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CNN LIVE EVENT/SPECIAL

After Party: Where Do We Go from Here?

Aired January 4, 2009 - 14:00   ET

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


DONNA BRAZILE, CNN CONTRIBUTOR: Welcome to a new year and soon a new president.
DAVID BRODY, CHRISTIAN BROADCASTING NETWORK: A new year, yes, but from recession to congressional chaos to warfare in the Middle East. That new president is going to be facing many of the same old challenges.

BRAZILE: Well, with challenges come opportunity. Hello, I'm CNN contributor Donna Brazile. I'm set to discuss what's ahead in 2009 with a panel of progressive analysts.

BRODY: And I'm David Brody with the Christian Broadcasting Network. I'm going to be watching with three top conservative commentators right here, ready to point out all the ways, Donna, you have gone astray.

BRAZILE: Astray? We got a new direction in 2009. Welcome to the "After Party."

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: Somebody was sending rockets into my house where my two daughters sleep at night, I'm going to do everything in my power to stop that. And I would expect Israelis to do the same thing.

(END VIDEO CLIP)

BRAZILE: That was candidate Barack Obama back in July visiting an Israeli town often hit by rockets from Gaza. What's the key thing President Obama needs to do in the ongoing crisis? Let's go right to my guest Peter Beinart with "Time" magazine, "the Daily Beast."

Of course, Peter, what's your take on this situation? This is a very crucial crisis for the new administration. How should President Obama handle this situation?

PETER BEINART, "TIME" MAGAZINE: This is a lose-lose situation. He's doing exactly the right thing by saying nothing until inauguration and hoping this is going to be over by the time he takes office. In the long term, there has to be a much more intensive effort at negotiation in the Middle East between the Israelis and the Palestinians, even if we're not going to get a peace deal, just to make sure we don't slide backwards, but in the short term he has nothing to gain by making a statement about this conflict while it's going on. BRAZILE: Nico Pitney with the "Huffington Post," do you agree that this is a lose-lose situation and President Obama should just let things settle down or settle itself?

NICO PITNEY, "THE HUFFINGTON POST": For me, yes. There's no such thing as being half pregnant and there's no such thing as being half president. I think he's doing the right thing now by keeping quiet. Because there's very little gain by speaking out, but there's a lot to lose. You look relevant, and there's the potential that you know upset potential key figures who you are going to have to negotiate with in a few weeks. So, I think he's done - he's played it exactly right.

BRAZILE: But Liz Chadderdon, with the Chadderdon Group, don't you think that President-elect Obama should send some signals perhaps through Secretary Rice or incoming soon-to-be Secretary of State Hillary Clinton that he intends to engage diplomatically to try to resolve this crisis?

LIZ CHADDERDON, DEMOCRATIC STRATEGIST: I don't agree it's up to him yet. I really don't. I agree completely with Peter. He's not there yet. He's not president. And frankly, the Bush administration is actually doing a pretty good job. Condoleezza Rice is still doing a very good job as secretary of state. Is he having conversations with them, President-elect Obama? I'm sure he is. But Hillary Clinton is not Secretary of State yet.

It's just not time. It's terrible timing, but we've got two, what 2 1/2 weeks to go until he's president. It's just time for him to sit back, but the minute he's inaugurated though he needs to start making some bigger steps.

BEINART: If he criticizes the Israeli action, then he will have a political problem with the kind of conservative elements of the Jewish community and pro-Israel groups. If he doesn't criticize them, then he will lose the potential opportunity he has with the Muslim world. He needs to maintain both of those relationships now so that when he does take office he can actually try to move forward.

BRAZILE: But how do we get back to the road to peace, if ever there's going to be peace, especially with the Palestinian authorities sitting it all out. Hamas still at the drawing table in terms of Gaza? I mean, what do we do? How do we get back to the two-state solution?

PITNEY: I mean, -- well, I think Peter's right. That the U.S. and the quartet have to be much more involved than they have over the last few years. This is a crisis of global security. And right now, the people with global stakes in the game aren't engaged in the way they should be. And there's a lot of signs. I mean, the Israeli press has been doing some good work on Obama's plans for the region. And diplomacy is involved heavily. I mean, he's you know, "Haaretz" used the term army of diplomats. He's going to go in a bull bore it seems and really try and change the dynamics whether he's successful or not.

BRAZILE: But I get the sense that we're saying that President-elect Obama should do nothing, should allow the president who is currently in office the last 10 days or whatever to do something, but what is that?

BEINHART: I think eventually this bombardment is going to stop and then the question is going to be, how do you try to reconstruct some kind of ceasefire with Hamas that can hold?

BRAZILE: Can you do that without involving some of the moderate Arab nations like Egypt, Saudi Arabia?

BEINHART: No, Egypt is going to be very important. I think one of the key things that Obama has got to do is try to improve American relationship with Egypt. Because Egypt is a key factor here. It's their border is on the other side of Gaza from Israel. It's going to be very, very difficult. When this is over, probably hostilities towards Israel in Gaza will be even greater than this now, that's possible.

Hamas arsenal will be weakened but they can get those arms back but that's got to be the long-term goal, a durable, permanent ceasefire with Hamas and then a real push to try to try to improve the quality of life in the west bank so the Palestinian authority which does accept Israel existed can have more legitimacy than it does now.

BRAZILE: Does Israel face a backlash in the short term? Because pretty soon there will be elections in the Palestinian regions and perhaps more hard-liners will run, more folks connected to Hezbollah and Tehran and Hamas and Damascus.

PITNEY: I think that's exactly right. I mean, the pro-Israeli group, J Street, I think they are progressive and I think their line has been exactly right that this bombardment while perhaps justified has been against the interests of Israel in the long-term, you know, peace - potential for peace in the region. And I also think, I mean, conditions have to be improved in Gaza.

