This is a rush transcript from "Special Report," March 29, 2011. This copy may not be in its final form and may be updated.


SEN. CHARLES SCHUMER, D-N.Y.: I always use the word "extreme." That's what the caucus instructed me to do the other week, extreme cuts and all these riders. And Boehner's in a box. But if he supports the Tea Party, there is going to inevitably [be] a shutdown. What we're trying to do here --

REP. JOHN BOEHNER, R-OHIO, HOUSE MAJORITY LEADER: Instead of them issuing marching orders maybe what they should do is get to work and actually pass a plan.


BRET BAIER, ANCHOR: OK. Senator Chuck Schumer was on a conference call today, thought he was just talking to his colleagues, fellow senators but the call also had reporters on at the same time. That is when it was cut off there. That's what you heard.

Also today, former Democratic presidential candidate and DNC chairman Howard Dean said this - "From a partisan point of view I think it would be the best thing in the world to have a shutdown," meaning a government shutdown. "If I was head of DNC I would be quietly rooting for it. I know who's going to get blamed. We've been down this road before."

Well, we have little more than a week left before that deadline is here. We're back with the panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's clear that at two levels the Democrats have decided they're not going to make any serious cuts and they are going to wage the coming campaign of 2012 on the issue of cuts. They are going to make the Republicans look like extremists. And this is a word that Schumer has been instructed he has to use all the time.

And the president at one level in the budget he gave, next year's, made no cuts at all of any seriousness, no attempt at tax reform, no attempt of entitlement reform. He is waiting for the Republicans to counter with a budget that has cuts. And he's going to attack, and here Schumer is doing it on the level of these small cuts in the continuing resolution.

BAIER: Are we bound for a government shutdown?

MARA LIASSON, NATIONAL PUBLIC RADIO: I certainly hope not. I mean, but at this point, you don't see progress at all. I mean we've only got until next Friday and there are no more temporary's CR's in anybody's back pocket. They've kind of finished --

BAIER: Continuing resolution.

LIASSON: Yeah, they've kind of finished with those. The thing that is interesting to me, of the two bites you played, I think the Howard Dean one is so much more damaging. Chuck Schumer just sounded like he was saying what he always says only he said, here are my talking points, and then he said them.

But what I think is interesting, is the Democrats were getting ready to accept somewhere in the neighborhood of $30 billion of cuts for this year. That is what John Boehner started with before his Tea Party freshmen said you have to go more. So until we heard the talking points, talking point gate, whatever we're calling that, it's was as if John -- this budget battle could come out with John Boehner being the huge winner, in other words, we might have the John Boehner budget in the end, if he can get enough Republicans to support him.

BAIER: Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Republicans would say, however, that they never actually got that offer. There's been a lot of talk about them having gotten that offer --

LIASSON: Right but I think that's --

HAYES: -- but the offer was never received.

LIASSON: Right but I think that's what the Democrats are willing to do.

HAYES: OK but that's a pretty big difference.


BAIER: Nobody put it on paper.

HAYES: Nobody put it on paper.

LIASSON: That's right, that's right.

HAYES: Look, I think the Democrats want a shutdown for a couple of reasons, primarily because we're going to have huge debates about bigger issues later and they think that they can set the Republicans up on the coming debates on debt limit and the coming debates on the 2012 budget by having a government shutdown now. They can use these small cuts which, you know, five or $10 billion, everybody, I think, agrees who wants to limit government that -- take the cuts if you can get them.

But you're talking about $40 to $45 billion in the discussion of the short-term budget where you are going to be talking about trillions of dollars in savings over the long-term when Paul Ryan puts out a very aggressive budget within a couple of weeks.

BAIER: And quickly, we are approaching the debt ceiling limit. We are now at $14, more than $14 trillion in our debt, which is another battle.

KRAUTHAMMER: Well that's why Democrats want to shut down, sets it up, blame the Republicans and have them on the defensive in all debates including on the debt limit.

BAIER: That is it for the panel. But stay tuned for another edition to the Libyan coalition.

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