This is a rush transcript from "Special Report," January 10, 2014. This copy may not be in its final form and may be updated.
BRET BAIER, ANCHOR: People inside that place are probably happy to be out of the spotlight today as Governor Christie was in it. But a former adviser to the White House David Axelrod tweeted this about Governor Christie today, quote, "Christie handled about as well as he could. Unless smoking gun turns up ping him to scheme or others arise, he lives to fight another day." Take a look at the Real Clear Politics average of polls for 2016. And we know it's early, but these are the early polls as they are lining up right now. And there you see the possible Republicans, and there are many others. I will get a lot of emails about this. And then take a look at this. Chris Christie against Hillary Clinton as it stands now in 2014. And this is before, obviously, bridge-gate.
We're back with the panel. Chuck, what about the presidential implications?
CHARLES LANE, EDITORIAL WRITER, WASHINGTON POST: Well, you know, this very day that this storm was breaking, the Quinnipiac poll came out showing that in their sort of ratings of how warmly voters feel towards the various politicians who might run for president, Chris Christie came out as number one, the most warmly regarded of all the possibilities, substantially ahead of Hillary Clinton.
And so there is this huge irony that this guy is literally hot in American politics. He is fresh off a tremendous re-election victory, one in which unusually for Republicans he polled lots of Hispanic, African- American, and female votes. He was absolutely touted as the solution to the Republican's presidential problems. And then, boom, this blows up. I think one thing it shows that he needs, he needs to start thinking about. If you are going to go national and you are going to go presidential, you need a team that can play at that level. Among the other things that's kind of embarrassing and humiliating about this episode is sort of how small time, how insular, how local, how Mickey Mouse the mentality is that's behind it. And if he wants to play in the big leagues, he is going to need big time people around him.
GEORGE WILL, SYNDICATED COLUMNIST: It's a difficult moment for everyone running for president. They have to say goodbye to some the people who are with them when they were county commissioner and dogcatcher and have to go to the new league. This serves him in three ways, however. It gave him a chance to look like what a president is, an executive. He actually acted and made decisions. Second, every campaign has a crisis sooner or later. Mr. Obama had the Reverend Wright crisis right in the middle of his campaign. So this gives him a sense of how to handle this. And third, it gives him a real taste of the scrutiny that comes with presidential politics.
BAIER: Charles, this comes also the same weeks that Bob Gates has a book out in which Hillary Clinton is characterized the as having this conversation, quote, "Hillary told the president that her opposition to the  surge in Iraq had been political because she was facing him in the Iowa primary...The president conceded vaguely that opposition to the Iraq surge had been political. To hear the two of them making these admissions, and in front of me, was as surprising as it was dismaying."
Now, that was covered it was mentioned, but it is gone.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, and it's one of the reasons why I think it's really hard to somehow spin this as somehow a positive in regard to Christie. This hurts him. The only question is how much and how lasting will the damage be?
Part of the damage is that the story today would have been the utter ruthlessness and soullessness of a politician who would either approve or deny or object to a surge of troops in a war that was in real difficulty purely as a reason to advance one's political career. That is a pretty serious charge. And it comes from a serious man. It's not a partisan here. And that's why I think this sort of stepped on the Hillary story. She was lucky about that.
However, the book is going to be in print. It will be around. This story about the bridge will fade. But this charge by the former secretary of defense, who has been regarded as a straight shooter for all of his career, is going to stick to her and hurt. The worst element that isn't that she opposed, at least as he tells it, opposed the surge because of her political leanings. It was that she and Obama as senators denied the efficacy of the surge when it was already in train and everybody could see it was working and kept trying to shut it down. That was even worse.
BAIER: Quickly, does he bounce back from this.
KRAUTHAMMER: Yes, he does, if he told the whole truth.
LANE: I agree. The worst case scenario for him is that all of these investigations, this U.S. attorney and so forth, turns up something new or that he didn't tell the truth.
WILL: He will only be stronger because it humanizes him and just displays some of his thump, or he will be beaten.
BAIER: That's it for the panel. But stay tuned for a special message that only involves one vowel.
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