This is a rush transcript of "Special Report With Brit Hume" from November 20, 2007. This copy may not be in its final form and may be updated.


MAJ. GEN. BOB SCALES (RET), FOX NEWS MILITARY ANALYST: The secret of the su rge wasn't the numbers, it was the strategy. Beginning back in February, Petraeus and his generals put together a four phase plan that was intended, first, to break the back of Al Qaeda inside Baghdad by establishing these joint security stations and combat outposts that moved into neighborhoods an pushed Al Qaeda out of the city.


BRIT HUME, HOST: Well, Bob Scales has been pointing out that for some time, as have others. And now, even The New York Times and Newsweek Magazine are saying the same thing.

In The New York Times today, look at this, "Baghdad starts to exhale as security improves," with a picture of a wedding going on in the outdoors in Baghdad.

Newsweek Magazine, a similar piece, "Baghdad comes alive." And these are reports talking about people out in the streets until all hours, stores reopening, some people who have left the area coming back to live there, and so on.

Some thoughts on all this now from Fred Barnes, executive editor of The Weekly Standard, Nina Easton, Washington bureau chief of Fortune Magazine, and the syndicated columnist Charles Krauthammer — FOX News contributors all.

So, it appears that — we talked quite a lot about how Anbar province had turned around because the Sunni insurgents changed sides, rejected Al- Qaeda, and so on. The situation in Baghdad has been improving, but it appears, now, to have reached a real turning point, it would seem.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: What's happened was, as Scales explained, we have essentially expelled Al Qaeda out of Baghdad, which was the key event in securing the city, because it was Al Qaeda and the insurgents who began the cycle of the descent into the civil strife with the attacks on the Shiites, who then sought protection with their extremist militias.

When you hear Democrats talk about this, and you had David Obey and John Murtha of the Democratic leaders today explaining why they are proposing a bill that would essentially stop the surge and end our success, they called what is happening a lull, or a so called "lull," as if Al Qaeda had gone on holiday.

Al Qaeda is on the run. It is in disarray. And the Sunni tribes have changed sides in a civil war of insurgency, and are now on our side, a radical change in the politics of the region.

This is the most important change in the fortune of war since the Inchon landing, and even comparable to what happened in the late months of the Civil War. We had gone from a losing war to a winnable one. And not because of an accident, and not because of a lull, but because of American strategy and steadfastness.

NINA EASTON, FORTUNE MAGAZINE: But as generals on the ground will tell you, this is a small window in which you need to make political progress.

And I thought what was quite interesting about reading these pieces, documenting how Baghdad is coming back alive, is the extent to which it's still an empty city. There's four million refugees that fled the country.

And I happened to experience this in Jordan a few months ago — these refugees are the people of means, the people who are educated, the people you need back in this country to build a civil society that will press this government to move forward with reform.

HUME: It would be quite a miracle had they all returned by now.

EASTON: Of course, but what I'm saying this — I'm not saying that this isn't dramatically significant, but that progress needs to go forward. You do need progress on the political front.

And I think you need more people back in the country, particularly the type of people who fled, who have the means to flee, to make that move forward.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well, they are starting to trickle back, and that's encouraging, in small numbers. I think one piece I read, maybe it was The L.A. Times, said 20 or 30,000, something like that. That is a small number for sure, but they are trickling back.

And when I read what Murtha and Obey had said about this lull — this is like the lull after Sherman took Atlanta, or the lull after D-day. It is a lull after the big corner has been turned.

And I don't think this is a small window at all. This is a huge window that has been opened. And what's happening, though, is not a huge window opening for the government to act — though it should, the central government, which seems pretty feckless and dysfunctional — but it has opened this window to the reconciliation that's happening all over Iraq at the grassroots and provincial level already.

The whole story in the L.A. Times was about Baghdad, where Sunnis and Shiites are coming together in these concerned citizens groups to drive out the terrorists. And the same thing is happening in other places in Iraq. Reconciliation is occurring.

And we Democrats, who are going to go back and say well, these 18 benchmarks, they haven't met all the benchmarks. The benchmarks are virtually irrelevant. They are probably the worst measure of progress that has gone on in Iraq now, where Al Qaeda has been routed, as Charles said, the civil wars is all but over, and it is a different Iraq.

EASTON: Even a Washington Post editorial said the Democrats are acting like nothing has changed since January.

But the one problem that the administration continues to have is public opinion, and that will also take some time. You've still got 68 percent of the public disapproving of the president's handling of this war. You do have a number of people starting to increase on do we think this is a winnable war — up to 40 percent now. That is starting to pick up.

It will take some time, though.

KRAUTHAMMER: It does, because public opinion is a lagging indicator. You had a six-month delay between real change on the ground and the arrival of that news here in the U.S. in the mainstream and media. The news of Lincoln's assassination only took 11 days to get to Paris. Here it took six months.

Now that that news has arrived, now it will begin, over time, to have an effect on public opinion. And that is a lagging indicator, but eventually it will change.

And the minor change you have had, which is almost a plurality of Americans believe that the war is going better. That minor change alone was enough to hold the Republicans in the Senate, kept the president in control of the strategy, and made the surge possible.

HUME: Is it not the case, however, that the opponents of this war still have a powerful talking point in this whole argument about national reconciliation, national political reforms, and the behavior of the Maliki government?

That the argument is made over and over again, you hear it all the time — it says "Well, the purpose of the surge, you see, was to make possible the reconciliation," and a lot of people nod and agree with that.

