Updated

This is a rush transcript from "Special Report," August 4, 2016. This copy may not be in its final form and may be updated.

Defense Secretary Ash Carter is in charge of the military response to ISIS.
I sat down with him today to talk exclusively about the fight against the terror group and began by asking him about the expanding ISIS threat and footprint around the world.

(BEGIN VIDEOTAPE)

BAIER: ISIS has had safe haven inside Syria, expanded into Iraq in 2014.

ASHTON CARTER, U.S. SECRETARY OF DEFENSE: Right.

BAIER: And now it has 30 affiliates in 24 countries and five aspirational while developing this worldwide network inspiring followers to kill citizens.

So I guess the question is can you allow that safe haven to stay?

CARTER: No, no.

BAIER: And when does it get eliminated?

CARTER: Ok. No. You have to destroy safe havens for terrorist groups like ISIL. And you're absolutely right. It all started in Iraq and Syria. And that's why we're waging the campaign that we're waging. And that we've been waging here and the Defense Department, with the President's approval, now for a number of months. That has led to the taking of all the towns in Iraq.

So we're heading up towards Mosul and over in Syria, towards Raqqa, which they say is the capital. So they have to be destroyed and defeated in Iraq and Syria because that's where this whole cancer started. And you've got to destroy it there.

But as you say, it's not enough because it's spread to Afghanistan. It has spread to Libya. You noticed that in recent days, we have begun air strikes in support of ground forces, local ground forces in Libya, who were fighting ISIL there. We're obviously doing the same in Afghanistan and we're going to need to do that anywhere the cancer metastasizes.

I brought all the defense ministers of all the countries that are part of the coalition out to Andrews Air Force Base two weeks ago and I said look, guys and gals, we need you to do more. You know we're doing more. We're trying to accelerate what is the certain defeat of ISIL. And you've got to get in the game and do more because we need to win as fast as we can.

BAIER: You mentioned Libya. On Monday, you launched five air strikes against ISIS in Libya. Tuesday, three. Yesterday, one. As of today it's zero. When somebody looks at that, they don't say wow, that's overwhelming taking out ISIS in Libya. They say this is a limited, narrow, one-city approach.

CARTER: Well, that's where ISIL is. It's a town called Sirte and that's where they're concentrated. And the targets we hit when the Libyan forces identify them. And they do that. And they'll do that, I'm certain, there will be more. For example, what you'll see is the Libyan forces, by the way, with some of our intelligence support, moving into a certain neighborhood. The ISIL guys will get in the truck or a tank to fight or to leave. We'll see where they are. That's the point at which we strike.

So we strike when we find targets. Obviously, we do that in a precision way. The reason we're doing it in the town of Sirte is that's where ISIL is.

BAIER: The CIA director told Congress a couple of weeks ago that ISIS has between 5,000 and 8,000 fighters in Libya -- still accurate?

CARTER: I'll leave the assessment to him. That sounds right to me. You know, these estimates are always uncertain. That's about right.

BAIER: So are we limited to that city by the Libyan government that we're working with? I mean the strikes only being in Sirte?

CARTER: Well, it's where they're fighting right now. And that's where the greatest concentration is.

BAIER: But if there were strikes, other places --

CARTER: But you're right -- there are other --

BAIER: -- could we do it?

CARTER: -- there would be -- yes. If we were asked by the Libyan government in the future, which may happen, to help them in other ways and other places, I'm sure we would be willing to consider that very favorably because look we're after -- Libyans don't like foreigners in their country. So Libya has its own problems. There's kind of a civil war going on there. But if we could get the people to stop fighting one another, Libyans, over who is going to run the place, they will turn against ISIL. They're not a bad partner to have.

BAIER: Afghanistan. It seems that the Pentagon is ramping up things there-- more airstrikes, more authority to strike the Taliban. Does this mean the strategy over the past year has not worked?

CARTER: No. The strategy, and you know this very well, is to strengthen the Afghan security forces so that they can more and more do it themselves. This is the fighting season there. So we want them to make as much progress as fast as we can. That's why we asked the President for some additional authority which he granted. That's why we asked him to keep some additional forces there next year. But it's not that we're securing Afghanistan. The whole point is to get the Afghans to secure Afghanistan.
But they're not ready to stand on their own two feet, yet.

BAIER: Last week, a company of Army Rangers, some 150 American troops, fought this fierce three-day battle against ISIS-affiliated forces in eastern Afghanistan. They killed, according to the sources we had, hundreds of ISIS fighters, but there were five American troops shot. When you look at that, why is that not serious combat?

CARTER: I just talked to two of them this morning. I just got off the phone --

BAIER: Oh good.

BAIER: -- with the two guys who were there with their families. I told them this, and this is kind of an answer to your question.

First of all, I'm sorry that they got shot. We're going to take good care of them. But they ought to know how successful the mission was that they were part of. And this is important.

This actually was a highly successful mission, destroying terrorists that had come over across the Pakistani border into that area.

People shouldn't be in any doubt, Bret, that when we're doing this, our people are in harm's way. There's no more serious responsibility for me as secretary of defense, and that's why I called these guys, than taking care of people that we put at risk. But make no mistake, they're at risk, and they did something that was heroic but also very successful there and absolutely necessary for our national security.

BAIER: I guess it's the semantics. Combat operations, major combat operations. I mean if you would talk to those guys, they were in three days of -- pretty heavy battle --

CARTER: I wouldn't get too hung up on the semantics. I think these guys are fighting, they're definitely in combat. That's how you get shot.
Their purpose is counterterrorism. They were after a group of terrorists coming in there.

