This is a rush transcript of "Special Report With Bret Baier" from May 19, 2009. This copy may not be in its final form and may be updated.


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


BRET BAIER, "SPECIAL REPORT" HOST: Well, the Senate majority leader said tha t numerous times in a news conference up on Capitol Hill. But his senior aide had to walk him back a little bit, saying the Senate majority leader may have gone too far, and that they're going to wait to see what comes out of the administration.

The bottom line here is that Democrats are deciding not to fund the closing of Guantanamo Bay until the administration has a plan. And Senate Majority Leader Harry Reid is saying they don't want Gitmo detainees in the U.S.

So what about all this? Let's bring in our panel, Bill Kristol, editor of the "Weekly Standard," A.B. Stoddard, associate editor of "The Hill," and syndicated columnist Charles Krauthammer.

Try to explain that, Bill, but if you watched the news conference, it was a little disconcerting. And I'm sure if you were a Democrat, you were wondering where the Senate majority leader was.


But President Obama will clear it up, Bret. He's giving a major speech on this Thursday. He really is, actually, which they scheduled before Harry Reid got all confused today. And this does heighten the pressure or raise the stakes for Obama's stakes.

Vice President Cheney, as you know, is already scheduled to give a speech on this whole complex of issues, detention, interrogation, Guantanamo, the terrorist surveillance program, at the American Enterprise Institute Thursday.

So Thursday we will have Obama versus Cheney, which is going to be fun, don't you think? Luke Skywalker and Darth Vader, you know.

And I want to say that I was always on Darth Vader's side, even when I saw the movie. And I'm sticking with him.

BAIER: On the issue of Gitmo, the Republicans, under Mitch McConnell's leadership, have risen this issue and caused some problems.

KRISTOL: McConnell has gone to the floor them 15 times, I think, to speak on Gitmo. He saw early on that this was a vulnerability, that Obama's promise would be hard to carry through, that there are political vulnerabilities, and also legal and practical vulnerabilities.

And I think he has done a good job, not just politically, but he has actually laid out the arguments effectively. And now the Democrats are in real disarray.


A.B. STODDARD, "THE HILL": They are. They are actually repeating what McConnell has been saying, using his own almost — Senate Majority Leader Harry Reid today almost sounded like a Republican saying we're not letting them here at all on U.S. soil.

This is a major mistake of Barack Obama, and his exuberance in his first week in office to say it would be done within a date certain was a huge mistake.

To keep a campaign promise on Guantanamo is one thing. He could have assured the left it would happen at the right time and just kept punting with his commission to decide what to do.

But to present himself and the Congress with a date certain when he was managing wars and an economic crisis and trying to pass major reforms on domestic policy was a huge mistake. It was an impossible deadline to meet.

What he has done, though, to ruffle the feathers of the Congress is really what we saw today out in the open.

I was told today by Senate leadership aide on the Democratic side, you know, the House and Senate Democrats have carried water for this administration, but this is a bridge too far. We have been begging them for messaging help. There has been radio silence, because the administration literally doesn't know what to do about Guantanamo. Guantanamo was an impossible problem before the election, before the transition, before the inauguration, before the 100 days. It was always where to send these people.

If they didn't go to the Congress and figure out where the political will was to move the prison population, they weren't going to have an answer.

BAIER: Charles, it seemed to start breaking over the weekend. Obviously, we heard a lot of problems from different Democrats. But then Virginia's Senator Jim Webb said he was in favor of not closing Guantanamo over the weekend.

And then you had a lot of problems yesterday and today with Democrats saying, where will they go?

KRAUTHAMMER: When you have the Chairman of the Senate Appropriations Committee, Daniel Inouye, refusing to appropriate a penny on this until he has a plan, when you have, as you said, Jim Webb, a distinguished Navy guy who — excuse me, Marine, who is sort of de facto spokesman on defense issues for Democrats because of his history of actually having been in the Reagan Cabinet, and when you have Harry Reid chiming in and saying nowhere, no how, nobody, you got a problem.

And I must say that Obama deserves it. He is the last prisoner on Gitmo right now, and he incarcerated himself. The Bush administration, which he demagogued mercilessly on this, made a wise decision, a difficult and wise decision. They'd understood at the beginning of the war, the beginning after 9/11, that this is going to be a long war and you would have, as in all wars, people you would have to detain without trial.

And the way to do it is on an offshore island under American control. I liked the idea of an island not just because of security, but that's where you send — Devil's Island, Sr. Helena. Islands are where you put people who are outside the pale civilization.

I know it's the romantic in me. But it was the right place. Everyone now knows that, because you have a Democrat in the White House instead of a Republican. So it is a serious issue that has to be dealt with seriously.

Obama, I think, in the end will have to get Democrats to accept something like perhaps a prison in a remote area United States.

But walking all the way back on the promise of Guantanamo is going to be a hell of a thing for him to swallow. It will be a huge embarrassment.

BAIER: And a lot of Democratic leaders were pretty far out there, saying this was a stain on America. It should be closed immediately. There was even Senator John McCain, who said it should be closed. And, of course, President Bush even said that. But, bill, where do they go from here?

