This is a rush transcript of "Special Report With Bret Baier" from March 4, 2010. This copy may not be in its final form and may be updated.


KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: Let's have an up or down vote that the American people deserve. A majority vote in the House and the Senate should move this issue forward.


WALLACE: Health and Human Services Secretary Sebelius continuing the White House push for health care reform using the parliamentary maneuver called reconciliation. Meanwhile spokesman Robert Gibbs is now calling for the House to pass the legislation by March 18th, just two weeks from today.

Well, let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.

So Mara, let's get into the vote counts, because that's what it's going to be all about. Giving deaths and resignations and some people switching their votes to oppose the bill, Speaker Pelosi is going to get some of the 39 Democrats who originally voted no to change their vote and go yes.

How does she do that, and how tough a vote would that be to switch from no to yes for any Democrat interested in being reelected?

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: It would be very, very tough for some of them. And Bart Stupak who, of course, is the leader of the pro-life kind of Democratic caucus has said he won't vote for this Senate bill because of the kind of language it has on abortion.

He says he is going to bring, I think, 11 people with him and they are not going to budge. There is going to have to be something done about abortion to satisfy him or a certain number of his group.

WALLACE: Can you do that in the fix bill which is supposedly —

LIASSON: There is a debate about that. The question is, first of all, is any abortion language germane? But it does have to do with funding, the funding of abortions, so maybe it is. That is still an open question.

I think she has a very heavy lift. I think it will be easier for her to hold on to her yes votes, even though some of them have been wavering, because once you cast a yes vote on the health care bill, you are going to get blasted for it anyway. So there is not much that you can do to save yourself by switching to no.

But a no vote is going to be very hard to turn to yes in this climate because the Democrats have only gotten more panicky.

WALLACE: Steve, I want you to answer the same question about how the difficulty of trying to get people, because that's what they are going to need, to switch from no last November to yes now.

But let me throw something else into the hopper, and that is this fuss over Congressman Jim Matheson of Utah who was an original no vote. They want to switch him to yes. He said he's undecided, and now there is this fuss over the fact that his brother, Scott Matheson was just nominated this week by the president to be an appeals court judge. That's the level of judge just below the Supreme Court.

White House spokesman Robert Gibbs today flatly denied any connection to trying to get Congressman Matheson's vote. Let's watch what Robert Gibbs had to say.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think based on Mr. Matheson's ABA rating, based on Mr. Matheson's long legal resume, and based on the support he has from somebody important like Orrin Hatch, who has agreed to help shepherd his nomination through the Senate, I think it's a pretty silly argument.


WALLACE: Orrin Hatch, of course, the conservative Republican senator from Utah. Are you persuaded that there is or is not a connection here to try to get Congressman Matheson's vote?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Not by what Robert Gibbs just said. We all expect Robert Gibbs to say that. That's the case he has to make.

It certainly smells funny. The timing of it looks funny. I think if you look at Matheson's record, Gibbs is right. He has an impressive record. Nobody would deny that or dispute that. But the fact that the nomination comes as they are trying to woo his brother, get him to switch sides.

WALLACE: They say they were vetting this for months.

LIASSON: And that's true.

HAYES: That may, in fact, be true that they were vetting it for months. The question is why the timing now at this crucial moment of the health care debate?

It brings up a broader point. The broader point is one of the things that people have objected to most strongly — I think people object to the substance of the bill. People are not in favor of what the president wants to do here. But people have also been sort of repulsed by the process. We have seen that really since December 20th with the "cornhusker kickback" and since then.

How is the White House — how is Nancy Pelosi going to win votes, going to convert votes without these kinds of giveaways that are typical — I mean, this stuff happens all the time in Washington. But now the president knows that there is such a focus on it, it makes it more and more difficult to do these kinds of things to win these kinds of votes at a time when that's what you need to do.

WALLACE: And there's really, Charles, no back room as you are talking doing this in two, as the White House is talking about, or maybe three weeks?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: No. It's all out in the open the way that the corrupt deals in the Senate were all out in the open.

I'm agnostic about this one on Matheson. Yes he has all qualities to be on the court. On the other hand, I'm sure his consideration has been going on for a while, but there are others under consideration. There are hundreds of lawyers and judges who want to be on the circuit. The court is a prize of a lifetime, it's a lifetime appointment. And it's a step up to the Supreme Court eventually, or at least it's the channel, the way that you get there. And it is odd that the timing, it should all happen right now.

But on the larger issue of does Pelosi have the votes, think of it in this way. She had 220 the first time around. One death, two resignations, and a switch back. She has now 216. The resignation of one, the Republican means 216 is enough. It's a majority.

If you lose 11 with Stupak on abortion, then you have to make up 11 of those who voted the other way. I don't think they have 11 today. They might have it at the end of the week or two with a lot of arm- twisting.

But that's the real issue. I think it looks like it's about 50/50. But I have no doubt there are going to be a lot of deals which will either come out now or in the future.

LIASSON: That's when they have to do something about abortion.

KRAUTHAMMER: But on abortion, they have a problem, because you said it's unclear it can be fixed on reconciliation. It can't. Kent Conrad, the chairman of the budget committee in the Senate, he said it can't be done in reconciliation, as did Steny Hoyer, number two in the House. It looks as if it's not a fixable issue.

