This is a rush transcript from "Fox News Watch," December 26, 2009. This copy may not be in its final form and may be updated.

JON SCOTT, HOST: On "Fox News Watch"...


SENATE MINORITY LEADER MITCH MCCONNELL, R-KY.: The majority will pay a heavy price for ignoring the wishes of the American people.


SCOTT: Following a late-nighter and some slick deal making, Senate Democrats vote to move forward on their controversial health care bill. But now that the euphoria has settled, is the press pressing for answers on how this will work and who will get scrooged?

ABC News has a new anchor.


DIANE SAWYER, ABC NEWS ANCHOR: Good evening. And it is so good to be here with you tonight.


SCOTT: What was the biggest news story of the year?

The most-searched item on the Web?

What crazy things did the liberal media do?

What was the best cover of the famed New York Post?

Plus, a little reminder about who we should remember this holiday season.

Joining us on the panel this week, former White House press secretary, Dana Perino; editor of the National Review, Rich Lowry; Jim Pinkerton, fellow, New America Foundation; and Newsday columnist, Ellis Henican.

I'm Jon Scott. "Fox News Watch" is on right now.


SENATE MAJORITY LEADER HARRY REID, D-NEV.: I would hope that everyone would go back to their gentlemanly and — ways.

I said to a number of people, Rodney King, let's just all just try to get along.


SOCTT: Senate Majority Leader Harry Reid there pleading for civility on the Senate floor Monday on the divisive health care debate. The late- night vote was praised by many in the media. But are most members of the press missing some of the details about this plan?

The devil is in the details here, Rich. What about the job the media are doing trying to cover it?

RICH LOWRY, EDITOR, NATIONAL REVIEW: Well, it's not just the details they're missing. I think they're missing the big story of the extraordinarily partisan nature of the first year of the Obama administration.

Clinton had NAFTA, a significant bipartisan initiative. Bush had No Child Left Behind, a significant bipartisan initiative. And he got Democrats for his big tax cuts. Obama has basically been nothing. And if he weren't a liberal Democrat, there would be screaming headlines about how partisan this is.

SCOTT: Let's talk to someone who was in the Bush administration. Dana, the president said he would not raise taxes on individuals making more than $200,000 a year — President Obama, I'm talking about obviously. No tax increase for couples making more than $250,000. Are the press paying enough attention to the promises?

DANA PERINO, FORMER WHITE HOUSE PRESS SECRETARY: I think it's remarkable. I think the writing was on the wall a few months ago when it seemed as if they were going down the path to get the bill done, that he was going to break that pledge. I remember during the campaign, then-candidate Obama talked about that pledge a lot. And that's was — we didn't — nobody else defined the rich. He defined the middle class as $200,000 for an individual and $250,000 for a family. Those taxes are going to go from 0.5 percent up to 0.9 percent payroll tax. And the Robert Parish story in The New York Times, this week, there's not even a mention that this was breaking that promise.

SCOTT: A promise broken by a politician, Ellis, should we be surprised?


ELLIS HENICAN, COLUMNIST, NEWSDAY: Jon, I gather my co-panelists are not in favor of the health plan. Listen, it was a political battle here and it was a very tough and intricately covered political battle.

SCOTT: Do you think it was intricately covered?

HENICAN: Here, there was good and bad in it, like most coverage. The knock down, drag out politics, yes, we got every single imaginable detail and expression of outrage in all directions. To me, the part that was missing was that we never really had a philosophical conversation in the nation: What do we want to do in terms of health care? Do we owe our fellow citizens health care? Can we look into the eyes of a diabetic man and say, we're not going to give you health care because you can't afford it.

I wish we had had that coverage, but, boy, we got a lot of political back and forth, didn't we?

SCOTT: There's been all kinds of infighting, even among Democrats, Jim, over this health care bill. We saw one Democrat who apparently didn't like the way things were going in the House — well, in the Senate, but he's in the House — he decided to jump ship. He was citing concerns over the Democrat's direction.

Here's Alabama Congressman Parker Griffith.


REP. PARKER GRIFFITH, R-ALA.: As the 111th Congress has progressed, I have become increasingly concerned that the bills and policies pushed by the current Democratic leadership are not good for north Alabama or our nation. And more importantly, they do not represent my values and convictions. While I voted against health care, I voted against cap-and-trade and two huge spending stimulus bills, I now believe that I have to go even further and stand with the party that is more in tune with my beliefs and convictions.


