This is a rush transcript from "Special Report," June 24, 2015. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: Tonight we welcome Senator Ted Cruz to our "Center Seat." Joining him on the panel, syndicated columnist George Will, Mara Liasson, national political correspondent of the National Public Radio, and Jonah Goldberg, senior editor of The National Review.

Senator, thanks for being here.

SEN. TED CRUZ, R-TEXAS: Bret, it's great to join you.

BAIER: I want to start with today's vote on TPA, the trade agenda.

CRUZ: Yes, yes.

BAIER: You were a big supporter of trade and you spoke out about it. You wrote even a column with Paul Ryan about it. But today you voted against it.

CRUZ: I did.


CRUZ: Well, I'm a big supporter of free trade. I campaigned in support of free trade. And the first time it came up in the Senate, I voted in favor of Trade Promotion Authority. But two things have changed since that first vote. Number one, WikiLeaks released the text of a portion of the Trade and Services Agreement that explicitly contemplates changing immigration laws of member countries.

Over and over again, we've been assured there were no changes in immigration laws. That leak was one material change. And then a second material change was the back room Washington deals that were cut on the Export-Import Bank. The Export-Import Bank is a classic example of corporate welfare and it appears now that leadership cut a deal to reauthorize this cronyism. Hundreds of billions of dollars of taxpayer dollars on the line to help giant corporations as the price for TPA. And the two together were too much. And so I voted no.

BAIER: You know, Senator, it seemed to catch your leadership by surprise. And you have done that numerous times. Your leadership often is not happy with you. Legislatively, working with Republicans, is that a problem?

CRUZ: You know, leadership in Washington is not listening to the American people back home. I'll tell you, as I travel the country, I ask groups gathered all over the place, how many of you all are frustrated with Republican leadership? I've yet to see a crowd where every hand doesn't go up. And the reason is, over and over again -- this is a great example. When -- when Trade Promotion Authority was in the House, a group of conservatives came to the speaker and said we'll give you the votes you need to pass this if you agree to let the Export-Import Bank die, let this massive corporate welfare program die, which it's going to do under current law.

Leadership said no. They're more indebted to K Street and the Washington lobbyists, the Washington cartel, than they are to conservatives. And this week, we're seeing a purge where two different conservatives, Mark Meadows and Ken Buck, have been stripped of their chairmanships as a result of their standing for their principles.

And, look, conservatives across this country are frustrated. Why does leadership always cut a deal with the Democrats instead of standing for conservative principles?

BAIER: Well, we'll go to the Export-Import Bank, which is, you know, people don't fully understand and we'll have many pieces on this. Senator Graham, for example, thinks it's going to cost jobs in South Carolina. But let me turn to George Will.

GEORGE WILL, SYNDICATED COLUMNIST: Senator, in less than 16 hours, the Supreme Court might hold that subsidies have been illegally distributed through exchanges not established by the states. If they hold that way, six million or so Americans might suddenly lose their health insurance.
There will be a move in Congress among Republicans to extend the subsidies for 17 months to get into the next president's tenure.

Could you support that?

CRUZ: I could not. Under no circumstances should Republicans in Congress extend ObamaCare. If the Supreme Court rules, as many observers expect, it will conclude that the Obama IRS violated federal law and illegally imposed billions of dollars of taxes on millions of Americans, millions of young people who are working right now, the Obama IRS is extracting taxes from them.

And if the Supreme Court concludes that President Obama violated the law, the last thing Republicans in Congress should step up and do is codify his lawlessness and extend the subsidies.

WILL: But the six million people who will be out of health insurance had to buy it. There was a mandate. They relied on this. Are they just -- what do you say to them? Tough?

CRUZ: What I say is we should use this opportunity to address the real problem, which is that ObamaCare has driven health insurance premiums through the roof. Remember, President Obama promised the average family's health insurance premiums would drop $2,500 under ObamaCare. In actuality, the average family's premiums have risen $3,000. I've joked on the campaign trail, every family whose premiums have dropped $2500, they should vote for Hillary Clinton. I'll take everybody else.


