Updated

This is a rush transcript from "Special Report with Bret Baier," September 7, 2016. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

HILLARY CLINTON, DEMOCRATIC PRESIDENTIAL NOMINEE: The American people have a big choice to make when it comes to national security. On the one hand, we have Donald Trump, who disrespects our military leaders by saying, and I quote, "I know more about ISIS than the generals do."

DONALD TRUMP, REPUBLICAN PRESIDENTIAL NOMINEE: Immediately after taking office, I will ask my generals to present to me a plan within 30 days to defeat and destroy ISIS.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: The two major party candidates talking about national security as they get ready for a commander in chief forum tonight. More about this issue and the state of the race. Let's bring in our panel: Dan Balz, national political correspondent at The Washington Post; Mercedes Schlapp, columnist for The Washington Times, and syndicated columnist Charles Krauthammer. Dan, the focus foreign policy, this seems to be a driving issue. But obviously we've seen these elections really focus on the economy, and that's where things mostly turn.

DAN BALZ, THE WASHINGTON POST: They do. I think this one probably will still turn on that, but there's no question that national security is a bigger issue this time than it was certainly in 2012. The world's in turmoil, as we know. There's questions about both of these candidates and where they stand and how reliable they would be as commanders in chief and as presidents. So I think it's heightened the discussion. So tonight we'll begin to get a look at it, but this is a debate that is going to carry on through the election.

BAIER: Mercedes, Hillary Clinton going after again and again and again temperament of Donald Trump. Donald Trump today going after the temperament and performance of Hillary Clinton. Take a listen to trading attacks today, Donald Trump and Hillary Clinton.

(BEGIN VIDEO CLIPS)

TRUMP: Sometimes it seemed like there wasn't a country in the Middle East that Hillary Clinton didn't want to invade, intervene in, or topple. She's trigger happy and very unstable. Hillary Clinton's legacy in Iraq, Libya, Syria, has produced only turmoil and suffering and death.

CLINTON: He's very loose in his talk about nukes. He says he doesn't care if other countries get them, doesn't know why they haven't been used already. I mean, it's so mindboggling.

(END VIDEO CLIPS)

BAIER: Thoughts?

MERCEDES SCHLAPP, THE WASHINGTON TIMES: The battle is about the qualities for commander in chief. Is it the temperament versus the trust issue? For Hillary Clinton, she's been focusing time and time again in almost every speech about how dangerous Donald Trump is. He's unfit to be president. For Donald Trump, he's making the case that you look at Hillary Clinton's record. It's a failed policy in the Middle East, the Middle East is more unstable now that we've seen before. We've seen the failures in Libya, the failures in Egypt and what we've seen in Syria, putting the blame clearly on Hillary Clinton as well as focusing on her e-mails scandals, which is the trust issue. Once again, can we trust Hillary Clinton to be commander in chief knowing that she can't figure out classified information, what's classified and what's not classified.

BAIER: And the honest and trustworthy numbers in just the recent polls suggest that Trump's even doing better than Hillary Clinton in the new CNN poll, for example. Charles, your thoughts on this as we get ready for this forum?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: That's true. Her numbers are sinking, his are staying the same. So he's rising on that measure. But there's no connection with the trust issue and whether people believe you can be commander in chief. Richard Nixon was known as "Tricky Dicky." He was never trusted. And yet everybody agreed when he ran that the pluses on his side had to do with his knowledge of foreign affairs, and it turned out he did rather well on that measure.

You know, look, you get Trump saying that he has a plan for ISIS, and the plan is to ask for a plan when he gets into office. That's not much of a plan. And considering that he would ask for the plan from the generals, who he says know less about ISIS than he does, I think it's more an exercise in rather remarkable humility on his part than it is a grand strategy.

BAIER: But on the flip side, you can argue that the Obama administration plan hasn't really worked and Hillary Clinton's plan is to continue President Obama's plan.

KRAUTHAMMER: I would argue that nobody has a plan, particularly this administration. I think the president actually has a vision and he did years ago, that he would just gradually squeeze them out of Iraq and leave the Syrian part to his successor, which I think is sort of what is unfolding. But it's not quick enough or decisive enough.

