This is a rush transcript from "Special Report," February 25, 2020. This copy may not be in its final form and may be updated.

KATIE PAVLICH, FOX NEWS CHANNEL HOST: And for my last photo, the question is, is that a real lion or a fake lion? You get to decide.

JESSE WATTERS, FOX NEWS CHANNEL HOST: Are you lying about the lion?

DANA PERINO, FOX NEWS CHANNEL HOST: Why do you tell us?

PAVLICH: So, it's a great trip.

(CROSSTALK)

WATTERS: I think it's -- I think it's --

(CROSSTALK)

PAVLICH: Really interesting.

WATTERS: I'm going to go with fake.

JUAN WILLIAMS, FOX NEWS CHANNEL HOST: I think, congratulations.

WATTERS: All right.

PERINO: I think it's real.

WATTERS: Set your DVRs. Never miss an episode of THE FIVE. "SPECIAL REPORT", up next. Hey Bret.

BRET BAIER, FOX NEWS CHANNEL ANCHOR: Nothing says love like a Jesse mug. Thank you.

Good evening, welcome to Washington. I'm Bret Baier. Breaking tonight, a dramatic new warning for Americans about the coronavirus, or its official name, COVID-19.

The Centers for Disease Control and Prevention is telling people in the U.S. to brace for a likely outbreak of the virus, saying, the question is not so much if the virus will come, but when?

That warning, on the same day, the president and his administration projecting confidence about containing the virus. As this virus spreads globally, the concerns prompted another major hit to international and American financial markets. We'll talk live with the head of the National Institute of Allergy and Infectious Diseases in just a few minutes.

We'll also hear President Trump's assessment insisting the administration is on top of things. But we begin tonight with correspondent Jonathan Serrie, home with the CDC in Atlanta. Good evening, Jonathan.

JONATHAN SERRIE, FOX NEWS CHANNEL CORRESPONDENT: Good evening, Bret. In fact, CDC officials today say that this outbreak needs several criteria for a pandemic with another, possibly on the horizon, worldwide spread.

(BEGIN VIDEOTAPE)

SERRIE: As COVID-19 spreads to more countries outside China, federal health officials warn containment efforts at our nation's borders will become more difficult.

NANCY MESSONNIER, DIRECTOR, NATIONAL CENTER FOR IMMUNIZATION AND RESPIRATORY DISEASES: Ultimately, we expect we will see community spread in this country. It's not so much a question of if this will happen anymore, but rather more question of exactly when this will happen. And how many people in this country will have severe illness."

SERRIE: At a sometimes contentious hearing on Capitol Hill, Health and Human Services Secretary Alex Azar, brief the Senate Appropriations Committee on the administration's response to the threat at home.

ALEX AZAR, UNITED STATES SECRETARY OF HEALTH AND HUMAN SERVICES: We do have on The Strategic National Stockpile ventilators, we have masks. We have --

(CROSSTALK)

SEN. PATTY MURRAY (D-WA): Enough?

AZAR: Well, of course not. Or we wouldn't be asking for a supplemental to seek more money to procure more of that.

SERRIE: International health officials say community spread is already occurring in Italy we're more than 300 cases are confirmed. And the CDC is advising people to avoid nonessential travel to South Korea, where the virus has infected nearly 1,000 people and may jeopardize plans for joint military exercises with the U.S.

MARK ESPER, UNITED STATES SECRETARY OF DEFENSE: General Abrams and General Park are looking at scaling back the command post training due to concerns about the coronavirus.

SERRIE: International health officials have praised China's aggressive quarantine efforts which are reducing the numbers of new cases in that country. But Secretary of State Mike Pompeo, says the initial secrecy of government officials in China and Iran have put the rest of the world at greater risk.

MIKE POMPEO, UNITED STATES SECRETARY OF STATE: Expelling our journalists exposes once again the government's issue that led to SARS and now the coronavirus, namely censorship, it can have deadly consequences.

(END VIDEOTAPE)

SERRIE: If there were to be community spread in this country, you would likely see school closings, more people working from home and also the cancellation of major public events.

CDC officials say, they hope it doesn't come to that, but they want the American public to be prepared. Bret.

BAIER: Jonathan, thank you. The senators received a briefing on coronavirus today. Or told the House will receive that Friday morning. As we mentioned, the markets are still reeling from the expansion of the coronavirus.

The Dow plunging 879 points today. The S&P 500 dropped 98. The NASDAQ fell 256. Let's get some analysis from Fox Business Network correspondent Jackie DeAngelis in New York tonight. Good evening, Jackie.

JACKIE DEANGELIS, FOX BUSINESS NETWORK FINANCIAL CORRESPONDENT: Good evening to you, Bret. That's right, the stock market losing 879 points today, wiping out more than 1,900 points in two days. That's the Dow steepest two-day point loss in history.

