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CNN LIVE EVENT/SPECIAL

After Party: Where Do We Go from Here?

Aired November 16, 2008 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


DONNA BRAZILE, CNN HOST: Barack Obama is choosing a cabinet. Can he meet rising expectations?
DAVID BRODY: And the economy is in a tail spin. Are bailouts becoming handouts?

BRAZILE: We'll discuss this and a lot more with David Brody of the Christian Broadcasting Network. He will handle the conservatives.

BRODY: Democratic strategist Donna Brazile will be joined by a panel of progressives. Say that five times fast.

BRAZILE: And then a few of us will discuss these issues from all sides.

BRODY: It's the AFTER PARTY: WHERE WE GO FROM HERE. It starts right now.

BRAZILE: All right, let's kick this conversation off with a pop quiz. In a word or two, what do you think Congress should do when they come back next week for the lame duck session? Jennifer Palmieri is joining me from the Senate for America's Progress. You get the first shot.

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS: I think that they should pass a package to do the - to help the automotive companies in the bailout. Whether or not they're actually able going to - actually going to be able to do that is the big question.

BRAZILE: Nico from The Huffington Post?

NICO PITNEY, THE HUFFINGTON POST: Extend unemployment insurance. The House has done it. The Senate hasn't. And they have to catch up. It's crucial right now to do it. And I think President Bush would sign it if they passed it.

BRAZILE: Chris Kofinis, former colleague, of course, worked on the John Edwards presidential campaign. What do you think?

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: SOE, save our economy. I think focus on the stimulus automotive package. Whether it happens, I'm a little bit pessimistic. I don't think the Republicans want to play ball right now.

BRAZILE: Should President-elect Obama get involved in structuring some bailout deal for the auto industry?

PALMIERI: I think it's really difficult for him to do. So I mean, we saw that when, you know, he is the president-elect now, so he does have more authority, but there's only, as he often says, only one president at a time. And we saw how it was very difficult during the campaign when McCain tried to get involved. I think that, you know, it's unfortunate, but he may be faced with dealing with a major, you know on top of all the other crisis, major automotive crisis in his first days as president...

BRAZILE: But Chris, can we afford to allow the automobile industry to go under in this country right now?

KOFINIS: No. We can't afford it. I mean, it's one of those things where I think people are really angry that why are we bailing out? Taxpayers are very angry, but why are we bailing out all these industries? But it's the reality that we are stuck between a rock and a hard place.

We don't really have a good choice. We can't let an industry that is this significant to the economy, that not only represents hundreds of thousands of jobs in the auto industry, but let alone all the supporting industries, you just can't let that happen. We're going to have to come up with some kind of bailout package that works, but also forces the auto makers to move into a better direction where they can be more competive, you know, develop new systems, new energies, new engines, whatever it might be to make them more competitive.

BRAZILE: Nico, the Democrats are coming back at a time when the president, of course, is still trying to figure out what he can do on the bailout. Is the bailout that Congress passed in October about helping everyday people on Main Street?

PITNEY: It's a quick fix, yes. I mean, the economy right now it's taped together with you know, bungee cord, duct tape. It needs a more permanent solution, but the bailout is - you know, is a fix. It was important to stave off collapse. And I think Barney Frank, regarding the auto bailout, I think he's got a good plan to divert some of that $700 billion to the auto industry, rather than trying to pass a new package. And I agree completely with Jen. Obama shouldn't get involved now. It's a losing proposition. There already Hill leadership working on this. And they're going to succeed or fail without Obama trying to expend some of his capital.

BRAZILE: But Jennifer, you know that homeowners out there are still struggling. We saw this week, you know, one out of five Americans are now faced with some kind of mortgage crisis. I mean, can Congress do more to help those homeowners who are struggling to make ends meet and stay in their houses?

PALMIERI: Yes, they can. And they have - I mean, the way the package was structured, the Treasury could be doing more out of the existing $700 billion. And then also, Sheila Baird, FDIC, has come up with another plan to try and help homeowners stay in their homes as well.

But as we're seeing the $700 billion isn't even enough to do what it was -- the more limited scope of what Treasury wants to use it for. And I think that you'll see, I know that Senator Obama's economic transition team is working on a plan to have, to help homeowners. We have, Center for American Progress, a plan that would similar to what they did in the '30s actually, where the government bought out bad loans, put homeowners on a repayment schedule, and actually ended up making money over the long term. And I think that, you know, it's very dicey times the next three months whether you're going to be able to do anything more with this sort of - with the lame duck Congress, but Obama...

BRAZILE: We know the politics of the House and the Senate. And of course in the House, Nancy Pelosi probably has the votes to pass a strong stimulus proposal, but what about Harry Reid in the Senate? Do you think Harry Reid will be able to convince some of those Republican senators who lost a couple of weeks ago? Will he be able to convince them to support a bailout, Chris?

