Panel Previews Races and Possibile Stimulus Package

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MIKE HUCKABEE, (R) PRESIDENTIAL CANDIDATE: I look forward to not just winning tomorrow, I look forward to a year from now being able to stand on that platform, take the oath of office, and remember that if it hadn't been for South Carolina, it wouldn't have happened. Tomorrow, South Carolina, I need you.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: And whether I win or lose tomorrow, and we will win tomorrow--we will win tomorrow!

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BAIER: He caught himself there. Mike Huckabee, John McCain on the stump today. "We will win tomorrow!"

Of course, tomorrow is the South Carolina Republican primary. Polls open at 7:00 a.m. We have a new FOX News Opinion Dynamics poll out today, and there you see it--John McCain at 27 percent, Mike Huckabee at 20, Romney at 15, and Fred Thompson at 11.

So let's analyze the Republicans first and then the Democrats. Some analytical observations about all of this from Fred Barnes, Executive Editor of "The Weekly Standard, Mort Kondracke, Executive Editor of "Roll Call," and syndicated columnist Charles Krauthammer, Fox News contributors all.

You heard, Fred, Mike Huckabee and John McCain catch himself that he is going to win tomorrow. What do you think? Is the military--the veteran base in South Carolina big enough to throw McCain over the top versus the evangelicals that support Huckabee?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": I think yes. I think it is.

McCain campaigned very strongly against President Bush there in 2000, and developed a base, particularly among veterans, but not just that. Remember Lindsay Graham, the Senator there, is McCain's biggest supporter in the world, and he's the Senator from South Carolina. So he has real strength there.

Mike Huckabee--it does help that he's a southerner and a Southern Baptist, and there are a lot of Southern Baptists in South Carolina. I don't think there are enough of them that will be for him, but we'll see.

But I think McCain enters tomorrow's primary with an advantage. And then, of course, Romney, it will be a god day for Romney, too, because he has to win the Nevada caucuses among Republicans because nobody else is contesting him.

BAIER: And what about Romney? Let's say he wins Nevada, and then in South Carolina, maybe finishes third. Is that a big deal?

MORT KONDRAKE, EXECUTIVE EDITOR, ROLL CALL: If he finishes third, that means that Fred Thompson finishes fourth, and that we've seen the last of Fred Thompson, I think, which means that Romney will inherit the regular Republican mantle from then on out, I think, unless Rudy Giuliani makes a showing in Florida.

But I've talked to McCain people who are worried that this evangelical base that Huckabee has--according to one poll I saw, 62 percent of the vote in South Carolina is expected to be evangelical, and Huckabee has something like a 13-point lead among that group.

And what happened in Iowa was that with very little outside organization, they sort of got themselves to the polls and gave Huckabee a victory. And these people are worried about whether McCain has a similar organization that can turn his people out.

And what Huckabee has been doing is pounding. He is declaring that he is for a constitutional amendment to ban gay marriage and ban abortion. He is beating McCain up on immigration. He says--he is playing the confederate flag card.

This is supposed to be a nice guy. I don't think so, but it may be enough to bring the evangelicals in.

BAIER: So, Charles, if Huckabee does not win South Carolina, is this evidence that if he can't win South Carolina he can't win more broadly across the nation?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think so. It will mean that he is a sectarian candidate of the Christian evangelicals. I think if McCain wins tomorrow, I think he wins the nomination.

Romney would have a chance to sort of slug it out. He has the money, the organization, and he could pick up a few states here and there. He might have a chance, but McCain would be in a commanding lead, because it would mean that Huckabee is a very restricted candidate.

However, the problem is that Huckabee's numbers at another poll are tied with McCain, and if you look at how he polled among evangelicals in Iowa, he got half of them. The polls in South Carolina show him only with a 13-point lead among evangelicals.

If you assume that the split will be more like Iowa, in which he gets half, Huckabee wins.

BAIER: Let's talk about the Democrats. They obviously have the Nevada caucuses tomorrow, a big deal for them.

This week, Barack Obama told a newspaper editorial board there in Nevada that he believed that Republicans really had the mantle looking forward--let's not put this up yet--that they essentially had the vision going forward.

And today Hillary Clinton came out and had a little bit of a pushback on that.

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: My leading opponent the other day said that he thought the Republicans had better ideas than Democrats the last ten to 15 years. That's not the way I remember the last ten to 15 years.

BAIER: Now let's put up the full screen. This is Obama's campaign response: "It's hard to take Hillary Clinton's latest attack seriously when she is the one who supported George Bush's war in Iraq, the most damaging Republican idea of our generation.

While others were triangulating and poll testing their positions, Senator Obama has been fighting for progressive ideals for over two decades."

Fred, what about this back and forth about Republican in the Democratic Party?

BARNES: It is typical of the Democratic presidential campaign when they agree on all the big issues whether it is Iraq or healthcare, immigration, taxes, they agree on all of that, so they fight over the little things, picking out something that Obama said. Hillary jumps on that, or they fight over expense, or who is a change agent. It's pretty silly.

