This is a rush transcript of "Special Report With Bret Baier" from February 22, 2010. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: I don't want to see this meeting turn into political theatre with each side simply reciting talking points and trying to score political points. Instead I ask members of both parties to seek common ground in an effort to solve a problem that's been with us for generations.

MCCONNELL: But I think the fundamental point I want to make is the arrogance of all of this. You know, they are saying ignore the wishes of the American people. We know more about this than you do, and we're going to jam it down your throats no matter what.


BRET BAIER, "SPECIAL REPORT": The back and forth ahead of the big White House bipartisan meeting this Thursday as the president unveiled his own health care plan. Largely the Senate bill is many of the aspects in it. The most controversial provision would give the federal government more power to block rate hikes by insurance companies considered excessive. But here's the deal. The White House says it will cost about $1 trillion over 10 years but it will not be scored by the Congressional Budget Office. Here's why. The Congressional Budget Office blog says preparing a cost estimate requires very detailed specifications of numerous provisions and the materials that were released this morning by the White House do not provide sufficient detail on all of the provisions. Therefore the Congressional Budget Office cannot provide a cost estimate for the proposal without additional detail. Where are we with all of this? Let's bring in our panel, Fred Barnes, executive editor of The Weekly Standard, Nina Easton, Washington bureau chief of Fortune magazines, and syndicated columnist Charles Krauthammer. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, the plan that the administration unveiled today is really a travesty masquerading as outreach to the Republicans.

It looks at the — first of all, it has nothing about tort reform, which is a very important element. We know why. Howard Dean himself has said that the Democrats don't want to anger the trial lawyers.

And tort reform has been estimated by the Massachusetts Medical Society that doctors who practice defensive medicine, a quarter of all tests and procedures and referrals —

BAIER: Although the White House says the president is anxious to talk about that, so perhaps it will be on the table.

KRAUTHAMMER: If you have a 2,600 page bill with nothing in it on tort reform, you are not serious about real reform. This is a partisan attempt from the start. Secondly, there is nothing about nationalizing the marketed and purchasing health insurance across state lines.

What the president has done here is he tries to reconcile House and Senate. But he does it by throwing money at every difference. For example, the Nebraska kickback, which is federal giveaway on Medicaid that was only for Nebraska — every state now has it.

The union cutout, which was the unions being exempt from the Cadillac — from the tax on the Cadillac plans until 2018, everybody has it. Higher subsidies for those who are forced into purchasing health insurance — all of this is going to cost.

And you said it would — the estimate in the White House is it is going to cost $200 billion. That is a vast underestimate. And it's added on to a Senate bill which is $850 billion which in and of itself is a huge underestimate it only counts the second half of this decade. It's twice that.

In effect, what you have here is a $2 trillion-dollar expenditure at a time when the president is hypocritically calling for deficit reduction. Republicans ought to announce they are not going to allow anybody to be appointed from the Republican side on that commission because it is entirely a farce.

BAIER: Nina?

NINA EASTON, WASHINGTON BUREAU CHIEF, FORTUNE MAGAZINE: Well, I thought — I looked at this as much as anything as a political document because it looked to me like President Obama is betting that all the independent voters who didn't like Obama-care, he is betting that they hate price gouging insurers more than they hate government bureaucrats.

Because the main new idea, if you look at this, the main idea that comes out of the White House, as you said, is the federal regulation of insurers. And it fits into this populist theme that the White House is pursuing big, bad, profit-making companies.

And, of course, the insurance company in California, the Anthem Blue Cross played into that with their 39 percent, up to 39 percent increase in premium cost, which is staggering and does — politically helps the president.

This is way that they can put the Republicans on the defense. They can say are you lining up with the price-gouging insurers? We're standing with the average guy.

So I think it was a political move. I think it was also — but it was smart. They dropped the public option, and these other — the cutouts, the Nebraska kickback and so forth.

The problem with, again, this insurance regulation though is the insurance companies are already regulated by the state. The state commissioner in California signed off on those price increases. And the reason those price increases is because healthy people in this bad economy are leaving those pools, and so there is an economic reason for it.

And it's not going to do anything to keep medical costs down to regulate them. So, I think it's — if there is a good policy argument to be made but politically I think they will succeed in putting the Republicans in a corner.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I don't think so at all. I mean, this is — look, the public hates Obama-care, hated the house version, hated the Senate version.

This is very much like the Senate version, except that there is — it's as if they answered one question that they said the public was — one demand of the public. We want Washington to have a bigger role. That's not what the public is saying. That's not what independents are saying. It's not what the tea party people are saying. That's not what Republicans are saying. That's not what very many Democrats are saying.

Give Washington a bigger role? I mean, it really is as if the Massachusetts Senate election never happened. I mean they are going ahead with what is pretty much the same thing, only worse in some areas.

And I cite one of them in particular, where they want to raise something like $330 billion by putting a tax on unearned income, the Medicare tax on unearned income. That's the money people get from dividends and capital gains and so on.

Taxing the investor class that's already going to have their individual income tax rates go up at the end of this year, taxing them more at a time when what is lacking in the economy is private investment. These are the people who invest. And they are going to tax them more. That's nuts.

This can pass the Senate by reconciliation, but the votes are not there in the House.

BAIER: You mentioned reconciliation, and that's a special process by which — it's really just for budget measures where it goes from 60 votes to 51 votes. There is some question whether this could fit into this process.