KOFINIS: Possibly, but I think it's going to be much more problematic. I mean, politically, I think what's happening here is a lot of these stimulus packages and bailout packages have kind of gotten lost in this politics of where the Republicans are. And the Republicans right now, a party, where you saw it in the RGA conference just a, you know, few days ago where you basically had all these Republican governors fighting to be the standard bearers for the party. And not once did I remember did they ever mention anyone in Washington of their party. And they ran away from McCain as fast as they could.

And so what's happening here, I think, they're stuck in a place where they do not want to be backing proposals that they think just do not reflect their ideological principles, or should have been the ideological principles that they, you know, should have ran on in this election.

So it's going to - I think it's kind of stuck there. I mean, I think the problem you're going to face if you're President-elect Obama is a lot of this thing is going to fall apart on you on day one. And that is a really unfortunate thing. But again, it is a failure of the Bush administration, even in these last days, to step up to the plate and lead.

PALMIERI: And it doesn't seem that the Senate Republicans have figured out what to do. I mean, you don't see Mitch McConnell emerging and saying - and offering a sort of direction of how they want to do it. They could take the approach that Tim Pawlenty took, which he said, you know, relatively bipartisan remarks at the RGA meeting in Miami the past couple of days. But other Republicans are, you know, just kind of zeroing in on flat tax and the Fairness Doctrine as an issue.

I just don't see -- I thought that they would be more - I thought they would come out Wednesday - Newt Gingrich would come out on Wednesday and say, OK, here's the new sort of paradigm for conservative thinking, how we're going to operate in the opposition. And you...

(CROSSTALK)

BRAZILE: Do you think that we're going to some big ideas from the Republicans on what we should do to help everyday people on Main Street?

PITNEY: Clearly. I mean, they had months to plan for this, but - you know, period.

(CROSSTALK)

PITNEY: Exactly. And they obviously failed. I think it's really going to be, you know, well obviously the RNC race to see who's party chairman will be important. And then Michael Steele's out. Newt Gingrich obviously has a role. And they're going to receive a lot of attention. That's the next, you know, big kind of media storm for the Republican side. And they'll have a, you know, a heavy role.

KOFINIS: See, that's the purpose - the most stunning about this. You know, I hate to give advice to Republicans, but...

BRAZILE: They need some help right now.

KOFINIS: I know. They do need some help. Let's level the playing field. If they learned nothing from this past election, what this past election was, not only was it I think an ideological shift where the country was moving in a more progressive direction, but even the bigger part of that, I would argue, was it was the country saying listen, we've had enough with government that fails. We've had enough with government that doesn't focus on every day bread and butter real problems. If you don't do that, we're going to punish you.

So when they get stuck in these kind of I think, you know, trap of talking about, you know, past conservative principles, wedge issues, whatever it might be, I think they are completely tone deaf to the reality of what everyday Americans are going through. And when they don't talk about those issues, they suffer.

BRAZILE: Let me ask a question. Will President-elect Obama keep his promise to cut taxes for the middle class and raise taxes on those who make over $250,000 a year? Jennifer?

PALMIERI: I think so. You know, in the -- in '93, and even to some extent in Bush's election in 2000, there's the sort of the expectation that you get elected and then you walk back what you're going to do. But this team has shown no penchant for doing that. And I think that they think that you can - you know, they're not going to - people are speculating, they're going to delay health care. They're not going to delay health care. They're going to move things on parallel track but I think he's going to stick with it.

PITNEY: I think he definitely will.

BRAZILE: Right.

PITNEY: He's going to come out of the gate with an economic stimulus, not necessarily focused on the auto industry. But you know, for Main Street the stimulus that the Republicans won't be able to oppose. I mean, it sailed through the last time. It'll sail through again. And I think there's a decent shot if he sees the potential to attach some of the tax cuts to that bill. And the Republicans, you know, they'll propose bigger tax cuts. They'll try and wedge in, but I think they'll be steam rolled. I mean, this is - what John Podesta is helping out with now, it seems like Obama's definitely on the same page. They're going to move aggressively out of the gate. And that's a smart move.

BRAZILE: What about his promise, Chris, to enact some kind of health care reform, universal health care? Will he be able to do that?

KOFINIS: He'll be able to do it -- here's where I think the reality is going to become problematic. I think you have to focus on turning around the economy. I think everyone agrees with that. So it's a question of where you want to put your priorities and where you want to put your energies. I think, depending on what happens with lame duck, it's going to probably be enormously focused on seemingly energy. Infrastructure is also all part of kind of this big broad stimulus package. And I think at some point, whether it's the first 100 or whether it's the first 200 days, whatever it might be, he's going to do health care. It's just a question of timing. And it's also a question, I think, of whether Republicans, we don't get 60. You know, what kind of obstacles they put in place that basically forces compromise. We don't want to compromise.

BRAZILE: Well, Kim, when we come back, we'll take on some other problems facing the new president. And then the conservatives will get their time in the spotlight. I wonder how they'll feel about a clear restriction of free trade that's about to happen right here in Washington, D.C. From baseball games, to rock concerts, ticket scalpers well they're just doing their jobs. But they're going to be in a world of trouble if they think next year's inaugural celebration will be a free for all to make money.

