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Special Report

Sestak Saga Returns to Headlines; Can U.S. Withdraw From Iraq?

This is a rush transcript of "Special Report With Bret Baier" from August 12, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. JOE SESTAK, D-PA., U.S. SENATE CANDIDATE: Mr. P resident, I would never -- I would only get out of it or not get into it at the time, because I wasn't in the primary at the time, if I felt it wasn't the right thing to do for Pennsylvania working families and not for an offer.

FORMER PRESIDENT BILL CLINTON: I did not, that's not... I wasn't even accused of that.

(END VIDEO CLIP)

SHANNON BREAM, ANCHOR: All right, a war of words. Did former President Bill Clinton try to talk Joe Sestak out of running against Arlen Specter in the heated Pennsylvania Senate primary?

Let's bring in our panel to talk about it, K.T. McFarland, Fox News national security analyst, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Welcome to you all.

K.T., I'm going to start with you. What do you make of the situation?

K.T. MCFARLAND, FOX NEWS NATIONAL SECURITY ANALYST: Either Sestak is lying or someone else is lying. And Joe Sestak, son of Naval Academy graduate, a Naval Academy graduate himself, spent an entire career talking about honor and not lying, I mean, I'm inclined to believe him. Especially when, who he is talking about? He's talking about a former president who lied under oath and a White House who is pretty guilty of the Chicago-style politics. So my money is on Sestak.

BREAM: All right, so after the comment we heard from former president Clinton yesterday saying I didn't try to get him out of the race, no one even accused me of trying to get him out of the race, the latest response today came from Sestak himself at an event, saying President Clinton was carrying a message. It was no secret Washington wanted me out of the race.

So A.B., do we know that the message was. What did Clinton carry to Sestak?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: I think Bill Clinton always has a different definition for, you know, what "is" is, and he is a good parser. So what happened was he carried on a message and an offer, an earnest offer for the White House team -- he has been very good ever since his wife became secretary of state at staying on the team, he has been very disciplined -- he carried an offer.

And what he did in that video in response to the question, to say I didn't even try to get him out of the race, I wasn't even accused of that, is saying I passed on the offer, but I wasn't pushing him. Maybe even with a wink and nod was encouraging him to stay in the race while he passed on the offer.

It's a way of double-speaking, but it's also a way politically -- let's just admit it -- of making the story last longer and embarrassing the White House and making them answer these questions all over again.

BREAM: Well Charles, a lot of people I'm sure hoped the story would go away by now, but it just keeps having new life. And with the comment from the former president yesterday, it doesn't look like it is going away.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It doesn't look to me as if he tried to make trouble. He got a question hurled at him and he responded as he always does to defend himself.

And I agree with A.B. that this sounds like Clinton being Clinton, what you see with him is never what you get. Everything is always interpreted in a different way.

I'm sure what he tried to say and what he meant here is, I wasn't trying to get him out of the race. I was simply opening his eyes to the other ways of serving this wonderful land of ours, using all the expertise he had in a way that would benefit the American people who are a wonderful people. This is how he would interpret it. I was simply opening other opportunities. That's what I take as the message.

He can't deny a call was made, because that was a statement by the White House Counsel's office and he would be contradicting an investigation of the counsel's office. So he admits he made that call. But he is interpreting it as he always interprets his actions in a different way.

I don't see it quite as an assault of the president, but he is a man who doesn't allow himself to be, sort of attacked or accused by, of the people without defending himself.

I would say the one problem that remains in this is something that has not been picked up in the counsel statement that was issued a few months ago. It said that the call for the president was one event. But it says there were several attempts to reach out to Sestak in June and July and look at other things he might do. Well, one phone call could not have happened in June and July.

There's other things that happen by the admission of the White House counsel's office. And no one has ever asked what were those offers, who made them and what came of them.

BREAM: Well, K.T., do you think we'll get to the bottom of the questions?

MCFARLAND: No. I think that it's in everybody's best interest to just let it be foggy and mucky and never get there.

But the other thing to remember is the relationship Clinton has with Sestak. Sestak worked for Clinton on the National Security Council. Sestak was a three-star admiral. Clinton would have pinned those pins -- those stars on his shoulder. So if there's anybody that Sestak is going to be loyal to and try not to say anything bad about, it's probably President Clinton.

BREAM: And A.B., you mentioned the fact that President Clinton stayed on the team. He has stayed in lockstep with the White House and be a good sport over the last 18 months. But do you sense growing friction? We know he and the current president endorsed different people and the primary races. Do you see some split going on there?

STODDARD: Well, we know that he had been backing his former -- Sestak worked for him in the administration and he, Sestak was a champion campaigner for Hillary Clinton during in primary. And the Clintons are loyal and they, of course, were going to back him.

It was the backing of Andrew Romanoff in the Senate primary, the Democratic Senate primary in Colorado that became the issue because the White House was so clearly behind sitting Senator Michael Bennet and working hard to keep him in the race. And President Clinton endorsed his challenger.

He has, as a result of all of this, he lost this week and as a result, the White House is breathing a huge sigh of relief they don't have to face another story about the political moxie and potency of the Clinton endorsement. The Clintons have both rehabilitated themselves in the public standing and are moth both now more popular than President Obama.

So it remains a strain for sure.

BREAM: Still more questions than answers on this topic. Not over yet. I'm sure we'll be back to it.

All right, log on to the homepage at foxnews.com/specialreport and vote for the top take you want us to talk about in Friday Lightning Round tomorrow.

