This is a rush transcript of "Special Report With Bret Baier" from April 20, 2010. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: We have updated our intelligence assessment of Iran's missile programs, which emphasizes the threat posed by Iran's short and medium- range missiles which are capable of reaching Europe.
This new ballistic missile defense program will best address the threat posed by Iran's ongoing ballistic missile defense program.
JAMES CARAFANO, HERITAGE FOUNDATION: Just last week, you had a senior defense administration official crowing before the House Armed Services Committee that, oh, we are going to have a missile defense system to cover all of Europe and additional protection for the United States by 2018 and being proud of that.
And you go, OK, we'll have a defense by 2018, and they are going to have a missile by 2015, this is what the administration is not saying. What 2015 basically means is that we are living inside the margin of error.
(END VIDEO CLIP)
BRET BAIER, "SPECIAL REPORT" HOST: Well, a new Defense Department report says just that, that Iran could have an intercontinental ballistic missile capable of hitting the U.S. by 2015. They did have a rocket test in February of 2010, you may remember. They put up this rocket and it was successful in Iran.
The first sound bite you heard was the president explaining the new intelligence assessment after the decision to scrap missile defense plans in Poland and the Czech Republic back in September.
What about this new report and all the things in it? Let's bring in our panel, Fred Barnes, Executive Editor of The Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It looks like we're back to an estimate of 2015, which is roughly what the Bush administration had said, that Iran would go intercontinental by 2012 to 2015.
What's remarkable is that 11 month ago the Obama administration issued a National Intelligence Estimate in which all of a sudden it revised the assessment and said the old one in the Bush administration was too alarmist. This is not going to happen until the second half of the decade, 2015 to 2020.
And it was that rationale of the administration then used, the president then used when he unilaterally and abruptly canceled the agreement we had with the Poles and the Czechs to build a missile defense system that would precisely be designed to shoot down an intercontinental rocket from Iran headed over to the United States.
So that rationale now collapses. It looks as if the Iranians are on a faster track. And the rocket test you showed, the one in February where Iran put up a rocket and satellite in space that had a mouse on it. You remember at the time, I pointed out that Iran is not exactly the leader in rodent research. It was showing its reach in being able to hit any country on earth.
That was a two-stage rocket, intercontinental. You need a three stage if you want to hit the United States. But that is coming, and we know it's coming. Why the administration would cancel a system in Europe that would help us, why it's reducing the number of ground space launches in Alaska that would shoot down a Korean rocket, and why it canceled the airborne laze, the single most prominent technology for shooting a rocket on its way up, which is much better than shooting it on the way down where it can deploy chaff and a lot of multiple warheads, is incomprehensible to me.
BAIER: I will say the Pentagon, the Pentagon officials say that currently in Alaska they have the ability to cover the continental U.S. and they are looking to put a radar site in Turkey, but that hasn't developed yet either. They say they're covered at the moment with what they have on the ground in Alaska.
KRAUTHAMMER: But they cut down on the number of interceptors to be constructed.
BAIER: A.B., the timing of this report, coming out of the DOD -- this is actually from a DIA, the Defense Intelligence Agency, and it comes after Defense Secretary Gates' memo leaked to the "New York Times" questioning whether the administration has a long-term Iran strategy or policy.
A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Right. And there was a great move to try to sort of backtrack the assessment that the media interpretation of the Gates' memo. The timing of this is interesting.
But I would say it puts tremendous pressure on the administration not only to deal with the sanctions question and how they are going to contain Iran nuclear capability, but in this report there is so much information about how much energy and resources Iran spent for decades, making friends with our enemies right now in Iran and Afghanistan with insurgents and terrorists, but all over the world.
And I think that there is going to have to be other plans, other tracks in the administration's Iran policy, not only to contain the nuclear threat, but to deal with how much they are undermining our efforts and trying to counter our influence in the war zones.
And they are going to have to make clear what they are doing to stop millions of dollars and the paramilitary exercises and all the training that the Iranian Revolutionary Guard is doing in the war zones but also all over the globe.
BAIER: To that point, Fred, here is a quote from the unclassified report. "Iran is attempting to secure political, economic, and security influence in Iraq and Afghanistan while undermining U.S. efforts supporting various political groups, providing developmental and humanitarian assistance, and furnishing lethal aid to Iraqi Shia militants and Afghan insurgents."
It says the Iranian Revolutionary Guard is not a rogue element and in fact is controlled by the regime.
FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: And, of course, what they did was concede someone in the Pentagon and the Obama administration that it was a rogue force, the leaders at the top level in Iran were not really behind this. Now we know they approved everything that went on, all the efforts to kill and stymie Americans in Iraq and Afghanistan.
And Bret, what has happened in the last two days is the utter collapse of the Obama administration's policy toward Iran. First the Gates' memo said they had no effective policy for dealing with if Iran does become nuclear or even just assembled the parts for a nuclear weapon. They are not ready to deal with that. That was a Gates memo leaked a couple days ago.
And now we have this report that says they were wrong about how soon a missile, an Iranian missile could reach the United States. And of course, as Charles said, that was the basis, basis for their policy of saying the two missile sites in Poland and the Czech Republican were unnecessary.
It's clear now that engagement and even sanctions have not worked at all. If anything, since Obama came in, the Iranians have speeded up efforts to have nuclear weapons and undermined America in the Middle East and Afghanistan.
BAIER: Charles, what do you say to folks who say, listen, we have heard intelligence reports before in lead up to Iraq that were not accurate. Why should we believe this one?
