This is a rush transcript of "Special Report With Bret Baier" from September 1, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY: While there a lot of gloom and doom going around, I think that General McChrystal's assessment will be realistic one and set challenges in front of us. At the same time, I think we have assets in place and some developments that hold promise.

(END VIDEO CLIP)

BAIER: The defense secretary talking about General Stanley McChrystal's assessment of Afghanistan in a statement just a couple of days ago. The general said the situation in Afghanistan is serious but success is achievable and demands a revised implementation strategy, commitment and resolve and increased unity of effort. This comes as there is a new public opinion poll out about what the public thinks of the president's handling of Afghanistan, and there you see now it is at 48 percent, down from 56 percent in April. So what about the situation in Afghanistan and the administration's response? Let's bring in our panel. Juan Williams, news analyst for National Public Radio, Nina Easton, Washington Bureau Chief of "Fortune" magazine, and syndicated columnist Charles Krauthammer. Charles, you see that the public support for Afghanistan is slipping in almost every poll we look at, and then this assessment that President Obama is going to take with him to Camp David this Wednesday.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, I think a lot of slippage in the polls is Democrats.

Let's remember how all of this happened. During the Bush years, the Democrats inflated the importance of Afghanistan and pretended it was the good war, the war that had to be won, even as Obama said just a month ago, a war of necessity, as a way to oppose the Iraq war and not appear to be entirely antiwar as the Democratic reputation was ever since the Vietnam days.

It was a cynical political maneuver. Bob Shrum, who was a high advisor in the Kerry campaign five years ago admitted that it was a political move as a way to oppose the Bush war, but not the antiwar.

Well, now that the Democrats are in control, and they have a president who understands that it is an unpopular war and infinitely more difficult war than Iraq because it was never a country, it's extremely decentralized, it has a very weak central government and a huge amount of corruption. But he stuck with it.

So what has happened is his troops, meaning his political troops, Democrats, the rank and file, who in the Bush days were ostensibly in favor of the war, are now open about their opposition. And he's losing his constituency on the left and in the center and even some on the right.

BAIER: You mentioned some on the right. George Will had a column in which he said it's time to pull out of Afghanistan, essentially saying, and we will put up the, "America should only be done what can be done from offshore, using intelligence, drones, cruise missiles, air strikes, small potent special forces units, concentrating on the porous 1,500 border with Pakistan, a nation that actually matters."

He said "Genius sometimes consists of knowing when to stop. Genius is not required to recognize that in Afghanistan. When means now before American valor is squandered."

Nina, that's powerful from someone like George Will.

NINA EASTON, WASHINGTON BUREAU CHIEF, "FORTUNE" MAGAZINE: What he is talking about when he talks about the first part of that quote is precisely the opposite direction that McChrystal is going, which is less reliance on drones and offshore support, more reliance on getting involved with the locals, more reliance on foot patrols, and more reliance on trying to bring the civilian population along with the program.

So it's gone from, I think, the good war to the deadly war. That's a more — short-term, at least, I think it's very likely, and we're seeing more casualties because soldiers out there. They're exposed more.

And so I think that's going to create an incredible danger zone ahead for this president when he goes to Congress when he needs more troops, when he needs more money there.

By the way, he also, keep in the mind, in his budget claimed a $1.5 trillion savings by winding down Iraq and Afghanistan. That's clearly not the case in Afghanistan.

BAIER: Juan, this sounds like an assessment what General Petraeus did in Iraq, in moving out into these communities, protecting the population, and trying to reach out. But that is going to require more troops.

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: I don't think there is he any question it will require more troops. And I think that this report is simply preliminary to that request.

But what he is doing here, General McChrystal, is laying out a strategy, a strategy that's different than any that has come before, with the hope that he can get people inside the White House to buy in and hear him talking, not just about President Obama, but Vice President Biden and people looking at the poll numbers and seeing that now a majority of the American people think this is a war that is not worth fighting.

But if you go to the Pentagon and you talk to Admiral Mullen, what he will tell you is the Taliban is more sophisticated than they were a year ago. We just heard from Defense Secretary Gates saying that there is a tough road ahead. He thinks that we have assets on the ground and we have some chance of success. But nobody is standing up and saying this is a cakewalk, this is going to be easy. And what is really troubling if you're looking at it from the White House perspective is numbers — not about President Obama's handling. And let me just say, I don't think this is democrat or Republican. Look at these numbers, numbers that indicate that now only 25 percent of America think we should send more troops to Afghanistan. That's down from about 40 percent from a month ago. That is a tremendous drop off, and I think it's indicative of the fact that people in this country are tired of war. And I don't know that you can lay it on any one specific administration's doorstep, but how crazy is that after 9/11 when we were attacked and that we now have to stop Afghanistan from becoming a sanctuary for Taliban and Al Qaeda right next door in Pakistan? I don't understand it, except to say we are as a people war weary.

BAIER: Charles?

KRAUTHAMMER: McChrystal is proposing an Afghan surge. This is a complete recreation of what happened in Iraq in '06, '07, '08. We were at a low point in public opinion at the time, and elite opinion was entirely against the surge in Iraq.

Bush made the most courageous and correct decision of his entire presidency in insisting on it against the polls. And what happened is that surge succeeded in saving a lost war.

