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

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: They don't want to be constructive. They just want to get in the usual political fights, back and forth. And sometimes that's fed by all the cable chatter on the media. But you and I know the truth. This country wasn't built just by griping and complaining. It was built by hard work, and taking risks.

(APPLAUSE)

(END VIDEO CLIP)

BAIER: Well, that was the president today talking about opponents to his agenda, including health care reform legislation.

The DNC, the Democratic National Committee, had a different take on the folks at these town hall meetings across the country. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It will break him.

UNIDENTIFIED MALE: I hope he fails.

UNIDENTIFIED MALE: This mob activity is straight from the playbook of high-level Republican political operatives. They have no plan for moving our country forward, so they have called out the mob.

(END VIDEO CLIP)

BAIER: OK, that ad continues.

What about this tactic by the White House and the Democratic National Committee? Let's bring in our panel, Michael Barone, senior political analyst for "The Washington Examiner," A.B. Stoddard, associate editor of "The Hill," and syndicated columnist Charles Krauthammer.

This is alive, Michael, the mob in the town hall meetings.

MICHAEL BARONE, "WASHINGTON EXAMINER": They are trying to demonize the opponent of this by focusing on people shouting at constituent meetings and by demonizing the insurance companies who they've been actually quite happy to deal with their lobbyists and to claim support for them when it suited their purposed, but now they're going to be demonized.

And the reason is that the support for the Democratic plans has been dropping like a stone. We've had our persuasive and articulate president out there, the highly skilled leaders in Congress, and support for these plans has gone down, opposition has gone up. They crossed the line. A graph from pollster.com, you can see that the line has gone down. And people aren't buying it.

Quinnipiac poll today found by a 57/37 margin, Americans oppose any health care bill which would substantially increase the budget deficit, and support for current health systems, according to pollster Scott Rasmussen, has gone up from less to 50 percent to well over 50 percent.

People threatened with the government plan have come to appreciate what they have got.

BAIER: A.B., the president said this country wasn't built on griping and complaining today. His White House press secretary said these town halls are manufactured events, went as far as saying that.

It is just an interesting thing to see the White House operating in this way, isn't it?

A.B. STODDARD, "THE HILL": There was also some accusation that the people coming to these gatherings are actually representing the interest of the insurance companies, which is really a stretch.

They obviously feel that they have to fight back against these mobs, because their own members who they have bewildered in recent weeks with mixed messages and not a lot of leadership from the White House, have come home and can't even be heard at these meetings.

Now, I think the problem started weeks before the angry mobs showed up, and that is because there is no program that the leadership and the White House has been able to send conservative, nervous, moderate centrist Democrats home with.

So when people talking about a public plan, when they're talking about socialized medicine, there is nothing to push back on. And so this problem could have been avoided altogether before we had this scene.

But this is democracy in action. There is nothing they can do. The more they complain about it at the White House level, I think the worse it becomes.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, the White House accuses it as being orchestrated. Orchestrated is a synonym for organized. And I thought that community organizing was a high calling. I mean, our president, he used to deploy it every day when he was a campaigner as a sign of his altruism.

This is unbelievable hypocrisy, and it's because the administration has a hard time defending itself on the merits of the case. The support for health care reform is sinking, and that's because it understands that the people who — as you look, as you unpack what is happening here and what's in the bill, it is a monstrosity.

The administration has made a turn in the PR and you can see it in an op-ed that the secretary of health and human services had earlier this week with "The Post," "the Washington Post" in which she mentioned the uninsured in paragraph one, and then you never heard about them again. It was all about the insured and keeping it and having it, and making the insurance companies have you keep it. The reason that they have shifted is because that's how you sell it.

But the problem is that's not what's in the bills. The bills being discussed in the town halls and the bills that have been out there for weeks and the bills that have been drafted and you can read have all this other stuff in there — the mandates and the huge deficits and the new-aged nonsense of wellness and other stuff that everybody is rejecting. That's what they're stuck with right now.

BAIER: The other thing that is perking people's ears, especially on the Republican side, is this call by the White House on the Web site, if you see anything fishy as far as an e-mail or a Web site about health care reform that seems fishy, send it to White House.gov.

Here is what Senator Cornyn, Republican from Texas, said about that "By requesting that citizens send fishy e-mails to the White House, it is inevitable that the names, e-mail addresses, IP addresses, and private speech of U.S. citizens will be the reported to the White House.

I can only imagine the level of justifiable outage if your predecessor asked Americans to forward e-mails critical of his policies to the White House. I suspect you would have been leading the charge in condemning such a program, and I would have been at your side denouncing such heavy-handed government action."

What about this, Michael?

BARONE: I think Senator Cornyn is getting a little overwrought about this, but this should not have come from the White House. This might be legitimate coming from the Democratic National Committee or one of the Democratic Astroturf groups that are out there.

I mean, David Axelrod, the president's chief adviser, was an Astroturf specialist in terms of organizing people that would come together.

BAIER: As opposed to grassroots.

BARONE: Yes, as opposed to grassroots.