Barack Obama's swearing in promises to be the hot ticket of the year. Flights are booked. Hotels are jammed. And people are already hitting up friends and relatives for couch space. And tickets, well, tickets that don't even exist yet were reported to be selling on the Internet for thousands of dollars, but Congress has stopped that cold. You have to contact your member of Congress, House of the Senate to get those prized seats. They're going to be given away for free right before the event, so they're not going to be reselling these tickets on the Internet. And let me tell you, it's a federal crime to sell tickets for the inaugural celebration.

(COMMERCIAL BREAK)

BRAZILE: Welcome back to the AFTER PARTY. And let me tell you, there's a new book in town. And it's called "Change for America: A Progressive Blueprint for the 44th President of the United States."

Nico, let me ask you. Is this a good blueprint for the Democrats and President-elect Barack Obama?

PITNEY: It's crucial. It's incredibly substantive and thorough. It's something like 60 chapters long, goes through virtually everything that the new administration will be faced with, providing suggestions. And this is the mistake, that you know actually not doing this is the mistake that so many past administrations have made. Not planning extensively for when they get in. Barack Obama's not repeating that. And it's a great move.

BRAZILE: Jennifer, I know you've read every page, including the index.

PALMIERI: Matter of fact, I have during the course of...

BRAZILE: So what are some of the highlights of this wonderful book?

PALMIERI: Everything. Well, a lot of it is not dissimilar to what Senator Obama has advocated in his agenda. And a lot of the same names that wrote the chapters in these books are now also involved in Senator Obama's transition, but there are some sort of boutique issues that are interesting ideas.

One is to make -- we have the National Economic Council in the White House, the National Security Council in the White House. One of the ideas advanced there is to have a National Energy Council in the White House in which -- led by an energy czar. And the idea is to not just focus attention at the White House level on this, but bring together the disparate agencies that have to work together to come up with a long term energy and economic strategy.

And so, there's also a really interesting proposal on health care delivery system. Obviously, we're for universal health care, but G. Lambert who's put forward a plan for how you would redo the delivery system to get rid of inefficiencies. So it's about structuring the departments and about good government and policy.

BRAZILE: And Chris, what about the blue dog Democrats? There's a lot of chatter right now on Capitol Hill that the blue dogs might come in and decide to flip the script, so to speak. What do you think? Will this blueprint help the blue dogs sort of stay in line with the regular Democrats or the regular dogs?

KOFINIS: Well, what I think it does help the Obama administration is it gives kind of a guiding direction on a lot of these key issues, whether it's health care, education, and you know, energy, whatever it might be. So in that sense, I think it's a very positive step.

I think the main challenge with dealing with the blue dogs as well as to the Republicans is going to be, there's going to be a real fiscal battle next year partly because we are going through huge deficits. It is the reality, especially considering how large these stimulus packages are going to be.

So now the question is, you know, how's that politics going to play out and do blue dogs and want to kind of try and reign in spending, especially at a time we're going to have to, whether we like it or not I would argue, put in some real serious infusion of capital and taxpayer money to help turn this economy around.

PITNEY: Oh, yes. And this is really important. It's, you know, the blue dog line is that we've got to be prudent by not raising deficits, but all serious economists right now are saying you've got -- spending by the government is the only way to do it.

KOFINIS: The country left the station.

PITNEY: Exactly. And that'll be a real debate.

BRAZILE: But let's talk politics for a moment. And of course, there are some real interesting Senate races taking place still across the country. Let's focus first on Alaska. What's happened in that race with Ted Stevens, who was indicted a couple weeks ago, who was convicted. He was convicted.

KOFINIS: Convicted felon. Days after the election, it looks as if he's ahead. And then suddenly, late last week, his Democratic opponent, the mayor of Anchorage, jumps ahead of him based on absentee ballots. It looks as if he's going to pull it off. Democrats will get another seat closer to that magic 60. It's still not clear if they're going to hit it. It's unlikely, but it's still got a shot.

BRAZILE: (INAUDIBLE) he has a shot at becoming a United States senator?

KOFINIS: I think -- at this point, it's likely. The votes that still out are in Democratic areas. And I think he's going to be the next senator.

BRAZILE: So Jennifer, what do you think about Minnesota? Al Franken, a good friend of course, will he provide comic relief? It's - what's going on in that race against...

PALMIERI: I would find comic relief in another Democratic vote in the Senate under any (INAUDIBLE). Minnesota seems a little less - maybe less positive than Alaska looked. And I mean, it's better than I expected because both Franken and (INAUDIBLE) started behind on election day. But...

KOFINIS: Possibly, but not necessarily probable.

PALMIERI: Possible, but not necessarily probable.

BRAZILE: Let's talk about the peach state, because that's also a real hot race in Georgia.

PALMIERI: Yes.

KOFINIS: That's going to be an interesting, you know, fight because you have this - you know, Georgia has this strange system where if the candidate doesn't reach 50, it's basically a runoff between the same candidates. And essentially they didn't get 50, which I find amusing, but nonetheless -- so you have, you know, Saxby Chambliss.;..