But nobody has a plan. The difference is that Trump says he has one and he'll do it quickly, and that he knows exactly what it is. But he didn't want to tell the enemy. That didn't sound like he's hiding it from the enemy.

BAIER: Dan, what about this tactic to go to the left of Hillary Clinton on her hawkishness, on the fact that she's trigger happy, the fact that you have a Republican nominee now saying that the Democrat is more likely to be engaged in countries around the world and we shouldn't be?

BALZ: It's one of the question marks about Donald Trump. Obviously we know that Hillary Clinton is more hawkish than President Obama. But Donald Trump has sort of tried to have it both ways, which is on the one hand we're going to bomb the you know what out of ISIS. And on the other hand, we're not going to do the kinds of things that Hillary Clinton has done. We're not going to be as interventionist.

I think that, as Charles suggests, there's a question about what Donald Trump really wants to do or would do. And so I think that raises both the issue of temperament and stability but also knowledge and experience. And I think that's where they engage.

BAIER: Dan, I want to ask you about "The Washington Post" 50 states effort that you've been doing. We have this graphic "Washington Post" Survey Monkey and some of the electoral breakups that you have right now. You've been traveling a lot. The most interesting thing I thought from a lot of this data is the number two was the effect of third party candidates in all these states in the different polls. And I think we have that up. What have you found?

BALZ: Well, there's no question that when you bring the Libertarian and Green Party candidates into it, Hillary Clinton's lead is narrower than if they're not in it. The Real Clear Politics number is like a point or a little more than a point smaller. We found that there were at least three states that move from kind of Hillary Clinton's column into the toss-up column. It didn't directly help Donald Trump, but it created a larger batch of competitive states.

I think the survey we did, which was a survey in all the 50 states, a huge online sample, 74,000 respondents, showed that this race has tightened, that Trump has some strength in the Midwest that he can try to exploit. He's not over the hump yet, but he has some strength there. That Hillary Clinton is able to put some red states in play, but that the bottom line is that he still has a much narrower path to 270 votes than she does.

BAIER: The Electoral College. But this race is so strange. There's a new poll out in Rhode Island that says Donald Trump is down by two. There's a poll out in Arizona that says Hillary Clinton is down by three. These are two states that are all Republican in Arizona, all Democrat in Rhode Island.

BALZ: I guess what I would say about that is, one, Donald Trump's an unconventional candidate, so in some sense that can kind of scramble things. I think the second is that by Election Day these states line up kind of like they have done historically. We don't know what their actual numbers will be, but there's a kind of rank order that you can expect.

BAIER: No one thinks Hillary Clinton is going to win Texas this year.

BALZ: Exactly, although we had it as a dead heat. But this is a time in which that normal order gets messed up, and I think we're seeing some of that in the polling right now. It will begin to fall into a more predictable pattern, but not until after the debates probably.

BAIER: The debates matter this time.

SCHLAPP: The debates matter, and you're seeing Gary Johnson in the teens. Is he going to make the cut, 15 percent? Can he make it into the debates? It would definitely shake up how the debates play out.

BAIER: Last thing, and I wanted to mention this. We covered the Iran payments. We were one of the organizations that broke this story originally. Now we find out that there were cash payments. We don't know whether it went to a third party and then cash to Tehran, but how this affects this administration and possibly even Hillary Clinton. Understand that she wasn't in the office when it happened.

KRAUTHAMMER: It affects the administration in two ways. Number one, the dribbling out of the information. Yes, they said the payment was made at the time. But the idea that it was on an airplane -- on airplanes that were unmarked and they were holding it until the hostages were released and that was done in cash and foreign currency, all of that indicates something quite humiliating, if nothing else. And it's obvious the administration did not want anybody to know. That was a concealment operation, and it came out.

And the second is, what are we doing bargaining in this way with a terror country when we sat down originally for the nuclear negotiations? We should have had an un-negotiable demand on the table. We are not going to talk to you about anything like relieving sanctions until there are no hostages here. And that's the crux of the issue.

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