Bob Corker, Debbie Stabenow, Tom Cross, Abner Mikva, Roundtable

CHRIS WALLACE, HOST: The Senate says "no" to an auto industry bailout. Now, will the president save the big three?

We'll talk with two Senators leading the debate, Republican Bob Corker, architect of a tough love proposal to help the carmakers, and Democrat Debbie Stabenow of Michigan, a strong advocate for the auto industry.

Then the governor of Illinois stands accused of trying to sell Barack Obama's Senate seat. Will he be forced from office?

We'll find out from Tom Cross, the leader of State House Republicans, and Abner Mikva, Obama's mentor, who's advising the state attorney general in the case.

Also, has the president-elect been stained by his state's political corruption? We'll ask our Sunday regulars, Brit Hume, Mara Liasson, Bill Kristol, and Juan Williams.

And our power player of the week paying a Christmas tribute to the nation's fallen veterans.

All right now on Fox News Sunday.

And hello again from Fox News in Washington, where there is some breaking news to report.

President Bush landed in Baghdad this morning for a surprise visit with Iraqi leaders and U.S. military officials. The president is expected to sign the recently approved status of forces agreement with the Iraqi government.

Also, this weekend, the Bush administration is working on a taxpayer bailout to prevent the collapse of America's troubled automakers. The White House abruptly changed its policy on helping Detroit after the Senate voted down a rescue plan.

Well, joining us now to discuss what happens next are two key Senators, Republican Bob Corker of Tennessee and Democrat Debbie Stabenow of Michigan, who joins us from her home state.

Senator Corker, when I came in to greet you in the green room a moment ago, you were on the phone with the White House.

Where does the bailout of the big three stand right now? CORKER: Well, it's my understanding that Treasury officials are actually going through the balance sheets of the companies, talking with them about where they are.

Each of the companies has a very different situation, although both Chrysler and GM are on the verge of bankruptcy, I think just a few days away.

So they're assessing their options. Obviously, the reason I was talking to them is to advocate some options to them.

WALLACE: What do you want to see?

CORKER: Well, look, I -- we have a problem and that is we have a group of people who think that the companies ought to go bankrupt and go through Chapter 11 and then we have a group of people who just want to put money on top of a capital structure that will not work.

General Motors has $62 billion in debt and, even in healthy times, cannot pay that back. And then every car they make, they're at a competitive disadvantage because they are disadvantaged by their labor costs.

So we put forth a plan that actually has shared sacrifice, that causes the debt-holders to reduce their debt by two-thirds so the companies are actually viable to do some things on something called VEBA, which actually causes the union to get the things that they have bargained for, but on the other hand, causes them to become competitive with Nissan, Honda, Toyota and BMW sometime in the year '09, as certified by the secretary of labor.

WALLACE: But, Senator -- and I'm going to bring in Senator Stabenow in a moment -- this is what the negotiations in the Senate broke down over.

CORKER: Right.

WALLACE: You were asking the UAW for concessions. They weren't willing to give them. The bill failed and then the White House...

CORKER: No, no, no, no.

WALLACE: Well, let me just -- the White House right away said, "We're going to bail them out."

Why shouldn't the UAW believe, well, if the White House gets too tough with us, they'll eventually blink and they won't force any concessions on us.

CORKER: Well, that is what happened, but the bill that failed was a White House bill, not my proposal. And had the UAW just agreed to be competitive by the year 2009, as certified by an Obama secretary of labor, this bill would've passed with 90 votes.

WALLACE: I understand that.

CORKER: And the reason that it didn't pass was the -- and Gettelfinger told me this -- he knew the White House...

WALLACE: The head of the UAW.

CORKER: He knew the White House would bail them out. So at the end of the day, they knew the TARP funds were available and, unfortunately, it kept us from doing something that I think would cause the auto industry, GM, Chrysler...

WALLACE: But if I may, just briefly. The direct question is doesn't that same dynamic exist now. If the White House were to insist on all of these concessions, Gettelfinger is going say, "You know what? They're not going to let us go down. I'll resist the concessions and the White House will blink."

CORKER: Well, of course, I think we should deal with it legislatively. OK. But if that's not going to occur, look, I'm here, I can be down to the Capitol in about an hour. I think Chris Dodd can be down from Connecticut.

I think we could solve this appropriately legislatively. But if the government, if the administration is going to use TARP funds, they can write in these same exact conditions.

The big conditions of bondholders taking huge cram-downs could be written in to what they do with TARP. So they could do exactly the same thing and, of course, the benefit they have, they don't have to negotiate. They can say, "This money is available, but it's only available under these conditions."

WALLACE: Senator Stabenow, you favor a bailout. How tough should the administration get in demanding concessions for the $14 billion or however many billion it ends up being from the auto companies, from the auto workers and from the bondholders?