BRAZILE: The incumbent.

KOFINIS: The incumbent Republican who ran I would argue the most despicable campaign in recent history against Senator Max Cleland last cycle around, going up against Jim Martin.

BRAZILE: And John McCain...

(CROSSTALK)

BRAZILE: ...called the ad that...

(CROSSTALK)

BRAZILE: Yes. John McCain denounced that ad that Saxby Chambliss ran last...

KOFINIS: So you have this really interesting dynamic emerging, where basically all - you know, everyone's going to be pouring enormous amount of money into this race to try to pick up that seat. Stop at 60, if we, you know, assuming that Franklin is voted in. Stop potentially the 60 votes for the Democrats and for the Republicans, pick up, you know, a key seat. Either way, it's going to be an interesting extension of an election season that seems to have no end.

BRAZILE: And that race is on December 2nd. Quickly, should Joe Lieberman remain in the Senate Democratic caucus?

PALMIERI: If he's going to vote for Harry Reid for majority leader, and he's going to vote with Democrats, you know, when you're in charge and you're a leader, you know, it's about bringing the big tent together. If he's willing to do that, I'd rather have him on our, you know, on our side than outside being a problem.

BRAZILE: Yes or no? Should he remain in the caucus?

KOFINIS: You know, personally, I, you know, if I'm thinking about this not strategically, no. But you know, if you're thinking about this strategically, the smart thing is trying to figure out a way to work with him.

BRAZILE: OK.

PITNEY: Can I challenge your question, Donna? I don't think the question is whether he should stay in the caucus. Everyone wants that.

BRAZILE: Right.

PITNEY: It's whether he keeps the chairmanship of the Homeland Security committee. That's a reward for someone who behaves well. He was out there attacking Obama day after day, lying apparently. He had promised other Democratic senators that he wouldn't do it. He lied to them. He shouldn't keep that seat. And the Democrats are going to have a chance in secret ballot to do it. And they ought to act - they ought to take the right move.

BRAZILE: Of course, I'm going to also weigh in. Yes, he should stay in the caucus. No, he should not retain his Senate seat or Homeland Security.

One last question, this is very personal. Have you guys applied for a job in Obama's administration? Have you seen the questions?

PALMIERI: 63 questions. BRAZILE: This is the best one. Have you ever had any association with any person, group, or business venture that could be used - even unfairly - to impugn and attack your character and qualifications for government service?

I'm worried. Baby Jack, I hung out with him when I was a kid. Not to mention Jeffrey, Randy, you know. I got some problems. What about you?

PALMIERI: I haven't dared to look at the 63 questions. It does look a little...

BRAZILE: That's all the time we have today. And let me thank Nico Pitney, Chris Kofinis, and of course, I would like to wish my good friend Jennifer Palmieri a happy birthday. Happy birthday, yea. Thank you.

And as you can see, David Brody is waiting in the wing. Oh, boy, that's what happens when these conservatives come. He's my friend. He'll continue with his after party in just a minute.

(COMMERCIAL BREAK)

DAVID BRODY: And welcome back to the AFTER PARTY. I'm David Brody with the Christian Broadcasting Network.

Let's get right down to business. Congress coming back next week. What should be done in that lame duck agenda? Tara Wall, "Washington Times," what do you think?

TARA WALL, THE WASHINGTON TIMES: Well, provided it happens at all, I think obviously, the biggest issue is the economic situation, the stimulus, if there is another stimulus and/or bailout if you will. But right now, it doesn't seem like there's any agreement with Democrats and Republicans. So that may not happen.

STEPHEN HAYES, THE WEEKLY STANDARD: Yes, I'd say as little as possible. I mean, the less they do, probably the better at this point. I mean, they're talking about a stimulus package that would include massive amounts of new spending. Let's have that fight.

BRODY: Brian Debose, "The Washington Times"?

BRIAN DEBOSE, THE WASHINGTON TIMES: I think that the stimulus package, if they're going to get one, should include cuts to small business taxes. Some incentives to small business taxes in the immediate -- so they can get that money back in April. And I think they're also going to have to cut the corporate rate by 10%. Republicans advocating that. Probably not happen.

But they also are going to have to look at, you know, some -- doing something with extensions of unemployment. Because we do have 1.2 million people who have lost their jobs.

And on the automotive bailout, nothing at all because the problem with the automotive bailout is union stranglehold of the big three. And nothing Congress can do is going to help with that.

BRODY: Well, let's talk about - a little bit about that auto bailout, auto industry bailout, because I mean, at the end of the day, I mean, everybody's talking about, you know, this needs to happen, it's imperative, it has to happen. Well, first of all, let's talk about that. Does it have to happen or not? Let's start with that.

WALL: No, I mean, it's $25 billion they're asking for to start with. It could be even more than that. But Brian made a great point. It's the unions. I'm from metro Detroit. I grew up in the area. I know those issues. This has been a long time in the making. This is not something that a bailout is going to solve overnight. You need to address the union issue, which has yet to be addressed. It costs more for workers than it does for sheets of steel to even build these cars.

