This is a rush transcript from "Special Report," June 30, 2011. This copy may not be in its final form and may be updated.
BRET BAIER, HOST: Welcome to Baby Boomers diner in downtown Des Moines. We have a local political discussion with exer ts experts here. Joining me here at the diner is David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University, also Kathie Obradovich, a political columnist with The Des Moines Register, and Dave Price, political expert, anchor for WHO TV. Thank you for being here .
Let's talk about issues here in Iowa. David. first to you, what is top on the minds of potential caucus goers?
DAVID YEPSEN, SOUTHERN ILLINOIS UNIVERSITY: Jobs and the economy, a lot of concern about the size of the federal government. Caucus goers are conservative so I think there's a lot of concern about the size of government.
BAIER: Kathie, how does the national debate, between the president and congress, over this debt ceiling, play here in Iowa.
KATHIE OBRADOVICH, DES MONIES REGISTER: It's important here. The debt and deficit are very important and it's really playing into why Obama isn't at popular as he has been in the past. The debt ceiling and raising the debt ceiling is a dealer killer for a lot of Republicans.
BAIER: A deal killer?
OBRADOVICH: A deal killer in their candidate supports raising the debt ceiling.
BAIER: Dave, there's a lot of talk obviously about Iowa and its viability as being first in the nation. How do people react to that criticism here that is it really whoever comes out of here could play nationally.
DAVE PRICE, WHO-TV: Defensively.
Of course they would say yes but the public comments and private comments are so different about that because they know after what happened in '08 with Mike Huckabee winning and flaming out, and Michele Bachmann is the hot story around here right now, but what if she flames out? Say she hangs on then tanks in New Hampshire and disappears. That two cycles in a row where the attention goes to the upstart and they're gone.
BAIER: What about candidates who decide Iowa's not in the cards for them?
OBRADOVICH: It's a risky proposition, you may argue whether it's significant but it's a first. They've got the opportunity to meet voters, talk about issues on a national stage in Iowa.
It's the same with New Hampshire. If you miss the campaign in New Hampshire, you're missing all the opportunity to talk to the nation from that location. So I am the reason Rudy Giuliani didn't do well and we don't have president Giuliani is because he waited for Florida.
YEPSEN: The bypass Iowa strategy rarely works because a candidate who doesn't play here gets behind. There's a winner, somebody who comes in second.
BAIER: Is Bachmann in poll position heading into Ames, Iowa?
YEPSEN: I think so. Clearly that's the momentum and energy but her problem is expectations. How well somebody's expected to do. And this is awful early for her to peak because she has a lot of media scrutiny. How does she hold up under the scrutiny? She's got a long way to go.
BAIER: The other question is who else gets in. Texas governor Rick Perry obviously is doing well.
OBRADOVICH: There's room for more candidates to get in. Mows Republican caucus goers have not made up their minds. They're not entirely satisfied with the field in a sense they're saying some haven't even picked a candidate. So there's room for somebody like Rick Perry to rally the conservatives and --
PRICE: One thing about Perry, Perry's people are reaching out, starting to have private conversations with some of these Iowa Republican operatives so you can definitely feel if it started a couple months org maybe, but the probability level is that Perry might get into the race after the straw poll.
BAIER: We have the next debate in August 11. Put in perspective for folks what Ames means for candidates.
YEPSEN: The straw poll has replaced the caucuses as an event that raises somebody out of obscurity. If you don't do well if the straw poll your money starts to dry up. If you do better than expected it provides you a boost of energy.
So critics of Iowa say the straw poll and caucuses means Iowa has would bites at the apple. Not only do we get to see candidates get in the race but we have candidates who drop out because they can't raise money. Your debate becomes very important because a lot of Republican activists will watch it trying to make up their mind.
BAIER: The conventional wisdom is social conservatives about do better in Iowa and South Carolina, but hearing the talk, the economy is still driving this place.
OBRADOVICH: People say we want our candidate to be fiscally conservative and that's important. They want them to touch all the hot button issues but when it comes down to it, what they want to care about is the economy, creating jobs and getting government out of the way.
YEPSEN: Every single one of these folks, even if they're courting social conservatives, everyone is talking about fiscal matters. Even Santorum, who made his reputation on social issues, he'll bring it back to the economy every time.
BAIER: Dave, Kathie, David, thank you very much.
Content and Programming Copyright 2011 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.