There has been an 18-month blockade there, civilian conditions are absolutely atrocious. Infants don't have basic medical care. People are starving. It's really bad there and that needs to -

BRAZILE: Well, let me just turn to another crisis. Because you all probably heard that sales went down during the Christmas holiday. I tried. I gave it all. With a number of siblings and nieces and nephews, I did my part. But, clearly, consumer confidence once again has dropped. And, Liz, the new president will be in town next week to meet with Speaker Pelosi and Majority Leader Reid, what's on the menu?

CHADDERDON: Oh, well, let me tell you what's on the menu is stimulus, stimulus, stimulus, and fix the economy, fix the economy, fix the economy. We never before, you know, just to bring up the old refrain was it more "it's the economy, stupid," I mean. And going back to if I was advising President-elect Obama, which I'm not, but if I were, I would tell him send your Secretary of State, send your diplomats when you're president to deal with this problem in Gaza, but first and foremost to dance with the one that brung you. It was the American people that have elected him and what they want to see is a resurgent economy. And you know, what's he going to do? I think we're going to see a new stimulus package. I think we're going to see a republican push-back in Congress. But let's be honest, the republicans are really not in the numbers that they used to be. And I think it's probably going to pass. Is it going to work? A lot of people don't think the last stimulus worked. So I think you're going to start to see a lot of economists try to get involved with the new administration. But you got real wars within the economists whether or not stimulus is the right thing to do. Whether the bailout was the right thing to do, it's going to be - tell us.

BRAZILE: So Peter, do you think that Speaker Pelosi, Majority Leader Reid will try to add their own two cents on this package and perhaps expand it a little bit?

BEINHART: Probably. I don't think the White House can ever fully control these kinds of things. I mean, when Congress has their hands on it, they will add. But I mean, the basic thing is what is the size of it is and does it go towards things that help build American infrastructure in the long term, to have long-term benefits as well as short-term stimulus benefits. And I think there will be a big package that I think republican are making a huge mistake by opposing this. What is their answer to stimulate the economy -

BRAZILE: I don't think they're even saying -

PITNEY: I think the low point for the democratic party in the last eight years was when democratic leaders feigned opposition to republican bills but went along with them anyways. They kind of did a kabuki bans. This is what the republican leadership is doing now, they are not going to oppose it in the end, or it's highly unlikely, but they're going to pretend as if they and it puts them in a very weak position and I think it's a bad omen for them, you know, in their attempts to regain the majority.

BRAZILE: Is it the size of the package or the contents that really is disturbing some conservatives?

CHADDERDON: I think it's both. You know, I think we will all agree. I think it's probably both. I think some of the conservatives that's going to be the size of the package and some of the conservatives it's going to be what's in it. But I actually, completely agree with you, Nico, I don't think they're going to be able to scream, no, no, this is a bad thing and then go run a vote for it behind closed doors.

I think that they're really going to have to come to terms with where they stand in bringing the economy back. This is actually an opportunity for the republicans. If the democrats in their new massive majority in Congress and their new president can't figure out how to turn the economy around in the next six to 12 months, it's a huge opportunity for the republicans to come in and actually save the day. But not if they've been backing all our policies.

BRAZILE: Let me ask you a question before we go to break. Will the republicans try to block it in the Senate? Since we all know that there's still problems in getting democrats seated right now over this.

BEINART: I suspect that Nico has it right, maybe they will try to fine-tune it a little bit more in the way tax cuts and a little bit less in public spending. I just don't see how at the end of the day you can oppose a stimulus when most economists say it's a government fiscal stimulus. We've run out of monetary policy, there's nothing more the fed can do basically that is really our only hope now of averting an incredibly damaging recession.

BRAZILE: I have to agree with you.

We're going to take a beak right now and when we come back, our conservative friends are eager to get their chance here at the table and tell us a little bit about what's been going on in the wilderness.

But right now, everyone is asking one big question, what is up with Illinois Governor Rod Blagojevich?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH, ILLINOIS: Please don't allow the allegations against me to taint this good and honest man.

(END VIDEO CLIP)

BRAZILE: The embattled Illinois Governor appoints a respected politician to the same senate seat he's accused of attempting to sell to the highest bidder. Welcome back to the "After Party." I'm Donna Brazile.

And I cannot believe that the governor thinks that he can appoint someone that the Senate will accept next week. Roland Burris is a good guy. I know him. He's a former leader of the democratic party. But that aside, Roland Burris understood that this was a tainted position. And now the Senate must decide what to do. What do you think the Senate will do?

PITNEY: I think they made clear they're not going to accept it. And Danny Davis made the right decision which was to avoid - I mean, he was offered the spot apparently and said, no. This is a bad call. It's going to be bad for me, and I'll probably not going to get the seat in the end anyways. I'll be smart about it and turn it down. And Roland Burris -

BRAZILE: Danny Davis is a black congressman from the state of Illinois, from Chicago. But another black congressman from Chicago, Liz, made an interesting comment when he described the senate basically being against blacks and it should be a, "black seat."

CHADDERDON: Well I don't - I think that it's completely unreasonable to think that any seat should or should not be a female seat, a male seat, black seat, a white seat. I just think that it's undemocratic. But going back to whether or not the Senate is actually going to seat him, I don't think they are. And I think it's a real double-edged sword. Because on the one hand by not seating him, they are trying to send a message that none of our seats are ever up for sale, none of them are ever tainted.

But the flip side from a democratic point of view, is by not seating him, this story stays in the media. How long have we been listening to this story? Who would ever thought that the governor of Illinois would be in the news for three weeks? And he's going to stay in the news I think really right up until inauguration day. So it's a little bit of a double-edged sword whether or not it is the right thing to do, not to seat him or to seat him.