STABENOW: Well, Chris, first of all, let me say we're in a global credit crisis. Every other country in the world that has an automaker presence is stepping up to help them get through that because they know it's critical to their economy, it's critical to jobs, and it's critical to their national defense.

So, so far, we're the only ones in America that have not understood that and stepped up.

I welcome the White House doing that. What Senator Corker is talking about, though, is a structure, first of all, a loan. We had in front of us a $14 billion loan, bridge loan, that would allow them to get through the end of March and to do all the restructuring that he is talking about, bringing administration, the workers, the bondholders, everybody to the table equally to get involved in making the kinds of cutbacks and concessions...

WALLACE: But, Senator Stabenow, you have...

STABENOW: ... if I may...

WALLACE: ... you have -- if I may. You have the leverage now. So why not, before they get the $14 billion, say to everybody, up front, agree, not in March, but now, before you get the money, agree to these concessions?

STABENOW: As far as I'm concerned, as long as everyone is at the table equally, that's fine. The Senate Republicans wanted to negotiate once with workers, who've already been the only ones that have taken cuts, once with workers, first, and then bring everyone together.

And I think it's very important for us to talk about reality, as well. If we talk about hourly wage rate in America, the fact is that GM workers make $0.22 an hour less than Toyota. Chrysler makes exactly the same and Ford makes $1 less.

The reality is that it's health care and pension costs. We're the only ones that don't have national health care and pension policies of all the countries that we are competing with.

So if, in fact, we're talking about -- if Senator Corker is saying people shouldn't get their pension or shouldn't get their health care, and I'm sure he's not, but if he is, I mean, that's really what we're talking about.

WALLACE: All right. Let me -- let me...

STABENOW: The structure we need is health care reform. If we want to get to the costs that Senator Corker is talking about, then we need to join with our president-elect and have real health care reform.

WALLACE: Let's -- and I know that you're upset with some of the things or take issues with some of the things that Senator Stabenow said, Senator Corker.

The president of the UAW, Ron Gettelfinger, held a news conference Friday, in which he said or suggested that you and other Republicans in the Senate, during his negotiations, tried to set him and the union up. Let's watch.

(BEGIN VIDEO CLIP)

RON GETTELFINGER, UAW PRESIDENT: The GOP caucus was insisting that the restructuring had to be done on the backs of workers and retirees rather than having all stakeholders come to the table.

They thought perhaps they could have a twofer here, maybe. You know, pierce the heart of organized labor while representing the foreign brands.

(END VIDEO CLIP)

WALLACE: Senator Corker, I don't want to get into the details of hourly rate, wage rates and things like that, but I want to get to the more general question.

In your effort to negotiate a deal, were you trying to do it all on the back of the unions or were you saying everybody had to get what's being called now a haircut?

CORKER: Everybody. First of all, I have a General Motors plant in my state. It's very important to the state.

I have been a card-carrying union member myself. We began a process by first getting the bondholders to take $0.30 on the dollar, a $0.70 haircut. That had to happen first by March 15 and if it didn't...

WALLACE: And they agreed to that.

CORKER: They have agreed -- they got -- yes. They have agreed that if they don't get there, the company has to file bankruptcy.

So General Motors was at the table, Chrysler was at the table, Ford was at the table. They were in the ante room. They agreed to that.

Secondly, we agreed to the fact that the VEBA payments was, without getting into a lot of details, $21 billion that General Motors has. Half of it would be paid in stock, half of it in cash.

So that's off to the side. We had everything worked out except for one thing and that is that the UAW had to be competitive. Now, that's a loose term. And if Deb Stabenow is right that the UAW actually gets paid less than Nissan and Toyota and Honda, then it seems to me it's a no- brainer.

Gettelfinger, I called him the next day and said, "Look, please, I'm pleading with you. This is not something that's that difficult. I'm pleading with you to let the"...

WALLACE: And he said?

CORKER: And he said, "We know the administration is going to come forth with TARP moneys and I am not going to agree to do this with you."

WALLACE: Senator Stabenow, do you think there was an effort by either Senator Corker or other Republicans, as Ron Gettelfinger suggests, to break the union?

STABENOW: Well, Chris, let me say this. Bob Corker and I have talked throughout this last week. I believe he is sincere and came to the negotiating table in a sincere way.

I also believe, and it was very clear, that his leadership did not want an agreement. While Senator Corker was in the room and while they were negotiating and actually coming to an agreement, leadership staff, Republican staff were already circulating a story that the unions had killed the deal.