DEBOSE: They're paying more...

WALL: That's right.

DEBOSE: ...for people who aren't working in retirement than they're paying people who are working.

WALL: In addition to, and they're not even, I mean, let's talk about bringing up the quality of their products. That is one of the issues. So it's about time we start letting these companies fail and start having them streamline what they're doing and making sure they're actually paying attention to what works, what doesn't work. And then, let's not even talk about the add ons, Detroit is now asking for itself. The city of Detroit is now saying we want some, too. We want about $10 billion as well. It is a -- it's just getting out of control.

(CROSSTALK)

DEBOSE: American express.

HAYES: One of the things that's been really missing from this debate about of these bailouts is that there's this sense the way it's discussed I think in the media and by Democratic lawmakers, that there's some pot over here that they just can take money from any time they want to. And the reality of it is, this money comes from somewhere. It has to come from somewhere. People are going to have to pay for it. So if we're taking money and giving $25 billion to the automakers, that's coming from taxpayers. And this is money that's not going to be in the economy.

DEBOSE: $25 billion. And here's the one problem. The difference between what happened in 1979 with the Chrysler bailout, Chrysler got $1.2 billion. Reagan comes in. Reagan looks and says this isn't going to work. He cuts back on Japanese imports of foreign cars and other foreign cars. We can't do that now. Honda, Toyota, Nissan, they're building cars here in America. Americans are working at those factories. Totally different landscape.

BRODY: Let's hear a little from Secretary -- Treasury Secretary Henry Paulson real quick this week talking about the auto industry bailout and some of the changes he's going to need to make to that.

(BEGIN VIDEO CLIP)

HENRY PAULSON: When we went to Congress, illiquid assets looked like the way to go. As the situation worsened, the facts changed, I will never apologize for changing in approach or strategy when the facts change.

(END VIDEO CLIP)

PAULSON: Look some people are calling him emperor or I mean, look, I mean, at the end of the day. We knew about this for a while. Didn't' we? I mean, we knew that Henry Paulson was going to have this idea that he was going to be able to indeed spend the money the way he wanted to spend. I mean, this was already out there.

WALL: God bless Henry Paulson. I got to tell you. It wasn't this summer that he was saying, you know, we're not in an economic situation. Everything's fine. Now, there's this economic crisis. We need bailouts. Now we don't know have - we don't know where the money's going with the bailouts. There's no accountability. There's no transparency. This new bailout talk has not even addressed the transparency or accountability.

He's already saying he doesn't know. You know, there's -- these banks are saying they don't know where the money's going or can't account for where the money's going. That is a huge problem. $15 trillion, this is accounted to - for at this point. We have got to at least stop some of this bleeding and start having a little more accountability.

PAULSON: Yes, I absolutely agree. It was interesting. I had a chance to interview Sarah Palin yesterday. And she used, I thought, very strong language talking about Henry Paulson saying, look, what is happening is shifting rationales or shifting targets for this money is breeding voter distrust.

PAULSON: Absolutely.

HAYES: Bleeding distrust among the American people. And she went so far as to warn him. She said no more surprises. It was a pretty stern warning.

PAULSON: Well, they don't have the votes anyhow in the Senate to get this thing done. And they're nowhere close to 60 votes that they need.

DEBOSE: The sad fact - well, that's the first problem.

BRODY: Right.

DEBOSE: Even if they come back, you know, the reality is even Harry Reid said it's not going to happen. The sad fact is that what do we do with Paulson when the new administration comes in because he has got to go. He was saying everything was fine, then we have to bail out Fannie Mae and Freddie Mac. We need $700 billion. We need another 25 billion for the auto industry.

WALL: And you know, honestly, taxpayers should be angry with Congress right now to have - to be indignant enough to ask for this without putting in place or at least putting on the table where we go from here as it relates to accountability. How are we going to account for the money that's out there? What are these - what is the auto industry going to do to ensure this money gets spent properly, if it should even be spent. I think -- these are tough, hard questions that need to be asked that have yet to be asked.

BRODY: Well, you know, let me talk a little bit about the priorities, if you will, for the Obama administration. Because he's to be dealing with all of this economic mess in a few months.

And I want to show you a poll real quick. These are the top priorities for President-elect Obama from a poll taken recently, Associated Press Poll. Improving the economy, number one, creating jobs, two, and folks want to see a stabilization of U.S. financial institutions.

I mean, clearly, the economy is on people's minds. I just wonder what the middle class tax cut, and we heard so much about, is he really going to - I mean, Clinton jettisoned that thing quickly. I mean, is Obama going to do that? And if he does, is it a smart move? Because really, he can play the centrist label if he goes ahead and tries to go for those tax cuts.

HAYES: I think he should do it. I mean, you certainly should do it. I mean, one of the most important things I think for him to do when he comes to office is do the things that he said he was going to do.

BRODY: Right.

