This is a rush transcript of "Special Report With Bret Baier" from October 26, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: I will never rush the solemn decision of sending you into harm's way. I won't risk your lives unless it is absolutely necessary.

SEN. JOHN KERRY, D-MASS.: I am convinced from my conversations with General Stanley McChrystal he understands the necessity of conducting a smart counterinsurgency in a limited geographic area. But I believe his current plan reaches too far too fast.


BRET BAIER, HOST: President Obama speaking to naval aviators, most of them in Jacksonville, Florida, today after his sixth White House strategy session with his advisors, this coming on a day, the deadliest day in more than four years in Afghanistan — 14 Americans died in two helicopter crashes there.

What about the decision making on the ground and when it will happen from the White House? Let's bring in our panel tonight, Steve Hayes, senior writer for The Weekly Standard, and Jennifer Loven, Chief White correspondent for the Associated Press, and syndicated columnist Charles Krauthammer.

Jennifer, start with you about this decision and Robert Gibbs, press secretary today saying it could be at any time. Are they getting to the point where this is going to happen soon?

JENNIFER LOVEN, ASSOCIATED PRESS: Look, I think we got the biggest hint in terms of narrowing this down to a window from Defense Secretary Robert Gates oddly enough.

He was in a NATO meeting last week, and he said that where they are now is in this two to three-week phase of looking at options as opposed to analyzing the situation.

And what that does, interestingly enough, is puts them right up against, right around the Nov. 7 runoff election in Afghanistan, either right before that or right after it, and I think that's on purpose, frankly.

BAIER: Steve, we also had confirmed today that the Pentagon has war gamed out the different options based on the number of troops that possibly could go in, as we have reported General McChrystal has requested up to 40,000 troops.

What about this decision-making process, and as it drags on, if you will?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I think it is happening rather show slowly. And you have people other than former vice president Dick Cheney making the argument that it is happening slowly.

You have Anthony Zinni, who was a strong critic of the Bush administration in Iraq, former CentCom commander, a strong critic of the Bush administration in Iraq, say basically this is taking too long. They need to make a decision.

But I think it's also important to recognize that today we had Robert Gibbs and the White House essentially go back on two of the arguments they were making last week, one this question or this allegation from Rahm Emanuel that the Bush administration never asked these questions.

Gibbs today and his gaggle announced that those questions had been asked and they had been briefed on this review at the end of the Bush administration.

And two, the idea that out of the request for 30,000 troops sat on desks while the administration put that down rather forcefully over the weekend by a Pentagon official. So I think they have had to backtrack a little bit.

BAIER: Charles, you saw the president speaking to sailor and naval aviators and giving this speech that he won't put them in harm's way until the strategy is set. He has said that numerous times now. Today he went out and spoke in front of military personnel.

Is it a case that he is making effectively as this decision-making process continues?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think he's a little bit defensive because it has been a drawn-out process. Drawn-out decision making is OK, but not in public.

But I think it is reaching an end. I think it's correct that they are postponing the decision until after the elections in Afghanistan, but perhaps it is only a coincidence, but that's also the elections in the United States.

This is going to be unpopular either way, and I think they would rather have a decision after the November odd-year election.

BAIER: But are you saying this is a political calculation domestically for liberals in New Jersey or Virginia if the decision is let's go with the full troop contingent?

KRAUTHAMMER: Suggesting that cynicism is possible in this administration. That is as far as I will go.


But on the substance of this, what we heard from Senator Kerry, and he's coming out now rather strongly against sort of the maximum McChrystal plan is interesting.

He is a serious guy. He has spoken a lot with Karzai. He points out that we have a problem in governance in Afghanistan. He's absolutely right. But McChrystal is arguing that unless you reverse the spiral of what is happening militarily on the ground now, governance isn't going to matter because you aren't going to have anybody to govern.

And that's the urgency of the request for the real increase or the surge, the same way that in Iraq you had to reverse the downward spiral of the Al Qaeda insurgency, especially in Anbar, in order to allow the emergence of a local strong government. It has got to be done now in Afghanistan, and that's what McChrystal has been arguing.

BAIER: Jennifer, the president and this administration have praised Senator Kerry specifically for his travels over there to Afghanistan. Do you think that as he speaks out that he is speaking from an intimate knowledge of where perhaps the president is sitting with this decision- making process?

LOVEN: I don't think that's what Senator Kerry intended to do, and I don't think that's what he is trying to telegraph.

You remember when he sat down with President Obama last week after he came back from Afghanistan and had that dramatic role there, and he — Senator Kerry both and the White House both said afterwards they didn't discuss the specifics of what the president was going to do, the president didn't tip his hand.

Senator Kerry said at the time that he would give this speech, which he delayed until today. It was supposed to be Friday. So I don't think he is trying to telegraph numbers, trying to send a signal.

I get the sense that the White House has not come to a full decision of which way the president wants to go, and all this hue and cry about the timing, in some sense, is just that.

And there is a strategic reason for them to say right this minute that they're going to have a decision right this week or on Nov. 5 before the runoff or after.

If they leave a little mystery to it, they have a little more leverage over the process in Afghanistan and over President Karzai to run a clean election.

BAIER: Steve, clearly Senator Kerry is leaning forward here. He says he believes General McChrystal's current plan reaches too far too fast. And that is just blatantly out there.

