This is a rush transcript from "The Kelly File," February 1, 2016. This copy may not be in its final form and may be updated.
MEGYN KELLY, HOST: And breaking tonight a record setting nail- biting caucus night in Iowa to officially kick off the race for the White House.
Welcome to a late night edition of "The Kelly File," everyone. I'm Megyn Kelly reporting tonight from Des Moines, Iowa. Where we are witnessing an amazing display of democracy in action. This is the scene right now at the candidate campaign headquarters. Ted Cruz is a big winner for the GOP. And on the democratic side it is still too close to call. So both Hilary Clinton and Bernie Sanders decided to speak to their supporters while they wait. The results have taken longer than many expected. After the caucus sites were completely overwhelmed, staying open late to accommodate long lines, some even running out of ballots but local leaders promising everyone who wanted to vote would vote.
As you just mentioned, Texas Senator Ted Cruz proving to be the big winner tonight edging out Donald Trump, who finished second, despite suggestions he had the evangelical vote. Perhaps the biggest surprise of all, Marco Rubio exceeding expectations and how with a very strong showing, finishing right on Donald Trump's heels. Meantime, Mike Huckabee has officially called it a night. And on the democratic side, third place finisher Martin O'Malley has also announced, like, Huckabee, that he's out. While we wait to see whether Hillary Clinton or Bernie Sanders finishes first, we have a very big show for you tonight.
Charles Krauthammer is here. Plus, we'll be joined by Chris Stirewalt and Howie Kurtz, as well as Bill Burton and Marc Thiessen. Already some political analyst are saying that Ted Cruz scored big tonight by targeting evangelicals and libertarians from the very start of this race. Two of the most reliable Iowa voting blocs, here with the candidate moments ago.
(BEGIN VIDEO CLIP)
SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE: God bless the great state of Iowa.
Tonight is a victory for the grassroots.
(CHEERS AND APPLAUSE)
Tonight is a victory for courageous conservatives across Iowa and all across this great nation. Tonight the state of Iowa has spoken.
(END VIDEO CLIP)
KELLY: Joining us now, Alice Stewart, she is the senior communications advisor for the Cruz presidential campaign.
Alice, congratulations. How are you feeling tonight?
ALICE STEWART, CRUZ CAMPAIGN SENIOR COMMUNICATIONS ADVISOR: Thank you, Megyn. I appreciate you having me on. Great. It's a tremendous night for conservatives across Iowa and across the country. One thing for sure is that the Cruz campaign did not leave anything on the tracks this time and voters came out and prove that. But the Ted Cruz victory tonight means it's a victory for millions of Americans across the country and those here in Iowa that they're tired of Washington as usual. They're tired of the Washington cartel.
They're tired of big government, dictating what goes on in this country and what Ted Cruz was able to do is galvanize conservative cross Iowa. This is an opportunity for them to show, look, the Republican Party is not uniting conservatives. Now, what we saw as we travelled across the state over the past several months was that conservatives want to join together and stand behind one person who is a consistent conservative.
KELLY: OK. He galvanized conservatives. Sorry. My apology. He galvanized conservatives but he did not galvanize the moderates who went more for Donald Trump and Marco Rubio. What does that mean for Ted Cruz a week from now in New Hampshire?
STEWART: Well, we're going to continue the message that we have had here in Iowa, the time for a conservative to unite. But what we certainly don't need to happen is for the Republican Party to nominate another moderate and to lose when it comes time for the general election. So what people here in Iowa did, they saw that they had someone that they could believe would say something today on the campaign trail and when nominated president would actually do that. And they needed someone that they haven't had in the past two cycles, someone that had the organization and resources not only to win here in the Iowa caucus, but also has a multi-state strategy to do well in New Hampshire, South Carolina, and Nevada and all of the early states, all the way through super Tuesday and secure the nomination.
KELLY: And speaking of the organization, Alice --
STEWART: They're telling the --
KELLY: Speaking of the organization, how did Ted Cruz do it? Was it the ground game? What was it?
STEWART: It was, first of all, it was the message. It was the messenger and it's a tremendous ground game. He's been out here in Iowa for ten months. And listen, if you're to tell him 10 months ago, that you would be in this spot, no one would believe you because he had been attacked relentlessly by other Republicans, by the establishment, by the Republican elite in Washington, D.C. And he stood up to them. And the ground game here in Iowa is going together. We have also a tremendous volunteer, we had thousands of volunteers, Megyn, 20,000 phone calls a day knocking on doors, and also our online voter outreach, identifying voters, and targeting the message to the voters in order to get them out to focus and as you've said earlier, we were at --
KELLY: Right. It all pays dividends for Ted Cruz tonight. Alice, thank you very much. We appreciate it. Alex Stewart everybody with the Ted Cruz campaign.
