This is a rush transcript from "Special Report," March 9, 2011. This copy may not be in its final form and may be updated.

RON SCHILLER, NPR: It is very clear that we would be in the long-run without Fe deral Funding. NPR would definitely survive. And most of the stations would survive.

REP. MIKE PENCE, R-I.N.: I think it's right that the CEO step down. It would be more right, though, if we seize this time of a fiscal crisis to say it's time to end public funding for NPR.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We do not support calls to eliminate funding for National Public Radio and the Corporation for Public Broadcasting.


BRETT BAIER, ANCHOR: Well, after an undercover video surfaced showing the foundation president at NPR talking about conservatives, the story evolved from there. And today, the president and CEO of NPR Vivian Schiller announced that she is stepping down, reportedly ousted by the board there. Here is what she was talking about just Monday night, at an event. Take a listen.


VIVIAN SCHILLER, PRESIDENT AND CEO, NPR: We made some mistakes, and I made some mistakes. And the key thing now is reflect on those mistakes and to fix some things that some of our systems that fell down on that day and to make sure it doesn't happen again. And so that is the learning experience from the experience with Juan Williams.


BAIER: Two days later, she has stepped down. What about the shakeup at NPR and the talk about federal funding? Let's bring in our panel, Tucker Carlson, editor of TheDailyCaller.com, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Tucker, let's start with you.

TUCKER CARLSON, EDITOR, THEDAILYCALLER.COM: Well, I think it's over for funding of public broadcasting, and look it should be. We're $14 billion in debt. We've been reminded again that the people who run a lot of public broadcasting kinda hate a lot of the country. And by the way, Republicans were hired in this last cycle to do things like defund public broadcasting. So I think it's gonna happen.

It'll affect -- Not all public broadcasting is the same, though. NPR is gonna be fine, NPR has a lot of quality programming; they don't take that much federal money actually as a percentage of their budget. A lot of their programs -- it can compete in the marketplace is the bottom line. Cause people like it and there aren't a lot of options. PBS, on the other hand, a lot of nice people there -- I had a show there once. I'm not attacking it, but the quality elements of it will go off. I mean Ken Burns will go to Discovery in 20 minutes and Jim Lehrer will probably revive CNN or whatever. But the rest of it will not survive without federal funds, and I think it's going to happen.

BAIER: A.B., this battle was pretty fierce before this development this week, with some Democrats bringing in ya know Elmo or would you name your character--

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Because it always works.

BAIER: --defending that. But now does this change the whole dynamic?

STODDARD: I mean look, the fight to phase out Corporation for Public Broadcasting and the National Public Radio is always difficult. The family programs are very popular. And there is always an argument that the rural stations suffer and rural communities will suffer without those stations without the federal funding.

This was going to be an uphill battle, as Tucker points out. Our debt and deficit are just too high at this point to argue that cancer research and home heating oil is less important than funding NPR. I think that, it makes -- it was already an uphill battle and it makes it much harder. And I think the board's decision to demand that Vivian Schiller leave just reflects upon how deeply its members just felt that although the two incidences between Juan's firing and this secret videotape may not be connected they have inflicted so much damage on NPR's brand they literally had to find new leadership.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think the one connection between the two incidents and the reason that NPR is in such trouble now is because in each instance it revealed the bias inherent in NPR. And it gave you an insight if what people at NPR would say to each other when they're off the air and that would then be denied when they speak in public and say we're evenhanded and there isn't any bias.

In Juan's case it was obvious. The ombudsman in writing about the firing of Juan criticized the way in which it was done, but he said there was some merit because he was expressing opinions in other venues. But this was a preposterous argument given the fact that Nina Totenberg, who is a reporter, unlike Juan who is a commentator, so she should be held to a higher standard, has been issuing opinions infinitely more partisan and pointed than Juan for seventeen years on "Inside Washington" --

BAIER: A show that you are on.

KRAUTHAMMER: I know about that because for my sins I have been sitting on that set for the same 17 years. So I can report firsthand that Juan is infinitely more moderate, and yet he's the one who got fired. It's clear and what we heard from -- what was his name? Ron Schiller.

BAIER: No relation to Vivian.

KRAUTHAMMER: -- about gun toting, racist conservatives is a reflection of what you know happens inside of NPR.

The other element of this is NPR has been an anachronism for 20 years. At a time where public television, for example -- at a time you had three networks, it made sense. You could argue, well you've gotta have a third outlet for British costume dramas. Without, ya know, 50 channels, 500 on television, 1000 on radio -- it's completely unnecessary, and if it is biased it doesn't have a chance at all.

BAIER: Tucker, the White House said this is an important priority in the president's budget today. I mean is that the right fight for the White House to be making at this point?

CARLSON: Well it is hilariously out of touch. In fact to increase -- I mean so public broadcasting gets $450 million a year, they want to up it -- only by a $1 million, but still they want to up it; totally out of touch. And I would say that that out-of- touchness reflects the same spirit of NPR itself.

The Daily Caller, we're the first ones to have this story, so I went on today on NPR to talk about it. Very sweet people on this NPR program, talking about, well, is NPR really considered liberal? And I am thinking to myself, first of all there's nothing wrong with having a radio network for, ya know, rich urban people who drive Volvos. That's OK. But admit what you are. There was this sense, and I get this always when I talk to people from NPR, that they have no clue that their views are in any way out of the mainstream.

BAIER: Last word, A.B.

STODDARD: I don't think that when you go to work at NPR you have to be militantly pro-Muslim and anti-Tea Party.


STODDARD: I think that this was an embarrassing -- it reflected badly on NPR, and it makes the fight to retain their federal funding that much more difficult.

KRAUTHAMMER: You don't have to be, but it helps.

BAIER: Next up, the Strategic Petroleum Reserve, should President Obama release some of the oil to hold down gas prices?

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