KRISTOL: I think there is a lesson in that. I remember writing something on Guantanamo fairly early on along the same lines of what Senator McConnell was saying, and people calling up and saying "that is a terrible issue for Republicans, Guantanamo. It's so unpopular. Even Bush was opposing it. McCain was against it.

What you want, Republicans to wrap themselves around is the discredited relic of the Bush administration?"

Where it just shows that politics is very unpredictable. You fight on an issue, and suddenly — Pelosi made that mistake, which, I think, incidentally, hurt a lot. I mean, it is not directly related to Guantanamo, but the general impression over the last two or three weeks now is that Democrats are wrapped around the axle on the set of issues that conventional wisdom not just among Democrats, but among Republicans to three months ago, was that Republicans should shy away from.

I think McConnell deserves a lot of credit for fighting on this, and Cheney also deserves a lot of credit for really taking the fight to the Democrats on this.

BAIER: A.B., last word.

STODDARD: I'm just surprised — I agree with Charles. I was not surprised he reversed on releasing the detainee photos or on military tribunals, that he would be governing from the right on national security. I am surprised that Barack Obama, who doesn't do this to himself, create traps, actually gave himself a date certain, which he is probably is going to have to renege on, and it would be a major embarrassment.

BAIER: You have something short, I can tell.

KRAUTHAMMER: Short. Look, but it is not political errors on the part of Democrats. It's inherent in the issue. In the War on Terror, you are going to do stuff that you have to do responsibly. Democrats have been wrong for eight years on this, and now in government, responsible for the safety of Americans, have got to do what essentially the Bush administration did.

BAIER: So what do the all-stars think of the president's plan to increase gasoline efficiency? We'll find out after the break.



PRESIDENT BARACK OBAMA: For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing green house gas pollution for all new trucks and cars sold in the United States of America.

SEN. TOM COBURN, (R) OKLAHOMA: I don't believe in CAFE standards. I believe in markets.

Again, what are we are going to have? We will have a CAFE standard that says you can't buy the car you want in this country. You can only buy one that fits within what the Obama administration's standards are, which is so much CO2 and so many miles per gallon.


BAIER: The president announcing new nationwide rules today for automobile emissions and mileage standards. They take effect in 2012.

What about them, and what does it mean for the industry? Back with the panel — Charles?

KRAUTHAMMER: Well, with an essentially nationalized auto industry, the president has decreed that by 2016 autos will have exactly on average 39 mpg and trucks 30.

Well, if you do the math, it is a seven-year plan. Stalin restricted himself to five-year plans.

It's quite ambitious, and it's the most inefficient way of curtailing gasoline consumption, which we ought to do for a host of reasons, including national security. We want to reduce the amount of oil imported.

But instead of having it in mandates from Washington, arbitrary numbers picked out of a hat, what you do is you impose a gasoline tax and you refund it immediately a reduction in the payroll tax, so Washington keeps not a penny of it.

And the beauty of that is when you had the gas at $4, we had a change in consumer habits and the buying of smaller, efficient cars. What you do is you recreate that with a gas tax, except that instead of all the money ending up in Saudi Arabia and in the pockets of Hugo Chavez, it ends up in the pockets of the American consumer.

And that's what we always to do instead, but nobody has the political courage to propose that.


STODDARD: The auto industry has been struggling for awhile. And this will put more, obviously, pressure on them to comply, and I think they will be asking more of the consumer as they rush to comply.

There is a question, obviously, about whether or not vehicle sales end up rebounding and recovering. And if they don't, what does that mean for, you know — auto bailouts are very unpopular in this country, and what does that mean for our future commitments to these car companies that the Democratic government has taken over?

But I actually think it is sort of a stunning political moment. If you look back at how much has changed so rapidly, I mean, that in a change in majorities in the Congress and a change in the public sentiment about whether or not the government should do something on climate control, it is amazing to see after a decade of opposition, the auto industry coming not only to the table in agreement but in gratitude for these — thank you for harmonizing our standards and regulations, because now we have this badly needed certainty that will help us with our future product plans.

This has happened quickly, and it is very stunning.

BAIER: But, frankly, a lot has to do with the purse strings, does it not?


BAIER: I mean, the government owns the auto industry.

KRISTOL: These fuel economy standards, the CAFE standards — you know when they were first imposed, first legislated by Congress? 1975. You two were like in baby seats in the automobiles. Charles and I were somewhat mature at that point.

It's ridiculous. Obama is supposed to be a candidate of hope and change, new policies, take a fresh look. And if he wants to have liberal policies that would be very green and cut down on pollution and encourage people to drive small cars —

Charles is absolutely right. There are totally sensible economic policies, tax policies that would provide the right incentives.

Instead, he is updating 35-year-old policies that were foolish when they were put in. This is Ford administration economic thinking, Ford administration regulatory thinking. It hasn't worked for 34 years, and the auto industry has been in great shape for the last 34 years. It's not going to work now.

BAIER: All right, please join us Wednesday. Our weekly online broadcast is back this week. We'll be right here after "Special Report" at 7:00 eastern. Be sure to submit your videos in a new segment we're calling "Your Special Report." It shows us how the issues are affecting you.

You follow the link from our home page. And there you see it. When you are uploading your video, select "Special Report" in the category field. Each week we will pick one or two of the best and feature them during the show. Keep them clean. It's online, but it's still broadcast.

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