They did not want an agreement. And here's my biggest concern. That is a political agenda of the leadership at a time when the economy is teetering on the edge and we have potentially three million people that will go over into the unemployment rolls, taking us off the cliff, and we have the largest manufacturers in the country, which is the backbone of the middle class of this country.

That is not a slogan. The reality is we built the middle class because we could build things and the fact is that manufacturing is on the edge in this country.

This is not the time for a political agenda. Yes, bring everyone to the table. The bill we had in front of us was tough. I believe if Senator Corker and I and others by ourselves, without the Senate leadership looking over his shoulder, were able to come together, we could get an agreement.

But it's got to be fair for everybody and the biggest thing is we have to understand that we have an economy on the edge and people cannot play games with this.

WALLACE: All right. We've got less than two minutes left and I want to get through a couple of more issues.

Senator Stabenow, assuming that the big three get enough money from the Bush administration to tide them over until March, is that it? Are you promising that the big three will never have to come back to Washington and ask for more taxpayer money?

STABENOW: Well, I think, unfortunately, we're still in a situation where the long-term restructuring has to be done. There has to be a manufacturing strategy for the future.

I'm confident our incoming president understands that and is committed to that. But we're in a situation where a short-term bridge loan makes sense and then it's not about just continuing to give additional loans.

It's about giving them time to be able to restructure, everyone, workers, the CEOs, the suppliers, the bondholders, everybody, so that they have a long-term, viable industry.

WALLACE: Senator Corker, how long do you expect this to go on and how much is this going to end up costing the taxpayer?

CORKER: Look, we have a historic opportunity. The company, GM, has told me if I could've -- if we would've been successful this week, they would not have asked for any money.

If we do this under the terms that Deb Stabenow is asking, this is the beginning of probably hundreds of billions of dollars, because we're piling on taxpayer money on top of $62 billion liability that they cannot pay back.

Let me just say this. I have never been prouder of my conference. Mitch McConnell, we, in the room, were all trying to figure out some way of getting the UAW to just agree to a finite date.

I think the Bush administration has a historic opportunity over the next few days, if it's not coming back to Congress with TARP, and, unfortunately, I think the president has to decide -- is he still running the White House or is the UAW? And that's a pretty tough thing, but...

STABENOW: And let me just jump in...

CORKER: ... I have to tell you, this is a time for the shared sacrifice to happen.

STABENOW: With all due respect...

WALLACE: Senator Stabenow, you get 30 seconds and you have the last word.

STABENOW: Bob, with all due respect, the only people that have already sacrificed, and I can tell you that directly from men and women in my state, have been the workers.

The reality is this is not about workers in America. It's not about workers in America being paid too much. It's not about the middle class being paid too much.

It's about a long-term commitment to advance manufacturing and that's what we're talking about.

WALLACE: All right. We're going to have to leave it there. Senator Stabenow, Senator Corker, thank you both. Thanks for coming in. We'll see what happens this week.

Coming up, Illinois Governor Rod Blagojevich and the scandal of our president-elect Obama's vacant Senate seat. What's next for the governor and what's the political damage to Democrats?

We'll hear from two men at the center of the storm when we come back.

(COMMERCIAL BREAK)

WALLACE: The Illinois general assembly meets in special session tomorrow to consider what to do about Rod Blagojevich. The Democratic governor was arrested Tuesday for allegedly trying to sell the Senate seat of President-elect Obama.

Joining us now from Chicago are House Republican Leader Tom Cross and former federal judge and Obama mentor, Abner Mikva, who was advising the Illinois attorney general in the case.

Well, gentlemen, one of the first things the state house will consider when it meets in special session tomorrow is whether to strip the governor of his power to appoint Barack Obama's successor to that Senate seat.

Representative Cross, before we get into all the complications of how you actually make that a law, why a special election? Why not basically give the powers to the lieutenant governor that the governor now has to appoint Obama's successor?

CROSS: I think you have to eliminate any appearance of impropriety. We've just been shocked as a state over the last four or five days and in order to restore whatever integrity we have left in this state, we have to make it as transparent as possible.

We have to give the voters an opportunity in a special election. We have to have the media involved. And the only way you can do that is to completely open up this process.

Everybody in this state on the Democrat side and, to a large degree, the Republican side knows everybody and I think you have to completely open it up to restore whatever integrity we can.

WALLACE: Judge Mikva, isn't that the small deed, the most democratic way of settling this, especially with the cloud hanging over the appointment of Mr. Obama's successor, to basically let the voters decide who's going to hold that Senate seat?

MIKVA: I don't have any problem with that and, again, the federal Constitution indicated that there were two ways of deciding it, by the legislature, either the -- there would be a special election or the governor would fill the vacancy.

The only problem with a special election is it'll be some time before that's resolved. It won't be until April that we finally have a Senator from Illinois. It'll cost the taxpayers money.

