Should U.S. Cut All Aid to Pakistan?

This is a RUSH transcript from "The O'Reilly Factor," April 12, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Back of the Book" segment tonight: The United States gives Pakistan about $3 billion a year in aid. That country has not been a very good friend to us lately. Now, Pakistan is reportedly demanding the CIA cut back its presence there and that President Obama stop the drone attacks designed to kill Al Qaeda and the Taliban in the north of Pakistan. Also, in March, a major Indonesian terrorist was captured in Pakistan, but the Obama administration has not sent anyone yet to interview the guy.

So what's going on? Joining us from Washington, Fox News political analyst Charles Krauthammer. Pakistan, should we cut all aid to that country, Charles? This is what Trump says. Let's get out of there. I mean, they're not helping us out. Why are we giving them $3 billion? What do you say?

CHARLES KRAUTHAMMER, FOX NEWS POLITICAL ANALYST: Well, I think we're getting very near to that point, but it's not for reasons of petulance. It's for reasons of strategy. This is a very weak and double-dealing, duplicitous ally. One of the reasons that we haven't been giving the Pakistanis information about our drone attacks in advance is because we worry. They give so much covert support through their intelligence services to Al Qaeda and to the Taliban that they will warn the bad guys.

Look, this is an ally, as you say, we're giving $3 billion to, and they're not much of an ally. I think it's time to get -- to not cut it off but to give them an ultimatum that we will cut it off unless they cut it out and they join us in a serious war on the bad guys. We gave them an ultimatum two days after 9/11: "You help us to fight the Taliban. You allow us to overfly. You cut relations, or," according to Musharraf, what we said to him two days after 9/11, "we bomb you back to the Stone Age."

They will respond to an ultimatum. And if they don't, what we have to say is the magic word: India. "We're leaving the region. We can't win in Afghanistan if you're not going to help us in Pakistan. This is an Indian problem. We'll turn it over to India." They are scared to death of the Indians. They don't want anything to do with India extending its power over Afghanistan or over them. That, I think, will get their attention. If they still won't help us, I'd say cut them off.

O'REILLY: All right. Now, if we do cut them off, we run the risk of having them then throw in with the Taliban, throw in with Al Qaeda, actually cooperate. The ISA, which is their security service, even now, as you said, cooperates sometimes with the militant Islamists, the terrorists. They do. So there is a downside.

KRAUTHAMMER: But they're not doing -- but they're not doing that because they want Al Qaeda to take over their own country. They want to have a hand in Afghanistan. They think the Indians have hegemony intentions over Afghanistan. They think America is leaving. They heard Obama say December 1 last year, we're going to be out in 2000 -- we're going to start leaving this year. They want to be at least on a good relations. But they are interested in having people under their control in Afghanistan. They are not interested in having Al Qaeda take them over because then everybody in leadership is dead.

O'REILLY: They're dead. That's for sure. But right now I think you're right. We have to get tough with these people. And then on that thing, on the same tough line, they got this Indonesian bomber, they pick him up, and the reports are the Obama administration hasn't even talked him yet.

KRAUTHAMMER: The problem here is not Pakistan. The problem here is Obama. Obama and the Democrats were so critical of what Bush did, the interrogations, the secret prisons, Guantanamo and all of that, and even the war on terror. Obama won't use the word. He's made war on the war on terror. That if we pick up somebody, we cannot really interrogate them. You have to use the Army Field Manual.

O'REILLY: They should try.

KRAUTHAMMER: Come on. You're going to get name, rank and serial number. You can't even offer the guy a cigarette. You're not going to get any information.

O'REILLY: A lot of Americans -- a lot of Americans think Obama is soft on terrorism, yet he's the drone king.

KRAUTHAMMER: Yes, he's the drone king and you know what a drone does? It kills all these guys, and we get no information. We cannot pick anybody up because we won't hold them. There's nowhere to hold them. All the secret prisons are shut. He won't -- he hasn't put anybody in Guantanamo, nobody. You've got to release them in two weeks. And if you use the kid, the gloves interrogation, you're not going to get anything in two weeks. And is there anybody in the CIA who's going to interrogate after the Obama administration has threatened to prosecute the people who interrogated people after 9/11? You don't understand. We have no sources of information, and that's why we are killing these guys rather than capturing them, as you want in a war on terror.

O'REILLY: All right, Charles. Thanks very much. We appreciate it.

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