This is a rush transcript of "Special Report With Bret Baier" from May 20, 2009. This copy may not be in its final form and may be updated.


SEN. DICK DURBIN, (D) ILLINOIS: The reality is that we are holding some of the most dangerous terrorists in the world right now in our federal prisons.

SEN. DIANNE FEINSTEIN, (D) CALIFORNIA: We have the facilities to keep convicted terrorists behind bars indefinitely and keep them away from American citizens.

SEN. HARRY REID, (D-NV) SENATE MAJORITY LEADER: If terrorists were released in the United States, part of what we don't want is them be put in prisons in the United States. We don't want them around the United States.


BRET BAIER, "SPECIAL REPORT" HOST: O.K., two prominent Democrats on the floor of the Senate today as Republicans and Democrats join forces to shoot down millions in funding to close Guantanamo Bay, saying that there has to be a plan from the administration.

And then you saw the Senate majority leader from his comments the other day.

This comes as a New York Times report came out referring to an unreleased Pentagon report saying one in seven free the detainees left from Gitmo, already released, returns to terrorism. Since, FOX has confirmed that report from our Pentagon team.

This is continuing to get juicy. Let's bring in our panel, Juan Williams, news analysts for National Public Radio, Nina Easton, Washington Bureau Chief of "Fortune" magazine, and syndicated columnist Charles Krauthammer.

Charles, just to start on this new unreleased report, one in seven going back to the fight. It's obviously being pounced on by Republicans on the Hill.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, it tells us how serious of an issue it is and how dangerous the release of these gentlemen is.

I read a friend who when he wants to end a dinner party, says "You don't have go home, but you can't stay here." And that's Obama on the Gitmo prisoners. He doesn't want them in Guantanamo. He pledges it will close. He has received a resounding message from the Senate today, 90-5, that they can't go into the United States.

The Europeans won't take them. The host countries will not take them. Saint Helena needs refurbishing. Elba didn't work out the first time. And Devil's Island is now a tourist destination.

There is nowhere except Guantanamo.

Obama is going to give a speech tomorrow, and I have no idea how he squares the circle.

Either he rolls the Democrats in the House and Senate who are scared about this issue because it puts in question seriousness about national security, either he rolls them and gets agreement to construction or reconstruction of a super max prison dedicated entirely to Guantanamo terrorists, or he gets rolled, and he reverses on Guantanamo, and perhaps extends his deadline indefinitely.

BAIER: Nina?

EASTON: Well, it's interesting to watch this. Barack Obama, who is a very talented politician, forgot one of the basic rules of politics, which is you don't promise an exit if you don't have an exit strategy.

So I think he was so captive of the ACLU view of the world that he didn't understand that this is not the view of most Americans, and it's not the view of how Americans want to be kept safe.

But I think we have to distinguish here. If you look — if you parse down the issue a little more and go a little deeper, there is two sets of terrorists.

There is the terrorists which the Republicans helpfully released today bios on, the 9/11 masterminds, and so forth. There is those, who could come to the United States if Dianne Feinstein had her way and stay in these super max prisons, could be tried in military tribunals if that worked out, but could also end up in civilian courts. We're not sure how that's going to end.

But then there's the detainees who will be released, presumably. And that's where this report is quite troubling, which we have read before, the recidivism rates of these guys who are not the masterminds of 9/11, and they go back at a high rate back into terrorist activities.

BAIER: Juan, we should point out that currently on the Senate floor, Mitch McConnell's, the minority leader's amendment to make sure that all of the specific detainees, a report about each of them, is released. And we are looking at a live look at the Senate floor now.

That amendment is being voted on now. And apparently there was some heated back and forth between Senator Dick Durbin and Senator McConnell over this.

Juan, you have to say that Republicans have played this issue pretty well.

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: Yes. So far there is no evidence — I was talking to White House people today — no evidence that in fact the polls show Americans still have tremendous faith in President Obama when it comes to national security.

And, of course, traditionally, this has been a Republican advantage over Democrats, national security. So far, Obama is holding.

The question about the detainees in Guantanamo, I think, that has been a problem from the beginning. I said it here. I just think he had not figured out how to deal with the detainees in terms of proper disbursement. And I always thought that deadline was a mistake and he shouldn't have said it.

But now that it's said, I think it has opened a real window of opportunity for people to criticize him and point out what, basically, could boil down to hypocrisy. You say one thing during the campaign, and you don't back it up when you're in office. So that's a problem for Barack Obama.

But let me say, I think Republicans are overplaying their hand when they try to, I think, stoke fears about people are coming to live in your communities. We have still got the guy, you know, who was involved with the New York bombing back in the '90's and in jail up in New York. Nobody has ever heard from that guy. He's not a problem. We have terrible prisoners.