And the notion that the coronavirus is spreading outside China faster than expected is likely to hit here at home in some greater degree as well. That had investors hitting the sell button taking profits from those record levels. The Dow is now less than 500 points away from what people on Wall Street call correction territory. That's a decline of 10 percent from its highs.

With respect to the virus and the stock market, Larry Kudlow, director of the U.S. National Economic Council said this.

(BEGIN VIDEO CLIP)

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Our economy is in good shape. This virus won't last forever. We have contained it. Long term investors should take a good hard look at whether they want to add to their positions in the stock market.

(END VIDEO CLIP)

DEANGELIS: Still, they hear and now is that investors are anticipating slowing global economic activity, which would be directly caused by the virus in the bond market. That's where investors seek shelter, safety. It raised a very big red flag today.

Investors have bought so heavily into treasuries that the yield on the 10- year note fell to an all-time low. Bret.

BAIER: Thank you, Jackie.

President Trump on his way back home right now after what he called a fantastic two days in India. Before he left, the president talked about the coronavirus. He said the administration is watching it closely but he did not seem overly concerned.

Chief White House correspondent John Roberts, reports from New Delhi, India.

(BEGIN VIDEOTAPE)

JOHN ROBERTS, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: At a round table to sell Indian business leaders on investing in America, President Trump sought to quell fears about the coronavirus and its effect on the markets.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We think we're in very good shape in the United States. We've essentially closed the borders to areas where we had to close them. We lost almost 1,000 points yesterday on the market, and that's something, you know, things like that happen.

ROBERTS: The president has asked Congress for $2-1/2 billion in emergency funding to fight the virus and develop a vaccine. But Democrats, say that should be more than $3 billion.

SEN. CHUCK SCHUMER (D-NY): The Trump administration has been caught flat- footed. The administration has no plan to deal with the coronavirus. No plan. And seemingly, no urgency to develop one.

ROBERTS: It was the response President Trump had predicted.

TRUMP: I see that Chuck Schumer criticized it, he thought it should be more. And if I gave more, he'd say it should be less. Automatic, you know, with these characters.

ROBERTS: President Trump also kept up his criticism of Supreme Court Justice Sonia Sotomayor, for her scathing dissent and the recent public charge case. Sotomayor rips the White House for repeatedly running to the Supreme Court to stay lower court rulings.

And faulted the court for accepting them, saying stay applications have "benefited one litigate over all others."

The president argues, Sotomayor and Justice Ruth Bader Ginsburg, should recuse themselves from cases involving the administration.

TRUMP: Trying to shame people with perhaps a different view in devoting her way. And that's so inappropriate.

ROBERTS: President Trump also weighed in on election interference. When asked if he would pledge to not accept Russia's help, he said --

TRUMP: I want no help from any country and I haven't been given help from any country.

ROBERTS: And he dismissed the notion that he fired the former director of national intelligence, Joseph Maguire, for a briefing in which Congress was told Russia was trying to get him reelected.

TRUMP: He is a terrific guy. But you know, in March 11th, his time ended anyway. So, his time came up, so we would have had to, by statute, we would have had to change him any ways.

ROBERTS: After a lavish state dinner, President Trump departed Delhi with a lot of goodwill. A $3 billion order for military helicopters and a promise to work on rewriting the trade relationship with India. No small task given India's long history of protectionist policies.

TRUMP: I want reciprocal. It has to be reciprocal.

(END VIDEOTAPE)

ROBERTS: On the coronavirus, White House officials tell Fox News that despite bipartisan criticism, there are no plans at the moment to increase the emergency request for the coronavirus above $2.5 billion.

That money would run until the end of September when the White House could request more or if Congress really is, is concerned as it says it is about that amount. You could always give the White House more. Bret.

BAIER: John Roberts, traveling with the president in India. Safe travels. Thanks, John.

Let's give an update now from Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. He joins us from Bethesda, Maryland.

Dr. Fauci, thanks for being here.

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Good to be with you. Bret.

BAIER: You heard those reports. Where are we? The last time I had you on this program, you had some confidence that we were dealing with it as a country pretty well, the coronavirus.

Since then, obviously, it has popped up in other countries, Italy, Iran, and others. Your thoughts where we are today.

FAUCI: Well, I think the discussion really has been engendered by the fact that we're seeing community spread to a significant degree. In some other countries. We're seeing it in South Korea. We're seeing it in Italy. We're seeing it in Japan. And when you have that situation, you have to realize, I mean, it would be unrealistic not to realize that when you have multiple countries in which you have sustained outbreak, that the chances of there being spillover into our country, namely, a pandemic if you want to use that terminology, which will involve virtually every country in the world, you have to be prepared for it.

