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Fox News "Fox News Sunday" - Transcript

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MR. WALLACE: I'm Chris Wallace and this is "FOX News Sunday."

(Intro music plays.)

After another tough week on Wall Street, many are now looking to the next administration for answers. We'll get a sense how President- Elect Obama will handle the economy from David Axelrod, his senior White House adviser.

Then, Congress holds off on giving the auto industry a bailout. Will a deal get done? We'll sit down with Steny Hoyer, the House majority leader, and John Boehner, the House minority leader. Hoyer and Boehner, only "FOX News Sunday."

Plus, the Obama Cabinet starts to take shape. How is it playing in Washington? We'll ask our Sunday Regulars: Brit Hume, Mara Liasson, Bill Kristol, and Juan Williams.

And our Power Player of the Week.

CHIEF FLIGHT ATTENDANT REGGIE DIXON (AIR FORCE ONE): (From videotape.) I'd like to welcome you to the president's Oval Office aboard Air Force One.

MR. WALLACE: An unprecedented behind-the-scenes look inside Air Force One.

All right now on "FOX News Sunday."

(Intro music ends.)

And hello again from FOX News in Washington.

Late this week, the leak of possible names in President-Elect Obama's Cabinet became a flood as word rushed out that posts at State, Treasury, and Commerce were about to be filled.

Joining us from Chicago to talk about the incoming administration is David Axelrod, who has been appointed a senior adviser to the new president.

And Mr. Axelrod, welcome back to "FOX News Sunday."

MR. AXELROD: Thanks, Chris. Good to be here.

MR. WALLACE: The president-elect is expected to announce his new economic team tomorrow, and let's go over some of the names that are being mentioned now.

FOX News has confirmed Timothy Geithner, head of the New York Federal Reserve, will head Treasury. Governor Bill Richardson will be Commerce secretary. And there are reports former Treasury secretary Lawrence Summers will direct the National Economic Council, coordinating the federal response to the meltdown.

Mr. Axelrod, what message is Mr. Obama sending to the markets and to the country with these appointments?

MR. AXELROD: Well, obviously, we had a dramatic problem facing this country. We lost -- we've lost 1.3 million jobs this year; the market has lost a great deal of its value. Last week we had announced the 560,000 unemployment claims, the largest number since 1992.

We've got big problems, and there -- right now, it looks like they could get worse before they get better. So we need to start climbing out of the hole we're in.

The president-elect spoke yesterday about his goal of creating or saving 2.5 million jobs in the next couple of years, and the plan that -- or, the outline of a plan that will get us there. And we need the best people we can find, the best minds in our country, to help us accomplish that plan, and people like Tim Geithner and Larry Summers are among those people.

Bill Richardson's -- I saw that report, and certainly he's someone who the president-elect has huge respect for, but that is not necessarily an appointment we're going to announce anytime in the next day. So I'll confine myself to those two right now, and say that they are people who are recognized across the board as leaders in the area of the economy.

Tim Geithner is someone who had experience in dealing with economic crises, as the assistant secretary of Treasury for international affairs in the '90s. He's obviously intimately involved with the situation now, in his role as president of the New York Fed.

By temperament and experience, he's the right man to lead the Treasury now.

MR. WALLACE: During the campaign, late in the campaign, Mr. Obama talked about an economic stimulus package in the neighborhood of $175 billion. Since then, the stock market situation has only gotten worse. All signs are that the recession is going to be even deeper and longer.

Is he now thinking about a stimulus package even bigger than that 175 billion (dollars)?

MR. AXELROD: Well, as he said yesterday, the economic recovery plan we are going to bring in January has to be big enough to deal with the huge problem we face, and I expect he will ask for what is necessary to begin this process of economic recovery, to put people to work repairing bridges and schools and working on alternative energy projects, and to do the range of things we need to do, not just to get out of our problems in the short term, but to build our economy in the long term.

MR. WALLACE: He said yesterday, Mr. Obama did, that he hopes to sign this package soon after he takes office.

That would seem to indicate that he intends to work with the leaders of the new Democratic Congress even before he takes office, so that it'll be there and ready to go soon after Inauguration Day.

Our hope is that the new Congress begins work on this as soon as they take office in early January, because we don't have time to waste here, Chris.

As I said, the projections are that things may get worse before they get better. We're facing the biggest economic challenges we've had, really, since the Great Depression, and we want to hit the ground running on January 20th.

MR. WALLACE: It's been suggested that one way that Mr. Obama could reassure the markets is to announce that he is not going to raise any taxes, even on the wealthy and corporations, during a recession. Is that something that he is considering announcing, postponing that part of his tax plan?

MR. AXELROD: Well, as you know, Chris, the aggregate effect of his plan would be a net tax cut. He's committed to getting middle class tax relief in the pipeline quickly.

And there's no doubt that we're going to have to make some hard decisions in order to pay for the things we need. And whether it is through repeal of those tax cuts for the very wealthiest or whether we simply allow it to -- allow those cuts to expire in 2010, we're going to accomplish that.

Because we have to. We have to make some hard choices.

MR. WALLACE: But you're making it sound as if one consideration would be to let them expire, which means that the taxes would go up on the wealthy and corporations in 2011, rather than calling for it right away so it would happen in 2009.

MR. AXELROD: Well, as I said, you know, those considerations will be made. The main thing right now is to get this economic recovery package on the road to get money in the pockets of the middle class, to get these projects going, to get America working again. And that's where we're going to be focused in January.

MR. WALLACE: Let's turn to the Big Three automakers. And I think it's fair to say that the chief executives who came to Washington this week bombed in asking for the 25 billion-dollar bailout.

MR. AXELROD: (Chuckles.)