But again, if the legislature decides that's what they want to do, that's fine. Again...

WALLACE: Do you think this is really good government...

MIKVA: ... I think the worst...

WALLACE: Judge Mikva, do you think this is really good government or do you think it's a power play by the Republicans to get a Senate seat that they wouldn't get if a Democratic lieutenant governor appoints a Democrat?

MIKVA: Well, my feeling is that they won't get the seat, in any event, if the Democrats come up with good candidates.

But I think this is a decision that the legislature ought to make. The lieutenant governor has gone both ways on this. I think that President-elect Obama has indicated that he sees nothing wrong with a special election.

It's only the problem that for four months, there will not be a second Senator from Illinois and that, of course, is sad.

WALLACE: Representative Cross, let me present another problem and perhaps the biggest obstacle is even if the general assembly passes this law, the governor still has to sign it, that is, Governor Blagojevich.

Do you have any indication at all that that governor is voluntarily going to give up any of his powers?

CROSS: I don't think anybody knows that right now. The ability to predict what he may or may not do is almost impossible.

I think the -- backing up a little bit. The Democrats actually proposed the special election to us earlier in the week and I think they even know, in order to rehabilitate the problems they're going to have over the next weeks and months and even longer because of this, is to have this special election.

We will be ably represented in Washington, D.C. with Dick Durban and also having the president of the United States from the state of Illinois.

So I think the length of time of having to wait for a special election is not a problem we have.

Again, this is an issue of restoring a little integrity into a system that has been shocked.

WALLACE: Representative Cross, the next question that you're going to have to face starting this week, and you've got a busy agenda, is how to try to remove Blagojevich from office.

Now, the Illinois attorney general, Lisa Madigan, on Friday, filed a motion with the state supreme court to remove the governor or strip him from his powers on the basis that he's unfit.

Why is impeachment a better way to go than this motion to the state supreme court?

CROSS: I'm not at all disagreeing with the attorney general has done. I think most of us would say let's take whatever track works to have the governor removed.

The one question about her approach, though, is that it doesn't bring any finality to the situation. Impeachment is clear. Once we're through with that, there's closure, there's finality.

That's not the case with the approach that she's taken. The question now is whether the speaker of the house, who happens also to be the state party chairman for the Democrats, is willing to let us move forward on impeachment.

I think you'd find that most Republicans and Democrats in the state believe it's the right way to go if he doesn't resign.

WALLACE: Judge Mikva, where do you stand on the impeachment versus temporarily stripping of powers?

And more specifically, on the attorney general's case, she's doing it under something called Rule 382. Isn't that really about disability in the sense of a physical disability or a mental disability, not an inability to tell right from wrong, as we apparently have with this governor?

MIKVA: Well, the word "physical" or "mental" are nowhere used in there. It's true, this is a case of first impression and lawyers and attorney generals are always uncomfortable when they're in deep water.

But the problem with impeachment, and, certainly, it is the final answer, I couldn't agree more with Senator Cross that the ultimate answer is for the legislature to act and it won't be final until they do.

The problem is that that is going to take a long time, certainly, if there's going to be due process afforded to the government, which I'm sure the legislature will try to do.

But there's nothing in the lawsuit that the attorney general filed which suggests anything other than that the legislature should move ahead with impeachment as quickly as they can.

WALLACE: Representative Cross, let me switch to another aspect of this fascinating and somewhat troubling story.

There are reports that Obama Chief of Staff Rahm Emanuel had conversations with members of the Blagojevich team about a list of candidates for the Senate who would be acceptable for Mr. Obama, to succeed him, and that at least some of those conversations were captured on the government wiretaps.

Representative Cross, does that raise any questions, in your mind, that possibly Rahm Emanuel did something wrong?

CROSS: Well, people are going to ask that. I think it's a little premature for any of us to speculate on what was said or what wasn't said or how this is going to impact people.

Clearly, the governor, on those same tapes or at different times with tapes, talks about, in essence, selling the U.S. Senate seat. I'm not sure what Rahm Emanuel said and surely there are those that would like to carry this further.

I think time will tell and I'm sure the U.S. attorney's office is -- this is really the early stages of, I suspect, an investigation that's going to take some time. But I'm not sure, at this point, what all Rahm Emanuel has done or hasn't done.

WALLACE: Judge Mikva, even if there's no legal exposure, the fact that Emanuel is captured on these conversations reportedly with members of the Blagojevich team, could that embarrass the president- elect and certainly undercut his image as a new kind of politician?

MIKVA: Well, Governor Blagojevich has embarrassed all the citizens of Illinois and most especially the officeholders and former officeholders and Democratic officeholders.