WALLACE: Well, there is going to be plenty for us to talk about. You can get more information about health care reform on our homepage. Go to Foxnews.com/Special Report and read how Democrats are trying to push health care through before a series of town hall meetings planned for the spring recess. This is why timing is such a key issue.

Speaking of timing, in three minutes, the timing returns to discuss the midterms and whether we are headed for another wave election.



REP. NANCY PELOSI, D-CALIF., HOUSE SPEAKER: We spend our time reading our ethical responsibilities to the American people by doing the job here for them.

REP. JOHN BOEHNER, HOUSE MINORITY LEADER: Literally, what's happened over these last 13 months has been really one of the most remarkable periods of the 20 years that I have served here in Congress.


WALLACE: House Speaker Pelosi and Republican Leader Boehner trying to set the stage for November's midterm elections. And we are back now with our panel.

Charles, let me start with you. First of all, what do you think of the comparison, and Steve Centanni reported on it today, comparing this year, 2010 to 2006 or 1994 as a possible wave election?

KRAUTHAMMER: Well, if you look at 2006, the analogies as he pointed out are, first of all, ethical scandals in the majority party. And, second, in '06, intensely unpopular war leading to a bitter mood in the country, and today intensely unpopular health care reform with a bitter angry oppositional mood in the country.

Yes, that is right, except for a couple of things. First of all, I don't think you can quite compare the antipathy generated by unpopular war with Americans dying, also a war that in '06 was going very, very badly, with an unpopular social reform.

Second, Obama —

WALLACE: Which are you saying is more intense.

KRAUTHAMMER: The war is infinitely intense.

WALLACE: I don't know. Health care is pretty strong.

KRAUTHAMMER: It's pretty strong, but I think when you think that your country has been taken, and some had believed through lies and deception, into a war in which Americans are dying and treasure is being spent, that really embitters the country. I think we had a bitter mood in '06 unlike any seen since the Vietnam days.

So I don't think health care reform compares. Yes, you have opposition on principle and also on policy. But I don't think it compares any way in depth and intensity.

The other issue is this — Obama himself maintains popularity, unlike Bush, and, secondly, the Democrats still enjoy a compliant press. It was adulatory press in '09. Now it's only compliant. The press was extremely hostile in '06. And that will help the Democrats.

WALLACE: I want to talk about one other subject, Mara that may favor the Democrats. Maybe you disagree with me — ethics. It seems to me in 2006 you had Jack Abramoff, Tom DeLay, Duke Cunningham, you had just breaking about a month before the election the sex scandal of Mark Foley.

LIASSON: That's key.

WALLACE: Do you think there is the same drum beat?

LIASSON: Not yet. I don't think that Charlie Rangel getting a Caribbean vacation paid for, and it's unclear what's happening with Eric Massa, what he actually said to this staffer. I think having a sex scandal, especially a homosexual one in the Republican family values party breaking so soon before the election was something everybody could understand, that really, really hurt them.

There is plenty of time left. Believe me, this isn't good for the Democrats. The good thing is that there is plenty of time left.

You know, in 1994, the wave broke very late. People didn't see it coming. Republicans were also kind of at the height of their popularity as a party. Democrats were coming down. This year that's not true. The Republican brand is still pretty bad.

But this is going to be a horrific year for Democrats. And it's quite possible they will lose both houses of Congress. But, you know, it's hard to draw exact parallels. Look, these ethics scandals don't help them. They can only hope that this is the end of it.


HAYES: I think the ethics scandals matter most when they confirm a narrative that's in the press. You had that in 2006. In 2006 Republicans and particularly the White House with George W. Bush were sort the gang that couldn't shoot straight. When you had these ethical scandals sort of on top of that, it's like, jeez, they are incompetent and they are not ethical.

I think you are beginning to see that here with the current Obama White House. You see problems with them, competence problems from a group that said they were going to come in and be the new competence party. And now you're seeing an increasing number of these scandals.

But the scandals themselves don't drive elections. What drive elections are the big substantive issues in Iraq in 2006. And this year I think it's not only health care, remember, it's health care, but it's also debt and deficits and spending and national security. These are huge issues.

WALLACE: What do you make of the comparison, because Charles and I kind of disagree with it? Do you think that out in the public, where do you think the mood is as venomous now as it was in 2006?

HAYES: The difference I have with Charles is I think the voter intensity. He is right on voter intensity in terms of the Iraq war. If you believe your president took your country to war based on lies, there is nothing that will create that kind of intensity.

I disagree with you on the depth or the breadth of the discontent. You now have this kind of discontent with the levels of spending that we are seeing in Washington, the health care, the bigness of what government is trying to do that spreads far beyond conservatives, far beyond the Republican Party well into where the independents are.

KRAUTHAMMER: But what you had in '06 was also a mood of despair, a losing war spiraling out of control, no obvious exit. The surge wasn't proposed until after the election. It looked as if we were headed into an abyss. That was the issue.

Today, yes, it's discontent over issues, but it isn't as if people are imagining that we can't reverse the course. You kill health care.

HAYES: I strongly disagree. I think there is a huge sense of despair, but it's long-term despair. But it's there.

WALLACE: To be continued. That's it for the panel.

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