SCOTT: Pretty unusual that he's leaving the party in power to join the minority party. How has that been covered?

JIM PINKERTON, FELLOW, NEW AMERICA FOUNDATION: I don't think it's gotten a lot of coverage. I'm trying to figure out why that could be.


Maybe the same reason why Obama breaking his tax pledge didn't get any attention, as you said. Whereas, the president I once worked for, Bush 41, broke his pledge and I think, even to this day, people remember Bush lied, Bush lied, Bush lied.

Look, I think the bias on this has been in the direction of let's get something through because we just have to for all the reasons Ellis would be happy to echo. And what has been missed is the reality that nobody knows what they're voting for.

As Megan McArdle wrote in The Atlantic, the CBO numbers are just simply made up. They don't know. And they deliberately don't try to take into account the reality of how these things actually play out.

SCOTT: Yes, Ellis, I mean, you seem to like the notion of this bill or health care change. I mean, it's morphs so much — the numbers are all over the map. How can the press get a handle on it? Are they trying?

HENICAN: It's a tough story. And my point isn't to defend the bill. There's all kinds of stuff in the bill I don't like. But let's talk about the media coverage of this thing. We have some responsibilities, right? We've got to layout the political fight that's going on. We've got to address some of the underlying facts and say cut through that political debate and say here is what we know to be true and here is a bunch of bull. And the press has done a pretty good job on the policies and not such a good job on the bull question.

LOWRY: This is where actually I think — let me stand up for the press for a minute.

HENICAN: Go ahead.

LOWRY: This is where I think they've been good, on the corn-husker kickback and all of the ridiculous special favors. Everyone understands legislative bribery.

HENICAN: Right. It's the way it works.

LOWRY: Everyone knows it's a good story, so you have The New York Times doing it, you have the A.P. doing it, you had ABC News doing it. And it was such a backlash, you had Senator Ben Nelson going on the floor and floating the idea of rejecting this money, not that he'll ever actually do that. So I think on the gross dealing, that is — reflects a total reversal of what Obama campaigned on, the media was actually pretty good.

PERINO: If I could add one thing though, I think the traditional media has been OK. But I think that one of the great things about this debate is that there's all of these different places where people can find out information now and a lot of interesting Web sites that have popped up over the past several years where you can find a lot more information. I mean, bloggers played an important role in trying to expose some of these things. So you might look at The Washington Post but you also might look at National Review or Newsday ...


SCOTT: Or a blogger named Jim Pinkerton, who seems to do a little bit of that.


PINKERTON: No. Right, thank you. I have a blog on this, called seriousmedicinestrategy, in which I noted, again, the pseudo precision by which we operate. For example, Ruth Marcus, said — in The Washington Post — if we don't have reform, costs will increase 7.2 percent a year in 2019. But if we do have reform, they will increase 6.9 percent a year in 2019. That's the kind of illusion of numbers that the CBO has given a crutch to people so they can do what they really want to do, which is cover the horse race and the fight. They don't want ...


HENICAN: It's simple. That's the lazy reporter's game. That's easy.

PINKERTON: That's right. As you said before, lazy reporters have lots of crutches they use, and polls are one.

LOWRY: To accent Dana's point, there's no way you'd know what the truth is about the CBO score by reading the newspapers.

PERINO: That's right.

LOWRY: Because it just reports the top-line numbers which are all basically fiction. And you've got to get into the details to know what the truth is, that this thing as built on a Jenga tower of false assumptions.

SCOTT: What a way to run a country, huh?

Time for a break.

But first, if you're interested in knowing what our panelists have to say during the time we go to a commercial break, you can find out after the show. Go to Foxnews.com/Foxnewswatch. We might be beating up on Ellis.


And we'll be back in two minutes to talk about a first at ABC News.

ANNOUNCER: ABC News names a new anchor.


SAWYER: Good evening, and it is so good to be here with you tonight.


SCOTT: How does Diane compare to Katie? And will this woman's point of view show up in "World News Tonight"?

Plus, The New York Post wants your vote on the best cover of the decade. Details next, on "News Watch."



SAWYER: And that is "World News." And one last time for you, for you, Charlie Gibson, I hope you had a good day and a great night. I'm Diane Sawyer. See you tomorrow.


