This is a rush transcript from "Special Report," January 11, 2012. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: What these companies represent is a source of optimism and enormous potential for the future of America. You have heard of outsourcing. Well, these companies are insourcing.

KASIM REED, ATLANTA MAYOR: I think if you look at what he has done versus what Mr. Romney did at Bain Capital, I think this president is going to win that argument.

LEO GERARD, UNITED STEELWORKERS: I am the president of one of the unions who had Bain Capital come in and acquire companies and high grade them and then close them.


BRET BAIER, ANCHOR: The White House press secretary said the president is not focused on politics right now. But this event today at the White House was a jobs event. And aides acknowledge pointedly that it was aimed at Mitt Romney and his time at Bain Capital. Then afterwards, you just saw there, the allies of the White House who were at that event openly talking about it, answering questions about it.

Here was Governor Romney's response in his speech to all of this back- and-forth.


MITT ROMNEY, R - PRESIDENTIAL CANDIDATE : The country already has a leader who divides us with the bitter politics of envy. We have to offer an alternative vision. I stand ready to lead us down a different path where we are lifted up by desire to succeed, not dragged down by a resentment of success.


BAIER: OK, we're back with the panel. Chuck, first of all, what about this event today and the fact that all of these folks came out in the White House briefing room to kind of go after Mitt Romney and Bain?

CHARLES LANE, EDITORIAL WRITER, WASHINGTON POST: Well, I don't think it was any kind of coincidence that it happened right after the New Hampshire primary. There is, in fact, a legitimate phenomenon going on here of manufacturing returning to the United States. The president talked about it in the Midwest. It's actually happening mainly in the nonunion south. But never mind that. It is a real phenomenon and it's a great phenomenon.

The guys who decided to take a shot at Romney are taking advantage of what I think we have to recognize is a legitimate liability that Romney presents.

It reminds me Karl Rove talking about how the way to attack your opponent is to go after his strong points, right? That is kind of counterintuitive. But if Mitt Romney is going to go into this race saying I have real world business experience and it's why I should be president, they should go after an attack it and show why it shouldn't.

And I think Mitt Romney is going to have to do just what Bill said. He is going to have to talk and explain to voters what is private equity is all about, why it's a good thing, why it's legitimate business experience and why it qualifies him to be president. That is an absolutely legitimate issue.

BAIER: Charles, we have often said and you said at the panel that it's clear the White House is in campaign mode. But this is very clear that they are in campaign mode.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: You could call it an abuse of the office but of course I wouldn't.


KRAUTHAMMER: Clearly the president has stopped governing months ago. This is all about campaigning. He thinks the Republicans are in control of the House. Nothing is going to happen anyway. He is probably right. But it is rather remarkable, I mean, in January of an election year that he is already ginning all this up in the White House.

However, it's a warning that Romney ought to look at. To give an answer, the answer he gave last night -- this is his class war and it's politics of envy -- is not enough. The White House and Gingrich, Perry apparently are going to run ad after ad of somebody who lost his job. And that's gonna have a real impact. You can't answer with abstractions.

He is going to have to, A, show the faces of people who actually were helped, had a job, perhaps slimmed down, lost a job but regained it. And he's gonna have to say look, look what Obama did with the auto industry. He had to throw a lot of people out of work, he had to close a lot of dealerships, but in the end he saved it. I did exactly the same but with private money, higher risk because sometimes you have to make a company lean if you want to save it and produce jobs.

BAIER: Bill?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: And it's better for Mitt Romney to get a lot of practice beating, back these assaults now in a primary that he is probably going to win, from Rick Perry and Newt Gingrich than to sort of coast through and have to face these assaults suddenly in September and October. Mike Dukakis kind of won the primaries pretty easily in '88. It ended early. He was Mr. Confidence. He was 17 points ahead of Bush. He had never really been attacked. And suddenly Bush attacks him on things he had done as governor of Massachusetts and the whole thing crumbled.

So it's another reason, I think, why this primary should go on, everyone should stay in it. And Romney, you know, should respond to the attacks and also lay out his positive vision. The other way you get off the question of why did you take over this company in 1997 with this deal, is you say, hey, wait a second. Let's talk about what we want to do for the country. Here is my tax reform plan here's my spending plan.

BAIER: Quickly.

LANE: If he loses, "I like firing people" will go down in history as -


BAIER: No, no, "I like to be able to fire people who provide services to me."

LANE: It will go down as the biggest gaffe.


LANE: Even taken out of context, it will go down as the most devastating gaffe --

BAIER: He was talking about health insurance, it was taken out of context. We got this. But you are saying that sentence --

LANE: That will be used against him. And if he loses it will go down as one of the worst gaffes.

KRAUTHAMMER: It would be egregious if it were used that way.

KRAUTHAMMER: That's it for the panel, but stay tuned to see one of the overlooked moments at one of the debates last weekend.

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