And when it comes to the report that you were citing, you know, that's 14 percent rate is much less than it is for criminals that create crimes here in the United States.

KRAUTHAMMER: But here a criminal will kill a person or two. And there a terrorist will kill 3,000 in a day.

WILLIAMS: No you have to have a terrorist organization, Charles. It is not an individual.

KRAUTHAMMER: The difference between crime and war is a matter of scale.

WILLIAMS: Correct, and what we're talking about are individuals here. If you put one guy in this prison and one guy that that prison, essentially, the United States knows how to hold prisoners. I don't think anybody thinks that we have prisoners running wild willy-nilly all through our streets.

KRAUTHAMMER: But if you release them, as we did, into the Saudi Arabian rehab program, you end up with the new head of Al Qaeda in Yemen as a graduate of that program.

BAIER: Quickly.

EASTON: I would just add, just politically, you talked about the Republicans. But Harry Reid said we don't even want them even in our prisons. So he has a problem with them.

WILLIAMS: Harry Reid has turned 180 degrees on that. So everyone is playing politics. Let's look out for America. And if you do, I think some of these aspects here are being overblown for political reasons.

BAIER: I want to leave on this — from the "New York Times," two administration officials who spoke on condition of anonymity said the report was being held up by Defense Department employees fearful of upsetting the White House in the current environment.

We will see if this report comes out in a couple of days.

Iran test-fired a very threatening missile today. The panel tells us what that means for the U.S. and Israel, next.


BAIER: U.S. officials confirm to FOX News that Iran test-fired an upgraded surface to surface missile with a range of about, they say, 1,200 miles today.

And this is the Sajil-2 missile. And that would potentially put it in striking distance of Israel and American bases in the Persian Gulf. U.S. officials telling us it is the first successful test of a solid fuel missile, which is a missile easier to move around and easier to hide than the current liquid fuel options.

What does this mean for the U.S. and for Israel? We're back with the panel — Charles?

KRAUTHAMMER: Well, the timing is interesting. I think, in part, it's Iran just continuing a program in which it wants to overhaul the region. It's showing how it is advancing unrelentingly on the technology of the weaponry, the nukes themselves, and, here, the means of delivery.

But secondly, it has to deal with the launching of the Iranian presidential campaign. The president of Iran, who is running against moderates, is making a statement in a case here.

BAIER: Mahmoud Ahmadinejad.

KRAUTHAMMER: Yes. He is making — the moderates arguing against him that all of these provocative measures in the past and now would threaten relations with the world and isolate Iran.

And what does he say? Look what's happened. I did all of these measures advancing our program, ignoring and provoking America, and what do we get in return? An administration with an outstretched hand that's going to open negotiations and wants to relieve our isolation.

So he says that the program I supported of aggressiveness and not stopping in the face of criticism abroad is giving us, a, a program of nukes, and, b, acceptance in the world and acquiescence by the United States.

It is quite an argument, and this is a punctuation mark on that argument.

EASTON: And you have to wonder if this was — I agree that it is part of the presidential campaign there, but you also have to wonder to what extent this is an answer to President Obama's determination to diplomatically engage Iran if they unclench their fist, as he put it.

This came a day after the Supreme Leader Khamenei, by the way, on national T.V. in Iran accused the U.S. of fostering terrorism.

So the provocative acts, I don't think, are going to end here. I think we will see more as we move forward.

I think Obama seems to want to move on his timeframe. I mean, he says they don't have patience forever. They keep making that clear. But they do seem to want to move on their timeframe. But I think these acts are pushing them to move quicker.

BAIER: Juan?

WILLIAMS: I think it is bellicose behavior by a guy who is campaigning and wants to portray Iran as not a weakling, not vulnerable to Israel or to U.S. troops stationed in the Gulf, and that they can protect themselves.

Of course, the other way to look at it, as we just heard from my fellow panelist is, it says we now have a missile. I think it's 1,200 miles, and capable of hitting Israel and hitting the American troops in the Gulf, and therefore makes them all the more a threat, given what they have said about wanting to wipe Israel off the map and how they accuse the United States of terrorist activities.

So in that regard, here is my difference with Charles. Charles says, oh, you know what, we have approached them with an open hand and they have now come back with a clenched fist.

Why does it have to be in terms of simply looking at the Iranian leadership and the Ayatollah? How about our allies, the people we need to put pressure on Iran?

We have, I think, to make the case, especially after what happened in Iraq, we have to make the case that we are open to talks and negotiations and rational behavior before we get involved in a strong military stand that would simply fall, by the way, on American forces when it should fall on an international —

BAIER: So you don't see this as an answer to that?

WILLIAMS: No. I think the guy is campaigning, and I think this is all directed to a domestic audience inside of Iran.

KRAUTHAMMER: It is a domestic audience, except it is a shot heard around the world.

WILLIAMS: Well, that's a consequence.

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