Updated

This is a rush transcript of "Special Report With Bret Baier" from April 3, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA: In America, there is a failure to appreciate Europe's leading role in the world.

Instead of celebrating your dynamic union and seeking to partner with you to meet common challenges, there have been times where America has shown arrogance and been dismissive, even derisive.

But in Europe, there is an anti-Americanism that is at once casual but can also be insidious.

(END VIDEO CLIP)

BAIER: President Obama has taken his town hall on the road to France.

That was today, and earlier before that town hall started, the French President Nicolas Sarkozy had a few things to say about President Obama, saying "It feels really good to work with a U.S. president who wants to change the world and who understands that the world does not boil down to simply American frontiers and borders.

That's a hell of a good piece of good news for 2009."

What about all of this? Let's bring our panel — Mort Kondracke, executive editor "Roll Call," Byron York, chief political correspondent of "The Washington Examiner," and syndicated columnist Charles Krauthammer.

Charles, your thoughts on the day?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Where does one begin? Obama says in America there is a failure to appreciate Europe's leading role in the world.

Maybe that's because when there was a civil war in Europe's doorstep in the Balkans and genocide it didn't lift a finger until America led.

Maybe it's because there was an invasion in Kuwait it didn't lift a finger until America led.

Maybe it's because with America spending over half a trillion a year keeping over the sea lanes and defending the world, Europe is spending pennies on defense.

It's hard to appreciate an entity's leading role in the world when it's been sucking on your tit for 60 years as Europe has with regard to the United States, parasitically.

BAIER: Was that a Charles Grassley reference or just a Charles Krauthammer?

(LAUGHTER)

KRAUTHAMMER: It was a turn of phrase which I am sure I will regret.

(LAUGHTER)

And then he goes on and calls America arrogant, dismissive, and derisive regarding Europe. The London Telegraph, a correspondent in Strasburg, said this was the most critical remarks he had ever seen a president give on foreign soil, and I think he's right.

When Kennedy arrived in Paris, he did not attack Eisenhower and the United States. When Obama's elected president, he is president of all of the United States, including Americans who opposed him, and he owns American history, including a past he may not have wanted to engage in.

I think what he did is, in order to gain the adoration of the crowd, he denigrated his country in a way that I think is disgraceful.

BAIER: Byron, what about this town hall in France and what transpired today?

BYRON YORK, CHIEF POLITICAL CORRESPONDENT, "THE WASHINGTON EXAMINER": The think about the permanent campaign is that it's permanent. And not only was this the town hall format, everything he said was really quite consistent with what was said in all of the Democratic primary debates in 2008.

And it seems that, you know, to Charles it's America-bashing, perhaps to them it's Bush-bashing, and Bush-bashing does not stop at the water's edge. And so it seems to me that the transition he hasn't made is the transition from candidate to president.

MORT KONDRAKE, EXECUTIVE EDITOR, "ROLL CALL": I completely disagree with both of you. He is over. He is trying to repair a relationship that has been frayed.

And some of it is fair and some unfair, but he was distributing the responsibility equally, that, look, in the first administration, the Bush administration was arrogant and dismissive and derisive and triumphalist and unilateral and all that kind of stuff. Old Europe, just get out of the way.

The Europeans didn't help much. They didn't go into Iraq with u, but nonetheless, you know, Rumsfeld and Cheney and all those people just poked the Europeans in the eye whenever they had a chance.

It changed in the second term, and Bush sounded like what Obama was today, that we have worldwide responsibilities — terrorism, global climate change, economics that we have to do together, but he didn't get credit for that and the atmosphere was lousy.

So Obama is there, and he says you're responsible we're responsible. Let's have a partnership, let's get together and solve these problems.

KRAUTHAMMER: That is a revisionist history, and it's not even true.

KONDRACKE: It is true.

KRAUTHAMMER: The Bush administration spent six months at the U.N. trying to get an international consensus. It didn't walk in unilaterally. It got one resolution after another.

At the end it had to make a choice, go into Iraq with a few allies or not at all, and it decided it would go.

That is not showing disrespect or arrogance. It showed enormous respect. But in the end it had to make a decision.

Look, if you want to attack the United States and you're the president, you do it at home. Traditionally, that's how you do it. If you go abroad and you do it — and, look, it wasn't only on Europe. He said America has to change its behavior and show more respect for the Muslim world.

We're a country that went to war six times on behalf of Muslims in the last 20 years, and we're apologizing?

BAIER: Byron, what does this say about this trip, what's being accomplished? Is it working, this whole mea culpa for America thing?

YORK: That is the issue. It's the admission of error and mistake overseas. Because he said, for example, that we got sidetracked — "side tracked was the word he used — in going to Iraq.

Now, the United States still has 130,000 troops there. It has an interest in a stable and functioning Iraq. He could have stressed that. I'm not quite sure why he felt that he had to actually admit error other than to please the Europeans.