When turn out started surging early in the evening, a lot of folks thought it was first time Trump voters showing up to hand a big victory to the New York businessman. Well, that did not happen. Trump used a brief speech tonight to say, thank you for the support he did get.
(BEGIN VIDEO CLIP)
DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: Iowa, we love you, we thank you. You're special. We will be back many, many times. In fact, I think I might come here and buy a farm, I love it. OK? Thank you. Thank you, everybody. Thank you. Thank you very much.
(END VIDEO CLIP)
KELLY: Donald Trump also congratulating Ted Cruz in a gracious speech tonight. Let's go live now to Trump's campaign Headquarters in Des Moines and senior national correspondent John Roberts. John?
JOHN ROBERTS, FOX NEWS SENIOR NATIONAL CORRESPONDENT: And Megyn, good evening to you. You know, Donald Trump doing whatever he could to try to endear himself to Iowans over this last few days including wishing that his daughter Ivanka would have her baby while she was here in Iowa. Donald Trump putting a brave face on the result, not saying it was a loss but declaring it a victory telling the crowd here that back in June when he declared for the presidency, he was told by people closest to him, don't even bother going, they'll never warm up to a person like you.
So, for him, he says tonight, finishing second, he is a victory. But certainly not the outcome that he had hoped for. He really did want to win this. But you know, we started picking up signs it was after he skipped the debate on Thursday that late breakers would probably not going to go his way. We followed a bunch of door knockers around from a couple of other campaigns. We found people who said, hey, I was for Trump but now decided to go for Cruz or I was for Trump but now I have decided to go for Rubio.
And you know, I think Rubio's close finish behind Donald Trump really is an indication Megyn that you can have all of the fame and fortune in the world but still old fashioned show ledger and hard work counts for an awful lot. Now, where does he go from here? He lost in Iowa. But he's still way ahead in New Hampshire, way ahead in South Carolina. Still leads in Nevada and Florida. And he's looking back at history here in Iowa saying 2008, you chose Mike Huckabee. John McCain became nominee. 2012, Rick Santorum won. Mitt Romney won handling in New Hampshire then went on to become the nominee. So, he's hoping that history repeats here again.
But the one thing he'd had to watch in these elections, Megyn, is sometimes the momentum or the lack thereof can take on the life of its own. And when you look at what Marco Rubio came out of Iowa with and the head of his team he'll have going into New Hampshire, Donald Trump has got to be a little concern that those poll numbers that he enjoys right now could change, and change fairly quickly -- Megyn.
KELLY: John Roberts, thank you.
Well, Trump may have taken the number two spot tonight but the big story may be Senator Marco Rubio's third place finish less than six points behind the leader. Here is Senator Rubio just a short time ago.
(BEGIN VIDEO CLIP)
SEN. MARCO RUBIO, R-FLA., PRESIDENTIAL CANDIDATE: So, this is the moment they said would never happen.
(CHEERS AND APPLAUSE)
For months they told us we had no chance. For months they told us because we offered too much optimism in a time of anger we had no chance. For months they told us because we didn't have the right endorsements or the right political corrections we had no chance. They told me that we have no chance because my hair wasn't gray enough and my boots were too high.
(CHEERS AND APPLAUSE)
They told me I needed to wait my turn. That I needed to wait in line.
(CHEERS AND APPLAUSE)
But tonight, tonight, here in Iowa, the people of this great state have sent a very clear message. After seven years of Barack Obama, we are not waiting any longer to take our country back.
Chief Congressional correspondent Mike Emanuel is live at Senator Rubio's campaign headquarters in Des Moines, Mike?
MIKE EMANUEL, FOX NEWS CHIEF CONGRESSIONAL CORRESPONDENT: Megyn, it was a jubilant scene here at Senator Marco Rubio's headquarters. For days we'd be hearing about whether there was Marcomentum if you will and they say it turned out to be true, they say the FOX News debate on Thursday night was huge for Senator Rubio with Donald Trump off the stage to give Senator Rubio a chance to show national audience what he was capable of doing and gave him more face time and bottom-line they think that was a win for Marco Rubio and hurt Donald Trump with some of the late-deciding Iowa caucus goers.
Bottom-line, they also think that coming out early this evening with a very upbeat speech in front of a national audience celebrating a strong third place finish, outperforming the polls in Iowa was huge for them. And they think as other candidates leave the stage and it gets to be down to a few person race, that that will really be an opportunity for Marco Rubio to shine. They also love the idea of the fact that in recent days, it was boiling down to a two person race between Donald Trump and Ted Cruz, they say tonight it is clear as a three-man race between Cruz, Trump and Rubio and they say it's on in New Hampshire. Senator Rubio is on his way there at this hour -- Megyn.
KELLY: Mike Emanuel, thank you. Joining us now with more Charles Krauthammer, Fox News contributor, syndicated columnist and author of the book "Things that Matter." Charles your thoughts on what we've seen tonight.
CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Well, I think this was a major infliction point in the Republican campaign. Ted Cruz was saying, all last week, the week before, that if Donald Trump won in Iowa, he'd probably win in New Hampshire and he would run the table. And he wasn't only scaring the people in Iowa, and trying to get to their support. I think he was absolutely right. I think had Trump won, it would have reinforced the sense of inevitability, the momentum he said. Remember ever since he declared, in June, everything he's done somehow was golden.
And for instance he would say outrageous things and his numbers would go up. Remain steady or would go up. And this is the first time he's encountered defeat. This is a guy who says over and over again, I'm a winner, I don't lose. I've never lost. I'm not going to lose. And this punctures that. And I think it has two effects. One is on the audience, one is on the voters. People who have been swept up in this and you go out to see a guy who isn't only entertaining in his speeches but who you think is inevitably going to be the nominee and perhaps the president.
But the second effect I think is probably more important, and that is the effect it has on the media and on the sense that we have to follow and listen to everything he says. Every time he raises an issue, every time he says something, every speech he gives, every rally, it covered as if it's, you know, the word from heaven. And again, because of this sense, that this guy is a winner and he's on his way, that is going to have to change. There's going to be a lot of attention now to what Cruz is saying and Rubio is saying. This is now a three-man race. There is no establishment lane.
There is a Cruz campaign, which is sort of austere conservatism. There is a Trump campaign which is a populist, Trumpist if you want because it's extremely idiosyncratic. And you've got Rubio who is the main stream, more moderate conservative. That is what it is. Establishment, long establishment is irrelevant but the Trump train has been interrupted, not to say he won't win, it's going to win in New Hampshire, it will probably win elsewhere. But now it's going to be a long slog and he doesn't run the table.
KELLY: Uh-hm. He tweeted out in June, quote, "No one remembers who came in second," quoting Walter Hagen, Donald Trump did. No one remembers who came in second.
KRAUTHAMMER: Or Vince Lombardi. Winning isn't the main thing, it's the only thing. And that has been the Trump message and it's now punctured.
KELLY: What effect, if any, do you believe Trump skipping the debate on Thursday night had? Because you just heard Mike Emanuel say that Marco Rubio's campaign is saying they believe that was critical, that they -- it gave Marco Rubio all of the oxygen he needed to cement that last minute surge.
KRAUTHAMMER: Well, I think that is right. I think it had two effects. Number one is, without Trump on the stage, and remember, throughout the campaign he dominates every news cycle no matter where he is, what he does, what he says. And when he's off the stage in a campaign debate, he absents himself. Look, imagine, if he had been in a debate, no matter how he did, he would be the center of all the coverage, and would sort of wipe out and diminish his opponents. So, he didn't show up, he allowed the others to come out and shine and I thought it really helped Rubio, who obviously he had twice as many late deciders supporting him as Trump and the second reason is, you saw it from anecdotal evidence, people who said Iowa is different.
Iowa is special. We expect individual care and if you like, even coddling -- coddling by candidates. And this was the kind of a slap in the face of Iowans who take their responsibility very seriously. A caucus is a very serious responsibility and it requires a lot of effort and Trump didn't. And I think that that cost him a few votes and, you know, was a four points spread and he beat Rubio by only one point.
KELLY: Uh-hm. And so talk about the fortunes of Marco Rubio now who at least in the last entrance poll we got, we get these updates in waves. He actually did better than Trump when it came to voters for whom the economy was the number one issue. This has always been Trump's sweet spot.
KRAUTHAMMER: Well, look, I think Rubio is remarkably articulate. I don't think there's anybody who denies that. And when he gets out there, when he makes the case, when he speaks about his own past, rising from his immigrant, the immigrant situation in which he grew up.
KELLY: And he had no prompter tonight. No prompter.
KRAUTHAMMER: And you can see the ease with which he does this. And then he spins it into a story about the American dream, American opportunity. And then he talks to some extent about the ways he's going to do it, he's got a great story to tell. When it gets out, it gets out, there I think, it has an effect. So, I think in a state like Iowa, where he put in a lot of effort in the last couple of weeks, that really resonated. Trump went around on the plane, and he opened it up and had the kids running around on his airplane yesterday. Its great showmanship and people have this idea. He's a businessman so he'll be able to fix things. When they think about it seriously, at the caucus they have to make the case, they give speeches and listen, I think the Rubio message prevailed. And I think it's sort of an encouraging sign that on ideas and being specific and not just talking about things in generalities, you can actually prevail, and he did. Essentially ideas over celebrity.
KELLY: Ted Cruz has got the wind in his back right now however, he is the winner and by decisive margin. And making the case tonight that you need a constitutional conservative. Is he too conservative for New Hampshire or the states that are going to follow? Or do you think the Iowans really sold Ted Cruz to the American public tonight?
