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CNN LIVE EVENT/SPECIAL

After Party: Where Do We Go from Here?

Aired November 8, 2008 - 18:00   ET

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


HILARY ROSEN: The election is over and it's now certain that the government will change.
STEPHEN HAYES: So we're going to discuss how politics could change. How will the Republican defeat affect the conservative movement?

ROSEN: And how will president Obama deal with the resurgent Democratic party? I'm Hilary Rosen with the Huffington Post and I'll be discussing that and much more with a panel of progressives.

HAYES: And I'm Steve Hayes with "The Weekly Standard." I'll be talking with conservatives, and then Hilary and I will face off for rapid all out.

ROSEN: I can't wait. So let's get started with "After the Party: Where We Go from Here."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: Immediately after I become president, I'm going to confront this economic crisis head on by taking all necessary steps to ease the credit crisis, help hard-working families, and restore growth and prosperity.

(END VIDEO CLIP)

ROSEN: It's clear that the deteriorating U.S. economy will be President Barack Obama's first order of business. OK, in a quick word or two, let's go around the panel. How confident are you that he's going to get it right? Let's start with my Huffington Post colleague, columnist Rachel Sklar.

RACHEL SKLAR: You asked for a word or two, so I've got one and it's hope.

ROSEN: Hope.

JOSHUA GREEN, SENIOR EDITOR FOR THE ATLANTIC: I think every indication so far has been positive.

ROSEN: That's Josh Green with "The Atlantic". And Jamal Simmons, a Democratic strategist, what do you think?

JAMAL SIMMONS: I think the president will be just fine. He's got a great team of advisers that'll keep him on the right track.

ROSEN: You know, this economic package is a big deal. Whereas we potentially have a stimulus, $100 billion. There's a tax cut. And to pay for it all, he's probably going to have to raise taxes on those people making over $250,000. How bipartisan do you think this effort is going to end up being?

Jamal, what do you think?

SIMMONS: Well, you use the term raise taxes. He certainly will allow the Bush tax cuts to expire on people who make more than $250,000. But for the other 95 percent of Americans, their taxes will either stay the same or go down. So I think there will be great incentive in a Congress controlled by Democrats to give the middle class tax cuts to as many people as possible.

ROSEN: Josh, President Clinton in 1992 passed an economic package without a single Republican vote. Do you think that's going to happen to Barack Obama?

GREEN: No, I don't. I think if you look at how Barack Obama has operated so far, the early indications, you can actually take a look at what Clinton did and conclude that Barack Obama also looked at that and is doing exactly the opposite.

ROSEN: Rachel?

SKLAR: Well, I was just going to say that at this point, I think everybody wants to be, not only to make the economy work, but to be seen to be making the economy work. I think that the spirit of bipartisanship will live on on both sides at least in the beginning.

ROSEN: He campaigned on big things. Energy, health care, education. What does he go to next and how does he get it done? What do you think, Jamal?

SIMMONS: Well, the biggest issue certainly is going to be the economy. How does he address this economy? And the breadth of the win that he had in states like North Carolina, Florida, you know, New Mexico, Colorado. The breadth of the win that he had is going to give a lot of people in Congress, Republicans and Democrats alike, incentive to be supportive.

But after you get past the economy, certainly, the problem in Afghanistan is really going to rear its head again. We're already starting to see more attacks there. And President Obama's going to want to show that he's tough on terrorists. So I think Afghanistan's going to be high on that list.

ROSEN: So the rest of the domestic agenda may get distracted by the war? He's made a lot of promises to those of us on the left about the war. What do you think?

GREEN: I don't think -- I think the economy is the big and the only issue. And everything else was talked about in the campaign after that is secondary to that. If you talk to people in Congress, they're thinking right now about a re-election two years from now. And they believe that whether or not they're re-elected depends on whether or not the country seems to be coming out of recession, whether Congress is viewed as having solved the problem, helped the economy rather than hurt it. And I think that's where the focus is going to be, both for Democrats and for rattled Republicans who have seen what's happened to their party over the last four years.

ROSEN: But Rachel, you know, liberals are salivating over that $12 billion a month we're currently spending in Iraq. There's labor out there. There's women's groups. There's Hispanic groups looking for immigration reform. How patient are all of these groups going to be on the left with their own agenda that they've been waiting so many years for, while these other issues like the economy get addressed?

SKLAR: Well, I think that everybody's going to be, you know, beating their drum. But Josh is right, the economy is the big kahuna right now. And I think actually that, you know, tamping things down in Iraq plays right into that. The Iraqis are anxious for a draw down. And the mandate sort of has expired. And that's what -- that's what Obama campaigned on. And so it will be a natural fit, you know, stop spending money over there so you can start spending it over here.

ROSEN: Can we spend it over here, though? Are we going to end up spending it all in Afghanistan and Pakistan and not have enough money for the rest of the domestic agenda?

SIMMONS: I think the big come to Jesus for a lot of people on the left is going to be realizing that in fact the money was put into Afghanistan that we ended up saving, and the troops that we end up pulling out of there, will end up going out of Afghanistan, out of Iraq, into Afghanistan, into Pakistan, and into some of the other foreign policy challenges that we have.

