This is a rush transcript from "Special Report With Bret Baier," September 15, 2010. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
(R) DELAWARE SENATE CANDIDATE: What I think it means is that the political process belongs in the hands of the people, and they want it back. That's what last night means.
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CHRIS WALLACE, ANCHOR: Christine O'Donnell on this day after explaining her victory in the Republican Senate primary in Delaware. Time now to bring in our panel, Fred Barnes of The Weekly Standard; Erin Billings from Roll Call, and syndicated columnist Charles Krauthammer.
Well, the conventional wisdom today I think it's fair to say is that Christine O'Donnell can't win in Delaware and without Delaware Republicans can't win the Senate. Fred, are we writing off Christine O'Donnell and the grassroots movement that gave her a victory yesterday too quickly?
FRED BARNES, THE WEEKLY STANDARD: Yes. I think she can win. It's not impossible. It's harder than it would have been if Mike Castle had beaten her and won in the primary.
Where tea party candidates have won in other states, like Alaska for instance, and Utah, the states are very conservative states, so you nominate a tea party candidate who is conservative and is going to win easily in those states.
But Delaware is different. Delaware is a state that leans Democratic. It's not a conservative state. So it will be tough for her.
But this could be a wave election where the Republicans win in unusual places. We'll see Republicans win a lot of seats, many of them they have had before, in New England and New York and Pennsylvania this year. Delaware, I wouldn't rule out the fact her prospects for winning harder but not impossible by a long shot.
WALLACE: Erin, we talked earlier in the show. James Rosen had a piece about one of the king makers. One was Sarah Palin and we'll talk about her in the next segment. But one of them is Senator Jim DeMint who has been bucking the national Republican establishment, supporting a number of insurgent Republican candidates like Christine O'Donnell.
He said again today he would rather have a minority in the Senate that believes in something than majority that believes in nothing. Let's listen to Senator DeMint.
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SEN. JIM DEMINT, R-S.C.: I don't want the majority back if we don't believe anything. I came in the Senate when we had 55 senators, a large majority in the House, Republican in the White House. And frankly, we didn't do what we said we were going to do.
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WALLACE: Is he driving some of his fellow Republican senators nuts with the sentiment?
ERIN BILLINGS, ROLL CALL: Yes. Look Senator DeMint wants have a conservative purity test. He has made that very clear. The problem is most Republicans want to be in the majority. They want to be in control and they want to be legislating. They want to be able to go toe to toe with President Obama.
Delaware, I disagree with Fred. I think that Republicans are going to write this off. Certainly they're sending the signals out that they're going to endorse and they're going to give her money, but that's about all they're going to do. I don't think anyone will really campaigning for her. There are other states that are really in play and I think that this is set that Senate is probably going to stay in Democratic hands.
But certainly Senator DeMint thinks he can play a significant role. He got out and endorsed a lot of candidates. Some will win in November and some won't. I don't think Christine O'Donnell will.
WALLACE: Charles, what does it say about national Republican Party that in state after state they backed one candidate and grassroots activist helped nominate someone else? There are a bunch of states this is true of now.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's not unusual for establishment to support candidates that aren't in tune of grassroots of the party, particularly in off-year elections where you get the most energized activists.
But I think Senator DeMint is wrong when he says I'd rather have a party that believes in something and not a party that doesn't. Well, the party he is in, in the Senate right now, the 40 senators believe in something. And it's stopping the Obama agenda.
What is remarkable over the last year-and-a-half is how much Mitch McConnell, the minority leader, has held that caucus together all the way from Olympia Snowe to Jim DeMint in opposing Obamacare, opposing the stimulus.
So he is wrong in saying that this is ideologically, heretical or sort of unreliable Republican senatorial caucus. And if they really are serious about stopping Obama, the way to do it is get the majority. Otherwise, we're going to have another two years of what we had in the last year-and-a-half, of Democrats instituting major structural and some of it change they cannot in the end be reversed.
