'Special Report' Panel on Afghanistan Strategy; Economic Growth

This is a rush transcript of "Special Report With Bret Baier" from November 24, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: After eight years, some of those years in which we did not have, I think, either the resources or the strategy to get the job done, it is my intention to finish the job.

(END VIDEO CLIP)

CHRIS WALLACE, GUEST HOST: That was President Obama previewing the announcement he will make next week about his new strategy and troop levels for Afghanistan.

Let's bring in our panel: Steve Hayes of The Weekly Standard; Jeff Birnbaum, managing editor digital of The Washington Times, and syndicated columnist Charles Krauthammer.

Well, Steve, during that commercial, I just got word that Steve C entanni, our Pentagon reporter, is reporting that a senior military official tells Fox News the president is expected to announce next week he is sending 34,000 troops.

Just by way of comparison, supposedly General McChrystal in his, what, September or August review, was calling for 40,000.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Right, but it's a lot higher than the numbers that were advocated by Joe Biden. His vice president was pushing for somewhere in the neighborhood hood of 10,000 to 15,000.

There seems to have been a sort of consensus that grew out of these now nine meetings that he had with his Afghanistan war council where Hillary Clinton and Bob Gates and others sort of coalesced around this number, somewhere in the 30,000 to 35,000 troop range.

Look, the details still matter here. We need to see what the strategy is and we need to see how the president talks about the war. That will be very important in front of the troops.

WALLACE: But as someone who was pretty critical, I like think you would be somewhat relieved...

HAYES: I was getting to my "but."

But I think this is good news. We should be cautiously optimistic that he is going to say the right things given what appears to be his decision to double-down again. He doubled-down in March, in a sense, not literally doubling-down, but pressed forward and followed through on his campaign rhetoric in a speech March 27th.

He seems to be inclined, in all the reports are accurate, to do it again. I think that speaks well of him and we should give him credit for doing it.

WALLACE: Plus he has certainly been trying to get, Jeffrey, thousands of NATO troops onboard, so if you have 34,000 U.S. troops plus several thousand NATO troops, you get pretty close to McChrystal's request for 40,000.

JEFF BIRNBAUM, MANAGING EDITOR DIGITAL, THE WASHINGTON TIMES: Very close. But I think that Steve is right that the devil will be in the details here. How quickly will he ramp up? I'm sure that's an important question.

And the other question people will be looking at including from the president's political left is how long will they stay there?

What we're also likely to hear is a rather explicit timetable for withdrawal and how explicit he gets and how persuasive he is about how quickly we'll get to those 34,000 troops and how quickly they will leave, that will I think form the basis of the opinions that will be put on this after he announces it next Tuesday.

WALLACE: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think the key word here is — phrase, is "It is my intention to finish the job." And what he will have to do next week is explain what he thinks the job is. That's the real issue. How does he define the objective?

Now, he has been all over the map during this deliberative period, and he seemed in the last time that he spoke openly about this in public, he seemed to define the mission very narrowly: Keeping Al Qaeda out, not rebuilding the Afghan nation. Perhaps he was establishing a straw man argument and he will announce a middle way in some way.

But I think it's very important that he define an objective and then we can decide if the troop level is appropriate. Look, the level he is talking about that we're hearing is near what McChrystal is asking. I'm certain that if the number you said earlier is the number he announces, he will announce that NATO will close the gap in some ways so it will be near the McChrystal number.

But the McChrystal idea is a counterinsurgency, which is essentially rebuilding the nation, at least to the extent of establishing our presence, staying in the villages and taking our casualties as we did heavily in the surge in Iraq.

If the president announces that's his strategy, then I think we are going to have something that is coherent. If he buys the troop level of McChrystal but announces a narrower strategy, it's going to be hard to understand what his objective is.

WALLACE: Let me switch, if I can, to another aspect of this, which really has developed in the last couple of days, and that is you have some liberal Democrats like Carl Levin, like David Obey — and Levin is the head of Senate Armed Services, Obey is the head of House Appropriations — so these are two lions of Congress, and they are both talking about a war tax.

If you are going to send more troops, and I guess the going rate is a billion dollars for every thousand troops for a year, Steve, they're saying that we should pay for them.

HAYES: Well, it's nice to hear people like Carl Levin and David Obey talking about fiscal discipline. It's too bad that it took winning the war that their party said was the good war to get them to that point. I think that's unfortunate.

You talk about the stimulus package. It cost $787 billion. You could fund, depending on which numbers you use, but if you use say $50 billion a year, you could fund the war in Afghanistan for 16 years from what we spent on the stimulus.

I think it's important to win the war. The first job of the commander in chief is to keep people safe and to win wars.

I wish — it also should be noted that these are members of Congress who are not in favor of actually escalating. They are not in favor of the president's policy.

WALLACE: Do you think this is a way, Jeffrey, to basically send a message that this is going to cost a lot of money if you want to pursue this policy?

BIRNBAUM: Well, actually, the person in favor of this war tax that is most important is Charlie Rangel, who's the chairman of the tax writing committee in the House. These other two really don't have anything to do with taxes, but Charlie Rangel does.

And this is a Rangel strategy. He used it before to put pressure on the administration not to do what he wants to tax. Taxes discourage things, and he...

WALLACE: He was calling at one point for a draft.

BIRNBAUM: That's exactly the point. He wanted the draft to send soldiers to Iraq as a way to discourage the government from engaging in Iraq, and he and these other liberal Democrats are pushing for a tax as a way to discourage a build-up in Afghanistan.

