This is a rush transcript of "Special Report With Bret Baier" from September 17, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: We've also repeatedly made clear to Russia that i ts concerns about our previous missile defense programs were entirely unfounded. Our clear and consistent focus has been the threat posed by Iran's ballistic missile program, and that continues to be our focus.

REP. TRENT FRANKS, R-ARIZ.: The preeminent responsibility of the president of the United States is to protect the national security of the United States and I believe President Barack Obama's actions today fundamentally betray that responsibility.


BRET BAIER, HOST: Today President Obama announced that a ground-based missile defense shield in Poland and the Czech Republic, which is what it looked like here, has been scrapped.

Pentagon officials said the change happened because intelligence changed about Iran's long-range intercontinental ballistic missile threat and that it just hasn't developed as quickly as they thought, so now they're going to a mobile system, basically a sea-based, mostly for missile defense. The ground-based plan has been scrapped.

Let's bring in our panel about this: Fred Barnes, executive editor of The Weekly Standard; Mort Kondracke, executive editor of Roll Call, and syndicated columnist Charles Krauthammer.

You heard the president there, Charles, talking about Russia. Russia had a big problem with this being in their backyard. Do you think that was the center of this decision?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is all about the U.S. and Russia. What just happened today is that the United States unilaterally abrogated the security agreement with two close East European allies.

BAIER: Poland and the Czech Republic.

KRAUTHAMMER: So close that they have troops in Iraq and Afghanistan that supported us, at the behest and because of the pressure of the Russians.

Now, number one is the timing. Apart from the merits of all this, the idea that we should announce on the 70th anniversary of the Russian invasion of Poland, a security agreement that we had with Poland at the behest of Russian objections, is scandalously, indescribably amateurish.

Now, on the merits — if there is a secret agreement between us and the Russians that in return for our capitulation on this issue to Russian desires, if the Russians, in return, have agreed in an ironclad way to give us strong support on extremely strong sanctions on Iran and to not send anti-aircraft missiles into Iran, which the Israelis have said would precipitate an Israeli attack.

If all of that has happened, then you could say this is a cynical deal, but perhaps you could support it the way that you would say we derecognized Taiwan in the Nixon days in order to achieve a strategic advantage in having relations with China.

The problem is there is not a shred of evidence of a deal.

And if not, what this is is a capitulation to Russia. This is an earthquake in our relations with Eastern Europe and the beginning of their detachment from the American umbrella and it's the abandonment of serious missile defense.

It is a huge, huge setback.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: I agree with everything that Charles said.

You know, the chances of the Russians siding with us and imposing really stiff sanctions on the Iranians like, for example, cutting off gasoline, is practically nil. I mean, they have said over and over again that they are not going to go for sanctions and I don't see that this capitulation is going to change their minds.

And all that does is make the United States look incredibly weak. And I don't even think that there is a real military case for this.

Look, the Iranians in February launched a satellite. What is a satellite? A satellite is carried are up there by an ICBM, an intercontinental ballistic missile.

So if they have serious developments on the intermediate and short-range front, which the administration is claiming is the excuse for this, putting in another system, OK, then you have to defend against two kinds of missiles. But you don't give up a defense against something that is patently there.

BAIER: Fred, candidate Obama made a lot about the intelligence that led the Bush administration to war in Iraq. He said that it was faulty. Now he is trusting the intelligence that Iran is not working on long-range missiles.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Look, I don't think the intelligence has anything to do with it.

Just ask yourself this: Would this decision have been made, absent Vladimir Putin, absent pressure relentlessly applied with every meeting with American officials and with President Obama, absent that, would they have made this decision to undercut Poland and particularly the Czechs, where the leaders had gone out on a limb to back the United States in this.

Would this have happened absent the Russian pressure? Of course it wouldn't have happened.

And look, and even if the intelligence is correct that they're not moving ahead — the Iranians, that is — moving ahead as quickly as had been thought earlier in developing a long-range missile that could be, in other words, send a nuclear weapon to the United States, don't you want to be prepared for the eventuality that it might pick up speed again in the development of that missile?

And, look, we would be much better, much safer, the U.S. would, much safer with a system, a defensive shield system in Poland and Czechoslovakia, than we would with a system in California and Alaska that the Obama administration has already cut funding on.

BAIER: Vice President Biden was in Iraq. He was asked specifically about this move. Here is what he had to say:


VICE PRESIDENT JOE BIDEN: I am much less concerned about the Iranian potential to have a missile at this point or launch a missile that could strike the United States of America.


BAIER: He's not concerned about the potential threat from Iran. This comes on a day, Charles, when the U.N.'s nuclear watchdog, according to the Associated Press, has and annex of a report that says that Iran has sufficient information to build a nuclear bomb.

It seems every week we're getting more little nuggets about how close Iran is to an actual weapon. Is this the wrong tone to be sending to the world about U.S. concern about the Iranian threat?

KRAUTHAMMER: It makes it sound as if the threat is less than it actually is. The IAEA has not acted in good faith. It's been underplaying the Iranian threat for years, but it's becoming increasingly evident.

But I want to add one point on this: This is going to be an historic day in the life of Eastern Europe. We have now declared that Eastern Europe, which had assumed that after the Cold War had joined the West indissolubly and would enjoy its protection, is now in many ways on its own, subject to Russian and hegemony and pressure.

