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

BRET BAIER, "SPECIAL REPORT" HOST: So what about the president's choice today? Let's bring in our panel, Fred Barnes, executive editor of the "Weekly Standard," Mara Liasson, of national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer — Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, as we heard today, she has a great American story.

And — but there is someone else here, as we just heard, who also has a great American story, and that is Frank Ricci, who is the fireman who sued because he took a promotional test, he and others, and was denied the promotion simply because of his race.

And that's a case that came to the second circuit court, and Judge Sotomayor summarily dismissed it.

Now, that is important because it tells us a lot about her judicial philosophy. And the fact that, as we heard Judge Jose Contrera, on her court, also a Clinton appointee, was upset by her dismissal of this, and not even being willing to recognize the serious constitutional issues, that tells us that she really is a believer in the racial spoils system.

She is a person who said in a speech that she would hope that a wise Latina woman would come to better conclusions as a judge than a white male.

I mean, imagine if you heard someone say the reverse. He would be run out of town as a racist and a sexist.

And it reflects the president's idea of empathy in the judicial choice, meaning a person who cares about the standing of a defendant or a plaintiff in a case, meaning if he is rich or poor, black or white, advantaged or not, which should not be something a judge takes into consideration.

A person ought to take into consideration their personal life and philanthropy, someone in Congress ought to take into considerations in judging if taxes ought to be high or low depending on your station in life, but never a judge. Station in life is not a consideration. It is what the law is.

She is a believer in that, and I think that that's a distortion of the law, and it ought to be a reason to oppose her.

BAIER: Mara, the president, when introducing Judge Sotomayor, obviously hit on the personal story, but kept on coming back to her respect for the rule of law. I'm sure, we're waiting for Charles to weigh in on what he just did.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: He described her in terms that a conservative would have no argument with — respect for precedent. She understands the limits of the role of the judge. She understands it is not to make law but to apply the constitution.

So she — he described her the way I think he would describe himself — pragmatic. He said she has no ideology and no agenda.

Now, it's going to be up to her opponents to prove the opposite. And I think that's going to be the contours of the fight that we will over the next couple of months.

BAIER: Fred?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": Clearly politics won out over judicial excellence in this case. Would she have been picked if she were not a Hispanic woman? I doubt it. She is a very average member of the appeals court.

Obviously she is qualified to be on the Supreme Court. But is she the most qualified person out there? She's not a powerhouse. If the president had wanted to name a judicial powerhouse, it could have been Tess Sunstein, the Harvard law professor who is now working at the White House for President Obama. He could have picked Elena Kagan, who also works for him, who is now the Solicitor General. She was the head of Harvard law school.

Now, those are legal powerhouses. Or he could have gone to other judges on the appeals court to pick up somebody.

He has picked a very average appeals court judge because the politics are good.

Now Republicans will raise the issue that Charles raised, and I think they can raise it powerfully. But, remember, Democrats have 60 votes and putting together — and even if she turns out to be a bad witness, putting together enough votes to even have a filibuster against her would be difficult.

But she is — look, this is a liberal judicial activist who — and, generally, they are not popular with the American people

BAIER: A lot of people have made a lot about this not really moving the court further to the left, because, obviously, she is filling the seat of David Souter.

Will she, if she's confirmed, Charles, be able to sway the court in any way, looking at the record that you have looked at?

KRAUTHAMMER: I think not. She hasn't had a big effect in swaying the second circuit by the account of people who have looked at her opinions. She is not, as Fred indicates, a powerhouse.

If Obama wanted somebody who would be a towering figure on the left who would, he didn't pick it this time. He will pick it next time, I think.

BAIER: Because most believe he will have a couple bites at the seven?

KRAUTHAMMER: It was a political appointment, a Hispanic woman. It's a way to at least appease the Hispanic constituency in a president who is not going to push hard on amnesty and immigration.

So it wins him a lot of time and space for the constituency he needs and he is winning.

BAIER: Do you agree with that?

LIASSON: I agree. It was a politically irresistible pick.

But she also does have impeccable credentials. This is someone show has served for a long time on the court. She has been a prosecutor. She has been in private practice. She comes with glowing recommendations from the people she has worked with.

Now, she is a liberal, but, you know, I think that he is going to have more picks. It is very possible he will be bolder and do something that is even more upsetting to the right in the second and third.

And that's why I think you're going to see Republicans making some very serious calculations about whether they make the big battle royale this one or wait for the next one.

BAIER: You think the left was collectively was happy with this pick?


BARNES: Why not the best? Why do you pick somebody who is a mediocre appeals court judge — look, there were some pretty dazzling choices he could make. Instead —

LIASSON: Elena Kagan has never been a judge at all —

BARNES: That doesn't matter. We're talking about legal powerhouses. There are lots who were never judges before. Hugo Black wasn't. There are all kinds of them who became powerful members of the Supreme Court. She's not going to be one.