BRAZILE: What happens if Roland Burris shows up in the Senate gallery next week? Will somebody give him a pass as a citizen and watch the proceedings?

BEINART: I think they're probably try to avoid a public spectacle. I do think once we start to have real news starting inauguration day, that this is going to fade and that means I think the Senate can fight this and delay until you got a new governor off Illinois.

And I actually frankly think Bobby Rush's comments make it even more important that they not cave. Because I mean, I think it would be terrific to have an African-American appointed to the seat. I think the democratic party in general needs to think about growing it's African-American politician base so they can start winning House and Senate and state Senate seats in multiple, in mixed areas so they can run for senate.

But to then kowtow after this comment by Bobby Rush I think it would make it more politically damaging to allow Burris, even though he's a perfectly good guy, I wouldn't have minded if someone else had nominated him, but I think now what he needs to do is to look for another African-American to be nominated by a legitimate governor of Illinois.

BRAZILE: Nico, I know that next week, Harry Reid is going to perhaps tell those Senate rules committee to look at you know, to look over the details and to see whether or not Mr. Burris is qualified, et cetera. But do you think that's the right procedure, or should he just allow this to work its way through the court and see if the Illinois legislature can somehow dethrone the governor?

PITNEY: I think both paths will proceed on course. I mean, there's some precedent with a House member who has voted and the House refused to seat him and he ended up being seated. So, they may face a stumbling block if they try. But, I mean, it's too bad for Roland Burris.

On the other hand, this is a guy who gave Blagojevich - his firm gave to Blagojevich. He had clear financial ties. It's like if you were going to appoint anyone, if Blagojevich was going to appoint anyone, at least choose someone who wasn't a previous donor. It just boggles the mind.

BRAZILE: That's a republican, some kid out of diapers that never gave to a politician? We all give money to politicians. Let's talk about the republicans before they come and take their seat at the table.

As you know both parties will be selecting a new leadership in terms of the party committees. And one of the candidates seeking the position made some, what I call unfortunate remarks. He referred to Barack Obama, a parody, sent out a DVD using this - some - trust me, it's not a hit song, "Barack Obama, the magical Negro." It will not be a hit song. It's not even a satire, it's really a bad record for the republicans to have a chair, a potential chair used this type of inflamed rhetoric to try to get a seat at the table.

BEINART: I think this is actually a great opportunity for the republicans. They should have denounced him completely, run him out of the republican party and made a statement about the fact that this is not tolerated. But, in fact, they weren't able to do that. Some like Gingrich actually to their credit said no. But other people kind of rushed to his defense and they got - it seems to me this has been a disaster not only because of the comment itself but because they could not unify and say for goodness sakes, morally and politically, we need to reject this guy.

CHADDERDON: Oh, absolutely. I mean, have the republicans not at all studied the data about what just happened in this election? I mean, have they gone -

BRAZILE: They're in the wilderness, they are not looking.

CHADDERDON: Because, I mean, they lost African-American voters, they lost Hispanic voters, they lost young voters, they lost new voters and yet they're out there doing this? This is how they think they're going to win the presidential race in 2012 or in 2016 is by this kind of 1950s Ku Klux Klan crap? Oh, my god. I can't even - I agree with you. They had an opportunity to turn themselves around and they stuck themselves further in the mud than they already have.

BRAZILE: What does this tell us about the republican party? Will they play the loyal opposition or will it be the party of spoilers?

PITNEY: Well, can I just say one word of defense? Shockingly enough, which is that the songwriter is African-American and it was a parody based on an "L.A. Times" op-ed by a progressive African-American, so I do want to be - I want to at least put it in context. That said -

BRAZILE: Did he write it about Barack Obama?

CHADDERDON: Very surprising.

BRAZILE: Was it about some 1930s satire about magical Negroes?

PITNEY: I think that's kind of a literary analysis, you know, putting Barack Obama in - anyhow, that said, it's a major statement about the state of the modern republican party, that this may end up actually helping the RNC candidate who distributed this.

BEINART: Because the people who will like it don't know the fact that you just mentioned, right? They just like it because, you know, they feel like it's a poke in his eye. CHADDERDON: Right.

PITNEY: Yes, it is. And it's sad, because I think it would benefit everyone, democrats, America, for the republican party to moderate and to be more inclusive. I think it would help everyone.

BRAZILE: Loyal opposition or the party of obstructionists?

CHADDERDON: Loyal oppositions or the party of obstructionists?

BRAZILE: Yes.

CHADDERDON: Party of obstructionists, you've got to be kidding. You know, at this point, I tell you what though let's talk real briefly about the Democratic National Committee. I want to run Donna Brazile for chairman. You guys want to join me?

BRAZILE: I'm not qualified.

CHADDERDON: This is a draft Donna Brazile -

BRAZILE: No, not today. Not today.

CHADDERDON: Oh, come on.

BRAZILE: I enjoy being a superdelegate, but that's about it.

CHADDERDON: Peter, loyal opposition or the party of obstructionists?

BEINART: Look, they don't have any obligation to support all of Barack Obama's agenda. I mean, they should support some of it but they have ideological obligation to support all of Barack Obama's agenda. I mean, they should support some of it but they have ideological opposition and that's fine. They should just not make personal kind of personal attacks and for goodness sakes they shouldn't make racist attacks. I think that's the standard.

BRAZILE: I agree with you. I hope that they are a loyal party to their cause and their principles that they find a way to work with the new president.

Well, that's all we have to say. We need to turn the table over to the conservatives. And here they come now, out of the wilderness. Don't worry, we'll be watching them, and we'll be back to challenge them on any of the facts.

