This is a rush transcript of "Special Report With Bret Baier" from December 14, 2009. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: I think it is going to get this out of the Senate before Christmas.

SEN. JOE LIEBERMAN, I-CONN.: We don't need to keep adding on to the back of this horse because we are going to break the horse's back and get nothing good.

SEN. BEN NELSON, D-NEB.: We don't know what it will cost. The second thing is I'm concerned that it's the forerunner, the under the ultimate single-payer plan, maybe even more directly than the public option.

CHRIS WALLACE, HOST: Overall health care spending goes up, not down: You will vote against it?

SEN. CLAIRE MCCASKILL, D-MO.: Absolutely. Here is the other thing —

WALLACE: What happens then?

MCCASKILL: We will go back and look at other proposals. Here's the thing: Doing nothing is not an option.


BRET BAIER, HOST: Well, there are Democrats, the president saying he wanted this bill out before Christmas, saying confidently that it was going to be. Democrats expressing some doubts about what was on the table.

And now tonight, Democratic Senator Tom Harkin from Iowa saying to reporters just minutes ago that the public option, once a priority for him in healthcare reform, and the Medicare buy-in, dropping the age to 55, are now gone from the Senate legislative efforts. He said it's not fair, but it's reality.

Harkin saying that is what they're dealing with, and we are waiting for senators, Democratic senators to come out of the caucus and possibly talk live.

We'll bring that to you here as we bring in the panel: Fred Barnes, executive editor of The Weekly Standard; Juan Williams, news analyst for National Public Radio, and syndicated columnist Charles Krauthammer.

Charles, it appears that because of the pressure from Joe Lieberman and saying he would oppose the bill if it had the Medicare buy-in and a public option — or either one — that the White House and the Democratic leadership is punting.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, the success of this reform, meaning success in its being passed, always hinged on the rationality of the left, and the left isn't always rational, but it's rational now.

And Harkin is speaking for the Democratic left when he says they willing to abandon the public option and the buy-in because if it stays in, they lose and everything will collapse.

They understand — I think, the wisdom of the left on this is to understand it doesn't really matter if you get the public option in this particular iteration of health care reform. You have got to get something. And once you get the rest of the bill, the other 1,900 pages, you have federal control of health care, one-sixth of the economy.

It will be the biggest achievement of the left in terms of expanding the reach of the scope of government possibly in 50 years. Heavy regulation of the insurers, it is going to be an individual mandate, 118 commissions, essentially be government-run through the insurers, be a proxy system. So why would you not have it to pass leaving out a public option?

I think they have become rational. And the pressure from the White House is obvious because its Obama's signature. If he were to fail on this it would ruin his presidency. The hand of the White House is in this and there is an element of rationality.

I think it now has a good chance of passing the Senate.

BAIER: Juan, we have talked a lot about how the Senate bill and the House bill that passed the House are very far apart. We don't really even know all what is in the Senate bill yet.

What's the thought about reconciling the Senate bill with what is passed in the House? Would they just sign on to what the Senate does?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: Well, that's one possibility. It is called a ping-pong option kind of thing, where in fact Nancy Pelosi — the thought is — would simply get the House Democrats to go along with what the Senate has proposed rather than risk the possibility that you go into some conference and then as things go back in front of the Senate they would have a breakdown in terms of the necessary 60 votes.

But what we're seeing now, and I want to reiterate something that Charles said — I thought Charles was eloquent on the point — the pressure, the political pressure is tremendous.

Despite all that you have heard about problems with scoring and the fact that the cost trajectory might not be reduced, today you had a report coming from the Council of Economic Advisors saying exactly the opposite. I got to think political pressure is at play there.

Tomorrow you will have the Senate Democrats who have been caucusing tonight up at the White House. President Obama is going to use Christmas season political pressure. You guys, you have got to deliver. And some might call it a turkey, but they had to deliver for Christmas right now.

In fact, the president told Oprah Winfrey today, he considers himself, I think it was a B-plus president, but he said he would tip over to become an A-minus president if he gets the health care bill passed. That's how important it is.

BAIER: Fred, I don't think you are giving him a B-plus.


KRAUTHAMMER: Especially on his own exam. I wish I had the option to have graded myself in college. I would have gotten straight A's.


BARNES: He got the exam early.

Look, I agree that if Obama and the Democrats can get Lieberman, that is a huge step towards passing a bill.

BAIER: Wait, even if the public option is taken out and their Medicare buyout is taken out, even if it doesn't have the two big things that the left wants, you saying it is a big win for...?

BARNES: I think that's the only way they're going to get a bill. And as Charles said, it is rational to them to act that way. They would get an enormous amount in anyway, as Charles said, near-federal control of the healthcare system, and then they can add to it later. If they're smart, they will do that.

You see senators like Senator Burris — he says he won't vote for anything that doesn't have the public option in it, and Senator McCaskill who we just saw worried about that stuff.

Look, in a pinch, a tie — and this is a near tie — the president always wins, no matter who he is. Obama can come up with the one or two votes. Lieberman would have been hard because Lieberman is not even officially a Democrat any more, but these others — Ben Nelson, Blanche Lincoln, Senator Burris, McCaskill — Obama can get them.

