This is a rush transcript from "Special Report," January 25, 2012. This copy may not be in its final form and may be updated.


REP. HENRY WAXMAN, D - CA: To understand this situation better, Mr. Rush and I requested that we invite the Koch brothers or the Koch Industries to come here and testify.

REP. ED WHITFIELD, R - KY, HOUSE ENERGY AND POWER SUBCOMMITTEE CHAIRMAN: We are not going to be subpoenaing the Koch brothers and we're not asking the Koch brothers to appear because the Koch br others have nothing to do with this project.

REP. JOE BARTON, R - TEXAS: We fought and won World War II in less time than it's taken so far to evaluate this project.

KERRI-ANN JONES, ASSISTANT SECRETARY OF STATE: The first piece, which we don't have yet, is to just identify is what some of those alternative routes may be. So we don't even have a complete route for this pipeline, which goes through the whole part of the central of -- the center part of the country.


BRET BAIER, ANCHOR: Well, it was a hearing up on Capitol Hill today about the Keystone XL pipeline that the Obama administration rejected. It got fiery at times. There you heard the State Department official saying that they still needed time to talk about routes. The state of Nebraska, which was really at the center of all of this, came up with a different route, that took it away from sensitive aquifers - different sensitive area -- environmental area.

As you look at the map, they came up with a new route. And the governor -- Governor Heineman said they were ready to go forward. And the State Department had already approved the more environmentally-sensitive route but they came up with a different route and he's going to put that back in by September. This hearing was quite something.

We're back with the panel. Charles, you heard Democrat Henry Waxman point to Koch brothers, the Republican contributors, saying they might have interests in this pipeline.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Yes, I think we really can't let the moment pass without commenting on the Waxman objection. So this is going to be now a new criterion for evaluating a public policy, something that would create thousands of shovel-ready jobs, that would reduce our dependence on unfriendly sources of oil, that would cement our alliance with Canada, that would have for us and secure a source of oil, that's secure and long range and deny a strategic asset to China. It is something that we ought to reject because it might help the Koch brothers. I mean it's like saying that if Qaddafi's son owned a biotech company that discovered a cure for cancer we would ban its importation lest it helped the Qaddafis. If you can think of a more stupid, intellectually desperate argument on anything I'd like to hear it. And I would address that to Congressman Waxman with the highest and all due respect.

BAIER: We'll ask him to come on and respond. The invitation is out there.

Juan, the president didn't mention the Keystone XL pipeline obviously in the State of the Union address. He did talk about energy. As this goes on, is this a vulnerability for this administration? I mean is it a real problem --

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: That is why you see the Republicans persisting in this thing. I mean clearly, the president has said there will be no decision until 2013 at the earliest. And he may not be president then. So, why are Republicans persisting? They sense that they have the ability to say this is about jobs. And America, we care about jobs, it's the number one political issue in the country. And we're going to beat the president about the head.

BAIER: If he thought he was going to wait until 2013. Heineman is gonna come forward with another plan.

WILLIAMS: He can come forward with any plan he wants. They need permission from the state department because it crosses international borders. So it's just politics, Bret.


WILLIAMS: And let tell you something about Heineman. You can not hold Heineman up as a paragon of virtue? Heineman is a guy who opposed the pipeline and said that it was going to poison the aquifer in Nebraska and then under pressure from Republicans in Washington changed his tune.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Or the fact there was three-and-a-half years of environmental study that suggested that it wasn't going to poison the aquifer, a study that the State Department said would have no adverse environmental impact. The State Department said this twice, once in 2010 and once in 2011.


WILLIAMS: Correct. The route has changed in that period. They are now asking the State Department to look at new routes --

HAYES: Even more reason to -


WILLIAMS: So let's -- all right. So the president said Republicans insisted as part of the tax deal that we have a decision by February. And he said you know what? It's too quick. And what do we hear today from the lady from the State Department --

HAYES: -- too quick?

WILLIAMS: -- who was being browbeaten by the Republican? She said, you know what, we don't have the alternative route --

HAYES: It's been three-and-a-half years.

WILLIAMS: Since the alternative routes it's not three-and-a-half years.


HAYES: The alternative routes are less environmentally sensitive than the ones that -


WILLIAMS: That may be the case. Give people a chance to look at it. Why did it have to be part of the tax deal? Because it was political pressure. And let me just say one thing to you about --


BAIER: Now, people like this show because, we don't yell.

WILLIAMS: We don't yell. But let me just say one thing quietly.


WILLIAMS: You know me -- about the Koch brothers.

KRAUTHAMMER: You know I'm licensed to sedate you.

WILLIAMS: And actually, if you knew my wife she is would appreciate that.


WILLIAMS: Let me just say this to you about the Koch brothers.

KRAUTHAMMER: I'll bring the valium spray next week.


WILLIAMS: Thank you. The Koch brothers, let me get this straight, so now your argument is oh gee, why look at the Koch brothers? When it was Solyndra and there were people who were bundling money for the Obama administration, you said, oh, that's very suspicious.

KRAUTHAMMER: The point is, if it did benefit them or not, this policy is so overwhelmingly positive that it makes no difference whatsoever who benefits. It's a complete non-sequitur.

BAIER: I mean to compare it to Solyndra, Juan, Solyndra failed.


WILLIAMS: Yes. It did. But he's using it as a point of criticism to say why bring up the Koch brothers?


BAIER: This panel was fiery. We'll come back to it again. Thank you all. But stay tuned to see how one movie may have influenced the latest GOP debate. We'll also have our results of the text to vote on the other side of the break.

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