This is a rush transcript from "Special Report," June 7, 2012. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: Former President Bill Clinton talking back -- walking back something he said yesterday about extending all of the Bush tax cuts, at least temporarily.  That is his answer today. We're back with the panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think a concise way to summarize that is it depends what "is" is. I mean I write for a living and I've edited in my day and I edited lousy copy, but I can't make heads or tails of this. It's really un-editable. In fact, in psychology there is a term if you get a raving lunatic, excuse me, psychotic who comes in the door and makes no sense, you say he is speaking in the world salad. This is world salad with vinaigrette on it. He is apparently trying to walk back this idea he contradicted Obama on extension of the Bush tax cuts. He knows he did. He is not changing his position that I can understand, but he is basically saying I'm sorry. I don't think it washes. And I think you could sort of look at him and you know that he is saying -- essentially he is doing with a wink and a nod I'm under duress. Don't pay any attention to what I am saying.

BAIER: Kirsten, this comes as new polls are out, Fox News polls out today. If the vote for president were held today it breaks down like this -- tied 43 percent 43 percent, there you see the difference between May and now, according to our polling. It is plus or minus three percent. Then you look at the independents, and it's Mitt Romney 38 percent, Barack Obama 34 percent. Your take on these polls?

KIRSTEN POWERS, COLUMNIST, NEW YORK POST: This is what I would have predicted would have happen, that it would tighten up this way. It's interesting that Mark Halperin of Time magazine had a story out today saying that Democrats are now concerned that Obama could possibly lose, which was always obvious that he could potentially lose. But for some reason all these people in Obamaland and the Democrats were living -- I don't know -- in some other bubble where they didn't realize that this was going to be a really tight race, and I think they're starting to realize that and a poll like this is going to just reinforce that.

The good news in the poll for Obama, and I'm not saying this is amazing news, it was 55 percent in April of 2010 thought we were in a recession, versus 41 percent now. He needs that trajectory. To be that at least people feel that we are no longer in a recession. They think we are in a downturn now, so it's a slight improvement.

BAIER: Only by one percent though, put up a number five if you could. The poll that Kirsten is talking about is that 41 percent say they are in a recession, 42 percent say downturn, 15 percent say doing OK.

POWERS: But it's down from April --

BAIER: From where it was.


BAIER: Bill?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: I would love the be a fly on the wall on November 6, on election day in the voting booth in Westchester Country, New York, where Bill Clinton votes. Because I would like to see who Bill Clinton is really going to vote for in this election. And I think Bill Clinton will vote for Mitt Romney.

BAIER: You do?

KRISTOL: Yes. Well, A, he probably thinks Romney would be a better president. Because Clinton at the end of a day is a grownup who did have a reasonably good economic record, and knows that Barack Obama is clueless about the economy, B, President Clinton is justly proud of the fact that he took the Democratic Party to the center, he rescued the Democratic Party from its failures of preceding decades, the Dukakis-Mondale party, and Obama has taken it back there. And he has done so while dissing Bill Clinton continually. I mean it is really startling. You can listen to Barack Obama give speeches for months. The last 30 years of American history have been terrible, right wing, income inequality, just all these failures. And Bill Clinton must be listening to those speeches and say, hey, I was president for eight of those years. But the way -- in Obama's mind it's sort of Reagan, Bush, parenthesis, (Clinton), Bush, bad years, I'm the savior. And I think Bill Clinton does not really appreciate that point of view from Barack Obama.

BAIER: So when he says in response to questions about that, that is nuts, and then he says if Mitt Romney was president it would be calamitous, you just don't buy all that?

KRISTOL: It's shocking Bret that I don't entirely believe that Bill Clinton is being 100 percent candid 100 percent of the time.

BAIER: I do want to mention that the Fed chair Ben Bernanke was up on Capitol Hill today said that the crisis in Europe, Charles, has affected the U.S. economy dramatically and is calling on European policymakers to take a number of actions. How do you think that all fits into the picture of the U.S. economy?

KRAUTHAMMER: I think it helps to explain why there is worry or concern or panic in Chicago in the Obama campaign. It isn't only the failure of the roll out of the campaign effect that Romney is doing well unopposed. They understand they are completely hostage to Europe. They can't do a thing about it. And the reason that the markets have dropped except for yesterday, but a dramatic drop, almost all of the gains of this year given back, is because whereas people thought they were around they had turned a corner on the Europe earlier in the year. It looks as if it is in bad shape, with the banks in Spain on the brink. Greece going to have an election that may have them leave the Eurozone. If all of this happened, and it's far more likely today meaning the collapse in Europe than would have been six months ago, it certainly is going to hurt the U.S. economy and it will hurt it early enough to effect the election. And they know that there is nothing this administration can do, any administration. It's really out of our hands.

BAIER: Even pressuring Germany to act more than it is.

KRAUTHAMMER: I don't think Germany is going to respond to our pressure. What exactly is our leverage? Are we an exemplar to say look how well we did so you are to do what we did? Germany is one of the success stories. It's not going to jump off a cliff because it hears a President of the United States say I need you to help my re-election. That's not going to work.

BAIER: That is it for panel. But stay tuned to see why it's important to get briefed on what you are reporting.

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