BAIER: But what about, again, back to the House. You have Bart Stupak, Congressman Stupak from Michigan who put in the no federal funding for abortions. He failed in the Senate under Ben Nelson. So what happened if the Senate doesn't have anything on abortion and the House is saying you just have to sign on to what the Senate has?

KRAUTHAMMER: Stupak right now looks as if it blocks this, because it's not in the Senate and it is in the House bill. I think in the end, if they get past the public option, as apparently is happening, they would, I would say, if they're smart, put Stupak in the Senate bill, pass it over to the House.

The left in the House swallows with the understanding that it will undo Stupak in a year, next year or the year after. It's only one measure of many. And then it could succeed. I think that is the only way.

I can't see this entire architecture collapsing over abortion. I think that they will be able to placate the left by saying this is temporary and in the end we're going to fix it.

BARNES: Look, I mean, the bill might not get Stupak's vote and he claims to have 40 votes. Does he really? They have a lot of leeway since there is such a large majority in the House. They can get some of them back and get enough. I don't think they need to go as far as Charles says. I mean, that might work, but I think they can pass the bill without that.

BAIER: Last word, Juan: For the people on the left who are very vocal about the public option, very vocal about Medicare down to 55, they just say, well, we had to get something done?

WILLIAMS: Yes, we have to get something done and, much as we discussed on the panel tonight, what you will see is that there will be changes, there will be amendments.

The idea is that suddenly you're in charge now. You have a possibility of increasing the rate of people insured in the country. You are pleasing high numbers, there still is a high majority of American people want some form of health care reform.

BAIER: It depends on how the question is asked.

WILLIAMS: But generally most people say look, the insurance companies have been over the top; something has to be done. But when they ask about specifics, then you get all the arguments. Then you get the back and forth.


BARNES: Not just specifics. You ask them about President Obama and Congressional Democrats' bill specifically, the people hate it and all its parts.


KRAUTHAMMER: ... an accumulation of specifics.

WILLIAMS: I think most Americans feel we got to do something, and I think that's the impulse that is being played on. And the Democrats, as you point out, are the ones that will have to swallow some of these negatives big time.

BAIER: The president put the squeeze on the financial industry today. We will talk about whether that's a good idea after the break.



OBAMA: I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.

The people on Wall Street still don't get it. They don't get it.

Our banks now have a greater obligation to the goal of a wider recovery, a more stable system and more broadly shared prosperity.

RICHARD DAVIS, US BANCORP CEO: We agree viscerally that more lending needs to be done. We're looking for opportunities to make sure we don't put people in harm's way and we don't put banks in harm's way.


BAIER: The president summoning the top bankers in the country to the White House for a private scolding, apparently. What about this and what is coming out of it? We're back with the panel — Fred?

BARNES: The bankers with whom practically nobody in America has any sympathy — including myself — is getting whipped by the administration.

On the one hand, President Obama says why aren't you lending? You should start lending. And then the regulators are telling them, you better be careful. We don't want any of these imprudent loans again and you have to have higher reserves and be very careful.

So they're hearing two quite contradictory things. And since they're making money, they're willing not to lend as much.

You know, Obama, if anybody doesn't get it, I think it's president Obama. I mean, he ought to understand what's going on with the banks. It's not just the big banks. It's banks everywhere across the country. It's community banks and so on that just aren't lending for the same reason. They got burned before.

Remember what got us in trouble in the first place. It was partly the banks to do all these imprudent loans to people who couldn't pay back on them, but they were encouraged by the federal government that would buy up a lot of these loans, Freddie Mac and Fannie Mae and so on.

The government promoters, Obama said also today, that the bankers entirely responsible for the economic problem, the economic collapse last year. Well, they're partially responsible, but the federal government is responsible as well.

BAIER: Juan?

WILLIAMS: It seems to me that the bankers have a great deal of responsibility here. I don't think there's any question. I think that they would have failed if the American taxpayer hadn't fail bailed them out.

And just now, for the president to say you also have an obligation to make an extraordinary effort to help this economy get back on its feet, to get Americans back to work does not seem out of line to me at all.

And even as they're paying some of this money back, and they're saying, yes, I think Bank of America...

BAIER: Citigroup.

WILLIAMS: Citigroup said they would pay back some, there are still these people offering huge bonuses.

I agree with him. They don't get it. Wall Street doesn't get it. They are acting as if no problem here. Let's have a party. They're crazy people.

And to me, what you have here, President Obama, in calling them "fat cats" on "60 Minutes" is just touching an edge that spans Republicans and Democrats and is about populist anger at Wall Street in this country.

And if they don't do more, not risky loans, Fred, but responsible loans, especially to small business, which is a heart of the Obama plan, a plea to them, get small business back on its feet. Banks, if they don't do, they should be hauled to the highest mountain and absolutely beaten.


BAIER: Charles.

KRAUTHAMMER: But why would a bank not want to lend to a good risk? Obviously it would. It makes business sense.

What is going on is pressure from the feds to lend to people who are on the cusp. Now, that is what got us into this problem in the first place. And I think it will be imprudent.

Look, banking isn't social work. The government, the feds and the state governments, are into social work, and they ought to do it, help out those who ailing.

But if we want to really undo the recovery of the banking system on which the entire economy hinges, we would increase the pressure to engage again in improvident loans. This is not a time to do it.

The recession that we're suffering through right now is the process of drying up the previous set of improvident loans. You don't want to add on to that list.

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