In Iraq, Mosul, you mentioned before. Will Mosul be recaptured by the time you step down?

CARTER: I can't say that for sure, but I certainly hope so. And we are positioning forces to make that possible.

Let me tell you how that's going to go. Right now, just as we speak, forces are moving up that we have trained, these are Iraqi army units, supported by us in all ways -- with logistics, equipment, training, air power, advisers. They're moving north to two towns -- Makhmur and Qayyarah-- that are on the southeast and southwestern side of Mosul.

Meanwhile, Kurdish Peshmerga units, also equipped, trained, and supported by the United States, are moving to the north. They will envelope Mosul and collapse ISIL's control. The precise time table, we know what the time table is when those forces will come, we'll have to see what ISIL does and how hard they fight. One way or another, Mosul will be taken.

BAIER: How many more troops can Americans at home expect to be going to Iraq?

CARTER: Well, right now, there are about 3,500 U.S. forces there and there are about 3,500 coalition forces. And their role is to enable tens of thousands of Iraqi army units because that's the number we train and equip to take back their country. So I can't predict that.

The only thing I can say is we are prepared to do more wherever we see an opportunity to accelerate this defeat. So if more is required, and I'm sure there will be additional authorities and additional capabilities that will be required. I'll let our commanders see opportunities to do that. I will go to the President with the chairman of the joint chiefs of staff, as I have and he's done like he's done so far, he'll say go for it, because we need to get this done quickly.

BAIER: Iran. Were you consulted in any aspect of this deal with the $400 million and getting it to Tehran?

CARTER: It's not a Defense Department matter. It's been a State Department matter so I can't add anything to what you've heard from the State Department or the White House.

BAIER: So the military didn't help and facilitate --

CARTER: Well, we are certainly -- we do things with respect to Iran, not this. There was a nuclear deal done with Iran, which was good in the sense that it took away, if it's implemented verifiably which it is being so far, the nuclear weapons danger from Iran. But Iran is still involved in malign activity. It threatens its region, it threatens our neighbors. And that's one of the reasons why we have a big presence in that part of the world.

ISIL is one reason but deterring Iranian aggression, countering Iranian malign influence in the region is the other reason that we have forces there.

BAIER: But you haven't seen any change from Iran since the nuclear deal as far as giving money to terrorists, thumbing its nose at the world with the ballistic missile test, anything changing with Iran?

CARTER: Well, I think they continue to do things that are dangerous.
That's why we need to protect ourselves. That's why we need missile defense. That's why we need aircraft carriers and other ships in the Gulf.
That's why we do all these things.

BAIER: The Marines today are taking a 24-hour pause, it's a grounding essentially, because they've had some planes that have had major problems.
They've had a crash, one pilot was killed. Should Americans be worried about military aviation?

CARTER: Well, you're talking about Marine Corps Aviation readiness, which is an issue. It's the top priority for the Marine Corps, for the Commandant General Miller, for me as Secretary. We've been making special investments. We do have issues associated with the way our budget has been treated over the last several years.

You know there's been gridlock in Washington. There's been sequestration.
There's been threats of shutting down the government. And as Secretary of Defense, and all our folks here in the Department of Defense, this kind of budget turbulence and this kind of budget uncertainty makes it very difficult for us to do what we have to do, which is provide the best and total and adequate protection for the country. And spend the taxpayers'
money well.

It's got to stop. And the only way for it to stop is people have to come together, both parties, both Houses of Congress, Congress and the administration, behind something that's sensible and that people can agree to. And not have this upsy-downsy, herky-jerky budgeting.

BAIER: The President is meeting with you today. Your three predecessors told us in interviews that they had interesting dynamics with this White House. And it was kind of hands on. They felt a little restrained in their job here. And each of them had a different take on it.

(BEGIN VIDEO CLIP)

ROBERT GATES, FORMER U.S. SECRETARY OF DEFENSE: It was the operational micromanagement that drove me nuts.

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE: Too often people are kind of worried or second guessing where the President wants to go. And they try to then shade their views to basically please the President.

CHUCK HAGEL, FORMER U.S. SECRETARY OF DEFENSE: I don't think there's one veteran on his senior staff at the White House. I don't believe there's one business person. I don't believe there's one person who has ever run anything. I think he's got to fundamentally understand and I'm not sure he ever did, nor the people around him the tremendous responsibility the United States has.

(END VIDEO CLIP)

BAIER: Your assessment of working with this president and how this national security apparatus is set up in the Obama administration?

CARTER: I'd say two things. First of all, I never had any problem getting a hearing, nor does the chairman. We go over, we have private meetings with the President. Every time we've come to him and said here is a way we can accelerate the defeat of ISIL, he said go for it. Now he's demanding he wants it to be thought through, but we're good at that.

And the other thing I would say, and this would be true of any president late in their second term. President Bush, President Clinton -- after seven and a half years, President Obama knows a lot.

So if you're talking about some little town in Syria, most Americans have never heard of it, and I don't want them to have to. But he has. So by this time, he's got a lot of experience under his belt.

So those are the two things that stand out most. I always get a hearing, and by this time, he's pretty knowledgeable.

BAIER: Mr. Secretary, thanks for the time today.

CARTER: Thanks -- Bret. Good to have you back here.

(END VIDEOTAPE)

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