BAIER: Last word, Mort — is he going to have success getting Europeans to step up in Afghanistan with all this talk of unity and coming together?

KONDRACKE: I'm afraid not. The French are not going to send anybody but trainers and stuff like that, and he's not even going to get a stimulus package. That's the problem with this approach.

KRAUTHAMMER: So he steps all over America, and he gets nothing for it.

BAIER: The lightning round is next. We will talk about the people who made news this week when we come back.

(COMMERCIAL BREAK)

BAIER: We are back for the lightning round. The first topic is Israel and the comments coming out of Israel about Iran.

Here's how "The Atlantic" writes it. Benjamin Netanyahu, the new prime minister, laid down a challenge for Barack Obama. "The American president," he said, "must stop Iran from acquiring nuclear weapons, and quickly, or an imperiled Israel may be forced to attack Iran's nuclear facilities itself."

Quoting from Netanyahu, "The Obama has two great missions — fixing the economy and preventing Iran from gaining nuclear weapons."

We're here with the panel. Mort, what about this talk from Netanyahu about Iran?

KONDRACKE: The Israelis are sending a message that Obama has months, not years, to bring the Iranian nuclear threat to a conclusion, or else they are going to take it out.

Now, it is interesting that Secretary of Defense Gates and General Petraeus both said just flat out that the Israelis might do this, might take it out. I would guess that they have some time into 2010, but not much longer to do it. And the Obama administration seems reconciled to that idea. So they will have to push on the Iranians with sanctions.

BAIER: Byron?

YORK: In the same interview, Netanyahu also conceded that there might be non-military options that could force Iran to change its behavior.

Recently there has been a letter from all the top committee chairman Democrats in the House to Obama saying you can try diplomacy, but you need to set a time pretty soon, and you need to undertake sanctions.

KRAUTHAMMER: I think it is inevitable. And it isn't only the Netanyahu government. The Olmert government, the moderate Kadima government a couple of weeks ago attacked an Iranian ship on the way to Hamas, which was in the Sudan with aircraft. And that was a reach longer than the reach into Tehran.

It was a message to Israel, we can hit Iran, and we will.

BAIER: This week Attorney General Eric Holder dropped the charges, saying prosecutors are not moving forward against former senator Ted Stevens. That has created an uproar and an investigation on Capitol Hill.

KRAUTHAMMER: It should. In the immortal words Labor Secretary Ray Donovan, who also was dragged through the mud and exonerated in the end, where do I go to get my reputation back? The answer is nowhere. You can't after something like this happens to you.

BAIER: Stevens of course lost to Mark Begich that Senate seat. Now there's a call for another election.

YORK: You might also say "Where do I go to get my Senate seat back?" Convicted a week before an election, he loses by 4,000 votes. Mitch McConnell has been complaining about — they only have 41 Republicans in the Senate, 42 would have made life much better for them.

BAIER: Mort?

KONDRACKE: Stevens was convicted during the Bush administration by the Justice Department under his control. So there was not political interference, clearly. But there is a lack of integrity, clearly, in the public integrity section of the Justice Department, and it ought to be investigated, because there are other allegations against it, as well.

BAIER: Quickly, the president's budget moves through Congress. Thoughts about that? It's a massive plan.

KONDRACKE: Yes, it's a massive play. Two points — the issue is reconciliation. Will the Democrats be able to ram through healthcare reform and cap and trade on a 51-vote bases?

The answer on cap and trade, according to the Senate by 67 votes or something like that, is no. It remains to be seen about healthcare.

YORK: Zero votes on either side. Zero in the House, zero in the Senate. No moderates, no nothing. Clearly did not see any political price in opposing this budget.

BAIER: Charles?

KRAUTHAMMER: Irresponsible spending on a galactic scale. There's nothing to recommend it. The Republicans are absolutely right in opposing it.

BAIER: That's the lightning round. And that's it for the panel.

But stay tuned. Media analysts have made some charges about the over- the-top feel to the president's trip, the coverage of it overseas. We'll have some evidence.

(COMMERCIAL BREAK)

BAIER: Finally tonight, I asked my staff if I was wrong to characterize several network's coverage of the president and the first lady's trip to Europe as fawning at times, or over the top, or just a little bit too excited. They said no, and then they showed me this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I am little nervous about this for the president. They'll be fine. They've been coached up on this. But this is a big occasion.

Do you do the two-cheek thing? Is it just a simple shake of the hands?

This is really what I have been waiting for today.

I'm thinking there's a courtesy, there's a bow, there's a neck thing.

Am I wrong to be just a tad nervous?

There is. There it is. Should we listen?

JON STEWART, HOST, "THE DAILY SHOW": Yes, Tony, let's listen. Let's listen in. Let's be bad just this once.

(END VIDEO CLIP)

BAIER: That's it for this Special Report, straightforward news in uncertain times.

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