So, the discussion from the CDC today was saying, you don't need to do anything different today than you did yesterday. But the thing we need to do is to be understanding what we would have to do if we did see community spread here. And that's what we call mitigation.

So really, nothing has changed except outside -- the outside world, the other countries are getting into more difficulty which may actually ultimately impact us.

BAIER: Just for a perspective, we have this -- these stats. The coronavirus, more than 80,000 cases worldwide, 2,700 deaths roughly. But you see these others, the common flu cases per year 200,000 in the U.S. 35,000 deaths per year. SARS, 2002-2004, 774 deaths, 8,000 worldwide. Swine flu, 60.8 million, no estimate worldwide. That's in the U.S. between 151 and 75,000 worldwide, as far as deaths.

What -- just keep us in perspective about this.

FAUCI: Right.

BAIER: So, you know, because there's a lot of coverage of it. And I think people at home really want to know, what does it all mean in the big picture?

FAUCI: Well, you know, the wild card in all of this, Bret, is that it's the unknown. This is a brand new virus. We're not really confident about how it's going to go, what it's going to do, how much involvement globally it's going to be, and that's the reason why we're keeping an eye on it. We're preparing as best as we can. And we're taking it very seriously.

When you're dealing with something like the numbers that you just gave, influenza, even right now as we speak, is a real and present danger in the United States, we still are well into an influenza outbreak.

Now, that doesn't mean that you can compare comparably one versus the other. Because we know enough about flu, that we know in the next month or so, it's going to go down, it's going to disappear for a while, go into the radar screen. And next winter, we'll have another seasonal flu.

We don't have that confidence with this new virus. And that agenda is the anxiety that you hear about not knowing where it's going to go. So, the best you can do is to prepare as best as possible.

(CROSSTALK)

BAIER: I want to play this -- I want to play this sound bite. This is Larry Kudlow and the president earlier today.

(BEGIN VIDEO CLIP)

KUDLOW: We are ahead of the curve. If it turns out that there's a worst contagion rate in the United States, that's a big if, because so far it's been very contained. We have tightly contained this. Tightly contained this. So, it's an early success for our side.

TRUMP: You may ask about the coronavirus, which is, you know, very well under control in our country. We have very few people with it.

(END VIDEO CLIP)

BAIER: Obviously, administration wants to express confidence. But are those sentiments accurate?

FAUCI: Well, you know what Larry and the president did say about control. So, if you look at it, we've had 14 cases of what we call the travel related where individuals came into the country, 12 and then, two who are close contacts, namely spouses. The others in this country are ones that we evacuated either from the -- a Diamond Princess ship here to take care of. Or people who came in from Wuhan.

So, if you look at what's been done thus far in this country, it is correct that it has been contained very successfully. We have not had community spread from person to person. That's good news.

It might change. So, what I think you were hearing from Larry and the president that right now, it is under control. But that doesn't mean you could let your guard down and think that there's nothing to be concerned about. That's the difference.

BAIER: Yes. So, your message to people would be, do the things that you always do. You know, wash your hands, just do the things that you try to do to avoid the regular flu.

And in the meantime, the Wall Street Journal, says, "Drugmaker Moderna delivers first experimental coronavirus vaccine for human testing." What is the prospect of that and how long does that take?

FAUCI: Well, that's our group that's actually doing it with the Moderna company. We're going to go into a phase one trial to determine safety, probably within the next month and a half to two.

That'll take about three months to see if it's safe. And then you go into a much larger trial call a phase two trial to determine if it actually is effective. That whole process Bret is going to take about a year to a year and a half.

So, even when we're going as fast as you possibly can, still it's going to take a good year and a year and a half to see if we have a vaccine that works.

BAIER: In the meantime, do what you always do.

FAUCI: Exactly, exactly.

BAIER: Dr. Fauci, we appreciate your time as always.

FAUCI: Good to be with you.

BAIER: In tonight's "DEMOCRACY 2020" report, presidential candidates are expected to take sharp aim at the Democratic frontrunner tonight. The 10th candidate debate begins later this evening in Charleston, South Carolina.

Ahead of that state's primary this Saturday, Senator Bernie Sanders has the proverbial target on his back not just from the other candidates but it appears from the party establishment as well.

Correspondent Peter Doocy is in Charleston tonight.

(BEGIN VIDEOTAPE)

PETER DOOCY, FOX NEWS GENERAL ASSIGNMENT REPORTER: For the first time, this cycle, Bernie Sanders stands alone at center stage, and candidates appear to be prepping new lines of attack on him, like this from team Bloomberg.

TIMOTHY O'BRIEN, SENIOR ADVISER, MICHAEL BLOOMBERG PRESIDENTIAL CAMPAIGN: Bernie has all of this loopy stuff in his background, saying things like, you know, women get cancer from having too many orgasms or toddlers should run around naked and touch each other's genitals to insulate themselves from porn.