But, basically, I think it is pretty weak as an attempt to intimidate people. But what is fascinating is that when pro-Democratic health care groups send out these mass e-mails that say show up, come here, show how much you're in favor of the president's position, they get a handful of people.

These other groups, or just spontaneous citizens, get huge numbers of people, you know, 150 where the town hall meetings used to get 20 and that sort of thing.

The balance of enthusiasm has changed. It favored Obama in '08. It is working against him now.

BAIER: A.B.?

STODDARD: That's really the crux here, is that they're — I agree with Michael that this is the kind of activity that is pushed back in the solicitation for fishy e-mails and other information really should coming from Organizing for America or DNC or one of those other groups.

But, at the same time, the real problem here is that the left wing of its party, the middle of his own party, are not as engaged and the Republicans and opponents of reform are.

BAIER: But does Senator Cornyn's part about if it was George W. Bush that asked for e-mails, it would have been —

KRAUTHAMMER: Look, I'm not as sanguine as my colleagues on this. The first amendment says that Congress shall make no law abridging the freedom of speech. And now, apparently, however, the president will collect e-mails that contain fishy disinformation. I mean, that's Orwellian language that you expect and get out of Hugo Chavez as he shuts down 100 radio stations.

I don't think there is a vast conspiracy of collecting IP addresses, but a White House ought not be collecting disinformation. Even that language is language that America doesn't use. It is a language of dictators.

And the tactic here is Chicago-thug politics. It is disgraceful.

BAIER: I would never describe you as "sanguine."

(LAUGHTER)

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Certainly not on this show.

BAIER: Mahmoud Ahmadinejad is sworn for a second term as Iranian president as the American president's top spokesman does a 180 on the Iranian president.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nobody in Iran is waiting for your congratulations. The Iranian nation does not give importance neither to your frowns and threats, nor to your congratulations and smiles.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president is reaching out in order to ensure that they don't develop a nuclear he weapons program. Those continue to be our goals.

QUESTION: But does the administration recognize Ahmadinejad as the legitimate president of Iran?

GIBBS: He's the elected leader.

(END VIDEO CLIP)

BAIER: Well, Robert Gibbs corrected that today, saying "I noted that Mr. Ahmadinejad is the elected leader of Iran. I would say it's not for me to pass judgment on. He's been inaugurated, that's a fact. Whether any election was fair, obviously, the Iranian people still have questions about that and we'll let them decide that."

We're back with the panel about Iran — Charles?

KRAUTHAMMER: Well, that was a Kinsleyian gaffe in which a politician accidentally speaks the truth, or at least as he understands it.

It is not the truth about Iran itself. The guy who was sworn in today is not elected. It was a fraudulent election. Everybody knows it.

However, it reflects what the administration wants in Iran. It wants him in power. It did not want the demonstrations. It saw it as a nuisance. It got in the way of the grand scheme of having negotiations in which Obama sweet talks Iran out of its nukes, which is in and of itself harebrained and na<ve, and now it is all collapsing around him.

It was dishonorable, our lack of support of demonstrators in the street who were being shot in the name of democracy. And now, on top of dishonor, is failure. We are not going to have negotiations with this guy after the fraudulent elections, and we are at a dead-end of a policy which was harebrained at the beginning and has nowhere to go right now.

BAIER: We occasionally still get videos that seep out of Tehran of protests, and some of them show protests being put down — A.B.?

STODDARD: Obviously Ahmadinejad is more legitimate and discredited than he was when, as a candidate, Barack Obama said he would negotiate without preconditions.

This makes it very difficult for him. He gave Bibi Netanyahu and the Israelis a deadline by the end of the year — he gave Iran a deadline when he was visiting here several months back by the end of the year.

Now I literally do not think the administration knows what to do, because they're dealing with the supreme leader who validated Ahmadinejad's election.

And under Mousavi, they weren't going to get a halt to the nuclear program either. Progress on the nuclear program will continue. And I think the Obama administration is in a pivotal moment where they don't want to have — I disagree. I think they don't want to have those negotiations, and I think they don't know what to say about it.

BAIER: Michael?

BARONE: One member of the administration, I believe, said that we're going to give Iran a chance to respond positively to the offers Obama first made as a candidate back in July, 2007 for unconditional negotiations until the U.N. General Assembly meets.

Well, that's on September 15, which is five weeks and six days from now. It's not a lot of time left.

I agree with Charles. What has really struck me about the president in this and members of this administration is the stony indifference to these people that are demonstrating for freedom and for democracy, many of them for a change to this genuinely evil regime that shot a young woman like Neda, that executes homosexuals.

Obama campaigned as the candidate of hope and change, but on Iran, he has been the president of the status quo of despair.

BAIER: And there's no more evolution here.

KRAUTHAMMER: The only option I think would be a suggestion in Congress of a gasoline embargo which would truly hurt Iran. It has a lot of crude, but it doesn't have refined gasoline. But it would be a dangerous, risky step, which might involve a blockade.

Whether Obama would do it or not, I don't know. But if he doesn't, he has got nothing.

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