This is a rush transcript from "Special Report With Bret Baier," August 25, 2010. This copy may not be in its final form and may be updated.


GEN. JAMES CONWAY, COMMANDANT OF THE MARINE CORPS: We know the president was talking to several audiences at the same time when he made his comments on July, 2011. In some ways we think right now it's probably giving our enemy sustenance. We think that he may be saying to himself, in fact we have intercepted communications that say, hey, we only have to hold out for so long.

GEN. DAVID PETRAEUS, U.S./NATO AFGHANISTAN COMMANDER: The message that July, 2011 was meant to convey was not one that we are going to head for the exits and look for light switch to turn it out as we head out the door. It was not about an exodus. It was really about a message of urgency.


BRET BAIER, HOST: Two generals, one a Marine Corps commandant and one the top man on the ground in Afghanistan, describing and explaining the July, 2011 date brought up by President Obama about Afghanistan and when troops would start moving out or begin the process to do that.

What about this back-and-forth and other elements of General Petraeus' interview with Jennifer Griffin?

Let's bring in our panel, Mark Tapscott, the editorial page editor of The Washington Examiner. We welcome Mark. Erin Billings, deputy editor of Roll Call, and syndicated columnist Charles Krauthammer.

Charles, first, let's talk about General Conway's comments. He is a plain-spoken guy, he says it like it is. I know General Conway, and he was asked a question about July, 2011, and gave that answer.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think it's absolutely astonishing. This is a serving soldier, a leader of the Marine Corps, a commandant, who is basically saying that his commander-in-chief has given sustenance, which is a polite way of saying aiding and abetting the enemy.

Now a lot of us have said this. We said it a dozen times on the set because it's pretty obvious, but it's different if it comes from someone in the chain of command. Now, it's true that Conway is leaving at the end of the year, but nonetheless he's active duty now. That's quite remarkable.

And the more interesting element of this is not just that it's his opinion but he cites evidence from intercepted communications where they tell each other we have to wait it out. And you notice he doesn't cite contrary communication which a guy says oh wow, I watched the secretary of Defense on ABC News and he walked it back. That level of analysis doesn't exist in Afghanistan.

What's happening is the president's statement is truly making it difficult to fight the war.

I think what is interesting is how Petraeus attempts to finesse think, he pretends, he says, well, it means in July, 2011, if there are areas entirely under our control and it's safe, we will transfer over to Afghan authorities, which is plausible. There might be the main hockey rink in the capital to be turned over if it's in a secure area.

But I think all of them are really regretting the announcement of the withdrawal and telling the president openly it's a mistake, and he needs himself to walk it back.

BAIER: Erin, to be fair to General Conway, he went out and talked about how his marines will be on the ground after 2011 and turned it around, saying it could be advantage that some of the Taliban will take it on the chin from the Marines who are going after them, even though perhaps the Taliban thinks the U.S. is all leaving.

That said, however you cut that comment, the administration comes off on the short end of the stick.

ERIN BILLINGS, DEPUTY EDITOR, ROLL CALL: And I'm sure the administration is not happy he made comments. If he were not leaving at the end of the year, I wonder what other conversation might go on behind the scenes.

Having said that, I don't think they have any illusions we're getting out of there July, 2011 hard and fast. And Petraeus has said that, even the president has said, look, this is a starting point. As Petraeus said earlier in the interview with Miss Griffin that this is a starting point and a time when we're doing some limited withdrawals. But I don't think anyone is under illusion we are getting out in July 2011 regardless of politics.

BAIER: Mark, thoughts?

MARK TOPSCOTT, WASHINGTON EXAMINER: If you go back to Obama's speech at West Point he did not say definitively hard and fast we will be out in the beginning in July. He said a process will begin. Administration people since then have talked about it and political people have accepted it as a hard and fast rule.

BAIER: Vice President Biden among them --

TOPSCOTT: Absolutely.

BAIER: -- quoted in a book saying bet on it.

TOPSCOTT: But I have to wonder. I think the most interesting thing about his comment is he must have felt some sense of freedom or opportunity to say that.

BAIER: General Conway?

TOPSCOTT: Yes, General Conway.

KRAUTHAMMER: When you announce process, that's a very subtle notion, and war isn't a subtle operation. You've got Afghans on the ground whose lives are at stake --

TOPSCOTT: Absolutely.

KRAUTHAMMER: -- if they choose the wrong side. And they hear a president say our forces out of Afghanistan in July of 2011 to begin the transfer. Well that sounds like Americans are leaving.

BAIER: Mark, another thing that struck me was the talk of reconciliation with the Taliban. General Petraeus went in fair detail about how the Afghans are reaching out. What about that? Is that how U.S. officials think perhaps that this is an endgame in Afghanistan?

TOPSCOTT: I was struck that he very quickly acknowledged that yes, we have been at least facilitating some.

The whole discussion here reminds me frankly, I'm old enough to remember the neutralist government that was established supposedly in Laos in 1962. That didn't work out very well. It was a reconciliation government.

BAIER: General Petraeus, Erin, mentioned sitting down in Iraq with folks who had U.S. blood on their hands, and he mentioned Northern Ireland. He got into fair detail about how this is going forward.