We've already seen the Russians start to rear their head. The Iranians have made some -- you know, some overtures this week. There's going to be some real foreign policy issues for the president to deal with. And then the economy is a big - it's got its own pot that it's going to have to pull from.

ROSEN: You know, there are a lot of issues on the table that don't cost money. Like labor wants changes to union rules. And Hispanics want changes to immigration. Gays and lesbians want anti- discrimination protection. Changes in the military. Women's groups want pay equity. There are a lot of things where Nancy Pelosi and Harry Reid have been saying let's just wait until we get a Democratic president and we can get moving on some of that stuff. But that stuff's also the hot- button issues that have potential pitfalls for a new president. What do you think about his willingness to jump out on some of those really progressive issues that people have been waiting for?

SIMMONS: I think there'll be great opportunity for him to do that. There also -- the big kahuna here again is going to be judges. This president is probably going to have an opportunity to fill an extraordinary amount of judgeships and maybe two Supreme Court slots. That's going to be a big issue for people on the left. And I think if he can stay focused on some of these bigger issues, the president should do just fine.

ROSEN: Josh, what do you think about some of those hot-button issues and the ability to get them done?

GREEN: My -- you've got your kahuna. You've got yours. My big kahuna is still the economy, but I think that there's a way that you can fold in some of those issues. We're going to have probably a fiscal stimulus package this fall, a small one. Maybe $100 billion.

What the Obama administration wants to do is do another one next spring, a bigger one. And into that, you can fold things like alternative energy tax credits, you know, money for green jobs. You can address a lot of the things he talked about on the campaign, but do so without busting the budget and, you know, having a carbon tax or universal health care or something like that.

So if you look at the early signs what Obama's done, the people he's surrounded himself with, what they have in common is that they're pragmatists who know their way around Washington. I don't think he's going to make these kind of social issue hot button mistakes that Clinton made by leading with gays in the military.

SKLAR: I agree. I think he ran on a multi kahuna platform. But I think that, yes, it's a very pragmatic administration. And also, you know, Obama made a clear point in his speech in his acceptance speech, pointedly reaching out to those who did not vote for him, in saying, I'm your president too, we will get there. And there's a lot of people who still did vote for John McCain. And not only that, cast their vote specifically against Barack Obama. So there will be, I think, a sense of purpose and a sense of direction, a sense of let's get this done, but also a sense of conciliation and not that, you know, that sense of here's our mandate, here are our votes, and you know, now we're going to run away with it, and run away with the country.

ROSEN: And...

SIMMONS: Think about how Barack Obama ran for president. We basically know today what we knew about Barack Obama in 2004. He believes there's more that brings us together than there is that divides us. And if we focus on things that unite us, we can accomplish great things. I think the government will reflect that same philosophy.

ROSEN: Is that realistic? Are the progressive groups really going to listen to this call for patience?

GREEN: Well, what choice are they going to have? I mean, they can call chief the staff Rahm Emanuel and make their case. And you know...

(CROSS TALK)

GREEN: At a certain point, if you look at Obama's acceptance speech, the effort to reach out there was to Republicans, was to people who did not vote for him. He wasn't throwing red meat to liberals the way George Bush did to Republicans after the 2004 election. He seems to be somebody who has a very clear idea of who it is he's targeting, where he's going to go. And it's not to left wing of the party. SKLAR: What's actually amazing about the opportunity Obama has is that, that sort of is red meat to liberal. The red meat is, you know, bipartisanship, and we can work together, and we can make this happen, and everything's going to be better. I mean, the hope is sort of liberal red meat.

GREEN: Well, I think it is to a certain strain of liberal. But then I think the strain of liberal that supported Obama in large numbers that likes to blog, that wants to get out of Iraq, that wants to pass universal health care...

ROSEN: It's a continuum.

GREEN: And I think there's a moment of reckoning coming for those types of people. And you know, Obama himself recognizes...

ROSEN: Like a FISA moment. All right, we'll leave it here.

GREEN: We might not it first year.

ROSEN: And we'll have more on that in the next block. Everyone, we'll be back and move from policy to pure politics. Here's a question to think about. Will Democrats on Capitol Hill prove to be a bigger problem for President Obama than the Republicans? The "After Party, Where We Go from Here" will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Let's remember that it was a man from this state who first carried the banner of the Republican party to the White House, a party founded on the values of self-reliance and individual liberty and national unity. Those are values that we all share. As Lincoln said to a nation far more divided than ours, we are not enemies, but friends. Though passion may have strained, it must not break our bonds of affection.

(END VIDEO CLIP)

ROSEN: Listening to President-elect Barack Obama's speech on Tuesday night, it was very clear that he's hoping to govern with the help of both Democrats and Republicans. Will the Republicans play along? And more importantly, how will the Democratic base react?

Josh, what do you think about this new bipartisan feeling in Washington?

GREEN: Well, I think it's going to depend on what issue we're talking about here. If it's a fiscal stimulus, if it's bringing the economy out of recession, then absolutely. And I think that's one reason why that's a helpful issue for Obama to start with. You're going to have that built-in bipartisanship because you need it if you want it to pass.