CRUZ: And then we've never had to raise --

BAIER: Excuse me to interrupt. You're saying you would not vote for a patch to take you from point A to part B.

CRUZ: So what we should do instead -- correct. What we should do instead is allow states to opt out and allow states to opt out of everything. Opt out of the individual mandate, opt out of the taxes, opt out of the employer mandate, opt out of all the mandatory coverage which is driving up premiums for a lot more than six million people. You're talking hundreds of millions of people who are seeing their premiums go up for ObamaCare.

And let states also opt out of the taxes, opt out of the medical device tax, opt out of the investment tax, opt out of -- all of the crushing costs. And what that means, if a state like California or New York decides they want ObamaCare, they want to pay the taxes, they want to lose the jobs, they want people forced into part-time work, let them choose that. But I can tell you, other states, like Texas, we would choose economic growth and helping everyone rather than sticking with this failed law that isn't working.

BAIER: Mara?

MARA LIASSON, NATIONAL PUBLIC RADIO CORRESPONDENT: Is there a Cruzcare? Is there a Ted Cruz replacement for ObamaCare?

CRUZ: We absolutely need health care reform after repealing ObamaCare. And I'll tell you what I think one of the real distinctions in
2016 is I am campaigning every day on repealing every single word of ObamaCare.

LIASSON: But what are you replacing it with?

CRUZ: What you replace it with is something that expands competitions and that empowers consumers and dis-empowers government from getting between patients and their doctors. And three specific reforms. One, you
-- and let people purchase health insurance across state lines. That creates a 50-state national marketplace. That lowers costs and gives you more choices, which expands access.

Number two, you expand health savings accounts, so that people can save in a tax-advantaged way for routine health care. And number three, you work to delink health insurance from employment, so that health insurance is portable. You or I lose our jobs, we don't lose our life insurance or our car insurance or our house insurance. There's no reason we should lose our health insurance. And that's what causes much of the problem of pre-existing conditions.

We should be empowering patients, not putting government bureaucrats between us and our doctors.

BAIER: Senator, we will talk international issues. Start with Jonah Goldberg.

Senator Cruz on "Center Seat," when we come back.


BAIER: And we're back with our panel and Senator Ted Cruz in our "Center Seat." OK, Jonah?

JONAH GOLDBERG, SENIOR EDITOR, "NATIONAL REVIEW": Senator, on the issue of ISIS, as I -- as I understand it, your position is a really full- throated air campaign plus arming the Kurds.

CRUZ: Yes.

GOLDBERG: You haven't really talked about arming the Sunni tribes.
I'm going to leave that at the moment. But is it really plausible to think that the Kurds, no matter how many arms you give them, are going to liberate Mosul? They're going to -- you know, they'll protect their own borders, but they're not -- is it realistic to expect them to do much more than that?

CRUZ: What is plausible is that, number one, air power, when used aggressively, can have a dramatic impact. Right now we've got such restrictive rules of engagement that it is -- it is more pinprick strike.
It is a bomb here, it's a missile there. I'd characterize it as photo op foreign policy, rather than using concerted, overwhelming air power to take out ISIS.

Secondly, you're right, the Kurds can't solve everything. But they're right now fighting and winning on the ground and it is a miracle that they are, because ISIS is using U.S. military equipment they've seized in Iraq.
The Kurds' equipment is hopelessly outclassed and yet they're fighting and this administration, because it is obsessed with seeking conciliation between the Sunni and Shias and uniting Iraq, it sends weaponry to Baghdad, that doesn't pass it on to the Kurds.

That doesn't make any sense at all. We ought to use the Kurds as boots on the ground along with overwhelming air power. Now that could likely involve embedding more special forces in to target that air power.
But I think our principal boots on the ground can be the Kurds and we should be giving them the tools to defeat ISIS.

BAIER: Senator, we asked Twitter and Facebook to weigh in. Tom Pinkerton wrote this, "How will the foreign policy of Ted Cruz specifically differ from that of Barack Obama and George W. Bush?"

CRUZ: Markedly different. The last --

BAIER: With both?