But I think President-elect Obama can take credit out of the fact that Governor Blagojevich knew who he was dealing with and spoke about President-elect Obama's unwillingness to be involved in any of these shenanigans, in no uncertain terms, in no uncertain and unprintable terms.

WALLACE: So you don't see any possible or potential embarrassment, not talking about legal exposure, but embarrassment to President-elect Obama from the conversations between Rahm Emanuel and Blagojevich's staff.

MIKVA: Well, as I said, Blagojevich's actions and his self- dilutions are embarrassing to everybody. It certainly was appropriate for Rahm Emanuel to have discussion with the governor both about the vacant seat for the Senate and also about his own impending vacancy.

Under Illinois law, a Congressman, when he resigns, resigns to the governor. So it would be impossible for Rahm Emanuel not to have had some communication with Governor Blagojevich when he was becoming chief of staff.

The problem is, as Representative Cross said, none of us knows what was said on those tapes, what the context was, and it's pretty clear that Blagojevich was never given any reason to think that he could make any kind of a deal with the Obama forces.

WALLACE: Representative Cross, I want to get into one final area with you and that is that when New York Governor Eliot Spitzer got in trouble with a prostitute, he resigned within the same week, in fact, two days after the story broke and he initially apologized to the citizens of that state.

Why do you think Blagojevich is holding on? It's now five days and counting.

CROSS: I this was, my guess is, a complete shock to him what happened Tuesday morning. I suspect there are three things going on.

One, by nature, he's a fighter. Two, I suspect that he, unlike Eliot Spitzer, has got to figure out how he lives day to day without a job. And third, I suspect he's also talking to his legal team about how to handle this situation with the U.S. attorney's office, does he plead, does he not plead, is it best to resign.

Those are all things I suspect he's talking about. I clearly haven't talked to him.

But at the end of the day, for the people of the state of Illinois, in order for us to get back to the business of the people of the state of Illinois, the best thing would be for him to resign.

If he doesn't do that, we have to go through the unpleasant task, it's not something any of us revel in, but go forward with impeachment.

We've got to move forwards, because there are a lot of issues facing this stage.

WALLACE: And finally, Judge Mikva, and we have less than a minute left, what's your best guess as to what Blagojevich's angle is now as we go into the end of the first week of him in this kind of limbo?

And secondly, as somebody -- and I know personally -- who has been representing Illinois for the better part of a half of a century, how do you explain the continued political corruption in your state?

MIKVA: Well, first of all, I don't know what's going on in Governor Blagojevich's heads. I hope he resigns. I agree with Representative Cross. It would be the best thing for the people.

Secondly, perhaps out of this dismal situation, maybe something good will come. As I listened to Representative Cross today and as I have been reading the newspapers over the last few days and hearing what's going on, perhaps this will bring a little bipartisan spirit in Illinois to try to reform our structure.

We have never paid enough attention to laws regarding pay to play or ethics that we should. Paul Simon and I went back -- go back 50 years trying to pass some of the laws that the legislature is just beginning to come around to look at.

And I hope that this enthusiasm of our cleaning up this mess will continue after the impeachment and Democrats and Republicans can come together to restore the good name of the state of Illinois.

WALLACE: Judge Mikva, Representative Cross, I want to thank you both for coming in today and talking with us, and you're both going to have a very busy week.

Thank you, gentlemen.

CROSS: Thank you.

WALLACE: Up next, our panel weighs in on the Blagojevich scandal and its impact on Barack Obama. Will he be tainted by his state's political corruption?

Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I've asked my team to gather the facts of any contacts with the governor's office about this vacancy so that we can share them with you over the next few days.

(END VIDEO CLIP)

WALLACE: That was President-elect Obama this week responding very carefully to the Blagojevich scandal.

And it's time now for our Sunday group. Brit Hume, Washington managing editor of Fox News, and Fox News contributors, Mara Liasson of National Public Radio, Bill Kristol of the Weekly Standard, and Juan Williams, also, from National Public Radio.

So Barack Obama campaigned for president, pledging to bring transparency and openness to the whole political process.

But, Brit, he reacted this week as a more traditional politician. First, when the whole case broke, while other people were condemning Blagojevich, he said the case saddened him. Now, it's been five days and counting.

He still has not released any information on what the contacts were between his team and the Blagojevich team.

Are you surprised?

HUME: No. The reason is that -- first of all, it should be said, as it has been earlier here, that what information we do have about any contacts that may have occurred led Blagojevich to the belief that he wasn't going to get anything out of Barack Obama except appreciation if he appointed somebody Barack Obama wanted and then he used some very salty language, very salty language to describe Obama and the Obama forces.

