This is a rush transcript of "Special Report With Bret Baier" from May 11, 2009. This copy may not be in its final form and may be updated.


CHENEY: We had captured these people. We had pursued interroga tion the more normal way. We decided that we needed some enhanced techniques. So we went to the Justice Department, and the controversy has arisen over the opinions written by the Justice Department. The reason we went to the Justice Department wasn't because we felt we were going to take some kind of free-hand assault on these people, or that we were in the torture business. We weren't.

If we had been about torture, we wouldn't have wasted our time going to the Justice Department.


BRET BAIER, "SPECIAL REPORT" HOST: Former Vice President Dick Cheney this weekend speaking out about the Obama administration, about the CIA memos, about the decisions made in the Bush administration on terrorism and fighting terrorism.

Let's bring in our panel, Juan Williams, news analyst for National Public Radio, Nina Easton, Washington Bureau Chief of "Fortune" magazine, and our newest FOX News contributor, Steve Hayes, senior writer for the "Weekly Standard. Steve, welcome.


BAIER: You have written a book by Dick Cheney. And were you surprised by some of the things he said this weekend?

HAYES: I really wasn't. What surprises me is that other people have been surprised that he continues to be outspoken and that he continues to aggressively defend the policies they really helped formulate.

You had criticism coming at the Bush administration really going back to 2004 on the broad conduct of the War on Terror, and then more specifically in 2008. This was Barack Obama's, of his main campaign pledges was to end these practices.

It's hardly surprising that the vice president would come out and defend them and defend them aggressively.

And I think, as we have seen with his interview coming tomorrow with Neil, he will continue to do so.

BAIER: Nina, you turn on other channels, this is everything.


BAIER: I mean, is it —

EASTON: I agree with Steve. What surprises me is that more people aren't coming out to defend him. As he said in the interview, as the vice president said in the interview, it's pretty astonishing that he's out there alone defending these practices.

And at the time, and you know from your book, Dick Cheney was changed by 9/11. He woke up every morning worrying about a nuclear attack in an American city. He worried, as he said in this interview, he worried about, at the time there were reports that Al Qaeda was on the verge of getting nuclear weapons.

This was a real fear. And it wasn't like they went willy-nilly into torture. So I think he was on perfectly good moral authority and is on good moral authority doing that.

What bothered me about that interview to some extent was his dismissive comment about Colin Powell, because if Dick Cheney has moral authority on the War on Terror, I think Colin Powell has moral authority on describing to the president, as he has revealed since he left, describing to the president the consequences of the invasion of Iraq and how difficult that war would be.

And I thought that was just sort of a dismissive comment on just the way, the tone and everything, and —

BAIER: Well, let's take a quick listen to that specific part of the interview.


CHENEY: If I had to choose in terms of being a Republican, I would go with Rush Limbaugh, I think. I think — my take on it was Colin had already left the party. I didn't know he was still a Republican.

UNIDENTIFIED MALE: So you think that he is not a Republican?

CHENEY: I just noted he endorsed the Democratic candidate for president this time, Barack Obama. I assume that's some indication of his loyalty and his interests.

UNIDENTIFIED MALE: And you said you would take Rush Limbaugh over Colin Powell.

CHENEY: I would.


BAIER: Juan?

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: I don't know what to say to that. It is so unbelievable.

If you want to win elections, if you want to move the party forward, I don't think that there is much, from a political perspective, much of a choice between Rush Limbaugh and Colin Powell.

Colin Powell is ranked as one of the most respected American leaders across the political spectrum, and Rush Limbaugh is a very popular entertainer, but he is not in the same rank and certainly not of the same seriousness as a Colin Powell.

BAIER: But his question was about the conservative side of things and who stands up for the conservative side of the Republican Party. And the former vice president said that Rush Limbaugh did.

WILLIAMS: No, I think what he said — what he said is that Limbaugh's attitude towards Colin Powell and the fact that Limbaugh has condemned Powell is something that — he said if was a choice between Limbaugh and Powell, he'd take Limbaugh.

And I just don't think that if you're concerned about the Republican Party going forward you would make such a statement.