CRUZ: Yes. The last six and a half years, we've seen the Obama- Clinton foreign policy. Leading from behind is how they memorably summed it up. And what happens is America has receded from the world. Today our friends and allies, they don't trust us. And our enemies, they don't fear us. I think we should get back, number one, to American leadership in the world.

That means speaking out with a clarion voice for freedom, speaking out for the -- for the oppressed, speaking out for people like Pastor Saeed Abedini, an American pastor imprisoned in Iran, speaking out for people like Leopoldo Lopez, the Venezuelan opposition leader, who's been wrongfully imprisoned and has -- is on the 29th day, I believe, of a hunger strike.

This president is silent in using the bully pulpit of speaking for freedom. But at the same time, any U.S. military force, we have always been exceedingly reluctant to engage in military force. It's worth remembering, the biggest country Reagan ever invaded was Grenada. Any military force should be dictated by the vital national security interests of the United States. And if and when we use force, we should use overwhelming force for a clearly stated objective. And then when we're done, we should get the heck out.

Yes, where I differ with George W. Bush, I don't think we should be engaged in nation-building. It's not our job to turn foreign nations into democratic utopias, to try to turn Iraq into Switzerland. It is the military's job to hunt down and kill our enemies, to kill ISIS before they murder American citizens and they wage jihad.

BAIER: Mara?

LIASSON: Would you put more U.S. combat troops -- I guess we call them advisers -- in Iraq? Would you put them embedded, you know, on the front lines, to do what everyone says has to be done if you're going to use more air power, you know, be spotters, call in the strikes? And how many more troops do you think we need there?

CRUZ: You know, the current policy we're following makes no sense.
And -- so the advisers that we're sending in are not able to be effective.
And the reason is the commander-in-chief hasn't set an objective, hasn't set the right objective of destroying ISIS and using overwhelming military power to do so.

Last year, the Senate Armed Services Committee, I asked the secretary of Defense and the chairman of the Joint Chiefs, I said if the object were to destroy ISIS in 90 days, militarily, what would be required for that?

General Dempsey responded, I'm sorry, that's impossible. I said OK, General, if that time frame is unrealistic, you tell me, in your military expertise, what would be required not to degrade, not to weaken, but to destroy ISIS and what time frame is reasonable? His answer was, he said there is no military solution to this. We have to change the conditions on the ground, the poverty, so that young men are not attracted to radicalism.
Now, with all respect to General Dempsey, that's utter nonsense.

The answer is not expanded Medicaid in Iraq. And the problem with our military strategy is the commander-in-chief hasn't laid an object, we are going to make it so that if anyone joins ISIS, he is signing his death certificate. Right now radical Islamic terrorism -- it is the perception of many that ISIS is winning. And that only strengthens them. And the reason is the commander-in-chief hasn't laid out the objective.

On the question of boots on the ground, there are some politicians in Washington that beat their chest. They want to show they're tough, so they say absolutely, boots on the ground. There are others who say never boots on the ground. I think that question should follow the expert military advice once the objective has been set by the commander-in-chief --

BAIER: All right, so no numbers.

CRUZ: -- of destroying ISIS.

BAIER: No specific number?

CRUZ: It's not an arbitrary number for armchair generals who are politicians.

BAIER: Yes, but you want to be president.

CRUZ: But as president, I wouldn't be making the day-to-day combat decisions. The job of the commander-in-chief is to lay the objective out and then you rely upon the generals and admirals and commanders to give you their expert advice on the tools needed to carry out that objective.

BAIER: Senator, thank you.

We have one more segment, "Center Seat." We'll start with George Will after the break.


BAIER: And we're back with our panel, and Senator Ted Cruz in our "Center Seat."

Thanks for sticking around, Senator. George.

WILL: Eighteen states and the District of Columbia with 242 electoral votes have voted Democratic in six consecutive elections. Why is Ted Cruz the answer to flipping some of those blue states that in six consecutive elections other Republicans have been unable to flip?

