This is a rush transcript of "Special Report With Bret Baier" from April 6, 2010. This copy may not be in its final form and may be updated.


HILLARY CLINTON, U.S. SECRETARY OF STATE: We are reducing the role and number of weapons in our arsenal while maintaining a safe, secure, and effective deterrent to protect our nation, allies, and partners.


JIM ANGLE, FOX NEWS ANCHOR: Well, there is Secretary Clinton along with any number of other officials who were announcing fundamental change in U.S. nuclear policy today.

Let's bring in our panel, Steve Hayes, senior writer for The Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and syndicated columnist Charles Krauthammer.

Now, the interesting thing about this was that — there are all sorts of interesting things about it. One, the wire story summarized the policy as: "Under the new plan the U.S. promises not to use nuclear weapons against countries that don't have them." I didn't know that was our policy to begin with.

But nevertheless, for decades the U.S. has kept open the possibility of using nuclear weapons under various certain circumstances against the Soviet Union in particular if it were necessary. Now President Obama says he is changing that by narrowing the circumstances and the number of countries who might be threatened, Charles.

What does this mean in practice? And why now?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Let me tell you one scenario they brought up exclusively, and that is if the United States is attacked by a country with biological or chemical weapons, under the old policy of every administration for decades our response is we will obliterate that country with a nuclear response. That has been the Clinton policy, Reagan policy, everybody.

And now we have a new policy that if that occurs, before we would retaliate in that way, the White House lawyers would ascertain if that country is in compliance with the NNP, nuclear nonproliferation treaty. If it is, if it is kept up with the IAEA inspections, it gets immunity from the massive nuclear retaliation. It gets instead, I suppose, a retaliation with the TNT and Marines shooting guns. This to me is either insane or ridiculous. I can't decide. I report, you decide. It's ridiculous even in the moral sense where our assumption of this is the scenario where the greatest war crime in history is committed let's say in Boston and we will look to see if the country is in compliance with the IAEA regulations to determine if it's immunized from a nuclear retaliation or not? Secondly, and probably more importantly, is the idea we are not going to use nukes defending an ally or deterring an attack on an ally with conventional weapons. We kept the peace for 50 years where the Soviets had a huge advantage in tanks and could have occupied Western Europe overnight because from Kennedy on we had a policy of extended deterrence. You attack with tanks, and we retaliate, and Moscow disappears. Is it a credible threat? Who knows? But the Russians had to worry about it, and it was our policy from Kennedy on up until Obama, and now it disappears. If you are an ally, what are you going to think of America as your defender and America as a deterrent of attack on you?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: We have not ruled out first use. The ultraliberals want him to rule out first use. If there is an attack in Europe, we still have a nuclear umbrella over it, and that is specifically why he did not renounce first use.

But this, the amount of change here from the Bush policy is rather minor. The fact is if — what we said is if we get attacked with chemical and biological weapons by Iran or North Korea, we can still respond with nukes.

And the lawyers, believe me, will far precede the attack. There will be a list. And Iran and North Korea are on notice.

Furthermore, Obama said that he wants to get rid of all nuclear weapons. This is moving in that direction very, very slowly. We have going to have 1,500 nuclear warheads under the START treaty. We are not renouncing first use, et cetera.

And it's amazing, not only did Ronald Reagan want to get rid of the nuclear weapons — George Schultz does, Henry Kissinger does. Obama is much more realistic than they are.

ANGLE: Here is what I can't figure out, Steve. There were 150 meetings about this, and the president is said to have intervened in many of them. What has he ruled out? It's hard for me to figure out exactly what is different about this policy than our previous one.

One thing said today is we'd only use nuclear weapons in extreme circumstances. Well, I would hope so!


STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think it's interesting — I agree with part of what Mort said and part of what Charles said.

I think in a sense the policy is more incoherent than Charles suggested because if you look at the first example, right after they in effect, they rule out the counterattack after a chem-bio attack, they say a couple pages later we revised — we could revise our opinion and reconsider the attack if we decide to. Of course, of course you can.

But the bigger problem is this is classic Obama. It's big on language, big on rhetoric. The changes are not earth-shattering. But what it does is sets up the United States as the good example once again. And he seems to think this is an effective way to conduct nuclear policy.

The lessons of the past 30 years suggest otherwise. We reduced our warheads from 10,000 to between 5,000 and 6,000. We haven't designed a new warhead. There are all sort of things we've done to set a good example over the past several decades, and yet the world is becoming more and more nuclear and more dangerous.

KONDRACKE: But one other thing. The real danger is Iran and North Korea. And Hillary Clinton as I understand it just got through advising the leadership of Congress not to go ahead with a conference committee report on a bill calling for gasoline embargoes. That is counterproductive.

ANGLE: Why not?

KONDRACKE: Well, because we ought to be threatening a gasoline embargo —

ANGLE: Why did she call for them not to do it?

ANGLE: Because they don't want to hurt the Iranian population. You're not going to have sanctions that bit or cripple without hurting or affecting the population.

