This is a rush transcript from "Special Report," August 5, 2011. This copy may not be in its final form and may be updated.
CHRIS WALLACE, ANCHOR: Every week viewers vote for your choice online in our Friday Lightning Round poll. This week, the super committee members won with 50 percent of the vote. And we're back now with our panel. So, Jonah, in the next few days congressional leaders have to appoint the members to that super committee set up as part of the debt deal which has to come up with a plan to cut another trillion dollars of debt by Thanksgiving. Any thoughts about who should and who shouldn't be on the panel?
JONAH GOLDBERG, AT LARGE EDITOR, NATIONAL REVIEW ONLINE: Well with a name like Super Committee, you want to say Batman, Superman, the Flash. But I think, ya know, Paul Ryan is probably a definite, Jon Kyl is probably a definite. But my bolder prediction is I think we are going to see some people refuse to go on it and a lot of people scream bloody murder about changing the rules for it.
WALLACE: Let me ask about that, A.B., because aren't congressional leaders under tremendous pressure to appoint people who won't give on anything, Republican leaders to appoint people who won't give anything on revenue, Democratic leaders to appoint people who won't give anything on entitlements? And if that is the case, since they're evenly split six to six, what is the point?
A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Right. It was really created for deadlock. You are likely going to have a six-six vote and deadlock.
The Republicans already said they are not going put anybody on who would consider the idea of new taxation, and the Democrats will return the favor by ya know, putting -- stacking it with people who refuse to budge on any of the real meaningful changes that would save money to Medicare or Social Security. So, that is what we are expecting.
But out in the country side, members are going home and they are facing the constituents and they are finding that there is a building amount of outrage. And I, like Jonah, predict a real backlash to this and I think the leadership in the end might have to sort of change the formula here. It might end up being a little different than what we think it's gonna be. I don't think it's up to this gang of 12 ultimately.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I dissent. I think they will appoint hard-liners. Coburn for example on the Republican side who agreed to a slight increase in taxes will not be on, but it won't matter. They are going to have six people lying on either side who won't give an inch on their own if it were an independent commission.
But they will be subject to whatever the leadership in the end decides. It's not independent out there commission, you know, hanging in the sky. I think if the leadership, you have Boehner who actually agreed to $800 billion in increase in revenues. If he is prepared to do it, which he was with Obama, and he works out a deal with the Democrats on entitlements and tax reform, which I think is the way out, you could easily have a deal no matter who is on the panel.
WALLACE: So maybe a backdoor grand bargain.
WALLACE: Let's move on to the second subject. The Senate agreed today to extend a short-term extension of funding for the FAA. Jonah, it gets thousands of people back to work. What do you make of the flap of what happens in mid-September when the extension runs out?
GOLDBERG: It was almost like a medieval conference it got so nitty-gritty in these bizarre details. Basically I think what is happening here is there was a lot of exaggeration about how many people not being able to work. And the reality is that the Democrats haven't been able to come through on card check, Obama hasn't been able to come through on card check. And they desperately want more support from the unions. And that's manifesting itself in a lot of these lesser levels, suborder political issues where the unions are saying give us something, throw us bones. And so, whatever happens with FAA next we're gonna see a lot more squabbles like this.
STODDARD: Well, and the fight continues. It's only an extension for five more weeks but clearly the Democrats decided that this was not a fight worth -- worth, you know, hitting the government of $1 billion worth of ticket, airline ticket taxes on that was going to be lost during the furlough and also the impact to the economy that the furlough would have. And so they decided to put it off for five weeks pretty much. The fight will continue in September.
KRAUTHAMMER: I disagree with Jonah. It was not the Counsel of Trent. It was Keystone Kops. There actually was a provision in the House bill which allowed a waiver for the Secretary of Transportation, which would have finessed all of these issues. And the Senate hadn't read it. After it read it, it passed it. The waiver is granted, and the issue is now at least temporarily resolved.
WALLACE: Finally, perhaps the most troubling chapter yet in Operation Fast and Furious -- not only did the federal government apparently deal with the cartels to get guns into Mexico to try to trace and to track down the cartels but there's also a report now, and you all saw William La Jeunesse's piece earlier, that they allegedly agreed to let drugs go into this country, as part of a deal to get some members of cartels to inform on their rivals. This gets worse and worse.
GOLDBERG: It does if true. I have deep-seeded skepticism towards the statements of drug cartels in criminal trials. I mean, heaven forbid that they would actually make something up.
But at the same time, I think the political fallout from this is a little different because this would be going back to the Bush administration, which would give some Republicans maybe some trepidation about following through while at the same time balancing out the Democratic fallout for it. So I don't know where it's going. I'm still a little on the more skeptical side.
STODDARD: I think given Fast and Furious and this new revelation obviously that ATF and the DEA should be investigated floor to ceiling really. But at the same time, this is a practice that has gone on in our government forever. We have also during the Bush administration handsomely paid Afghan drug lords who provided the Taliban --
WALLACE: Do we let them bring their drugs in the country?
STODDARD: We have paid criminals all over the world forever. And it's not going to stop.
WALLACE: Are you as cynical as A.B.?
KRAUTHAMMER: Absolutely. I think even more cynical, or I'll try to be.
Look, dealing with double agents is inherently ethically problematic. People have made a lot of money in novels writing exactly about that. It always is. They are actually helping subsidizing a bad guy and you help them in doing all the bad stuff. In return you get information. So it's as old as warfare it's as old as policing.
The problem is show us what you got out of it, and that's what I think is missing here. It's not that we actually collaborated with bad guys. Yes, it's always done. But did you get any information with any coordination? Apparently not. And that to me is the scandal.
WALLACE: Well, I just want to disassociate myself from the panel and say I officially am shocked.
That's it for the panel. But stay tuned to see the birthday present that President Obama got from one of his friends.
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