• With: Charles Krauthammer, Charles Lane, Steve Hayes

    This is a rush transcript from "Special Report," May 27, 2011. This copy may not be in its final form and may be updated.

    BRET BAIER, ANCHOR: Before the break, we asked you should the U.S. give financial aid to Egypt and Tunisia after the Arab spring revolution there? You see six percent said yes, 94 percent said no in this unscientific poll.

    This is the lightning round. We're back with the panel. The winner of the vote this week was actually would Paul Ryan run for president? We covered that in the first panel. And the second place finisher was the fallout from Israeli Prime Minister Netanyahu's visit to the U.S. which happened to be the focus of Charles Krauthammer's column this week. Charles, what about the fallout?

    CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think the most important event was the speech in Congress that the prime minister gave and the electric response he elicited. And it was not about the territories and the lines. It was all about him saying, Mr. Abbas, why won't you say the five words, "I accept the Jewish state"? I think the American people understand and we saw it in the Congress that's the core issue.

    And those the implicit rebuke, democrat and Republicans, to a president who nonetheless is putting all the onus, all the pressure, all the criticism on Israel, when it's clear that it's the Palestinians that won't negotiate and won't recognize the Jewish state and if it doesn't, you can't have peace ever.

    BAIER: Chuck?

    CHARLES LANE, WASHINGTON POST: I have to say, I largely agree with Charles although I do think that Netanyahu's approach may have gone a little bit over the top. To me, the whole atmosphere in Congress there was a little bit too much like a campaign. A little bit ungracious on the parts of the guests actually to really confront the president that directly and so politically. But I can't disagree with Charles that it was effective for him.

    STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think Netanyahu was surprised by exactly what the Obama administration did. I think that was bad for him. You don't do that to an ally.

    BAIER: You say what President Obama said about previous --

    HAYES: Right, the details of the new setting for the negotiations, I think. It was an affront and Netanyahu has every right to respond the way he did.

    BAIER: Another response from the White House, according to many reports and confirmed by the Clinton folks, Bill Clinton retracting this statement he said earlier in the week.

    (BEGIN VIDEO CLIP)

    FORMER PRESIDENT BILL CLINTON: Hey, if we defaulted on the debt once, for a few days, it might not be calamitous. But if people thought we weren't going to pay our bills anymore and then they would stop buying our debt.

    (END VIDEO CLIP)

    BAIER: White House chief of staff Bill Bailey and Gene Sperling made a call and at their urging came this statement from the Clinton folks, quote, "We regret if there has been a misinterpretation a comment President Clinton made about raising the debt limit. President Clinton did not in any way mean to suggest that a default would not be a highly damaging -- be highly damaging for the economy even for a very short period of time."

    KRAUTHAMMER: A classic example of a Washington gaffe, which is when a politician accidentally speaks the truth. Clinton was absolutely right in his original state. We're not going into to turn into a pumpkin at midnight on August 22nd. This is a classic example of Democratic scare tactics that they've becoming extremely adept at in this election season.

    LANE: This is the second time the Republican talking points, as you know, Medicare and Paul Ryan. So I guess maybe fearing that that would happen, the White House decided to jump on it. I think he's ruled out because he's already had a couple of turns.

    HAYES: The best part of it is the clarification in which they regret any misinterpretation. There was no misinterpretation. He was very clear. Everybody took him to mean what he said. And that's precisely the problem.

    BAIER: That basically the government can continue to function at some level, pay its bills.

    HAYES: Right. As the package showed earlier and others have argued and the Congressional Research Center have found and made the same argument that Bill Clinton is by far the most prominent Democrat to make that argument.

    BAIER: Quickly down the road, last weekend was the allegation against Lance Armstrong that he took performance enhancing drugs. Another allegation, he was on this mountain biking ride that I took part in, Steve took part in, a few weeks ago with President Bush. This was before the allegation came out. And we're going to show it on Monday. What about this, Steve?

    HAYES: Well, I think the problem that he faces is both with the number of people who are making the allegation and where they are in his orbit. There are an increasing number of people who are saying these things about him and people who are close to him and have a lot of experience with him so I think it's troubling in any case.

    LANE: Here's another problem he has which is he can deny this all he wants, but a lot of people who denied steroid use and other drug use have been proven to be liars and we have Barry Bonds. We have possibly Roger Clemens. We have Mark McGwire before that, Rafael Palmeiro. And I'm afraid it seems like where there's smoke on this stuff, there's very often fire.

    KRAUTHAMMER: I have little doubt he was a doper and the American team were doping, that 80 percent of all cyclists at that level are doping. If you care about men in shorts cycling up and down the Alps, it matters. For the rest of us it really doesn't.

    BAIER: OK. Tune in Monday and we'll show you this piece where I go biking with Lance Armstrong and President George W. Bush as well as 14 wounded warriors, and that's really the focus here, in honor of our nation's veterans on Monday, 6 p.m. Eastern Time.

    Content and Programming Copyright 2011 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.