This is a rush transcript from "Special Report," October 4, 2010. This copy may not be in its final form and may be updated.


OBAMA: The predictions among pundits is, there’s going to be a bloodletting for Democrats. We can't let tha t happen. We cannot sit this one out.  We can't let this country fall backwards because the rest of us didn't care enough to fight.

STUART ROTHENBERG, POLITICAL ANALYST: What we see the Democrats doing now, that is trying to scare their own voters to turn out in the fall, is what we saw Republicans trying to do in 2006 and 2008, trying to scare up their voters to get to the polls when Republicans were disillusioned.


SHANNON BREAM, FOX NEWS REPORTER: Let's bring in our panel, Bill Kristol, editor of The Weekly Standard, Juan Williams, news analyst for National Public Radio, and also syndicated columnist Charles Krauthammer. Welcome gentlemen.  Glad to have all of you here tonight.

Alright, before we get started with our discussion, we want to look at the brand new Gallup poll numbers that we saw come out. During the show, Brit had them at the top of the show. These are whittling down to not just registered voters; we are now talking about the likely voters. These are the head to head polls.

If you have a high turnout, Democrats would get 40 percent of the vote, the GOP would take 53 percent, so 13 percent advantage for them there. Lower turnout, it looks like the Democrats would take 38 percent and 56 percent for GOP, so an even wider margin there. Charles, what’s your reaction to the numbers?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It shows what happens if you scream for enthusiasm, because if you do the same question just for anybody who’s registered you get only three percent gap. This is what everybody is talking about, especially in a mid-term election; the turnout will be a lot lower. But even if it's high there is a huge gap among those likely to show up at the polls.

And that I think is the really important number. The Democrats know that. That's why we saw the president with the sleeves rolled up, and he's gone from hope and change to fear and loathing, which is essentially what is going to be the theme of the Democrats. If you don't elect us, reelect us, the troglodytes will come into Washington and rule the country.  Everybody does that. If you are on the losing side of an election, you try to scare the base. I’m not sure how effective it will be. If you know where the president was actually speaking; he was at the University of Wisconsin. If he has to go to the University of Wisconsin to get a friendly audience, you know he is in trouble. Where is he going to go next? Berkeley? Berlin?

BREAM: He might. You never know. We'll keep track if he does.

Alright, Juan, we all know the gap often closes in the month leading up to the election. Dan Pfeiffer, White House communications director said this weekend that the enthusiasm gap is closing. Is that true?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: If you look at the numbers there seems to be some tightening of the races. There’s going to be some arguments about are you looking at registered voters versus likely voters. Who are the polls polling? And are those people going to show up on Election Day or night?

From a policy point of view, I think what you are looking at is Democrats settling on a strategy. They do not want a national election.  They don't want it to be a referendum on Barack Obama and his presidency.  They don't want to talk about healthcare reform.  What they do want to talk about localized issue and compare their candidate to the Republican candidate. In many cases they want to say the Republican candidate is Tea Party extremist whose intent on doing away with the education department payments to schools, privatize Social Security, or saying that unemployment payments are unconstitutional.  If they are able to make that case, to compare themselves favorably to the opponents, then you will see a lot of the races that you would think are out of hand tightening. This weekend a Republican strategist was quoted in the New York Times as saying there are 20 races, which are half the races we thought we had in hand are really now secure. If that is the case, it means Nancy Pelosi and the Democrats might retain control of the House of Representatives.

BREAM: Bill, what do you make of strategy of painting the GOP or the Tea Party as the extreme fringe and not the candidate you want when you match them up against the Democrat? Any chance that backfires, because we continue to see in the polling more and more Americans find that they are in some way self-identifying with the Tea Party.

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: I mean if you have been  in power for two years, had the presidency, had the Congress it's a little desperate to campaign against the threat of these Tea Party activists, god forbid they should actually have some influence on public policy in Washington. It’s the Democrats have been in charge. That's what this election is a referendum on.