Now, your statement to me, Bret, was he's concerned about the conservative base. And my statement to you is this, the conservative base is growing — needs to grow, in order to put the Republican Party into the political mix. It can't just be content with the attitudes of a very small and shrinking group of people.

Now, let me just say, there was a serious issue here also with regard to the way the vice president presented the terror threats to the United States. Basically what he is saying is, going forward, the country is more vulnerable to attack because of President Obama's decisions.

I think that it's right to say that constitutes fear-mongering. And rather than being helpful in terms of protecting America at this critical juncture in our fight against terrorists, here is Vice President Cheney saying, no, what we did was good, what you did was bad. And if anything happens, we're going to be able to say "We told you so."

That seems —

HAYES: But how can that possibly be fear-mongering? This was a guy, who, as we discussed, really helped conceive these policies, and certainly was the most aggressive defender.

If he truly believes, as it is clear that he does, that these policies kept people safe, that they may have prevented thousands — he said potentially hundreds of thousands of people from dying — why is he out of bounds by saying that? There is nothing at all wrong with it.

EASTON: Particularly with the release of those memos, the CIA memos. There is real concern that that does endanger us going forward. Why shouldn't he be able to state that case?

WILLIAMS: No, he can state the case. What he needs to do is work towards protecting America. This is into a political fight. At some point, you have to say what's important here is protecting America against terrorist activities.

All he is doing is says, looking back, and this is what Gibbs, the White House Press Secretary, picked up on today, he is looking back as he tries to go forward. He's trying to defend the Bush administration's key legacy, which is there were no attacks after 9/11 and we did everything to protect America. But instead of saying this is what we need to do to go forward, because overwhelmingly, Americans don't —

HAYES: He is saying that.

EASTON: But the Obama administration is going back. The reason this is all in the news again is that the Obama administration insists on going backwards by releasing those memos. And Democrats on the Hill want to re-prosecute the War on Terror.

BAIER: Let's also point out that the former vice president has called for the release of other memos —

WILLIAMS: Correct.

BAIER: — which have not come out yet, CIA memos which he insists will lay out how many plots were stopped and thwarted and how many lives were saved.

HAYES: If that's the discussion, whether these things actually did keep us safe, then it is totally hypocritical for the Obama administration not to release these two memos, 15 to 20 pages each, that Vice President Cheney has requested.

They claim to be the most transparent administration in U.S. history, and they're holding back these memos after released these memos that the CIA director said would jeopardize national security.

WILLIAMS: Steve, the way that you and the vice president are talking would suggest that the memos would be conclusive. In fact, the memos are not conclusive. Even if we got some information —

HAYES: How do you know? Let's let people judge.

WILLIAMS: Let's say the memos indicate some information was forthcoming. It doesn't suggest that this information wouldn't have been obtained without using enhanced interrogation techniques or torture.


And no doubt, the process, according to what the vice president said yesterday, he has been notified the process is going forward on the release of these memos.

So that is not the point. The point is, why is Vice President Cheney, unlike President Bush, I might add, launching a campaign, a public campaign on every show he can get on, every voice, to condemn people and to suggest that America is more vulnerable to a terrorist attack because of Barack Obama, and despite the fact, even as he conceded yesterday, that President Obama campaigned against many of the techniques being used by the Bush administration, and the American people elected Barack Obama.

HAYES: No question the American people elected Barack Obama. We can settle this discussion. Let's have the memos.

Pete Hoekstra —

WILLIAMS: You'll get the memos.

HAYES: Who's the ranking member on the House Intelligence Committee —

WILLIAMS: It won't prove anything to you, Steve.

HAYES: — wants more information and additional memos. Let's see those.

This is hypocritical in the extreme.

BAIER: Not the end of this story.

Coming up, healthcare providers say they want to do something to curb skyrocketing prices, like saving you a couple trillion dollars.


PRESIDENT BARACK OBAMA: The explosion in healthcare costs has put our federal budget on a disastrous path.


BAIER: The panel will discuss whether the providers' plan is the answer to the problem when we come back.



PRESIDENT BARACK OBAMA: Getting healthcare costs under control is essential to reducing budget deficits, restoring fiscal discipline, and putting our economy on a path towards sustainable growth and shared prosperity.