SCOTT: Diane Sawyer, in case you didn't know, on Monday night, closing out her first broadcast as anchor of ABC World News.

All right, so, Ellis, there are two women anchoring the evening newscasts now. Does that matter?

HENICAN: That's as crazy as having a woman as a presidential press secretary.


My god! Brian Williams has to launch an Affirmative Action program to defend his job.

SCOTT: Is he running scared?

HENICAN: Jon, who cares? This battle is over. Women can look into a camera and read a prompter and, it turns out, a lot of them could do it really, really well.


OK? Get over it.

SCOTT: So are we going to see in any — a change in the way the stories get covered at ABC now, do you think, Rich.

LOWRY: I doubt it. The evening news is so formulaic and boring and, I think, uninformative. Good for her, that she has the slot. It's a little bit like being a Romanov in 1915 or 1916, it's a distinction, but it's one that's going to lose its usefulness over time. And I find network reporters, their best content is Twitter and the blogs. That's where you really learn things from them now.

SCOTT: If you had to look at the three evening network news anchors and sort of sum up the world view, Jim, how would you do it?

PINKERTON: I would call it consistent liberal. And I see unlikely that Diane Sawyer is going to change that one...

SCOTT: Diane Sawyer, who worked for the Nixon administration?

PINKERTON: Again, I mean, she spent 35 years living that down, 35 years trying it convince New York liberals that she's one of them. And I think the proof that she succeeded is this broadcast. But look, the NBC/Wall Street Journal polls had an interesting little factoid. It said, who do you look to most for your news. And number one was the broadcasts news channel, 36 percent, all three channels put together. Second, interestingly enough, at 27, was Fox. So Fox News all by itself is almost the size of the three broadcast networks put together and bigger than any one of the broadcasts...

LOWRY: When she really makes it, she'll be an anchor at Fox?


SCOTT: Dana, when you were at the podium there at the White House, were you thinking about how this plays on the evening newscast? I mean, did you ever have to...

PERINO: No, I just had to make sure I didn't say anything that was incorrect or start some sort after problem in the world.

SCOTT: But they're losing influence, the evening newscast.

PERINO: They are, but there's still 21 million people. If you add them up, 21 million people watch them in the evenings. The thing I think that's interesting is I do believe that the networks — and I think that Diane Sawyer will do this well — is go cross platform. So she'll do some "Good Morning, America," she'll go overseas, and she likes to go overseas and do interviews. And she still has the ability with the ABC News brand to be able to get them.

SCOTT: Does it hurt Katie Couric that she's not unique among the three evening news anchors?

PERINO: Not necessarily. I don't think that probably matters either way. And it might help them. As Ellis said, maybe now the point is that we've done so well, maybe it doesn't matter.

HENICAN: It's the wrong lens honestly. This battle has been fought and won a long time ago. And there's a lot of interesting analogies...

PERINO: I don't think most women would say — I don't think most women would agree with you that it's been fought and won, but...

HENICAN: In the anchor chair?

PERINO: Well...

HENICAN: Look at every news show in America now, has tons of women anchors, don't they?

PERINO: Not at the big networks. But now, that's changed. That's changed.

HENICAN: Two to one.

PERINO: And right now, it's two to one.


So we won.

HENICAN: I'm ready for my Affirmative Action program, how's that sound?

SCOTT: Well, the rub on Katie Couric, when she took over, Rich, was that she was kind of a morning show host, you know, a chatty type person. Does Diane Sawyer come into the role with more gravitas?

LOWRY: I think so. I mean, look, she's going to do fine. Her first night was fine. Why wouldn't it be? She's beautiful. She's been doing it for 30 years and she's a total pro. So as Ellis says, she can read the teleprompter and deliver the news just as well as anyone else.

SCOTT: And familiarity is what counts, and the fact she's been in people's living rooms forever gives her a leg up.

PINKERTON: Right. And they're making doing the shows. That's why they still do them. It's just not big event of the day that it was when we were growing up.

HENICAN: But, Jon, anchoring is hard work. I want to make that clear.


SCOTT: It is.

HENICAN: I'm not suggesting anybody can do it.

SCOTT: It's tough. And let me get back to my prompter now, OK?


It's time for another break. We'll be back to talk about bias in the media and much more.