BAIER: President Obama has made it clear he wants Sotomayor's confirmation to move swiftly.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We don't want to delay this to the point where it's unreasonable. And I think doing this before we bake for August is not an unreasonable request by the president.


BAIER: The panel discusses the politics behind the process when we come back.



BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA: I hope the Senate acts in a bipartisan fashion, as it has in confirming Judge Sotomayor twice before, and as swiftly as possible, so that she can take her seat on the court in September and participate in deliberations as the court chooses which cases it will hear this coming year.

SEN. JOHN CORNYN, (R-TX) SENATE JUDICIARY COMMITTEE: It's going to take us some time to read her opinions and speeches and other writings to determine her qualifications. It's not just a matter of the right degrees.


BAIER: Well, the White House wants Judge Sotomayor confirmed before the August recess. As you can imagine, Senate Republicans aren't so sure.

So what now? And can Republicans actually block this nominee? We're back with the panel — Mara?

LIASSON: I think it's going to be very hard. Very soon, I think the Democrats will have 60 votes, if Al Franken from Minnesota is seated before the vote on Sotomayor.

There are seven Republicans, sitting Republican senators, who voted Sonia Sotomayor when she was made an appeals court judge. Now, they might change their minds, but you would think among that universe of seven, the Democrats could pick off the one or two they need.

BAIER: And the 60, of course, refers to the ability to block a filibuster.

LIASSON: You've got, Gregg, Lugar, Snowe, Collins, Hatch, Cochran. Those are — that's a pretty good pool to fish in. Now, a lot of them are going to vote no.

Also, the other thing that I think is interesting, although a lot of Republicans, as you heard Senator Cornyn say we want to take our time and look at her records, no Republican has came out of the gate saying no.

When Judge Bork was nominated, Ted Kennedy was on the floor that day manning barricades against him.

So that hasn't happened yet, and I think they will think very hard and long about opposing the first Hispanic Supreme Court Justice.

BAIER: Asked about a possible filibuster, the ranking member of the Senate Judiciary Committee, Senator Jeff Sessions, had this to say just moments ago.


SESSION: I think it ought not to be done, except in extraordinary circumstances. And I wouldn't predict a filibuster at this point, for sure.


BAIER: Charles?

KRAUTHAMMER: He's right. It shouldn't happen at all. It should not happen in this case. The Republicans are going to lose in trying to stop her.

But that's not why you do not oppose it. You can win in losing, because I think this is a very important case. I would not focus on her, you know, the rumors from law clerks about her temperament. I wouldn't look at the accusations of being a left-wing liberal.

Unless there is something in her past explosive that nobody knows about, she is going to end up on the court.

I think what Republicans ought to do is talk about judicial philosophy. It should be high-toned, not ad hominem, and not personal.

But people have been saying ever since the '08 election what the conservatives and Republicans believe in, they are in disarray, intellectually and ideologically.

Well, look, here we have a clear distinction between what she believes and Obama does on the one hand, and what Republicans believe on the issue of what is equality before the law.

The first witness I would call if I were a Republican, Frank Ricci. Let him explain his case. Let him give his story, which is also a story of overcoming obstacles. And he is denied a promotion entirely on the basis of race, and she upheld it.

Let's have a rev referendum on the question of equality of the law, is it about a group or is it about individuals? Is it about merit or is it about handing about promotions on the basis of race?

Let's have it on that issue, and Republicans will win even in losing her confirmation.

BARNES: I agree with that. Republicans need to do that.

But let's not confirm her yet. She's not there yet. The confirmation process can really have some real pitfalls, no matter how popular the nominee is.

I can are remember nominees who were certain. The perfect nominee, bound to be chief justice in just a few weeks. And things come along. Things turn up.

They turned up on Fordis. Things turned up on Doug Ginsburg. Now he's a appeals court judge who was nominated by Ronald Reagan, believe, to be on the court.

Look, Anita Hill popped out of the woodwork and almost derailed the nomination of Clarence Thomas. So things can happen.

That's one of the reasons why Republicans want to extend the process longer, for things to happen.

And then the confirmation hearings, particularly if a guy like Frank Ricci is there, can have a bearing.

Look, Sotomayor also needs to be a good witness. They're good witnesses and there are bad witnesses. Robert Bork was a bad witness.

Look, chances are 90, 95 percent that she will be confirmed. But let's not put her on the court yet.

BAIER: Down the line, does this process finish up before the August recess?

BARNES: I doubt it.

LIASSON: I think it might.


BAIER: There you have it.

North Korea was at it again today. Two more missiles were fired. We'll talk about what that means for the U.S., after the break.