We're circling.

(LAUGHTER)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I'm here on this trip to reaffirm the special relationship between Israel and the United States. My abiding commitment to Israel's security.

(END VIDEO CLIP)

BRODY: In July, presidential nominee Barack Obama stood in Jerusalem and reiterated his support for the state of Israel, but as Israeli jets pound Gaza in response to Hamas rocket attacks, what should President-elect Obama do about the ongoing situation? And CNN contributor Amy Holmes, what should Obama do exactly?

AMY HOLMES, CNN CONTRIBUTOR: Something must be wrong, because I agree with all of our liberal colleagues. And I think that Barack Obama should do nothing, study up and for two reasons. He doesn't want to make a policy pronouncement that doesn't have any power or authority. He doesn't have the authority of force behind it, nor does he want to be in a situation where he is contradicting and confusing current American policy. George Bush's policy has a two-week shelf life. Barack Obama will be sworn in and at that point he needs to hit the ground running.

BRODY: Brian Debose of the "Washington Times," what do you make of this?

BRIAN DEBOSE, "THE WASHINGTON TIMES": I disagree. I think he has to say something right now and I think he needs to separate Hamas from the rest of the Palestinian people and the Palestinian government. Although they do have a ruling majority in the Palestinian parliament, we have to start working right now and into the future as separating and isolating them as a terrorist group, an Islamic jihadist group so that by the time Obama does get in there we're on firm footing that we no longer view them as a political entity.

BRODY: Steve Hayes, "Weekly standard," we have a conservative split. Where are you on this?

STEVE HAYES, "WEEKLY STANDARD": I'm with Brian. I think at a bare minimum he needs to reaffirm the special relationship with Israel, something he's not yet done in a forcely way in public. I also think he needs to condemn the rocket attacks from Hamas, the terrorist group. Which is something the Bush administration has done. Those are two steps that are relatively painless. He wouldn't be making policy but he can make a stand about where the United States is.

BRODY: Let me ask you real quick, all three of you, but let me start with Amy. Obama seems to be or is going to be on a high wire, if you will, for this. Because as Steve was saying, he's got to come across as a friend of Israel and he's got some proving to do in that area. At the same time the world community, if you will, is looking to Barack Obama to be, I don't want to use the word "savior" but a guy that's going to come in and be sympathetic to the Palestinian cause and maybe do something a little different than President Bush has done. Are they going to be disappointed in something like that?

HOLMES: Well, at this point we don't really know what Barack Obama's approach is going to be. I think you remember at APAC, he gave a very hawkish speech in support of Israel but then the next day and a couple of days later he sort of pulled that back, because he realized you know if you were to become president he needs to work with both sides to try to come to some sort of peace agreement. But the Middle East, I mean, is a vexing problem.

Israel has done what the world community wanted it to do, pulled out of Gaza, turned it over to the Palestinians. They elected Hamas which has been sending rockets over the border to Israel. It's a kind of damned if you do, damned if you don't scenario. But that's what President Obama is going to have to work with.

HAYES: Look, this is the difficulty of governing. The man has 80 percent approval rating right now because he hasn't done anything. And he's avoided taking strong positions on a lot of these issues. He'll; said something milquetoast and sort of bland, but he has to get down to governing. This is the thing with governing, and I think we've seen as Amy mentioned, you know, his speech at APAC which was very hawkish, received well by Pro-Israeli groups. He pulled that back quickly the next day after it was criticized heavily by Palestinian groups. So this is where he - I think he gets some difficulty.

DEBOSE: Your question raises my point. You said Barack Obama needs to feel or be perceived to be sympathetic to the Palestinian play. Hamas - we have to consider that Hamas, although they were elected two years ago, is very much separate from the rest of the Palestinian people right now. They are encouraging Israel - and they're encouraging Palestinians to stay while Israel counterattacks against rocket and mortar fire. Putting civilians at risk, many countries, including Egypt, and some reformed Iranians are saying that this is detestable and has to stop -

HOLMES: That's true, that's true, Brian, but Hamas is democratically elected you know, unfortunately for the rest of the world. This group that is a terrorist organization. But the American president, whoever he is, needs to be considered an honest broker, because if he can't get both sides to the table and that includes the Palestinian people on the Gaza strip who voted and elected for these people.

Now, the earlier panel said you know the suffering that they've been under for the past two years have been terrible. I agree. Of course, you want to be sympathetic to the suffering of these people. But they seem to be able to smuggle weapons but they're not smuggling baby formula. So, you know, Barack Obama is going to have that difficult problem that's confronted every president. Bill Clinton did his best at Camp David and he still couldn't get them to -

HAYES: It's a question about how he's going to handle Hamas generally. I mean I disagree with Brian a little bit in that they do have some support among the Palestinian people, strong support among the Palestinian people. But remember when Jimmy Carter went during the campaign and met with Hamas leaders, Barack Obama wanted nothing to do with that, despite the fact that he would already said that he would sit down with leaders of rogue states. So I think again this is where you know campaign rhetoric is one thing. Giving good speeches is one thing, but sitting down, rolling up your sleeves and trying to actually move the process forward is going to be very difficult. BRODY: Let me turn real quick to the economy. We only have a few minutes to discuss the stimulus package, if you will. But, look, I mean, this is the - the stimulus goes on tour right now, right? I mean, David Axelrod and everybody fanning out across the country, you know, it's like a Broadway show. I wonder, though, that the Obama campaign has been very effective at going into communities and explaining, not just Obama but his handlers. They did this with safe outreach, they did it with a lot of other topics, going in there and explaining their position on this. It seems that this is going to be the M.O., the method of operation, Brian, for - for this type of stimulus.

DEBOSE: I think they are going to be effective about this.

