This is a rush transcript from "Hannity," December 22, 2011. This copy may not be in its final form and may be updated.

MARK STEYN, GUEST HOST: Moments ago, House Republicans reached a deal with the Senate to renew the payroll tax cut before it expires at the end of the year, bringing an end to the December deadlock on Capitol Hill. Speaker of the House, John Boehner, says he expects to pass a new bill that will extend the tax break for two months, while Congress works to negotiate a more long-term solution.

(BEGIN VIDEO CLIP)JOHN BOEHNER, R-OHIO, HOUSE SPEAKER: We expect that there will -- these members will work expeditiously to complete the one-year extension that all of us want. We will ask the House and Senate to approve this agreement by unanimous consent before Christmas.


STEYN: Meanwhile, according to a senior Senate GOP aide, the Senate may very likely pass the payroll tax cut deal tomorrow, a risky move that could open the door for a constitutionally grounded objection from the House since all revenue-related measures are technically supposed to originate in the House and not in the Senate.

Joining me now with the reaction as we continue to monitor this developing story, a Fox News political analyst, Juan Williams and the co- host of "The Five," Kimberly Guilfoyle. Juan, how did the Republicans mess this thing up?

JUAN WILLIAMS, "MUZZLED" AUTHOR: Well, it says a lot, Mark, as you would introduce it in that manner.


WILLIAMS: But they did. This is, you know, for me, it's all now about how do you get out of this situation, saving some face because politically, it has just been a fiasco. It's just been a mess, and it's harming the party. It's harming the Republican brand going into a presidential election year.

So, when you ask me how did they get into this? Largely, it's evidence of the continuing split within the party between establishment Republicans, Mitch McConnell in the Senate and even John Boehner in the House who thought, you know what, this is a good enough. We're going to put pressure on President Obama in terms of the Keystone Pipeline deal.

I mean, he's going to embarrass himself one way or the other, if he says "yes" or "no." And we're glad, and we're going to negotiate this again in two months. But the House freshmen, the Tea Party freshmen didn't buy the deal and say that, you know what, we didn't get sent to Washington to maintain the status quo. We're here to create change and the change includes taking on the Republican establishment.

STEYN: But it wasn't just the freshmen, Kimberly. I mean, basically, the idea here was that the Republicans were going to call the president's bluff on the Canadian pipeline, and instead, he called their bluff on the tax cuts?

KIMBERLY GUILFOYLE, "THE FIVE" CO-HOST: Yes. It’s a little bit of ‘Keystone’ theatrics going on in here. But I go to tell you. Everybody sort of have stain on them in this situation, because no one is really happy. You have all the infighting, which I think you see that it's very fractured party right now.

We're seeing that in terms of the primary, even trying to decide any a candidate. So, to me, this isn't a surprise that this happened today. I think, someone who's getting criticized heavily can't seem to please anybody right now is poor John Boehner is really coming out of this ruffled and not looking like he's able to have the support of a unified party behind him, which I think is problematic.

STEYN: But beyond the politics if the situation, there is something faintly ridiculous in this, isn't it? We're now supposed to be happy that we've got another two months of this payroll tax cut so we can stage the old, you know, payroll tax cut debate again in another, you know, whatever it is, 6 1/2 weeks when it all starts counting down again. What's the point of --?

GUILFOYLE: They will showdown again.

WILLIAMS: Right. And the whole thing to me, you know, living in Washington, watching this up close is we are now locked into a perpetual, continuous game of brinksmanship.


WILLIAMS: And everybody says, oh, I'm not compromising. We have to come up to the very last hour. Now, in this situation, the only reason that we didn't get to December 31st is it became so embarrassing and politically damaging for the Republican Party. But other than that, now, you know, you think back to debt ceiling, you think about -- the budget, everything just goes in this manner.

STEYN: But is this -- is this just a particular foolishness? You mention the debt ceiling where he spent whatever it was two months negotiating the equivalent of a day and-a-half savings or whatever it was.


STEYN: Now, we've got the situation of hyper power, the dominant global nation on the planet, supposedly, legislating for two months.

GUILFOYLE: It's really embarrassing. It's shameful, in fact. Isn't any surprise to you that Congress has the lowest approval ratings in the history -- I mean, hang your head in shame, wear a wig, dark glasses, and a hat. Don't even admit that you're a member of this mess. What's wrong with you, people? We love the American people. We want to help you out. For what?! Eight weeks? And then what? Get it together, people.

WILLIAMS: You know, Kimberly’s on target here about something that's much larger in this mess, which is Republican or Democrat, I think a lot of Americans think, you know what, a pucks (ph) in all of you. We really can't stand any of these. You, guys, are dysfunctional. You don't get things done.

If a husband and wife are having an argument, you know, at some point, somebody compromises and we move on. These guys absolutely seem to take pleasure in sticking it in each others' eyes like little kids or something.

GUILFOYLE: Very juvenile, I mean, honestly. It's not even -- it's more like kindergarten or something.

STEYN: Yes. But why can't John Boehner make that case? Why can't he just say, grownup people don't negotiate -- don't sit down and have a negotiation for two months? For over a two-month deal. Who's got the time for that?

GUILFOYLE: I'm telling you, we need a new sheriff in town or something, because it's like the O.K. Corral. You have to keep track, because you're getting shot in the back by your own party and another party faction's shooting you from the left and you've got to take cover from the right. I mean, you don't even know. Who's on what side here?

WILLIAMS: Well, let me just say --

STEYN: Is he done, John Boehner? I mean, --

WILLIAMS: This is the story that's coming, I think, that hasn't yet been written, which is John Boehner's leadership is now threatened. It's almost untenable. It's clear that John Boehner had a deal with Mitch McConnell, his Republican fellow leader in the Senate, and that they had a deal with the White House with Obama.

OK. But Boehner couldn't deliver. And if you can't deliver, that means you're not a leader. You're not in control of your troops.

STEYN: Yes. I bet he's wishing he could crawl down into that Canadian pipeline.


STEYN: Thanks a lot, guys. Merry Christmas.

WILLIAMS: Merry Christmas.


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