MR. WALLACE: There are a bunch of ideas out there now -- bankruptcy; what's called a pre-packaged bankruptcy, which would be a pre-packaged bankruptcy, which would be a pre-arranged bankruptcy, or a bailout.

Does President-Elect Obama have any preference for a solution?

MR. AXELROD: Well, as he said earlier this month, what we can't give is a blank check for an industry that isn't prepared to reform itself, to rationalize itself, and to re-tool for the markets of today and tomorrow. And if -- and so he expects that they will do that.

I hope that they will come back to Washington in early December, on commercial flights, with a plan to do that, or the beginnings of a plan to do that. Because the American taxpayers aren't going to hand them a blank check to continue doing what they're doing.

Some of the practices of the last 20, 25 years are the reason that they're in the hole they're in. And we certainly aren't going to encourage them to go forward in the same vein.

MR. WALLACE: Yeah, but, Mr. Axelrod, let me ask you about those practices. It wasn't just the Big Three automakers; it also has been the unions, the auto workers who have been big supporters of President Obama. Is he prepared to say to them you have to sacrifice, too, as part of the solution?

MR. AXELROD: Look, I think everybody involved in the auto industry who wants to save the auto industry -- and Chris, it's imperative that we do. There are millions of jobs that rely on that industry. We have to have an American auto industry, but --

And everyone involved in it has a stake in doing the things that are necessary to keep it competitive and to keep it flourishing, or to help it flourish.

So I expect those discussions will go on between all the players there, not just the executives of the auto companies.

MR. WALLACE: Let's turn to the national security team that President-Elect Obama is expected to announce after Thanksgiving. And again, let's look at the key, leading players.

FOX has confirmed that Hillary Clinton will be secretary of State. Retired Marine General James Jones is the leading contender for national security adviser, and Mr. Obama is at least talking with Defense Secretary Robert Gates about staying on at the Pentagon.

Mr. Axelrod, a lot of voices in the left wing of your party are saying this is not the kind of change that they thought they were going to get.

MR. AXELROD: Well, let me make something clear, Chris. There's one person who's going to set policy in this administration, and that's the president of the United States. That's true on the economy; it's true in foreign policy. And what he wants are the people who are most able to help advance that agenda.

But the agenda will come from Barack Obama. He has a very clear sense where he wants to lead this country. The people who he's recruiting for these jobs understand what that vision is, and they wouldn't be joining the administration if they're not willing to support and advance it.

And everyone who voted for Barack Obama can have great confidence that he's going to follow through on the commitments that he made.

MR. WALLACE: Ever since Senator Clinton's name was mentioned, I guess about 10 days ago, there has been the familiar soap opera that always seems to surround them about his financial ties to foreign countries and companies, whether or not she would really prefer to stay in the Senate.

After two years, almost, during the Democratic primaries, of dealing with all this, why on Earth would Barack Obama want to bring the Clintons into his White House?

MR. AXELROD: Hmm. (In acknowledgement.) Well, let me just say they've had some great conversations. Some of the obstacles that you mention have been removed. We'll probably make an announcement on some of these national security positions after the holidays, but --

So let me separate that from what I'm about to say, which is that Hillary Clinton is a demonstrably able, tough, brilliant person who can help -- who, if she were in a position such as that, would help advance the interests of this administration and this country. And that's the basis on which he would make such an appointment.

The one thing about -- that I've learned over six years with Barack Obama is that he invites strong personalities around him. He enjoys that input, that give-and-take, people who are willing to tell him what they think he needs to know. And then he makes the best judgments, based on all the information that he has.

And again, I'd just say this. He will be the leader of the government. He will be the man who sets the direction, and what he wants are people who are capable, strong, dynamic, to help drive that agenda forward.

MR. WALLACE: Finally -- and we have about a minute left -- as we said, you are going to be the new senior adviser to the president. I don't know how you're going to like this comparison, but are you going to be the Karl Rove of this administration, in a sense, at the intersection of policy and politics?

MR. AXELROD: Look, I've never accepted that comparison.

My role with Barack Obama for the last six years has been to help the communications operation impart his message, his values, and his vision to the American people, and I expect to continue to do that.

And my role is circumscribed to those responsibilities. I'm not trying to rebuild the Democratic Party or any of these other --

I think Mr. Rove had quite an expansive portfolio. I think mine is very focused.

MR. WALLACE: Mr. Axelrod, we're going to have to leave it there. We want to thank you so much for talking with us today, and we look forward to seeing you again once you get to Washington.

MR. AXELROD: Thanks, Chris. Thanks for having me.

MR. WALLACE: Up next, the House majority and minority leaders on the proposed auto bailout, the economy, and much more. And later -- (bridge music begins) -- inside Air Force One, as only the president usually sees it.

Stay tuned.

(Announcements.)

MR. WALLACE: And we're back, to discuss the possible auto bailout and how Congress will work with the incoming Obama administration.

Joining us, two men who will have a big say in all that: House Majority Leader Steny Hoyer and the Republican leader, John Boehner.

And Congressmen, welcome back to "FOX News Sunday."

REP. HOYER: Good to be with you, Chris.

REP. BOEHNER: Good morning.

MR. WALLACE: Let's start with the question of the economy. President-Elect Obama said yesterday his first order of business, once he becomes president, is going to be a big economic stimulus package to get the country working again.

Congressman Hoyer, given the current problems, how big?

REP. HOYER: We don't know how big that will be. We offered a 61 billion (dollars), which passed the House in late September. The Senate considered that and rejected it.

There was discussion about a $100 billion package this past week. But it needs to be large enough so that we can give some help to those who need it badly.

MR. WALLACE: There's talk now about 300 billion (dollars), 500 billion (dollars)?

REP. HOYER: Well, we're not going to -- I'm not talking about numbers right now, Chris. We're going to have to determine that.

