BRET BAIER, FOX NEWS ANCHOR: Next on SPECIAL REPORT, the president sits down for an interview with FOX News and discusses unemployment, Afghanistan, his critics and more. Attorney General Eric Holder takes fire over the administration's position on Guantanamo detainees, and
Senate Democrats get the price tag for their health care reform legislation.
I'm Bret Baier in Washington, and this is SPECIAL REPORT. Our top story, FOX News talks with President Obama. Here are just a few of the headlines you will hear tonight.
The president says because of the growing national debt, Americans could lose confidence in the economy and trigger a double-dip recession. The president says the administration will not make its January deadline for closing the Guantanamo Bay detention facility, but he anticipates the prison will be closed sometime next year with cooperation.
He says America does not yet have the kind of partner we would like in Afghanistan, and he insists building new settlements does not contribute to Israel's security. Here is senior White House correspondent Major Garrett's interview with the president in China.
(BEGIN VIDEOTAPE)
MAJOR GARRETT, FOX NEWS SENIOR WHITE HOUSE CORRESPONDENT: Mr. President, the FOX News Channel is very happy to see you.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good to see you.
GARRETT: And on behalf of the news channel, let me wish you, Michelle, Sasha and Malia, a very happy and joyous 2009 holiday season.
OBAMA: That's so nice. I appreciate it. To the FOX family, let me say the same.
GARRETT: You have a job summit next month. You want a jobs bill in 2010. Will that jobs bill raise the deficit or will you demand that it be deficit neutral?
OBAMA: You know, our first job was to get the economy to recover, and we're now seeing that. We've seen economic growth. We anticipate economic growth next quarter as well. I always said that job growth would lag behind economic growth. The question now is how can we accelerate it?
There may be some ways that we can accelerate it without spending money. For example, one of the keys to this Asia trip is to start promoting the notion of balanced growth where the U.S. is an exporter again. Now, this is a region where right now we're sending about 25, 26 percent of our exports. If we just boosted our share of exports by one percent, that might be 250,000 well-paying jobs in the United States. So export promotion would be an example of something that we could do without spending money.
There may be some tax provisions that encourage businesses to hire sooner rather than sitting on the sidelines, so we're taking a look at those. I think it is important, though, to recognize that if we keep on adding to the debt, even in the midst of this recovery, that at some point people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.
And so one of the trickiest things that we're doing right now is to, on the one hand, make sure that the recovery is supported, and not withdraw a lot of money either with tax increases or big spending cuts and states, for example, need a lot of support to keep hiring teachers and so forth, at the same time making sure that we're setting up a pathway long term for that deficit reduction. It's about as hard of a play as there is, but it's what we have to do, and whatever jobs, additional jobs legislation comes out has to fit into that broader framework.
GARRETT: Does it raise the deficit or does it not?
OBAMA: Well, the --
GARRETT: Or you haven't made up your mind now?
OBAMA: We haven't seen that and that's part of the reason why I think we want to look at this.
GARRETT: David Obey said yesterday that erroneous estimates from the administration on the job creating power on the stimulus bill and I'm quoting now, "are outrageous and the administration owes itself, the Congress and every American a commitment to work night and day to correct these ludicrous mistakes." Your reaction?
OBAMA: Look, I understand David Obey's frustration. I think that we made a decision very early on, on the biggest stimulus package in history, and every economic model that we looked at, at the time said that if you start economic growth that unemployment will cap out at a certain rate. Now, there's no doubt that employment has been worse than any of the economic models that occurred at the time.
GARRETT: But his criticism isn't about the job creating.
OBAMA: Right.
GARRETT: . which is about what you have said about the job creating.
OBAMA: Well --
GARRETT: Have there been mistakes? Do they need to be corrected?
OBAMA: Look, this is an inexact science. We're talking about a multi-trillion dollar economy that went through the worst economic crisis since 1933. The first measure of success for economic recovery is that we pull ourselves back from the brink. We did. And we got an economic growth going again. We have.
The question now is, can we make sure that we're accelerating job growth? That's my number one job. Nobody has been more disappointed than I have to see how high the unemployment rate has gotten, and I spend every waking hour when I'm talking to my economic team about how, where are you going to put people back to work. It's going to be --
GARRETT: The estimate thing.
OBAMA: This is a side issue.
GARRETT: Do you support or oppose GM using bailout funds for its overseas operations specifically?
GARRETT: What I have said is that we are not going to meddle in GM's decisions. They now owe the U.S. government money. We are a shareholder, but we're not an active shareholder.
