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'Special Report' Panel on Expectations for Obama's Upcoming State of the Union Address

This is a rush transcript of "Special Report With Bret Baier" from January 25, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: What you are going to hear from the president is the same thing you heard from him over the past several years, and that is that for far too long people in this country felt like Washington was about the special interests and not about them. That's why they are frustrated.

SEN. JOHN CORNYN, R-TEXAS: I think we will gain a lot more seats, because, frankly, I think it will show how tone deaf they were to the message that the voters of Massachusetts and across the country were trying to send.

PRESIDENT BARACK OBAMA: I was hoping, coach, you would bring some books for Republicans and Democrats in Congress, maybe to get them to start playing like a team together.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: President Obama meeting with the Lakers there, but earlier in the day he met with his Middle Class Task Force to talk about proposals to help the middle class and to really shift the focus away from healthcare reform.

What is happening with the agenda ahead of the state of the union address? Let's bring in our panel: Steve Hayes, senior writer for the Weekly Standard, Mara Liasson, national political correspondent for National Public Radio, and syndicated columnist Charles Krauthammer. Mara?

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: What's happening is the president always planned to pivot in the state of the union address even earlier to a more relentless focus on economy and jobs. He knew that voters were tired of hearing about health care all the time and wanted him to focus on their number one concern.

So that was already always in the works. What happened in Massachusetts just kind of made this all the more urgent and more of an emergency.

The big question for Wednesday night is he will roll out these middle class initiatives that he previewed today, but, also, how he will acknowledge what Massachusetts meant. It's one thing to be kind of defiant and not give up on your priorities. Nobody wants him to crumple and surrender.

But he does have to show that something happened and a message was sent and he has absorbed it in some way. And that's what we are waiting to find out.

And then, of course, there is the bigger question, which I don't think the White House has figured out yet, which is what does he do for health care.

BAIER: He told ABC in an interview today that he is determined to continue to tackle health care reform with Congress. Take a listen to this.

(BEGIN VIDEO CLIP)

OBAMA: The one thing I'm clear about is that I'd rather be a really good one-term president than a mediocre two-term president.

(END VIDEO CLIP)

BAIER: He went on to say he continues to fight. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, there is a third option he didn't consider, which is that he could be a mediocre one- term president, and that's what he has been thus far in his first year. And because mediocrity does not usually encourage the electorate to reelect you, that might account for being a one-termer.

I think what's even more astonishing than the result in Massachusetts last week was the Democrats' response over the weekend and how they understood the election. It was a marvel of obliviousness, obtuseness, and unbelievably condescending arrogance.

We heard the president say that the reason they suffered in Massachusetts is because he has been so busy doing all this good stuff for the American people he hasn't had a chance to go out there and to communicate the shared values.

This guy has been on the tube more than Regis. This is a guy who has given more interviews, press conferences, and speeches than any president's first year in history. The guy gave 29 speeches on health care.

Then Gibbs is asked on "Fox News Sunday" about the agenda that Brown had laid out in winning the Massachusetts race, very specific, including — he didn't say I'm uneasy about the healthcare proposal, I'm going to reform it or improve it. He said I'm going to oppose it and I'm going to kill it.

Gibbs says, well, that's not the reason that people voted as they did in Massachusetts. They are angry against the banks.

I mean, this is unbelievable. Explain to me how anger against the banks translates into a vote against Obama-care, particularly since if anybody had the bank issue, it was Coakley, who was for the bank tax. Brown actually opposed it.

BAIER: Steve, state of the unions are always usually a shopping list of proposals that the president lays out. Today, he is talking about boosting tax credits for families caring for children and aging relatives, reducing the minimum monthly payments on federal student loans, some changes in the IRAs.

These aren't big game-changer ideas, right?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: No, they are not. And I think one of the real questions about Wednesday night is will the president come out and play small ball, try to refocus the debate on things that the American people could sort of grasp, and say, look, the president is actually doing something, and we can see that he is doing something on our behalf.

