Updated

This is a rush transcript from "Special Report," December 13, 2011. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

RON PAUL, R - PRESIDENTIAL CANDIDATE: When I talk about cuts I talk about real cuts, the first year like a $1 trillion, and I get a good applause talking in this language because the American people are sick and tired of what they're getting right now.

NEWT GINGRICH, R - PRESIDENTIAL CANDIDATE: Our determination is to run a positive campaign and also indicating that should any super PAC that is doing so in my name attack any of my friends that are running, that I would publicly disown them and urge people not to donate to them.

MITT ROMNEY, R - PRESIDENTIAL CANDIDATE: We are not running any negative ads at that point, but we may. This is after all politics. There is no whining in politics.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Some of the sights and sounds from the campaign trail as some new polls surface today. One of them PPP. This is a Democratic polling unit, but we have used the polling before. And there you see Iowa, Newt Gingrich 22 percent, Ron Paul one point back, 21 percent, and Mitt Romney at 16 percent. Another poll out, a new poll, ARG, the American Research Group, again, Gingrich, 22 percent, Ron Paul, 17 percent, Romney at 17 percent. There you see Rick Perry inching up to 13 percent from other polls that have him in Iowa at single digits.

What about the state of the race here ahead of the big debate here in Sioux City on Thursday? Back with the panel. Charles, your thoughts?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: What I think what's so remarkable, and if you are a Romney fan, alarming, is the fact that the one consistency in the two polls is Romney at 17, which is quite a drop from where he was through most of the year, around 25 percent. This is a significant erosion. It shows how the vote is getting split every which way.

Perhaps, it might be early, I'm not sure, it could be a response to some of the negativity that we're seeing, attacking Gingrich, because we remember from the races several cycles ago when Gephardt and Dean attacked each other on the Democratic side in Iowa. Iowans aren't really too accommodating to negative campaigns. They collapsed and John Kerry and John Edwards snuck through. So you could see something of that.

The other thing is the slight decline in the Gingrich numbers. Again, it could be artifacts. These are small samples and people are taking polls every night. But nonetheless, it could be that as some of the conservative electorate is getting some more knowledge about his past apostasies and some of the business affairs like with Freddie Mac. A little bit of the sheen might be coming off.

BAIER: OK, Charles. Mara, before I go to you on 2012, we have this Fox News alert. The House has just passed a Republican version of a payroll tax cut extension. The vote was 234 to 193. And this is the payroll tax cut extension that includes the construction of the Keystone XL pipeline, which Democratic senators have said is nonstarter in the Senate. The administration has said this isn't going to fly either. Now there's a standoff about the omnibus legislation, the spending for the U.S. government, with a government shutdown looming Friday night. All that said, Mara, back to 2012.

MARA LIASSON, NATIONAL PUBLIC RADIO: Back to 2012.

BAIER: Thoughts on Iowa and possibly Ron Paul gaining support here. And we have seen he's organizationally very strong in this state.

LIASSON: Organization counts for a lot in Iowa. You gotta get people out, as the cliché goes, on a cold winter night, they gotta stay there for a couple of hours on the caucus site. I think Ron Paul right now is Mitt Romney's best friend. Anything that can stop Newt Gingrich from consolidating the anti-Romney vote is good for Romney. At this point Newt has surged so far and so fast that he is expected to win Iowa or place a very close second. And I think that if Paul could win, that gives Romney a new lease on life. Newt has to look to South Carolina where he is polling strong.

But the whole trick for Romney when he was stuck at 25 and now when he has dropped a couple points below that is to count on the rest of the candidates splitting the rest of the vote.

BAIER: Jonah, I have only been here in Sioux City for a few hours. But I have noticed the local cable provide that has Fox News Channel, the local ads are nonstop. I mean, they are one after another, candidate ads. And Ron Paul has a really brutal ad against Newt Gingrich that's out. As his negatives perhaps get affected by these negative ads, how do you think that changes the race for the rest of the candidates? You have Rick Perry really trying to make a surge. Rick Santorum has been to 99 counties. Michele Bachmann trying to make a stand as well.

JONAH GOLDBERG, AT LARGE EDITOR, NATIONAL REVIEW ONLINE: The nightmare all along for Mitt Romney was to actually be baited into committing to competing in Iowa, to promising to do well in Iowa, and then ending up doing badly. That's really deadly for him. It's also deadly for Newt Gingrich. It's funny that both front-runners have an enormous amount to lose in Iowa.

It's entirely possible Romney could come out of this in fourth in Iowa, which would be devastating. But at least he would have this strategy for coming through New Hampshire with a win to sort of fix his storyline. If Gingrich doesn't do really well in Iowa, he has to wait a long time in political terms before he can put a win up on the board. Iowa is becoming extremely fluid, and as Charles was referring earlier, things can really change in those last 10 days. So it could upset a lot of predictions.

BAIER: Charles, that makes this debate Thursday the last time all the candidates will stand on the stage together that much more important. You know, you talked about positive Newt Gingrich. You know, for Newt Gingrich, you and Brit Hume both mentioned that he needed to get back to the positive after that Bain Capital comment yesterday. It seems that he took that advice last night, or at least said he was going to with his campaign.

KRAUTHAMMER: Well he did say he would disown anybody who attacks another candidate. And the question is, does that mean he will disown himself over what he said yesterday? I think Newt understood it was a bit of a mistake, off the cuff. He has to discipline himself and stay positive, which I think will help him.

But it is interesting. It was mentioned earlier how Ron Paul had this relentless attack on Gingrich. And we saw it in the previous debate where he essentially said that what he did for Freddie Mac was immoral. I mean, I think there's sort of a visceral and in some ways, perhaps, principled opposition by the libertarian Ron Paul about Gingrich. And he does become Romney's best asset although it's obviously accidental.

I think what is interesting is, I think Romney comes out of this, even if he ends up in fourth, he comes out of it with a ticket to New Hampshire. Gingrich will, Ron Paul will. And I think, we'll probably see among the three remaining candidates, Perry, Bachmann, and Santorum, one ticket. And that sets up the frame for New Hampshire a week later, adding Jon Huntsman, who is putting all his eggs in the New Hampshire basket.

BAIER: Charles, Mara, Jonah, thank you very much. Even through technical difficulties we still got through the "Brady Bunch" panel. Thank you very much. That is it for the panel, but next, a look ahead to a big week here in Iowa.

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