This is a rush transcript of "Special Report With Bret Baier" from March 17, 2010. This copy may not be in its final form and may be updated.

BRET BAIER, "SPECIAL REPORT": We have expanded panel tonight. Syndicated columnist Charles Krauthammer, Juan Williams, ne ws analyst for National Public Radio, A.B. Stoddard, associate editor of The Hill, and Steve Hayes, senior writer for The Weekly Standard.

Let's go around the horn here, thoughts on the interview. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, I thought he did a very clever rope a dope. The president, for him, this was his last campaign speech on health care. And he is reaching an audience he doesn't ordinarily reach.

You asked me yesterday why is he doing this? He is trying to reach the huge number of Democrats and independents who watch Fox that he wouldn't ordinarily reach, and he stuck to his message.

Now, he tried not to discuss process because it obviously isn't going to help him. It's a messy and, for his perspective, a destructive one, and he tried to stay on message. But he did not have a lot of answers on all of those process issues, and I think that's going to hurt him in the long run.

I think he might have helped himself marginally by repeating all the talking points about how it's going to help these groups of people, but overall, marginal, at best.

BAIER: I should point out that Charles is, like we all are, going to the radio TV dinner. That's why he is so dressed up tonight.

KRAUTHAMMER: Yes, but I'm going as a waiter.


BAIER: OK, didn't get that word.

A.B., your thoughts on the interview?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Well I'm going to have to disagree with Brit Hume. I have never seen Barack Obama on the defensive for such a sustained period at all. John McCain never managed to do this in their presidential debates.

I really thought that you had him on the defensive on process, Bret, on the process of voting, but also on cuts to Medicare, on the doctor fix, on several — on several accounts, on the special deals included in the legislation previous or current. And I thought that he really had a rough time.

He did stick to his talking points. He reverted to them automatically when on the defensive. I thought that he did well to be fair at the end when he just said, you know, come what may, I make the best decisions I can and I believe in them on principle, and they might not be popular.

But I thought for the majority of the interview, I don't think I have ever seen him so uncomfortable. And I think he was having a tough time talking about a bill that doesn't yet exist. It's not yet online. We don't know what the final numbers are or the details, and I think he was on the defensive certainly over what he called Washington process.

BAIER: Steve Hayes?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I thought this was actually President Obama at his worst. He mischaracterized his opponents' arguments, saying that they were in favor of the status quo if they voted against the bill.

At the same time he mentioned in his discussion with you that he spent seven hours with Republicans talking about ideas. And at the time he praised those Republican ideas. Why is he now claiming that people who oppose the bill on its merits have no ideas and favor the status quo? It's simply dishonest.

I also thought he ran into trouble several times when he tried — when you tried to get him to answer questions about what exactly is in the bill. It's astonishing to me that the president of the United States here three days before this bill could potentially become law couldn't tell you directly what was in it and what was not in it. I thought that was rather striking.

BAIER: Juan Williams is joining from us Fresno, California. Juan, it is tough. We are given a limited timeframe here to try to pin the president down. As you heard me talk with Brit, you know, I didn't want to interrupt him as much as I did, but I tried to get as many answers as I could.

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: No. I think that's exactly what I would have done. I think that's what you are supposed to do as a professional journalist. I don't care if you are working for Fox or anybody else. You're there to get answers from the man in charge, the president.

Now, I did think that, as A.B. said, he was on the defensive. I thought he was stammering at points. What was interesting to me in watching this as an exercise, was it was almost was like two trains crossing, two planets in different orbits. It was clear to me you were focused heavily on the process.

And I think from President Obama's eyes, what I saw was he viewed this as my minutia. And from his perspective he was doing what Teddy Roosevelt hadn't been able to do, make history by accomplishing something large, something that was transformative. Later you came back to that question, can he be a transformative president if he fails here?

And I think this is for him so critical. If he fails on this, I don't think there is anything else to come. He talked about oh he is making progress on education and energy. If he fails here, I think that his ability to get things through the Congress, to seem as if he is in charge and he's someone that other politicians have to follow, will be mortally damaged, Bret.

So I think that's the key here is that you are talking about Mr. President, do you believe that, you know, the Louisiana purchase is a good deal? Do you believe — is Connecticut in?

He doesn't want to talk about details. He is flying at a higher level, and he is saying what is important here is that we simply have a vote, that the Democrats, whoever votes for it or against it, will not be able to hide behind a veil and say it was because of the deem or the Slaughter rule that I voted for but I didn't really vote for it. Everybody will know you voted for it if you vote for that rule.

