This is a rush transcript of "Special Report With Bret Baier" from December 11, 2009. This copy may not be in its final form and may be updated.


SENATE MINORITY LEADER MITCH MCCONNELL, R-KY.: The administration's own scorekeeper — the actuary down at CMS — telling us that it won't save money. And we thought the whole exercise from the beginning was about bending the cost curve.

SEN. JOHN MCCAIN, R-ARIZ.: The CMS report should put the dagger in the heart of the Reid bill.

SEN. BILL NELSON, D-FLA.: I'm lukewarm on it, because I think when we get the score back from CBO that it's going to be too costly, so at the end of the day, I think it's going to be a non-starter.


BRET BAIER, HOST: A non-starter from a Senate Democrat there. The CBO, of course, the Congressional Budget Office. The other letters you heard, CMS, the Center for Medicare Services.

The chief actuary at CMS came out with an estimate of what it would mean to drop the age to 55 for Medicare, saying that the overall spending over the next 10 years will actually increase by more than $200 billion and that 20 percent of all hospitals, nursing homes will go into the red — meaning they either shift costs, stop taking Medicare altogether or they go out of business.

Here is what the Senate majority leader just put out moments ago: "Senate Democrats are edging closer reform to America's broken health system. Today's report from CMS actuary confirms that our bill will extend the Medicare trust fund solvency by nine years and reduce seniors' premiums by $300 per couple per year by 2019."

A lot of numbers. That's why we have a panel to go through them. Let's bring them in: Juan Williams, news analyst for National Public Radio; Nina Easton, columnist for Time and Fortune magazines, and syndicated columnist Charles Krauthammer.

Nina, let's start with you. Our quick analysis of Senator Reid's statement is that he is talking about extending the Medicare trust fund, but, of course, they're going to pull $465 billion out to pay for other things, so it's a little bit of counting money twice in the statement.

NINA EASTON, WASHINGTON BUREAU CHIEF, FORTUNE MAGAZINE: I think overall to get out of the weeds for a minute, what is really interesting about this is that the Democrats have used the word Medicare throughout the debate to soothe people, to soothe senior citizens who like Medicare. They trust it. It is a brand name.

So you saw the Democrats applying Medicare to — when they're talking about a public option. It is just like Medicare. And now this was the second option. It is just, well, we're going to lower the age for Medicare. We're going to broaden Medicare. It seems like a comforting kind of thing to do. Why not?

In fact, it hides the fact that Medicare is a fiscal disaster. It is a crisis that's at our doorstep. And that's why you have Bill Nelson there, extremely concerned about this and what is going to happen there.

But there is some internal studies that I think probably are going to come out and I think Jim Angle referred to this, that it can also create a death spiral for the Medicare system in and of itself if you expand it.

Compounded with that, you have got hospitals and doctors on the warpath because they don't get reimbursed at a high enough rate to stay in business — a lot of them. So they're saying that that report, the actuaries' report said that we will get out because we use private insurance to subsidize our operations.

So I think it is going to be back to the drawing board for Harry Reid, despite what he says about that. He is not going to have the 60 votes he needs.

BAIER: Juan, you hear Senator Nelson, Bill Nelson, not the Ben Nelson we usually talk about, expressing real doubts about this moving forward. Is there a light at the end of the tunnel for Senate Democrats now? Or is it a train coming the other way?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: The train is coming the other way to this extent — what we heard today doesn't even include the latest proposals that the Democrats, that senator Reid just put together to try to gain some degree of peace among the Democrats. That's the proposal Nina referred to, which would allow people 55 and older to buy into this sort of extension of Medicare.

It doesn't include that, so obviously that's going to drive up this number for CMS even higher and make it all the more untenable for people like Bill Nelson of Florida.

Now, I think that there is a tremendous amount of momentum on the Hill among Senate Democrats who feel they have got to get something done. That's why they have to stay in this weekend. Harry Reid is pushing. He has got the whip out and he's driving. This is their moment in history.

But all of this talk about cost plays into a principle Republican argument that if you're not considering the deficit, you're doing damage to the country and damage to the economy, contrary to the argument that health care reform, including Medicare reform, is actually something that will have a salutary effect on our economic future.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is going to be a moment in history. Waterloo was also a moment in history.

Look, today we hear from an objective actuary from inside the administration that the Reid bill will increase the debt by a quarter trillion.

Secondly, we hear that the half a trillion dollars in cuts in Medicare are going to cause one in 10 hospitals or nursing homes to become insolvent, which means they will either have to close or they're going to shift all of those extra costs onto the other folks using their services, which means people with the private insurance will be increasing their premiums and their costs.

Now, we get every week another report, whether it's from an actuary in the administration, from CBO, which is simply a report to prove the obvious from the beginning. There's no free lunch. You cannot expand healthcare coverage by 30 million uninsured and expect it will have the curve going down. It is going to increase costs. That is obvious.

Every report is just reinforcing that. You cannot have a cut of half a trillion in Medicare and pretend, as Senator Baucus is pretending, it's going to make Medicare efficient and the services better. It is going to destroy Medicare because doctors and hospitals are not going to have the funds to treat them.

And if they do, they're going to have to see patients at such a rapid pace at the rates so low that there is not going to be a real good medicine. It is going to undermine the quality of the medicine. It is going to undermine the whole system.

BAIER: Quickly, Nina, we're talking about Medicare. We're not even talking about Medicaid, which would increase by some 15 million people. There are doctors out there who say they get paid a dime on a dollar in Medicaid.

