This is a rush transcript of "Special Report With Bret Baier" from March 16, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: There is no way in the world we will be doing an unconstitutional thing. We are the rules committee.

HOUSE MAJORITY WHIP REP. JAMES CLYBURN, D-S.C.: We aren't into sleight of hand here. All we are saying is we will deem that the 60 votes Senate got this bill passed and we are going to go on and pass these corrections.

REP. JASON ALTMIRE, D-PENN.: The self-implementing rule where you're talking about where you wouldn't have a formal vote on maybe the most important policy in the past 40 issues, I have a big issue with the way they are doing the process. I think it's wrong and my constituents don't like it.

HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: Anybody who thinks they can sneak this bill through and deem it, all these other tricks, there is no way to hide from the biggest vote that most members of Congress will ever cast.

(END VIDEO CLIP)

BRET BAIER, "SPECIAL REPORT" HOST: What are they talking about there? It's called the "self- executing" or the "deeming rule." Essentially it means that the House would vote once and then the Senate health care bill would be deemed into law. They'd be voting on the reconciliation bill. So they'd get out of the official vote on the Senate health care bill.

Here is what Nancy Pelosi said it about it yesterday to a round table of bloggers — "It's more insider and process oriented than most people want to know, but I like it, because people don't have to vote on the Senate bill."

She was asked about that statement today.

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HOUSE SPEAKER NANCY PELOSI, D-CALIF.: No. I said there are a lot of the people who don't want to vote for it.

UNIDENTIFIED FEMALE: Aren't you saying that the Senate bill (inaudible) problems with it?

PELOSI: We will do what is necessary to pass a health care bill to improve quality, lower cost, and make America healthier.

(END VIDEO CLIP)

BAIER: OK. Does everybody get it now? Let's bring our panel, Tucker Carlson, editor of TheDailyCaller.com. A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Tucker, the deeming rule?

TUCKER CARLSON, EDITOR, THEDAILYCALLER.COM: You heard it, "we will do what is necessary." And they will. They will do whatever is necessary. I think in the short-term, it's so ugly that there will be consequences. She is basically admitting that they want the Senate bill to become law but they don't want to vote on it because it's so filled with indefensible elements.

Steny Hoyer sort of summed up their view when he said who cares? Nobody is paying attention. In the long run that's right. In the long run no one looks back on the civil rights act or any landmark piece of legislation and says what an ugly fight that led up to it.

In the short run, I think it could hurt them if the Republicans are able to make the case. And I think that's an open question. Judging by the last couple of days you short of wonder if the majority of the country is against this legislation, we're moving in slow motion toward it, Saturday is the day we will find out. Where is the organized opposition to this bill?

BAIER: A.B., we have heard the president and the House speaker and others saying the American people are not interested in process. I will tell you I have received thousands of e-mails from people who are interested in the process. What about this process?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: The Democrats made sure the American people remembered the 2003 Republican leadership process vote for the Medicare prescription drug bill, where they kept the vote open for more than three hours and sold votes on the floor. People remember it to this day.

The problem with the Slaughter rule, this deeming thing, combined with the criticism we have now been hearing for two weeks about using reconciliation, is that it begins to give the sort of titanic deck chair rearranging feel to the last and final days of the effort to pass health care reform.

It just gets worse and worse and they are doing — scrambling to do all these things that seem sort of not proper but maybe they are legal. But it invites more chatter on television all day, and more opposition.

It's not — it is so much more painful for a member to go and try to fight and say no, no, I really didn't vote for the Senate bill. I voted for the deeming of the Senate bill. I mean, this will literally do more political harm for those members than just voting for the Senate bill.

BAIER: Because Charles, the American people aren't stupid. They follow this pretty closely, more than many issues than we have seen.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: If this were a single isolated procedural oddity, it could be washed away. But it's coming on top of a whole lot of others. We have never in our history passed a piece of legislation this sweeping and important, first of all, without a single support, single member in either house of the opposition party supporting it, never done that.