HAYES: If he's not speaking for the White House, and I think Jennifer is right that he's not, certainly there is the appearance that he might be since he has done so much so closely with the White House over the past couple of weeks.

I think that is the risk that the White House has having him be out as much as he has been.

BAIER: And one last thing. Do you think Secretary Clinton is somehow fuming about the attention Senator Kerry is getting on the foreign policy front?

KRAUTHAMMER: It is odd that the brokering of the runoff election was done by a senator, not the secretary of state or by our envoy, Richard Holbrooke. Kerry was on the scene. He is the man who appeared when Karzai announced a very important runoff. So it's not clear what the secretary of state is doing and if she has any significant role here in this Afghan policy.

BAIER: We will look at where we are in the healthcare public option debate. And do insurance companies really make all that much money? The panel returns after the break.



SEN. HARRY REID, D-N.V., SENATE MAJORITY LEADER: The best way is to move forward is with a public option with the opt-out provision for states. Under this concept, states will be able to determine whether the public option works well for them, and will have the ability to opt out if they so choose.

I believe then the public option can achieve the goal of bringing meaningful reform to our broken system and will protect consumers, keep insurers honest, and ensure competition.


BAIER: The Senate majority leader out today saying that the government-run option, the public option is in. It includes an opt-out for states.

The problem, we don't know what that means, and neither do the lawmakers as they send this proposal to the Congressional Budget Office.

So, we had some reactions from Republican Senator Judd Gregg from New Hampshire, saying "Assuming the states will opt out of a federally subsidized plan is like assuming your children will opt out of their allowance.

This partisan legislation negotiated behind closed doors is not a true prescription for reform and boxes Americans into subpar government-run healthcare."

And we are back with the panel trying to determine what this means — Charles?

KRAUTHAMMER: Well, it's getting weirder and weirder. We already have a 1,500-page bill of some sort eventually, which is a mishmash, a crazy quilt of regulations, and new programs and mandates all mixed up adding hopeless inefficiencies on to an already hopelessly inefficient system.

And now we're going to have an opt in and opt-out public option, which is going to make the quilt even crazier.

Look, the argument is it will increase competition if you have a public option. The way to increase competition, to lower the price of health insurance, is simple. It's not adding inefficiencies and regulations and government involvement in subsidies. It is abolishing the ban on the purchase of health insurance across state lines.

You buy auto insurance in a national market. You buy life insurance. It's the reason that prices in America are low. If you weren't allowed to buy oranges across the state, it would be expensive in Wisconsin, especially in the winter.

But the problem is that Democrats think that is too easy, too competitive, and capitalist. Instead, what you want is a public option under one guise or another which will increase government control. That's what it is about. It is not about competition by any means.

BAIER: Jennifer, the politics of this are interesting, because now with this opt out provision, the public option in, the Democrats lose Republican Senator Olympia Snowe who had signed on to the Senate Finance Committee bill, and she is for a trigger possibly.

She came out with a statement saying she is deeply disappointed with the majority leader's decision as he rolled this out.

So possibly we could be looking at trying to pass a major on-six of the U.S. economy with just Democratic support.

LOVEN: Remember, we have hit a lot of milestones in this debate, and there are a lot left to go.

So this is Senator Reid, the Majority Leader's mark, as you will — he's not a chairman — but it's his proposal to put there on the table for the Senate to debate four amendments to be added to, voted on. This could become an opt-in. It could become a trying. It could become nothing.

I think the politics, as you started out with, are that Senator Reid knew that the reality in his party is that he needed to show support not just rhetorically, but in a bill for a public option to be voted on, and then to see where it goes.

The president has not committed to it. The president has not said it has to be in a bill that he will sign. There is a long way to go yet.

BAIER: Steve?

HAYES: I think if you are looking at what this means in terms of the legislative calendar, I don't think it speed things up. In a sense, it resolves some of the debates within the Democratic Party, but what does it do on substance?

As you pointed out, we don't know what is in the bill. Is the doc fix in the bill? We don't know. If it is, is it paid for? We don't know. If it is, how is it paid for? We don't know.

There are so many things that are unknown about this, it is hard for me to really see how this does anything but take a baby step, and you still have the possibility that when this gets to conference it's could be moved further left and they could kick out the opt-out provision and add a trigger and take it out.

There is just so little that is known about this.

KRAUTHAMMER: And in principle, how can the CBO make an estimate of a cost of a program in which some states presumably will opt in and opt out, but you have no idea which states, how large, how expensive, and how subsidized?

BAIER: And we're not going to play the sound bites here, but we heard the House Speaker and Senate Majority leader talk about the health insurance companies and how they are making these astronomical profits.

As you look at the video, it's not what the numbers show. Networking Communications equipment actually top the list of the Fortune 500. The make 20.4 percent.

Way down on the list behind railroads and medical products is health insurance at number 35 with a profit margin of just 2.2 percent.

Does that hurt the demonization of the health insurance companies — Charles?

KRAUTHAMMER: I'm not sure how responsive to actual facts the Democrats are, but that is part of their propaganda, the idea of these immoral, amoral profits. Senator Kerry was one of those who attacked the healthcare industry as having immoral profits.

Heinz Ketchup, to which he is married, had almost twice as high of a profit margin as health insurance. So I'm not sure that he has the moral high ground here.

BAIER: Quickly, down the row here, does it pass this year, compromise legislation?

KRAUTHAMMER: Yes, something has to pass.


HAYES: Something, but something ugly.

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