This is a rush transcript of "Special Report With Bret Baier" from October 7, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP) ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Any type of effective strategy has got to include a countr y that has the capability and willingness to ultimately, at least in one instance, provide their own security. We're not going to be there forever.

HOUSE MINORITY WHIP ERIC CANTOR, R-VA: We stand ready to support him if he makes the right decision. And in their mind, that decision was made back in March, which was to support the recommendations of our commanders in the field.


BRET BAIER, HOST: On this the eighth anniversary of the U.S. invasion of Afghanistan, the president held his third strategy review in the situation room. You see it there. We also got word that the president received a copy of General Stanley McChrystal's request for more troops, the official request, last week before he met with the general on Air Force One in Copenhagen when he was pushing the Chicago Olympic bid. Let's bring in our panel, Steve Hayes, senior writer with The Weekly Standard, Juan Williams, news analyst for National Public Radio, and syndicated columnist Charles Krauthammer. What about this decision as we move closer to the actual day when it will happen, Charles, and what do you make of this, this day, the eighth anniversary of this war?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Clearly we have a split in this administration between the presidential advisor to the White House and the military. That's obvious.

A lot of leaks from the White House dissing the commanders. You had a public reprimand from the secretary of defense to McChrystal, our commander in Afghanistan, in which he said publicly that advice ought to be given privately and juxtaposing the administration's position. McChrystal and Petraeus, who is the area commander, have recommended all in, meaning you have to do this the way Iraq was done. You have got to is have a surge of troops. You have to occupy the territory, and you have to protect the population, or else we lose the war.

And the reason it's important is McChrystal is the expert, the world's expert on the opposite kind of strategy. He did in Iraq the special ops stuff, the remote control, under the radar operations. Four years. He killed a lot of the bad guys. He is the world's expert on it. He knows its potential and its liabilities. If he tells you that his expertise in that area is useless, what you have to do is go to the other strategy, it's persuasive.

The administration is refusing that add size, at least up until now, because it means a costly year, year and a half, two years, as we had in Iraq with the surge, that it thinks that politically it cannot afford.

BAIER: Juan, you talked to administration officials, and they say that McChrystal's request actually comes in stages, and that there is a high risk stage where they don't increase, a medium risk where there is a some kind of half and half, and low-risk when it is the all-in full request. If you talk to military commanders and some analysts, they say the half and half is really dangerous.

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: Well, because it may just get you stuck.

In other words, you don't have enough to actually complete the mission as it is intended, which is to say that you surge across, you conduct what many people view as confusing language, counterinsurgency, where you ac. locate people, gain intelligence necessary by becoming insinuated in locales and local communities.

BAIER: The trust of the people, basically?

WILLIAMS: Yes. And that is our counterinsurgency. That's what us, the good guys, would be doing in order then to advance the larger counterterrorism agenda.

But the question is how long does this take? What we know is that people are saying this could take a decade or longer to truly accomplish this mission. This is a long-term effort. And if you look at what the polls are showing here at home, the American people just aren't buying into this.

It's clear now that the American people, Republicans and Democrats, want to win this war. There is no question about that, but there's variations of opinions about are we are, in fact, creating a stable government that's going to be able to sustain whatever gains we put in place.

And secondly, if we put more people on the ground, how long are we expected to stay there?

BAIER: Steve, we talk a lot about a war-weary American public, but it is also a war-weary U.S. military, and some of these folks have been on five or six deployments these divisions in Iraq or Afghanistan.

If you have a president who decides with the half and half, like middle of the road, does that demoralize some of the U.S. military?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I think it does, and it also, I think, would send a message as this entire public debate is sending a message to the enemy.

Right now what our enemies are seeing is Afghanistan public vacillation. It's a president who is unsure of what he is going to do despite having stated quite clearly back in March that he was going to be wining what he called the war of necessity.

This was something that really factored in to the build-up to the surge in Iraq. You had commanders — you had a president who said when he announced the surge "We are coming and we are going to win." There was no two ways about it. That was what was going to happen.

We had a fascinating piece by a Harvard professor in The Weekly Standard talking about the likely psychological impact of that kind of public statement by the commander in chief. It says to the enemy, "We are going to win. We are not going to accept half measures and we're not going to muddle through."

I think the danger you hear now from analysts and from other generals, retired generals, is if you choose to pick the muddle through option, what message does that send to the people you are trying to defeat?

BAIER: Charles, how is this coming across, do you believe, this decision making process as he meets for the third time with his security advisors. They say a decision is coming soon but hasn't come yet. Does it come across as stalling and indecision, or does it come across as thoughtful and making sure we get the right strategy?

KRAUTHAMMER: If all of this happened at the beginning of the administration, it would have been thoughtful. A new administration is going to review everything.

But after the president announced six months ago, I have a new strategy, here he is, I have a new commander, introducing him. We're going to go all out, I have concluded a review. All of this he says in March.

And then six months later he says I can't decide on the troops because I don't have a strategy. Well, then, you've got to ask yourself, what happened to the original strategy?

All of this agonizing, this Hamlet in the White House of trying to decide which way to go, it is scaring to death our allies in Pakistan, those who support us and want to push the counterinsurgency in Pakistan, and the average Afghan who has got to decide he doesn't like the Americans or the other guys, but he has to decide...

