Updated

This is a rush transcript of "Special Report With Bret Baier" from December 4, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

LISA JACKSON, EPA ADMINISTRATOR: This long overdue finding cements 2009's place in history as the year when the United States government began seriously addressing the challenge of greenhouse gas solutions and seizing the opportunity of cleaner energy reform.

SEN. JAMES INHOFE, R-OKLA.: This bureaucratic nightmare is based on flawed silence. Lisa Jackson, who is Obama's EPA administrator, admitted to me publicly that the EPA based its action today on the findings of the U.N.'s Intergovernmental Panel on Climate Change that's known as the IPCC.

(END VIDEO CLIP)

BRET BAIER, HOST: And of course Senator Inhofe then points to the e-mails that have circulated now called Climate-gate surrounding the IPCC data.

The issue today, the EPA has finalized its finding that greenhouse gases are a threat to public health and thereby can be regulated under the Clean Air Act according to a Supreme Court ruling.

So what about this and how it changes the whole dynamic? Let's bring in our panel: Steve Hayes, senior writer for The Weekly Standard; Juan Williams, news analyst for National Public Radio, and syndicated columnist Charles Krauthammer.

Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I think it's hard to overstate how important the EPA ruling is today. It really gives the EPA and the executive branch free rein to do just about anything, to regulate just about any aspect of U.S. commerce given how much of manufacturing, automakers, what have you, emit greenhouse gases....

BAIER: So even though the climate change legislation on Capitol Hill looks like it's stalled right now.

HAYES: This is a back door. It is a way to get to the same result potentially by using the mechanisms of the executive branch.

I think to have the timing that this happened on the eve of the Copenhagen conference, I think the White House would like everybody to believe that that was sheer coincidence. I think the timing suggests otherwise.

BAIER: Juan?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: The fact is that the Supreme Court of the United States has ruled that the congressional action on the Clean Air Act includes things like greenhouse gases.

So now you have Lisa Jackson and the EPA administrators stepping up and saying yes, we think based on the scientific evidence that CO2 gasses — greenhouse gases — do fit this definition, and therefore, it puts her in position, for example, in specific, to work with the Department of Transportation on limits of emissions coming from the new light trucks that are being put out in the country. And, you know, about 23 percent, I think it is, of all greenhouse gases produced in the U.S. come from vehicles on the road. And so it puts the EPA in position to deal with that.

Now, I think if you wanted to be critical of this, you would say, look, it's a time of high unemployment, we're in a recession, you don't want some kind of administrator in Washington putting the kibosh on any kind of new innovation or just plain old industry.

But the fact is that the economy has to change. We have to go towards green jobs. We have to do something about global warming. And the politics of it is, as Steve just pointed out, it helps the Obama administration and helps with what is going on in Copenhagen, but it doesn't have much effect on the Congress.

The Congress remains the place — the theater — for real action. If there is ever going to be any action, it will come on cap-and-trade and that's where the deal is.

BAIER: It was largely thought that this move would be a hold over the heads on Capitol Hill to say either move forward on cap-and-trade legislation or we will move forward on regulatory moves like this.

Charles, this is the first step, but it could continue.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, it's blackmail. It is a way of saying to Congress either you do cap-and-trade or we will do cap, no trade. We will regulate every aspect of American life.

If the EPA now has in its power, and perhaps it will enact it over time, to intrude on every aspect of American life. Essentially what it can do is to regulate emissions from any institution, any enterprise, any apartment block that emits more than 250 tons of CO2 in a year, which is a very low level. It says it will raise that much higher but it doesn't actually have the authority to actually raise it.

So it can regulate every aspect of American life. It really is what Vaclav Klaus, the president of the Czech Republic said, environmentalism is the new socialism. It is a way for the feds, for the best and brightest in the federal government to regulate all aspects of life. It used to be in the name of socialism, which was social equality. Now it's in the name of the planet.

It's a smart strategy on the way of the left, but it is a hell of a way to do it. If you want to do it, at least you do it by the consensus of Congress. If you do it by regulation, there will be a revolution on the administration's hands.

BAIER: Senator Inhofe and others, Steve, says this opens the doors to a lot of lawsuits. And primary of those lawsuits would be what is the decision based on? And he claims that the EPA administrator, Jackson, said it was based on the IPCC data which came from, among other places, East Anglia University, which is the center of the Climate-gate e-mail controversy.

HAYES: It's not just James Inhofe's claim. It is indisputable that the data that the EPA has used comes via the IPCC via East Anglia, and that's what I think is crucial here.

Look, it is absolutely essential for the people who are proponents of climate change, dramatic climate change acts, that there be no questions about the science behind it. Otherwise, it wouldn't make any sense at all to take the kinds of drastic measures that they're proposing.

The fact is there are questions about the science. You don't need to be a climate change denier to be a climate change skeptic. And the questions were raised by the scientists themselves. The most vocal and outspoken and dogmatic proponents of climate change in the world at East Anglia are the very people raising questions and saying look, we can't explain the cooling trends over the past decade. That's a travesty.

So when you have the world's premier scientists on this issue raising these questions in private, it undermines all of their certainty, the certainty that they project when they make their public argument.

WILLIAMS: I don't think so at all. Wait a second: There's one thing to say that you are saying, we don't want to put out this data because it will feed our critics or people who don't believe that global warming is taking place. There is a difference between saying that and saying, you know what, global warming is a fraud...

(CROSSTALK)

HAYES: You're right. There is a difference...

WILLIAMS: And we want to perpetrate a fraud on the American people. These people are not...

HAYES: And it is a difference that I made. I drew exactly that distinction.

(CROSSTALK)

HAYES: The e-mail was "We can't explain the cooling trend over the past decade."

WILLIAMS: They didn't want to put that information out and open it to lots of discussion.