But I think that's — he would be doing so as a misread of the public sentiment here. There is one clear message from Massachusetts and New Jersey and Virginia and the polling on health care and the polling on the economy, the president's approval rating, the tea parties. It's that the American public doesn't want a left wing president.

It's really not much more complicated than that at this point. And the problem that the president faces right now is that he has been a left-wing president. It's what he believes. I think he fundamentally is -- he shares liberal views, strong liberal views.

And if he were to now somehow recast himself as a populist, he would, in fact, try to give voice to what people believe — he can't do that, because people are opposed to his agenda. So he would have to sort of fight against his own agenda.

BAIER: Mara, can he tack to the center like Bill Clinton did after the '94 election?

LIASSON: I think there are certain ways he can do that. He can call the Republicans' bluff. He can submit a jobs bill that has tons of tax cuts in it — payroll tax holiday for small businesses and see if the Republicans will vote for it.

He can offer health care plan that have medical malpractice in it and buying across state lines, you know, actually put Republican initiatives in there and dare them to vote for it. I think they would not vote for it anyway.

But I think to use Bill Clinton analogy can be misleading, because Bill Clinton was facing a Congress controlled by the other party. You can triangulate if you have a partner of the other party to work with against your own unpopular party in Congress. That's not what President Obama has. The Democrats have 59 votes in the Senate. They are still in charge.

The Republicans have the best of all worlds. They can now absolutely block anything and they don't have responsibility for government because they are not in the majority anywhere yet. So I don't think it's so simple about moving to the center.

BAIER: What happens with health care?

LIASSON: What happens with health care is a big question.

BAIER: Because they don't know. They seem to have a muddled message here, right?

LIASSON: I think the only thing — Nancy Pelosi does not appear to have the votes to push the Senate plan through the house at this time. That appears to be the only option that they have got.

BAIER: And this negotiation with Republicans, is that a starter?

KRAUTHAMMER: I think it's a non-starter. The Republicans are not going to want to save the bacon of the Obama administration, and the Obama administration, particularly the left in the party, is not going to want a negotiation with the Republicans that's going to have to include tort reform. That's going to be absolutely a requirement, and you think the Democrats are going to oppose and defy the trial lawyers? I think not.

LIASSON: To get health care they would.

KRAUTHAMMER: To get health care, I doubt it.

BAIER: As confident as you were that health care reform was going to pass, are you shocked that we are sitting here in this position right now?

KRAUTHAMMER: Well, in the absence of an earthquake in Massachusetts, in an unexpected election result, yes, it would have passed. I don't see a way in which the Democrats can actually recoup and pass anything resembling what now exists in the Senate or the House.

BAIER: Agree?

HAYES: Yes, I think that's right. But Gibbs was asked today – he was asked are you going to try to pass something as comprehensive as what the Senate passed, and he said yes.

BAIER: The outcry isn't going away over the handling of the man charged with trying to blow up an airliner on Christmas day. The panel weighs in on that three minutes from now.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

CHRIS WALLACE, 'FOX NEWS SUNDAY' ANCHOR: The decision to charge Abdulmutallab as a criminal defendant and not treat him as an enemy combatant?

GIBBS: Well, Chris, the charges didn't happen until several days later. FBI interrogators believed they got valuable intelligence and were able to get all that they could out of him.

WALLACE: All that they could?

GIBBS: Yes.

MAJOR GARRETT, FOX NEWS CORRESPONDANT: There was an AP report yesterday that said he was only interrogated 50 minutes, and 50 minutes and 30 hours is an enormously different time sequence.

GIBBS: Well, I think a timeline — I think some of that information, we're certainly trying to gather.

GARRETT: Is 50 minutes just wrong?

GIBBS: That's one of the questions that I have — that I have asked somebody to pull up.

(END VIDEO CLIPS)

BAIER: Well, there is still no clear explanation of the timeline here about when the decision was made to charge Abdulmutallab, the man now charged with trying to blow up that airliner on Christmas day.

