This is a rush transcript from "Special Report," November 30, 2010. This copy may not be in its final form and may be updated.


PRESIDENT OBAMA: We should wor k to make sure that taxes will not go up on thousands of dollars on hardworking middle class Americans come January 1, which would be disastrous for those families, but also could be crippling for the economy.

There was broad agreement that we need to work to get that resolved before the end of the year. Now, there are differences how to get there.

SEN. MITCH MCCONNELL R-KY.: It is the view of 100 percent of Senate Republicans and a number of Senate Democrats as well that the tax rate should not be bifurcated. In order words, we ought to treat all taxpayers the same.


BRET BAIER, HOST OF “SPECIAL REPORT”: Well, the president held a big meeting at the White House today with the congressional leaders, about 35 minutes without staffers in the room. The president called it a productive meeting and he said extending the tax cuts, he agreed there must be something sensible.

He also proposed negotiating team to work to hammer out a deal.  That includes Treasury Secretary Tim Geithner and budget director Jack Liu, representing the White House, Republican Jon Kyl and Democrat Max Baucus for the Senate, and the Republican Dave Camp and Democrat Chris Van Hollen to represent the House. They are supposed to hammer something out in this lame duck session of Congress. What about all of this?

Let's bring in the panel, Steve Hayes, senior writer for the Weekly Standard, Juan Williams, Fox News contributor, and syndicated columnist Charles Krauthammer. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think the most interesting part to come out of the meeting was, as you said, the appointment of these negotiators. Well think of the issue of the extension of the tax rates.  It's not exactly a complicated or you're trying to reconcile two huge healthcare reforms, in which case you'd want a committee on one side and a committee on the other who would negotiate a deal with a compromise in the middle.

With the tax rate, the only issue is--are all people going to be treated in the same way? How long is the extension going to be? Two questions.

So I would interpret what the president has done by allowing others to do the negotiating on a decision that ultimately he makes and he makes in a minute-and-a-half as a way to distance himself and set up a compromise where he accepts the fact that the rates are extended and it's probably for a couple of years. He has the cover of saying they worked on this and hammered out a compromise.

BAIER: Juan, there was a build-up to the big meeting, and then this negotiating team. We talked about at this table many times handing the keys over to Congress. They work out the details. Is this another example of that?

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: It sure is. We have covered this ground healthcare reform, TARP -- all the rest of it. It was a mistake early on for the administration to simply say to Democrats in Congress you are the majority. We will trust you to negotiate a deal and include some of Republican ideas, because given the polarized cycle the Democrats response they've been in, they froze us out, and we'll freeze them out. And it just exacerbated polarization on Capitol Hill and Washington and injured President Obama in terms of independents who expected he would live up to his promise to deliver on a more bipartisan approach to American policy.

BAIER: But doesn't this injure him even further to say it pushes them to the end of the year? Here’s the looming deadline is January first. Now we have a negotiating team?

WILLIAMS: Something big happened in the interval, election, where the Republicans triumphed. So the leverage here is with Republicans and the pressure is on President Obama to come back and live up to delivering on his promise on a bipartisan Washington and getting something done. I think that the deadline is tight that there is pressure for pressure on both sides to walk away with achievement.

BAIER: Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I would make a distinction that is important in the delegation. What he did the stimulus and healthcare, he delegated to people in Congress. This time he did not do that. And this gives him space and distance from Nancy Pelosi and Harry Reid who can't enter the negotiations and say we're open to this compromise. Nancy Pelosi won't do that.

BAIER: Because Geithner and Liu were at the table for the White House?

HAYES: They are at the table and say the can say we can look at this. And this gives him space that Charles was referring to.

BAIER: Listen to Jake Tapper, ABC's White House Correspondent in an exchange with Robert Gibbs, The White House press secretary today.


JAKE TAPPER, ABC NEWS: The president thinks that funding the government and passing unemployment insurance extensions, "don't ask, don't tell" repeal, the dream act, tax cuts, and START, all can be done in the next 18 days?


TAPPER: Good luck.

GIBBS: Thank you. You'll have a lot to cover.


BAIER: "You'll have a lot to cover," 18 days.

KRAUTHAMMER: I don't think it's only a matter of how impossible it is in terms of timing. I think there's a question of the illegitimacy that Republicans ought to raise. Of course lame duck Congress has legal authority to do anything it wants, but it's illegitimate.

The people spoke on Election Day. They threw the Democrats out of the House. And yet this lame duck session is still run by Democrats. They could extend a continuing resolution to allow the government to continue into next week and beyond, do the tax rates, and then stop. I think Republicans ought to argue on principle the country has elected a new kind of Congress and it ought to be making the decisions on how the country goes. I think that is an argument they ought to make and not just that the time is running out.

BAIER: That list, funding the government has to happen very soon, passing the unemployment extension, there's a debate about that, "don't ask, don't tell" repeal, a big issue, the Dream Act, extending the Bush era tax cuts, and the START treaty being ratified.

WILLIAMS: I think it can be done. I think that there is incentive for both sides politically in terms of the reaction of the American people to say let's get something done. Stop wasting time.

BAIER: Something or all the things?