But clearly, we need to have stimulus and help for those -- not the big corporations, but those who are struggling with losing their jobs, losing their ability to put food on their tables and losing health care coverage.

MR. WALLACE: Now, President-Elect Obama said yesterday he would like to have a package to sign shortly after he takes office. That would mean that he would have to be working with you over the next couple of months, before he's sworn in.

REP. HOYER: Chris, we're working right now, as David Axelrod said. We're working right now to address that. We've been working on it --

MR. WALLACE: With the Obama team?

REP. HOYER: With the Obama team, which is not fully in place, but we're working with the Obama team. And we expect to have, during the first couple of weeks of January, a package for the president's consideration when he takes office.

MR. WALLACE: Does this give you just tremendous heartburn, Congressman Boehner?

REP. BOEHNER: Well, I think American families and small businesses are struggling.

I put an economic stimulus plan out some six or eight weeks ago that basically says if we're really serious about creating jobs, what we ought to do is we ought to eliminate the capital gains tax for the next two years on any equities that are purchased.

Why not lower capital gains taxes for -- and corporate income taxes for corporations in America to help keep jobs here?

And if we're really serious about creating jobs in America, why wouldn't we do the American Energy Act, our all-of-the-above plan that will create a million new jobs over the next five years and keep more of our energy money here in the United States?

MR. WALLACE: Well, what about ideas that you heard President- Elect Obama talk about -- infrastructure projects, billions of dollars to get people working; aid to states for their various expenses?

REP. BOEHNER: I don't think we want to empower government here and keep bureaucrats employed. I think what we want to do is to help all Americans.

I think infrastructure may have a place in this package, but we're doing a big highway bill this coming year. Why not reserve that infrastructure money for the highway bill and do it in the right way?

But if we want to create jobs now and we want to create certainty now, why wouldn't we lower taxes? And if we really want to help the economy, why wouldn't we have the president-elect say I am not going to raise taxes on any American in my first two years in office?

REP. HOYER: Chris --

MR. WALLACE: I -- that's a very interesting question, and I have to say, since I asked it -- (chuckles) -- that David Axelrod left it wide open. Would you agree that maybe you should delay for a couple of years the taxes increases?

REP. HOYER: President Obama has said, and we agree, that we're going to lower taxes on 95 percent of Americans, who are hurting, who are struggling who are having a tough time.

Very frankly, John's answer to almost every problem has been lower taxes. That was the program in '01 and '03, and frankly, we've had one of the worst economies, worst job production economies, since Herbert Hoover.

What we think we need to do is invest in our people now. As I said, we need to help those who are unemployed. We passed unemployment insurance; the Senate passed it this time, the extension.

We need to put food on people's table, make sure they have availability of health care, and invest in infrastructure now. The states need that; local governments need that.

And what it does is it creates jobs now. Where? In America. That's why we think substantial infrastructure --

REP. BOEHNER: If we were to lower taxes --

REP. HOYER: John, let me finish, please.

REP. BOEHNER: You lower taxes. Once -- once it's --

REP. HOYER: You said this back in -- (cross talk) -- '03.

REP. BOEHNER: And frankly, it helped our economy a great deal.

REP. HOYER: The worst job production we've had since Hoover.

REP. BOEHNER: And the fact is, is if you lower -- if you lower taxes, you don't have to wait for the money to get to the states, the money to get out in contracts. You send the signal immediately. And so businesses start making decisions.

MR. WALLACE: All right. We have heard this --

(Cross talk.)

REP. HOYER: Yeah -- (inaudible) -- message.

MR. WALLACE: -- and it's going to be a debate that we're going to have. But I want to move on, because there are a lot of subjects to discuss here.

The auto bailout. The Democratic congressional leaders, Mr. Hoyer, sent the Big Three executives back to Detroit after their performance this last week, basically sent them back packing and said you've got to come up with a much more specific plan as to how you'd use the $25 billion.

What do you need to see that, by -- on December 2nd, to see from the car companies to convince you they've got a plan to use the money?

REP. HOYER: Essentially, what we need is to, A, show how they're going to be accountable. This is a large sum of money they want and need. Secondly, to show how they're going to be viable in the long term.

Those are the two key questions they're going to have to answer. And I talked, as a matter of fact, to all three of the auto executives on Friday and specifically gave them that message.

Senator Reid, Speaker Pelosi sent them a letter, outlined clearly what we need to have as a response to give the American people the confidence that investing in these companies is going to make a difference not only in the short run, but in the long run.

MR. WALLACE: If you don't see something that satisfies you, that they're really serious about restructuring, is it possible you would not even call Congress back into session?

REP. HOYER: We'll, we're going to be back here, but my expectation is that we are going to see something, that the auto companies are going to respond in a way that I think will give confidence to the Congress and to the American public that we need to assist these companies -- vital to our national security, vital to our economic security -- to not only be viable in the short run --

MR. WALLACE: So you think you'll pass a bailout in December?

REP. HOYER: I'm hopeful that we will come up with the information that will justify doing so, yes.

MR. WALLACE: Congressman Boehner, is there anything the Big Three could come back to you with that would convince you to vote for a bailout?

REP. BOEHNER: I think that the Detroit auto industry is important to the United States. It's important for hundreds of thousands of Americans who have their jobs, as a result.

When I talked to one of the CEOs, about -- over a week ago, when it was clear that they need the money and they need it now. But I asked this CEO, I said, well, what's the plan? And I didn't get an answer.

I said you at least have to come in here with a plan. And the fact is, is that I'm not sure that they will have a plan by early December, a real plan. And on behalf of the American taxpayers, they're not interested in investing money that -- it's going to be, really, thrown away.

And I think that Detroit has to come back with a plan in terms of how they're going to pursue talks with their employees, their creditors, their shareholders -- the other stakeholders. And if at some point there's a role for the federal government to play to help bring about a restructuring of these companies so they are viable, then we might consider, on behalf of American taxpayers, whether it's a good investment or not.