ALISYN CAMEROTA, ANCHOR, CNN: Sir, what? What?

O'BRIEN: Why has this stuff not been more surface?

DOOCY: In 1969, Sanders did right, "Now, if children go around naked, they are liable to see each other's sexual organs, and maybe even touch them. Terrible thing. If we raise children up like this, it will probably ruin the whole pornography business."

Sanders is also hearing it from Democrats and Florida, home to thousands of Cuban immigrants for praising a literacy program trumped up by Fidel Castro.

REP. DONNA SHALALA (D-FL): We made more than a mistake, it's what he believes. And it's unacceptable to our community.

DOOCY: The Democratic socialist is not backing down.

SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: You know what he did? He initiated a major literacy program. It was a lot of -- a lot of folks in Cuba at that point, who are literate. And he formed the literacy brigade, you might read that -- read that. They went out and they help people learn to read and write.

You know what? I think teaching people to read and write is a good thing.

DOOCY: Sanders is trying to win a first in the south primary that he dumped on last cycle.

SANDERS: You know, one can argue there are people who say why does Iowa go -- Iowa go first? What does the Hampshire go first?

UNIDENTIFIED MALE: Yes.

SANDERS: But I think that having so many southern states go first --

(CROSSTALK)

UNIDENTIFIED MALE: Yes.

SANDERS: Kind of distorts reality as well.

DOOCY: For now, the man to beat on Saturday remains Joe Biden, in the primary, the presidential primary.

JOE BIDEN (D), PRESIDENTIAL CANDIDATE: My name is Joe Biden. I'm a Democratic candidate for the United States Senate. Look me over --

(END VIDEOTAPE)

DOOCY: Joe Biden is not a candidate for the United States Senate. I just spoke to a campaign staffer who stressed that the former V.P. just misspoke while he was delivering the line that he's delivered hundreds of times about being a candidate for president. And at that event, they had just been talking about the Senate race here in South Carolina. Bret.

BAIER: OK. It should be interesting one tonight. Peter Doocy, live in Charleston. Peter, thank you.

Up next, why some school districts are ending their programs to help gifted students? We'll explain.

First, here is what some of our Fox affiliates around the country are covering tonight. Fox 40 in Sacramento as California communities focused on fire season near the end of what is likely to be the driest February on record in the Sacramento region.

California is not currently in a drought and the reservoir storage is healthy, but the veggies vegetation that dried during the recent drought still poses a fire risk.

Fox 61 in Hartford as investigators from Connecticut and 38 other states will look into the marketing and sales of vaping products by Juul Labs. The probe will assess whether the company targeted youths and made misleading claims about nicotine content in its devices.

And this is a live look at Phoenix. More affiliate, Fox 10. One of the big stories out there tonight as more than $12 million worth of cocaine and methamphetamine seized during a traffic stop in northwestern Arizona.

Police in Bullhead City pulled over a tractor-trailer on Interstate 40. They report finding 370 pounds of cocaine, 220 pounds of meth in that big rigged.

That's tonight's live look "OUTSIDE THE BELTWAY" from SPECIAL REPORT. We'll be right back.

ANNOUNCER: This program is sponsored by the all-new Lincoln Aviator.

(COMMERCIAL BREAK)

BAIER: Senate Democrats are blocking a pair of Republican bills that would ban most late-term abortions and threatened prison for doctors who do not try saving the life of infants born alive during abortions.

The debate on the Senate floor today was emotional.

(BEGIN VIDEO CLIP)

SEN. BEN SASSE (R-NE): Like last year, 44 Democrats are going to filibuster an anti-infanticide bill. There's nothing in the bill that's about abortion. Nothing! It's about infanticide. That's the actual legislation.

And you got 44 people over there who want to hide from it. And talking euphemisms about abortion, because they don't want to defend the indefensible.

SEN. DICK DURBIN (D-IL): To argue that you have some novel idea that infanticide should be a crime, and we don't cover it now under the law is just not accurate. And it's not factual. And that's why I think your bill is unnecessary.

(END VIDEO CLIP)

BAIER: Senators voted 56 to 41 for the born-alive bill. And 53 to 44 for a separate measure banning most abortions after 20 weeks. Both tallies were short of the 60 votes needed to end Democratic delay tactics and force a Senate vote.

The judge in the case of former Trump advisor Roger Stone held a sealed hearing today on Stone's request for a new trial. Judge Amy Berman Jackson removed the media, so no one could see the jurors what they look like, setting a need to protect them.

Jackson pointed to President Trump's tweets calling out the jury. In fact, during the hearing, President Trump sent a tweet calling for a forewoman of that jury totally biased. And evidence about that is part of the basis for a defense request for a retrial.

Yesterday, Judge Jackson denied Stones's motion to disqualify her.