HAYES: I mean, it sounds really simple and naive and obvious, but it's true. I mean, he should do the things he promised to do. The one place I'd caution him, though, is on raising the taxes of, you know, upper income individuals and families and particularly on capital gains tax. I mean, raising capital gains tax, at one point he was talking about raising it to 28%, the level that it was under Bill Clinton. Would be a disaster...

DEBOSE: Oh, 28% levels was under Reagan as well, but the difference at that time was dividends were tied to income. Whereas now, they're both separate at 15%. Absolutely no middle class tax cut. I'm firmly against that, based on the way he's designed it to be a payout instead of an actual cut on your incomes.

UNIDENTIFIED FEMALE: It also includes people who don't pay into the income system.

DEBOSE: Yes. And that's just free money, thrown out there. But you know, I had been saying vocally that I am sort of irritated with the notion that you can cut taxes at the time of war. We have troops on the ground. This country has to pay for its own war. We're borrowing money to fight a war that's a weak position as a nation, that puts us in a weak position as a nation. So everything has to be rethought as far as I'm concerned.

WALL: I think he ran on the notion that he was going to - I mean, this was one of his promises, this notion that he was going to cut taxes.

UNIDENTIFIED MALE: Right.

WALL: But he has also, as you saw towards the end of the campaign, he softened off of that, saying that he may have to put it off because of the economic situation we find ourselves in. And so I wouldn't anticipate any immediate action on that.

BRODY: I'm also going to be watching to see if what sort of compromises. He's going to make along the way. What are his non negotiables exactly? And I think we'll earn...

DEBOSE: I've seen a lot of things on the trail. No new taxes. And then they have to change their mind.

HAYES: Yes, don't get reelected.

BRODY: All right, time to go to break. Stay right where you are. We're going to be back and move from the rather gloomy future of the economy to a look at the hopefully brighter future of the Republican party.

First though, a CNN program note. Only a few days left now to vote for your favorite CNN hero. Go to CNN.com/heros to see their stories and vote. Then join Anderson Cooper Thanksgiving night to find out who will be CNN's the hero of the year.

(COMMERCIAL BREAK)

BRODY: And welcome back to the AFTER PARTY. I'm David Brody of the Christian Broadcasting Network. And I'm in deep conversation with Tara Wall, Steve Hayes, and Brian Debose.

Guys, the GOP, we only have seven minutes for this segment. So goodness, if we could spend a long time on it.

WALL: We could spend the whole half hour.

BRODY: Yes, and speaking about the whole half hour, how about Sarah Palin? I mean, you know, down in Miami this week. Quite a scene in that whole press conference. I mean, there has been so much exposure of Sarah Palin this week. I mean, I'm waiting for her to like show up on a Sheatty's box or do a guest stint on Hannah Montana.

My goodness gracious. I mean, what else is she going to do?

(CROSSTALK)

BRODY: That might not happen.

I think she has done, in a sense, what I think she needed to do after the Mccain campaign. She had to come out. She had to be her own person. He had to, I think, correct some of the misimpressions that existed from 71 days of talking to the media in a very limited way and start that conversation.

I think she did that and did it pretty effectively. We saw sort of a new Sarah Palin with a level of confidence that I certainly didn't see exhibited by her on the campaign trail.

Now the one exception I would say is at the press conference that she held late last week, you know, it was ten minutes long. She took four questions. It just didn't, the whole thing didn't really work. But other than that, I think she actually had a pretty good week.

WALL: Yes, I think she certainly took the glimmer away from the other up and comings like the Bobby Jindals and the Governor Crists and all of those.

But I mean, it was her moment. It was her moment to shine. It was unfortunate that she only answered about four questions at the press conference. I think that was disappointing probably to a lot of the press there.

But look, at this point, she did do what she needed to do. It's time for her to go back and to govern and to expand her, you know, her portfolio if you will, and think about next steps. She obviously is an energizer for the party. She obviously has a big future in the party. She needs to be careful in how she presents herself again because she doesn't want to appear at this point whiney and all of that that comes with it.

So I think that - she had her week. It's time to move on and get back to the business of governing Alaska.

BRODY: And I don't think she wants to see these unfavorability ratings, which we've got some of these new polls that have been out in the last week or so.

The favorability rating, Sarah Palin, 49%. But that unfavorable rating of 43 percent. Now "TIME" heals all wounds potentially. You know, there's some rehabilitation she needs. But speaking about the GOP, you have Bobby Jindal, Michael Steele, who's going to - looks like, well, I mean, he's put his hat in the ring for Republican National party Chairman.

So I mean, are we -- does the GOP need a new face, if you will? In other words, do they need to not look, you know, just like the white, male party?

DEBOSE: Yes, that's the first thing.

But you know, more importantly with Michael Steele is that in four years ago, we're talking about somebody who was the accounting chairman, the state party chairman, the lieutenant governor. And all the credentials do need to be party chairman.

And they chose Mel Martinez, who had never done any of those things and was - at that time, first time senator. I thought that that was a poor choice by President Bush. I thought it put the party in a very bad position. Because going somewhere -- they had a really good guy in Steele, who was advancing the party and could carry the message from the two previous chairmen. And with Martinez dropping out, that left Mike Duncan in a very difficult position of having to take over the reins in a very difficult election year.