ANNOUNCER: Did the top news stories of 2009 make the list of the most searched on the web? And did a year of big headlines deliver a year of big bias in coverage? Answers next, on "News Watch."



KATIE COURIC, ABC NEWS ANCHOR: You're so confident, Mr. President, and so focused. Is your confidence ever shaken? Do you ever wake up and say, damn, this is hard?


SCOTT: That's Katie Couric earlier this year with President Obama. Her performance there garnered the Media Research Center's "Let us fluff your pillow award for obsequious Obama interviews." The MRC acknowledging more achievements in its annual awards for the year's worse reporting. The "master of his domain award for Obama" puppet (ph) egos to Time's Joe Klein for his May 4th cover story on Barack Obama's first 100 days as president.

Dana, you were in the Bush White House. Compare that kind of coverage to the coverage of Bush.

PERINO: There's no comparison. I gave up a long time ago, as a Republican, think we were going to get comparable type of coverage. There are a lot of Democrats — and the polls will tell you that President Bush got a lot of fawning coverage after 9/11. And obviously, that swung back the other way.


But I always say, you know, if you're looking for communications advice, ask a Republican because they've had to try so much harder.

SCOTT: To be fair, Ellis, do you think there's a quote from a conservative member of the media that deserves to be mentioned?

HENICAN: Listen, those are two icky examples. I wouldn't want to be caught up in either one of those things.

SCOTT: Icky?

HENICAN: Yes, come on. Let's be honest. There was some pretty awful stuff on the other side. And I did a little poking around. And I have this one from Limbaugh. He said a few things, right? He said, "We're being told that we have to hope he succeeds, that we have to bend over, grab the ankles because his father was black."


HENICAN: That's pretty awful isn't it?

PERINO: I would never say something like that, but Limbaugh doesn't pretend to be an objective journalist, OK? And Katie Couric does.

HENICAN: And there's a variety of quotes we could pull from any of those venues. But listen, people have asked stupid stuff in both directions, let's admit that.

LOWRY: What's different, Ellis, I mean, one, he's not supposed to be an objective reporter. Two, if you go to the Media Research Center Web site and look at...

HENICAN: An objective organization, right.

LOWRY: And look at every single video clip from the inauguration. And it's, in your word "icky," every single one of them is icky from every single major media outlet. They were in love with this guy. And they still are, most of them.

SCOTT: The Associated Press announced its list of top news stories for 2009. The economy was number one, followed by Barack Obama's inauguration, health care, the auto bailout and the H1N1 flu virus. Coming in number six, Afghanistan, and then the death of Michael Jackson, the massacre at Fort Hood, Senator Ted Kennedy's death and, number ten, the miracle on the Hudson.

Interesting, however, the top ten overall web searches this past year, much different types of stories. According to Yahoo!, this list reflects America's need to escape and cope in tough times. Michael Jackson, the top search of 2009 on Google, Bing and Yahoo! On Yahoo's list, that was followed by "Twilight," the vampire story that has spawned a couple of movies, followed by the WWE, also known as World Wrestling Entertainment, actress Megan Fox and singer Britney Spears. Coming in at Number six, Naruto, the Japanese comic character and series, and then there's the mega-hit TV show, "American Idol," celebrity Kim Kardashian, NASCAR and RuneScape, the online adventure game. A couple of pretty different types of lists there.

Are you surprised, Jim?

PINKERTON: No, I'm not. And I don't think that that reality, that there's a huge gap between the news and sort of the popular culture was any narrower 50 years ago. I think 50 years ago, the news was simply presented to people. They weren't really that interested, but they had to watch it because there was nothing else on. Now, they don't have to watch, which is why, for example, the network news shows have shrunk so much. And people can spend their lives learning about Kim Kardashian and other important people.

SCOTT: Please, no.


PINKERTON: That's the nature of the gap and I just think it more a function of freedom, which, from a public policy point of view, it not entirely good.

SCOTT: Thinking about the news side of that list, is there anything that the A.P. poll missed? Would you have picked any other story?

LOWRY: I think that's a pretty good list. But I would say, Jim, things that people are searching are not necessarily news worthy. Just because they're interested in Megan Fox that doesn't mean she's news worthy in any sense.