Now we know from court documents that he was Mirandized, charged December 26th, the day after the attempted bombing. We also know from testimony that FBI Director Muller was asked “were you contacted by whether or not this individual should be treated as an unlawful enemy combatant or civilian criminal?” His answer, no.

What about this? We're back with the panel. Steve?

HAYES: I think, you know, one of the things that have to cause concern is the fact that Robert Gibbs a month after the attack can't give the very basic time line of how Abdulmutallab was handled by the administration, by the intelligence community.

The president called for and received the results of an exhaustive review that was supposed to have given us the answers to all of these questions. And I am totally befuddled as to why he can't answer that very basic question.

But on the bigger issue, the real problem here is what Gibbs said yesterday with Chris Wallace, where he said that the FBI in this 50-minute interrogation had gotten everything that they could get from him. That is a preposterous claim. There is no way that that is true. No FBI interrogator worth his salt would ever tell you that that was true.

And it doesn't take into account the kinds of intelligence that we could be pulling from Abdulmutallab today. If we had new intercepts that mentioned somebody that Abdulmutallab was in contact with when he was in Yemen — he was in Yemen for four months — we could ask him about those contacts. We could ask him about these people, what was this person's role, what were they doing? How did they report to the leadership? How were they recruited?

We don't have an opportunity to do that anymore because when he was Mirandized less than 12 hours after he was taken into custody, he stopped talking.

LIASSON: Yes, I mean, there are a lot of questions here that haven't been answered. I think the FBI has to explain why it got everything it thought it needed in less than an hour, which seems really speedy. I don't know anything about interrogations, but that seems awfully short.

BAIER: Not only that, he was said to be drugged at the time because his injuries from the...

LIASSON: He was wounded, yes.

BAIER: ... from the attempted bombing.

LIASSON: So there are a lot of questions that need to be answered. And there also are a couple gaps between what the FBI, our intelligence agencies, knew about him at the time that don't appear to have been communicated to the president in Hawaii, the fact that the president came out and said he was — acted alone when they knew at that time that he had connections to Al Qaeda on the Arabian peninsula.

BAIER: Do you think, Mara, that Eric Holder, the attorney general, is in some trouble politically if the White House named him as making the call to charge this guy criminally?

LIASSON: You know, Gibbs' answer sounded like he was trying to put some distance between the White House and the Justice Department, but I actually don't think that Holder is in any trouble. That certainly seemed like the body language, that this was Holder's decision and we didn't make the decision.

I don't think that Holder could be making the decisions that he is if he didn't have the full backing of the White House.

BAIER: I want to play this sound bite really quickly. This is from President Obama's 60 Minutes interview in March and John McCain reacting this weekend.

(BEGIN VIDEO CLIPS)

OBAMA: Do these folks deserve Miranda rights? Do they deserve to be treated like a shoplifter down the block? Of course not.

SEN. JOHN MCCAIN, R-ARIZ.: To give this individual civil trial in civil court, which then gave him his Miranda rights, means he has lawyered up. He was cooperating until he got a lawyer. Now, that — that makes it almost impossible for us to pursue the leads that the Christmas bomber might have. That, to me, is unbelievable.

(END VIDEO CLIPS)

BAIER: Charles?

KRAUTHAMMER: Well, then it's almost unanimous. You get the president saying last year as president you don't want to give him Miranda rights. You have John McCain saying it's absurd. You get the head of — the director of national intelligence today saying it was a mistake.

And the only person out there who says it was the right decision is the president's own press spokesman on the weekends, and speaking on behalf of the president and the administration. The gang can’t only not shoot straight; it can't speak straight. It doesn't know what its position is.

It's standing on a decision that everybody knows was a mistake. It won't admit it. There appears to be no way you can undo it. And the result is we're losing intelligence from a source who could know what's happening today from an active, hostile cell of terrorists.

BAIER: That's it from the panel. But stay tuned for the latest PR effort from one group always in the news.

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