But I think it's important that they go out and have these meetings with their stakeholders, they have these negotiations. And at the end of the day, it's not about convincing me; it's about convincing the American taxpayer that they're making an investment in a viable corporation.

MR. WALLACE: Congressman Hoyer, the Democratic Caucus chose its leaders this past week by secret ballot. And yet you want to pass the union card check, which would deprive workers of the ability to cast a secret ballot when they're asked whether or not to unionize their workplace.

Why is a secret ballot okay and desirable for Congress, but you want to take it away from workers?

REP. HOYER: Chris, very frankly, what we want is to make sure that workers can get the opportunity to be represented and to bargain collectively for pay and benefits and working conditions. We think that's a basic American right protected by law.

The problem has been that getting an election has been extraordinarily difficult for American workers. Organizing and getting that ability to be represented has been extraordinarily difficult. That's why the card check bill came about.

When you have over 50 percent sign up and say we want to be represented, and then they are prohibited from getting an election by all sorts of maneuvers, we don't think that's fair. We don't think that's the intent of the law, and that's why the card check bill has been proposed.

We're going to look at that. We're going to see if there are modifications to it that can be effective, will bring compromise. But we think, absolutely, American workers have the right to organize and be recognized.

MR. WALLACE: Congressman Boehner, is that the problem, that once you get a majority of people going for union organization that then the businesses won't agree to the election?

REP. BOEHNER: If you get more than half of your employees to sign a card, there's almost an automatic election. But even then --

MR. WALLACE: They do sometimes get delayed, though, sir.

REP. BOEHNER: Oh, it may get delayed, but it's pretty hard to stop an election. But even there, only about 30 percent of the elections held, do they want a union.

This is nothing more than a payback to the big labor bosses who spent 4 (hundred) or 500 million dollars of their members' money helping the Democrats earn their majority in the Congress and buy the White House.

And to take away the secret ballot election from workers is not supported by union workers, by potential union members. This is, I think, an affront to the American people and we will do everything we can to stop this.

MR. WALLACE: Congressman Hoyer, I mean, it just, on the face of it, seems, the idea of the secret ballot seems like something that's very American.

REP. HOYER: I agree with that.

MR. WALLACE: And -- well, and the sense that you would take away the secret ballot would seem to lend itself to intimidation.

REP. HOYER: I think the problem is intimidation has led to prohibiting the elections that John says is automatic.

You talk to organizing efforts, they will tell you not only is it not automatic, but it is delayed ad infinitum until such time as the employees are dissipated in terms of the numbers of people who have supported -- (cross talk).

MR. WALLACE: Is this high on your agenda? Is this something you're going to pass early on?

REP. HOYER: Oh, we passed it early on last year, and this is going to be certainly something that we give attention to early on.

MR. WALLACE: Congressman Boehner, finally, House Republicans -- and I don't mean to be unkind on a Sunday -- have lost more than 50 seats in the last two elections with you as a leader, and now the leader.

Why are you the man to bring them back from the political wilderness?

REP. BOEHNER: Well, if I thought that I was to blame for those losses, I wouldn't have run for this job. And I can tell you, my colleagues would not have reelected me.

We've got a long way to go. American people have issues. They've got concerns. We need solutions; solutions to the issues that the American people care about, but built on our principles.

And I believe that reenergizing our party, reenergizing the idea machine that we used to be, is a step in the right direction.

I think our fight last year on energy that lasted three or four months was a very good fight and showed us how to win, how we could grab an issue, grab the attention of the American people and succeed.

And so you'll see a lot of effort on our part to be the party of new ideas. I don't think we can be the party of "no." There are going to be times when we do have disagreements and we do have to say no and be the loyal opposition.

But at the end of the day, I think that we have to be the party of new ideas, new solutions, and attract more Americans to our party.

MR. WALLACE: Gentlemen, we're going to have to --

(To Rep. Hoyer.) Real quick.

REP. HOYER: Just say, the people voted for change. They saw that the last eight years of the policies that were being pursued didn't work. They want change, and we're going to bring it.

MR. WALLACE: Gentlemen, we're going to have to leave it there. Congressman Hoyer, Congressman Boehner, thank you both so much for coming in today. Please come back.

REP. HOYER: Thank you, Chris.

MR. WALLACE: Lots to talk about in the coming year.

REP. HOYER: (Chuckles.)

REP. BOEHNER: Thank you.

MR. WALLACE: Still to come, inside Air Force One -- how it's kept in top condition to fly the president, and what are some of the perks reserved just for the commander in chief?

And our Sunday Regulars on the Cabinet-in-waiting of President- Elect Obama. We'll be right back.

(Announcements.)

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) I have already directed my economic team to come up with an economic recovery plan that will mean 2.5 million more jobs by January of 2011.

MR. WALLACE: That was President-Elect Obama talking about his top priority after taking office, during the weekly Democratic radio address, which can now be seen on the Internet.

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 let's review what's shaping up as the Obama team, both the selections we know and the leading contenders, in other cases, for his economic team: Tim Geithner at Treasury, Bill Richardson likely at Commerce, and Larry Summers definitely directing the National Economic Council.

On the national security side, Hillary Clinton at State, General James Jones the leading contender for national security adviser, and Defense Secretary Robert Gates being seriously considered to stay on at the Pentagon.

Brit, when you see all of that, does it make you reassess the way that Mr. Obama will govern as president?

MR. HUME: Well, it's certainly -- I would say there are two things that characterize this group: experience and, generally speaking, centrism and moderation.

So I would say that, particularly in terms of the economy, these are -- these names are pretty reassuring that anybody on Wall Street, for example, who was worried about Obama trying to impose early on a very intense, liberal economic agenda.