But the truth is, in the 1990's, and I think through the Bush campaign in 2000, Republicans did have more and better ideas. Their exhausted now, they seem to have run out. But during the period of time Obama was talking about, I think he is unquestionably correct.

KONDRAKE: What Obama said was that Ronald Reagan was a transforming president. That is patently true.

But in the same interview he also dismissed Bill Clinton and said that he wasn't a change agent. That is not wise, especially because Bill Clinton traditionally has been so popular among Democrats, and it ignores the fact that Bill Clinton really did change the face of the Democratic Party.

Instead of being far left, he moved it to the center on things like welfare reform and crime and stuff like that. And it would have been wise of Barack Obama and gracious of Barack Obama to give Bill Clinton credit for that.

BAIER: Quickly Charles, could Barack Obama have mentioned President Reagan perhaps to make a run in California?

KRAUTHAMMER: He is trying to show himself as a transcendent figure. Reagan was seen as the radical right, radical right, and has become in retrospect the great American of the last half century. So he's trying to say even though I am a liberal Democrat, I can become like Reagan.

You notice with Obama, whenever he is attacked on any issue his resort is she voted the wrong way on the war. Experience--what about the war vote? New ideas--what about the war vote?

It works among Democrats, but it's about all he has whenever he is attacked.

BAIER: That's it for this topic. When we return with our panel President Bush unveils what he thinks would be a good idea as far as the economic stimulus package. The debate is happening up here on Capitol Hill and at White House. Will all this work? That's next.

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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: The growth package must include tax incentive for American businesses, including small businesses, to make major investments in their enterprises this year.

Giving them an incentive to invest now will encourage business owners to expand their operations, create new jobs, and inject new energy into our economy in the process.

To be effective, a growth package must also include direct and rampant income tax relief for the American people. Americans could use this money as they see fit.

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BAIER: That was President Bush today talking about what he thinks needs to be in an economic stimulus plan. The details of that plan still have yet to be worked out with Capitol Hill.

Back with our panel--Mort, what about the details? When do you think we will get them, and is there harmony on this issue between Republicans and Democrats?

KONDRAKE: Amazingly, both Republicans and Democrats are in a mood to agree on something. I mean, they've been fighting like cats and dogs for the last year, achieving nothing.

Well, they've come back from break, and they've decided that, facing recession and facing polls that indicate that the public is deeply unhappy with both of them for not getting anything done, that they're going to get this done, I think.

And the negotiations will begin on Tuesday. The congressional leaders are going to go down to the White House, and the Democrats are talking about passing this thing in 30 days.

It's $145 billion dollars a year--one shot, $145 billion, one percent of GDP, which is larger, by the way, than any Democrat has proposed in their package, and it will be a deal.

I mean, the president will get--you saw what he is asking for is targeted business depreciation breaks. And the Democrats will get, in addition to money, tax rebates for taxpayers, will get some sort of money put in the hands of people who don't pay taxes.

KRAUTHAMMER: I find it a bit less amazing that the two parties agree on sending airplanes over America and dropping dollar bills out of it, which is essentially what this Bill is going to do. It's pumping the money into the economy, and at least a part of it is going to be actual rebates of $800 a person, $1,600 for a couple.

What's happening here, I think, though, is this is going to be one percent of GDP, and this is to counteract the effect of the oil shock that we've had since August, which has essentially suck $150 billion out of our economy.

It wasn't an oil shock happening immediately, it was a rolling one, which was less noticed. But this will be exactly counteracting that effect, the money sucked out because of higher gasoline, and putting it back in on behalf of the government as a way to counteract that and to restore the economy to the state it's in, which is already weak because of the structural issues with the mortgages and the housing crash.

BAIER: The last time the government sent out a tax rebate check in 2001, it did spur the economy, didn't it?

KRAUTHAMMER: And this will have an immediate effect because it will undo the effect of high gasoline.

BARNES: That wasn't the part that had the big effect. A lot of people, as we discovered later, actually saved that. If I get a check for $1,600 I'm spending it, and I think a lot of people will.

The key is that the Democrats and Republicans and Bush have different incentives here. Bush wants a package where one sends out the check to get some expensing, which means immediate depreciating for business. The best they would have would be 100 percent expensing over a couple of years, and then you would really get an effect.

And Democrats will get something like extending something like extending unemployment insurance, or something like that. But their incentive is, the Democrats in Congress, desperately want to do something in a bipartisan fashion, because they refused to do it at all last year and have been zinged for it, they've really been criticized.

So that's their incentive. Bush wants the thing, and so they're going to get a deal here.

BAIER: The House Speaker, everyone is saying, is handling this very well. Hillary Clinton today said that it doesn't go far enough even though the details of the plan are not out yet.

KONDRAKE: Nothing that George Bush does could possibly be correct, according to Hillary Clinton.

BARNES: Her problem was that she proposed spending that wouldn't take effect at any time soon. That doesn't help.