On other issues, universal health care, climate change, that sort of thing, ideological hot-button issues like judges, I think it's going to be harder to bring Republicans along. He's going to have to work really hard.

ROSEN: So the Democrats obviously didn't win 60 seats in the Senate. That makes centrist senators like on the -- for the Democrats, of Ben Nelson, Blanche Lincoln, all that more important. On the Republican side, you have Olympia Snowe or Arlen Specter. Do you end up seeing lots of coalitions? Or will the president be able to bring the parties together with even larger than 60 vote majorities?

SIMMONS: Well, again, this president, President-elect Obama, I think is someone who really is focused on how we get past whatever minor problems or disagreements we have and focus on the things that bring us together. I do think he will try to start out with a greater number of senators. That may get whittled down by the time you get to final passage, but the objective is to sort of start out with a broad base and then see what we can get to get past.

ROSEN: You know, there's a lot of focus on the Senate, Rachel, but let's listen to what John Boehner, who's the House minority leader, said about the president's first appointment on Thursday.

He was attacking Rahm Emanuel as appointment to be chief of staff of the White House. "This is an ironic choice for a President-elect who has promised to change Washington, make politics more civil, and govern from the center." He's already getting criticized by the Republicans. Republican talk radio is already starting. What ends up happening here with Republican support for President Obama?

SKLAR: Well, I think that there's always going to be agitation. And yes, choosing Rahm Emanuel made a point. I tend to return to what Josh said about pragmatism. I think that, you know, Rahm Emanel is like an all business, get it done kind of guy.

I think Obama that is going to be a very powerful president. I think that's what we're going to see. We'll see that -- the first issues starting with the economy will mean that he'll be able to be successful in reaching across the aisle. And you know, we open with this clip of him quoting Abraham Lincoln. One of his favorite books is "Team of Rivals." He's said before that he's willing to reach across the aisle for the best people.

So in that respect, there are going to be a lot of people who are going to want to be on his good side. And separately from that, this is a man who changed the electoral map in terms of who came out to vote and how those voters were tapped. He understands the path to power. And the Democrats can, you know, see in him the potential to hold on to the White House and hold on to power for a long time.

SIMMONS: I think this issue about Rahm Emanuel - and it's interesting. I spent a lot of time campaigning in the south. One of those idioms you pick up is the hit pig that hollers. And so what makes me -- worries that all these Republicans are all screaming about Rahm Emanuel is because they know he's a tough fighter. He won't let go until he absolutely wins the race. And I think that's the thing that makes them nervous. He's not that ideological. But once the team comes up with a program, he's going to fight for that program.

ROSEN: You think they'd pick their battles. Pick it on the first guy out of their box seems interesting to me.

GREEN: Well, and Boehner also is not necessarily representative of all Republicans. Here's a guy who has failed at his job of leading that House caucus, who's clinging to his job, who's fighting for his...

ROSEN: Although it's clear he's going to be re-elected.

GREEN: Clear he's going to be re-elected, but that doesn't mean he's out of the woods two years from now, four years from now. There are other people in the Republican party like Senator Lindsey Graham who came out and had a very different message about the appointment of Rahm Emanuel, tried to strike a different tone. So I think you're going to see, you know, this is evidence of the divisions in the Republican party. We're going to see...

ROSEN: What about some of the folks on our side though? Already you're seeing criticisms from -- on the liberal blogs. I saw Jane Hampshire (ph) at firedog lake yesterday, starting to criticize the notion of having Republicans as Secretary of State, suggesting there ought to be a broader litmus test approach, pro-choice, environment, for a whole series of cabinet positions. Is our side going to let President Obama be bipartisan?

SKLAR: I think, you know, you -- to totally conflate a phrase, you go to your cabinet with the people you have, not with the people you want, with all the issues that you want.

I think, look, at this point, it's not going to be a dream team for everybody on the left in the blogosphere, that is for sure. I think that the ideal is to choose people who are qualified, and who can get the job done, and who can work together and who will work together. If everybody was on the same page about all the issues that are, you know, really important to people that's -- that would be great.

SIMMONS: Well, and everybody remembers what happened in 1993 when Bill Clinton went through his litmus test exercise in trying to pick -- trying to pick cabinet secretaries. And we ended up with two or three attorney general nominees before we finally ended up with Janet Reno.

ROSEN: Right.

SIMMONS: And nobody wants that kind of mess.

ROSEN: What's Joe Biden's role going to be in all of this, Josh? Do you think he helps in this effort to be bipartisan? How do you think the president will use him?

GREEN: I mean, I view him as sort of a more benign Dick Cheney, I mean, someone who knows and cares a lot about foreign policy. He comes out of the Congress. He has many long-term relationships there with people on both sides of the aisle. He's been chairman of the Foreign Relations Committee. So he's certainly someone that can reach out to Republicans, and that knows his way around Washington, has the respect of a lot of people who are presumably going to be key in the Republican party if Obama is going to govern in a bipartisan manner. I don't know that he's necessarily going to be the key. But certainly he can help Obama navigate this new world that he's taking over.