But you know, in addition to the Gallup poll, there is an interesting fact, Curtis Gans, the director of the Center for the Study of American Electorate, a non- partisan center, put out a study last month, and he adds up all the votes in all the primaries. The Republican vote exceeded the Democratic vote by about four million, total.  The final set of primaries happened September 14, and after his study, the number there are probably narrow to 3.5 million. The last time that more Republicans voted, this all across the nation, all the primaries in 2010, the last time more Republicans voted than Democrats in a year's worth of primaries was 1930.  I'm not saying -- it would be amazing. It would be an unbelievable irony of history that the Democratic era which began in 1932 would end in 2010 right after President Obama's huge victory in 2008 which was supposed to herald a new Democratic era and “new” New Deal. I don't want to go that far.  But I think when you see, that's a real number. That’s people voting, that’s not answering a poll. That number has got to reflect something real, and I think it shows that the Republicans are in awfully good shape this year.

BREAM: And Juan they certainly feel that way. We know the executive director of the national Republican senatorial committee has put out a note saying there are six races they think are locked up that were in contention.

But he points to other ones like Russ Feingold's seat in Wisconsin and others that are still very tight. What do Democrats have to do to win in those cases?

WILLIAMS: Again, I think that the emphasis for the Democrats has to be, one, getting out their vote. And the one x factor in all that we've been talking about, what Bill says is exactly right. There have been more Republicans voting in the primaries.

But all the energy has come from the right so far. The Tea Parties have been driving American politics. In this moment now, the question is now can the Democrats reignite what remains of the people who turned out in 2008, those folks who were so excited about Barack Obama? Can they come back?  So to get them excited you have got to say to them there is something at stake. Is that fear? I don't know. You can use fear. You can try to encourage people. Don't turn the clock back and blame President Bush. You know the deal.

BREAM: So we have predictions ranging anywhere from 20 or 30 seats up to 80 seats by some folks. Charles, where do you think is the legitimate number along that spectrum? In the House?

KRAUTHAMMER: In the House I think there's about a 60 percent chance, maybe 70 percent that the Republicans will win the House. I think there is a little bit of a rebound. If you look at what was happening in August and September and the numbers and these elections, which are not general elections, yes, you get a high Republican turnout.

In fact, the percentage of the electorate that is the highest Republican turnout since 1970 and the lowest Democratic ever. But I think the lowest Democratic is going to change. If you are a lefty and you’re not that happy with everything that Obama has delivered, but when Election Day approaches, I think you might get off your duff and vote against Republicans. I think the fear factor will work and there will be a bump.  But I do believe in the Senate, where you have these really interesting races, West Virginia, which should not be in play, actually has the Republican ahead of a very popular Democratic ex-governor by two percent on average, which is really shocking.  I think you will get in the Senate pretty close to a Republican majority. I think they will get eight or nine, and that will be really surprising.

BREAM: All right, and we'll be watching on November 2.  Gentlemen, thank you very much.

Up next, the European terror alert. Logon to the homepage at FOXnews.com/SpecialReport and vote in our online poll. Tell us whether the alert would keep you or your family from traveling to Europe. We'll be right back. 



ERIC HOLDER, ATTORNEY GENERAL: We'll work in conjunction with our partners, our allies in gathering information from a variety of sources.  We use human sources, we use other means. And it is an accumulation of all of that that led us to the place where we are today.

WALID PHARES, TERRORISM ANALYST: The problem has always been at what level we should intervene. We are only intervening at the very last level. Take the case of Nigerian Christmas day bomber. He was beaming his information, his ideology, in 2005, five years before.


BREAM: All right, let's bring our panel back in to talk about the terror alert. There you've got Attorney General Eric Holder saying we looked at a lot of sources and we needed to put out this alert. And then Dr. Phares, who is an expert on terrorism, said often we waited too long, in situations like with the Christmas day attempted bomber.

Bill, what do you make of the alert? Is it too much, too little?  Some people say it's just so vague you can't even really do anything with it.

KRISTOL: You can't do much as an individual with it. But I won't second guess the government. If they think the alert will help, that's the right thing to do.