BILLINGS: That's right. You mentioned the Taliban. They do have to get them to the table. And that I think underscores how long the process might take. You know, we don't know how this is going to play out. Karzai obviously has been somewhat of an unpredictable player in all of this. So, yes.

BAIER: Last word, Charles. There are critics out there saying are there moderate Taliban?

KRAUTHAMMER: Well, it isn't as if there were moderates in Iraq. It was Iraqis-Sunnis opposed to us, opposed the new regime after the fall of Saddam, who were so incensed by what Al Qaeda had done they turned against it. We don't have -- and then it sought our assistance and became our ally. It wasn't if it had a change of heart suddenly overnight.

Here, I don't see a lot of evidence of elements of the insurgents against us, split against other elements and thus looking for an alliance. So I think the situation is different. We haven't heard of a lot of elements in the enemy in Afghanistan who have now gone over and become our allies.

BAIER: Perhaps we'll start to hear that.



SENATE CANDIDATE LISA MURKOWSKI, R-ALA.: The president's agenda has a budget-busting attack on Alaska. Protecting our future means taking control of government spending. I opposed wasteful programs like President Obama's trillion dollar stimulus that failed to stimulate when it came to creating jobs. We can't afford this debt.

SENATE CANDIDATE JOE MILLER, R-ALA.: You also have to realize that the polls in Alaska are notoriously inaccurate. In fact, in Governor Palin's race in 2006, they were off by almost 40 points. I can tell you that it's red hot here on the ground. We're closing the gap rapidly.


BAIER: Oh, yes, he closed the gap. In fact, Joe Miller is leading in the Alaska Senate primary race for the GOP. Here is the latest, the very latest, just got new numbers in -- 50.8 percent to 49.2 percent against incumbent Republican Senator Lisa Murkowski. The spread right now 1,492 votes. They still have to count about 15,000 absentee ballots on Tuesday. And this one is too close to call. This is the shocker. We're back with the panel. Erin, there just wasn't any sign this was coming. You heard Joe Miller in that interview saying the polls are wrong. I feel it on the ground. He was right.

BILLINGS: Yes. All of us are were pretty stunned. No one was even focusing on it. I didn't even see Joe Miller's face until today. I don't think anyone, particularly in Washington had this guy on their radar. And Clearly Lisa Murkowski didn't have him on the radar. She had the money, she certainly had the establishment to help her if she wanted to tap into it. I don't think she was worried. She didn't want to go negative.

And now we're hearing folks are saying maybe she didn't take this seriously enough like John McCain who took his race very seriously, and he trounced J.D. Hayworth in the Arizona Republican Senate primary race.

BAIER: She could have spent more money on this race in the primary.

Charles, Sarah Palin endorsed Joe Miller. So are you going to eat a little crow tonight --

KRAUTHAMMER: Yes. This is a public confession. Once again I've underestimated her. This really was a stunner. She had a clean sweep. Everybody she endorsed yesterday won.

BAIER: It's not over yet. He hasn't won yet.

KRAUTHAMMER: Even if he doesn't, it's so close it's a moral victory, if you like. So on the one hand she helped John McCain. He would have won on his own, but she helped him as a sort of generous repayment of a favor.

And in Alaska her endorsement of Miller was a fairly ungenerous continuation of the blood feud that she has had with the Murkowskis. She defeated Lisa's Murkowski's father and ended his career essentially. I think that was a little more visceral.

But she had a good night. And I think it sort of undoes the image she has had up until last night where she had a losing streak. She is a force in the party. There's no way to deny it. Even if it is a sort of a virtual tie in Alaska, it speaks a lot about her influence.

BAIER: Mark, Joe Miller, we haven't talked a lot about him. There hasn't even been a lot of video of him campaigning. But he's a West Point graduate with a Yale law degree, a former federal district judge, a veteran of the first Gulf War with a bronze star. This guy has quite a resume.

TOPSCOTT: He has got some substance behind him. I think there are two points here. Number one, Jonah Goldberg wrote an excellent column a couple of weeks ago in which he said all the rules have changed. I think we have to now consider the possibility that maybe Sarah Palin understands that fact better than the experts do.

Number two, we don't know where the absentee ballots come from or when they were cast. They may have been cast to some degree before things got hot. And Lisa Murkowski may still win.

BAIER: It's pretty amazing when you look at the big picture. Are there any broad themes, Erin, that you are seeing? Or is it just such a different election cycle?

BILLINGS: Every time we talk about a primary, every time we come and the panel discusses this, the narrative seems to change. Is it a Tea Party year? Is it not? Is it Sarah Palin's year? Is it not? Is it an anti-incumbent year? Is it not?

I'm not sure there is one common thread we can draw. We may have to wait until November 3rd, look at the entire picture and then see what themes we can really hang onto.

BAIER: Charles, it does seem like conservative candidates overall are doing well, or more conservative candidates. John McCain obviously in that race was not the most conservative, but he did try to shore up his conservative credentials.

KRAUTHAMMER: McCain ran right and he is a giant in the state. So that's I think that's an exceptional race.

I think the Florida race, the McCollum-Scott race is the interesting one, where McCollum, who was the veteran politician lost. I think in the absence of an ideological difference between the candidates, running against an incumbent can be decisive. And if you have a lot of money, the other guy will say you are buying an election, but the underlying assumption also is you are incorruptible because you are rich. I think that is also a factor.

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