BRIAN RIEDL, HERITAGE FOUNDATION: We will run a bigger deficit this year than in President Bush's first seven years combined.


BAIER: Well, the White House holding a meeting today with the top health insurance providers and drug companies, the president saying he is looking for savings in healthcare spending by 1.5 percentage points each year.

Very few details, however, and it happened on the same day that there was a revised estimate of the budget deficit this year, $89 billion more — that's five times more than what he said he was cutting from the budget last week. We're back with the panel — Nina?

EASTON: Well, this president, as we know, has a very ambitious healthcare reform proposal, just like he has a very ambitious cap and trade energy proposal, very expensive proposals.

I think this was an indication today that that's in trouble on the Hill, that healthcare reform plan, because they had a way to pay for it. This plan — which could be up to a trillion dollars, by the way — they had a plan to pay for it by limiting deductions on wealthy individuals.

Well, that's dead in the water, really, because of moderate- conservative Democrats. So they have to figure out some other way to come up with this kind of funding. So they come up with this idea for cost savings. And it brings in the industry as well. They hope to save $600 billion over ten years.

Well, it all sounds great. There are more — there is more middleman administrators in the healthcare system than there are nurses. I mean, there's lots of problems and lots of potential cost savings in the healthcare system, you know. We need to modernize. We need to IT. We need all that.

However, this is voluntary. It was a way to get industry in. Industry thinks it's a way to stop a public insurance plan, not clear that's going to be the case.

So I'm just not sure where this goes. Great idea.

And, by the way, I do think cost containment is — the president is right, it is key to entitlement reform. You have to get the cost of Medicare under control or you can't do entitlement reform.

So yes, it does help the deficit if it happens. But there are no details, and it's voluntary.

BAIER: Right — Steve?

HAYES: Well, I think, you're basically talking about a plan, if we can even call it that — I'm not sure that's being too generous — where you have industry saying, look, we want to cut costs at some point.

But the reality is if this had been something that was achievable or it was easy, this would have happened a long time ago. What you now have is these vague plans, which, as Nina says, are voluntary. There is nothing compulsory about them whatsoever.

And there is no clear indication that we're going to see any kind of a punishment if industry doesn't do the kinds of things that they're going to do.

So if you take a step back and you look at what the president has proposed across the board on spending, we're spending this money. The short-term money is going out. We're spending it. We know we're spending it, and it's costing us.

The long term is a plan. It's a plan, and I would say a hope. And we have seen this from the president before. He comes out with a big splashy announcement, and he says, look, this is what we want to do. And it's something that sounds good to everybody. But the details so few that it's really hard to even look at.

BAIER: Juan, the markup for healthcare legislation is expected sometime this summer, but the devil will always be in the details.

WILLIAMS: No doubt about it. And Steve is right. There is no sense of accountability. There is no sense of which this pledge can be enforced on the part of the people who are at the White House today. But what the good news was is that you had the AMA, you had the pharmaceutical companies, you had some of the insurance people there, saying this can be done, and saying, you know what, we want to get involved in this process. And as the White House people pointed out later, these were the folks who were blocking healthcare reform back in the '90's under the Clintons.

So suddenly you see industry taking a wholly different posture, and I think you see people from the Chamber of Commerce and the like saying healthcare reform is necessary because it is become such a burden on American business and an impediment to economic growth, and it would help in terms of lowering that deficit.

BAIER: But that is the big story today —

WILLIAMS: That's a huge story.

BAIER: — but it really got overshadowed. I mean, it is four times bigger than last year's budget deficit, it's $89 billion more.

WILLIAMS: I think that's the big story today. I think healthcare is going to happen. I think there is tremendous momentum right now for healthcare in this town. I don't know if it can happen as quickly as the Democrats and the Obama White House want it to happen, which would be by August.

But the deficit story is very big, because I think it's attached to the possibility, very real now, of having to raise taxes that. And that, of course, will open the door to Republican charges that this has always been about raising taxes.

And don't forget the threat of inflation attached to very large deficits.

Now, the counterargument is that the Obama administration has to do something. We are in the midst of a deep recession. Most Americans said some steps had to be taken to deal with unemployment and the needs of everything from banks to the auto industry.

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