BRODY: Yes.

DEBOSE: I think what republicans are going to have to do in Congress once we get back is make a decision that we're going to hack at the stimulus in areas that we think are wasteful. Public-private partnerships that are for economic benefit like casinos, certain office building projects, those sort of things we really don't have to pay money for. Most of them are projects that are awaiting financing for a guarantee of government money, that's not really a guarantee. I think you have to hack those out of the stimulus and then sort of see where you are from there. I think the republicans will do well doing that.

HOLMES: And I think they can insist on some tax cuts in there, whether or not that they get them. That the republicans need to go back to principles and let's face it democrats have already sort of conceded that tax cuts - or tax raises, rather, are bad for the economy. They are keeping Bush's tax cuts.

DEBOSE: Obama said so himself.

HOLMES: They said so themselves. We know that they've already seeded that ground. So philosophically and in principle, now I think the republicans need to push it. We know that McConnell is saying, Mitch McConnell, Senate minority leader for the republicans has said he wants tough oversight, tough scrutiny of this bill, I think they can go at least two steps further.

BRODY: Yes. Steve, I was going to say real quick, because there seems to be divided, the stimulus in three parts, infrastructure and then you have the tax cuts so to speak and then the direct aid to the states, which it seems to be, you know, danger, Will Robinson.

HAYES: Right.

BRODY: That seems where the problem could lie here.

HAYES: Yes, sure. I mean you look at the list that the U.S. conference of mayors have already put out, some $73 billion in pork - what I think most of us would regard as pork projects.

BRODY: Right. HAYES: Some of this will be a disaster and political trouble for the Obama administration. I agree with both Brian and Amy. I think the republicans actually have an opportunity here to make a strong case to reassert sort of first principles like tax cuts.

If there's going to be spending, it should be spending that benefits not only the economy but the rest of the country. Spending on defense issues which actually at the end of the spending we have something to show for it.

It also reminds people, oh, by the way, we're at war and these things matter. We've used a lot of the -- hard materials in these wars over the past seven years. We need to replenish these things.

BRIAN DEBOSE, THE WASHINGTON TIMES: And we asked the auto industry for a plan to show us how you're going to reorganize and reshape your company in exchange for the money.

What states have done that?

I don't -- California doesn't have a plan. Michigan doesn't have a plan. There's state after state that are in -- terrible financial shape because of their spending problems. That they have no plan on how to cut spending, no plan on how to cut taxes, no plan on how to grow revenue.

Why are we giving them money that they're going to waste?

HAYES: They think they don't need a plan. This -- their plan...

DEBOSE: That's not...

HAYES: ... is to come to Washington and say, give us this money.

(CROSSTALK)

HAYES: And there's little indication that they're not going to get it. That's what they said.

AMY HOLMES, CNN POLITICAL CONTRIBUTOR I was going to tell you, after the auto bailout and I just read that the industrial economy of the Midwest wants to get their bailout, too, way beyond the...

DEBOSE: The real estate and the retailers.

HOLMES: Yes, they all want bailouts. And -- but for -- for the Republican Party opposing this is good -- I think it's good principle and it's good politics.

DAVID BRODY, CO-HOST: Well, they may want to oppose it, but are we all in agreement that this thing most likely is going to pass?

HAYES: Absolutely.

(CROSSTALK)

DEBOSE: There's not even a question.

HOLMES: Right.

BRODY: But they're going to make -- but they're going to make Obama and the Democrats work for it.

DEBOSE: Yes. And they should.

HOLMES: They are going to work for it.

DEBOSE: As well they should.

HOLMES: And they're going to be the grown-ups at the table saying, no, you don't get everything you want. This needs to be reasonable. And this is a chance for the Republican to, once again, becomes the daddy party, while the Democrats are the mommies.

BRODY: The daddy party...

(LAUGHTER)

BRODY: I like that. Put up a graphic on that.

All right, got to take a break. And despite the progressives, I know they're over there just waiting to pounce on our every word, guys.

We're going to be back to talk about that wild battle over Barack Obama's old place in the Senate. Oh, Blagojevich. The AFTER PARTY back in a moment.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN ANCHOR: Hello, I'm Fredricka Whitfield in Atlanta.

New this hour, New Mexico governor Bill Richardson has withdrawn his nomination to be commerce secretary. Richardson cited the distraction of a federal investigation into his ties with a California company that won a contract to do business while in New Mexico.

President-elect Obama said in a statement he accepted Richardson's withdrawal with deep regrets.

Israeli ground troops cut deeper into Gaza today. Palestinian security sources say Israeli troops now control parts of northern Gaza.

The Israeli military says one soldier was killed today in northern Gaza. Palestinian medical sources say 37 people have been killed since the ground attack began.

I'm Fredricka Whitfield. More "AFTER PARTY, WHERE WE GO FROM HERE" right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: I'm absolutely confident and certain that the United States Senate is going to seat a man of Roland Burris' unquestioned integrity, extensive experience, and his long history of public service.

(END VIDEO CLIP)

BRODY: Illinois governor, Rod Blagojevich, appointing Roland Burris to take the Senate seat that was once filled by Barack Obama.

Yes, the same seat he's accused of trying to sell to the highest bidder. You got to love Chicago politics.

Back with the panel. This has turned into "laugh-in," guys. I mean this is -- Mr. Burris goes to Washington next week.

(LAUGHTER)

BRODY: I tell you, what do you make of this, Amy?

HOLMES: Oh, my goodness, watching this, I was, like, Blago-you didn't.

(LAUGHTER)

BRODY: Yes, he did.

HOLMES: Pulling off this huge political stunt, it's been fabulous, spectacular and the next week we might have the spectacle of the first day that they're back and that they might be physically blocking Mr. Burris from entering the Senate.