I noticed that David Axelrod didn't really want to commit on the issue, which was appropriate, I guess. But you can sense that they may be leaning toward allowing the Bush tax cuts to stay in place until they naturally expire at the end of 2011 -- all of which, I think, is a sign that Barack Obama is going to be very careful and cautious and listen to wise old heads in this area, in particular.

The most interesting choice in the group, of course, is the Clinton choice, which is a little off the subject of the economy, but --

MR. WALLACE: All right. Well, we're going to get back to that soap opera in a minute.

But Mara, all the things that Brit is saying are reassuring to the mainstream, how much gnashing of teeth on the left wing of the Democratic Party? And does he have enough standing with the left wing of the party, President-Elect Obama, that he can in effect say hold on a minute, guys?

MS. LIASSON: I think he does. I think the problems that he's facing are so huge that people just want him to solve them. And if he wants to array -- assemble an array of people who are -- look more toward the experience than the change end of the spectrum, I think people are going to give him a lot of room to do it.

Hillary Clinton said famously during the campaign that you need experience to make change. He seems to have come around to her point of view here.

He's got this tight inner circle of Chicago people who'll be with him in the White House, but he's really reached out to, I think, what you might call the center right of at least the Democratic Party. We'll see if he gets Bob Gates to stay on. That would be kind of bipartisan pick.

But yeah, I think he has running room from the left. And I think that he -- almost everything he's done since he's been elected has been to kind of -- to move to the center in one way or another.

MR. WALLACE: Bill, I want to go back to what Brit was talking about, and clearly the most entertaining story of the week, and that was the wooing of Hillary Clinton to be secretary of State. Leaks about Bill Clinton's financial links to companies and corporations and then, of course, leaks about how he's going to comply in every piece of vetting, then leaks about Hillary as Hamlet, whether or not she wanted to stay in the Senate because that was such a wonderful opportunity for her.

Are you prepared to say right here and now this is going to be a disaster?

(Laughter.)

MR. KRISTOL: No, no. I approve of that. I like all these choices. I'm not much of a hope and change guy, so it's no problem.

If I were a hope and change guy, I'd be a little bit distressed, perhaps. But he must --

Look, he honestly must think, since there's a certain amount of drama (he will ?) take with Senator Clinton, he must think she will be a good secretary of State. And I think she might well be a good secretary of State. And all of this drama doesn't matter if she does a good job.

And for me, I mean, why her, rather than some of the more conventional picks? Because she has been a little more hawkish than the mainstream of the Democratic Party -- voted for the war in Iraq; gave a very fine speech I went and looked up last night, which I recommend that everyone --

I think liberals, especially left-wing, anti-war activists who think Bush was such a horrible president who invented WMDs and all that, they should go and read Hillary Clinton's October 10th, 2002 Senate floor speech -- a very good justification for the war in Iraq, which she's never retracted, to my knowledge. Tough on Iran, and that's fine with me, if she's going to be secretary of State.

And Jim Jones, who served on the Clinton and Bush administrations at very high levels in the military, obviously, as national security adviser. That would be interesting.

MR. WILLIAMS: Well, I think it causes people concern, the same reason that it causes you such pleasure, gives you such pleasure, that people who were in support of the war or -- you think about Bob Gates, who thinks we need to have a continued ground operation in Iraq. And the idea is what happened to the guy who said we're going to get out of Iraq. The minute I get into office, the first thing I'm going to do is call the generals in; that seems to be gone.

And I think it's realistic, but at the same time, I think that there are a lot of people out there who wonder what happened to the -- you know, filling in the blank spaces when it came to that promise of change. It just does not seem to have happened.

And when it comes to the economic policies here, Tim Geithner's a obviously experienced guy. He's been in charge of the New York Federal Reserve, which is kind of the lead office of Federal Reserve around the country.

But again, it's the question of ties to Wall Street and the fact that he's been so involved in the -- putting together this bailout package that has not proved to be either popular or effective so far.

MR. WALLACE: Let's talk about the economy, Brit, because it was just -- and we had a steady drumbeat of this. I could just replay this part of my question.

More terrible economic news this week -- unemployment claims up sharply; the stock market headed, at this point at least, for the worst year in terms of the total loss, or percentage loss, since 1931. And now even talk about the possibility of deflation.

How big do you expect the Obama economic stimulus package to be? How big should it be?

MR. HUME: Well, I think the better question is -- I don't know how big it will be. My guess is that if it's a conventional stimulus package with a lot of roads and bridges in it, it will do very little good and that most of the projects will be put into play after the recession is over. That's the history here.

Barack Obama set an interesting goal, didn't he? Two point five million jobs. That sounds like a tremendous amount.

In fact, at the rate the economy is going, with the rate of the layoffs, if he dates the starting point for creating 2.5 million jobs to the day that he's inaugurated, it's likely the unemployment rate'll be significantly higher. He'll be -- we'll be down about half that many jobs anyway.

So normal recovery would take care of about half of his goal, and general growth, if we get it back, would take care of a lot of the rest of it. It is not, in any sense, an unattainable goal.

MS. LIASSON: No, that was --

MR. HUME: It's a relatively modest goal, when you think about it.

MS. LIASSON: Yeah, I think that was a very modest goal. But I do think, though, that the discussion inside the Clinton camp about how big or huge -- do you want a merely big stimulus package, or do you want a huge one? I think they're going to be tending towards the huge side.

I mean, this is going to take -- right now, the Federal Reserve has run out of tools. I mean, there's only -- if you cut interest rates all the way to zero and you're not stimulating the economy, well, then, Congress has to step in and spend tremendous amounts of money.

And I think that's what he's going to do, and he's going to make a down payment on all -- a lot of his campaign promises -- infrastructure, energy, middle class tax cuts.

