This is a rush transcript from "Special Report," March 30, 2011. This copy may not be in its final form and may be updated.


SEN. HARRY REID, D-NV, SENATE MAJORITY LEADER: If people want to move the country forward, they can't let the Tea Party call the shots.

REP. JOHN BOEHNER, R-OHIO, HOUSE MAJORITY LEADER: The Senate says we have a plan. Well, great. Pass the damn thing, alright. And send it over here and let's have real negotiations, instead of sitting over there rooting for a government shutdown.


CHRIS WALLACE: House Speaker Boehner and Senate Majority Leader Harry Reid both taking partisan shots as the over debate over passing continuing resolution drags on with just nine days left until the government runs out of money.

Incidentally before the break, we asked do you think Congress can avoid a government shutdown before funding runs out next week? 27 percent say yes, it can avoid a shutdown; 73 percent responded no, it can't avoid a shutdown. I guess that means we're gonna have a shutdown.

We're back now with our panel. So the infighting over the budget continues, Bill. Who is winning the political battle? If our viewers are right, if there is a shutdown, who's gonna get the blame?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: I'm not sure but I think this is bad for Republicans in this respect. Paul Ryan who I think is gonna be on "FOX News Sunday" on Sunday --


KRISTOL: Is on Tuesday going to unveil the Republican budget for 2012, the real budget for the whole year, with broad and radical entitlement reforms, tax reform, real cuts in domestic discretionary spending over ten years. A serious, comprehensive Republican vision of governments. And unfortunately, from my point of view, and I think -- I'd say from most conservative point of view honestly, we're having this infighting about a continuing resolution which covers a very small amount of money for the next six months. And it's now gotten so confusing both within -- between the House and the Senate, and among Republicans, and among Democrats, that I'm not sure who wins this fight. But it is a distraction from what Republicans should want, which is a clear contrast between the Paul Ryan budget and the Barack Obama budget.

WALLACE: But couldn't you argue, Kirsten, that if Ryan is talking about hundreds of billions of dollars in cuts for the Democrats who say, well we can't get to $20 or $30 billion is gonna make them look even weaker?

KIRSTEN POWERS, NEW YORK POST: Well see, I actually think if it ends up being a shutdown it's gonna be a pox on all of you. I think people are sort of fed up with this. And that what we're talking about really is such a small number at the end of the day. And they do have much bigger things to get on to, not just the 2012 budget but the raising of the debt ceiling. I mean, there are serious things going on. We now have a third war going on. And you have the controller of the DOD up on the Hill saying, you know, "we can't function like this" on these two-week continuing resolutions, you can't enter into long-term contracts with people. It kind of has to stop at some point.

And what really should happen is if Boehner could strike a deal with the Blue Dogs and the moderate Dems and just go with the $30 billion with the Senate and just move on.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Chuck Schumer wants a shutdown. He's lusting after a shutdown. He has been talking about it for weeks and weeks.

WALLACE: We should explain that he is in the Senate Democratic leadership.

KRAUTHAMMER: Because he thinks it will redound against the Republicans, and I think he's absolutely right. And you can see it in the speaker of the House, Boehner. He does not want it. He's trying to do everything he can to actually avert it. He's speaking with moderate Democrats hoping he will have enough to pass a compromise.

And the reason I think is, even if it is a pox on both Houses, it's the Republicans who won the last election, who have the mandate or the ones who have said we've been empowered by an overwhelming majority of Americans in the vote in November to do something. And that's why the budget, I think, as Bill indicates, the Ryan budget for next year and the future is what is important.

This is a distraction. If there is a shutdown it will throw it out of kilter and Republicans are gonna have to defend themselves on this small amount of money instead of arguing about the big issue, which is the size, scope, the reach of government spending and taxes, which is where they are strongest.

WALLACE: All of which raises a really interesting question for John Boehner. And this is the first big challenge of the speakership. Is he going to be able -- if all these great wise heads agree that he aught to just split the difference, go for $30 billion in cuts and take on the big fights. Is he going to be able to sell that to his caucus? Is he going to be able to sell a compromise to tea party Republicans, especially freshmen who are not in the mood for compromise?

KRISTOL: He's working hard at it. And I talked to one of his staffers just about an hour ago, and they think they will be able to do it. But they have a lot of balls in the air, the White House is not helping. As Charles says, Chuck Schumer is purposefully not helping very much. The Senate Democrats are being tough to negotiate with.

I think, at the end of the day, they won't get it done in the next week. There will have to be a short-term -- one more short-term continuing resolution. Then I think a compromise to end up -- to take care of fiscal year 2011, which will have cuts. The Republicans say, you elected us and we cut spending from what it would have been if you hadn't elected us, but then the big debate is on entitlements and on the future.

WALLACE: And real quickly, do the Tea Partiers agree to it or does he, as Kirsten suggested have to go get Blue Dog Democrats to give them the ma jority in the House?

KRISTOL: I think they would like to get 218 Republican votes in the House, I'm not sure if they can.

WALLACE: Interesting. Alright, lots to follow, lots to talk about. That's it for the panel, but stay tuned for Moammar Qaddafi's bizarre response to President Obama's speech this week.

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