KRAUTHAMMER: No. I think he is a fairly hard line conservative. Look, he and Rubio have infinitely more in common than either of them has with Trump in terms of philosophy because they both argue that Trump is not a conservative and I think they are right. But between them, it's a matter between Rubio and Cruz. It's a matter of a tone and inclusiveness. Rubio is the main stream, the softer one. Cruz has had a harder edge. Which I think means that in a general election you're going to have a harder time. But either way, among the Republican electorate, I think each of them had a very strong case to make.
KELLY: And --
KRAUTHAMMER: Yes. Go ahead.
KELLY: I have to go but I want to get you quickly to weigh in on what we saw tonight on the democratic side.
KRAUTHAMMER: I take the view that a win is a win is a win. Especially if Hillary Clinton, who had been humiliated eight years ago, doesn't lose even if it's by a whisker. If you win, I think it's really different from having collapsed in the face of a socialist eight years after her humiliation in L.A. She's going to lost in New Hampshire and hanging over her is this uncertainty about what's happening in the FBI investigation. Which I think really hurts her sublimity. Not that Democrats care about the substance of that, but they worry about a shoe dropping and having no alternative if they nominate her. So, I think this is hurting her as well. Given all that, she needed a win, she got the win, it's probably enough --
KELLY: Well, we haven't called it. It's too close to call, officially.
KRAUTHAMMER: Well, assuming, look, if she loses, then it really is a defeat for her. But she's slightly ahead I think in some of the other --
KELLY: She is.
KRAUTHAMMER: I think having some of the other networks called it on their projections.
KELLY: They have. But Fox News does not. We are officially saying it's too close to call.
KRAUTHAMMER: Well, I'm entertaining the possibility that others could actually be correct. It could be a radical idea but it might be true.
KELLY: You take it up with the Fox News decision desk, you ask Karl Rove how that works out. I got to go.
KELLY: Charles, it's great to see you. Thank you so much for your thoughts.
KRAUTHAMMER: Sure. Sure.
KELLY: So, what does team Rubio have to say about tonight's results? And why were his polls, the polls about him, so off? He'll tell us live in just moments.
Plus, Stirewalt and Kurtz are here on what this means for New Hampshire straight ahead.
(BEGIN VIDEO CLIP)
RUBIO: Iowa, thank you so much. We will never forget you. We will see you soon again. And New Hampshire, we will see you in the morning. Thank you, God bless you.
Thank you very much.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
RUBIO: We will embrace all of the principles that made America great and we will apply them to the unique challenges of this new century. And when our work is done, here is what history will say of this generation. It will say that we lived in the early years of this new century in an uncertain and difficult times but we remembered who we were. We rose up to the challenge of our time, we confronted our problems and we solved them. And because we did, the American dream didn't just survive and reached more people and changed more lives than ever before. Because we did, our children and grandchildren grew up to be the freest and most prosperous Americans that ever lived because we did what needed to be done. The 21st century wasn't just as good as the 20th century, it was better, it was anew American century.
(CHEERS AND APPLAUSE)
(END VIDEO CLIP)
KELLY: That was a fired up Senator Marco Rubio sharing a passionate speech tonight that ran roughly 15 minute without notes or teleprompter. Maybe there were notes, there was definitely not a teleprompter. As he celebrated a much stronger than expected showing here in Iowa.
Alex Conant is the communications director for Senator Rubio's presidential campaign. He joins me now. Alex, congratulations on your better than expected finish. How do you think he did it?
ALEX CONANT, COMMUNICATIONS DIRECTOR, RUBIO PRESIDENTIAL CAMPAIGN: It's a big night for us, Megyn. We did it because we made Marco front and center in this campaign. He had a ton of speaking time at the FOX debate last week as you know. And people saw what he's offering the American people, his optimistic message that we can be, we can make the 21st Century a new American century. That is what he's been doing every day on the campaign trail here in Iowa in the last couple of weeks and it connected with voters. People want ideas. They want solutions as Dr. Krauthammer was saying in the previous segment. They know that we have challenges but they want solutions. That is what Marco is offering in this campaign. And voters responded in tremendous way here in Iowa over the last few days.
KELLY: What do you make of the fact that looking at the exit polls, or the entrance polls as we call them in the caucuses, the voter who's decided over the last few days, went, they broke for Marco Rubio, 29, he got 29 percent. Ted Cruz got 24 percent. Donald Trump 14 percent. Nobody else put meaningful points on the board. How did he do that?
KELLY: What happened over the last three days?
