News of New Terror Threat

This is a rush transcript from "Special Report, “October 14, 2010, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: Recent advancement in intelligence show a trend toward, as you mentioned, Senator Collins, smaller, faster developing plot, rather than larger, longer term plots like 9/11. These plots may include use of IEDs or teams who use small arms and explosives, both forms of attack that have been used abroad.  The results of these changing tactics are fewer opportunities to detect and disrupt plots.

(END VIDEO CLIP)

BAIER: Homeland Security Secretary testifying on Capitol Hill last month about terror threats. Now, tonight, FOX News has learned U.S. intelligence agencies are very concerned about the possibility that the Pakistani Taliban has sent another operative into the U.S. and may already be in the U.S. to try to carry out an attack on a different location. They don't have a name or where the attacker would strike, but they are said to be very concerned.  You will remember Pakistani naturalized citizen Faisal Shahzad was arrested. He was sentenced actually last week to life in prison in New York after he tried to set off a car bomb in Times Square in May. The intelligence suggests that the same group that sent Shahzad in sent someone else in who is already inside the U.S.

What about this? Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Juan Williams, news analyst for National Public Radio, and syndicated columnist Charles Krauthammer. We have a lot of reporting on this. Jennifer Griffin, Mike Levine, our producer at Justice, Steve, they say this is a different environment.  They're getting a different feel from officials and that it is multiple officials telling them about the real threat.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Yes, terrific reporting by both of those folks. It's consistent with everything I've been hearing from people I talk to in the intelligence community, at least that the chatter level is high, significantly higher than it has been over the past six months. That's troubling.

Also, just if you look around in D.C., driving in and out of town, there are signs up telling people to report suspicious activity that haven't been up in previous weeks, so you wonder if there's some connection there.

But look, the administration has been late on this, I think. They were late on the Pakistani Taliban. Remember, the Pakistan Taliban, which was behind the New York Times Square attack, or Faisal Shahzad as you said, initially those reports were dismissed. This was crazy. They weren't seeking to attack anywhere in the United States or seeking to attack outside Pakistan was the initial response. Janet Napolitano originally called that a one-off attack.

And at the time, people were arguing no, this is a group determined to attack the United States. That's exactly what they have done. I think at this point is what we need is for the government to put out more information, as much information as possible, and to tell people as maybe they are doing in connection with this, saying report suspicious activity.  Remind people to do that because in the Times Square attack, it was vigilant vendor who tipped off authorities.

BAIER: Juan, we're told the intelligence chatter is as high as it has been according to three intelligence officials. We have seen before Al Qaeda wish to strike around big events in the U.S., U.S. elections. The threat level has been raised in previous years. How does this effect everything and your assessment of this information?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: Well, I don't have the expertise that Jennifer or people at Justice, even Steve has. But I will say what I pick up from the wires and what people are talking about is I'm calling people to catch up on the story is one, they don't think it's imminent.

The second thing to say if for the streams of intelligence coming in, most of them are directed to potential targets in Europe, not the United States. The real difference here is now some of the streams seem to indicate someone has come into the United States.

And, again, what we are talking about here is not the kind of hierarchical intelligence we once saw from the like of Al Qaeda. What we see now from the new Pakistani based group is single agents sent out to carry out the kind of thing that would be, the kind of thing we saw from Shahzad in Times Square or someone who would go to a mall or take out a restaurant with prominent people here in Washington.

BAIER: Charles, there will be people out there speculating about how this comes about and how it affects elections, whether it's an effort to lower turnout with exciting Republicans to talk about a terrorist threat.  Our folks say the intelligence professionals think this is real.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I believe them now and I believed them in the Bush years when you had near an election people would accuse the administration of cheating up the threat to help itself in elections. Those are always truly cynical attacks and disgraceful attacks.

I think when you hear these threats; you take them as they are, real questions in the minds of people who are tracking this.

I think what is interesting here is how Al Qaeda has changed and its affiliates changed over the years. There was always a question in the middle of the last decade, why were there no attacks after 9/11? They said there would be an attack in six months or a year, and there wasn't any.

I think in part it was the pride of Al Qaeda. All of their attacks were spectacular, increasing in scope -- Tanzania and Kenya first, the attack on the Cole and 9/11. And it would have been a comedown to just have an attack on a restaurant.

I think Al Qaeda has reconsidered. Our defenses are hard and alert is up higher. They are prepared to do these smaller attacks, but it will cause chaos, mayhem. They are also looking at using either Americans or naturalized Americans or people who blend in rather than outside attackers as in 9/11. It can have a remarkable effect on the country, and I think that really is what is going on now.

BAIER: We'll stay on the story and bring you the latest as we get it.

Coming up next, we'll talk about President Obama 2.0 and the youth movement. Log on to our homepage at FoxNews.com/specialreport for a web exclusive report from Shannon Bream on whether President Obama is still cool.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I'm pretty confident that if we work together over the next several years, that the political temperature will go down, the political rhetoric will go down because we'll actually be making progress on a lot of these issues.