And I think that's the level he is at. Let's just have a vote. You are at a level of saying, where is the news, Mr. President, where is the beef in this sandwich? And he is just not playing. He is not taking a bite out of the sandwich.


BAIER: Charles, hold that thought, if you would. More with the panel on the specifics of health care reform and where we are after we take a timeout. Stay with us.



OBAMA: By the time the vote has taken place, not only I will know what's in it, you will know what's in it because it's going to be posted. And everybody is going to be able to evaluate it on the merits.

But here is the thing, Bret, I mean, the reason that I think this conversation ends up being a little frustrating is because the focus entirely is on Washington process, and, yes, I have said that is an ugly process. It was ugly when Republicans were in charge. It was ugly when Democrats were in charge.


BAIER: Back here at the White House after this interview with President Obama. He talked about what's in the bill, what's not in the bill. But trying to nail him down on the number of specifics was tough today.

We're back with our panel. Charles, one of the things I tried to talk about was the difference between $500 billion in savings in Medicare being spent on other things and $500 billion in savings on Medicare being spent on Medicare.

KRAUTHAMMER: Exactly. It wasn't all about process. It was about substance.

And I do believe that's the first time the president has been challenged on the claim he has made over and over again that this will — the half a trillion he is taking out of Medicare will both be used to reduce the cost of the health care entitlement and extend the life of Medicare.

He has said it over and over again. It was raised once by Ryan Paul, Ryan in the meeting with Republicans. But the president never answered it. So this is the first time, I do believe, he has ever answered it.

And it was really — it was quite clever the way he tried to, but extremely unconvincing. What he said is, well, some of the money will be spent on older folks by closing what's called the doughnut hole in Medicaid drug prescription benefits.

Well, yes. But that is still money spent in every year. That is, in fact, a new kind of entitlement in drug insurance for the elderly. It still is not money that you would put away, which is the only way that you could extend the life of Medicare.

So he tried to say I'm spending it on old folks, at least a part of it, but that doesn't answer the issue. If you spend it on the young or the uninsured or the old, it's spent. It's not saved, so it cannot extend the life of Medicare.

BAIER: A.B., I tried to pin him down on the deem and pass rule that the House is considering, that they pass the one reconciliation rule, which is one vote and then that deems the Senate health care bill into law.

He suggested that one vote will be just that, an up or down vote on health care reform, essentially saying that he is OK with the deem and pass option.

STODDARD: Well, remember that when he was a state senator, Barack Obama was fond of voting present. So he is a manipulator of process to be sure, legislative rules to be sure.

I think he is making the point, he is trying to dodge a question and the implications of hiding a vote. And he is trying to be removed from this by saying I'm not going to concern myself with House and Senate process right now.

But he is right, ultimately, Bret, I think as we have had this conversation before, I mean, look, you vote for that rule, you are voting for the Senate bill. You are not going to go home to your tough race in your swing district as a House Democrat and say I didn't really vote for the Senate bill. You are voting for this or you are not.

And if it ends up including $100 million for a hospital in Connecticut, that's what you voted for. And so I think he is trying to keep it arms' length. But he knows this looks bad. He knows that just days before this possibly becomes law it taints the entire thing. We're now debating instead of the substance of the bill, the process. And he knows it looks terrible.

BAIER: Steve, then Juan, short answers here. We may not get Congressional Budget Office numbers tonight. It may come tomorrow. But this may push the trip back, his overseas trip. Steve and Juan, quickly?

HAYES: It may push the trip back. I expect that it might if we don't get a CBO score soon.

It's interesting that he said to you that the bill would be posted for many days. Really if we are counting, we're talking about three or four. I don't consider that many days.

The other thing just quickly that I found so striking was his defense of what's been called the Louisiana Purchase, something that's sort of a new defense for the White House, you know. It didn't apply to Mississippi when it was first revealed and they only presented Mary Landrieu with the deal when it was known that she was wavering.

So I think he is retroactively defending something that is not defensible.

BAIER: Juan?

WILLIAMS: You know, Bret, when it comes to something like that, I think he is very clear in setting a standard for the viewers at Fox tonight in saying listen, if you have had a natural disaster, forthwith it will apply to everybody. I think that's a reasonable thing to say.

And I disagree with Charles. In terms of his response about what was going on there with a double elimination of money, you know, what was very clear is he is saying we can't solve all the problems of Medicare but we are going to try to do what we can at this moment.

