This is a rush transcript of "Special Report With Bret Baier" from June 5, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: We have a facility that contains some people who are very difficult to deal with.

Some of them probably should not have been detained in those facilities in the first place. They should have been processed and tried and convicted.

I don't anticipate that it's going to be resolved anytime in the next two or three months. I think it's going to be a longer process of evaluation.

(END VIDEO CLIP)

BRET BAIER, "SPECIAL REPORT" HOST: Well, in Cairo, President Obama called the detention facility at Guantanamo Bay, Cuba, a violation of American ideals and a reaction to the trauma of 9/11.

Today in Germany, he talked about how tough it is to close Gitmo. Standing alongside German Chancellor Angela Merkel, whose country has only accepted one detainee, and she made clear she is not ready to accept any more, saying when there is a solution in the offing, we will, "constructively contribute to it."

Let's bring in our panel, Fred Barnes, executive editor of the "Weekly Standard," Nina Easton, Washington Bureau Chief of "Fortune" magazine, and syndicated columnist Charles Krauthammer — Fred?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": I had very low expectations for the president's trip to the Middle East and Germany, and I have to say they have been fully realized.

And what he said about Guantanamo, I think, is part of that. He doesn't have a clue. He made a mistake in announcing he was going to close the prison, and he doesn't know what to do with these prisoners.

Look, this evaluation process, I don't believe there is one. What the president would like if for public and Congressional opinion to change over the next two or three months. And I don't think it's going to.

He has lost this argument, because, look, the Germans, you know what the Germans want? They say well, maybe we'll take prisoners from Guantanamo after the U.S. does.

And here we know that both Republican and Democratic members of Congress do not want them in their districts or states, and so it's not going to happen. So then Germany won't take them and other European countries.

So where are they going to go? As Charles and others have said and I have, too, there is one perfect place for them. It's called Guantanamo. I'm afraid the president is stuck with that.

BAIER: Nina, perhaps some are saying the president should spend some public diplomacy back here on Capitol Hill and less so overseas, because the real problem are the people behind this.

NINA EASTON, WASHINGTON BUREAU CHIEF, "FORTUNE" MAGAZINE: It is interesting. I think that the Guantanamo episode, it was an interesting contrast, because that's where the soaring rhetoric meets reality.

And on this trip we have the soaring rhetoric. We had, I think all the kind of Obama-style labels, brand names came out in this. We had "hope." We had "change." We had "empathy." And we even had a dash of audacity in that he told reporters after he left the Middle East that he expects serious progress this year on Middle East talks.

So, you know, it's a view of the world which I think is going to come to be tested, which is that if only we were nicer, if only they liked us more, we'd have fewer enemies.

It's something that I think John Kerry explored in his campaign when he said foreign policy should pass a global test. It is certainly a controversial, I think, view of foreign policy. But it's his chance now to see if it works, see if it flies. And I think this is the opening strike in that.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I love the way he said that some of the detainees should have been processed and tried and put away. He sounds like in the westerns where they grab a guy off the street and say let's give him a fair trial, and then a hanging.

It does somehow eliminate or leave out the presumption of innocence, which I thought is what all this idea of getting them a trial was about.

And it is possible that some of these guys will be acquitted. I mean, after all, it's not easy to get evidence and interrogations that will pass a civilian test, which means what's he going to do, the president, if the guy is tried in Manhattan and found not guilty?

And he walks out onto the streets of Manhattan, I can assure you what's going to happen. We're going to seize him and have him in detention without a trial. It will start all over again.

The problem is not solved. There are a group of prisoners, large number, who have to be detained and who will not end up convicted. So where do you put them?

When Germany accepts one and France accepts one, these are countries of over 100 million people between them, you know that we have a problem abroad.

And the hypocrisy is that detention without trial, even if you close Gitmo, is happening in Afghanistan at the Bagram Air Base.

And the other thing that we are still doing is rendition. We seize a bad guy in one country, and we squirrel him away to another country, where the, I can assure you, the prisoner is treated a lot less nicely than in Guantanamo.

So the moral issue remains, and the PR issue remains.

BAIER: Fred, what about the imagery today? He visited the Nazi concentration camp, Buchenwald, standing alongside the Elie Wiesel, Nobel Peace Prize winner, and laid a flower there at the memorial after that speech in Cairo. What about the imagery?

BARNES: It was fine. It was a photo op, and Obama is very good at the photo ops.

I think, going back to the Middle East, though, and, look, I wonder why he went to Dresden. Going to Dresden, you know, he said in the Middle East that he was going to tell the truth. I wish he had gone to Dresden and told the truth about what really happened there with the allied bombing.

And of course, this myth has been created by the Nazis and the Soviets that 250,000 Germans were killed and there were no military facilities there and all. And that's not true.

According to the German's own studies and the British and many other, there are about 25,000 people at most killed there. Kurt Vonnegut fell for the, whatever the name of that novel was, I remember reading it years ago —

KRAUTHAMMER: "Slaughter House Five."

BARNES: Yeah, right. He fell for that.

And, anyway, that was the truth the president didn't touch on.