ROSEN: Is the economic effort, the big test to bipartisanship? And how does his broader coalition of support out in the country play into that? Do you think he ends up using his supporters around the country to help him pass an economic program?

SIMMMONS: The problem with the economic problem -- the problem with the economic problem is that it's such a really big fundamental problem. This is something that I think Republicans, Democrats alike have got to figure out how to get past. And politics, while it's always present, can't be the pre-eminent issue. And I think you saw that with the $700 billion package when they tried to move it out the second time...

ROSEN: Isn't there a risk though that the Republicans who had to play along with George Bush on this economic bailout now don't really have to play along with Barack Obama? So those populist House Republicans in particular, and some Senate guys just say this is your problem now. And they go the opposite way. And bipartisanship is the last thing on their minds?

GREEN: I think that's definitely going to be true in a string of the Republican party. But overall, I don't think it is. I mean, these people, ideology aside, have to go back to their voters in 18 months and say, here's why you should elect me back to Congress, me as a Republican. And if you're not out there supporting the agenda that most people in Washington are when it comes - I mean, there's certain areas of agreement where we need to fix the economy, how we need to regulate financial services. If you're seen as nothing but an obstructionist, I think the lesson of the last two cycles is you're not going to have a job for very long.

ROSEN: OK, that...

SKLAR: Sorry, I was just going to say there's a lot discussed after the whole, you know, conflagration in the House over the bailout.

GREEN: And I think that's a lesson also.

ROSEN: Yes, a lot of recriminations.

SIMMONS: Smaller 401(K)s will give people incentive to put pressure on their members to cooperate.

ROSEN: OK, that'll have to be the last word.

Thank you, this is the view from the left. My thanks to Rachel Sklar, Josh Green and Jamal Simmons. Now, as you can see, Stephen Hayes is already in the studio, eager to bring in his conservative friends and their high-bound ridiculous reactionary opinions. Stick around. And at the end of the show, Steve and I will disagree respectfully about where the nation is heading in the "After Party."

(COMMERCIAL BREAK)

HAYES: Welcome back to the "After Party." I'm Steve Hayes. Let's get right to it. Every kday, we get more bad news about the economy. Clearly, it will be Barack Obama's number one priority. Here's a question. In a word or two, how confident are you that whatever fixes he puts in place will be the right ones? First, let's turn to Independent conservative Amy Holmes.

AMY HOLMES, CNN POLITICAL CONTRIBUTOR: Not at all in a word, or two words, three. You know, and I think that that's something that actually Republicans and conservatives need to think very clearly and very hard on, which is how are they going to address the bailout? How are they going to address $700 billion and maybe $25 billion more for the auto industry that's been both responsible and principled?

HAYES: Brian Debose, editorial writer of "The Washington Times."

BRIAN DEBOSE, THE WASHINGTON TIMES: You know, our editorial page has been very clear. The president's job should remain the president's job. Fixing the economy in its totality, whatever you want in these abstract terms, it's not his job. His job is to fix the spending side, start dealing with entitlements, start dealing with cutting back, so we can get this deficit down. Then maybe we have money to invest in the economy. Right now, we don't have any of that.

HAYES: And Kevin Madden, former spokesman for Mitt Romney.

KEVIN MADDEN: Well, I think my confidence level isn't very high on that because I think we are still in a hyper political environment so close to the election. And the odd paradox here is that the less political the agenda, the more political rewards will probably be seen. So, you know, I don't really have a high level of confidence.

HAYES: So not confident is the group answer.

HOLMES: I think that's -- unanimous.

HAYES: On Friday, Lawrence Summers, former Treasury Secretary under Bill Clinton, current Barack Obama economic adviser, said that the government - that the economy needs more spending from government right now. Is he right?

HOLMES: Well, I think we can look back to FDR's, you know, work programs, and that they didn't work. They're politically very popular. It gives the impression. But it crowds out the free market to be able to coming up with more efficient solutions and grow the economy that way.

And I think conservatives can make that argument. But again, politically, what are they going to come up that the people are going to feel like they're being responsible and they're taking care of people?

We saw in the exit polling in this last election, 51 percent of the public thinks the government should do more to help them. Now that's of course very much against conservative principles. So they're going to have to, you know, put together their game plan.

HAYES: Right. More spending, Kevin?

MADDEN: Well, no, I don't believe so. Look, I think what you're going to see is possibly a Democratic overreach on issues like spending. I think you're going to see public works programs as a way to - they think, you know, Democrats always look to government and public works in order to rejuvenate the economy.

But what's going to help the economy really is helping people's confidence. And I think people's confidence and their anxiety right now in the economy is driven by the fact that they are losing their purchasing power because of higher health care costs. We've seen higher energy costs. Because of the credit crisis.

So I think any policies that are geared towards thawing the credit crisis that we have, anything that's going to help bring down in a comprehensive fashion some of these rising costs that Americans are facing, that's what's going to help the economy. Because ultimately, you know, Americans are sitting at their kitchen table. And they're scratching out the money that's coming in, the money that's going out. And that's where their anxiety's being driven.

