This is a rush transcript of "Special Report With Bret Baier" from July 28, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: We don't want to ration by dictating to somebody, OK, you know what, we don't think that this senior should get a hip replacement. What we do want to be able to do is to provide information to that senior and to her doctor about this is the thing that is going to be most helpful to you in dealing with your condition.


BRET BAIER, "SPECIAL REPORT" HOST: There was President Obama today answering a question from senior citizens at the AARP, concerns about end-of-life issues as written in the current, one of the House bills, House Bill 3200. Some of the concerns in there very specific. The president trying to answer and calm some of those fears. Let's bring in our panel, now, Byron York, chief political correspondent of the "Washington Examiner," A.B. Stoddard, associate editor of "The Hill," and syndicated columnist Charles Krauthammer. Let's start on this specific concern about end-of-life issues and whether the government is going to get in between the patient and the doctor deciding how the medical care will move forward. Byron, what about this?

BYRON YORK, CHIEF POLITICAL CORRESPONDENT, "WASHINGTON EXAMINER": This is the notorious page 425 that the AARP mentioned today, which says that there will be consultation between a caregiver and a patient to discuss things like hospice care and other issues, other end-of-life issues. And the question is whether there's any coercive element to this.

And I think the problem for Obama is that it mixes in with what he said a few weeks ago, that health care forum at the White House, when a woman got up and her mother was 100 years old and needed an operation. But she was vigorous, she got it, and now he she is 105 and still vigorous. And was there some way to take her spirit of life into account?

And Obama has said maybe it would be better to opt out of the surgery and take the painkiller. I think that was kind of a chilling remark to a lot of people.

Senior citizens vote in large numbers, and I think this is going to be a big issue in August.

BAIER: The White House, A.B. is saying that this particular section of this bill is not mandatory. It's a consultation. It's to try to drive costs down in the long haul.

But Republicans, critics, say this is a slippery slope when you start getting down this road.

A.B. STODDARD, ASSOCIATE EDITOR, "THE HILL": This is part of a larger problem, which is the White House has never had a plan, and so they've never been able to sell a plan. The president went out before the American people in a primetime press conference with nothing to back last week. He can't have another one.

He has wasted the power of the bully pulpit speaking in generalities. He is not able to talk his way out of sections of the House bill now, because he is not backing specifics. He is still in a hands-off mode.

This is politically untouchable. It is the ultimate frightening rationing scenario, and this will be pounded on by Republicans during the August break. And if you think the House bills are looking unpopular now, they're going to look much worse mid September.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST : Byron talked about Obama's answer about the woman 100-year-old woman who should had the pacemaker, and he said, well, perhaps she should have had a painkiller.

Well, that not only is chilling, it is a revelation of abysmal ignorance on the part of the president. You don't treat an arrhythmia with a painkiller.

This is a guy who wants to run one-sixth of our economy in health care, and he doesn't know the most elementary things about it.

But on the larger issue here having to deal with end-of-life care, I looked at the language. There is no requirement that you be counseled, because it would be inherently coercive. If you're dying and a government official shows up and says I want to discuss options including your death, that obviously is going to be kind of a coercion.

But the idea that it is important to do it years in advance is nonsense. We heard Senator Grassley say this stuff ought to be decided when you're 50 and not when you're 80. What doctor when he has an 80-year- old with pneumonia will look at a document signed 30 years earlier and say he decided he didn't want to have extra treatment, so I'll pull the plug?

The idea of advanced directives, as it is called in the lingo, or living wills are determinative, is absolutely false. It almost never applies. It only if you are in a coma or demented, and even in those cases, it's the wishes of the family which almost always overrides everything in writing.

BAIER: Where do you think we are on the big picture of getting anything through before the August recess, which is the end of next week? The House — the Senate — the Senate Finance Committee is still back and forth. A.B. what is your sense of things on both sides?

STODDARD: I cannot imagine the House having a floor vote, and it's actually hard for me to imagine the House Energy and Commerce Committee, which is at a standoff and has been for over a week, producing something by Friday. Because the blue dogs and the conservative Democrats on the House side are actually waiting for a Senate mark.

That Senate mark coming from the finance committee chaired by Max Baucus has now been expected for more than two weeks. Almost two weeks ago he said something should come today. He couldn't even give just a page, a few paragraphs to the president to come and talk about in that press conference.

That could come out. I can't imagine the finance committee is going to do a full markup of a full bill by the time they leave on August 2.

And that's what wavering Democrats want. They want what they think will be the final legislation, which is the Senate finance bill, and they want it passed, and they want to talk about it over the recess. I don't see it happening.

BAIER: And Senate Republicans, some of them now vocally are saying they're concerned that Senator Grassley from Iowa may be giving up too much at the negotiating table, the ranking member of the Senate finance committee.

YORK: That's right.

First of all, the House goes out on Friday, so that's just not going to happen. But everybody wishes they could have this bill, or Democrats wish they could have something from the finance committee, because it would be a little more conservative. It would have a more centrist and moderate feeling imprimatur than the House bill and the Kennedy bill in the Senate. This is all about August. Nothing will be passed by any House before then. It is about August when everybody goes home. They talk to their people in their states and their districts. Democrats are deeply worried are about this, and you get pressure on both sides. There are certainly Democrats who are unhappy with Max Baucus for continuing to talk to Grassley and the other Republicans. But it seems to me that Republicans have a lot of leverage here, because if they go without a bill, they have August to talk about the House version and the Kennedy version.

