This is a rush transcript from "Special Report," July 25, 2011. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: Sure, the idea of doing things on my own is very tempting.


I promise you, not just -- not just on immigration reform.


But that's not how -- that's not how our system works. That's not how our democracy functions. That's not how our constitution is written.


BRET BAIER, ANCHOR: Presi dent Obama today, a speech at La Raza. And he was talking about compromise and the debt ceiling situation and other issues. Before the break we asked you, will a debt ceiling agreement be reached before August 2nd? 40 percent said yes, 60 percent of you said no in this unscientific poll.

There is another poll of interest, and that is the Gallup poll, this is the weekly Gallup poll -- 43 percent approval for the president. This ties the lowest week since he took office.

We're back with the panel. Steve, the politics of this for the president as he gets ready for a primetime address tonight.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, the daily Gallup tracking poll is actually even one point worse for the president. It has 42/49. And I think one of the things you're hearing from the White House, at this point, is that Republicans are doing this for political gain. They want to have another vote. They want to have this debate again during the election year.

But at the same time you're hearing the White House say that they're winning the politics of this, that actually all Republicans really want Republicans in the grassroots out in the country, want their members to vote for tax increases, and that Republicans are losing this political battle in Washington.

I think those numbers suggest that whatever the merits of the, you know, the president's arguments, or whatever the White House thinks the politics are on the specifics of the debt hike argument, he's not winning the overall argument. The number has come down. He was at 46/45 on July 1st in the Gallup daily tracking poll. He's at 42/49 right now.

And if there were any question that this were political, it was answered when Tim Geithner yesterday on "Fox News Sunday" said that he wanted to take the debt ceiling increase through the election. The treasury secretary said specifically through the election.

BAIER: The president has said something similar, Mara, where he wants to --

MARA LIASSON, NATIONAL PUBLIC RADIO: Yes. He thinks it would be number one, he said it would be too hard to do it again, and also the rating agencies don't want the uncertainty of not knowing if the whole debt ceiling is going to be increased.

BAIER: Although, I'll say that the ratings agencies could very well lower the rating even if you get this deal.

LIASSON: Anyway, I actually think that's going to happen. No matter what comes out of Congress, I think we're facing a downgrade on government debt.

But I think that these poll numbers show how -- what a toll this whole dysfunctional debate over the deficit has taken on the president. He needed a big deal more than anyone else, and those numbers show why. He does best when he's presiding over something bipartisan, bridging differences, kind of reinforcing his brand. And although some Republicans might be blamed -- some of the polls show that they'd be blamed for a default more than the president, I think in the end he will get punished if there's not a deal, and if there is a default. I think he needed a big deal, number one, for the economic benefit that it would have been given him, but also because he could have proven that he did do something on the deficit.

BAIER: Charles?

KRAUTHAMMER: I think when I heard today that he was going to speak at 9:00, instantly I thought, we've got a deal. Why else would the president request airtime? And then I hear that he's just going to make his argument.

And I think the reason he's doing this is because -- three nights ago, there he was on television summoning the leaders of the Congress to a meeting the next day, like King Henry summoning the wayward dukes to the castle. He has that meeting. Boehner decides we don't need the president anymore. We're going to work this out in Congress. And they were close to a deal on Sunday.

I think the president is speaking tonight because he's gone from emperor to bystander in three days and he wants to be, at least in on it to be resolved. And he doesn't want it to appear as if it was resolved in spite of him and without him.

BAIER: A primetime address though, and you asked for time, and you don't yet have a deal.

KRAUTHAMMER: It's his campaign 2012. He warned, I think it was Eric Cantor in one of these meetings, I will take it to the country. That's what he's doing. This is campaigning. This is all about his [INAUDIBLE]

Look, the date he chose as a drop-dead date. The debt ceiling extension has to go into the election. It's a political date. It has as much relation to real economics as the surge withdrawal date in Afghanistan does to actually -- to any military reality -- none whatsoever. It's not an economic date. It's a date which will help him get through the election without having to answer questions all the time on debt and how he's increased it by $4 trillion.

BAIER: We'll be back for the 9:00 p.m. eastern time speech. That's for it this panel. But stay tuned for a not so smooth transition.

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