KRAUTHAMMER: I have to correct you on the use of nukes. Our declared use of nukes as we have had for 50 years is protecting an ally or deterring an attack on an ally with conventional weapons. Under this new policy, it doesn't exist. No first use or not.

ANGLE: We have to go, Charles.

KRAUTHAMMER: It takes away nuclear umbrella.

ANGLE: Next up, the Iraqi surge in violence. Go to the homepage at Foxnews.com/specialreport and tell us what you think the U.S. should do about it by voting in the online poll. The panel returns after the break.


ANGLE: This is a Fox News alert. The U.S. Geological Survey says magnitude 7.8 earthquake rocked the Indonesian island of Sumatra. A local tsunami watch is in effect for Indonesia. The U.S. Geological Survey told Fox News Sunday it still considered this a normal year for earthquake activity despite major quakes so far in Haiti, Chile, and last weekend in Mexico.

You can go to Foxnews.com for latest details and watch "Fox Report" at the top of the hour for more information.

And we're back with the panel. There has been a wave of violence in Iraq in recent days. At least 49 more people killed today in coordinated bombings, one reason Ayad Allawi, a candidate for prime minister, is warning the U.S. not to pull troops out too soon.


AYAD ALLAWI, IRAQI PRIME MINISTER CANDIDATE: That should be a formational government and then they should leave, but not without government taking care of the country, that's time for withdrawal.

GIBBS: I think many expected insurgents would use this time to roll back progress both militarily and politically that we have seen in Iraq.


ANGLE: OK. There you have Robert Gibbs at the White House. So Allawi, Charles, is saying hold on, guys, don't get excited. If the violence is still too much, you don't want to leave on the schedule you're planning to leave on, which is taking about half the American troops out in August.

KRAUTHAMMER: Allawi won the election, he's moderate, probably the most pro-American of all the leading candidates. He's about to become prime minister and the most anti-Iran. He understands what is going on now is the instability you get in a country when there is a change of government and a negotiation over who is going to form the new government.

We saw that after the election of 2005 in which there were months of instability and ultimately it went into a downward spiral into a year or two of civil war.

His problem is that the Americans are standing down and they are leaving on the fixed timetable. Biden was over in Iraq a few weeks ago and he said we — this is a situation where this could be one of the great successes of the Obama administration if we support the Iraqis at the time of maximum stress right now.

The problem is that the president seems uninterested in Iraq except to wash his hands and get out on a fixed timetable. It's a matter of a few months until probably mid-summer when the future of Iraq will be determined, and to be drawing away, drawing down and displaying a complete lack of interest in what is happening from the highest level here is extremely unhelpful at the moment of maximum danger.

KONDRACKE: The president said he was going to withdrawal responsibly from Iraq. Now, the violence is not what it was in 2006 and 2007 when you had a virtual civil war going on, but it's escalating.

I don't expect him to make a decision tomorrow that we are going to stick around, but if the violence escalates and this instability continues, then it would be irresponsible of him to pull the troops out in order to meet a deadline.

His election is not until 2012. He can drag this out a little longer if it means to keep a stable Iraq. We've expended so much treasuries and so many lives that to withdrawal for sake of a schedule is irresponsible.

HAYES: There needs to be some word from the White House, I think quickly, that suggest we are going to be there to keep the peace. He can say it however he wants to. I understand the president will get grief from his left flank if he says we're going to stay longer than I promised.

But he needs to do something and send some message we will not allow this to unravel. This is time for one of the president's, trademark statements of certainty, the "let me be clear" statement — "Let me be clear. We will not allow Iraq to unravel."

ANGLE: You heard Allawi in the earlier piece saying, "democracy has been hijacked here." I assume he means by both terrorists and perhaps by the working of Iran.

KRAUTHAMMER: Iran is trying to destabilize Iraq for the last six or seven years. But secondly it's trying to influence the factions that are not competing to establish a government.

There have been a lot of delegations in Tehran negotiating with the Iranians about how a government would be formed in Baghdad. There are no delegations who have gone to the American embassy, and the reason is people are looking around and thinking who is going to protect us and who is not? Who is going to be around and who will be gone?

I think a signal from the U.S. that we might stay around and assist and keep some stability would be able to — would give us the opportunity of exerting influence and who ends up as the leader of the government and that it's pro-American government, not a pro-Iranian one.

ANGLE: Mort, Iran really is the biggest problem in the region for us, in spite of the fact we have the hostilities in Afghanistan and Iraq. What should be the policy if you are looking at Iran and trying to figure out how to keep them at bay?

KONDRACKE: Two. You obviously want to keep them at bay. Charles is right, we should be exerting influence here. I think this is a clear invitation by Allawi for us to get involved here. Allawi used to say that he wanted the United States to leave on schedule. Presumably the United States is unpopular, and here you have the prime minister-elect saying we want you to stay.

ANGLE: OK. That is it for panel.

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