• With: Bill Kristol, Erin Billings, Charles Krauthammer

    The following is a rush transcript of the July 9, 2010, edition of "Special Report With Bret Baier." This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    KRIS MINEAU, MASSACHUSETTS FAMILY INSTITUTE: This judge has found that there is no reason whatsoever for marriage to be defined as a man and a woman. He's totally abrogated 10,000 years of recorded history for all the cultures and all societies.

    (END VIDEO CLIP)

    CHRIS WALLACE, GUEST ANCHOR: Strong reaction in Massachusetts to a court ruling against part of the Defense of Marriage Act. Let's bring in our panel to discuss it, Bill Kristol of The Weekly Standard, Erin Billings from Roll Call, and syndicated columnist Charles Krauthammer.

    We had two rulings yesterday by a federal judge the Defense of Marriage Act is unconstitutional in barring federal benefits for same-sex couples in the state of Massachusetts where they can legally be married. Bill, what do you make of the judge's decision?

    BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: I believe a commentator said it, I think it's a pretty ridiculous decision. The federal court can specify what marriage is for the purposes of this federal program.

    They're not barring Massachusetts from permitting same-sex marriage or giving whatever benefits they want. The idea that the federal government has to defer to Massachusetts in terms of who is eligible for Social Security is an odd judgment by the judge.

    WALLACE: But, Erin, picking up on the judge, Federal Judge Joseph Torro, he says DOMA reaches state sovereignty and says it's motivated by "irrational prejudice," which, "never constitutes a legitimate government interest."

    ERIN BILLINGS, ROLL CALL: Well, that's right. It's interesting because we have the states' rights issue rearing its head in this, and you have progressives now advocating for state's rights which is typically something that conservatives are trumpeting.

    So, yes, an interesting ruling. I'm anxious to see if and when the DOJ does appeal it. And I'm anxious to see if it changes the debate on Capitol Hill. Obviously there is a repeal pending on DOMA. It hasn't gone anywhere. Pelosi said not this time, but I bet it could cause gay rights advocates to pick it up.

    WALLACE: It's interesting, the state's rights issue, because some critics said it was almost as if the judge in the case said you like the Tenth Amendment, I'll give you the Tenth Amendment.

    CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, if you will give it, I'll take it. In fact, I think it is rather hypocritical that a liberal judge will invoke it. But that is one of the themes of conservative philosophy, that is the Tenth Amendment has been completely overlooked, what it says essentially is anything not enumerated, not specially, specifically handed to the jurisdiction of the federal government belongs to the people of the states. It's rally cry of the tea party movement among others.

    So if he wants to invoke it here, I might want to take a hit for the team because Obama-care won't stand a minute of scrutiny under Tenth Amendment analysis, Obama-care, which mandates that an individual in the country has to enter into a private contract with an insurer on health care wouldn't withstand the Tenth Amendment.

    So, look, I'm sure it will be overturned, "a," because of what was said earlier, a judge is not the one who rules on high, what is irrational prejudice and what is rational social policy. It has been the policy of civilized states for thousands of years to have a man and a woman. So I think it will be overruled on two counts. If he wants to give us the Tenth Amendment, I'll take it.

    WALLACE: Two more issues I want to get into quickly with regard to this. One is that meanwhile, while this is going on in Massachusetts, a federal judge in California, Bill, is considering a challenge to Proposition 8, which voters in California passed last November to define marriage as that between a man and a woman.

    When you look at what is going on in Massachusetts and what is going on in California, where do you see the legal future of same-sex marriage?

    KRISTOL: I think there are a lot of judges that would like to take this in their own hand and do what the political branches and the voters are unwilling to do, which is to legislate same-sex marriage for the country or most states in the country.

    I think this will be a big issue in 2012. The Defense of Marriage Act was passed by Congress in 1996 and signed by President Clinton. There is a Democratic president and Democratic Congress right now. If they want to change the Defense of Marriage Act and say it's safe to have same-sex marriage act or then benefits will flow to both members of that marriage, Social Security, et cetera, they can amend it.

    If the voters of California want a referendum on same-sex marriage -- I think conservatives will rally to the proposition. Judges have a much more limited role and these matters should be decided democratically.

    WALLACE: Erin, Bill talked about 2012. We have an election a little sooner than that in 2010. We know, in 2004, how potent the issue of gay marriage can be, whether it's to ban it or not on several state ballots. Do you think it could be a voting issue in November?

    BILLINGS: Gay rights issues have been in the past and they were in 2006. A lot of Democrats and Republicans use them in the campaign. Certainly it could.

    I think it will also come up again in Elena Kagan's Supreme Court, not her hearing but the debate on Senate floor when she goes up for confirmation. I definitely think it will be part of debate. Will it be a defining issue? I tend not to think so.

    WALLACE: Less than a minute. Charles?

    KRAUTHAMMER: I think Republicans and conservatives ought to take a principled stand on grounds of federalism. As Bill indicates, if a state is going to adopt it and it does it by referendum or in the legislature, it ought to be respected.

    If it's a judge, as in Massachusetts, who was under a ruling of a 4-3 majority of the high court, I think that is truly illegitimate and undemocratic.

    So I don't want to see it undone in the state like California where it passed, where a ban on it was approved by referendum. Judges ought to stay out of this in the same way we learned lesson on abortion. We don't want the courts ruling for the whole country. Let each state decide according to its own societal norms and habits.

    WALLACE: All right, we have to leave it there.

    The people have spoken on our home page at FoxNews.com/SpecialReport on which topic should lead the Friday lightning round. We'll reveal your winner when we return.

    (COMMERCIAL BREAK)

    WALLACE: Every week on the FoxNews.com/SpecialReport page, viewers vote on what topic we should discuss first during the Friday lightning round.

    And today -- and this is getting a little bit repetitive -- yep, Charles wild card. Not that it in any way diminishes your triumph, Charles, but would you like to share some thoughts with us?

    KRAUTHAMMER: Yes. Let me say once again I'm humbled by the confidence of the viewers.

    The wild card question for the week is what the most underreported story? And the correct answer is that in Aspen this week, the ambassador of the United Arab Emirates said that he not only supports but almost invites, welcomes, demands a U.S. attack on the Iranian nuclear facilities because, he says, it is impossible to imagine living in deterrents or containments on Iran and even says without nukes it's still aggressive and cannot be contained.

    And I think he speaks for a lot of Arab states in saying that, and he said it openly and publicly.

    WALLACE: Erin?

    BILLINGS: I'll take a different tact. This is shocking for Charles. I think the most underreported story is the fact that Jim Traficant cannot make a comeback and will not be on the ballot in November, a former Democratic House member who just got out of prison. Why? Because everybody cared about LeBron James moving to the Heat.

    So Cleveland, Ohio, lost two --

    WALLACE: Giants.