KRAUTHAMMER: We have long list of intelligence reports that were inaccurate. But almost exclusively, with the one exception of Iraq, they have underestimated the speed of nukes. They underestimated the case of Russia in the late '40s, underestimated in China, India, Pakistan, always underestimated.
In fact, in the Gulf War in 1991, we had no idea that Saddam had active nuke programs and we discovered it after the war to our surprise and our horror.
So generally speaking the history is underestimating. Yes, of course, it's inaccurate. But from looking back and into the future, generally speaking it's underestimate, with the glaring exception of, of course, of the weapons of mass destruction in Iraq.
But it should tell you that if you get report after report that indicates Iran is working on the intercontinental missile and you watch them launch one in testing and they are announcing we are on our way, it would be to deny reality to deny it will happen and rather quickly.
BAIER: You can read more about Iran's nuclear program on our homepage at Foxnews.com/specialreport.
The panel discusses the president's plan for new financial regulations in three minutes.
(BEGIN VIDEO CLIP)
OBAMA: The leader of the Senate Republicans and the chair of the Republican Senate campaign committee met with two dozen top Wall Street executives to talk about how to block progress on the issue.
SENATE MINORITY LEADER MITCH MCCONNELL, R-KY: The president criticized me on his weekly radio address even as his deputies worked to strip the very provision I called in question a few days before. Well, they can't have it both ways.
(END VIDEO CLIP)
BAIER: You see the back and forth there. The provision they're talking about is a $50 billion fund for essentially bailouts. And that was stripped from the bill.
The negotiations are continuing at this hour. Senator Shelby from Alabama and Senator Dodd we are told are very close to a deal that would bring some Republicans on board and alter the bill. We're back with the panel. A.B., first let's talk about the bill and its prospects for passage and where we are here.
STODDARD: I think the Republicans are actually back in negotiations with the Democrats because I don't think they have a winning hand. I'm going to disagree with the panel here. I think they want this off the tape and they're smart to get it off the table, vote it away, neutralize this political issue for Democrats in this election, who want to drag it out all year and see a win.
Yes, the Democrats have been gratuitously political about this, and they can overdo it with too much regulation that will ultimately affect jobs and effect the competition.
But really, get this gone for Republicans. There is a -- they painted themselves into a corner, and it's time. Their members might have signed the first letter with the leader on Friday saying we'll hang together on the first filibuster, all 41 of them. But there are Republican senators who want to vote for the bill. They want to save face and move on. And that's why I think you'll have a deal.
BAIER: Two others maybe, Senator Corker from Tennessee and Senator Brown from Massachusetts. Senator Brown got a call from President Obama on Air Force One today, we're told.
Fred, is there a Republican pushback on this, one that is a winning happened as opposed to what A.B. is saying?
BARNES: A.B. already told you what I think, so I don't have to elaborate here.
The Democrats don't have a winning hand either, though. They came up with a bill that didn't do the fundamental thing that the people want. They want one thing, and that is to have banks not too big to fail, because if they failed then there would be bailouts in Washington.
You have to strip the bailout stuff out of the bill. That's the only thing the public really cares about. I think there are other bad things in the bill, but the public cares about that.
The reason for getting that $50 billion fund out, the best explanation was by Tim Geithner, the Treasury Secretary in the Obama administration, who said if we have that it will create the impression on banks and Wall Street they're indeed they are too big to fail and at the end of the day, if they are having trouble, they can come to Washington to get bailout fund. And that's why Geithner wanted it out of there, and so did Mitch McConnell.
So the politics on this, I don't think either side was winning. And this is what particularly happened. Democrats thought they would have a great issue. They don't have one now. It's not great issue for Republicans but not for Democrats either.
BAIER: Secretary Geithner also conceded that Fannie and Freddie, any changes there is not in the bill, but he claims it will be taken up very soon afterwards.
BARNES: And that is $380 billion that may be needed in a bailout.
KRAUTHAMMER: I think what is so ironic about this is it doesn't really matter in the end what is in the bill. You can structure it anyway you want even if you have a fund of $50 billion. That won't make any difference. What we saw in October 2008 that you needed hundreds of billions, trillions from the Fed to bail out the system. So that I think is only a symbol.
The point is everybody understands if the financial system is at risk, if a major institution is about to drag the rest down, the feds will intervene no matter what is in the bill or no matter what anybody says today. The text of the bill is irrelevant. It happened in '08 and no government will allow the collapse of the banking system.
So it's because of our recent history that everybody understands a bailout will happen one way or the other. So I think all of this arguing over the details is really a matter of positioning.
In the end, I think A.B. is actually right. This is all about the elections, upcoming elections. Obama wants a narrative where he says yes, I haven't attacked unemployment, but I gave you healthcare and I'm attacking Wall Street. It's a winning hand. The Republicans ought to settle, get it over with, and put it behind them.
BARNES: The bill does matter. Wait a minute. If you put stuff in there the Republicans want, which would be to break up the big banks.
You know, 60 percent of the bank assets in America are in ten banks. You break them up by stripping away the services they can't do anymore and set high reserve requirements and they can't be too big to fail. That's what you do.
BAIER: And finally, the Goldman Sachs issue in ten seconds. White House council, former White House counsel Greg Craig hired by Goldman Sachs to defend them in all of this. Big irony?
KRAUTHAMMER: Irony. Revenge is a dish best served cold. He is serving it hot.
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