Is this -- are these the optics that Harry Reid wants?

(LAUGHTER)

BRODY: That's a photo-op.

DEBOSE: This is the problem. OK, Constitution Article one, section 5...

BRODY: Read it off.

DEBOSE: ... paragraph two, each House may determine the rule of its proceedings, punish its members for disorderly behavior -- even if you hit someone in the head with a cane -- and with the concurrence of two-thirds vote expel a member.

HAYES: Was the problem part in there?

DEBOSE: No.

(LAUGHTER)

DEBOSE: The problem with barring him from the seat is they have no legal standing. They can seat him and then expel him, but they cannot bar him. That's -- that's the first problem.

Even if they do decide to expel him after they let him in, Adam Clayton Powell v McCormack, 1969, states that an elected official cannot be removed under these terms and in that case Clayton Powell himself was under indictment for corruption.

Burris is not under indictment for corruptions. He's not under suspicion of corruption. The only wiggle room they have is that he isn't elected, he's appointed. But the law in Illinois clearly states the senator...

HOLMES: But Brian, there's another hurdle.

DEBOSE: ... has the authority.

HOLMES: There's the legal hurdle that they really don't have any legal standing to keep him from going to the Senate.

DEBOSE: No.

HOLMES: But there's another hurdle if they want to, they have to get two-thirds vote to eject him which is going to mean six Republicans go along. Now, you know, of course, I'll be very happy to watch them sit on their hands and see if the Democrats can pull this off.

DEBOSE: That would be foolish to do so. In two years we get this guy in an election who is tainted by his very appointment. Why would you risk that and get somebody better?

(LAUGHTER)

HAYES: There's some question as to whether he would run in 2010.

DEBOSE: Exactly. I mean this is...

HAYES: And I think he's not likely to do that.

DEBOSE: This is golden. This is golden.

HAYES: Well, I think, it was interesting watching the Blagojevich comment where he said he was absolutely certain that they wouldn't deny him that seat. I think he also said he was absolutely certain that he's going to be vindicated at the end of this long and legal process.

(LAUGHTER)

DEBOSE: Yes.

HAYES: I'm not -- I'm not sure we should really take him at his word on this. But I think Republicans -- for Republicans, this is a time to sit back and watch this unfold. There's the old adage...

HOLMES: With popcorn.

HAYES: ... you know, don't get, don't get in the way of an unfolding scandal. Sit back and watch it unfold. You know, if -- if you're called on at some point to vote one way or the other, obviously, they'll have to.

But this is a time when they should watch, and otherwise keep their mouth shut.

DEBOSE: The Democrats remove William Jefferson from his seat, Republicans completely abstained. If you want to do it, you see, that's fine. We're not going to vote on it.

The Senators should do the exact same thing.

HOLMES: But hasn't it been astonishing, David, that the -- you know, appointments for these two now empty seats in New York and Chicago have been such a PR disaster for the Democrats?

They had two clean shots and this is what they've done.

BRODY: Let me ask you the big-deal question. What is the big deal about Blagojevich as it relates to the Obama administration?

I mean, at the end of the day, stimulus is going to go through, the work on energy, the work on health care.

I mean, is this just sideshow antics at this point? I mean...

DEBOSE: Maybe that's the point, because I -- you know now it's not Obama anymore. It's about this whole drama of Burris and -- or are the Capitol police going to escort him out? And, you know, are they going to bar the gates with -- wood and steel?

I just -- it's completely devoid of Obama at this point. It's sort of moved on to its own thing.

HAYES: It certainly looks like it. But, but we should also say that Patrick Fitzgerald asked for an extension on the time to file the indictment. He's got -- will likely get more time. He's talking about thousands of wiretapped conversations with the governor and his top staff.

And there are problems, I think, potentially looming down the road whether political or legal, but more likely political, but there are, I think potential problems for an Obama administration in the pages of those transcripts or other things.

BRODY: What a segue, potential problems to the GOP because the GOP does have some potential problems coming down the pike, and let's start with the whole Chip Saltsman DVD sent out with "Barack, The Magic Negro."

I have to tell you, when I -- when I saw it, I -- I personally was appalled at the whole thing. I mean, you know, there -- there's certain things that -- you know, there are certain humor that's just kind of off-limits.

I mean you don't start -- you know, the holocaust humor is off -- you know, two Nazis walk into a bar is not the way you start off a joke.

HOLMES: No.

BRODY: I mean, it's the same type of thing.

HOLMES: It's tasteless. It was juvenile and it was lacking in judgment and those are three qualities Republicans do not need in a future chairman.

But in terms of why we're still talking about this on Friday? I think this is a way for the media and for Democrats to try to indict the entire Republican Party.

Am I going to see on the front page of "TIME" magazine the fact that we have two African-Americans, very well qualified running for the chairmanship? Ken Blackwell and Michael Steele?

Are we seeing on the cover of "TIME" magazine that Bobby Jindal is a successful governor who has the respect and admiration of his fellow Republicans?

BRODY: That story has not been written, you're right.

HOLMES: Or the Vietnamese American who is now in Congress?

HAYES: But at the same time...

BRODY: Right, that's...

HAYES: At the same time, I mean, you know, this -- I'm with you on the moral problems with this. I mean I think that almost goes without, without an argument.

On the political problems, shouldn't it be disqualifying? If he did not know that it was going to provoke this kind of a firestorm and if people were not going to have this reaction, what kind of political sense does he have to be chairman?

HOLMES: Then he doesn't have the brains to be chairman.

BRODY: Right, right.

DEBOSE: We talked about the Republican RNC race and I had said then that there were some people who had done some things of a distasteful -- to other candidates, let alone this -- this Barack being the "Magic Negro" thing.