CONANT: We just put Marco front and center. He worked really hard the last couple of days trying to meet as many voters as he could and talked to them about his ideas for the future. We also had a fantastic ground game here on the ground and hundreds of thousands of voter contracts in recent weeks. We knew who our voters were. We turned them out. We've got the same operation in New Hampshire, South Carolina. We're the only state, Megyn, excuse me, they're the only campaign Megyn that is organized in all 50 states around the country. We don't expect that this is going to end anytime soon, we're ready for the long haul. We're really excited coming out of Iowa with a lot of momentum.
KELLY: What do you expect is going to happen in New Hampshire? Because Trump is up, I mean, by the latest poll, I think it was 28 points over his nearest competitor there.
CONANT: Well, Dr. Krauthammer said, it's a three person race now. Either Donald Trump, Ted Cruz or Marco Rubio is going to be the Republican nominee. So if you don't want Cruz or you don't want Trump, it's time to vote for Marco Rubio. And when we nominate Marco Rubio, he's going to unite the Republican Party. He's the only candidate that's able to unite the Republican Party. And then, we're going to beat Hillary Clinton. And I think a lot of voters chose Marco in the final days because they realized if you want to beat Hillary Clinton or if you want to beat Bernie Sanders if he ends out polling it off, the best way to do that, nominate Marco Rubio as the Republican nominee. Unite this party.
KELLY: What do you think this means for the other candidates who finished poorly on sort of the mainstream Republican side, you know, Jeb Bush, Chris Christie, John Kasich and the others?
CONANT: Well, obviously they have to win in New Hampshire. I mean, if those candidates don't win in New Hampshire, they have no pathway for it. There is no way that they're going to be the Republican nominees. So, you know, obviously good night for Marco Rubio, good night for Ted Cruz. So so night I guess for Donald Trump. Not a very good night for those other candidates. I think they'll probably telling more -- decisions to make if they don't win in New Hampshire.
KELLY: Where do you need to finish in New Hampshire? Where do you think Marco Rubio needs to land?
CONANT: Well, we definitely want to be in the top tier. I mean, it's a three person race right now. So, we want to try to keep it that way. If we can finish in the top tier in New Hampshire, as I said, we feel really good about South Carolina. We have Trey Gowdy, the congressman in South Carolina supporting us. We're going to have some big announcements coming soon in South Carolina and some of the other states. I think you're going to start to see the party coalesce around Marco Rubio, now that it's clear that's a three-person race.
KELLY: Uh-hm. Alex, thank you very much.
CONANT: Thank you, Megyn.
KELLY: And not to ruin the surprise four our viewers but it's already been reported tonight that one of the big endorsements Marco Rubio will be getting is Senator Tim Scott who was very much sought after, and he will be according to the reports endorsing Marco Rubio in South Carolina. So, well, team Rubio celebrates a big finish, what about team Trump? Guy Benson and Roger Stone are here next on that.
(BEGIN VIDEO CLIP)
TRUMP: And we finished second and I want to tell you something, I'm just honored, I'm really honored. And I want to congratulate Ted and I want to congratulate all of the candidates including Mike Huckabee who has become a really good friend of mine. So, congratulations to everybody.
(CHEERS AND APPLAUSE)
(END VIDEO CLIP)
KELLY: Breaking tonight, a stunning turn of events in Iowa. Ted Cruz proves to be the winner, calling his victory a rebuke against Washington deals run a mock. Donald Trump coming in second, but just behind him, almost tied Marco Rubio. On the democratic side, there are still no winner.
Hillary Clinton and Bernie Sanders in a virtual tie. Mrs. Clinton telling supporters she's ready to press forward. We'll go live to Sanders headquarters just ahead.
And here's an interesting number that just came our way. The last 13 polls out of Iowa show Donald Trump leading here, and yet, he did not win.
Guy Benson is the political editor of Townhall.com and a Fox News contributor. Roger Stone is a former political adviser to both Donald Trump and Richard Nixon. Welcome to you both. Guys, what does that tell you 13 polls? Last 13 say Donald Trump is winning?
GUY BENSON, POLITICAL EDITOR OF TOWNHALL.COM: Now, the pollsters got it wrong again. This is the trend we're seeing in politics across the world really. Donald Trump was the leader in this polls and the average by that five points and he lost. He underperformed by four points. Ted Cruz over performed by five points, Marco Rubio by seven points.
So -- I mean, I think what we saw tonight, Megyn, is that some laws of political gravity absolutely do apply to Donald Trump. Ted Cruz won because he outworked and out-organized Donald trump, and that this proved the polls big, big win for Cruz.
KELLY: The other thing, Roger, is that the evangelical vote tonight was big, 64 percent of voters described themselves as evangelicals. They win decidedly for Ted Cruz, 34 percent for Ted Cruz, 22 percent for Donald Trump, 21 percent for Marco Rubio prior tonight. Trump and Cruz had been splitting the evangelical vote, and it had been small or share of the electorate.
