Special Report Roundtable - January 23

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE SPOKESWOMAN: With the president has tried to do this year's is actually come up with several of the policy areas, on the domestic side, where he believes that we can really work together. They are healthcare, energy, education, and immigration. Bold new proposals in healthcare and in energy.

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HUME: Well, those bold new proposals, Dana Perino describes there, are probably the newest thing that we'll hear from the president tonight. The energy proposal is one to reduce gasoline consumption by 20 percent over the next 10 years. And the healthcare proposal is basically an insurance proposal where he'd use a tax break on -- you'd get a tax deduction on your insurance coverage of up to $15,000. Above that, your insurance coverage, if it was worth more than that would be taxed. What about these proposals? What about this speech? How's this all shaping up -- panel.

Fred Barnes, executive editor of the Weekly Standard; Mort Kondracke, executive editor of Roll Call; and Mara Liasson, national political correspondent of National Public Radio -- FOX NEWS contributors all three.

Fred, what do you think?

FRED BARNES, WEEKLY STANDARD: Well, you know -- this is no disrespect to President Bush to say that a State of the Union Address in the last two year of a presidency is not as exciting as one early in the presidency, when the president has more political power, and of course, we have a Democratic now, but the president the way I understand it is, the president wanted a couple, at least, of big proposals, did not want to go out with a lot of mini proposals. So, he came up with this energy idea, which you mentioned, to reduce gas consumption in the U.S. by 20 percent in 10 years.

HUME: Gasoline.

BARNES: Yeah, gasoline. You know, stuff that goes in your car.

HUME: As opposed to natural gas -- or the stuff coming out of your mouth.

(LAUGHTER)

BARNES: Should I get up and leave? I'll continue and I'll continue despite that. And, you know, I think he and Democrats will come together on something like that. They'll accept most of his proposal and probably add some to it. Health care, I really don't think he's going to get anywhere. And that is the boldest proposal that he's come up with. In fact, I think we have a little bite from his speech talking about that.

HUME: You mean a quote.

BARNES: A quote from it. There it is.

HUME: "In all we do, we must remember that the best healthcare decisions are made not by the government and insurance companies, but by patients and their doctors."

Well Mort, how would this proposal affect that idea? How would it put that idea into play?

MORT KONDRACKE, ROLL CALL: Well, it certainly is not a government expansion. It is a -- it would be -- in fact, it's described by White House chief of staff, Josh Bolton, as a transformational and radical change to move the health insurance coverage out of employer --the responsibility of employers to individuals. Not mandating it, but giving them a tax deduction in order to be able to buy their own health insurance.

HUME: Would it also -- so, if your company provided it to you...

KONDRACKE: Well, presumably, there would be a gradual move out of the employer based system. It wouldn't be overnight. But Democrats are attacking it as something that would encourage employers to get rid of their employee coverage. And generally speaking, the private health insurance -- individual market, is much more expensive than the corporate market because of the corporations' pool all of their people. So, the Democrats are flatly all against this because they say that it amounts to a tax increase on people, union workers, for example, who have so-called Cadillac coverage.

And it would be a tax increase for them. But the -- what the president is saying that this deduction would be available to people who now lack insurance and enable them to buy it. Now, I asked Bolton how many, and he said five million, that they would cover five million out of the 47 million uninsured people. That's not great progress.

HUME: When they're talking about uninsured people, they're not talking about -- are they talking about people who have no Medicaid coverage either?

KONDRACKE: No. No, no, no. I mean, some...

HUME: People who don't have any private insurance.

MARA LIASSON, NATIONAL PUBLIC RADIO: Who don't have private insurance and maybe their income is too high to get Medicaid. But look, the thing about this proposal, which is really interesting for this president, is that it is, in affect, a tax increase because you're making some people's plans less deductible...

HUME: It's a tax increase for some, but...

LIASSON: And a bigger deductibility for others. That's right, but that's sill interesting...

HUME: It's supposed to be revenue neutral.

LIASSON: Yes, but it's still...

HUME: It wouldn't raise any additional revenue.

LIASSON: Wouldn't raise any additional revenue

HUME: So, it redistributes the tax burden.