We will never have passed anything on this scale with, if it does pass the House by squeaking through by one or two single votes. It didn't happen with Social Security. It didn't happen with Medicare.

We will never have passed anything on this scale through the loophole of reconciliation in the Senate. And now adding insult on to all of this we will never have passed anything of this scale using the Slaughter rule, the deeming rule, which is in and of itself absurd.

Now, you add all of that together — again, it's not illegal. It can be done. It will be done. It will be rammed. But it's outside of our practice, outside of our tradition and the spirit of the law.

When you add on to it the fact that it's all about a bill that largely has a huge majorities overtime consistently against it, and adding after an election in Massachusetts in which it was the major issue and the opposition candidate ran on that as his number one issue, and he won on that, all of that together makes it extremely, extremely unusual and makes the process look as if it's being done because there is no other way that you could do something this unpopular and wrong without it.

BAIER: You don't think they have the votes yet, Tucker?

CARLSON: I don't know. We have got a couple people working on this full time, and I have been on the phone with them all day. The numbers are shifting. The timeline, however, is pretty clear. The president's plane, Air Force One leaves at around noon on Sunday to go to Asia. The press chart leaves at 8:00 a.m.

They have got to get this done by Saturday. That means we need a CBO score, which apparently comes late tonight. We are hearing rumors that it's not satisfactory. We are going to need the language tomorrow morning in order for the 72 hours to work out.

BAIER: The 72 hours online.

CARLSON: That's exactly right, to see legislation.

Let me make one quick point though. I agree with everything Charles said. This is repulsive. It's without precedent. But the Democrats understand something deeper about this, which is it's an entitlement. This is not a reform, it's an entitlement. And entitlements are narcotics, they're addictive.

And overtime, short time, five years, maybe, if this becomes law, the American population will be addicted to it. It will be sacrosanct. You will not be able to run against it. That's why this is momentous moment. That's why this is the moment the country changes forever.

BAIER: We don't often talk about the constitutional challenges that are already listed in a number of states out there, A.B., but this thing will be challenged if it's passed, if it gets that far. Do you think they have the votes to pass it?

STODDARD: Well, I know that they don't right now. And there is a real since of panic on Capitol Hill today. You can't get your e-mails or calls returned, for the basic questions are not answerable at this point. Whether they come up with those votes by Saturday is another question entirely. I think that, you know, you heard the House speaker, they will do whatever it takes. They simply have to pass it.

BAIER: Charles, what do you make of the president coming on Fox tomorrow?

KRAUTHAMMER: I think Fox has an audience, a lot of Democrats and independents who watch it. He is at a climactic moment in his presidency. He will need all the support, even if it's a marginal support, to tip it over the edge. I think he thinks he will reach a few people that might make a difference.

I hate to be cynical about it, otherwise I would say he has changed his mind about what Fox is and that it is really a news station.

BAIER: We have much more on health care reform on our homepage at Foxnews.com/Special Report, including a way for you to submit a question for me to ask president Obama during my exclusive interview tomorrow.

Coming up in three minutes, we will talk about the tensions between the U.S. and Israel.

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SECRETARY OF STATE HILLARY CLINTON: We don't agree with any of our international partners on everything. And with respect to the announcement that occurred when the vice president was there, we have expressed our dismay and disappointment, and we have, as I said earlier, engaged in consultations with our partners in the peace effort.

REP. ERIC CANTOR, R-VA.: What's the administration thinking in trying to bully an ally like Israel who has been the best ally we have got in the region and at the same time an administration that wants to sit down and negotiate with Iran?

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BAIER: Israel's announcement of a settlement expansion in east Jerusalem during Vice President Biden's trip there last week obviously set off a firestorm of reaction from the administration, including Secretary Clinton.

Israeli Ambassador to the U.S. Michael Orrin said after that response from Secretary Clinton and other remarks from the administration that relations between the two countries were in crisis. Secretary Clinton said that's not so today, but clearly there are some problems between the U.S. and Israel.

We're back with our panel. A.B., is this — how serious is this?

