This is a rush transcript of "Special Report With Bret Baier" from January 19, 2010. This copy may not be in its final form and may be updated.


SENATE MAJORITY WHIP DICK DURBIN, D-ILL.: With 60 votes, we had just enough to pass this bill on Christmas Eve, and now if we lose a vote with a new senator from Massachusetts, we are down to 59. And unless we can persuade a Republican to cross over, then we are short.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't believe that there is an entirely new agenda behind some door based on the result of tonight.

HOUSE SPEAKER NANCY PELOSI, D-CALIF.: Whatever happens in Massachusetts we will pass quality, affordable health care for all Americans, and it will be soon.


BRET BAIER, HOST: All Democrats talking about health care reform legislation after the results here in the special election in Massachusetts. So what happens, big picture, no matter which way it goes?

Let's bring in our panel from Washington, Hollywood Squares style, Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. A.B., what about this health care reform legislation hinging on what happens here?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Well, if Scott Brown becomes the 41st Republican Senator, he will block health care in the Senate, which means if the Democratic Party wants to pass a reform bill, they must pass the Senate bill, making sure that all of the House members that they need, 218, sign on.

There is much grumbling and much reservation from liberals through conservatives in the democratic caucus on the house side saying they don't want to do this, but it is the only way to pass the Senate bill in the House unchanged and then send it to the President's desk without having to go back to the Senate with a Senator Scott Brown.

It's a huge uphill battle, but it really is their only way out at this point.

BAIER: Charles, to hear how Speaker Pelosi talks about it, she's pushing forward no matter what happens and no matter what the message is out of Massachusetts.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It sounds like she is on a suicide mission here. But I think A.B. is right, the only way this will pass if the Democrats lose the seat in Massachusetts is if the House adopts the Senate bill exactly as is, no changes.

People have spoken about a tricky process called reconciliation. That is not going to work in the Senate, and the idea of delaying the swearing in of Brown if he wins for a week or two is so illegitimate that it would cause an insurrection in the country. So the only way is the House swallowing it.

Now, that's the real question. If that is the only way, and it happens, will the left, will the liberals in the House swallow all of their objections, and there are lot, and accept the bill as is? I think the answer is yes.

Then it leaves only the ones who are objecting on the grounds of abortion who are essentially the moderates on the right of the party, and there it is problematic. The numbers are difficult. I think if Pelosi insisted it might be possible, but I say the odds in the end are if the Democrats lose Massachusetts health care is dead.

BAIER: OK. Steve, you know, we don't have any early indications, there are no exit polls in this race. Polls close at 8:00 p.m. and Martha Coakley could pull out a squeaker here judging by the polls going in depending on turnout, obviously.

If she does that but still there is a message out of Massachusetts, are there still wobbly Democrats after that?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think if she wins, I think health care moves forward. It might be a little trickier and I think there will be more deals that have to be cut certainly before it becomes a reality. But I think if she wins health care likely passes.

I agree with Charles, though. I think if she in fact loses, it is a totally different world politically, and I actually don't think that you will be — if you are Nancy Pelosi you are going to be able to cut deals with people in the context of a Republican winning in Massachusetts.

It would be such sort of an earth change politically. What moderate Democrat is going to say at that point I would love to have a post office named after me so I’m going to vote for this when I will probably lose reelection if I do?

BAIER: A.B., did you see a turning point at all in this race?

STODDARD: You know, I think the turning point happened in December. Unfortunately, no one was awake to this. Bret, I really know that Democrats are blaming Martha Coakley as a weak candidate, but the Democratic Party is to blame, the national apparatus is to blame for letting it slip through their fingers.

A state with almost 50 percent unaffiliated voters, the very voters that are leaving the Obama coalition in droves. He won the presidency because he won independents, and he did so impressively. But he has lost them, he’s been losing them since the spring and early summer and he doesn't have them anymore. They lost gubernatorial races in New Jersey and in Virginia. They have members retiring. They have bad polls abounding.

There is no more writing on the wall that you need to look at a state like Massachusetts and say even here national trends could affect the state, even here we could lose the Kennedy seat.

So the Democrats all looked away and they let this slip through their fingers in December. I really think the turning point was not when we all woke up to these polls. It was when independents began to get excited about Scott Brown's candidacy and turn away from Coakley and turn away from Democrats in Massachusetts and begin a grassroots effort to get him elected. And that happened well over a month ago.

BAIER: All right, we will get final thoughts from the panel on the implications in this race after a quick break.


BAIER: We're back with the panel for some final thoughts on this race here in Massachusetts. Let's begin with Charles.

KRAUTHAMMER: Ironically the Democrats have discovered an issue here that works. It is not health care. When Obama came up here he didn't say a word about it, nothing about energy. He knows that the big agenda is a loser politically.

But what he did raise was the bank tax. It is almost as if the White House invented it. It launched it over the weekend as a Coakley tax because it gave her an argument.

Remember, the Republicans and also in this case this Republican opposes all tax hikes, so he had to be against the bank tax. And the bank tax is a way for Democrats to tap into the populism that up until now Republicans and conservatives had a monopoly on.

So watch for the bank tax to be high and emphasized in the State of the Union and emphasized all the way up to Election Day in November.

BAIER: Steve?

HAYES: Bret, I think it has been 364 days since the president was sworn in, and in that time period we have seen his favorability rating go from 70 to less than 50. Throughout that entire time period the White House has insisted that basically his opponents are a small band of radicals, tea party folks who are motivated only by anger.

It turns out they were wrong, whatever happens in this race tonight, and it turns out that it is a much broader coalition, and we are now seeing the roots of in Massachusetts, which should send them a message, but by all accounts the White House doesn't seem to be receiving it.


STODDARD: Bret, I think even if Martha Coakley pulls it out tonight, I don't think there’s 60 votes in the Senate for health care. I don't think you can go back there one more time. Wavering senators on the Democratic side don't want to take that vote again.

BAIER: OK, very quickly, Charles, prediction?

KRAUTHAMMER: Oh, God. I will go with my heart — Scott Brown.

BAIER: Steve Hayes?

HAYES: I think Brown wins and I think he wins by a decent margin, maybe six points.


STODDARD: I think Scott Brown wins by less than six.

BAIER: OK, Scott Brown all the way around the horn for the panel. We will keep you to it. Thank you panel for joining us from Washington. We are live from Boston and we will be live all night.

Thanks for inviting us into your home tonight. That's it for "Special Report," fair, balanced and unafraid.

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