In Afghanistan the idea is this — we have a bridge, a surge which would be a year or two, during which you build up the Afghan army to perhaps a quarter of a million, which would be able, if it succeeds, to then, with little western support, keep the capital, protect the capital, make deals with the warlords in the north, and contain the Pashtun insurgency in the south. That's all that we can hope.

But if you don't have a surge for a year or two where the west steps in and creates an Afghan army, we are going to have helicopters at the embassy in Kabul.

BAIER: Last thing, Nina — there are a lot of if's in that equation, if it can happen. And is there the political will to stand it out if it doesn't?

KRAUTHAMMER: There were a lot of ifs in Iraq as well.

BAIER: Right, but this is a different administration.

EASTON: And he had the opportunity when he first came in. He stood back, and there already was one surge. There already has been a change of leadership, military leadership in Afghanistan, just like happened in Iraq.

But now it's coming to the front burner. And I think if you think this is the bloody war over health care, watch it over Afghanistan. It is real political dynamite for the president.

BAIER: Well, Republicans will make their stand with two big governors' races this year. The panel tells us if they think they have a chance in Virginia and New Jersey next.

BAIER: So will there be a GOP comeback? There are a lot of people looking at 2010, but they are also looking at two governor's races this fall. In New Jersey you have Republican Chris Christie, a former U.S. attorney. He isahead by six and a half points over the incumbent Democratic Governor John Corzine.

And then in Virginia, where really Democrats have been winning most of the elections recently, former Republican Attorney General Bob McDonnell has a 9.5 point lead according to recent polls over Democratic State Senator Creigh Deeds according to the polls there in Virginia.

So what about the GOP's chances? We're back with the panel. Juan, let's start with you.

WILLIAMS: Well, I think that right now you have Republicans in the lead in both contests, and this is really a contradiction to the way that we saw the Obama team galvanize Democrats around the country, especially young and white suburban female Democrats who got so excited.

And here's a state, Virginia, that has long been a Republican stronghold, of late has become more of a purple state, trending Democratic.

But in this race, what we see is McDonnell, the Republican, having a substantial this week until this weekend when there were some revelations in "The Washington Post" about a thesis he wrote almost two decades ago in which he said that he thought women, especially working women, were somehow undermining the family, things like that, that would impact directly the base.

And in New Jersey, similarly, you had Chris Christie —

BAIER: We should point out that he says his views have changed over 18 years. That's his response.

WILLIAMS: Right. That's two decades ago, it was a long time ago. But the question is, it's on the table right now. Actually, that might be an advantage. It is not right before the election, but right now before Labor Day.

And in New Jersey, with Chris Christie, who was a former attorney — a former U.S. attorney in the state, he had been a substantially lead. But again, there has been some recent revelations, questions about ethics, about loans made to subordinates that have, you know, allowed his opponent, the incumbent, John Corzine, to go on the offensive in advertising and take him on. We see the numbers there, again, shrinking.

So at the moment, it looks like the possibility that Republicans could start a resurgence in terms of the national political map here, but it might be too early to come do that conclusion.

EASTON: I think it's really interesting that in both these races the Democrats want to make this a referendum on George Bush. In Virginia, for example, Creigh Deeds, the Democrat, is running ads saying he is for pro- business policies, not Bush economics.

And of course, Republicans see it as a possible referendum on Obama, and they think they're being helped by both the concerns about health care and spending and so on.

I would just say that Republicans shouldn't count — even if both these guys win, both these Republicans win in New Jersey and Virginia, Republicans should not count on that to sail them through the midterms next year, because they've got to become the party of growth, the party of low taxes, the party of jobs.

And the way that McDonnell handles this thing about the term paper, where he was very good about it. He said I'm the party of jobs and I'm the jobs governor. It's got to be that party and not the party of the thesis that he wrote two decades ago. And I thought that was so clearly defined for the future for the Republican Party.

BAIER: Charles, is that a danger when Republicans start talking about these two races in the fall as being a referendum, is that dangerous?

KRAUTHAMMER: Well, when you're way ahead and you think you are going to win, then you make it extremely important and national and predictive, which was always nonsense.

I think what is really interesting is how un-nationalized these races have become. And, as we heard, all of these issues are local, charges of corruption in New Jersey, heading each way, actually, two-way charges, and this thesis in Virginia. You can't get more local and personal than an attack on that basis.

At the beginning of the year when Obama was riding high, he had the wind at his back, of course he was incredibly popular, it looked as if they would be, again, national races in which Democrats had the advantage, again, running against Bush.

Here we are six months later. Obama has declined. The sheen and awe is off. The magic is gone and his numbers are at about 50 percent. What has happened is that Obama's decline has made these into local races again, the great trends, the Democratic sweep of last year is now over. It has been neutralized.

And the races will end up fought on petty issues like theses 20 years old.

BAIER: And Juan, how much does the economy play into GOP hopes of a comeback in 2010?

WILLIAMS: Well, I think that is the overwhelming issue right now in the political spectrum. You look at all the polls, everybody says the number one issue is the economy, deficits, which is related directly to the economy, and jobs, of course, are the greatest manifestation of this on the political scene.

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