So if there were contacts, apparently, they led him to that conclusion and they're probably quite innocent and, in fact, they'd be quite natural, as Abner Mikva pointed out earlier, to have discussions between the sitting Senator's team, when he's the incoming president, as well, and the man who would make the appointment to fill the vacancy.

Having said all of that, it's also true that Barack Obama is habitually and instinctively very cautious and this is a reflection, I think, of his caution.

It's also a reflection of the atmosphere when one of these frenzies gets going that if you put out some of the facts and not all of the facts, because you haven't put them together, then it begins to -- then you leave yourself open to stories where they say, "It turns out that the contacts were more numerous than the president-elect has said," and then you've got to go through another round of time on the cross on that.

So, look, it isn't pretty. It's not a pretty case. But I think it looks as if, when the facts do come out, they'll probably exculpate Obama and his team.

WALLACE: Mara, I think we'd all agree that the first month of the Obama transition went about as smoothly, about as pristinely as this process ever has.

Has this taken a little bit of the bloom off the rose?

LIASSON: A little bit. But, boy, if this is as bad as it gets, they're doing pretty good.

It's a distraction, for sure, and we just learn that it's always easier to answer the question the second time that it's asked, because the first time he was asked, he wasn't quite sure whether to say "I've had no contacts" or "we've had no contacts."

And now he's putting things on hold so he can figure out exactly what happened.

I think this is a distraction, but it's better to have a distraction now than after he's inaugurated.

He's had to answer a lot of questions about it. That press conference was dominated. I think he got one question about health care, because he was there ostensibly to showcase Tom Daschle, his HHS secretary and health czar.

But it being a distraction, I don't really see it being anything worse than that right now.

KRISTOL: Yes. Obama promised transparency and we got to read these fantastic transcripts of Blagojevich. So I think that was good of him. And he promised change and we're going to get a new governor, I suppose, in Illinois pretty soon.

So he's following through on his promises. Nothing to complain about.

WALLACE: That's all you've got for me today?

KRISTOL: My other comment is it's such a great old-fashioned scandal, no sex, no interns, no Mayflower Hotel and Eliot Spitzer.

WALLACE: Wait, wait, that's...

KRISTOL: But it is kind of just your classic Tammany Hall. I saw -- what did George Washington Plunkett say? "I've seen my opportunities and I took them."

Blagojevich is really in a certain tradition of American politics and it's nice to see that tradition is still alive and well.

WALLACE: Juan, what do you think is the exposure here, either legal or more likely in terms of public relations, embarrassment, for Rahm Emanuel and for Congressman Jesse Jackson, Jr.?

WILLIAMS: Well, it has -- right now, Rahm Emanuel apparently, according to the Chicago papers, is on the tap that was placed by the U.S. attorney, talking with Blagojevich about possible replacements for President-elect Obama.

So this leads you then to question exactly what did he say and, to use some of Brit's language, some of the salty language that both Rahm Emanuel and the governor are known for.

So it's likely to be an embarrassing tape in that sense.

But if there's more than that, if, in fact, there was some quid pro quo, then you have a real problem. We don't know that, no indication of it.

Patrick Fitzgerald, the U.S. attorney, has indicated that neither President-elect Obama or his team is in any legal trouble at the moment. So we don't know, but we don't know where it's going to go.

When you ask about whether or not it's a problem for Jesse Jackson, Jr., I think it is a problem, because he's been identified now as candidate number five and candidate number five in this criminal complaint is someone whose supporters were offering half a million dollars to the governor in exchange for the appointment, and potentially more.

And we know that on that day now, from further reporting, that Jonathan, Jackson's brother, was at a meeting with key fundraisers and they were having discussions about just this issue.

So it damages him, because I think of Jesse Jackson, Jr. quite differently than I think of Jesse Jackson. I think Jesse Jackson, Jr., in light with the new generation of black politicians, like President-elect Obama, like Deval Patrick in Massachusetts, Cory Booker in Newark, I don't think of them as people who are playing old patronage politics.

But here is Jackson now tainted and I think his chances of ever being in the U.S. Senate are gone.

WALLACE: Brit, what about the debate in Illinois that I talked about with Representative Cross and Judge Mikva about whether to let the lieutenant governor appoint Obama's successor or to hold a special election? What do you think is right on the merits and what do you guess is going to happen?

HUME: Well, I think that this apparently rests with the governor. You'd, I suppose, have to get the governor out of there or pass legislation empowering the lieutenant governor.

WALLACE: Which the governor then would have to sign.

HUME: The governor would have to sign. My guess is, knowing Blagojevich, that's a pretty valuable thing and he's not going to let it go for nothing.

So sooner or later...

WALLACE: For bleeping nothing.

