Panel on The White House and Bailouts

Panel on The White House and Bailouts

FOX News Special Report With Brit Hume - December 12, 2008


SEN. HARRY REID, (D-NV) SENATE MAJORITY LEADER: It's over with. I dread, Mr. President, I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight.

MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: The administration negotiated in good faith with the Democratic majority a proposal that was simply unacceptable to the vast majority of our side because we thought it, frankly, wouldn't work.

CHRIS DODD, (D) CONNECTICUT SENATOR: I'm very confident as I stand before you this afternoon that the White House will not allow this industry to collapse or go into an unplanned bankruptcy.


BAIER: Well, the auto bailout legislation died in the Senate last night. The market today was actually up. One reason, the White House indicated it will step in, the treasury department as well.

Dana Perino, White House Press Secretary issuing this statement to reporters-"Given the current weakened state of the U.S. economy, we will consider other options, if necessary, including the use of the TARP program to prevent a collapse of troubled automakers."

The TARP, as you remember, is the troubled asset relief program, the $700 billion bailout Congress passed in October.

Now some analytical observations 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.

So, Fred, the White House says the bailout legislation didn't work in the Senate. They're going to step in somehow. We don't know when. What do you think?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": Well, it shows you who is in charge here of the bailout at the moment, and that's the United Auto Workers.

You would think that somehow the UAW has a seat in the Senate, because it came down to the whole working out of a compromise in the Senate between Republicans and Democrats on some package to bailout the auto industry and turn them into a viable profitable industry at some point.

It was only wage concessions by the UAW that stopped that compromise from coming together. So all the Democrats had to be against it because the UAW refused that one thing?

I think they should have gone ahead and voted, but since they didn't, the UAW basically called the Republicans' bluff and the White House's bluff, and the White House is going to deliver to get them through into January, where they will get through with a more Democratic Senate and a Democratic president, they'll get a better deal by the UAW's standards, from Congress and the president than they will now.

And it will mean that we will have a bailout that will lead to another bailout, and another bailout, and another bailout.

BAIER: UAW President Ron Gettelfinger, Mort, today accused GOP senators of trying to pierce the heart of organized labor.

MORT KONDRAKE, EXECUTIVE EDITOR, "ROLL CALL": Well, he said that the agreement that the Republicans were advancing, or Senator Corker's from Tennessee, would put the whole load of saving the auto companies on the unions.

That is flatly not so, as Jim Angle's piece described. I mean, the creditors would also take a big hit under that agreement. So it is just flatly false.

But Fred is right. The Democrats are all marching to the tune of the UAW. And, apparently, the administration is, too, because they know what the effect of this is going to be. I don't know what kind of conditions they're going to apply, but I can't believe that they're going to give this money on the condition that the UAW take a big cut.

They could have done that in the negotiations with the Democrats. Instead, they had basically vague instructions for an auto czar without deadlines, without demands.

So what he President Bush, I guess, is afraid of is that not only will we have gone into a deep recession on his watch, but we might face total collapse, and he just wants to pass it on, pass the problem on to Barack Obama.

BAIER: Charles, the White House has long said, this president has long said that they were not going to dip into the $700 billion rescue package for this very purpose, for automakers. But now they're indicating that they will.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And that's why it's a huge concession. The administration understood that it destroyed all lines about government intervention, all the things that conservatives in principle stand against, by the interventions in the market.

But it tried at least to hold the line by saying that this is only for the financial institutions, only the banks. Why? Because a bank is special, because it provides a necessity, credit, without which all other industries collapse. So you make an exception.

But once you breach that, and once you allow the use of these funds for an industry, meaning the auto industry, then there are no rules. Then every industry will claim we are important, we have a lot of workers, our collapse will have a bad effect. And that's why there was such resistance on the part of the administration.

It had won, in fact, a battle earlier in which it said if the auto companies want the bailout, it has to come out of previously appropriated money, which was out of the Energy Department, which, ostensibly, would help or produce green cars--not exactly in demand today. And that had been worked out.

But in the end it had to reverse course because, as Fred said, the UAW played a high wire act last night. It risked its own collapse with the industry if the administration had not acted.

But I think it counted on, and it was right in counting on, the essential goodness of the president, in the sense that he wouldn't allow a collapse. And he also has a sense of obligation to his successor. He won't deliver him a dead auto industry.

BAIER: Fred, how does it play out?

BARNES: How does what play out, the bailout idea?

BAIER: yes.

BARNES: The public is against a bailout. And I think the public would be satisfied with one that actually did create or demand a viable, profitable auto industry in the big three, but we're probably not going to get that.

BAIER: Quickly.

KONDRAKE: The first of many bailouts.

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