MR. KRISTOL: I -- could I just say, I think you're maybe underestimating. They are panicked. I've talked privately to serious people, very -- whose names are now -- look like the very high levels of the Obama administration. This could be the Great Depression. That is what they think.

Maybe they're wrong; maybe they're overdoing it, but they think this is really a dire situation. And I don't think they're going be --

MR. HUME: What, 25 percent unemployment? They --

MR. KRISTOL: They think we could have a 10 -- yeah. We've given up 11 years of gains already in the stock market, in one year. We now have the worst year in history since 1931, '32. And we could be in 1931, and the rest of the drop came in '32, and that was another 40 percent in -- (word inaudible).

I mean, it's not likely, but they think we are really close to a -- we are at the precipice of a really, really dangerous situation.

MR. WALLACE: So what does that mean, in a policy sense?

MR. KRISTOL: Huge, huge stimulus.

MS. LIASSON: Huge stimulus. Huge.

MR. KRISTOL: Huge stimulus, and I think all the -- all the sort of normal rules of the road are off, here

MR. WALLACE: When you say -- what's huge?

MS. LIASSON: Five hundred --

MR. KRISTOL: I don't know what huge is. Hundreds of billions of dollars.

(Cross talk.)

MS. LIASSON: Hundreds -- (inaudible).

MR. WALLACE: "Huge" is getting -- it's harder --

MR. KRISTOL: Well, here's a question. Put off the tax -- the repeal of the tax cuts for the wealthy, let the --

MR. HUME: Till when?

MR. KRISTOL: At least till 2011, when they would expire anyway.

(Cross talk.)

MR. HUME: When they'll expire -- (inaudible) -- right.

MR. KRISTOL: But that's two years. That's something.

And I think the question they're going to have to face, the tougher political question, is how much to put off some of the other liberal things they promised that will, arguably, burden the economy.

MR. HUME: Yeah. How green can we be?

MR. KRISTOL: How green can we be? Are we going to do cap-and- trade if we're teetering on the collapse of the American manufacturing sector, parts of it? Are we going to do card check for unions at a time when you desperately want every small business in the country to be creating a couple of jobs, not feeling like oh, my God, we might get unionized and we've got to cut back?

So I think it's a real challenge for them. But I'm struck, talking to the economic guys, how very worried they are.

(Cross talk.)

MR. WALLACE: Let me ask you about one aspect of this, because we -- and this was something that David Axelrod sort of hinted at, and so did Steny Hoyer. You've got a kind of a power vacuum now.

And we do have a president in power, obviously, George W. Bush, but he seems to have lost a lot of credibility with the markets. So how much, before he's sworn in, can Barack Obama do?

MR. WILLIAMS: Well, he can't do much before he's sworn in. Obviously, the Congress is going away very shortly without passing any kind of package, the bailout for the auto industry or any kind of economic stimulus package.

So what you're doing, basically, is this White House is saying -- and I think you heard a little bit of this from Brit a few minutes ago when he said, you know, this attempt to build the infrastructure is not going to stir the economy very quickly. It takes a long time to get in the system.

So they're saying well, that seems to us like -- this is what the White House is saying -- seems like a waste of money, to us.

Well, I think the Obama perspective, actually, is the right perspective, which is to say there are long-term projects, infrastructure needs in the country that need to be taken care of. And you can create employment; you can put people to work -- I don't know exactly how many people, but you can put people to work, and I think that's a good thing.

One quick thing to say here is all this talk about socialism -- Barack Obama's a socialist, we're going -- you know, we're -- this is so crazy. And I think the craziness of it is revealed in this moment, where you see all these centrists, particularly on the economic team.

And the question now becomes exactly what is Barack Obama going to do on the tax cut? And I hear what Bill Kristol hears, which is that he's going to say, you know what? Keep the Bush tax cuts there until 2011. Let 'em go.

MR. WALLACE: So was all the -- (laughs) -- when you were talking about socialism, who were you directing that at?

MR. WILLIAMS: You know, I like to tease Brit Hume, because he --

MR. HUME: I don't think a word ever passed my lips.

MR. WILLIAMS: Never -- no, no. Are you kidding? The right wing of this country didn't go after Barack Obama on -- as a socialist?

MR. HUME: I said it didn't pass my lips.

MR. WILLIAMS: All right. All right.

MR. HUME: I wasn't talking about, you know, Dick Viguerie or somebody.

(Quiet laughter.)

MR. WALLACE: Just trying to get something started here, gentlemen.

All right. We're going to have to leave it there. I want to thank you all so much. Have a great Thanksgiving holiday, and we'll see you next week.

Up next, we're going to take you on board the president's plane, Air Force One, for a rare behind-the-scenes visit. I promise you're not going to want to miss this.

(Announcements.)

MR. WALLACE: On this day in 1971, the People's Republic of China took its seat as a permanent member of the U.N. Security Council. The Council, which has five permanent members, can impose sanctions to try to keep the peace around the world.

Stay tuned for a special Power Player of the Week.

(Announcements.)

(Brief video image plays.)

MR. WALLACE: That's President Bush on Friday, boarding Air Force One for his 48th and final foreign trip.

For a plane that's such a symbol of our nation, most of us know very little about what it's like inside. But this week we were granted special access to the aircraft and the dedicated crew that works on it -- for our Power Player of the Week.

It is the most famous, most photographed plane in the world. But when you walk into the hangar at Andrews Air Force Base and talk to the people who work on it, Air Force One means more than that.

COL. MARK TILLMAN (PILOT, AIR FORCE ONE): I've got 230 hand- picked folks that have tremendous pride to make sure this jet works perfectly every time for the president of the United States.

MR. WALLACE: Colonel Mark Tillman is completing 30 years in the Air Force, the last eight as the president's pilot.