In fact, it does seem, in a sense, that the reconciliation was often said to be the only way you cold end the insurgency. Now the insurgency seems to have ended, and the reconciliation on the national level doesn't seem to have happened. But doesn't that remain a potent talking point?

EASTON: I think the Democrats are dangerous because they can look like they're pulling the rug out from under the potential for this country that could go forward and be healed.

If they do that instead of finding a strategy that makes it look like they want to make this work, I think that politically, it's difficult for them. Although, again, they still have a very strong liberal left base that's angry that they're not opposing the war.

BARNES: They don't want to make it work at all. They're committed to defeat.

But Brit, that is why these benchmarks are doing things like a national law, dividing up the oil revenues, which are already being divided up anyway, are important merely, I think, for public opinion in the United States, and to answer those empty talking points of Democrats.

HUME: That's it for this topic. But when we come back, what has happened to Republican Fred Thompson's presidential campaign? We'll look into that with the all-stars next.



FRED THOMPSON, PRESIDENTIAL CANDIDATE: I've been up and down in Iowa. And nobody asked me when I was running second why I was second.

But they go up and down, and not only there, but other sates. And in the last few days, in times passed, a lot of things have changed in Iowa presidential elections.


HUME: Indeed they have. And they certainly could change, and they could conceivably change in Fred Thompson's favor, although Mike Huckabee looks like the candidate, at the moment, at least, that is moving up in Iowa, and, as Thompson mentioned, some other states.

Let's look at a new poll that has just come out on New Hampshire and where Fred Thompson stands in New Hampshire. Romney is still leading there, he's put everything he's had in Iowa. McCain is second, Giuliani, but look at Thompson. He is behind Ron Paul. That's not good news for this campaign.

Let's look at an average of national polls put together by our friends at Real Clear Politics. Giuliani, as you can see, has stayed about the same — down a point or so.

Fred Thompson, however, who was at 23 and trailing Giuliani by only a little bit, is now down to 14 or 15 percent on the average — still ahead of McCain and Mitt Romney nationally.

Is it too early, Fred, to say that the Thompson campaign has faltered and has fallen and can't get up, or not?

BARNES: I wouldn't say they can't get up. It's conceivable, but just barely. They have certainly fallen.

There aren't any problems with the Thompson campaign, except that it's the wrong message and a weak message. Other than those two things, it's a great campaign. Look, his message has been, basically, that he's the pure conservative, he's the consistent conservative, and that's clearly, when you see Romney doing so well, but particularly Giuliani doing so well, that's not even what Republican voters are looking for.

HUME: What are they looking for?

BARNES: They are looking for somebody who can win, and they're looking for somebody who they thing is a tough candidate, whose strong. And I think they see more of that in Rudy Giuliani and Romney than they do in Thompson.

And he is just not a very god campaigner, never has been. Remember, when he was elected to the Senate, he won in 1994, when if your name had an "R" by it you practically won if you were running for the Senate or House — "R" for Republican. He was reelected a couple of years later as an incumbent, and that was it.

He was never a strong campaigner, and he hasn't been as a presidential candidate.

EASTON: I have never bought into the Fred Thompson balloon. I always thought it was going to pop, and I have said on this panel many times I thought it was going to pop.

These comparisons to Ronald Reagan — folksy anecdotes and TV acting career aside, Ronald Reagan ran a huge complex state, and was the leader of a legitimate movement by the time he got the nomination. There is just no comparison.

My colleague at "Fortune" wrote about him, Fred Thompson spent three days on the trail with him. He wrote that he rambles, he mangles his words, he's skimpy on details, he gets stuff wrong, and he says "I don't know" a lot.

And we have watched, these audiences are just not wowed by the guy —

HUME: I think one of the things he had going for him when he started, Nina, was that there were a lot of conservatives who were rooting for him to get in and ready to listen to him, and even for him to succeed. He seems, at least, to have disappointed them.

EASTON: He was familiar. He was a familiar name. He was an actor. It was all name-I.D. And when you run on all name-I.D., then you're just a balloon that's ready to float downward instead of upward.

KRAUTHAMMER: The rationale of his campaign was that the three leading candidates all had huge liabilities — Giuliani as a social liberal, Romney, the flip-flops, and his religion, which is a problem with part of his constituency, and, of course, McCain, whose is an apostate on a lot of conservative issues, on taxes, campaign finances, et cetera. So he would come in as the consistent conservative.

But you can't run as a negative, as an "I'm not them." He didn't have anything that he brought to the table.

The other three have something strong. McCain, a war hero, who has been tough on the war in good times and bad, who could lead, Giuliani, the sheriff of New York, who cleaned it up, and Romney, a technocrat who can run things, a state, companies, and even the Olympics.

So each had something, and Thompson offers the folksy manner of a consistent conservative, but there is not anything "there" there. And in the absence of something, you can't win.

HUME: What can he do to turn this around? Develop a new message? What would have to happen?

BARNES: I don't know what he can do. That's why I think it's barely conceivable that he could rise. There would have to be some sudden moment in the campaign where people took a different view of him.

These things do happen, where something will happen that is unexpected, and they will take a different view of him. But, as I say, it is unexpected.

HUME: Nothing that we can fore foresee.


EASTON: And running for president is a draining, humiliating process. You have to really want it and know why you really want it.

HUME: There has always been that question, too, hasn't there?

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