Take a listen to the White House today trying to answer the question whether the president really supports reconciliation.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Reconciliation, as you know, is a legislative vehicle that has been used on a number of occasions over the past many years. I do think the president believes there ought to be an up or down vote on health care.

QUESTION: But saying that the president wants an up or down vote, is that a sign that doesn't happen, reconciliation is the way to go.

GIBBS: The avenue exists if one wants to pursue it. Again, I don't think it makes any sense to get ahead of what happens with the legislation legs on Friday before discussion on Thursday.


BAIER: Clearly leaving the door open there, Charles.

KRAUTHAMMER: Well, in that case, I will get ahead of them and I will tell you what's going to happen on Friday. The Thursday meeting is theater. This is the president who won the presidency on charisma, speeches, and theater, and he thinks if he tries it again, after a year of difficulty in governing, he will get somewhere.

And I think he has got a good chance of succeeding in the meeting.

But what's going to happen the morning after is he going to say he reached out, the Republicans refused, and they are going to pursue reconciliation. It will probably happen in the Senate, it's complicated, but he may win. But as Fred indicates, in the House, it's going to be really in trouble.

EASTON: There are also some liberals talking about reconciliation to get the public option back in, by the way, too.

BAIER: We'll be there.

BARNES: The public is not as fickle as President Obama thinks. They hate his bill.

BAIER: We have a few days to talk about this.

Updating our top story, the Senate jobs bill, Missouri's Kit Bond actually became the final Republican to join with Democrats in voting to close debate. He joined Susan Collins, Olympia Snowe, along with the newest Senator Scott Brown in Massachusetts and Ohio's George Voinovich. Their side carried the motion 62-30. Nebraska Democrat Ben Nelson joined the rest of the Republicans in opposing the move.

Next up, Afghan President Hamid Karzai says too many Afghan civilians are dying, and NATO apologizes for weekend air strike. How will this all affect the operation in Afghanistan? We will talk it over in three minutes.



ANDERS FOGH RASMUSSEN, NATO SECRETARY GENERAL: A majority of civilian casualties is caused by the enemies of Afghanistan, caused by the Taliban. And this is based on United Nations statistics.

BAIER: This weekend Afghan President Hamid Karzai made an emotional speech about civilian casualties, essentially criticizing the U.S. and NATO for how it's run this operation so far. How do you respond to that?

RASMUSSEN: What I can say is that we really do our utmost to reduce the number of civilian casualties.

ADM. MIKE MULLEN, JOINT CHIEFS OF STAFF: If we have learned nothing else these past eight years is that failure makes itself plainly clear but success takes longer to see.


BAIER: The NATO secretary general and the chairman of the joint chiefs talking about the operations in southern Afghanistan after air strike killed at least 27 Afghan civilians over the weekend.

What about this and how this war, this battle is being run in southern Afghanistan? We're back with the panel. Fred?

BARNES: Well, that — the 27 were killed in some area separate from.

BAIER: The operation in Marjah.

BARNES: Yes, separate. But that's actually beside the point.

Look, in war, you are always going to have a lot of civilian casualties, particularly when you are using rather powerful explosives, as are used with these rockets and predators and missiles and so on.

But, it's particularly sensitive in the war in Iraq because of — in Afghanistan, because of the strategy that's being used. It's a counterinsurgency strategy where you are moving into an area and you take it over and you want to win over the civilians.

They are an important part of it you don't want to alienate them. You don't want to kill them. You want to be their friends. You want to bring security to them. And it undermines it when civilians are killed by these rockets. And that's why it needs to be minimized.

Look, when we were using big explosives in Iraq from 2003 to 2007, that was basically losing. But when they adopted a counterinsurgency strategy going into the cities, particularly Baghdad, and driving out the terrorists and taking them over and providing security for the civilians, we won. And that's what we want to do in Afghanistan, too.

EASTON: I think this is a good time to recall that Vice President Biden and others supported this light approach of using more air strikes, which would have caused more civilian deaths.

I think boots on the ground is the right approach, and 70 percent of the Afghan population likes having foreign troops there and likes the security they provide.

And I think it was smart of the military commanders to get out there today to get out there with you to say that they were sorry and to really to be out front on that, because you want to keep that population supporting your presence there.

BAIER: So do you pull back on air strikes if you have had a couple of these?

KRAUTHAMMER: The answer is no. We have to be adult about all of this. Our enemy is an enemy that uses civilian shields deliberately as a tactic.

We already spoke about last week the restrictive rules of engagement on which our troops are operating where you can't even shoot back against an enemy unless you can actually see him and see his weapon, which places our troops at high danger, at high risk in order that we minimize these casualties.

That, I think is, a great effort on our part. We ought to acknowledge it, applaud it. And we are always going to have strikes like that that go awry.

I think the Afghan government ought to restrain itself on its attacks on us every time such an attack happens. We are defending them and their population, and they ought to acknowledge at least that our intentions are good here.

BAIER: Because it was a big speech by Karzai this weekend touting and mentioning these strikes. What about the public support, Charles, here in the U.S. if, as these generals explain, it's going to be a long, drawn out battle for southern Afghanistan?

KRAUTHAMMER: I think there is enough popular support, particularly since the Democratic president is conducting this operation, to sustain public support in the U.S. for the year or year and a half in which Petraeus and others have indicated we are going to have to conduct this campaign.

EASTON: I would say quickly, just except for the president's liberal base, which was complaining, uses ever incident like this to complain about our escalation in Afghanistan.

BAIER: That is it for the panel, but stay tuned for another example of a television host who appears to have missed the obvious.

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