LIASSON: Redistributes, now this is the kind...

HUME: The tax burden.

LIASSON: The tax burden. Now this is the kind of thing that, in the past, you know, you would expect people, like Grover Norquist, who has actually endorsed this plan, to attack because it's a tax increase...

BARNES: That is not right. That's simply not right. I mean -- no, no, no...

LIASSON: You're taking away a tax deduction.

BARNES: No, no, no, look, this is revenue neutral, it's not a net tax increase, at all. I mean, Grover Norquist doesn't go around attacking things like this. According to the administration, 80 percent of the people will actually pay less taxes and those of us, probably sitting here, who have Cadillac health insurance plans, we will pay more tax.

(CROSSTALK)

HUME: Hold it a second...

BARNES: Wait a minute. Wait a minute. This -- if you'll try again, and I think this is where you were going to say that this is a tax increase that Bush said he will never have a tax increase, I just don't think in this case that dog will hunt at all.

LIASSON: Well, it shows that the president is open, now that he is facing a Democratic Congress, to all sorts of things. He also -- he has a lot of bipartisan rhetoric in this speech, which I think is appropriate, given the new political realities. He even talk about this special advisory council on the war on terror that he wants to set up. You could say that it's just symbolic. I think we even have a quote from the speech on that.

"Both parties and both branches should work in close consultation," on the war on terror. But, the point is he's making a lot of rhetorical -- yeah, "...special advisory council on the war on terror, made up of leaders in Congress from both political parties."

He's making a lot of symbolic, rhetorical gestures to the Democrats and it'll be interesting to see how any of it followed up.

BARNES: On that council, I think Democrats have already rejected it. Haven't they? Said they have some council of their own. The only thing about the health -- look, the big difference on the healthcare thing is, and I agree, the Democrats are not going to buy it, they want to use more government -- more government control and mandates. What the president's trying to do is bring in more free market reforms and in this case, there would be some pressure, under this new plan if it were adopted, to have people get -- shy away from excessive health insurance.

KONDRACKE: The one -- I think the one place where he could get a deal here is on immigration. And he's going to go back and ask for a comprehensive immigration reform. And what the White House wants to do is to get this done as early as possible in order to get it off of the agenda for the 2008 presidential campaign, especially in the Republican primaries where the party is split on it. And so if they can get it done, along with the Democrats fast, then it would be out of the way and you wouldn't have the parties split over it anymore.

HUME: When we come back with our panel, there seems to be some signs of progress on the ground in Iraq, while the bloodshed continues, but the generalists (sic) say the situation is dire and the. Discuss that after a break.

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LT GEN DAVID PETRAEUS, MULTI-NATL FORCES CMDR NOMINEE: It is, however, exceedingly difficult for the Iraqi government to come to grips with the toughest issues it must resolve while survival is the primary concern of so many in Iraq's capital. For this reason, military action to improve security, while wholly sufficient to solve Iraq's problems, is certainly necessary and that is why additional U.S. and Iraqi forces are moving to Baghdad.

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HUME: That is General David Petraeus who is going to Iraq as the senior U.S. commander over there. He was one of the architects of a strategy of counter-insurgency which involves more American troops in Baghdad, in particular. He is also up for four-star general, which is one of the reasons he was on the Hill, that's a confirmation hearing, today for his -- for his elevation to four-star general. He's a three-star now.

He also said, I should mention, that the situation in Iraq -- Baghdad, I think he meant -- was dire and that it is not -- there's no military solution. At the same time, you heard what we just played. So, what about this? How likely is it that the president's hand will eventually get stayed on this by the political resistance in Congress, which to some extent is certainly now bipartisan?

KONDRACKE: Well, I don't think the president's hand is going to be stayed. Petraeus said it is hard, but not hopeless. That, you know, that's not to say that he's sure that we're going to win and what the president wants is to win and Petraeus said that he was concerned about whether 21,500 is enough troops.

HUME: Right, so did McCain.