(To Col. Tillman.) What is it like to land in a foreign country as the pilot of this plane, with the United States of America emblazoned across the side?

COL. TILLMAN: You see people from all over the world waiting to see Air Force One, but more importantly, to see the president of the United States and America arrive on their soil. The flag and the United States of America is -- we've brought the United States to that country.

MR. WALLACE: And all 230 people who work on Air Force One and the backup 747 have a keen sense of dedication.

COL. TILLMAN: We don't accept failure, so it's a zero-error, zero-failure mission. The goal for us is we are kind of the men in black, so we hang behind --

MSGT. RICK KOUZENOW (SP): Myself and my crew take great pride in this, because it's a sense of ownership. It says United States on the side, but we think of it as ours.

MR. WALLACE: Master Sergeant Rick Kouzenow (sp) is the crew chief. He leads a team of 17 who check and then double- and triple- check the plane.

MSGT. KOUZENOW (SP): Where other 747s would be, when things are fixed, it's because they're broken. We find things before they're broken and fix them before they become a problem so --

MR. WALLACE: The crew doesn't wash the plane; that would leave water spots.

So they polish everything -- even the tires -- by hand.

MSGT. KOUZENOW (SP): We probably checked out, I would say, 2 (hundred) to 300 rags, and they all have to be accounted for by every person when they go to check in at the end of the day.

MR. WALLACE: And what if there are 199 rags?

MSGT. KOUZENOW (SP): Then we will search this airplane until we find it.

MR. WALLACE: Staff Sergeant Jessica Cattrell has worked on Air Force One less than five months.

SSGT. JESSICA CATTRELL: To know that I can be part of safely making sure the president gets where he needs to go -- oh, it just -- you know, every time I walk in --

You get so caught up in the routine, but then I walk in and just -- I just can't believe it.

MR. WALLACE: Safety and security are the top priorities. Thousands of parts for the plane are stored in the hangar, so if there's any problem it can be fixed immediately.

COL. TILLMAN: It's a secure facility. All the parts have been bomb-swept, listening-device-swept, so they're ready to go to be put on the president's aircraft.

MR. WALLACE: And in case there should be a problem while the president is on his trip, they carry spares for any part that has ever failed, in the back of the plane.

COL. TILLMAN: We can't fail the president, nor do we ever fail the president. So we haven't failed him yet, and we're not about to.

MR. WALLACE: Now it was time to climb on board Air Force One to find out what's behind the gleaming fuselage.

Chief Flight Attendant Reggie Dixon greeted us. He has worked on the plane for 10 years, the last four serving the president.

CHIEF ATTENDANT DIXON: Air Force One will leave Andrews Air Force Base self-contained.

MR. WALLACE: What he's talking about is no matter how long the trip, the plane leaves with all the food it needs. They have two galleys that can serve 100 meals at a time. The president gets his own menu.

(To Mr. Dixon.) Can you tell us anything about his special tastes?

CHIEF ATTENDANT DIXON: I'll just say he's from Texas, so he loves his beef.

MR. WALLACE: One item we noticed in the galley, a special list which tells exactly how top staffers like their coffee.

(To Mr. Dixon.) I notice some people are on this and some people aren't on it. So is it a big deal to make the coffee order list?

CHIEF ATTENDANT DIXON: Right. Well, we don't necessarily advertise it -- (laughter) -- and so most people don't really know if they are on it or they're not.

MR. WALLACE: Then Dixon took us forward to the presidential suite.

CHIEF ATTENDANT DIXON: I'd like to welcome you to the president's Oval Office aboard Air Force One. As the crew, we like to look at this as the Oval Office for the president while he's on board the airplane.

The president'll come in and take off his suit jacket, and the very first thing he'll grab is the crew jacket, put it on.

And we like to think that the president has everything that he will need within an arm's reach. We have secure phones available to the president, as well as non-secure phones. The office is also set up so in the event the president needs to address the nation, video and teleconferencing way, he can do that as well.

MR. WALLACE: But, Dixon told us, staff and guests don't just wander up to the president's office.

CHIEF ATTENDANT DIXON: The protocol on the airplane is that wherever your assigned seat is, you can go aft of your seat, but you should not come forward.

MR. WALLACE: Now it was time to see the most private area on Air Force One.

CHIEF ATTENDANT DIXON: I'll take you back to the president's personal quarters. As you can see, we have a lavatory, full-range shower, vanity, double sink.

MR. WALLACE: Can I see the shower?

CHIEF ATTENDANT DIXON: Absolutely.

MR. WALLACE: All right. Now, that, for an overnight trip, has got to be quite a luxury, to be able to take a shower.

CHIEF ATTENDANT DIXON: It is. The president also likes his exercise, as we all know. So there'll be times where we'll travel, he'll exercise for about an hour on a bike, and then he'll be able to come in here, get a nice shower, and get off the airplane looking like the president that he is.

CHIEF ATTENDANT DIXON: And this is the suite --

MR. WALLACE: This is the president and first lady's private quarters?

CHIEF ATTENDANT DIXON: Suite. Absolutely. As you see right now, we currently have this area set up where there's two beds available for the president and first lady.

MR. WALLACE: Now, I understand the president's particular about his pillow. Does he have a special pillows?

CHIEF ATTENDANT DIXON: He does. It's not out right now, but he likes a very soft pillow, and --

MR. WALLACE: And you've got it.

CHIEF ATTENDANT DIXON: We have it. (Laughs.)

MR. WALLACE: That's good.

CHIEF ATTENDANT DIXON: We definitely have it.

(Demonstrates automatic window blinds.) The touch of a button, and they will go down.

MR. WALLACE: And given the irregular hours of a presidential trip, the first couple can rest day or night.

CHIEF ATTENDANT DIXON: And then another touch of a button, and they can all come right back up.