BAIER: Charles?

KRAUTHAMMER: I think three things will happen. There will be no House bill by the recess. I doubt that the Senate will produce — the Senate finance committee will produce a bill by the recess.

But I'm sure there will be a bill by the end of the year that will pass. It will be extremely watered down because the president has to have a bill he can call health care reform. Otherwise, the presidency is over, and the Democrats know that, and they will pass something that will look like health care reform.

BAIER: And does he take it on the political side from the left if it doesn't include a public option?

KRAUTHAMMER: He will, because he will always have his left, but he has to have a center here. And without it, he gets nothing, and he has to have something.

BAIER: The defense secretary gets a firsthand look at Iraq one month after U.S. troops left the big cities. We'll talk about how it is all working, next.



ROBERT GATES, DEFENSE SECRETARY: We will have withdrawn all our combat units by the end of August 2010. And we will stick to our commitment to withdraw all of our troops by the end of 2011. Those are the commitments we have made. Those are the agreements that we have signed with the Iraqi government, and we will implement those agreements as written.


BAIER: Defense Secretary Gates in Iraq today, following up, of course, on a recent trip last week of Iraqi Prime Minister Nouri al Maliki to the White House, in which he said that things are going well in Iraq, and the Iraqi forces are working well with U.S. forces. That trip, that visit, did not get a lot of coverage, and the prime minister is happy about that. And the "Washington Post" saying "The lack of focus on Iraq at the public level is a reflection of the fact that while Iraq was once a very hot part of the globe, not it has settled down. In the past it was all about Al Qaeda and about militias and about guns. This is evidence of our performance in achieving victory over those forces. This is a success." We're back with the panel. What about that — Charles?

KRAUTHAMMER: Well, I think in part he is right. I mean, the coverage of Iraq is driven by three factors — American casualties, media interest, presidential interest.

Our casualties are at a record low. The media interest is zero, a, because if you run a good news story, it's a retroactive vindication of the Bush administration and nobody in the press wants that. If you run a bad news story, it's a story that might imply that Obama is losing the war already won.

But a third factor here is presidential interest. Obama is not interested in Iraq. He is only interested to the extent that he doesn't want to lose this war, but he wants it off his plate.

What is so interesting about the Maliki statements when he was here with the president is he spoke about possibly having American troops beyond 2011. Obama did not, and we just heard Gates say we're absolutely out of there.

And also, Maliki when he was here spoke about the importance of the second agreement we signed. It wasn't only a strategic forces agreement. It was a strategic cooperation agreement, and he talked about Iraq being an ally of the U.S. in the region. Obama said almost nothing about that.

The Iraqis want us in in the long run as an ally, as a protector, airpower, et cetera. Obama has no interest in this.


STODDARD: I think that no news is good news. Charles is right. Violence is down. It appears to be stable.

But the Obama administration cannot take their eye off of Iraq. They need to be vigilant and focused on this, because the gains remain fragile and reversible.

And if you look at the government, it's not stable. They're not providing the services for their citizens. We don't know — there's questions about their own military readiness, obviously, or we wouldn't still be there advising them.

They are like teenagers who want to be free from us, but they need a quick bailout if something — if trouble arises.

But if you look at the fact that political reconciliation, which the surge was designed to foster, has not really started to occur, there's a long way to go. And I think it will be trouble for Barack Obama's administration if he doesn't make sure that he keeps it as stable as it is now.

YORK: He almost has a domestic incentive to not pay a huge amount of public attention to it. If you look at the opinion polls, the areas where he's working hardest, health care, economy, stimulus, auto takeovers, those are areas where his poll numbers have fallen quite a bit.

The only areas where his poll numbers are really good is in his handling of Iraq and Afghanistan.

And so right now, the public seems fairly happy with this just one number on the casualties. There have been fewer casualties, American casualties, American deaths in Iraq, in all of 2009 than there were in May of 2007 alone.

That factor, the relatively small number of American deaths is, I think, driving the relatively low interest, and Maliki's visit and the war in general.

KRAUTHAMMER: What we have is a difference in the visions of McCain and Obama. McCain spoke about a presence in Iraq in the future, like our presence in Korea, where we stay in garrisons, no Americans are killed, and we have an ally and we have a lot of influence in the region.

Obama argued against it as a candidate, and he looks as he is really against it as a president. And I think that would be squandering an amazing asset achieved at terrible losses, terrible cost of many American lives and treasure. And yet it now is a relative success.

There is an opportunity of cooperation. Having an ally in the most important nation in the region, in the most important strategically important area in the world in the Middle East, and to forfeit it out of disinterest or out of ideological aversion to anything Iraq would be, I think, a terrible mistake.

BAIER: And as far as the political reconciliation, you think it is happening?

KRAUTHAMMER: Among the Sunnis and the Shiites, yes, but the real issue is the Kurds. And that's an argument over territory and oil, and traditionally those are hard to solve short of armed conflict. And they're not that far away, the Arabs and the Kurds.

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