HAYES: Brian, can he do this without raising taxes beyond what he said he would do during the campaign?

DEBOSE: I don't know. I mean, let's talk about some of the numbers on the table. We've got $725 billion for the bailout -- economic bailout. We've got $25 billion for the auto industry. We're spending $516 billion, $520 billion more than we have coming in. That's the current deficit level.

This is $1 trillion -- over $1 trillion of money that's already out that we can't afford to pay for. I don't think you can talk about spending more government money. They're talking about a stimulus package now, $100 billion. That's as high as they can go. They don't have any more money.

HOLMES: And that doesn't include entitlements that need to be reformed.

DEBOSE: Exactly.

HOLMES: So we have Social Security that is going to be owed Baby Boomers that as we know is just a bunch of IOUs. So is Barack Obama really going to be able to afford some big new entitlement spending?

DEBOSE: And that is the point. He has to make cuts. He has to find ways to cut the budget, eliminate the deficit. I don't think you can do it in four years. You may not be able to do it in six years without raising taxes, unfortunately. But you know, I think that - that everything has to be on the table. We're not in a situation where we can have political games about we're going to fight against this because you like it. We can't do that.

MADDEN: Well, you know what? One thing I found out on the campaign trail this year was that when you went to these town hall meetings and groups of voters, Democrats and Republicans, and you know, you talked about tax cuts, there would be tepid applause.

DEBOSE: Yes...

MADDEN: And you talk about social issues, there'd be tepid applause.

The second that anybody said I'm going to stop, we have to stop this wasteful spending in Washington, people would leap to their feet. There is just a -- you know, there's a feeling among the American electorate that Washington has lost its way on priorities on how it spends money.

So I think that's going to be, quite frankly, an opportunity for Republicans. Again, how do we go out there and make an argument now without the Bush -- having moved past the Bush administration and its record on spending, and again re-establish ourselves as fiscal conservatives?

HOLMES: And let's remember that, you know, Clinton's popularity was balancing the budget. This is something that people can understand. Why can't you balance your budget when I have to? You know, when I have credit card debt, I have to pay it. So I don't get to just kick it down the road. Something I think that resonates very fundamentally with voters.

HAYES: Well, the more than 50 million Americans share, I think, the skepticism we're seeing at this table and did not vote for Barack Obama on Tuesday. Let's listen to Barack Obama from Tuesday night in Grant Park and what he said to those folks.

(BEGIN VIDEO CLIP)

OBAMA: To those Americans whose support I have yet to earn, I may not have won your vote tonight, but I hear your voices. I need your help. And I will be your president, too.

(END VIDEO CLIP)

HAYES: Brian, should we believe him? Do we think that Barack Obama is going to govern as a centrist? Or is he going to be as "National Journal" cited him a year ago, the most liberal senator in Washington?

DEBOSE: I was always very skeptical of the "National Journal" rating, I have to admit. But I think he's going to have to govern from center. I mean, we - you know, we talk about the presidency and what people say and how they say it, as if we know what's going to happen.

George Bush went into the White House thinking, I'm going to just tackle domestic spending. He hasn't done anything with domestic spending because he couldn't. What Barack Obama will become as president, that seat and what is brought to that table will decide.

HOLMES: You know, and I don't think we know the answer that. I mean, the AP just had a story out saying we don't know Barack Obama's governing principle because he's never been an executive and so forth.

Do we believe Barack Obama? Possibly. But do we believe Nancy Pelosi, Harry Reid, Chuck Schumer, Dick Durbin, Charley Rangel and all rest of them now that they're going to have all this tremendous power? Barack Obama, he's not going to be only pushing against conservatives. He's going to be pushing against the left wing of own his party.

DEBOSE: That's absolutely right.

HOLMES: Who's going to want to drag American...

HAYES: And will the Congress, congressional Democrats, be pulling Barack Obama to the left?

MADDEN: I hope so. Look, I think that what's most important, what we did learn during this campaign was that Barack Obama -- we don't know what his governing principles are. We know what his political principles are. The ascension of Barack Obama was due in a large part to the fact that he faked it as a centrist on the campaign trail.

And that's where he's going to have to govern because that's the only Barack Obama that the American people know right now. I do think that there is going to be an inclination by Democrats to pull him left. They're going to look to score some political points with their very narrow constituencies on left, whether it comes - whether it's with public work spending, or whether it's on issues like national security.

So that's going to be the question is whether or not Barack Obama takes on his party and does so effectively.

HAYES: Well, that's -- hold on, hold your thought. When we come back, we're going to turn to the future of the Republican party, or perhaps better put, is there a future for the Republican party? Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN MCCAIN (R), ARIZONA: My friends, we have come to the end of a long journey. The American people have spoken. And they have spoken clearly.

(END VIDEO CLIP)

HAYES: I was in Phoenix Tuesday night with John McCain and I watched him. And what struck me was that he seemed relieved, almost happy, that the election was over, and that he could return to being the old John McCain. But what about the party he led? How does the GOP recover from this landslide defeat? Brian?