KRAUTHAMMER: If you can't solve the extension of Medicare issue you shouldn't be going around saying over and over again that what you have done is going to be solving at least a part of it. It doesn't. It makes it worse.

WILLIAMS: It's going to solve it —

BAIER: We'll be back. We have got to wrap it up on this topic.

A full transcript of my interview with the president is now available at our homepage. We will also post the entire interview on the website. Go to Foxnews.com/Special Report. The panel returns in just a moment to talk about the Middle East and Iran. We will see you in three minutes.


BAIER: Welcome back to the North Lawn of the White House. We wrapped up our interview with a walk and talk chat with President Obama on Israel, the subject of Iran, and, believe it or not, Tiger Woods. We are back with the panel.

Charles, on his comments about Israel, your thoughts?

KRAUTHAMMER: Well, I thought it was interesting that when you asked him if he thought it is a crisis, he deliberately and quickly answered no and appeared to damp and to lower the temperature, because, remember, it's the president himself according to his own leaks out of his own White House who escalated this into a real crisis at the end of last week when he had the secretary of state call the prime minister of Israel and read him the riot act, really an angry and threatening phone call over the gaffe that had occurred earlier in the week.

So there is a lot of stuff, a lot of tension behind the scenes. I think the president understands as this is still unraveling and as the arguments are happening, at least in private, he wanted to give a public appearance of it all being cool and under control.

It's not, but it was a deliberate attempt to make sure he didn't accidentally or deliberately re-escalate it, at least in public.


STODDARD: I agree with Charles. I think you saw him trying to hit the reset button. This is a very tough time for him to be fighting with pro-Israel lawmakers, particularly in his party in the Congress, and he is taking heat from him.

And you saw him trying to change the tone. He actually used the word we both sides need to rebuild trust. As you see Secretary Clinton heading towards a trip overseas to meet with Middle East allies and of course Netanyahu coming here next week, you will see more of this trying to get back to talk about the alliance and the friendship and the relationship and trying to make this go away.

BAIER: Steve, on the issue of Iran, I asked him if Iran acquires a nuclear weapon before the end of his term, would his foreign policy be a failure.

HAYES: Yes, and he said no and said it was one of his administration's highest foreign policy national security priorities. I just think there is very little today support the claim that he makes there.

The president has spent most of the first year doing everything he could, bending over backwards to avoid offending the Iranian regime in any possible way, even at times when they were confronting him rather directly both with their rhetoric and their actions.

In the time since, we have seen him, I think, fail to support the green movement, adequately. He has done very little to destabilize the regime, exactly the kinds of things that you would expect to see from the president if it were, in fact, the case that preventing Iran from getting a nuclear weapon was one of his highest priorities.

You've even had member of his administration, the secretary of state included, raise the prospect of a defense umbrella, using the language of containment to talk about this threat, which again, suggests that it really isn't one of his highest priorities.

BAIER: Juan, we asked a final question from emailer about Tiger Woods returning for the Masters. What did you think of his answer to that?

WILLIAMS: I was surprised he was pretty strong in saying Woods had betrayed, that's his word, his family. You know, I was struck by the contrast in emails. He says he gets his emails and letters at the White House, you get your emails here at Fox, and it looks like you are getting letters from a different crowd. I will say that.

You know, to me on the Israeli point, to go back to what was being discussed earlier, I think the president was exactly right to call Israel on the whole idea of expanding the settlements, and I think U.S. governments, Republicans and Democrats have done the same, that Israel is not going to be given a free pass, especially whether you have American men and women on the ground in Iraq, in Afghanistan, trying to create some kind of peaceful situation to fight a war on terror.

And sometimes the terrorist use the tensions between Israel and the Palestinians as a justification for attacking us. The United States has something of a strong stake here, and to just imagine that we are going to give a free pass to Israel to do whatever they want, any kind of incitement, would be wrong here.

So the president says let's calm it down. It's not that we are not totally committed to protecting Israel, but clearly something happened here. And I think the president was right to say it, and I think most Americans would say, you know what, we have our interest and we can say exactly how we feel about the settlement issue without having to fear some repercussions because Israel is angry at us.

BAIER: All right, 10 seconds, Charles — quick rebuttal?

KRAUTHAMMER: I disagree. We have never had a president who demanded that there be no Jewish construction in Jerusalem. That's what's new. That's why the Israelis were surprised. Netanyahu and Obama had agreed in the past no expansion outside of Jerusalem. And that's why all of this was extremely odd and unexpected.

BAIER: That's it for the panel. The panel, as always, thank you.

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