ROGER STONE, POLITICAL CONSULTANT: You know, I think Donald Trump created a large enough pool of people to win the Iowa caucus. Unfortunately, his campaign was not quite able to convert them to voters. But I would point out to you that Ronald Reagan lost the Iowa caucuses after refusing to do a final debate and he bounce back in New Hampshire.
New Hampshire -- the makeup of New Hampshire with the fewer number of evangelicals is probably better turf for Trump. So the Iowa caucuses do not a nominee to make. This contest moves on to New Hampshire and South Carolina.
KELLY: What do you make of it, guy? Because those here in Iowa, the biggest group of them, 42 percent said the most important thing to them in a candidate was -- they want somebody who shared their values. At 42 percent, the next caucuses can bring change which was half at 21 percent. So they really wanted somebody who shared their values.
Of those voters, 38 percent like for Ted Cruz. The next closest was Rubio at 21. Just 5 percent believe that Trump share their values.
BENSON: Yup. And that goes to conservatism. And one of the big critiques of Donald Trump from people like myself who are proud conservatives, that we don't view Donald Trump as a committed, reliable conservative. And when you add the two totals up from the true conservatives in this race among those top three, Ted Cruz and Marco Rubio, you get 51 percent coming out of Iowa to 24 percent for Donald Trump. So, the big question is, how will this field thin out? How quickly will it thin out? And if it does become that's three-person race that we just heard Marco Rubio's campaign taking about, how the dynamics change? I think they've changed dramatically.
KELLY: Roger, how this Trump deal with what Charles was taking about earlier which is, it pierces his message of invincibility, that he is a winner, that he always wins. He didn't.
STONE: Yeah. Nice try, Charles. The truth is, he was very humble and gracious tonight. Trump is a competitor and you're about to see what a fighter he is. Now, I think he needs to be more focused in his criticism of Ted Cruz, but Ted Cruz can't get to Marco Rubio until he gets through Donald Trump and I don't think that's going to happen. I think Ted Cruz's campaign is reached at high watermark tonight.
KELLY: Do you think, Roger, that Cruz -- I mean that Trump is looking at Rubio more now as a guy he's got to take out or Cruz?
STONE: Well conversely, Trump must deal with Cruz first to win the conservative intramural but clearly Trump is mindful the fact that Rubio is coming up the side and winning the intramural competition to be the establishment candidate. So, you know, honestly, Trump has to both deal with Cruz and ultimately with Rubio.
KELLY: It's about to get interesting. Great to see you both, thanks for being here.
STONE: Thank you.
BENSON: Thank you, Megyn.
KELLY: Well, the political probe from Iowa had predicted we could know the winners as early as 9:00 p.m. And here we are hours later and we still don't know who won at the democrat side.
Marc Thiessen and Bill Burton are here next with what that means for Mrs. Clinton and Bernie Sanders.
(BEGIN VIDEO CLIP)
SEN. BERNIE SANDERS, I-VT., PRESIDENTIAL CANDIDATE: What Iowa has begun tonight is a political revolution.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
HILLARY CLINTON, D-PRESIDENTIAL CANDIDATE: I congratulate my esteemed friends and opponents. I wish Governor O'Malley the very best, he's a great public servant who has served Maryland and our country.
And I am excited about really getting into the debate with Senator Sanders about the best way forward to fight for us and America.
(END VIDEO CLIP)
KELLY: Still an amazing sight to see the former president standing behind her. Isn't it like -- it's just amazing what's happening on that side.
That was, of course, Hillary Clinton earlier tonight. Right now, the race between Mrs. Clinton and Mr. Sanders is in a dead heat.
The Fox decision desk calling the democratic side of this race too close to call tonight. Chief Washington Correspondent James Rosen is live at Bernie Sanders headquarters in Des Moines. James?
JAMES ROSEN, CNN CHIEF WASHINGTON CORRESPONDENT: Megyn, good evening or should I say good morning. Aides to Senator Sanders tell me they still really don't know which way this is going to go. There's about 96 percent of the precincts have fully reported in. And there's only about 0.2 percent separating the two candidates.
They pointed me to a number of counties, Black Hawk County, Fremont County and others where Bernie Sanders is winning big and where -- and some of these counties, they're still 80 percent of the precincts that have only reported in. So they still think this could go either way.
When he took the stage shortly before midnight, about 10 to midnight, shortly -- after Hillary Clinton had finished speaking, Senator Sanders did not issue a concession speech and nor that he declare victory but he said that this was a virtual tie that they're going to walk away with that half of the Iowa delegates.
He congratulated Hillary Clinton for running a vigorous campaign. He had much warmer words for Martin O'Malley and then all, he proclaimed that his political revolution here in Iowa has begun.
(BEGIN VIDEO CLIP)
SANDERS: I think the people of Iowa have sent a very profound message to the political establishment, to the economic establishment and, by way the way, to the media establishment.