But we've got to stop the name-calling and we've got to stop looking at the next election. We have to be focused on figuring out what we're doing for the next generation.

(END VIDEO CLIP)

BAIER: President Obama today at a town hall on to MTV talking to young voters. Also here in Washington, still some reaction to that New York Times magazine piece where he talked about what he did wrong over the past two years in part, quote, "He let himself look too much like the same old tax- and-spend liberal Democrat and realized too late there was no such thing as a shovel-ready project when it comes to public works. Perhaps he should not have proposed tax breaks as part of his stimulus and instead let the Republicans insist on tax cuts so it could be seen as a bipartisan compromise."

The White House press secretary was asked about all of this today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you think of the timing of the self-criticism hurts the Democrats going into this election?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: No offense, I don't know how many people will read the "New York Times" magazine.

(END VIDEO CLIP)

(LAUGHTER)

BAIER: OK. So what about this? Back with the panel. Not a lot of people read the New York Times magazine, Juan.

WILLIAMS: I don't think that's true. In fact it's very influential, and the word gets out as we witness by the fact we are talking about it the day before the magazine is published on Sunday.

I do think this signals is acceptance by the White House that big change is coming and potentially they'll be working with the Republican majority in the House of Representatives. What is curious is the president saying in part it might be communication issues, but then harkening back in the piece to Bill Clinton, and saying Bill Clinton was an effective communicator and his numbers were down at a similar point. So he doesn't think its all communication but he says to some extent he could have done a better job.

BAIER: But talking about Bill Clinton and studying the 1994 elections does not exude confidence to Democrats running in this election in 19 days.

HAYES: No. I think the timing of it is probably not helpful as much as Robert Gibbs didn't want to admit that. What I found most striking about this was he said he wished he included Republicans more in building the stimulus package. But the reason he wished he included Republicans more was because then he wouldn't own it politically.

It has everything to do with the politics of it and nothing to do with the substance of it. So when he says I wish I hadn't looked like the old school tax and spend Democrat, the problem is his policies make him look like the old school tax and spend Democrat.

BAIER: Charles, today, he spoke a number of times about moving on, not name-calling, getting together, working together. That's not exactly what he did on the stump last week.

KRAUTHAMMER: No, he calls FOX News destructive and he accuses the Chamber of Commerce of illegally using foreign funds. It's demonize and scare. It's no longer hope and change. Then he gets nicey nice in front of a young audience.

What is interesting is what Steve said he hoped he had done stimulus different so that there would be a different political ownership, which is striking because in the same story he talks about one of the thing he is blames is lack of success and in certain areas how virtuous he was and thinking about the policies, not the politics.

He pretends it's a failing as a way to flatter himself. But it's so untrue. This is a man who shaped this thing entirely on political grounds, accepting every wish list from every senior member of Congress. Cap and trade was so politically corrupt that there wasn't even any trade. The permits had been given away by the arbitrary political patronage.

And then on healthcare, which is a pastiche of giveaways, the one element left out that would have really had an impact on health care cost, tort reform, isn't in there. Howard Dean told us why, entirely because the trial lawyers wouldn't have liked it. All politics, and yet he pretends all he cares about is the future of his country.

BAIER: Speaking of healthcare, Republicans of course around the country are calling for repealing and replacing the current at health care law.

There is also a legal challenge, attorneys general filing lawsuit against it, challenging the constitutionality. Today a judge in Florida today moved the case forward and cleared the first hurdle. They will now have oral arguments.

The Justice Department just put out a statement saying "While we're disappointed they did not dismiss the entire case, we welcome the judge's decision to reject most of the claims. The judge saved for another day the decision on the merits of two claims, and we remain confident that the law ultimately will be upheld."

It looks like, Charles, this is moving forward possibly to the U.S. Supreme Court, but this is a big step.

KRAUTHAMMER: Absolutely it's a big step because the judge in the case said I'm not deciding what the administration has done in this law is extra-constitutional, but I'm saying on the individual mandate and the expansion of Medicaid, the two elements he upheld, the attorneys general made a plausible case that it is extra-constitutional.

That is a strong statement and I think it will carry it all the way until it reaches the Supreme Court without any doubt.

BAIER: Does this play differently politically? Healthcare is a big issue, Juan, already, across the country, with 65 percent in polls, many of them saying it should be repealed. Does this ruling sup that up?

WILLIAMS: No. I think everybody anticipated it will end up in the Supreme Court. Last week there was a Michigan ruling upholding the right they mandate everyone has some kind of health insurance under the healthcare insurance reform plan.

I think what you have is a situation where the political pressures, the legal pressures are going to put it in front of the Supreme Court and we'll see what happens. If you were a betting man, people in the insurance business right now, the pharmaceuticals, thing this law will be upheld.

BAIER: Steve, last word.

HAYES: I think it does help in the court of public opinion. This is one of the ways Republicans want to challenge the law. And the more that it's brought up legislatively and in the courts, the more likely is it to shine light about the process and reform that people don't like.

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