STODDARD: It is very serious. I think both sides have raised the temperature. I mean, it is not merely a housing issue, construction in east Jerusalem. At the same time the rhetoric coming out of the White House team went too far, to say it's insulting and inappropriate, needlessly provocative. It wasn't helpful.

I think at this point, you know, prospects — peace talks are not on the back burner. They are frozen cold. The number one priority issue, the common goal, which is to mitigate the threat of a nuclear Iran, really is what matters here.

And I think if the administration, which says they are working on something could ever show progress on this issue, maybe reverse China, get them on board, then I think this would go away. But, if not, I think that Israel is going to dig in.

And I want to add this. The problem for the administration politically is that the distrust from pro-Israeli lawmakers and Congress and the Israelis predated this event. And so it makes everything so much harder.

BAIER: Tucker, there are a number of Democrats saying the administration should back off in rhetoric. U.S. envoy George Mitchell's mission to launch these talks has been put on hold. What about it?

CARLSON: I don't think the fundamental relationship between Israel and the U.S. is in danger of changing. I don't think it will change in my lifetime. I hope it doesn't. We support Israel. The American people fundamentally support Israel. I support Israel. I'm glad Israel controls east Jerusalem. We are Israel's oldest and most steadfast friend. I do think it was insulting, actually, because we support Israel to the extent that we do, and we should. I don't know — there is symbolism involved here. The vice president is off on maybe his dopey attempt to broker peace that may be silly. But still, he is still an envoy there on behalf of the U.S. government. Don't insult him. Don't do that.

I don't think we should be attacking Israel. I think we should be holding neighbors to much higher standards, et cetera, et cetera. I don't back the administration on this. But just the facts of the case, I think it was insulting.

BAIER: Yes, but the Prime Minister Netanyahu apologized openly.

CARLSON: He did.

BAIER: And the White House saying today it's time to move on.

CARLSON: Jeff Goldberg has this theory, and Charles knows much more about this than me and he can suggest whether it's right or wrong, but this is part of an administration strategy to move Netanyahu away from members of the coalition toward Kadima and the center. I don't know if that's right.

BAIER: Charles?

KRAUTHAMMER: The real puzzling issue is why did Obama escalate it into a crisis on Friday? Because, remember, the insult, it was an insult, happened earlier in the week. But it was a gaffe. It wasn't a change in policy.

What Netanyahu had agreed to with Obama over the last year is that there would be a freeze on settlements, but they explicitly, the two of them, excluded Jerusalem. So this announcement of the expansion of housing in this neighborhood was outside of that agreement.

Now, it should never have been announced at the time of the visit of the vice president. It was a gaffe. It was not intentional. The prime minister did not know about this. It happened by a member of their Cabinet, lower level member of the Cabinet. He apologized. He groveled. The vice president accepted it.

Then two days later was the call from the secretary of state which was then leaked, and it was indicated that Obama was extremely angry and he made new demands.

The secretary of state said a couple days ago Israel has to show its seriousness about peace. Now, that is an insult. Israel has been looking for a peace agreement since the last 62 years between '47 and the last year in 2008 actually, when Prime Minister Olmert offered an unbelievably generous settlement which Abbas, the leader of the Palestinians, rejected, again, as was rejected the deal in 2000 when the secretary of state's husband, the president of the United States, has told us the Israelis made it unbelievably generous offer, including the division of Jerusalem and were rejected again and again.

The Palestinians now have not even accepted before the Biden incident, did not even accept direct negotiations with Israel. That's why we are having proximity talks. They have not made a gesture or concession of a step, and the secretary of state says Israel has to show its seriousness about peace?

BAIER: The Israelis relationship with this administration seems to be cooling. But quickly, do you think it's really off track now?

KRAUTHAMMER: It is. And I think it's because Obama is seeing how much he can push the Israelis. And he is making demands which are now in private, including the stopping of all housing and development in Jerusalem, which no Israeli government will accept. So it's a question of how much he wants a crisis, because if he wants it, he will get it.

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