On the Middle East, he seems to think nobody has ever tried anything there before. He is the first guy, and he's clearing up misunderstandings. There are no misunderstandings. Everybody knows exactly where they understand.

As the fundamental thing, as Charles alluded to there, has been in the past, is that the Arabs and the Palestinians will not accept Israel as a Jewish state or as a state at all.

KRAUTHAMMER: People speak about the complexity of this dispute. There is one simple axiom. As long as the Arabs and the Palestinians do not accept a Jewish state, which is the history of the last 60 years, there is no solution.

On the day the Palestinians or the Arabs accept a Jewish state, the solution can be done in three months. Then it's a boundary dispute, and then it eminently soluble. An existential dispute is eminently insoluble.

BAIER: The administration adds another czar, but it loses a key intelligence expert and several hundred thousand more jobs. The Friday lightning round is next.

(COMMERCIAL BREAK)

BAIER: The White House dealing with staggering job losses over the past three months has rally ruined the administration's projections about what the stimulus would accomplish. May's jobless numbers were less than actually many people predicted, but still at 345,000 jobs lost.

So what about this and what the stimulus has or has not done? We're back with the panel. It is the first topic in the lightening round — Nina?

NINA EASTON, WASHINGTON BUREAU CHIEF, "FORTUNE" MAGAZINE: Well first of all, I think, in fairness to the administration, unemployment was always going to go up. It's a lagging indicator. It is the last thing that happens. So it was always going to go up.

Their problem is that they have this kind of fuzzy math about jobs created and saved, which you can't really count.

BAIER: They say 150,000 jobs saved or created.

EASTON: Saved or created, but how do you count a saved job? They're having trouble explaining that.

But on the stimulus, they want to — so now they want to shovel more of the stimulus money out the door faster.

And I think what you have to be concerned about is, a, is that going to viable projects that make sense, and b, it's not just jobs. Are these just all going to be public sector jobs, are these just government jobs? What we really need to look down the road is at creating private sector jobs.

BAIER: Charles?

KRAUTHAMMER: Well, it was supposed to go to shovel-ready stuff. It looks as if there is a huge shortage of shovels, because there is no evidence at all that it has increased employment.

And of course, they will find an economist who will concoct a number and say, well, it saved x number of jobs. That's utterly impossible to ever ascertain.

What we know, for sure, is that it has added almost $1 trillion to the debt, and that's going to have to be repaid.

BAIER: Fred?

BARNES: The administration, and this is what you were, I think, alluding to, Bret, earlier, was that they predicted that the stimulus would mean the unemployment rate would not exceed 8 percent. It is now at 9.4 percent, and I think we can generally agree it will go over 10 percent, and how much over that, I don't know.

And clearly the stimulus package, they have to ramp it up. It hasn't succeeded so far.

Nina is exactly right. There is nothing that they have proposed that would be incentives to the private sector to invest and create jobs. And that's what they need to do.

BAIER: Another Obama nominee has pulled his name from consideration. Philip Mudd was up for undersecretary for intelligence and analysis at the Department of Homeland Security.

He has pulled his name out of consideration because of concerns from Democrats about him being part of the counterterrorism center that dealt with interrogation techniques — Charles?

KRAUTHAMMER: This is perverse. It means that anybody who is intimately involved in the last seven years of intelligence, which kept us safe in a situation of extreme unsafety, is now ineligible to rise to a higher job. It's unfair, and it's going to hurt us in the future.

EASTON: I think it is all politics. I mean, I think the Democrats, they don't want Pelosi-gate to rear its ugly head again.

They don't want a discussion of these interrogation memos, which is what this hearing would have turned into, because then you get to see what kind of intelligence you actually got from some of these enhanced interrogation techniques.

BARNES: There is a man named Barack Obama who actually nominated this fellow to have this job at the Homeland Security Department. And did he fight for him? Did he stand up? Did he give any resistance to the complaints by Democrats on Capitol Hill to his nominee? Not that I heard of.

BAIER: All right, a czar update. The administration is now at 15 czars by our counting. As we scroll through the pages here, we should have three pages of all the czars, including, added recently, the Great Lakes Czar and the Stimulus Czar about Pay.

Nina, what about the czars?

EASTON: What scares me most is the Pay Czar, because, I mean, already the private sector, private companies feel completely burned by the whole TARP experience, and healthier banks are bailing out as fast as they can. They're not participating in other programs to help the economy, and this just screams "run!"

KRAUTHAMMER: More czars than you find at a Romanov wedding.

What I don't understand is why you want to call anybody a "czar." The czars had a sorry history of success and achievement.

(LAUGHTER)

I mean, of all the titles, that's about as low as you can go.

BARNES: What is the Cabinet for? You don't need the Cabinet if you have all these czars.

Look, this is obviously going to lead to fighting between the czars at the White House who will have more influence and the cabinet secretaries, in most cases.

BAIER: Down the line, very quick, does Gordon Brown keep his job as prime minister?

BARNES: No.

EASTON: Barely.

KRAUTHAMMER: He is out of the world series.

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