(END VIDEO CLIP)
ROSEN: And like most Bernie Sanders speeches, we heard a lot of bashing of the Koch brothers, the fossil fuel industry, Wall Street, Corporate America. He feels emboldened and he thinks he's on his way to a national campaign, Megyn.
KELLY: James, thank you.
Turning now two former White House insiders, Marc Thiessen is the Fox News contributor and former Chief Speechwriter for President George W. Bush. Bill Burton is a former Deputy Press Secretary under President Obama, good to see you both.
MARC THIESSEN, FOX CONTRIBUTOR: Good to see you Megyn.
KELLY: Marc, let me start with your thoughts.
THIESSEN: So the big loser tonight was the establishment in both parties. So if you think about it, if you look at the establishment choices which were basically Bush, Christie and Kasich they took a combined 6.4 percent of the vote tonight.
And then the democratic establishment candidate, Hillary Clinton, is tied in a race just too close to call with Bernie Sanders, a person she was leading at last year, at this time, 68 to 7 percent. So, if you think about in 2008, Hillary Clinton lost to a young, handsome, charismatic, rising political star. Tonight, she is in a dead heat with a 74-year-old disheveled socialist from Vermont.
That is not good.
KELLY: Bill, what do make of this democratic race?
BILL BURTON, DEPUTY PRESS SECRETARY UNDER PRESIDENT OBAMA: It's tight but I think that Iowa is always set up to be a tight race. It's a place where -- look, Bernie Sanders should have done better here in New Hampshire than any other State of the Union. Forty-three percent of Democrats here identified socialist.
BURTON: That's more than identified as capitalist. Literally in the last Des Moines register poll. So this is a place for Bernie Sanders has found to do well.
I think Hillary Clinton put together a better ground organization. And as a result of it, you know, it's probably going to eek out a little bit of a victory but we'll see. Its close but I think as this race progresses, you're going to see Hillary Clinton start to put together meaningful delegate ...
KELLY: So what does that mean for him? Let's see tomorrow they declare her the winner by just (inaudible). And then he move on to New Hampshire where he's (inaudible) right his way ahead there. What does it mean if she has a narrow victory here and he has a victory there?
BURTON: I think it looks a lot like 2000, Bradley versus Gore. Where, you know, if you don't start locking up wins where people don't expect you to win, you just run out of steam.
And so I think that for Bernie Sanders, he put together a good offer. I think he made economic issues at the -- put them at the forefront in a way that there maybe weren't and, you know, he ran a great race. But I don't think that there's a lot of steam left it in once he get to South Carolina and Nevada.
KELLY: What do you make of the GOP side?
THIESSEN: Well, I think a big loss for Donald Trump. And it shows you don't duck Fox News. I think that's the lesson for the night for Donald Trump. I mean, he skipped his last job interview in the State of Iowa and there were a lot of people -- we saw it in the poll that a lot of people decided at the last minute, they decided after that debate. He wasn't on the stage. He was afraid of taking questions from you.
So the big winner tonight is really Fox News and the big loser is Donald Trump.
KELLY: What about you, Bill? What do you think about what happened here with Ted Cruz? Do you see Ted Cruz having a chance now to actually secure the GOP nomination?
BURTON: Well, it's so funny. His victory speech was the most bizarre victory speech I've ever seen.
BURTON: It was long.
KELLY: Very long.
BURTON: It's exhausting. I can see why Hillary Clinton decided just to go out there. Mom, love you, dad, the whole thing. But I think Ted Cruz just follows a long line of Republicans who can't win the nomination.
KELLY: What about Marco Rubio?
BURTON: I think he had a big night. I think Marco Rubio surprised folks. He got over 20 percent for the first time in any poll that was conducted over the course there.
KELLY: He scared you with all the Democrats.
BURTON: I think if I had the choice of running against Ted Cruz or Marco Rubio and of course, I'd want to run against Ted Cruz but, you know, I think that Marco Rubio has some real vulnerabilities and Hillary Clinton has a strong message against him.
KELLY: How about your thought?
THIESSEN: I think that he -- the Democrats are more scared of anybody. On the field, they are scared of Marco Rubio because he is young, charismatic, optimistic, he straddles (ph) both establishment and the outsider lanes so he can appeal to both of those groups. And he talks about the future. He's optimistic. He is basically a modern JFK to Hillary Clinton and Richard Nixon.
KELLY: Just so quickly. What happens to the other guys at the bottom now? What's going to happen?
BURTON: I think you'll see the herd gets thinned out pretty quick.
BURTON: Next week. I think you lose all of the governors who -- unless something surprising happens. I think you lose all the governors.
KELLY: The night of the New Hampshire primary?
BURTON: Yes, probably or the .