WALL: But you also have to balance that. I mean, Mike Duncan is an extremely good organizer. I mean, obviously, he doesn't have the charisma that a Michael Steele would have.

There's got to be a balance between having a charismatic candidate or like a Barack Obama charismatic leader, if you will, who draws crowds, who's great at speaking, but also knows how to raise the money, organize well, which Duncan is able to - has been to do. He didn't do that successfully, obviously this route.

But they need to consider someone, I think Michael Steele obviously is very -- a good candidate to consider. There may be others as well. But I think that we have to understand that this party is going to need someone -- something different, not the same old thing. You know, I worked there for about four years. And I was there when chairman Melman was there and chairman Gillespie were there. And that was a new, different kind of leadership. I'd like to see a return to that for the Republican National Committee.

BRODY: I was about to say, Steve, because you know, Ronald Reagan, you know, everybody talks about his policies and all that. But at the end of the day, Ronald Reagan was Ronald Reagan. There was a personality to it. There was a mouthpiece, if you will, to further the agenda. And I think that seems to be crucial.

HAYES: I think you've hit on what I consider the single most important thing for the Republican party is to have an effective spokesman or to have several effective spokesmen.

We've had, you know, candidates in John McCain who had a great life story, but who was not an articulate defender of the things that were the core principles the conservative movement of the Republican party.

You had George Bush. I probably don't even need to say. You know, before that, you had George H.W. Bush. You had Bob Dole. I mean, we've had a long line as conservatives of people who are not very effective communicators. And I think what will be the most important thing going forward is to look at people like a Bobby Jindal, like a Michael Steele, like a Sarah Palin, like a John Huntsman from Utah, who are effective advocates for conservative positions.

DEBOSE: I'd like to see Haley Barber come back.

BRODY: Let me ask you, switching gears a little bit, off the GOP and over to the Obama administration. And what he has done, not so much looking back at Rahm Emanuel, but looking forward to what some of these other picks within his - -not the cabinet so much, but really the people who he's surrounding himself with. Maybe a Robert Gibbs, who's press secretary and others.

I mean, what is your sense about how he goes about surrounding himself with the right people so at the end of the day they'll serve him well?

WALL: Well, I think obviously, you know, most people want to see a little bit of bipartisanship. And he's already, you know, he's already made some inclinations that he is going to do that. He's going to reach across the aisle. And possibly bring in some Republicans and that kind of thing.

We do know Rahm Emanuel is pretty partisan, although he is, betty would say, effective. And he is professing to put that partisanship a side for the sake of working together.

But at the same time, we're even hearing now about, you know, possibility of Hillary Clinton being Secretary of State. So I think that so far, he looks like he is making some very quick, decisive, you know, choices as it relates to staff that looks like it's moving in a positive direction.

BRODY: I mean, he - is there a Republican quota here for his staff? I mean, Robert Gates staying on as defense secretary isn't necessarily going to do the trick.

DEBOSE: No, but I don't, you know, there's always a problem when you sort of try to merge the parties with the president. The Bob Cohen, Bill Clinton merger didn't really work. So -- but keeping gates on may work because there's a continuity there that's already ongoing with the war...

BRODY: : Yes, I think it - probably does get him some credit.

I mean, look, I think we'll most likely to see frankly, a few token Republicans like Jim looech. Somebody whose endorsed Obama in the campaign. I think that's the most likely thing that we'll see among Republicans.

BRODY: Panel, thank you so much. We are out of time. I want to thank obviously Tara Wall, Steve Hayes, and of course Brian Debose, but don't go anywhere. As you can see, we have Donna Brazil ready. And joining me as go over -- where is Donna? I don't know, she's somewhere probably behind me, I hope. She doesn't have any...

BRAZILE: I have a job application for all you guys.

BRODY: Clinton administration!

BRAZILE: It's thick, but guess what? We need to know everything about you guys.

(COMMERCIAL BREAK)

BRODY: And welcome back. This is "Last Call" here at the after party. I'm David Brody of the Christian Broadcasting Network. And with me, Brian Debose of "The Washington Times." And I'm CNN contributor Donna Brazil. And with me is Nico Pitney of the The Huffington Post.

Well, I have to ask you. I know prospects are dim right now for the new bailout of the auto industry. But let me ask you, who's going to rescue the Mustang, the corvette, the Cadillac?

This is about Detroit. And besides motel might be up (INAUDIBLE)

DEBOSE: It's not going to happen. It shouldn't happen. We've already given them $25 billion, but we're going to give them another $25 billion. And then they're going to ask for another $25 billion weeks later. No, no, no.

So if collapses, you're OK with that?

DEBOSE: Yeah, the foreign guys are making cars here. They hide American workers. The big 3...

BRODY: How do you know it was us?

UNIDENTIFIED FEMALE: This kind of vehicle (INAUDIBLE)?

DEBOSE: Mustang may have to die along with the Malibu and the Impala.

PITNEY: This is Republican.