Chip Saltsman was, was one of those folks. I think he represents the problem that they have in the party. There are a lot of members of the party who didn't have a problem with this. There are some dissension, you know, they couldn't get Saltsman -- they couldn't unanimously decide whether Saltsman should be removed from candidacy.

So I mean, I think it's a deeper problem and there's some soul searching that has to be done. But this is a two-year-old issue. I mean this - "Barack the Magic Negro" was in March 2007 report by David Aronstein, the Hollywood reporter for "The L.A. Times."

He coined the phrase and it was all about how -- typically I think Al Sharpton was singing it. It was some kind of caricature of Sharpton about being jealous of Obama. You know, now two years later it's turned into -- it has a life of its own.

It -- what should have been done. Rush Limbaugh should never put it on the show and we certainly should not be talking about it now.

HOLMES: And even if -- and even if those members don't agree that it was tasteless and they're having their little private laugh over it, they should know that it's a PR disaster.

DEBOSE: Sure.

BRODY: Yes.

HOLMES: And this is not anything that Republicans need and it's not a way to build the party and grow the tents.

DEBOSE: But they have to know that in order to come to that decision.

BRODY: Yes, let me ask you real quick about a little deeper, going into the Republicans and where they are from a mindset standpoint.

I want to read -- real quick, Paul Krugman in "The New York Times" this week. And this is what he said about, about Republicans, quote, "Will the Republicans eventually stage a comeback?" Yes, of course, but barring some huge missteps by Mr. Obama, that will not happen until they stop whining and look at what really went wrong.

And when they do, they will discover that they need to get in touch with the real 'real America,' a country that is more diverse, more tolerant and more demanding of effective government than is dreamt of in their political philosophy."

Steve?

HAYES: Well, I love a Princeton economist writing in "The New York Times" lecturing Republicans about the real America. Please, I think, Republicans will probably seek their advice elsewhere.

(LAUGHTER)

HAYES: Look, I think Republicans are plenty in touch with the real America. Certainly there are problems. Certainly when you look at what happened in -- in the past election, there are problems.

I think there are moves being made to address some of those problems, to address things like reaching out to minorities, recruiting more minority candidates, things of that nature.

But I also -- you know, I also think you look at the -- environment in this last election. We had an economy that was tanking, you had a war that the United States was now winning in Iraq, but was nonetheless unpopular. You had a broader campaign against global terrorism. You had, you know, one issue after another after another lined up against Republicans. I think it's -- you have to be a little cautious when you're drawing huge conclusions from, from one election.

HOLMES: Sure.

BRODY: Quickly, quickly.

HOLMES: And I would -- and I would go back to 2006 midterm elections where Republicans did badly, and that was because they had become the party of big spending. So for Republicans to get back to limited governor, you know, oversights of your tax dollars will help put them back on course.

DEBOSE: They put all their eggs in the Bush basket. When Bush is out of the way we can sort of move on. But who's whining? Who exactly is whining? Who does he say is whining? Now that's the part I don't understand. Who's whining?

HAYES: I don't know. Didn't Phil Gramm get in a lot of trouble for saying that?

(LAUGHTER)

HAYES: Where is the outrage for Paul Krugman.

BRODY: I think Newt Gingrich will be an interesting player to watch in the next year or two. He seems like the idea man, or at least, you know, he's -- positioning himself that way. It will be interesting to watch him.

All right. That's it. You can plainly see Donna determined to get in a rebuttal. I'm sure she is. So let's go at it. Why not? Oh she's here already.

DONNA BRAZILE, CO-HOST: I'm here. I want to see.

BRODY: That's right. Last call on the AFTER PARTY coming right up.

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BRAZILE: This is last call when the progressives and the conservatives get to stop arguing among themselves and argue with each other, the way it should be. So let's get it on, folks.

BRODY: Let's get it on.

BRAZILE: Well, CNN has brought out a new poll showing three-quarters of the American people feel that Barack Obama is a strong and decisive leader. That's even higher than George W. Bush right after 9/11.

Amy, I guess, you know, with all this political capital, will Obama be able to succeed in the Middle East where no other president has been successful? HOLMES: Well, that's a good question, because those polls don't reflect the Mideast perception of Barack Obama and what they're expecting from him.

But what we're talking earlier on the show, Barack Obama needs to be able to be seen as an honest broker in the Middle East which, of course, is complicated by the fact that Hamas is still considered a terrorist organization but they were democratically elected by the Palestinian people.

You know it's a tough, thorny issue. Bill Clinton did his best at Camp David, if you remember, and then Yasser Arafat launched the intifada in response. So, you know, Barack Obama is going to have a lot of smart people around him and Hillary Clinton who, I hope, is getting advice from Bill Clinton on how to be an effective secretary of state.

You know, it remains to be seen.

BRODY: Liz, I got to tell you, Barack Obama needs to be seen as a friend of Israel big time, and so there is a danger that his brand, if you will, could be damaged a little bit here if he goes the other way, so to speak, you know, to -- kind of be, you know, that world chorus, if you will, a lot of folks coming against Israel. So he's -- he's got to walk a fine line here, Liz.

LIZ CHADDERDON, DEMOCRATIC STRATEGIST: No, he absolutely does. And the truth is that everyone always has to walk a fine line in the Middle East. Remember former president Jimmy Carter just recently wrote a book about -- really about the plight of the Palestinians and you would have thought that he had written a book that said that the Palestinians were the greatest people ever.

I mean, the -- response, particularly, from Israel and the groups that support Israel against that book was just huge. And he hasn't been president in 35, 40 years. So, imagine what happens if Barack Obama plays the wrong card in this game.