HAYES: They called it a travesty.

(CROSSTALK)

HAYES: Why isn't there a discussion about it? It is science. Have a debate.

WILLIAMS: That's what they should do, Steve, and I couldn't agree more. But I think it's important for everyone to understand, at no point did they say that there any evidence that global warming is not occurring.

HAYES: They didn't say that. The other thing they said is they would manipulate the data.

KRAUTHAMMER: It is not just an invalidation of data and a suppression of data, it's a suppression of dissent.

(CROSSTALK)

WILLIAMS: I agree with you.

KRAUTHAMMER: It is about penalizing an editor who dared have an article —

WILLIAMS: Fine, but Charles, is there any evidence that there is anything other but global warming taking place and that, as responsible leaders, we should take action?

KRAUTHAMMER: There is a huge amount of contrary evidence, and the problem is that there are active elements of suppression in this, and that raises a question as to whether you can trust what is called a consensus, which is a forced consensus of suppression, boycotting and of scape-goating people who are dissenters.

BAIER: I'm going to have to suppress this panel, but Juan, it is good to have you back.

(LAUGHTER)

Is Harry Reid's connection between healthcare reform and slavery a monumental stretch? We'll talk about it next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SENATE MAJORITY LEADER HARRY REID, D-NEV.: All Republicans could come up with is this — slow down, stop everything, let's start over. If you think you heard these same excuses before, you're right. This country belatedly recognized the wrongs of slavery, there were those who dug in their heels and said, slow down, it's too early, let's wait. Things aren't bad enough.

SEN. ORRIN HATCH, R-UTAH: It is offensive, unnecessary, really a slap in the face to all Republicans, and I think a slap in the face to the Democrats to use language like that. But to make a long story short, they're frantic. They want this bill. To compare this to civil rights, my gosh...

(END VIDEO CLIP)

BAIER: Some interesting rhetoric on the Senate floor today as the Senate majority leader saying some senators back in the day resorted to the same filibuster threats back on civil rights legislation that we hear today.

Here's the issue historically as we look at the numbers. Back at the Civil Rights Bill of 1964, 29 of the senators who voted to continue the filibuster, a full 80 percent were Democrats. That's just a fact, but we're back with the panel.

Juan, what about this rhetoric today?

WILLIAMS: Hyperbole. You know, it's over the top. It reminds me of earlier people talking about Nazis.

BAIER: But this late in the game.

WILLIAMS: Democrats are desperate right now to get a deal done and get it done before Christmas and they're trying to put pressure on everybody involved. And of course, they're not even talking to Republicans. So it is really a conversation among Democrats.

That's why President Obama was up there this weekend. He didn't go and meet with the Republicans. He just talked to the Democrats. And what you are getting from Senator Reid, I think, is evidence of his anxiety and making it clear — I mean, to quote Dr. King, "Why we can't wait." We can't wait right now. We've got to do it now. Don't let your inhibitions or concerns from constituents back home hold you up. Go for it, baby; go now.

So that's all it is. But to me, it's a little bit much.

BAIER: Charles?

KRAUTHAMMER: The reason it is sort of cheap and desperate is also because civil rights and slavery were about relieving the shackles on people and increasing freedom. You can make arguments in favor of this health care reform, but an increase in freedom it's not.

If anything, it is going to intrude the federal government into one- sixth of American life in a way we have never had before. It will have the government — we will be creating about 118 new regulatory commissions, boards, regulators who will dictate how you get health care and every aspect of American life.

They will be dictating to health care insurers exactly what are going to be the ratios of the old and poor paying in. You will not be able to use actuarial tables in which it's now the elderly pay six times as much as the young. It's going to have to be — the government will have to regulate. It will be two to one or three to one.

All of this will be a net decrease in our freedom in action of life. So I think that makes the analogy to civil rights and slavery particularly inept. But as you say, it is a sign of anxiety on the part of Reid and of desperation.

BAIER: Steve, do you get the sense this is gaining momentum or losing momentum?

HAYES: I get the sense, the strong sense, it is gaining momentum. I think as every day passes it is more and more likely are to pass. And I'm somebody who thought this was a month ago this was a 50/50 proposition.

I think when it comes down to it, you're more than likely going to have the president putting pressure on individual senators, whether they be, you know, Democrats on the left, like a Roland Burris, who has threatened to filibuster something without a public option. He's not really going to filibuster something without a public option.

Or you have the president courting somebody like Olympia Snowe, who is the only Republican he did meet with. She is increasingly once again becoming a player in this.

And I think it suggests that they will go with some kind of a public option, whether you want to call it this office of personal management plan that's been kicked around in the last day that seems to be sort of a compromise. It is still a public option. It gives people, gives moderates a chance to say that they're not for the extreme public option. It potentially gives the left an opportunity to say this is a doorway into the public option.

I think you're increasingly likely to fine that kind of a compromise leading to an overall bill.

BAIER: And Juan, do you think this happens sooner rather than later?

WILLIAMS: Well, my sense is they want something today if they could get it today, but they have to bring in conservative Democrats.

Now, in just the kind of dynamic you heard Steve describe, they are going to try and make all kinds of accommodations and moderations and cuts, which raises the question: What are you going to have at the end of the day? Is it going to be worth it? Is it going to be something that really changes the way we deal with health care or is it simply going to be a veil that allows the Obama administration to say we got something done on health care?

BAIER: Quickly, Charles — you're still a long way from the Senate proposal on whatever it ends up being in the House bill that passed.

KRAUTHAMMER: In the end, the left will capitulate on its details because it knows it is an historic opportunity, once in a century to seize control of health care.

You pass a bill now. Obama signs it, and you can then amend it, fix it later. I can't see anybody on the left stopping it.

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