BRODY: Yes, but the thing is the Democrats always seem to make the issue here at this office industry bill, but it has to happen right away. It's so important. And then at the end of the day, how much will Barack Obama, Nico, invest, you know, really invest in this idea that he has to get something done in this lame duck session?

PITNEY: I think energy and auto industry reforms are going to be in the first package that he comes -- when he gets in office, the first thing out of the gate is going to be a package that includes, you know, energy issues, fuel standards. They're going to knock on the kind of stale auto industry actions and ...

WALL: And how will they create new jobs if we allow the auto industry to go on?

DEBOSE : If the auto industry can get itself together and advance its technology faster, we wouldn't be in this position. They got into flex fuel and Ethanol. The other companies were into hybrids. Now we're just starting to get into hybrids. I think we all agree...

UNIDENTIFIED MALE: They went into hybrids and to hybrid trucks, that's the best selling trucks on the market. It's one of the best cars in the market. Why go into flex fuels and ethanol, when you knew that that technology was not good. It wasn't fuel efficient. This is the problem with industry. Not innovating. Doesn't know what to do with it's union problems. If they -- let the market be the market.

BRAZILE: The union is ready to come to the table and renegotiate those contracts. They did it before. Are you prepared to help lead?

All right, so we are in the lightning round. So let's move on. All right? Guantanamo Bay. I mean, this is going to be talk about an international crisis, if you will. This is going to be something that Barack Obama is going to have to deal with obviously day one potentially through executive order and beyond.

What's your sense, Nico? I mean, the issue is he going to do this? And is it a good idea.

PITNEY: I think he's going to close Guantanamo. But I think the real issue is how the prisoners who were there are tried, whether they're done.

It's done outside the Constitution in a way that undermines their rights more - you know, or in a way that actually, when these prisoners are convicted, that everyone believes that it's after - you know, there are people in Guantanamo who are - they did nothing other than essentially - you know, they were the victims of liars essentially in Afghanistan who claimed that they committed crimes and then we find out they didn't. There are innocent people potentially in there. And that has to be dealt with also.

BRAZILE: Should President Bush fight this process right now?

DEBOSE: No. All of those people you just mentioned that were lied to, the CIA was paying people to find out who was a terrorist and who wasn't. They've been released.

The people in Guantanamo now are people who are ardent terrorists and we know that. Secondly, Guantanamo exists outside of the framework of the Constitution. (INAUDIBLE) case Supreme Court earlier last year. You should never...

HAYES: They disagree. They disagree.

DEBOSE: They had no jurisdiction to deal with the (INAUDIBLE) has never taken our money for the rent we pay at Guantanamo. Therefore, it is occupied territory outside of the United States under the president's control. Under the Constitution, the president has absolutely control over foreign intelligence.

BRAZILE: Our reputation, and it's time that we...

DEBOSE: That is fine, but President since 1960s have used Guantanamo. They have deemed it necessary to have Guantanamo there. Barack Obama's job is to uphold the Constitution. The Constitution says he has control of foreign intelligence. Absolutely.

BRAZILE: Ron, 3:00 a.m., should Hillary Clinton answer the call of Barack, offer her the position of Secretary of State?

DEBOSE: If he wants a good yarn about how her plane almost got shot down over Yugoslavia...

BRAZILE: That's a fairly tale, and you know that.

PITNEY: She - can you imagine foreign leaders opening up the door and seeing Hillary Clinton come in as Secretary of State? It's a powerful proposition. I think, if she's got a way, it's a huge decision. She's got a potential life term in the Senate if she wants it. And so she's going to decide, but it's key if she chooses... (CROSSTALK)

BRODY: Yes, but let me - I don't disagree with that, but let me ask you the question everybody's thinking, which is is she going to start thinking about her own agenda as Secretary of State in terms of just going ahead and really sees what's out there, and not necessarily carrying through on Barack Obama's extended agenda?

PITNEY: I think, you know, in the armed services committee, she dug her nose in. She wasn't trying to, you know, be a spectacle. She worked hard and she got the job done, worked bipartisan, you know, across party lines.

I think there's no reason to expect she wouldn't do anything different as Secretary of State.

DEBOSE: (INAUDIBLE) Secretary of State as well . I'm just - I'm concerned about her being able to be in control...

BRAZILE: Well, we agree with you. Thank you so much.

OK, this discussion will have to continue. Funny how many political issues are like that. The AFTER PARTY will be right back.

(COMMERCIAL BREAK)

BRODY: All right, let's wrap up this edition the AFTER PARTY with a look at a key event to watch next week. Tuesday, Senate Democrats are going to vote whether or not to kick Lieberman out of the Democratic Caucus. I want to be a fly on the wall. And I want you to give me into that meeting.

BRAZILE: Joe Lieberman will remain the Democratic caucus. But he might lose his chairmanship.

BRODY: That's going to be a problem for him.

BRAZILE: That's going to be a problem for no one.

BRODY: All right. For all our panelists, my co-host as well, Donna Brazile. I'd like to thank you for joining us on THE AFTER PARTY.