And Arkansas man is in federal custody tonight after being arrested on charges he tried to blow up a car outside the Pentagon. Matthew Dimitri Richardson was arrested Monday. A criminal complaint says a Pentagon police officer saw the 19-year-old standing next to a car, striking a cigarette lighter to a piece of fabric attached to the vehicle's gas tank.

It says, Richardson told the officer he was going to blow up the vehicle and himself.

Tonight, we will tell you about a growing trend among some school districts across the country to make significant changes in their programs for gifted children.

Correspondent Dan Springer, reports from Seattle that critics say such programs are unfair and discriminatory.

(BEGIN VIDEOTAPE)

DAN SPRINGER, FOX NEWS CORRESPONDENT: Yolanda Grigsby is so worried about the possibility Seattle Public Schools will end its gifted student's program, which her 8-year-old son tested into. She's considering the drastic step of selling her home and moving to a different district.

YOLANDA GRIGSBY, MOTHER OF A GIFTED CHILD: That causes my huge anxiety in just thinking about it because we don't have enough money that we can go to private school.

SPRINGER: The Seattle school board recently voted to end the gifted program at one middle school, replacing it with a math and science curriculum for all students. The reason, lack of racial equity. White students are way over-represented in the separate gifted classes, while black students make up less than two percent, even though they represent 50 percent of the overall student population.

TIM ROBINSON, SPOKESPERSON, SEATTLE PUBLIC SCHOOLS: The testing that put those kids there is flawed. The identification and assessment has been flawed and that's what needs to change. So, more students have the opportunity to get there.

SPRINGER: But tensions over potentially ending the whole gifted program are running high.

UNIDENTIFIED FEMALE: The superintendent and the board, they've been so divisive and hate-mongering within our community.

SPRINGER: Advocates, say districts need universal testing and to get creative like Miami, which gives poor kids bonus points on the exam. But ending the gifted programs they argue would hurt the most advanced students.

JONATHAN PLUCKER, PRESIDENT, NATIONAL ASSOCIATION FOR GIFTED CHILDREN: They essentially know everything that's going to be taught that entire year. That's why we need differentiated advanced services for these students.

(END VIDEOTAPE)

SPRINGER: Nationwide, there are more than 3 million public school kids in gifted programs and many districts are dealing with the same equity issue as Seattle. In New York, there have been calls to close the city's gifted and talented schools or at least change the name, so those who don't test in don't feel bad about their abilities. Bret.

BAIER: Dan, thank you.

Secretary of State Mike Pompeo, says the U.S., the Taliban, and Afghanistan, have arrived at a historic opportunity for peace. Pompeo told reporters today, an end to America's longest war will not be easy to obtain.

The U.S. and the Taliban currently are in a seven-day reduction in violence period that began last week. A peace agreement between the two sides could be signed in a few days.

Former Egyptian President Hosni Mubarak has died. Mubarak was the autocratic face of the stability in middle -- in the Middle East for nearly 30 years before being forced from power in an Arab Spring uprising.

Mubarak reportedly died from complications after surgery at a Cairo hospital. He was 91.

Up next, battleground South Carolina. How African Americans say they are faring onto the Trump economy there?

(COMMERCIAL BREAK)

BAIER: We told you earlier in the program South Carolina's Democratic presidential primary is this Saturday. Seven candidates debate tonight in Charleston. One of the topics surely will be the economy, and particularly how it affects African-Americans who make up a large portion of the Democratic voters in that primary Saturday.

This evening, FOX Business Correspondent Hillary Vaughn looks at some examples of how the American dream is playing out in South Carolina.

(BEGIN VIDEOTAPE)

ROMEO SHEPPARD, CROSBY'S SEAFOOD: When I got here, it was just a job. I didn't know I would love the job.

HILLARY VAUGHN, FOX BUSINESS CORRESPONDENT: Crosby's Seafood in Charleston, South Carolina, is growing and hiring. Thanks to higher revenue, the seafood distribution company has been able to add half a dozen more employees to their payroll. One of those is Romeo Sheppard, a military veteran who worked part time until now.

SHEPPARD: When I came by, they told me they would take me just based on the fact that I was even in the military. I just moved into a new house. It's all thanks to this one place.

VAUGHN: The facility processes and distributes around 1 million pounds of seafood a year and brings in nearly $11 million in revenue. A surging seafood demand allowed Crosby's to invest and expand their operation, upgrade their fleet of delivery trucks, and bring on more staff.

SHEPPARD: The hours are great, and I get to see my kids more.

VAUGHN: The jobs at Crosby's seafood are full time, paying over twice the minimum wage with benefits, injury protection, sick leave, plus a Thanksgiving and Christmas bonus.

SHEPPARD: The last eight months for me personally has been a turnaround.

