Fox News Network
September 24, 2008

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.

Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford. Assuming that they could sell or refinance their homes at a higher price later on.

(END VIDEO CLIP)

COLMES: That was President Bush earlier tonight. With us now for reaction to the president's bailout plan, the author of "Drill Here, Drill Now, Pay Less," former speaker of the House, FOX News

contributor Newt Gingrich. Mr. Speaker, welcome back. What do you think of this plan?

NEWT GINGRICH, AUTHOR, "DRILL HERE, DRILL NOW, PAY LESS": Alan, first of all, I'm glad you came on first, because I'm talking to you from Oberlin College, a bastion of people who love you and think you're the right guy for this program.
 

COLMES: Now you know how I feel. It's like talking to you and Hannity.

GINGRICH: Listen, I think this is an appallingly bad plan. I think it will be an engine of corruption.

I think that the -- if you read the fine print, the idea that the secretary of the treasury intends to buy back -- buy assets at above their market value means that -- one of two things. Either the current snapshot model of market to market is wrong, and we ought to replace it with a rolling market to market, in which case we'd know the true value; or the secretary of treasury intends to enrich some people by paying them more than they can get while not enriching other people.

And I think this is going to be a nightmare to implement, and I believe it is about as bad as anything I've seen in economic policy...

COLMES: Really?

GINGRICH: ... since I've been active in public life.

COLMES: These are some of the most striking (ph) comments I've heard against this plan.

GINGRICH: I think this is a disaster.

COLMES: Then what do you think should be done?

GINGRICH: I think, first of all, they should replace the current snapshot to market with a rolling three-year average.

I think, second, they should change the current loan reserve pattern so it's not pro-cyclical.

I think, third, they should zero capital gains.

I think, fourth, they need to adopt an energy plan to keep about $500 billion a year here at home instead of going overseas.

But on a practical level, if they need to open up a window to loan money to treasury plus 2 percent, and people want to come in and borrow the money and the responsibility (ph) of a workout not a bailout, and those people want to work their way out over the next three to five years. I'm comfortable saying this is a liquidity crisis; let's meet it; let's loan the money. But let's make sure they are responsible for their bad debt, and they're going to work their way out.

This idea that we're going to buy the paper and some bureaucrat in Washington is going to be responsible for $700 billion in bad paper, I think, is socialism at its worst. I can't imagine why this administration is doing it. I think it is profoundly wrong, and I hope it is defeated if it comes to the floor in this form.

HANNITY: All right. Mr. Speaker, let me ask you this. Let's talk about the political side. There's been a lot happening today. John McCain suspending his campaign. Barack -- and saying the debate should be put off while this bill is being debated and while this crisis is being solved.

Now, as I said to Jack Welch, Barack Obama said today that this is the worst financial crisis we have faced since the Great Depression. He said Americans -- "every American has a stake in saving the financial system from collapse. If we don't act soon, then people's jobs, savings, and the economic security of millions of Americans will be put at risk." That's what he said.

And then in the next breath, he said, "If you need me, if I can be helpful, I'm prepared to be there at any point." If it's that serious -- and I'm using Obama's words -- why wouldn't he put off the debate, because he's avoided him all summer, because John McCain has offered, you know, ten town-hall meetings with him? Why wouldn't he put off the debate and get this solved for the American people, considering he's saying it's so serious?

GINGRICH: Well, you know, based on what the president said tonight, I think it depends about tomorrow morning's meeting. If Senator McCain is prepared to accept this monstrosity, then frankly, they might as well debate Friday night.

If Senator Obama is prepared to accept this monstrosity, then they can debate Friday night.

If either of them thinks this needs to be profoundly rewritten, as I do, and get to a much better bill, then they shouldn't debate Friday night. They should spend the weekend...

HANNITY: Right.

GINGRICH: ... rewriting this dramatically. And I think the question is -- go ahead.

HANNITY: I don't want to interrupt you, but for the record, both have said that there need to be dramatic changes to this and that there has got to be more accountability. And I don't know that anyone is on board for the $700 billion without the accountability. And many of the very same criticisms you're laying out here tonight were made by Senator McCain and some others.

GINGRICH: Well, if this is going to be dramatically and substantially rewritten, then clearly, they ought to be prepared to meet all weekend. They ought to postpone the debate. I think it would be a tremendous sign for America and the world if Senator Obama were to work side by side with Senator McCain, jointly try to develop a joint bill. It think it would be a great act of the patriotism and good for the whole country, and I think it would put them beyond partisan maneuvering.

So I would hope that Senator Obama would reconsider. I think the idea that Senator McCain is prepared to work while Senator Obama wants to go talk doesn't speak well for Senator Obama's judgment.

HANNITY: Well, and certainly they're not even talking about economic policy. This was supposed to be a foreign policy debate, on top of all of this here.

The McCain campaign has accused Obama of cheerleading the crisis. The Obama campaign has actually come out with ads using the crisis for a fundraising pitch.

Now, one of the things that I noticed about Senator Obama's statement earlier today is he kept bringing up greed on Wall Street. He's got two economic advisors. One was leading up his vice-presidential selection campaign, Jim Johnson. He used to work at Fannie Mae. He was a top exec at Lehman Brothers. He made tens of millions of dollars.

And the Washington Post had reported that Frank Raines made $90 million in six years as the head of Fannie Mae and that he has been an economic advisor for -- for Barack Obama.

How can we solve the crisis and the greed that Obama is talking about if we don't start putting some of these guys under oath and the money that they donated to all these, you know, members of the banking committee, et cetera?

GINGRICH: Well, I was going to say, let's start with putting under oath some of the members of Congress.

Senator Dodd, who will presumably be helping write this bill, was the largest single recipient of money from both Fannie Mae and Freddie Mac. Senator Obama was second. Senator Clinton was the largest recipient for Lehman Brothers. Senator Obama was second.

I think Congress ought to also be under investigation. If we're looking at agreed, let's look at the politicians as well as the people who gave to them.

HANNITY: And put them under oath under the threat of perjury, the heads of these committees, those that got money from Fannie and Freddie, because that is also a big part of the equation. If we're not going to look at the problems and what caused them, we're going to be doomed to repeat them.

Now, by the way, special programming note. You have had a big success with "Drill Here, Drill Now, Pay Less." And you'll join us tomorrow night, and we'll talk about that, Mr. Speaker. Thank you for taking time to be with us.

GINGRICH: Thank you.

HANNITY: And coming up, Senator McCain and Senator Obama are offering bipartisan support to help solve the recent economic crisis. But did the president's speech resonate with both Republicans and Democrats? Congressman Mike Pence and Adam Smith, they respond, coming up next, straight ahead.