SUSAN RICE, U.S. AMBASSADOR TO U.N.: The fact is now that the international community has said this is not acceptable. We're not going to be intimidated by North Korea, which is really trying to test whether we mean what we say.

RIKI ELLISON, MISSILE DEFENSE ADVOCATE: The jump from technology achievement from where they were three years ago when that missile didn't fail to get into orbit or into space to where they are today shows you they are on path to being able to get that ballistic capability to where they need it.


BAIER: Two topics there — 14 hours after President Obama condemned North Korea for an underground nuclear test and three missile launches, North Korea launched two more missiles today.

So as the administration tries to get a strongly worded resolution out of the U.N. Security Council, and you hear Ambassador Rice still not sure what will come out of that body, there are new concerns about the Obama administration removing funding from the missile defense in the wake of these new actions.

We're back with the panel — Charles?

KRAUTHAMMER: The game is over. We have had 15 years of negotiations under three administrations, the Clinton, Bush, and now Obama. Not just are they a failure, but they are a humiliation.

I think it's time to recognize that it's over. North Korea is a nuclear power. It's not going to be stopped. The only issue is what do we actually do?

I would say forget about U.N. resolutions. Forget about the six- party talks, and forget about even bilateral negotiations. What we need is action.

Action number one, a nuclear Japan. Japan is a country that is directly threatened. I think we ought to have intensive negotiations with the Japanese to encourage them to declare themselves a nuclear power.

The only way in which we're going to have any progress in the area is if we reshuffle the interest of the parties here. A nuclear in Japan will send a message to China, especially, to recalculate its interests.

Up until now, it had zero interest in curbing its client. It is a thorn in our side. It is an ally in the area. It is a threat to South Korea. It supports its hegemony in the region.

A nuclear Japan will reshuffle the deck on its recalculations. It may send a message which would encourage China to change its policy.

Otherwise, nothing happens.

BAIER: Mara?

LIASSON: You know, President Obama famously said in Prague that words must mean something, and violations can't go unpunished. Well, so far they have.

And I don't think there is any difference between the Bush policy and the Obama policy. It hasn't worked. North Korea wants to be a nuclear power. It is one, and it will continue to be one.

I think the big question is, what do you do to stop it from proliferating, because right now it has a lot of good sales brochures. Every time it puts up one of these missile, it sends a message to the Syrians and Iranians, and I'm sure there were Iranians there watching — look, look what we can sell you, our stuff really works, as opposed to what it looked like a couple of years ago where it fell into the ocean.

So it has to be stopped from proliferating. And China's worry is not just that it wants to keep an ally in the region. China doesn't want North Korea to implode and send millions of people over the border. China doesn't —

BAIER: But they haven't really stepped up here.

LIASSON: No, they haven't.

BAIER: They haven't.

LIASSON: But we have to figure out a way to get China to step up.

BAIER: I just want to say, within the past few minutes, South Korea's news agency is reporting that North Korea has fired another missile. So that would make three missiles fired today in addition to the three missiles the other day, and the underground nuclear test —Fred?

BARNES: And so the message from Susan Rice, our U.N. ambassador, in "strong letter to follow." I mean, it's pathetic.

Charles is absolutely right. The game is over. My question is, will President Obama learn a lesson from the North Korean experience that he can apply to the Iranians?

And one of the things, obviously, is that engagement and friendly words and so on, and nice diplomacy, don't work when you have someone, a dictator, who wants to be a nuclear power, because a nuclear power does have more power. The world fears a nuclear power.

And then you have to also figure that China and Russia did not help with the North Koreans, lean on them, and they're not going to help with the Iranians either, that the U.S. is going to have to — and the Europeans aren't going to help much either.

It's going to pretty much have to act on its own.

BAIER: Fred, what about the future of missile defense?

BARNES: I think that would be the place I would go even before — missile defense is something we can do on our own. You would need the Japanese — and Charles, I think you would agree, that would be a hard argument with the Japanese —

KRAUTHAMMER: I'm not certain —

BARNES: They're the country that is most terrified by a nuclear North Korea. Look, I would do that. But missile defense is something we have gone a long ways on, can be improved dramatically in a short period of time. The Obama administration is cutting money for that.

BAIER: Is it resurrected because of this?

KRAUTHAMMER: I think Republicans ought to make a very strong case. It's a case that there is no way to argue against it.

In the face of what is being done, a nuclear capacity and missiles aimed at us and our allies, of course these cuts in missile defense are absurd. We ought to increase our spending on missile defense on all three stages, the boost, the intermediate, and reentry phase. We have the technology.

And to cut our defense spending on this unilaterally is insane.

BAIER: Back in the budget, Mara?

LIASSON: Not any time soon, but there will be a big debate about this.

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