And, you're right, especially with all the controversy over his middle name and all the controversy over his ties to the Arab community, which I don't believe are real, but that -- some people believe they are, he's got a really fine line to walk here.

But at the same time I don't think he can be all Israel, all the time, because the truth is, is that Israel has taken such a hard line on what's happening in Gaza. There's so much human suffering happening in this area, I don't think you can really take one side over the other. I think you're going to have to have a major humanitarian effort.

BRAZILE: But it's hard to abandon your ally in the war on terror...

HOLMES: It is, you're right.

CHADDERDON: Of course.

BRODY: Right.

BRAZILE: ... and Israel has been a steady ally with the United States and President-elect Obama is a strong friend of Israel, but yet he also would like to see the Palestinian people, the Palestinian authority, you know, get back into power so that they can propose new initiatives to get the peace process.

Will it work?

HOLMES: Sure, and it seem -- well, it seems that the Israelis know that. That there's, you know, some speculation, scuttlebutt, that they launched this offensive during a transition so that it would not be under Barack Obama's watch. They didn't want to saddle him with this dilemma.

So, it be that they wrap this up before, you know, he's inaugurated so he doesn't have this sort of facing him that very first morning as commander in chief.

BRODY: Let me ask you real quick about the stimulus package because I want to talk about -- what else -- what would a conversation be without the stimulus package?

(LAUGHTER)

BRODY: The tax cuts is going to -- there are going to be some issues in that. I mean McConnell and the Republicans are going to pitch a larger package, if you will, out of all of these billions of dollars, but I'm sure, what, you've got some concerns about that?

CHADDERDON: I have some big concerns about that. And you know, it's interesting, Amy and I do a lot of this talking head stuff together and we agree on a lot of issues, but we don't agree on this. I do not believe that the wealthy in this company -- company, in this country deserve more tax cuts certainly than they already have.

You got to give them to the middle-class. We've been waiting for 25 years for trickle-down economics to work, it doesn't work.

HOLMES: But we saw that the last...

CHADDERDON: It doesn't work.

HOLMES: We saw that the last stimulus package did not lead to higher spending. Retailers just had their worst quarter in 2008. The tax cuts that Republicans are proposing are for those...

BRAZILE: You know how far $300 will go in this economy given what the price of gas just some of that...

(CROSSTALK)

HOLMES: I believe money...

BRAZILE: ... went so quickly. HOLMES: I believe money should go back to the middle-class and I -- absolutely believe it should be supported and you should get your tax dollars back. I think government has too many of your tax dollars.

But when it comes to cutting -- cutting taxes to grow the economy, I think the best way to do that is for our small businesses. They make three-quarters of our jobs in this country. Those are the people who need to be incentivized to be -- to be growing with the economy.

I think the stimulus package, you know, what that is, it's politics. It's a politician being able to say, you see that job you have, that has my name on it.

Well, I don't care if a politician is going to get a political payback for this by the voters, what I want is a growing economy.

BRAZILE: Don't you think we have to jumpstart the economy in some way? I mean after all...

HOLMES: Well, I believe that...

BRAZILE: ... the last...

(CROSSTALK)

BRAZILE: It's all the cause of deficits.

HOLMES: And I believe -- we have the highest corporate tax rates in the world. I believe cutting that tax rate will help grow the economy.

CHADDERDON: I actually...

BRAZILE: All right.

CHADDERDON: Can I...

BRAZILE: We need some New Year's resolutions.

(LAUGHTER)

CHADDERDON: OK.

BRAZILE: And one of my resolutions is to, of course, talk less and to listen more to conservatives, to see if I can learn anything new since you all have been in the wilderness.

CHADDERDON: I like it when you talk, Donna. I don't like that resolution.

(LAUGHTER)

BRAZILE: I'm going to try to give a couple more hours each day.

CHADDERDON: All right.

BRODY: Amy, what's your, what's your resolution?

HOLMES: Well, we appreciate your graciousness. You know, I'm going to...

(LAUGHTER)

HOLMES: I'm going to stick to my principle, I want the other side to cut taxes and kill terrorists. If they do those two things, I'll be a happy girl.

BRODY: There you go.

CHADDERDON: OK. You know what, I want, I want the Republican Party to go to a bookstore and buy a dictionary, open it up, look at the word "diversity." Read it, learn it, embrace it, because it's here and here to stay.

BRODY: Very nice. All right. I'm not going to give you my...

BRAZILE: No.

(LAUGHTER)

BRODY: I don't have a resolution. I got to lose a few pounds, whatever.

(LAUGHTER)

BRODY: All right, we've run out of time. Our thanks to the guests here at the AFTER PARTY."

Donna and I are back with some final thoughts in a minute.

(COMMERCIAL BREAK)

BRODY: All right, back on the AFTER PARTY, a look ahead to 2009.

Donna, here's what I think. I think Obama will get the stimulus package through, what -- no shock there. I think he's going to get some sort of energy bill through in 2009. I also think we're going to see a lot of these community forums all across the country. He'll do that.

I think he's going to open up his presidential address, you know, each week to folks across America. I think that would be kind of neat.

And next week, I want to see all the cable, the 24/7 cable folk, Roland Burris-cam. I can see them barring the doors of the Senate. The -- oh, I'm telling you, it's going to be a spectacular situation.

BRAZILE: I think 2009 will be a year of hope and opportunity. The economy will come back. The American people will feel more optimistic, and we're going to have a great year, because we are a resilient people and we want to bring our country back to the forefront.

BRODY: That's wonderful, let's sing Kumbaya, shall we?

BRAZILE: Well, of course.

BRODY: Or maybe not.

BRAZILE: Well, that's it for myself and David Brody. Thanks for joining us in the AFTER PARTY.