VAUGHN: The company also gives employees a slice of the profit with a profit-sharing account. When revenue gets a boost, so do their paychecks. Crosby's supplies seafood too many of the top restaurants in Charleston. One of those is Nana's Seafood, owned by Kenyatta McNeil, who started his restaurant in 2011.

KENYATTA MCNEIL: If you're looking for rushed good, this ain't the place. Everything takes time.

VAUGHN: McNeil opened a second location last July.

MCNEIL: The tourism here is big. It has grown from when we first started, it's more than doubled. I'm doing at least 200, 300 cases of shrimp a week.

VAUGHN: McNeil buying more fish means Crosby's Seafood has the business to hire more staff.

MCNEIL: The climate for business is better.

(END VIDEOTAPE)

VAUGHN: Bret, a lot of people talk about the economy and think of spreadsheets and stock prices, but here in South Carolina, signs of the booming economy can be something as simple as more time at home with their kids and more money in their paycheck, and that is what is on their minds before they head to the ballot box on Saturday. Bret?

BAIER: Hillary Vaughn live in Charleston. Hillary, thank you.

Karl Marx and Friedrich Engels, they preached a new faith for a skeptical age, and it spread faster than any religion in history. Tonight, we continue our series, "The Unauthorized History of Socialism" with the story of their "Communist Manifesto."

(BEGIN VIDEOTAPE)

BAIER: In January, 1848, students and workers took to the streets of Palermo. By February, the revolt had spread to Paris. Soon, nearly 50 uprisings engulfed the European continent, from Russia to the English Channel. Marx and Engels rushed home to Germany to join the barricades. They had just finished writing a platform for a workers' organization based in London. The pamphlet would become known as "The Communist Manifesto."

The timing of its publication would forever link it to revolution, adding to its mystique. Soon the world would learn the central premise of Marxism, that the existence of all hitherto existing society is the history of class struggles.

JOSHUA MURAVCHIK, AUTHOR, "HEAVEN ON EARTH, THE RISE, FALL, AND AFTERLIFE OF SOCIALISM": For Marx and Engels, the heart of the system of capitalism was exploitation. As they saw it, the workers were the ones who were creating the things that were coming out of the factories, but the capitalists were the ones who were keeping most of the prophets. What they talked about was the means of production, the Marxist term for the machinery, the factories. And this was terribly unjust, and the only way to rectify it was for the workers to get together and take the factories away from the capitalists so that they could have the complete benefit of the products that they themselves were creating.

BAIER: "The Communist Manifesto" predicted that as capitalism progressed, the working class would become so large and so poor that revolution would be inevitable. The result - socialism, a new workers state where people contributed according to their ability and received according to their need. In time, government itself would become unnecessary and give way to a new stateless society Marx and Engels called communism.

SHERI BERMAN, COLUMBIA UNIVERSITY: What Marx and Engels said was don't worry, whatever happens to you, no matter how miserable your lives, no matter how desperate your political struggle seems, history is working its way towards this outcome, and that's what gives Marxism its incredible force.

BAIER: Many socialists bought the argument. "The Communist Manifesto" would go on to become one of the most influential pamphlets ever published, with translations in every major European language by the turn-of-the- century.

(END VIDEOTAPE)

BAIER: You can watch the rest of our six part series "The Unauthorized History of Socialism" on FOX Nation. The first episode is free. We'll continue to run pieces from that series all week here on SPECIAL REPORT.

Democratic presidential candidates expected to come out firing at front- runner Bernie Sanders in tonight's debate. We'll see what the panel thinks after a quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS, (D-VT) PRESIDENTIAL CANDIDATE: He initiated a major literacy program. You know what? I think teaching people to read and write is a good thing. The truth is the truth, and that is what happened in the first years of the Castro regime.

REP. DONNA SHALALA, (D-FL): It's what he believes, and it's unacceptable to our community, it's unacceptable to anyone in our country.

UNIDENTIFIED MALE: Does it disqualify him to be president?

SHALALA: That's for the voters to decide. But as far as I'm concerned, he's way off.

(END VIDEO CLIP)

BAIER: Democrats in south Florida don't much like the literacy program of Fidel Castro or that Bernie Sanders brings it up. But Bernie Sanders is the front-runner of this race, and he will be under attack on that debate stage. Seven candidates, as you look at them, Joe Biden, Mike Bloomberg, Pete Buttigieg, Amy Klobuchar, Bernie Sanders, Tom Steyer, Elizabeth Warren.

A lot of the conventional wisdom in Democratic circles is that Bernie Sanders is a real problem and that he might not win against Donald Trump. Peter Hamby with "Vanity Fair" a couple weeks ago wrote a piece, I'm just going to read a little bit of it. "Everything about Sanders, his ideas, his stubborn dogma, his sometimes kooky supporters, his contempt for greenroom culture and party circuit, is completely foreign to the intellectual and cultural fabric of Washington. In that universe the claim that Sanders is unelectable is more or less gospel.

