This is a rush transcript of "Special Report With Bret Baier" from January 30, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

MAJ. GEN. DAVID PERKINS, U.S. MILITARY SPOKESMAN: The last big election period here in Iraq, January '05, the average number of daily attacks in Iraq was 92 a day. Yesterday, the average, we have five total attacks in Iraq.

So you see this huge improvement in security already under the leadership of the Iraqis. So, obviously, the trend is in the right direction, and they are fully committed to making sure security is such that everyone can get to the polls and vote.

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BRET BAIER, HOST: Major General David Perkins in Iraq, a U.S. military spokesman, talking about the provincial elections Saturday. We talked about them months ago, about how important they would be. Now this day has come. There are still, I will remind you, 140,000, roughly 140,000 U.S. troops on the ground in Iraq.

Some analytical observations about all of this from Fred Barnes, executive editor of The Weekly Standard, Juan Williams, senior correspondent of National Public Radio, and syndicated columnist Charles Krauthammer — FOX News contributors all.

Charles, the importance of this election — we're not hearing a lot about it on other channels, you are hearing about it on this one — but why? Why is this so important?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It is a remarkable event.

First of all, it will legitimize the local leaders, the ones who have been shut out, the ones in Anbar and the Sunnis and others, in a kind of a federalist way, the way that in America you have governors who have a legitimate claim on power. So you can have a dispersion of power all around the country.

Secondly, what you are getting is this amazing proliferation of parties and candidates. Unlike the earlier elections, in which it was a closed list, which means you could only support a party but not a candidate, this one is an open list system.

So you are going to get a lot of changes. You are going to get a lot of individuals. And you are not going to have what we had in the earlier elections, people voting according to sect and the advice of their religious leaders. There are a lot of secular parties here.

What you have is the growth of civil society. And what's going to happen after this election, because of the vast number of parties, is going to be the bargaining among them, and you're going to get all kinds of interesting coalitions.

It is the beginning of a civil society in Iraq and the strengthening of a democracy. And, in a way, it vindicates the surge and the entire idea of Iraq as capable of having a real democracy.

BAIER: Juan?

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: I think without a doubt what's incredible is that you contrast it to the time when Saddam Hussein was in power, and the only name on the ballot was "Saddam Hussein." You either voted for him or you voted against him.

So this is a little bit different. It's a step up from Minnesota voting, I suppose, and hopefully they will do a little better.

But this, to me, is really a breakthrough moment in terms of all the effort that Americans have put in. And I have been highly critical. I thought it was a sad situation that we found ourselves in, and I think the surge, people might want to justify the surge and all. But now we've come to a genuinely pleasant, progressive moment in Iraq.

I'm particularly taken by the idea that you're going to have Shiites and Sunni participating in this election. So Sunnis who had not participated in the past now are going to be fully engaged in this electoral process to the point where even people who are strongly anti- American — here I'm thinking of Sadr —

BAIER: Muqtada al-Sadr, the radical cleric.

WILLIAMS: Exactly. He doesn't have a party, but he's willing to endorse individuals in this.

And, I think, again, that's a tremendous statement for where Iraq is at this moment.

BAIER: And you had the State Department spokesman, the Obama administration spokesman applauding where Iraq is today.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well, they should.

I want to quibble with Juan about one thing. In the elections for Saddam, you said you voted for him or against him. No, you voted for him. Remember the last election when he ran, it was announced he got 100 percent of the vote. Of course he did. If you didn't him, you were in trouble!

This was a remarkable election. I am trying to think when have there been free elections like this in Arab countries or the Middle East? Obviously, Israel is a democracy, but think of other Arab countries.

You can only think of Lebanon from the '40s to the late '70s before the Lebanese civil war, and then Lebanon had another election after the Syrians were pushed out, a free election in 2005. But that's about it in Arab countries. This is — I mean, I think the election itself is the most important thing.

And secondly, it's the Sunnis. The Sunnis were in power there under Saddam all those years. They boycotted the 2005 elections. So while some Sunnis were elected, they were not representative. They didn't have significant followings in the provinces.

Now they will. This will be a whole new generation of leaders elected in Iraq, and they'll have power like governors, as Charles was talking about.

And I think to see the Sunnis committing themselves to be a part of this electoral system and civil society in Iraq is enormously important.