HUME: For bleeping nothing, that's right. Sooner or later, you're going to have to deal with that guy and the only way, it seems to me, around dealing with that guy is to impeach him and convict him and kick him out of office.

And that may take a while, but, man, that guy's an ugly ornament on that tree out there this Christmas in Illinois and in Chicago and as long as he's out there and Barack Obama is sharing a political adviser with him, came out of the same background, it's not an attractive thing and it's a reminder that maybe Barack Obama isn't all that new.

(UNKNOWN): You know what? They all share fundraising ties and a lot of these ties go back to our friend Tony Rezko and then you talk about the people who are also raising money for Jesse Jackson, Jr. and Blagojevich.

And I think that Blagojevich has a reason to start talking about Tony Rezko and President-elect Obama. Similarly, I think Jesse Jackson's fundraisers have reasons to start talking about Governor Blagojevich and people who are raising money for President-elect Obama.

People want to get out of...

WALLACE: Which raises the question -- I want to nationalize this, Mara.

National Republicans are jumping at all this and saying, "Guess what? After taking a hit in 2006, it's the Democrats who now have the ethics problem."

You've got Illinois, you've got Charlie Rangel, the New York Congressman, you've got the just ousted Louisiana Congressman William Jefferson.

Do they have a point and do you think that issue has any legs at this point? LIASSON: I they have a point, but it hasn't gotten to the level -- it hasn't gotten to the critical mass that the Republican corruption scandals got to.

On the other hand, Democrats ran against a culture of corruption and now the shoe is on the other foot.

I don't think it's extended outside up into the White House yet. I don't think that they can do this against Obama, and I don't think they are. I haven't heard Republican's talking about him.

But certainly, Charlie Rangel, Jefferson, Blagojevich, maybe Jesse Jackson, Jr., they're starting to collect a nice little list of particulars and if it gets any bigger, they might be able to do what the Democrats did to them.

WALLACE: Bill, you get the last word here.

KRISTOL: A lot of these guys actually haven't been indicted. I'm sort of curious to see -- or certainly convicted, actually. I'm curious to see if they really -- how the criminal cases hold up as opposed to Patrick Fitzgerald, talking about what a disgrace this is and Lincoln would be rolling over in his grave.

It may just be that Blagojevich blustered a lot about wanting to be rich and talked to his chief of staff about hitting up various people in illegal ways, but I think you actually have to do it, don't you? You can't just sort of talk about doing it.

WALLACE: You have to take at least one overt act. I will say, and you're quite right on this, a lot of federal prosecutors are not happy with Fitzgerald for some of his ex parte comments about Lincoln rolling over in his grave and criminal crimes freeze.

We have to take a break here, but up next, why is the White House about to throw a financial lifeline to the troubled U.S. automakers? We'll discuss the economic and political reasons when we come right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GETTELFINGER: The UAW calls on Secretary of Treasury Paulson or the Federal Reserve to use their authority to prevent the imminent collapse of the automakers and the devastating consequences that would follow.

(END VIDEO CLIP)

WALLACE: That was United Auto Workers President Ron Gettelfinger calling on the federal government to step in after Congress failed to pass a bailout package for the big three this week.

And we're back now with Brit, Mara, Bill and Juan.

So, Brit, is it just me or do you agree that the UAW was the big winner this week, that they went eyeball-to-eyeball with Congress and the White House and it appears, in both cases, the other guys blinked?

HUME: Well, framed that way, the answer is yes. I think the UAW was the controlling factor here.

And when you hear the arguments made on the other side, they're pretty thin. But the UAW hasn't won yet. Its only hope now would be, other than what it might get in a bankruptcy, which can't be predicted, and which UAW certainly does not want, would be for the Treasury Department to go ahead and loan this money basically with no strings attached.

However, as was pointed out on this program by Senator Corker, the Treasury Department and Hank Paulson have the authority to impose whatever conditions they want, basically saying, "We've got the money you want. Sign this paper and agree to all this."

So if that happens, I think the UAW will have lost and that -- look, and the bondholders will lose, too, and a lot of people will lose, but something major like this has to happen to give the Detroit automakers a fresh start and a chance to really become competitive again, which I think, in the fullness of time, they certainly can do.

WALLACE: But, Mara, I have to say, I wonder about the likelihood that the administration is going to propose those draconian measures.

And you had -- and it was reported this week that on Wednesday, before this whole thing came up, that Vice President Cheney went to Capitol Hill, met with the Senate Republicans and basically said, "We don't want to be Herbert Hoover over again."

LIASSON: Look, I think that Cheney's analysis of the politics of this are probably correct. The Republicans don't want to be the Herbert Hoover here who let an entire industry collapse.

WALLACE: Collapse.