Some Trump advisors are worried about Sanders' strengths, his populist appeal, perceived authenticity, his durable popularity with the same white noncollege voters who voted for Trump. Democrats fretting about the prospect of nominating Sanders should consider for a moment how the few years in American politics have exposed the frailty of conventional wisdom and incremental thinking. They might also consider a Xanax.

Instead of asking if Sanders is unelectable, ask another question. What if Sanders is actually the most electable Democrat? In the age of Trump, hyper-partisanship, institutional distrust, and social media, Sanders could be examined as a candidate almost custom-built go head-to-head with Trump this year." That was a few weeks ago before Sanders went on a roll.

What about all of this? Let's bring in our panel, Charles Hurt, opinion editor for "The Washington Times," Mo Elleithee, executive director of the Georgetown Institute of Politics, and Jonah Goldberg, editor in chief of "The Dispatch." Mo, what do you think of that?

MO ELLEITHEE, EXECUTIVE DIRECTOR, GEORGETOWN INSTITUTE OF POLITICS: Peter Hamby is onto something here. I think Bernie Sanders is going to have a unique set of challenges should he be the nominee. But I don't disagree with Peter that we are in a different era. One of the ways Donald Trump won was by tapping into a sense of grievance amongst a whole lot of people out there, a populist sense of grievance, and using that to turn out voters that we haven't seen yet. That's the rationale of the Sanders campaign, that they can tap into a populist sense of grievance and turn out a whole new group of people.

The first three states we haven't seen him do that. He hasn't expanded the electorate in the first three states, and I think comments like that one on the literacy program in Cuba might be a challenge in some places. But then again, what the heck do any of us know? We were all saying there's no way Donald Trump can win four years ago, and he proved us wrong. Don't count him out.

BAIER: So Joe Biden is in a position in South Carolina where he really needs a win, has to have one. He has got an ad against Bernie that's airing in South Carolina right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Bernie Sanders told fellow senators he'd take on Obama. When it comes to building on President Obama's legacy, Bernie Sanders just can't be trusted.

(END VIDEO CLIP)

BAIER: The question is how Joe Biden can be trusted on the debate stage, and his previous performance and what tonight could bring. Clearly, it's going to bring fireworks.

JONAH GOLDBERG, FOX NEWS CONTRIBUTOR: Everyone is going to empty out the storehouse of ammo on everybody, I think. But the basic problem with Biden is he increasingly sounds like one of those bad lipreading videos you see on the Internet where words that do not go correctly in the order in which he is saying them come out of his mouth with alarming frequency.

BAIER: Today with the U.S. Senate, running for the U.S. Senate.

GOLDBERG: Look, he's talking about getting arrested visiting Nelson Mandela. Where is the nurse to rein him in? And that is his real problem. If he can come out and reassure people with more than shouting and anger that he was fully in control of himself, I think he would be in a much better position. But there's a nervous making aspect to his candidacy at this point, like maybe he just can't go the distance, and I think Democratic voters are picking up on that.

BAIER: Here is Bernie Sanders from "60 Minutes" and Representative Clyburn.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS, (D-VT) PRESIDENTIAL CANDIDATE: What Democratic Socialism is about is saying let's use the federal government to protect the interests of working families.

JAMES CLYBURN, (D-SC) HOUSE MAJORITY WHIP: Anybody who refers to themselves as a Democratic Socialist, that word has always had really dire consequences throughout South Carolina.

(END VIDEO CLIP)

BAIER: Usually endorsements don't mean a lot. Representative Clyburn's endorsement means a lot, actually, in South Carolina. And if he does pull the trigger for Biden and gets behind him, maybe that moves them across the finish line.

CHARLES HURT, OPINION EDITOR, "WASHINGTON TIMES": And also the non- endorsements like the one from Donna Shalala, what people are saying, and Mike Bloomberg, what people are saying about Bernie Sanders right now. And I know that people come together once a nominee is picked, but I have a hard time imagining how these people come back around and support Bernie Sanders after some of the things that they have said.

It raises another big question for me, where is Barack Obama? He risks having his entire legacy, you may not agree with it, but he risks having his entire legacy being destroyed by this guy whether he wins or he loses, and he's sitting on the sidelines. I don't get it.

But the similarities between Trump and Sanders is that they both reveal the dissatisfaction of regular voters with their parties, huge antiestablishment fervor. And I think it's real.