WILLIAMS: One of the things that struck me, Fred, was when I was reading about it was to see that people were talking, as we just heard from the general, that the security issues don't dominate anymore. It is service delivery — who can deliver the electricity, who can make the streets run, who can do the basic things that make for a civil society.

BAIER: Which will be even more important as U.S. troops start to draw down in bigger and bigger numbers.

BARNES: They're in the background for this anyway. The Iraqis are running this election, and basically, the one for the constitution and the one for the parliament the U.S. ran, but not this one.

BAIER: We go from Iraq picking leaders to the GOP picking a chairman. We'll also pick this week's losers and winners, and maybe the panel's pick on the big game this weekend.

Our Friday lightning round is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: We're going to say to friend and foe alike-"We want you to be a part of us. We want you to work with us. And for those of you who wish to obstruct, get ready to get knocked over!"

(APPLAUSE)

(END VIDEO CLIP)

BAIER: Michael Steele, the new chairman of the Republican National Committee, the first African-American Chairman, formerly a FOX News contributor.

He is one of the topics in the lightening round. We'll bring back the panel. Charles, Michael Steele?

KRAUTHAMMER: Good choice — politically smart, savvy, tough, as we saw in that little clip. If it hadn't been for Katrina, I think he would be Senator from Maryland, but I think this was a good second choice. I think it was an excellent choice.

WILLIAMS: He's a strong fundraiser and a great speaker, and really terrific as a charmer, going out there and spreading the Republican message.

He said, you know, this is the party of Lincoln, and he intends to go out there and do some very important work for Republicans, which is to go into embracing people who are new to this country, immigrants, people who are in the minorities, racially speaking, women, and say you have a home here in the Republican Party.

To me, that's key if the Republican Party is to have a chance in 2010.

BARNES: He certainly is not a WASP. He is not white. He is not Anglo-Saxon, and he is not protestant either. He is a Catholic.

I think he still has to prove himself as an organizer and as a fundraiser. He is very fortunate that Mike Duncan, the outgoing chairman, is leaving him with $20 million and no debt.

BAIER: Winners and losers this week-go down the line.

BARNES: I think the winner was in the House with the new Republican whip, Eric Cantor, who threw was shutout, a perfect game. Every Republican voted against the egregious Democratic stimulus package.

And the loser was Nancy Pelosi, the House Speaker, who claims she is non-partisan. Non-partisan, Nancy Pelosi — that's a laugh.

BAIER: Winner and loser?

WILLIAMS: I give more credit to John Boehner than to Eric Cantor. I think Boehner just had a wonderful week, and he's off now to the retreat, and he is able to say he held the troops together, and he did so at a moment when people were saying you got to give the new president a chance. He was able to deliver the message this is what Republicans stand for at a moment when Republicans are trying to find their voice. In terms of a loser this week, I think it's the national mall, which got kicked out of this budget stimulus package. The national mall is really, it's becoming decrepit. It's crumbling around the Jefferson Memorial. The sidewalks are broken up. The sod is terrible.

It is our national show place, and yet it is coming apart. And, somehow, politicians don't think they should fix it.

BAIER: Well, I don't know if that's the case. Many of them are saying it might be a good cause, but not stimulative. Maybe it should be in the appropriations process.

WILLIAMS: They haven't done it for years. This has been going on for years. The National Park Service has made requests. And every time it gets pushed aside, and I think it is really a shame.

BAIER: OK. Charles, winners and losers?

KRAUTHAMMER: Winners, I think John McCain on the Senate side. He came out against the abomination of the stimulus package early on FOX News Sunday, and he is the guy you would have expected to reach out and try to get a compromise. But he understood this was a bad bill.

The loser here, I think, is Obama. He allowed the House leadership and all of the barons to write this bill. It has his name on it, but he would have written a cleaner version. He stuck with this, and I think he is going to suffer as a result.

BAIER: All right, Super bowl picks, quickly.

KRAUTHAMMER: I'm a believer in lost causes. I supported John McCain, so Cardinals in overtime.

BAIER: Wow.

WILLIAMS: Steelers big — Steelers in a romp!

BARNES: The Steelers are a better team, but the Cardinals are hot. So I think the Cardinals will win.

BAIER: Wow, two Cardinals and one Steelers.

BARNES: Hot teams are hard to stop.

BAIER: I'm going to have to go with Pittsburgh. You and me, Juan.

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