KONDRACKE: Yeah. So, you know, one would guess that you would want to err on the side of more troops if you had any doubts about it and the White House says that if Petraeus asks for more troops, he'll get them. But apparently, he hasn't asked, and I don't know why. But, so, in any event, look, there is some progress being shown in Iraq, 600 or so Sadrite fighters, Mahdi Army people have been detained. Whether they'll be detained on a permanent basis or put out of commission or something like that is yet to be determined. But, you know, there is some progress being shown and so, you know...

HUME: The reason why people say that is progress is because it shows a different attitude on Maliki's part, saying we haven't seen this before.

KONDRACKE: Right, so, you know, so, you know, when questioned about whether one of these resolutions passing would hurt the morale of the troops and encourage the enemy, Petraeus basically said yes and you'd think that that would say to the Democrats, well, let's hold off on this and give this new commander a chance. I don't think that's going to happen.

LIASSON: Oh, I don't think it's going to say that to the Democrats. The question is how much Republican support is the president going to lose. I think that we're really in a race. I mean, which is going to happen faster, some kind of positive improvement on the ground there, that I think will cause Republicans to stick with the president or will things spin out of control and will he start losing more and more support? I mean, this week you saw John Warner join with other senators with this resolution, basically, of disapproval, but it wasn't as harsh as the one that Biden and Levin are coming up with. But I think that something has to happen. Petraeus is talking about May, he thought, that maybe you know, Baghdad could be quieted down. And I think that's the key.

BARNES: Well, it is a key, but you know, he did undercut those who include most of the senators, Republicans and Democrats up there, who are going to vote for this resolution who say, "but of course, we support the troops." And when he says, these are people -- when he says the resolution would discourage the troops and encourage their enemies, that doesn't sound like they're supporting their troops -- supporting the troops. I think he undercut them substantially. And besides, they're the people who vote for one of these resolution which would say no more troops being sent over there. Their line now would have to be, well we support the troops, but we won't reinforce the troops. I think he did a great job in, whether he attended it or not, of undercutting that hollow notion of so many that they support the troops. If they vote for either of these resolutions, they do not support the troops. I think Petraeus made that clear.

HUME: Do you agree with that Mort?

KONDRACKE: Yes, absolutely. Look, I don't see why the Democrats, as I said, don't just cool it for a while. I mean, everybody knows that this is in the balance. I don't know why they would want to tip the balance or be accused of tipping the balance against enterprise -- against the possibility of victory. I mean, they made their point...

HUME: Down deep, though, do you think -- I mean, they say they think we must succeed in Iraq, but do they think they mean that?

KONDRACKE: No.

LIASSON: I think they believe that we can't.

HUME: Can't.

LIASSON: We can't. And the best thing to do is to cut our losses.

HUME: But only a few of them, John Murtha is one, is saying all is lost and we got to get out of there. That we can't succeed.

KONDRACKE: Well, I think what it what is cover. They want to say...

HUME: The Democrats or the Republicans?

KONDRACKE: The Democrats. Well, and the Republicans who are against the surge too, that what they want is to say that we're going to have some sort of redeployment and that that will pressure the Iraqi government to do what it's supposed to do. You know, my guess is that were there to be -- that's not going to happen, I mean, Bush is going to pursue this policy, but were it to happen, I think that everybody would be discourage who's on our side and they would be -- it would make the situation more chaotic.

HUME: So, all right, let's talk about this -- circle back to the State of the Union. Will he get a warm reception?

LIASSON: I think he will get a mixed reception.

KONDRACKE: Appropriately polite and no more.

BARNES: I agree with Mort.

HUME: And how will -- and will he -- how will he do in this new atmosphere, will he be more effective, less effective, rattled, what?

LIASSON: He'll be better than he was giving that speech in the library just to the camera.

HUME: Well, that's a low standard.

KONDRACKE: Look, I never know from day to day what president -- there is no grand vision here that I can see. It's a defense of the war on terrorism that we've heard before, I think...

HUME: This is -- this -- everything depends on Iraq, doesn't matter. That's all that matters.

KONDRACKE: Yeah, but...

HUME: Do you agree with that?

KONDRACKE: OK, but apparently it's not an Iraq speech, it's a war on terrorism speech.

BARNES: Mort, maybe you hadn't noticed, he's in year seven now. We know his vision.