KELLY: That's when I say -- traditionally, they (inaudible) up.
BURTON: Yeah, exactly. And some will stick around until Super Tuesday but not that many.
KELLY: Fascinating. Thank you both so much.
BURTON: Thanks Megyn.
KELLY: Well the two men who often lead our political coverage will, tonight, get the last word. Stirewalt and Kurtz are next on the road to New Hampshire.
KELLY: Here now with some final thoughts, Chris Stirewalt, our Fox News Digital Politics Editor and Howard Kurtz, host of "MediaBuzz" on Fox News. Chris, your thoughts.
CHRIS STIREWALT, FOX NEWS DIGITAL POLITICS EDITOR: And I tell you what, that was a ripsnorter. That was pretty good.
The -- you have Trump demonstrates that his voters are real, but they're not as real as the polling suggests. You have Ted Cruz delivers on his promise. He looks like a traditional Iowa winner, like we've seen like Huckabee and Santorum, but he's got some steel in his belted radials, right? He's got more money, more organization, more national stuff, the chance to turn it into something else.
But probably, the single most important thing that happened, probably, beyond anything else for the Republican Party is they started to get their act together, right? They started to figure out that you can't have a Huckabee, a Santorum and a Cruz. You can't have a Rubio and a Bush and a Kasich and a Christie.
And I tell you what, no human being in history has spent more money to finish at 3 percent than Jeb Bush. And so, now as that part of the Republican Party, sort of the traditional Republican Party moves on, as that goes forward, Marco Rubio took a big step ahead.
Now you've got a three-man race. Now you start to see the contours and Donald Trump has to face a new reality where he's going to have to work harder for these votes and he's going to face a tough -- two tough other guys.
KELLY: Howy (ph)?
HOWARD KURTZ, HOST, "MEDIABUZZ": Ted Cruz deserves credit not just for beating Donald Trump. But this is a guy who got into the race, the beltway establishment feel -- well, he was a bond (ph) forward, he was an extremist, he was hated by the party establishment. He didn't seem as tough to you guys. He pulled something off here.
Two caveats. One is, I do think he hurt himself a little bit with that 40- minute speech. I thought he was start reading from "green eggs and ham" but went on so long. Secondly, you know, we always get swept up the Iowa after glow. It is intense but as you know, four of the last six winners of the Iowa caucuses on GOP side did not win the nomination.
This was a terrible made state for Ted Cruz. He had to win it. He did win it. But he is going to have a tougher time in places like New Hampshire, for example.
KELLY: Well, speak about the endorsements. Glenn Beck came in for Cruz at the last minute. Really said he's a constitutional conservative, he loves America, he loves the constitution and that's the way he's going to govern.
KELLY: Sarah Palin made a big splash coming out for Donald Trump and lending her Tea Party bona fides to him. In the end it didn't make the difference.
STIREWALT: Well it didn't make the difference. Donald Trump failed to participate in Iowa's only presidential Republican debate. That was a terrible decision. It was spun by his many, many admirers in the press as a genius play.
Iowans wanted to hear what he had to say in that presidential debate. He snubbed them. That was foolish. And the result reveals it.
You have to play by some of the rule. Everybody likes the fact that Donald Trump doesn't play by the rules. But in this case, you got to play by some of them and one of them is you got to do the debate.
Now, we'll see if he'll become a more disciplined campaigner and we'll see if he can keep himself in check (ph). Again, 25 percent of the vote in Iowa for the guy most famous from hosting (ph) the apprentice is pretty dag on good. And he should be proudly (inaudible). His voters should be proud of what they did. But if he can't figure out a way to run like a regular candidate a little more and do what he has to do, not going to be good.
KURTZ: That's clearly against Trump's (inaudible) invincibility which he had going for him. And I agree about the debate and I also think that Cruz had a much better ground game, a very traditional thing to do in the Iowa caucuses.
But, you know, maybe it's not such a bad thing for Donald Trump to get a little dose of humility. A lot of people think he is too braggadocios and so forth. He got to be a little humble coming out here today.
KELLY: He was a gentleman .
STIREWALT: Yeah, right.
KURTZ: Yeah, he was. People (inaudible) always going to melt down. No, he's not going to do that. And he still got a lot of enthusiastic support, and New Hampshire is a much better state for him. And he doesn't need money. He can use his own money.
But I also think a boost for Marco Rubio because he played the expectations game right. And therefore, he is seen as getting a boost .
KELLY: And his speech was quite something to listen to. All about America, this is not my story, this is our story, this is America's story. How about that? We'll be right back.
KELLY: What an exciting night to kick off the 2016 election. Hillary Clinton said she is heaving a sigh of relief. It's too soon. That race is too close to call.
Next week, we'll do it all over again in New Hampshire, what do you think? Facebook.com/kellyfile, thanks.
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