DEBOSE: I don't know. I don't think he ever led the party.

HOLMES: The oracle.

DEBOSE: Yes, I don't think John McCain ever led this party. I think the reality is this party, the base of this party, whatever the base is we keep talking about that, these abstract terms, didn't like John McCain. We talked about a 1 percent reduction in the Republican side, 1.3 percent I think, didn't vote. Democrats rose by about 1.2, 1.3 percent. That means that they just sort of got more of their people out there, but they also got more new registered people out there.

What we found out is that the Republican party found out that in places like North Carolina, in places like Indiana, Ohio, maybe even Florida, Nevada to some extent, Colorado, I mean, we're talking about state after state. We're talking about 50/50 states. These states were never majority Republican in and of themselves. They were majority Republican because the other side wasn't voting.

Now we have to talk about how we get more voters out there. I think in North Carolina, you talk about that northeastern section of North Carolina, you got a lot of black voters, church-going people, very conservative, very much about personal responsibility. They've never talked to those voters.

HAYES: Well, how does the Republican party -- I mean, what does the party do to attract new voters, to offset this enthusiasm for Barack Obama among young voters? What has to happen now?

HOLMES: Get their principles and govern well. I mean, we saw that Republicans were punished in 2006 because the public felt that, you know, they just weren't running the place well. It was a throw the bums out election. I think that this year was a throw the bums out election as well with, you know, huge dissatisfaction with George Bush.

But if you look at the exit polling in terms of self identified liberals, moderates, and conservatives, it's about the same number in 2004 and 2008. And 35 percent -- 34 percent self-identified conservatives versus 22 percent self identified liberals.

And if you remember in the Democratic primary, no Democrat would call himself a liberal. They tried to come up with other names. We're progressives. We're this, we're that.

HAYES: Right.

HOLMES: But they won't say that they're a liberal, because they know there's not a real appetite out there for it.

When -- the first policy issue I think that Republicans can get on board is offshore drilling. Trying to address the energy crisis both in terms of economic security and national security, and really push Barack Obama and a Democratic Congress to allow offshore drilling. We know it's wildly popular with the American public. And I think it's the right thing to do.

HAYES: Kevin, Amy says that Republican party needs to get back to its principles. But one could argue that one of the reasons we saw the results we saw on Tuesday was because nobody has a good idea what those principles are. What are they?

MADDEN: Yes, what's the answer? I mean, when I talked with a lot of Republicans, and we talked about this previously was what's the answer to the question "why us," who we are, and what we stand for, and how we're going to -- what's the direction that we want to take the country?

I think that we have - you know, we led little skirmishes around these ideas, but we haven't really had a real compelling argument to why we should support Republicans, why we ought to have a Republican majority again.

And secondly, I think what we're missing right now is an infrastructure. You know, a lot of these groups that are voter -- you know, these voter organizations, the infrastructure, the coalitions that brought together a Republican majority, have largely kind of gone into each other's corners. And they're not working together.

I think one of the things we have to do is bring these coalitions back together, build that infrastructure and build it around a compelling message. That's also going to not just talk to conservative Republicans, but how is it that we court conservative Republicans and conservative Democrats and like-minded Independents at the same time?

DEBOSE: Exactly. I think on the energy issue, you know, we talked about offshore drilling. And that was a victory in the summer when oil prices were extremely high.

Well, the barrel of oil now, $60 and falling, I think that sort of wanes. And when you talk about the future -- you know, that's what this election was really about, the future. Oil is dead in the future. Bruto Bay is almost gone in Alaska. You know, we've got maybe 15, 16 years left out of that place. Then we have to expand. But we have to look beyond oil.

Now I'm not saying that we shouldn't be drilling. We should absolutely be drilling and getting every resource we can that is home grown, but we can't just let that be our sole proprietary mission.

HAYES: In terms of practical politics, I mean, Amy makes a good point. You go to these Republican rallies, you go to a John McCain speech, and people get more enthusiastic about drill baby drill than they do about virtually anything else. So what's the practical effect?

(CROSSTALK)

MADDEN: But the problem with that is that's a slogan.

DEBOSE: Yes. MADDEN: And we can't just adopt a slogan and say this is the Republican idea on energy. It has to be about innovation. It has to be about creating an energy sector in this country that's going to help transition from some of the manufacturing jobs that we're losing into new jobs that are about technology and about where the country's going to go as far as the global economy.

So if we're just going to -- if our answer to the energy question to that person who's sitting at a kitchen table in Columbus, Ohio, is drill baby, drill, well then we don't really have a message. What we have is a slogan.

HOLMES: That's a first step. And I think everything that you're saying is right in terms of a comprehensive strategy. But what something that they can move on now in terms of legislation?

MADDEN: So you're telling me the reason that we lost is because we didn't go out there and make a case on energy security?

HOLMES: I think we did make a case on economic principle and the economic picture...

MADDEN: Right and energy is a component in a larger message.

HOLMES: I absolutely agree. And John McCain said all of the above. You know, clearly, he didn't win the day in terms of the election. But we do know that the public likes this element of the approach to energy policy. So why not run with it?