LIASSON: Collapse in a kind of violent way. Now, whatever we do, whether it's TARP, the Federal Reserve, bankruptcy judge, some kind of bailout, the end result is probably going to be the same.

It's not going to be the big three anymore. It'll be like the big one and a half. And the labor costs will be brought in line with the foreign competitors and the auto industry will be irrevocably changed in a dramatic way.

But the glide path is all we're talking about here. Are we going to do it all of a sudden and throw the cards up in the air or are we going to kind of give them a softer landing?

But I think that something is going to happen. The UAW is going to take a huge hit. So are the bondholders. Everybody is going to have to take a haircut. We're only talking about who is going to administer it right now or the Obama administration maybe.

WALLACE: But I want to follow-up on this, Bill, because I was really struck and, quite frankly, surprised that Cheney would go up to Capitol Hill and say, "We don't want to be the Herbert Hoover," which, apparently, according to Senate Republicans, made them think, "Well, we don't have to get tough with the auto industry because clearly the White House is not going to allow this. So we can avoid a tough vote."

And then as soon as it went down, the word came out, even before the markets opened on Friday, from the Bush administration, "We'll take care of it."

KRISTOL: Look, the Bush administration cut a deal with House Democrats. They had legislation passed to establish a car czar, which the Bush administration thought would do a lot of these things that Senator Corker then tried to write into legislation.

The car czar -- this would have kicked it off to the Obama administration. But frankly, politically, I think that would've been the best outcome for Republicans.

They would've prevented immediate bankruptcy, which is extremely risky for the big three or at least two of the big three, and they would've kicked it off to Obama and they would have -- I think the car czar, who would've in office until, I think, March 31, could've begun dealing with the bondholders and could've negotiated with the UAW.

Instead, the Senate Republicans, I think out of a sense of principle, that they wanted to get involved in this and not just kick the can down the road, I think, have created a political -- potential political trouble for Republicans.

I mean, I just think -- McCain got 40 percent of the union votes in 2008. I think he probably got about half of private sector union votes. Those are the people who helped make the Republicans a competitive party nationally. They elected Nixon, they elected Reagan.

I don't think it's very smart for a bunch of southern Republicans to decide that the future of the Republican Party is to beat up working class union members and say it's like Michigan, Indiana and Ohio.

The UAW is in a lot of trouble. They've shrunk by two-thirds in the last 30 years. They're not some huge force. They're going to shrink some more.

The wage costs are not that big a percent. An average automobile, ten percent of the cost comes from the wages. And they were going to cut wages by, what, 10-20 percent. So it's one or two percent of the cost of the auto deal.

To have a huge fight for that, I think it was a mistake for the Republicans.

WILLIAMS: Well, I hate to be Ebenezer Scrooge about this, but you know what? I don't think people are mad at the unions. I think they're mad at the people who have been running these auto companies and running them into a ditch, Bill.

I think that they've been running them badly and that's why most Americans think that this bailout is a mistake. They think it's a mistake to reward failure.

And the sympathy goes out, of course, to the workers who would be losing jobs and then there comes the political reality, which is that the economy is in trouble and if you have -- I think the big three employ 150,000 people.

If you have that many people put in danger, plus all the suppliers and auto dealers down the line, you have a problem.

But the thing is if you are going to do this, and I think this is the argument the Republicans on the Hill are making, who is representing the taxpayer?

Why are you and I paying for this bailout and is it, as some have said, a bridge loan to nowhere? Because what happens in three months? You say the car czar was there and he could've started these negotiations.

Why do you think the UAW would've been any more amenable to the car czar, knowing that Barack Obama is coming, and Barack Obama has had tremendous support from the unions. He's going to do everything he can for the unions.

He is in line with not only Debbie Stabenow, but Jennifer Granholm and all the politicians in Detroit, in Michigan.

So I think that right now, it's a setup for the auto companies to get what they want. Everybody's going to say, "You know what? We had to do it to save the economy."

What are they going to say when state governments show up at the door and say, "We want some of that bailout money, too?" What about transit companies?

I mean, everybody is going to say, "We want a piece of the pie." Every lobbyist in town is after that money.

HUME: One point to add to what Bill said. Bill made, I think it's fair to say, an entirely -- almost entirely political argument about this, that it was a political mistake for the Republicans to do this. He also suggested they acted on principle.

I'd like to read an editorial somewhere which would mirror that, Republicans acting on principle and not doing the political thing. I think I may be waiting a long time to read that.

WALLACE: But, Mara, we have less than 30 seconds left. I mean, if Juan is right, we're going to end up with a partially nationalized car industry into the future, no?

LIASSON: Yes. Well, we have partially nationalized quite a few things recently. The financial system is partially nationalized. Yes.

WALLACE: Thank you, panel. See you next Sunday.