BAIER: Think of it, the populist left and the populist right, the traditional establishment has faded into oblivion. But I'm going to take a break, then we're going to come back and continue to talk about this and the debate tonight after a short timeout.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENTIAL CANDIDATE: You're the ones that sent Bill Clinton to the presidency, and you're the ones who sent Barack Obama to the presidency. And I have a simple proposition here -- I'm here to ask you for your help. Where I come from, you don't get far unless you ask. My name is Joe Biden, I'm a Democratic candidate for the United States Senate. Look me over, if you like what you see, help out. If not, vote for the other guy. Give me a look, though, OK.

(END VIDEO CLIP)

BAIER: Joe Biden, as we referenced earlier, just wanted to play the full soundbite just for context. Mo, it's just been a bumpy ride.

ELLEITHEE: Yes. I still think -- we elected Donald Trump president of the United States. I think people give candidates a lot of passes for stuff like that. Joe Biden just hasn't connected, and I think there's a whole lot of other reasons.

Now, this Saturday, right, will be the ultimate test for him. It is where he's got to win. It is where he can begin a comeback or where he has to fold up the tent. But I think that the problem is what a lot of Republicans faced last time, and that is there is this antiestablishment fervor, there is a populist sentiment out there that is driving politics on the left the exact same way it drove it on the right four years ago. And they look at Joe Biden, and they like Joe Biden. They love Joe Biden. He's uncle Joe, but he hasn't tapped into that -- he is maybe the imperfect messenger for this moment on the issue of, can I bring change?

BAIER: Yes, but the question, really, in this whole thing is who can beat Bernie Sanders in this other lane? If we look at the Democratic popular vote, these are the three contests so far. These are the actual people who voted, numbers, this is how it comes down. Bernie Sanders, Pete Buttigieg, Amy Klobuchar is actually in third in the number of people who voted for a candidate. Now, delegates, it lines up differently. But Jonah, what about these other candidates who are going to be feeling pressure to get out of the way for somebody to consolidate to be up against Bernie Sanders?

GOLDBERG: It's a similar collective action problem like the one the Republicans had where everyone thinks the other ones should get out of the way for the consolidation to come. The problem is that basically if Sanders comes away with a close second or something like that or even a win in South Carolina, which I don't think he's going to do -- if really tonight, if the Democrats don't starting going hammer and tongs against Bernie Sanders, the same logic that kicked in with Trump is going to start to kick in around here, which is that he is the presumptive front-runner, he's the presumptive nominee, we have to unite to make him the strongest candidate possible for the general election. And attacks on Sanders will start being too little, too late. I don't know that Bloomberg just because he's spending enough money to scald a wet mule, as Haley Barbour would say, can change that dynamic. And so basically, it's basically tonight or the internal logic starts to take over.

BAIER: Mayor Bloomberg may have spent some more money on debate prep before tonight. We don't know. But what about Elizabeth Warren, who clearly was just going after Bloomberg. It seems like she was reticent to go after Sanders this week. She was pressed about it numerous times by reporters. She kept on going back to Bloomberg. Something tells me that might be what she does tonight.

HURT: Yes. And I think, clearly, she is probably angling for that V.P. lane because she realizes she does not have a chance.

But I think we are prepared to see a truly great debate in this country. If it does wind up being Bernie Sanders, as I suspect it will, the difference Donald Trump and Bernie Sanders is that Donald Trump got elected promising to spark a revolution in Washington, D.C. And to whatever degree, I would argue he hasn't done it enough, but a lot of people think he's done quite enough. But the difference with Bernie Sanders is Bernie Sanders wants a revolution in America. And this debate between Democratic Socialism, communism, whatever you want to call it, and free markets and freedom, the question about, is the federal government the answer to every problem we have in this country? I think that's going to be a fascinating debate. And it comes down to this -- the degree to which American education has failed to teach our young kids, and for them to understand the history of socialism.

BAIER: There's a great series on FOX Nation, a six-part series.

HURT: I can't encourage people enough to watch that, because it's important.

BAIER: All right, thank you, all. Panel, thanks. We were going to have a wrap up tonight of the debate at 11:00 p.m. with Shannon Bream. I'll be there. When we come back, a way you can honor an American hero.

(COMMERCIAL BREAK)

BAIER: Finally tonight, no man left behind. Earlier today, do I read my Twitter page? I do. I read a story and then I retweeted a message about a funeral being held in Evansville, Wyoming, outside of Casper, for Corporal Ray Barela, a Marine Corps veteran who served during World War II, died at the age of 101, no known family. So people were encouraged to show for his funeral Friday. I tweeted it out. Patriot Guard Riders responded to my tweet saying they were going to be there in force. A few others said they were coming with their family, weather permitting.

So, if you are near Oregon Trail Veteran Cemetery in Evansville, Wyoming this Friday, 10 a.m., show up, please pay respects to Corporal Barela. I'd be there if I could. That's it for the SPECIAL REPORT. Fair, balanced and unafraid. "THE STORY" hosted by Martha MacCallum starts right now.

Hey, Martha.

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