DEBOSE: I don't have a problem with the oil, as I said. But my immediate problem is the - is how unrealistic oil is. Our biggest natural resource in this country is coal. It always has been. It may be, it always will be. We are not talking about moving in the direction of clean coal. We keep talking about sequestration and how it's going to cost them too much money to transfer over to it. I mean, we got to stop thinking about that.

(CROSSTALK)

DEBOSE: That's our resource.

HAYES: Let's wrap up briefly. We've got about a minute left. Let's wrap up briefly by talking about George W. Bush's legacy. Briefly, Amy, what do you think the legacy of George W. Bush is likely to be?

HOLMES: As of right now, still an ongoing mess in the Middle East, economic meltdown. That's his legacy. What will it be 20 years from now, 30 years from now? I'll let historians sort that all out.

MADDEN: You know, I think that 20 years from now, he will not be remembered for what most people said he will be remembered, which is as the Iraq War. Instead, I think that will largely be judged based on the trajectory of stabilization that we're seeing there now because of our policies.

But ultimately, I think he's going to be rembered for this economic meltdown and his reaction to it.

DEBOSE: I think that's absolutely right. I think on the war however in 20 years we will be talking about the fact that George Bush was forced to clean up a lot of things sort of left on the table and punted by the previous administration. I know you don't blame previous administrations while you're in office, but after you get out and you start looking at the tallies, he got left with a lot on his plate, probably more than any single president should have to handle.

HOLMES: Not much plexiglass? OK.

HAYES: And if George W. Bush is judged by the standard he set for himself after September 11th, 2002, which was we are not going to be hit again under my watch, by that standard, at least that very narrow standard...

HOLMES: He succeeded.

HAYES: He succeeded...

MADDEN: Right.

HAYES: ...and succeed well.

Thanks, all, for coming today. We've run out of time. Amy Holmes, Kevin Madden, Brian Debose, clearly, you guys got it right. The previous panel got it wrong. But somehow, the Democrats still won.

MADDEN: That's our story and we're sticking to it.

HAYES: Exactly. As you can see, Hilary Rosen is eager to get a piece of me. The two of us will hash it out in just a moment. f

But first, we'll hear from President-elect Barack Obama's first press conference when "After Party" continues.

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(BEGIN VIDEO CLIP)

OBAMA: The one thing I can say with certainly is that we are going to need to see a stimulus package passed, either before or after inauguration. We are going to have to focus on jobs, because the hemorrhaging of jobs has an impact obviously on consumer confidence, and the ability of people to buy goods and services, and can have enormous spillover effects.

I do not underestimate the enormity of the task that lies ahead. We have taken some major action to date. And we will need further action during this transition and subsequent months.

Some of the choices that we make are going to be difficult. And I have said before and I will repeat again, it is not going to be quick, it is not going to be easy for us to dig ourselves out of the hole that we are in. But America is a strong and resilient country. And I know we will succeed if we put aside partisanship and politics and work together as one nation. That's what I intend to do.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROSEN: All right, President-elect Obama has indeed put the economy on the top of his to-do list. So let's start this head to head conversation the way we began our panel discussion, on the economy. Steve, how do you think the president-elect is going to handle these hard times?

HAYES: Well, I certainly won't like how he handles the economy in these hard times. I think the kinds of things that he's talking about are exactly the wrong prescriptions for an economy in trouble.

You can't talk about increasing spending the way that he's talking about it, without accompanying those spending increases with tax hikes. And I think the reality is, even though he ran and talked about not raising taxes, at some point, these two things come into conflict. You're going to have to either cut spending or restrain your spending or restrain his enthusiasm for new spending or he's going to have to raise more taxes. I don't know that we have we have an answer yet.

ROSEN: But you guys are just looking for something to start picking on him about.

HAYES: Well, that's true.

ROSEN: I heard your panel session. And pretty much every part of the discussion was about let's find an opportunity for Republicans to differentiate here. It's pretty clear, though, that the Democrats are going to try and start with the stimulus bill and add spending, which will create jobs. And then it seems pretty clear that the Republicans are going to oppose that.

HAYES: Yes, I think that's right. And I think Republicans are right to look for contrast here. One of the real problems coming through this past election is that the Republican brand became muddled. There was no message. You heard Kevin Madden talk about this earlier.

We have to -- Republicans have to stand for something. I mean, I consider myself conservative. Most Republicans consider themselves conservatives. What are the conservative principles? You know, where is the contrast with Democrats? I think one place we've lost it as conservatives is with President Bush and spending.

ROSEN: Yes, but you know this isn't really about the Republican brand, is it? I mean, you guys should give a chance. We -- the job loss report with this week is 240,000 more jobs lost this month. Unemployment at the highest it's been in 14 years. Don't you think that a new president is going to deserve some leeway to try and make an effort here? You know, when Bill Clinton in 1992 passed a stimulus bill, then he passed an economic package, and what did we have? We had record job growth over the next seven years, and deficit reduction.

