This is a rush transcript from "Special Report," January 6, 2012. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: As you look live at the White House, President Obama today very excited really about the unemployment figures, saying where there is more work to do but it's a good sign, he said, that it's heading in the right direction; the economy. There you see it, December unemployment, 8.5 percent. It's ticked down, lowest since February 2009, 200,000 net jobs added, 1.6 million jobs added in 2011.

Now the underemployment rate, and this is the broadest measure of the economy, includes people who have given up looking or have taken a part-time job, now stands at 15.2 percent. We're back with the panel. We're going to start there in the Friday Lightning Round, the economy. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is excellent news for Obama, and for the American economy. These are real numbers. I think what is the most interesting is the number of hours per worker is increasing and it has for the last few months. That means that employers who are still hesitating to actually hire a new person with all of the liabilities at a certain point are going to have to hire if they want more work. And at a certain point it translates into extra workers. So you can see a real increase in employment in mid-year.

Three caveats. Europe, still shaky, the U.S. housing market still slow, and, lastly, between now and Election Day, Iran and a spike in oil prices.

BAIER: Another caveat, seasonal jobs are in there. And often you see after this, revisions, and that is a possibility for this White House. But, now, they are enjoying these numbers.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: I was going to list the same concerns that Charles did. And you were right. They revise the numbers frequently, and anything can happen to send the economic picture south once again, and President Obama knows that. But if politically, the metric that the public uses to take the temperature of the economic picture is the unemployment number. This continues to brighten not darken. And that is good for President Obama.

BAIER: Steve?

HAYES: Yeah, good news as a snapshot. It's still the case that the labor force participation rate is too low. It's 64 percent. You didn't see it budge. You want that much higher, 66 plus percent. That's still something that's sort of lurking in the long-term, but as a snapshot both on the economy and on politics, this is good news for the White House.

BAIER: Recess appointments won the voting in the Friday Lightning Round vote. Richard Cordray appointed. How big a deal is this? Obviously, the controversy is a legal and constitutional one and whether the Senate was really in recess. But, Steve, how big a deal is this and will Republicans continue to hit on it?

HAYES: I don't think it's a huge -- what the president done is outrageous. I mean, he can't just decide willy-nilly that the Senate is in recess if the Senate is not in recess. I mean, what is he going to do? If the Senate leaves for a weekend, is he going to decide he's gonna recess appoint then? This isn't the president's prerogative. And there is a clear constitutional precedent.

The context for this, of course, is that the president wants to say that Congress is obstructionist and he wants to line up as many examples as he can give. This is going to be one of them.


STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think it moves partisans on both sides. He knew it would. It makes Democrats very happy that he did this and makes the Republicans furious he did it. They are calling it an illegal power grab. If you look at persuadable independent voters who see the Congress as paralyzed I don't know that he does too much damage to himself with the recess appointments.

KRAUTHAMMER: Whether or not it becomes a big political issue, it is a big issue. If the president wants to breach the constitution to achieve something important, let's say he needs a secretary of defense and he can't have it. And he says OK, I'll decide, the Senate is in recess and I'll do it. That is one thing.

But as was reported in the Times this morning, this is time and aimed exactly at Election Day. It's not about the actual appointment but a way to provoke the Congress and to link Republican presidential candidates with the unpopular Congress. It's entirely about elections, and that makes it a disgrace.

BAIER: Quickly, down the row. The U.S. Navy rescued some Iranian fishermen being held hostage by apparently Somali pirates. It seemed like a good day for diplomacy.

KRAUTHAMMER: But it is only humanitarian. I'm not sure it has any implication. The real story I think out of Iran today, the crackdown on the Internet. The regime understands sanctions will bite. It's worried about unrest at home.

STODDARD: I think what is so scary about the fact that the Iranians are so scared of an actual war, they are scared of prices rising, they are scared of their currency collapsing, is that as the Internet is restricted and policed, we lose our ability to also know what is going on as they lose their ability to sort of coalesce and unify against the regime.

BAIER: Good to save the fishermen.


HAYES: Better that we did it than that we didn't. We can deploy it as an argument. But ultimately the bigger story is instability in Iran.

BAIER: That is it for the panel. But stay tuned to see one show's take on the importance of this week.

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