And sometimes you don't get the plot early. It's better to get it late than not at all. That's why we have predator strikes in Pakistan and eight German-Muslims were killed in North Waziristan today. And I think they German Muslims who were recruited at the same mosque that the 9/11 pilots were recruited at.

Isn't that amazing, 10 years later, nine years later, that same mosque that changed its name from the Al-Quds  Mosque in Hamburg, they were recruiting, the Wahabists and the terrorists are recruiting Germans Muslims at the mosque, and then we killed a bunch of them in north Waziristan.

So it's better if you can get -- maybe someone to look at the German laws and see if we shouldn't be closing down these mosques that are being used for terror recruiting. And maybe we need to look at that too. That would be an early stage to get people at. But if they have been recruited and training, it's not a bad idea to get rid of them then, too.

BREAM: Juan, what do you think it says about how well we're doing coordinating with our European counterparts on these particular threats?

WILLIAMS: I think this is a little bit more complex. I think it's what we've got involved here are two levels. One is the need to fight terrorists. I think the increased use of the drones in Pakistan has therefore prompted the second level, which you get an outbreak of these small cells.

I don't think it's the hierarchical base structure for terrorist actions that resulted, for example, in 9/11. I think this is more like vagrant cells in Somalia and Yemen, and now we see some are still coming out in the Pakistan area.

In this case, as Bill just told you, these are people that came from Germany. So it's all over. I think that's why there is so much vagary about exactly who it is that would be leading any attack on these European cities.

But the key here I think in the overall is do we feel good and comfortable about the drone attacks? Some people say it lacks a conscience to these send unarmed vehicles to kill people. I think that it's a necessary step and to my mind less involved than sending 100,000 troops to Afghanistan.

BREAM: And certainly it sounds like a lot of information and reports are that it is coming by one individual, Ahmed Siddiqui, who was picked up; he was a German of Afghan background and picked up in Afghanistan on the battlefield back in July. Apparently he has fed a lot of information. What does that say to you, Charles?

KRAUTHAMMER: It tells us there is a demographic shift in the nature of jihadism. It's very interesting that, in fact, Siddiqui and the other Germans had been radicalized in a mosque of Mohammed Atta. But remember, Atta, was a Saudi. He led the 9/11 attacks. That was outside attack into the west, into the United States. We have now hardened ourselves in our security measures against that.

Not infallibly. We had the Christmas day attack, which was a breach, a lapse if that. However, we're a lot stronger. The real change now is that the jihadists are using westerners from the inside to launch these attacks.

As an example, these Germans were Afghans who were naturalized Germans, who were radicalized in the mosque. I think Siddiqui was naturalized in 2001, ironically enough, and he was the one captured in Afghanistan and was interrogated and gave us a lot of this information.

This is now a shift. We saw it in the Fort Hood shooter; we saw it in the naturalized Pakistani-American who tried the attack at Times Square. And that's why I think it's going to be a much harder era that we're approaching now, because if you going to stop internal jihadists, then you have questions of civil liberties and others, which are a lot harder to deal with without discriminating.

That's why, of course, the jihadists are exploiting westerners, naturalized westerners, as a way to attack us.

BREAM: Bill, I want to go back to something that Juan mentioned about the drones in the attacks in Pakistan. There has been a lot of pushback from the Pakistan people about that cross border action that we've taken.

But I think about the president writing a letter back to President Zardari back in November saying if you don't make clear your relationship with the militants and what exactly you expect to happen in Pakistan, we may be forced to act. Is that what we are seeing?

KRISTOL: I think so. And I also think Charles is absolutely right that there is much more recruiting in western cities, and that's a little hard to deal with.

What strikes me is that it's very helpful for them still to have a safe harbor and have they can go train. If you keep them on the run and they are to communicate from one basement in Hamburg to another basement here, maybe you get a single guy as we had in some of these cases, a Major Hasan gets radicalized.

To really train a group of people to do a coordinated major assault, it seems from what one understands about the terrorists, they seem to want to get together someplace and train. And that's why I think not allowing terror havens anywhere is awfully important.

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