EASTON: That has been the political problem all along is that you have got particularly lawmakers in rural areas, but not just rural areas, who have doctors and hospitals saying we can't survive on the payments from Medicare and Medicaid.

What is interesting on the political timing issue, they're coming up against a break, the holiday break. Harry Reid is really, I think, this is in trouble now, this latest proposal. Does he go back to a public option, which is also problematic and then lawmakers go home and they're going to hear an earful about costs.

BAIER: Hold on — down the road, does it get done before the end of the year?

WILLIAMS: Yes. I tell you, right now, it is like a wagon train being driven by Harry Reid and he has the whip out. But I just wanted to say Republicans have not been — all this concern about Medicare spending, it's going to have to re-jiggered even if there is no health care reform. You don't hear that.

BAIER: A long yes, but yes.


EASTON: I think there is a good 40 percent chance that the Republicans will completely stop this bill.

BAIER: Forty percent. Charles?

KRAUTHAMMER: I think it fails.

BAIER: The Friday lightning round with your choice online topic of the week is next.


BAIER: This week — like every week on FoxNews.com on our "Special Report" page — viewers vote on the topic we should discuss first during the Friday night lightning round.

You can see right there on the poll on our Web site halfway down on the right-hand side. As of 3 p.m. Eastern this afternoon, the results were tied: 38 percent of you voting for Climate-gate and "where is the concern about the deficit?"

So after much deliberation, we chose the deficit to go along with our coverage of the raising of the debt ceiling earlier in the show. It is all about synergy here.

We're back with the panel. Juan, where is the concern about the deficit? Do you see it here in Washington?

WILLIAMS: It's huge. It is a huge political issue. Jobs is number one, deficit is right after. People are really concerned about it. I think it is a big hindrance in terms of healthcare reform.

I think the Obama people know it is a big political problem for them. They're going to try to sneak it through making it part of the defense spending bill.

But even so, I think they know this is really giving ammunition to Republicans. Most people, everybody thinks, you know what, you should be fiscally responsible at home, and we should be as a nation. You can't just point fingers at Republicans and say most of the debt ceilings raised since 2000 have been under President Bush. You have got to take responsibility now that you're in office.

BAIER: Nina, we talked about Democrats are going to be raising the debt ceiling by some $1.8 trillion coming up. Politically, not a great time for that to happen, but it has to happen.

EASTON: Congress raised the debt ceiling multiple times under the Bush administration.

I think the interesting thing that's picking up steam on Capitol Hill is this idea of a bipartisan deficit commission. And before you yawn, which is most of us do when you hear about it, it's interesting it because what this commission would do is set out ideas or set out a plan to reduce the deficit and then members would have to vote up or down on it.

So it is a politically charged opportunity. And what's going to be interesting, it has got the support of Republicans like Congressman Wolf of Virginia in the House and Senator Corker and Judd Gregg in the Senate.

But what would happen is there some thinking that some Republicans will try to undercut this because they don't want to let Obama take any credit for cutting the deficit in an election year. That would be too bad.

BAIER: Charles?

KRAUTHAMMER: The reason that there is this huge increase in the debt ceiling today is that it gets us past Election Day next year, so you won't have to have another raise of the limit until after Election Day. So at least better to take the political hit now than later.

But as an index of how serious the debt issue is, economist Irwin Stealthser (ph) points out that Moody's has been issuing ratings since 1917. The United States has had a Triple-A since 1917 — world wars, depressions, unchanged uninterrupted. In 11 months, Obama has driven Moody's to the point where it has issued a warning that it might have to reduce it to Double-A, which is what you get for banana republics or places like Greece.

BAIER: We're going to have some breaking news here. It was going to be a topic in this panel. We are now confirming that Tiger Woods is going to take an indefinite break from professional golf.

I'm going to read this statement he has just put out: "I am deeply aware of the disappointment and hurt my infidelity has caused to so many people, most of all my wife and children. I want to say again to everyone that I am profoundly sorry and that I ask forgiveness.

"It may not be possible to repair the damage I have done, but I want to do my best to try. I would like to ask everyone, including my fans, the good people at my foundation, business partners, the PGA tour and my fellow competitors for their understanding.

"What is most important now is that my family has the time, privacy, and safe haven we will need for personal healing. After much soul searching, I have decided to take an indefinite break from professional golf. I need to focus my attention on being a better husband, father and person.

"Again, I ask for privacy for my family and I am especially grateful for all those who have offered compassion and concern during this difficult period."


KRAUTHAMMER: I think it's quite a confession and I think it's a reasonable request. He is a human being. He's had a failing — a major one. He wants privacy. He doesn't want — and he's removing himself. He's saying I'm leaving the public stage and he's begging for space. I think he should be given that space, he and his family.

BAIER: Nina?

EASTON: There is some rumors going around that he would move back to Sweden which is where his wife is from so they don't have to listen to — what do we have now, the cocktail waitress, the personal concierge, the reality show wannabe, the lingerie model and the three-way porn specialist are among the women who have come forward saying they're part of this —

BAIER: Specialist?

EASTON: Whatever that means.


It probably makes sense for them to get out of the country.

BAIER: Juan?

KRAUTHAMMER: This used to be a family show.

WILLIAMS: I think it's a mistake. Look, Tiger Woods is the greatest golfer we have ever seen. Nicklaus, Palmer, you talk about it. If he gets back on the golf course and gets back to winning golf tournaments, this shuts off this torrent of gossip. Now, it's going to open it up even more. And all these women, I think they are parasites coming out and talking about Tiger Woods.

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