HAYES: Well, I think we had broad economic growth at that time as well. Look, I think he deserves a chance to make his case. I mean, there's no question. He won. He won fair and square. I think he's got an opportunity now really to make his case to the country and to go, you know, through the media and sort of look beyond conservatives here.

He had some nice language in his speech on Tuesday about reaching out and representing voters who didn't support him. But I think the reality is at the end of the day he's going to look at his base, he's going to look at the Democratic party...

ROSEN: Yes.

HAYES: ...and say, here's where we are on spending and here's where we need to go.

ROSEN: Yes. Well, f the Republicans are going to start out complaining about the spending bill, obviously the bipartisan train is going to have a wreck before it kind of gets out of the station.

Let's look at something I thought maybe we could agree on. Your panel talked a lot about energy. Obviously there was an alternative energy bill that failed in the Senate by just one vote, which meant it already had some Republican support.

HAYES: Right.

ROSEN: Maybe the investment in alternative energy, which is a big priority for President-elect Obama, is something that Republicans and Democrats will work together on.

HAYES: Well, I think that's - I think there's some truth to that. I mean, Republicans have been making arguments about alternative energy as a national security issue. And I think they've made those effective arguments pretty effectively.

The problem I think is when Barack Obama is talking about drilling, you saw over the course of the campaign he started out really opposed to offshore drilling. He gradually moved over when John McCain did well and polled well on offshore drilling. And I think by the end of the campaign, he got to the point where he was almost in favor of offshore drilling.

ROSEN: Yes, but your guys even...

SWEENEY: So you could have some agreement there.

ROSEN: Your guys even admitted today that this whole like drill baby drill was kind of a sham, that really the nation isn't going to get very far if all we care about is oil. We need to have investment in alternative fuels, which is much more where the Democrats have been focused over the last couple of years.

HAYES: Well, I think it's a tactic. But in that case, it was a tactic that worked. I mean, it's one of the things the McCain campaign can look at and say look, we actually succeeded here. And the Obama campaign for the time that energy issues were a major part of the discussion found themselves sort of back on their heels. It didn't last very well very long, but it was there.

ROSEN: Until oil prices went down and it mattered less in the campaign.

HAYES: Right.

ROSEN: You know, the other thing I was surprised that came up more in, is coming up more now for Democrats and Republicans, you know, Democratic liberals are salivating at that $12 billion a month being spent in Iraq, and hoping that some of that money comes home that's gets spent on domestic priorities.

Doesn't look like if we have a new emphasis in Afghanistan and Pakistan that that's going to end up saving much money in the short term.

Are Republicans going to let Senator Obama have his way in drawing down troops in Iraq and minimizing that war, even if he then has to go out and increase in other areas?

HAYES: Well, I think it all depends on how he does it, and how, as you say, he's going to reallocate these funds. If he's talking about drawing down in Iraq in a responsible way, and we've seen again, we've seen his language I think change from the Democratic primary is where I would argue he was pretty strident about an immediate withdrawal to the language that we've seen in recent weeks, where he's talking about a responsible withdrawal and doing things that are not going to allow for a setback in the conditions on the ground there.

If Barack Obama is talking about reallocating some of the resources to Afghanistan after a responsible drawdown in Iraq, I think Republicans could actually support that. But if he's talking about, you know, new spending or FDR-like job programs, Republicans will scream and howl. And they'll be right to do so.

ROSEN: Well, you know, jobs are exactly what's being lost in this country. So I think that the country's going to support a new jobs program. You know, it seems pretty clear Republicans are going to be free from having to go along with administration policy. Sounded to me today like Republicans are pretty much excited about looking for opportunities to criticize, you know, the platform going forward.

HAYES: Well, I think they are. I mean, I think, you know, as you've learned, the opposition can be fun. I mean, there's a time for Republicans to make responsible arguments against the policies he's advocating. And there's also plenty of time to create mischief. And I think frankly we'll see a mixture of both.

ROSEN: Can we at least agree on what kind of dog the Obamas ought to get?

HAYES: I don't know that I have a strong opinion about that. I always thought the Democrats were cat people, and Republicans were dog people . Am I wrong about that?

ROSEN: I don't know. Would it be wrong for me to suggest we have a seance about it.

HAYES: I'm not sure that's a good idea. OK, we've run out of time. But we'll be back to answer one final question, and it's a traditional one. How will the nation view Barack Obama after the first 100 days? That's in just a moment when "After Party" continues.

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HAYES: Welcome back. We're going for broke here. The question is how will President Barack Obama be viewed after his first 100 days. Hilary?

ROSEN: Look, I think that the president after 100 days is still going to have great enthusiasm in this country. He still has huge support. We have a lot to do. I think he's going to feel - it's going to feel like he's delivering.

HAYES: Well, I think that level of enthusiasm for him right now that we're all feeling, is going to be a problem for him, because the expectations are higher for him than I did for any incoming president in recent memory.

And those expectations, if he doesn't meet them or get close to meeting them, I think will leave with some disappointment.

ROSEN: Well, we'll see. We're out of time. I'm Hilary Rosen.

HAYES: And I'm Steve Hayes. Thanks for joining the AFTER PARTY.