CRUZ: You know, Albert Einstein famously said the definition of insanity is doing the same thing over and over again expecting different results. Over and over again, the Washington world of consultants say we've got to run a moderate, an establishment moderate. And every time we do it, we lose. If you compare 2004, the last race Republicans won, to `08 and `12, by far the biggest difference is the millions of conservatives who showed up in `04, who stayed home in `08 and stayed home in bigger numbers in `12.

They fall into two groups. Number one, evangelical Christians, number two, so-called Reagan Democrats, largely blue collar Catholics up and down the Midwest and up into New England. You know, I'll tell you, Heidi and I, we spent months thinking about and praying about whether to run for president. Our daughters are 4 and 7. You don't lightly throw a young family into the maelstrom of the presidential race.

The reason we decided to go forward is I look at the rest of the field. There are a lot of people who are talented, who I like, who I respect. I don't see a lot of candidates who I think are likely to energize and mobilize and bring back to the polls those conservatives. And I think based on the record I've built of standing and fighting for conservative principles over and over again, that I'm in the best position to energize and bring back those conservatives.

And at the same time, to bring back together that old Reagan coalition of conservatives and libertarians and evangelicals and young people and Hispanics and women and Reagan Democrats. That's what we have got to do to win.

BAIER: Senator, there is a lot of focus on the Confederate flag in the wake --

CRUZ: Yes.

BAIER: Wake of the situation in Charleston. Two of your co-chairs in South Carolina, Lee Bright and Bill Chumley, are for leaving the flag, calling the removal of the flag "a Stalinist purge." Do you agree with those co-chairs in South Carolina?

CRUZ: Well, let me say, first of all, what happened at the Emanuel AME Church was horrific. It was heartbreaking. I'll tell you as a Christian, I cannot imagine a man walking into a church, sitting down and praying with men and women for an hour and then standing up and murdering them. I mean, it is a level of evil and racism and bigotry that just takes your breath away.

And let me say secondly, that for the victims' families to come out publicly and call for forgiveness, I mean, that brings tears to your eyes.
What an amazing display of Christian forgiveness. It is, I'll tell you, my friend and colleague, Tim Scott, gave a moving speech on the Senate floor.

BAIER: Yes, we played some of that.

CRUZ: And Lindsey Graham did as well, both of them. And Tim talked about the incredible forgiveness of those families.

On the question of the Confederate flag, lots of people like to focus on that. I think we should start by coming together, lifting up the families who were murdered in prayer, and looking for ways to come together. I think the question of the flag is a question for South Carolina to decide.

Now I will say this: I commend Governor Nikki Haley and Senator Tim Scott and Senator Lindsey Graham. They came out together, and they're leading. And I understand this is an issue that evokes strong passion. I understand people that see in the flag signs of racism and slavery, the original sin of this nation.

I also understand others who see an historical legacy that they don't want their ancestors forgotten. And I think it's wrong for a bunch of people who aren't from the given state to parachute in to South Carolina and dictate what they should do. But I'll commend the leaders there for standing up and leading.

I'll tell you in Texas, you know, my former general counsel, who succeeded me as the solicitor general of Texas, just won a case before the U.S. Supreme Court upholding the right of the state of Texas not to show the Confederate flag on a license plate. So my state of Texas has taken a different path. But this is a question for South Carolina.

BAIER: All right, Senator. Thank you very much.

Stay with us. That's it for the panel. But stay tuned to see one presidential candidate's hidden talent.


BAIER: Finally tonight, Senator Cruz has a hidden talent on the campaign trail, apparently.


CRUZ: JFK said, "Some men see things as they are." And ask why. I see things that never were and ask why not. We shall fight in the fields and in the street. We shall fight in the hills. We shall never surrender.
Mike Lee, I am your father. President Obama called me, he said, Jay, if you like your job, you can keep it.


BAIER: So, I mean, do you have a DeNiro? I mean, you've got everything else.

CRUZ: Well, look, a good impression is great. But a bad impression is even better.

BAIER: That's right. Senator Cruz will stick around for "S.R. Online" for a few minutes and take your questions. Fair, balanced and always unafraid.

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