We have specifically said that we're not in the business of running a car company. We wanted to make sure that you did not have the collapse of the U.S. auto industry in the midst of a very fragile economic situation, but we want to get out of that business as soon as possible. I was pleased to see that GM thinks it may be able to repay some of the U.S. government loans sooner than anticipated. That's something we encouraged. In the meantime, we're not getting involved in day-to-day management.
GARRETT: A couple on health care. Dick Durbin said the new deadline for signing legislation is now state of the union. Why is that delay acceptable to you and how upset are you about it?
OBAMA: You know, I want this done as soon as possible. And I think the American people do. We've had a long debate. But, you know, there's a reason why health care hasn't been reformed in 40, 50, 70 years. It is a big complicated piece of business, and frankly, Congress is not accustomed, lately, to doing big complicated pieces of business like this.
This we are pushing and prodding as hard as we can. I do think that a lot of the delay has been that the Congressional Budget Office, which scores or determines how much things cost, how much they might save, they've been overloaded, and it's taking a lot longer for us to get that. And I think it's entirely appropriate for legislators to say we want to make sure we get the final numbers on any piece of legislation before we actually vote on it.
GARRETT: So at the end of the year that's gone?
OBAMA: Well, no, I haven't given up on it. We're going to keep on pushing as hard as we can to make that happen.
GARRETT: Will you sign legislation on health care that includes the Stupak language?
OBAMA: You know, I think that there is a balance to be achieved that is consistent with the Hyde amendment, what existed before we reformed health care. I believe in the basic idea that federal dollars shouldn't pay for abortions, but I also think that we shouldn't restrict women's choices. And so I think there is some negotiations going on, not just on the Democratic side, but I think among people who are of goodwill on both sides, to see if we can arrive at something that meets that criteria. And I'm confident we can do that.
GARRETT: Yes or no, does the Stupak language strike that balance?
OBAMA: Not yet.
GARRETT: By how much will you miss the deadline to close Guantanamo by the expiration of an executive order and how disappointed are you on that?
OBAMA: You know, I'm not disappointed. I knew this was going to be hard. It's hard not only because of the politics of people, I think, understandably are fearful after a lot of years where they were told that Guantanamo was critical to keeping terrorists out. So I understood that that had to be processed. But it's also just technically hard because of the fact that --
GARRETT: Harder than you thought it would be?
OBAMA: No, as hard, I just think, as usual in Washington, things move slower than I anticipated. One of the things that we knew very early on, there are a set of detainees in Guantanamo that can be convicted and they will be convicted. There are a set of detainees that can be deported, and sent to other countries, and they will be.
There's a set of detainees, though, that are dangerous to the United States, but unfortunately, evidence against them may be tainted. Figuring out how to deal with them always was going to be difficult. And we are on a path and a process where I would anticipate that Guantanamo will be closed next year. I'm not going to set an exact date, because a lot of this is also going to depend on cooperation from Congress.
(END VIDEOTAPE)
BAIER: We will have part two of Major's interview later in this broadcast with responses to questions about the president's critics, Sarah Palin and the Mideast. But now let's go live to Major who is in Seoul, South Korea. And I guess it's good morning for you, Major.
Listen, I want to ask you about it. After all the focus -- after all the focus by this White House on FOX News, what were the atmospherics behind the scenes today?
GARRETT: Very calm, very rational, very relaxed. Look, I wasn't going to litigate whatever it was that was going on between FOX and the White House, whether it was a war or not. I was always a conscientious objector in that conflict. Bret, can you still hear me?
BAIER: Yes, we got you.
GARRETT: OK. We may have lost -- we may have had a power surge, I can't tell.
OK. Very good. We had a bit of a light flash, but I apologize for that.
So I didn't want to litigate any of that. What I wanted to do with the president at a very limited amount of time, 10 minutes, was cover as much ground as possible. There have been a lot of issues that have come up while we've been traveling through Asia, things he had not had a chance to comment on, questions he hadn't been asked. So it was my job to ask as many of those questions, get as many newsy answers as possible, and to a degree acceptable, I think. We got a lot of news out of this interview.
BAIER: Yes, it was newsy interview. In fact, it got picked up by a lot of wire services and newspapers on-line. Major, quickly, anything to catch you by surprise?
GARRETT: Yes, just to make sure you know, Bret, I can't hear you.
BAIER: Oh, I've got you.
GARRETT: So --
BAIER: Well, the technical difficulties, we will check back in with Major and we'll, of course, have the second part of that interview coming up. Much more from Major's interview plus the panel will dissect it later in the broadcast.
But first, some breaking news from Capitol Hill. The numbers are finally out for the Senate's version of health care reform. We'll tell you what's in the Senate Democrat's bill in just three minutes.