PERINO: Also, I think a lot of the news web sites are more branded than ever, so you don't have to search for them. You can go directly to them. But I think one of those things missing from the A.P. list, and I think it's remarkable, is Iraq. We have 125,000 troops in Iraq, still in a lot of danger, but they've done some great work. And you don't hear about it anymore.

HENICAN: That is striking, the Iraq thing. But I do think there's message in this for the news media. We need to find a way to cover all that dumb stuff in a smarter way. If our audiences are tell us that they would rather really poke around, when they have control, on Megan Fox, for instance, maybe there's a way we can do those celebrity stories in a more intelligent way.

PINKERTON: So — so ask Megan Fox what she thinks about Iraq.


HENICAN: I want a better idea than that, Jim. And I'm counting on you to give it to us.


SCOTT: All right. And here's something else that will keep you busy this weekend. The New York Post, which is owned by our parent company, wants your help. They're asking people to choose the cover of the decade. If you live in New York and you've seen some of the possibilities, you know they are many. The choices will not be easy.

Here are five examples from earlier this year: The Tiger Woods sex scandal, "I'm a Cheatah"; "Axis of Weasel, Germany and France Wimp out on Iraq" — a play on President Bush's now-famous phrase about the axis of evil; "Holy Shiite," referring to the News Week magazine cover story that was later retracted, alleging interrogators at Gitmo had flushed a copy of the Koran down the toilet in front of detainees; "Blonde Justice Fury as Paris Gets Out of Jail"; and a special edition of The Post in the aftermath of 9/11, the raising of the flag at Ground Zero with the words from our national anthem: "Gave Proof Through the Night that Our Flag Was Still There."

To cast your vote for The Post top cover story of the decade, go to NYPost.com.

Also, next week's "News Watch" will focus on the mega stories of the decade, the coverage of those stories and the roles of those ever-changing media — what about it — of those covers? Anybody got one?

LOWRY: The 9/11 one will probably be remembered a hundred years from now, that's really iconic.

HENICAN: Yes, that's the one that's probably — I do have to send a shout out to my brothers over there. I mean, it's a great art form to boil that stuff into a couple of lines, and those are some real clever ones.


PINKERTON: And The Post peaked out in the '80s though with "Headless Body in Topless Bar."


SCOTT: That's one...

PERINO: My favorite though was when Eliot Spitzer was in his troubles and they had "Ho No" as the headline.


HENICAN: What's that mean?

PERINO: I'm not going to tell.


You can't say it on TV. We can say it in the break.


SCOTT: And you'll hear it.

We have it take one more break. When we come back, coverage of our troops during the holidays.

ANNOUNCER: Far from home, away from their families and serving our country, has the press forgotten our troops on Christmas? That's next, on "News Watch."



SCOTT: "What is Christmas?" a new song by composer Matthew Hodge, something he and his school's chamber choir recorded as a attributed to American troops serving overseas while their families hold down the home front. That song getting a whole lot of play on YouTube, reminding us to keep our soldiers and their families in our thoughts and prayers during this Christmas season, something the press might be forgetting.

You served in the Bush White House press, Dana, what do you think is the — I guess, the coverage of the troops at Christmas?

PERINO: It's interesting to me is that a lot of — because there are so many other ways to communicate now, rather than just through traditional media, there are lot of different ways to tell the stories about the troops. And they're doing a lot of self publishing. And see a lot of that, bloggers and the like.

I think one of the problems is a lot of the news organizations aren't paying to have correspondents in danger zones where our troops are. And it's hard and dangerous for them. I'll give you an exception. Steven Lee (ph) of The New York Times had a fantastic article in The New York Times in which he talked about American soldiers who are working to restore a Christian church that had been destroyed in the war. The fact that The New York Times gave him front-page coverage for that story I thought was important.

SCOTT: Yes, I saw that piece. And kind of interesting that once you start winning the war, the war doesn't get much coverage or so it would seem.

HENICAN: Yes, and there's less coverage. Listen, I don't like to point fingers at others and say, hey, you didn't remember the troops. Just go do it yourself. Do your best. Try to do it yourself.

SCOTT: All right.

Remember those troops this time of the year.

That is going to be a wrap on "News Watch" this week.

I want to thank Dana Perino, Jim Pinkerton, Rich Lowry and Ellis Henican.

I'm Jon Scott. Thanks for watching. Keep it right here on "Fox News Channel." We'll see you again next week with another edition of "Fox News Watch."

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