WILLIAMS: All the things. I think you can get most of it done, in other words a sincere and genuine effort, not just standing and posturing.  And by the way, my sense is Charles says wait until the new Congress comes in because they've just been elected. This Congress was elected. If you waste time, people will say why --

BAIER: But then the votes won't there to get it through when the Congress comes in.

WILLIAMS: Not from the Democratic perspective. But again, that’s not the issue. What about the kids unfairly penalized by denial of the Dream Act --


HAYES: Look, I'd like to have what you and Robert Gibbs are drinking. There’s no chance all this gets done. There’s no chance that half this stuff gets done.  I think its tax cut and continuing resolution, maybe a few other minor things if the Republicans get what they want on tax cuts. And the president had two years to do these things. He didn't make the priorities, and that is fine, his decision. Now he pays for it.

WILLIAMS: He has a list of legislative --


HAYES: All of a sudden, all of these things that he wants and that Harry Reid wants, I think largely for political reasons are huge priorities.

KRAUTHAMMER: He spends a year-and-a-half on healthcare and then all of a sudden the Dream Act is an emergency. It's not. And the Congress that was tossed out on its ear ought not make a judgment on it.

BAIER: Which side do you think will have to make most compromises? Vote in our online poll at FoxNews.com/SpecialReport.

Up next, the Obama administration does some horse trading over Guantanamo Bay detainees.


UNIDENTIFIED FEMALE: September of last yore there were still no solution for the Guantanamo detainee problem and that closing Guantanamo Bay by the January deadline was off the table. Can you comment on that?


P.J. CROWLEY, STATE DEPARTMENT SPOKESMAN: I’m not going to comment on what is in the paper. We're committed to closing Guantanamo.  We continue to engage Yemen and other countries about detainees who are still at Guantanamo who we believe qualify return or resettlement.


BAIER: Well, despite all the efforts to clear Guantanamo Bay, as you take a look at Gitmo there, the State Department cable from the WikiLeaks document dump show it was really tough to empty the prison was coaxing all the countries with either money or access to the Obama administration get rid of the detainees and put them someplace else. Some interesting tidbits in these documents.  We're back with the panel. Steve, what struck you most?

HAYES: I think there’s been a lot of focus on the horse trading that goes on. Some people find it unseemly. Of all the things I read in the cables, that troubles me the least. That's sort of what you expect the government to be doing.

BAIER: The Bush administration did it too.

HAYES: It's what the government does. It's probably better to have these things be done in private than in public.

But I think there are serious substantive issues that emerged out of this. One Catherine Herridge referred to in the piece earlier with this Mosambague (ph) the U.S. ambassador to Luxembourg sending out a cable under her name and making an argument --

BAIER: Mosambague (ph).

HAYES: She's a former Guantanamo detainee who had been released who went back to London and he is admitted jihadist. He's an agitator, to be kind to him.  And he argues that the detainees are not that dangerous and can be repatriated.

And this cable that went out under the name of the U.S. ambassador to Luxembourg says his travelling to Europe and making the case is making the case that the U.S. government wants made on its behalf.

This is a loathsome, dangerous, bad man, and she is saying he is the de facto spokesman for the U.S. government.

There's one other cable I think hasn't gotten much attention that I think is very serious. It concerns detainees that have been repatriated to Afghanistan. And 29 of the 41 detainees sent back to Afghanistan have been released without even trial in Afghanistan.

The cable suggests that we had obtained that kind of a promise from the Karzai government. They have been released outright, which I think is outrageous and should, I think, cause the Obama administration to declare a moratorium on sending detainees back to Afghanistan from Gitmo.

BAIER: Juan, another cable that says Yemen was going to offer to take all the detainees and then the administration perhaps wisely said they would not make it a week or two in Yemen without being released, they thought, there. What do you think this says about Gitmo and where we're going with the detention facility?

WILLIAMS: It's very hard to resolve the issue. Obviously, the president has; again, we were in the previous panel talking about unfulfilled promises. This is one where he promised he would somehow close Guantanamo Bay.

But it has been difficult. You know, to pick up on what Steve was saying, the negotiations have been forth right. I think they've been admirable to get countries to accept the detainees, but in the case of Yemen to say you have to stop some point of limits on what happens with the people, you have to have the ability to track them. One absurd suggestion is that you even put chips in these detainees.

BAIER: By the Saudi king.

WILLIAMS: Which was rejected by  U.S. officials.

But this to me is all rational and all good. The problem is that there had been this idea you could somehow get rid of Guantanamo Bay and, of course, the United States itself is part of the issue because there has been resistance, notably among Republicans to having some of the detainees tried in U.S. courts.

BAIER: Charles?

KRAUTHAMMER: The Saudis have suggested the chip implanted in the prisoner, they explain it by saying that you do it with horses. And the American answer was well, horses don't have good lawyers.

I think it reveals how utterly absurd this entire venture is, enterprise is of ending Guantanamo. We are in a war. We capture prisoners of war. In other wars you keep them until the war is over. And you don't apologize. Who apologized for the prisoners we held in the Second World War or the Civil War?

The counterargument is the war is never going to end. Who declared the war in the first place? The jihad against us. And who is keeping it alive? If you pledge your allegiance to the Osama bin Laden and you are a soldier of his and we capture you, you stay in our custody until the war is declared over. We don't have to apologize for it.

Content and Programming Copyright 2010 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2010 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.