDRACKE: Productivity is surging and workers are not sharing in those productivity gains.

(CROSSTALK)

KONDRACKE: They're not. They're simply not. The wages have been flat.

KRAUTHAMMER: The way to answer what you're saying -- so why not raise it $10 an hour. The reason is if you raise it $10 an hour, it will destroy jobs.

KONDRACKE: It hasn't been raised for 10 years.

KRAUTHAMMER: It will always destroy jobs it's always a question -- it's only a question of how high you want to go.

BARNES: Mort, do you know someone who makes $5.15 an hour?

KONDRACKE: Of course I don't. Well, I suppose I do, but I don't go around asking people whether they the make minimum wage or not.

BARNES: This has been studied over and over again, Burkhauser found, and I don't think there's any disputing it, 87% of the benefits will go to people who are way above the poverty line. If you want to help the poor, the way you do it is with the earned income tax credit.

KONDRACKE: You denounce that all the time as welfare.

BARNES: I'm not for it, but that's one way you give money to the poor.

KONDRACKE: I would be in favor of an earned income tax credit in lieu of a minimum wage, I would, but that's not on the table.

WILSON: Well, let me ask you the bottom line here, is given the fact that it's an election year, this has become an election year football. What's really going to happen?

KRAUTHAMMER: It's going to pass.

KONDRACKE: Nothing.

KRAUTHAMMER: No, it's election year, it'll pass.

KONDRACKE: Oh, it's going to pass the House, but it's not going to pass the Senate, because the Senate has rejected the estate tax.

BARNES: And the Senate has already voted against raising the minimum wage, Mort.

KONDRACKE: Right.