WALLACE: Do you agree with that, Fred?
BARNES: I agree that electing conservatives is the thumb two priority. The number one priority is defeating Democrats. And there you want to field your candidate, to nominate a candidate who gives you the best chance of doing that. If that is a moderate, OK. If that's a conservative, OK.
William Buckley had this famous line about electing as a conservative -- he wanted to elect the most conservative candidate he could who could still win. And that might eliminate some conservatives. So defeating Democrats is number one. That's what you have to do first. That's how you get a majority and go from there.
WALLACE: There's been an interesting development. I want to move to the subject, Charles, an interesting development today. Erin, Karl Rove, of course, Republican bona fides are pretty solid as main strategist for George W. Bush for more than eight years, has been tough on Christine O'Donnell today. Let's watch.
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KARL ROVE, FORMER BUSH ADVISER: When you have a headline in the state leading newspaper "O'Donnell Faces Campaign Debt, back tax issues," that is something you have to deal with. And you can't get away simply saying go to my Web site, I have the answers there.
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WALLACE: What about his argument that it's not her ideology that is going to sink her, it's some of her personal baggage?
BILLINGS: Personal issues.
WALLACE: I mean there are questions about her paying her college tuition and back taxes and number of issues like that.
BILLINGS: The employment history. There are a lot of questions about her character. They're not being raised just by Democrats, Republicans as well. We heard Karl Rove say it. Mike Castle her primary challenger, she challenged Mike Castle, says she was a con artist.
So these are questions that are going to come up. I think the media is certainly going to scrutinize her record. Again, I think this all bodes well for the democrat Chris Coons. I think he is probably the luckiest man in politics today.
WALLACE: Charles, to wrap up this segment, we'll continue to talk politics in the next segment. I mean you have the real possibility here with Sharron Angle and Marco Rubio and Ken Buck and Joe Miller up in Alaska and Christine O'Donnell, you can have a different Republican caucus next year.
KRAUTHAMMER: Well, you could. But I'm not sure that any of these are as radical as people, that all of these are as radical some say. I think Sharron Angle is a particularly bad candidate in Nevada that may lose us Republicans a seat that was attainable. Harry Reid is extremely unpopular in the state. He should be trailing by double digits and he's now neck and neck.
I think O'Donnell is going to be a weak candidate. I'm not sure how much influence they would have if elected in the caucus. I mean overall, people have to decide do you want to follow the Buckley rule and get elected? And in Delaware, that candidate was Castle. He won 12 times statewide. She has lost twice, O'Donnell has lost twice.
I think it's probably a lost seat and it could cost them the majority, which would be divisive.
WALLACE: All right, tell us what topic you would like us to discuss in Friday's lightning round. Logon to your homepage at foxnews.com/specialreport and vote in the online poll. We will have more politics including other races from last night when we come right back.
WALLACE: And we're back with the panel. Let's sift through this latest round of primaries and talk some more politics. There were other races last night, and in the Republican Senate primary in New Hampshire, Kelly Ayotte won narrowly by less than 1,700 over Ovide Lamontagne -- love the name. She has the backing of Sarah Palin and he was courting the tea party. Fred Barnes, what is significance of that race?
BARNES: That race, any of the candidates running on the Republican side will probably win. Kelly Ayotte, the state attorney general, she is probably the best candidate.
There was a third guy in the race, Bill Binnie, who spent $5 million and got 12 percent. This is going to be Republican seat. They'll be holding one of their own. But Ayotte's going to win. I think Ovide, great name, I agree, he probably would have won, too.
WALLACE: But this is a victory relatively speaking for the establishment Republicans over the outsider Republicans in New Hampshire, correct?
BILLINGS: Yes. In this case, she was certainly supported by Sarah Palin, but also by the establishment. And New Hampshire will go to the Republicans unless something crazy happens. I think most people expect it to stay in Republican hands.