Up next, are we pulling the troops from Iraq too soon?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEPHEN BIDDLE, COUNCIL ON FOREIGN RELATIONS: Like Iraq, the Balkans were pretty intense ethnic civil wars of identity, which got resolved by negotiated settlement but then had peacekeepers present from outside the region to prevent formerly warring, still wary, combatants from going back to war with each other. I think that is the right way of thinking about drawing down the U.S. presence in Iraq; not that it doesn't go down, but it should go down suddenly and gradually rather than abruptly or suddenly.

MARK TONER, STATE DEPARTMENT SPOKESMAN: We believe that Iraq's armed forces are growing more capable every day. They have come a long way. There is still a way to go. We are going to continue to work with them, training them and advising them. And, you know, the bottom line is we would never let a security vacuum develop in Iraq.

(END VIDEO CLIP)

BREAM: All right, so when should our troops be leaving?

Let's bring back the panel. We have K.T., A.B., and Charles with us tonight. All right, we've got a status of forces agreement that says we're leaving by the end of 2011. That is what the president has said as well.

K.T., is that going to work?

MCFARLAND: The status of forces agreement was signed at the end of the Bush administration and it specifies two dates. One, when you get out of the cities and we did that. And the Iraqis didn't think we'd ever get out of the cities but we did in June of 2009. And now the second date stipulates by the end of 2011 we are out of there.

Now, a number of people including some Iraqis have said, well, you know don't take the training wheels off yet, we're not going to be ready until 2020. And yet General Odierno, who is really the architect of this and the one guy who has had a history of speaking truth to power, including favoring the surge when Obama and Clinton didn't favor it, he said they are going to be ready, that we're on schedule, that we should be ready to be fully withdraw by 2011.

The thing I always find amusing though about Iraq is everybody looks at it in the lens of the United States and European democracies. And as the General Petraeus has said to me, don't think of it as democracy. This is "Iraq-racy." This is two to steps forward and one step back.

So, is it everything perfect and copasetic and has the government been formed? No. But this is "Iraq-racy."

BREAM: A very unique situation. And we have this Iraqi General Zebari, who is saying we should stay friends with the Americans and the West because the Iraqi army will be ready in 2020.

Charles, we aren't planning to stick around -- that we know of -- for that long.

KRAUTHAMMER: No. But I think the fact he says they need us is important because it gives us leverage finally. These people know what happens if you get deposed in this area. In 1958, there was a coup. The prime minister was executed and then dragged through the streets and dismembered. So they have a history of what happens if you can't defend yourself.

If the army chief of staff says they might need us -- a decade is ridiculous; it's not going to happen. However, if they need us for an interim period of time, I think that allows us to say, OK, we might, for a short period if -- and here's where you exert the leverage -- a, you form a coalition of the government now and we tell them what we want, a coalition of Allawi, a centrist, and Maliki, who is the current Shiite leader. And secondly, we want you to help defer any cost.

And I think the way to sell this according to the treaty, the treaty status of forces agreement says we're out -- every American is out by --

MCFARLAND: American forces.

KRAUTHAMMER: Every American in the military will be out by 2011. Rename our troops "peacekeepers." In other words we say we stay six months or a year. We call the mission a different name. It's not overturning the agreement. It's a different phase with a different mission. And I think if we need another half year or year, and that would stabilize Iraq again if we have a stable government, I think that would be something that would be worth considering.

A hard date that is arbitrary and I think is dangerous in and of itself.

BREAM: And A.B., one of the things we talk about today was the fact that you know that date is no secret. Everybody knows. And Al Qaeda is now going after some people there who say they are not getting the payments from the government. Sunnis were brought in to form the coalition and some type of agreement there. But they are not getting their paychecks and Al Qaeda is willing to pay them even more and recruit them, what kind of situation is that creating?

STODDARD: Well, we know that Al Qaeda is not going to let up. We can't expect that they will. So we're looking at it's August of 2010, let's say next summer in July, or August of 2011, they've -- the resurgence is going strong and they have recruited more and more Sunnis away from the Iraqi government, paying them lots of money and they're gaining strength -- it will be very difficult politically for this to be sold even as a switch in language. I mean to change the name -- even if they're not combat and we change the name to peacekeeping advisory, Americans want out of Iraq and Afghanistan. They fear permanent wars. We have tremendous economic anxiety at home. And this is a very difficult sell for President Obama.

Next summer, Republicans will be coming out as candidates for president to challenge him in 2012. For him at this point to say it looks like Al Qaeda has another foothold and we just can't leave and we have to stay longer but we're going to massage it, we're not leaving, we're not turning out the lights, but just going to do this, it's an advisory role. He has sold a withdrawal from Iraq and Americans want out of Afghanistan. This is a real --

MCFARLAND: But you don't want seize defeat from the jaws of victory. And I think Charles is right. There is a lot of leverage here. One place we could apply that leverage is not just forming a government and also getting Iraqi military to pay its people so they don't go over to Al Qaeda, so they don't become ripe for the picking.

STODDARD: We hope the best happens. At this point, I think the president needs, and his advisers, the military really need to make it clear what's going on on the ground. Unless a coalition government is formed and things stabilized, they shouldn't wait until the last-minute to say we have to stay.

BREAM: Charles, quickly?

KRAUTHAMMER: One irony of the president shifting the focus and energy on to Afghanistan out of Iraq is that the cost of success in Afghanistan is going to be a hell of a lot higher than the cost of success in Iraq where we are on the cusp of success, but we could lose it all if we drawdown too quickly.

BREAM: A very delicate calculation. Charles, A.B., and K.T., thank you.