And imagine if the Poles and Czechs are upset about this, how the feeling is in Ukraine and Georgia. The Russians announced earlier in the week that if a Georgian ship is found in Abkhazian waters, which was a province of Georgia, it will be seized. So it has annexed part of George and it has escalated the war of words on Ukraine.

All of Eastern Europe now is in play.

KONDRACKE: I disagree with that.

Poland and the Czech Republic are in NATO. But it does send the signal that we are weak in relation to the Russians and if they want to do something in Georgia and Ukraine — which are not members of NATO — they're our guest.

BAIER: Last word.

BARNES: There is one word for the Obama policy, and it is "retreat." Retreat from America's obligation to support its allies, to guarantee national security, retreat everywhere. This just is another retreat.

And it's reminiscent of that famous meeting in 1961 of John F. Kennedy, a rookie president like Barack Obama, then with Nikita Khrushchev. And what did Khrushchev conclude from that meeting? That it was a weak president. And what happened? You had the Cuban missile crisis and the Berlin Wall built in Berlin, obviously.

Worse could happen here.

BAIER: Well, liberals don't like it. Conservatives hate it. We will talk about the fate of Max Baucus' health reform plan, next.



OBAMA: There is now agreement in Congress on about 80 percent of what needs to be done. Four out of five committees in Congress have completed their work. Yesterday the finance committee under the leadership of Max Baucus put out their own bill. Each bill has its strengths and there are a lot of similarities between them.

HOUSE SPEAKER NANCY PELOSI, D-CALIF.: I fully support the public option. A public option will be in the bill when it passes the House of Representatives.

SEN. JOHN ENSIGN, R-NEV.: This is still more and more government takeover of our health care system and that's something that myself and most Republicans oppose.


BAIER: Well, the people at that town hall meeting with the president apparently don't like Max Baucus' bill. There are some boos there, and obviously there are some lawmakers that have some questions about it, too.

What about this supposedly bipartisan plan from Senator Max Baucus. We're back with the panel — Fred?

BARNES: This is probably the least successful intro introduction of a new product since the Edsel, maybe since new Coke. All the liberal Democrats are against it. Republicans don't like it. Who likes it? Nobody does.

And besides, it's a terrible bill. It would over-regulate the insurance industry and reduce that industry to about four or five big companies. It's going to cut $400 billion out of Medicare. There's not a chance that that's going to happen.

And like in these other health care bills, it way underestimates what they're going to cost, because, look, when you give people all these subsidies — which some Democrats aren't enough in the Baucus bill — all these subsidies, you're giving them a free good or a heavily subsidized good, they will demand more of it, and it just blows the lid off of spending.

This happened where this has been done just with Medicaid in Tennessee, in Maine. And the Massachusetts plan has experienced the same problem, and it means their initial claims of how much it was going to cost are ludicrous. They're not believable.

KONDRACKE: A lot of that is true. There is a lot of other things wrong with the bill, including the fact that it has no medical malpractice reform. There is only limited ability to buy policies across state lines, although there is some. There is a lot of hidden taxes in it.

On the other hand, it's a whole lot better than the other Democratic bills that have been introduced and it's now in the Senate Finance Committee, which is the most moderate committee of any committee on Capitol Hill. And now is the time for the Republicans to get in there and offer amendments...

BAIER: Mort, isn't there a big problem from Democrats on the left?

KONDRACKE: Yes, sure.

BAIER: I mean, Jay Rockefeller among them. You talk about Republicans — there's a lot of Democrats, too.

KONDRACKE: It is Obama's job to twist their arms and make them accept a plan that doesn't have a public option. This plan does not have a public option, unless, of course, this co-op thing is a public option in disguise, which some people think it is. But that can be fixed by amendment, too.

KRAUTHAMMER: If it doesn't have tort reform, it is not a serious offer. There is so much money in tort reform, it would relieve the deficits and the subsidies and the hidden taxes.

So Republicans have no obligation to play in a field in which because of the Democrats being in hock to the trial lawyers, the most important element of this is left out.

The reason the Baucus plan is in trouble and everybody hates it is because in one respect it's honest. The CBO has declared that it is deficit neutral, so it pays for itself. And the reason it is hated is because in order to achieve that, it has to have all these incredible hidden taxes.

And they're all hidden because a lot of it ends up in the pockets of insurance companies and ultimately because of taxes on insurance in the government. But it is taxes on the young, on the middle class, on those who don't want health insurance who will have to pay a fee. It is across the big board, and that's why it will get savaged.

BAIER: And very quickly, today House Speaker Nancy Pelosi got choked up at one point, saying that she thinks the opposition to health care reform could end up being violent and could be like the violence she saw in San Francisco in the 1970s, referring to the city hall murder of gay rights activist Harvey Milk and Mayor George Moscone back in 1978.

Fred, apples and oranges?

BARNES: I call that a little hysterical on her part. And who was killed just recently? A pro-life demonstrator was shot down in the street by somebody who is pro-abortion.

KRAUTHAMMER: And what was the single major physical attack in the health care wars? A pro-reform demonstrator who bit the finger off somebody who was not amenable to major reforms.

KONDRACKE: I think there is a lot of hysteria going on, and it is on both sides of all these issues and I'm afraid of it all.

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