This is a rush transcript from "Special Report," July 21, 2011. This copy may not be in its final form and may be updated.

TIM PAWLENTY, PRESIDENTIAL CANDIDATE: The first step on the journey to beating Barack Obama is uniting our party. I can do that. I don't think the other candidates can. I've also got this record of results.

MITT ROMNEY, PRESIDENTIAL CANDIDATE: I would draw on 25 years of experience in the private sector to help get America back to work.

HERMAN CAIN, PRESIDENTIAL CANDIDATE: If you look at the latest Gallup poll in terms of positive intensity, I lead all candidates in terms of positive intensity. Secondly, within the last six weeks my name I.D. has gone from 21 percent to 48 percent.


BRET BAIER, ANCHOR: Well, there you hear some of the candidates, the GOP field getting ready for our debate August 11 in Ames, Iowa. Some news today, Jon Huntsman, one of the candidates out there, he has a new campaign manager. His campaign manager left. He has a new campaign manager, a former aide to Arnold Schwarzenegger. And we're talking about polls. Here's the latest Fox News polls. As you take a look at the Republican field there, Romney at 17 percent, not yet in, Texas governor Rick Perry at 14 percent, Michele Bachmann at 10 percent. There you see the rest. We go to the next page, Cain, five percent, Gingrich, four percent, Pawlenty and Santorum there at two percent. Huntsman is at one percent in this poll. Next page about the head-to-head against President Obama and you can see where it stacks up there in the front contenders, at least now. And it's of course early. We're back with the panel. Jonah?

JONAH GOLDBERG, AT LARGE EDITOR, NATIONAL REVIEW ONLINE: Well, it's, there is a lot of churn out there. I think that the polls are best looked at the way Real Clear Politics does it, it was an average and all the rest. That sort of clears out a lot of the noise and puts things back, where Romney is out front and all the rest. I think the Huntsman news has all of the political impact of announcing a change in the head waiter in the main dining room on the Titanic. I mean it just is a completely uninteresting thing to me.

BAIER: It has not -- the campaign has not taken flight --

GOLDBERG: -- taken flight. No it has not.

BAIER: Despite a lot of attention.


GOLDBERG: There you go. That's True. Let's not carry my metaphors too far. I think that to me the most interest thing, given where a lot of people thought was going to happen is Pawlenty, where Pawlenty has really truly not taken off. And he is now simply an Iowa candidate. And if he doesn't do extremely well in Iowa, he is done for. And a lot of people thought that he was going to be the dark horse guy who was really going to show something. He is smelling more and more like Lamar Alexander in 1996.

BAIER: Mara, there is anecdotally some evidence that he is doing well in Iowa. And there's at least one poll that says he is behind Michele Bachmann there. If he somehow surprises and does better than expected -


BAIER: -- in the Ames straw poll --

LIASSON: He has to do that. That is the make-or-break day for him, because Michele Bachmann has been the big surprise of this whole race, how she surged, how she became at least for the moment, until Rick Perry decided to get in, all but decided to get in, she became the conservative Tea Party alternative to Mitt Romney. And that is the first battle in the Republican primary.

And I think when Rick Perry gets in, there's going to be a battle between him and Michele Bachmann who will be the conservative challenger to Romney. And, you know, I think Michele Bachmann is a really compelling candidate for the Republican primary electorate, but Rick Perry is an 800 pound gorilla. He got a lot of money. He's apparently a great performer. And if he dispatches her, then it's a Romney-Perry battle.

BAIER: Charles, the story line on Governor Perry is that he was analyzing the money situation, seeing where the money was, and this is what's taking him so long to officially get in. But there is another potential storyline here in that he is calling all these former Defense officials down to Texas. He is gonna -- boning up on policy issues before jumping in.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think everything he is doing indicates a man who is running. And if you look at the polls he isn't even in, he's already running second or third, but he's second in the latest poll. He clearly is going to be, the minute he enters, a first tier candidate. Romney obviously is way out -- well, he is frontrunner. He may not be way out in front, but he is the frontrunner. Then you get Perry.

Then you get -- there is one wild card here. If Sarah Palin, who is making noises of getting in -- there are some reports she actually will. One in the New York Post a couple of days ago. If she does, then it becomes a three-way contest to become the anti-Romney. She goes head-to-head with Bachmann particularly as Tea Party candidates. They're both are favorites and they would be splitting that constituency.

BAIER: Which helps Romney in the end.

KRAUTHAMMER: Which helps Romney, might even help Perry in the sense, because if they split the vote, that sort of straight Tea Party, he could perhaps rise above them and come in second. So I mean, this is like three cushion billiards. It's hard to predict. But it depends in the end, I think on whether Palin enters the race or not. If she doesn't, I think it's exactly as you described, but if she does, then I think it scrambles who is going to be the big challenger to Romney.

BAIER: And of course the big issue is who can take on President Obama in the general election for most Republican voters. Here is what the president said in a recent interview just a couple days ago, quote, "If next November, if they feel like I have been on their side" -- this is voters -- "and I have been working as hard as I can and have been getting some things done to move us in the right direction, I'll win. If they don't, then I'll lose. And that is not to say the other candidate is irrelevant, but it does mean that I'm probably going to win or lose depending on their assessment of my stewardship." Jonah, that is pretty straightforward.

GOLDBERG: I think it's exactly right. It's going to be a referendum on Obama. We have seen his approval ratings going down during this whole, inside the beltway fight, about the debt ceiling limit. But that debt ceiling limit fight reflects badly on the right track/wrong track opinion about the country, on the economy and all that. And that's where he takes it in the neck.

BAIER: Last word.

KRAUTHAMMER: He's right about that. I'm surprised he said it because I guarantee you next year, all the billion dollars in ads he runs are not going to be about his great stewardship and how good the economy is. It's going to be all negative, it's going to be all about the challenger; he's going to try to make it a choice and not a referendum. But that's his entire strategy.

LIASSON: And that is what presidential re-elections are always about.

BAIER: That is it for the panel. But stay tuned for an important weather service announcement on this scorching Thursday.

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