MR. WALLACE: Presidents have had their own planes since Franklin Roosevelt in 1944 commissioned this C-54 called the "sacred cow." In 1962, John Kennedy started flying on the first presidential jet. A year later, it would take him to Dallas -- and bring back his body.

In 1990, this 747 took over as Air Force One. Colonel Tillman is the 12th presidential pilot.

COL. TILLMAN: This is the flying White House, so similar to the White House, there is an area for the Secret Service to go (to ?) to the first family's quarters.

MR. WALLACE: So there are two guys stationed here all the time?

COL. TILLMAN: That's right. It's similar to the White House --

MR. WALLACE: Okay.

COL. TILLMAN: The -- we've got a medical annex. So we've got a hospital on board, where -- the White House medical unit has a doctor and a nurse that'll travel with him all the time. And we've got medical equipment to go ahead and stabilize the president and then we can get him to a hospital, if necessary, while we're flying.

MR. WALLACE: Next, Tillman took us to the president's conference room. Originally designed as the situation room, but now used for meeting with staff on the plane or around the world.

COL. TILLMAN: The president'll sit right here. He's got the communication he needs to direct the nation as necessary, but he's also got the capability of a 50-inch plasma screen up top where he can actually do video teleconferencing.

MR. WALLACE: One thing we learned is there is a dividing line in the plane. In the forward section, the seat belts have the presidential seal, denoting that area's special status.

COL. TILLMAN: We'll move out of the White House. The tan carpeting is what we consider the White House, and then we'll move into a guest area.

MR. WALLACE: When we get to the blue carpeting, we're out of the White House?

COL. TILLMAN: Yes, sir.

MR. WALLACE: Colonel Tillman took us to the area where guests sit. But in recent years, it's also been used to carry the remains of former presidents to the nation's capital and then back home.

COL. TILLMAN: This area is set for -- the president that has fallen will lay in state back here. So the chairs will come out, the table comes off, the table right there comes out, and then the casket will lay in state right here.

We'll take care of the president from basically in office to when he lays in state. Air Force One will take care of the president.

For, like Nancy Reagan and President Reagan, we made the front of the aircraft exactly the way it was when President Reagan was president. So we pulled out President Reagan's Air Force One jacket. We had Nancy Reagan's jacket. We put them on the chairs up front with the books and the candies and whatever, just to make them at home.

MR. WALLACE: Finally, it was time to head upstairs.

COL. TILLMAN: This is the communications suite, so the backbone of the aircraft. It's where all the phones that you see on board, everything connects up into this area.

MR. WALLACE: How many phones?

COL. TILLMAN: About 87 phones. So basically on one side is all the phones on the jet; on the other side are phone lines that they have available, so they're just plugging and playing.

MR. WALLACE: Now, what's the difference in color over here on the right?

COL. TILLMAN: Normal communications are in the gray, and then the red is for, basically, once we want to make a classified call or a secure call for the president or for any of the staff, it's available to them.

MR. WALLACE: Colonel Tillman then took us into his office, the cockpit of Air Force One, where he has been an eyewitness to our nation's recent history.

COL. TILLMAN: I was with President Bush on September 11th in 2001.

MR. WALLACE: Tillman bristles at stories Mr. Bush was reluctant to return to Washington after the attacks on 9/11.

COL. TILLMAN: Many thought he might have been running around the United States, and that wasn't the case. We, as the military, were protecting him. The president wanted to get back to Washington right away to lead the country. But he was leading the country on Air Force One.

MR. WALLACE: In fact, the colonel was so worried after the initial attacks he had Air Force personnel guard his cockpit.

COL. TILLMAN: I did ask our head security forces person to go ahead and remain up in the crew rest area to make sure that there was no -- until we had everybody accounted for on the aircraft.

MR. WALLACE: So even the people on board Air Force One, you were concerned you might not know who's here.

COL. TILLMAN: I just went with the worst-case.

MR. WALLACE: The other indelible memory, Thanksgiving 2003, when Tillman flew Air Force One on a secret mission to Baghdad so Mr. Bush could have dinner with the troops.

(To Col. Tillman.) How did you feel about flying the president of the United States into a war zone?

COL. TILLMAN: The president was up in the cockpit with me then, and that's one of the things he mentioned was, you know, what is -- about bringing the president into a war zone.

Prior to taking off, I was extremely concerned, because I want my kids, when they -- and when I'm a granddad, I want all my grandkids to know that the history books show that Colonel Tillman got him in there safely and got him out.

MR. WALLACE: One thing the colonel won't discuss is security on the plane. It reportedly has defenses to ward off surface-to-air missiles and the effects of a nuclear blast. All Tillman says is the president is well protected.

It turns out, by tradition, when a president leaves office, so does his pilot. Which means come Inauguration Day, two public servants will be stepping down.

(To Col. Tillman.) What's it going to feel like the last time you push the throttle forward and take your president back to Texas?

COL. TILLMAN: As the throttles go forward and I start heading to Texas, it's -- bring back a lot of memories of what I've accomplished over the last eight years with the president.

Once we land there, my deputy, who'll be the next president's pilot, I'll move over to the right seat. I'll be his co-pilot. My name tag'll come off; his name tag'll come on. And it's a --

It'll be truly an honor for him and truly an honor for me to have served President Bush.

MR. WALLACE: And we'll have some final thoughts about our time on Air Force One, after this break.

(Announcements.)

MR. WALLACE: Our special thanks to Colonel Mark Tillman and all 230 men and women he commands. It was a real honor to see their patriotism and professionalism up close.

We also want to thank the White House Press Office for getting us on Air Force One. We'd been working on this for five years, and we were delighted to take you along with us for the tour.

And that's it for today. Have a happy Thanksgiving, and we'll see you next "FOX News Sunday."

END.

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