And I agree with Fred. I think had Lamontagne won he probably would have won the seat as well. But certainly the tea party is certainly a force to be reckoned with. They are playing in the races. And I think anyone who underestimated them should rethink it.
WALLACE: Talk about somebody who people won't underestimate. Sarah Palin who backed O'Donnell in Delaware, Ayotte in New Hampshire, Joe Miller, the big surprise winner Alaska, and a bunch of others across the country. I think she's had two dozen people she supported who won.
She talked about it today and message for the Republican party. Let's take a look.
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SARAH PALIN, (R) FORMER ALAKSA GOVERNOR: This is good timing because we still have six or seven weeks away before the midterms. And that is enough time. It allows some time for the party hierarchy to get it and understand that they better buck up or stay in the truck.
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WALLACE: You got that, Charles? You got to buck up or stay in the truck.
KRAUTHAMMER: Or go out and shoot a moose. That is the alternative.
WALLACE: Sarah Palin has shown a lot of clout in this election cycle.
KRAUTHAMMER: She has. But the test will be on Election Day in November. I think a lot of her candidates will do well, Nikki Haley in South Carolina among others. But I think a lot of people will look at Delaware and thinking how she jumped in at the 11th hour and supported O'Donnell against a sure winner in Mike Castle, so much a sure winner that Beau Biden, the son of the senator groomed since infancy to inherit the father's seat, pulled out when he saw that Castle was going to be the Republican opponent.
So I think a lot is going to hinge on that, because otherwise people will say she was irresponsible in areas, in races like that. And she will be judged on how many seats are won in the end from the Democrats, not so much of her strength inside Republican Party.
WALLACE: Do you think her candidates and how they do on November 2nd could have significant impact on her viability as candidate for 2012?
KRAUTHAMMER: Absolutely. All of this -- you can almost argue that some of the internal races we have seen in Delaware and elsewhere are sort of an index of her strength as a presidential candidate. These are proxies.
She has shown she is strong internally and has a real constituency and has a reasonable chance to win the nomination. But people will ask, is she electable? And there will also be a proxy on that question in November -- how did her candidates do against Democrats?
BARNES: They'll ask that, but I think the value of her endorsement or anybody else's you exaggerated, Charles. If you're underdog candidate and Sarah Palin endorses you, that will help. Jim DeMint actually helped candidates more. Like Ken Buck in Colorado, who told me he came down to the Senate and nobody would meet with him but Jim. And then DeMint came out and endorse and raised money for them. He raised $125,000 at a time when Buck had no money.
KRAUTHAMMER: She got O'Donnell over the hump in Delaware and Miller in Alaska?
WALLACE: Wait, wait, wait. I want to talk about one more race in Washington. Mayor -- incumbent Mayor Adrian Fenty lost by a fairly decisive margin to the city council president Vincent Gray. Erin, what happened?
BILLINGS: Well, I don't think -- obviously, Washingtonians were not very happy with Adrian Fenty's leadership. There was a lot of concern about how he was handling the reshaping of the education system here.
But again, it's an anti-incumbent year. People want fresh face. And obviously Mr. Gray is not a fresh face, he's on the city council. But this is the antiestablishment --
WALLACE: Charles, I know you want to talk about this and the significance of this race for school reform.
KRAUTHAMMER: His signature issue was school reform. He had a school superintendent out there firing teachers and being tough on competence in the worst school district in the country, being extremely active and aggressive on this. She was strongly opposed by teachers unions who opposed Fenty. Also, the government workers union opposed him.
And I think it's a huge defeat across the country for school reform. Here is a mayor who was a serious about it and backed the superintendent, and he got crushed.
BARNES: Why did he get crushed in particular? In the African-
American vote. He won the white vote, but he was rejected particularly in the poor and black neighborhoods.
WALLACE: Part of that had nothing to do with unions. It had to do with the sense that he had lost touch with the neighborhood.
BARNES: He lost touch with them, but a lot of them also complained about the firing of teachers and principals.
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