WALLACE: So briefly, Charles, are we talking about a fiscal responsibility or a political statement to try to oppose sending more troops?

KRAUTHAMMER: It's complete hypocrisy.

I'm not against a war tax. We have a war, we ought to fund it. I'm not against a national service draft. But these are people who oppose the war. It is just a message. And as Steve indicates, it is utter hypocrisy. Here are people who have spent trillions of dollars and who are going to spend trillions more on health care who all of a sudden have discovered the fiscal discipline over national security over the safety of our nation.

It is completely disingenuous.

WALLACE: All right, we have to take a break, but the good news about the economy wasn't quite as good as we thought. We will talk about the revised number on growth and what it means after a quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

VICE PRESIDENT JOE BIDEN: The GDP that grew last quarter by 3.5 percent, the first time it has gone that way in two years since 2007, a net change of 10 percent in 10 months.

(END VIDEO CLIP)

WALLACE: Well, that was Vice President Biden yesterday bragging about growth in the economy this past quarter. It turns out the news was good, but not quite that good.

We're back now with our panel.

So, Jeff, economic growth in the third quarter was revised downward today from 3.5 percent to 2.8 percent. How significant is that in telling us where we are in the recovery and does it add to the president's already existing political problems on the economy?

BIRNBAUM: Well, it certainly is good news that the number is still positive. The number is very close to the revision that was expected. It was expected to be 2.9 and ended up being 2.8.

The reason it was revised downward is that consumers weren't opening their wallet as widely as the initial estimate was, and that's not very good news in general. There are lots of concerns about Christmas sales, which is the time when retailers really make all their money.

In fact, the president himself in his interview with FOX pointed out that there really still exists the danger of a double-dip recession, which is that even though there was one-quarter of the uptick, which we're just talking about, it may go down again or not grow very much the next time we measure it for the upcoming quarter.

And so — which means that in all likelihood there will be a second stimulus package in order to prevent a double-dip recession, a return to recession, and to try to spur some job creation and growth, which really hasn't happened. That is a very difficult balancing act, a real dilemma for the Obama administration. The first economic stimulus plan created this little blip that we're talking about, this one-quarter of economic growth, but not enough to spur much employment.

And so the public and lawmakers are skeptical about using government again, but they have to use government in order to prevent a return to recession.

WALLACE: Let me talk about another balancing act, if you will, Charles, and maybe a mixed message, because on the one hand while the Democrats are talking about the stimulus and things like tax credits for companies that add jobs, on the other hand, they are in the process of passing health care reform and considering cap and trade, both of which, at least in the short term, a lot of people think would hurt job creation, not help it.

KRAUTHAMMER: In fact, the version unveiled in the Senate, there is an increase in the Medicare payroll tax, which is precisely the opposite of what you want when you have over 10 percent unemployment. It discourages employment.

And the whole health care obsession, which is essentially what the Democrats have been involved with over the entire year, at a time when people want the administration and the Congress to be looking at in addressing the economy as a whole, they spent all this effort on health care.

In and of itself, it is retarding hiring, because if you are a small or medium-sized business, you are not going to hire while you have hanging over your head a bill that could increase health care costs for every employee, or you might have to pay a penalty if you don't subsidize health insurance for your employees.

Already, you've got employers holding back because of the general economic conditions and the threat of higher taxes, and now you add on to that the uncertainty of the health care proposal.

The administration is doing everything it can to discourage hiring at a time when it is deploring the high unemployment rate and touting, as we saw in the clip with poor old Joe, the robust growth rate, which is a lot less robust than the administration had announced.

WALLACE: So, Steve, what happens next week when the president at the end of the week is going to hold his jobs summit and talk a lot about job creation at the same time that he is fighting for health care reform in the Senate, which, of course, he says and his supporters among Democrats say, in fact, will be good for the economy, not bad?

HAYES: Yes, I don't think he has any choice but to talk more about jobs. He has spoken about health care incessantly since May, and I think there has been this tremendous disconnect between what the American people want to hear him talk about, and we have seen this reflected in poll after poll after poll both in terms of the numbers of people who want the president to be talking about jobs and the economy and the intensity of their interest in that. And yet he is spending all this time talking about the issue that rates third or fourth in all of this public polling. So he doesn't have much of a choice.

I think he has got to be careful because what he's trying to do, obviously, is tee up the time when there is — when there is some — when jobs are generated, and he can then say, see, we have been talking about jobs. This is as a result of our jobs summit and the things that we have done.

It is a tough sell, though, because if he is continuing to do, to hold the jobs summit and he is going to talk about jobs in Allentown, Pennsylvania, he does all of this and then we get another bad jobs number and another one, people are going to conclude that his policies are failing.

WALLACE: So in about 30 seconds, Jeffrey, as our economic guru, he is obviously got to go for health care reform. He is all in on that. What can he do that would be the sensible, not explode the deficit even further, and really might be a stimulus to jobs?

BIRNBAUM: He has already signaled what he wants to do, and it is actually taking a page from the Republican playbook: He wants tax cuts. He is going to try to help small businesses in particular with a jobs tax credit.

He also will do something that is a consensus, which includes extending joblessness benefits — though that doesn't create jobs. That just helps the people who out of work. There will be a small package that will pass, and soon.

WALLACE: Thank you, gentlemen. That's it for the panel.

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