WILLIAMS: Only the president Charles, only our president who is responsible for our men and women and sending them into harm's way, and he has a responsibility to make a considered decision before he does that.

KRAUTHAMMER: He makes a considered decision, but when he contradicts a decision which he said he had considered six months ago —

WILLIAMS: Charles, there was an election. Times have changed.

KRAUTHAMMER: That was the 27th of March.

WILLIAMS: There was an election in Afghanistan...

KRAUTHAMMER: Oh, come on!

WILLIAMS: ... that revealed a huge flaw in terms of the stability of that government — fraud, and addition to which we have all sorts of narco-terrorist activity.


HAYES: Fraud in Afghanistan? Please! People who are reading anything about Afghanistan up to that point understood that there was massive corruption in Afghanistan.

KRAUTHAMMER: Obama was shocked to discover corruption in Kabul? Give me a break.

BAIER: We'll leave it there.

We have new numbers on the federal deficit and what one health care reform proposal may cost. The panel returns, we think, next.


BAIER: It was the scoring everybody was waiting for. The Senate Finance Committee bill, the nonpartisan Congressional Budget Office says the cost of Baucus bill, $829 billion over ten years. By the year 2019, CBO says 94 percent of the American people would be covered, leaving about 23 million still uninsured. The federal deficit would decrease by $81 billion over the decade, Medicare would face cuts of $404 billion including $133 billion for Medicare Advantage, and a tax on high-priced or Cadillac insurance plans would raise $201 billion to pay for other reforms. There is still controversy about the last point. We're back with the panel also on the day that the CBO said that their projection for the federal deficit this year is $1.4 trillion — Steve?

HAYES: To the extent that someone in, say, Wichita is paying attention to the minutiae of this debate, and to the extent that a Congressional Budget Office preliminary scoring of one version of one bill in one house of Congress matters —

BAIER: Because the preliminary scoring doesn't have the legislative language. And that is a big — a lot of gray area.

HAYES: And they say very straightforwardly that things could change.

To the extent that all of matters, this is helpful for the Democrats.

The reality is that none of that really matters because I think people are becoming more and more settled on what they think of the broad aspects of policy reform.

And what it doesn't change is the fact that Democrats are still divided among themselves and that the fights here are between Democrats. You're likely to see this new conference with Harry Reid, Christopher Dodd and Max Baucus, where they get together with the White House and they hash out the details of this, whether or not it's going to include a public option and the timetable for this, what have you.

That is where the real decisions will be made. And that is a problem for Democrats and the White House, because, remember, President Obama campaigned on doing all of these negotiations in public and on C-Span. This is going to be behind closed doors.

BAIER: On that point, Juan, Senate Minority Leader Mitch McConnell just put out a statement saying that this doesn't matter because the real bill will be written by Democratic leaders closed to the public conference room somewhere on Capitol Hill, and he went on to blast what's in the plan.

What about that, that the real mechanics of this will be pretty private?

WILLIAMS: Yes, but if the CBO numbers come out, and they had been in excess of this, if the had been flowing over the table, then you could have heard from Mitch McConnell, I told you so! This is going to bankrupt the American people. This is far more that Mr. Baucus predicted.

BAIER: Well, he is still sort of saying that.

WILLIAMS: So you can imagine there would have been hosannas on the Republican side as they would engage in what is essentially trying to block any change in terms of this health care legislation. And now, instead they're saying, you know, well, it doesn't matter, not a big deal.

But it's a big deal in terms of Max Baucus getting the vote and getting the process going, because just as he described, the real gain is going to be this very private, intense negotiation with Baucus, and then eventually between the House and Senate to try to reach some conclusion, and I must add here, of course President Obama is going to be the key player.

BAIER: A key also is Maine Senator Republican Olympia Snowe, and she has said she wants the CBO wants to score the actual legislative language, not this preliminary kind of gray area estimate. If they can get her to sign on, that's the biggest coup for the Democrats.

WILLIAMS: Well, they could say there is some level of bipartisanship.

But at this point, what we can clearly see is Republicans aren't playing and it is a Democratic game.

KRAUTHAMMER: Look, the CBO scoring, the numbers that came in, the blessing it gave is because of smoke and mirrors in the bill. For the people of Wichita, somebody has to wade into the weeds. I did it at great health risk.


Two items here. One of them is the $120 billion assumed of income from what are called fees of the big players in health care — the health insurers, the drug companies, the guys who do diagnostics and who produce the medical equipment.

The fee is a tax, and the tax, $120 billion, is going to end up out of your pocket and mine, because every penny of it will be in higher insurance, higher costs for drugs, for stents, any kind of medical devices, and for diagnostics. Everybody will pay.

But it's hidden. It is a cowardly way to do a tax. You do it on the industry and it is passed on.

Secondly, there are individual mandates. People are going to be shelling out a huge amount every year on insurance, and those who don't are going to have to pay a fine, also a tax, but under another name.

There are huge costs in here, which are all hidden, and that's why it looks OK.

And secondly, there is a $400 billion assumption of cuts in Medicare. That is not going to happen. It is an illusion. It is a fantasy. And that's why the numbers end up OK.

So if you really look behind all of these numbers, it's a disaster.

BAIER: We will have much more on this. You can tell there is a lot to dig into on the online show right after this show.

That is it for this panel.

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