This is a rush transcript of "Special Report With Bret Baier" from June 24, 2009. This copy may not be in its final form and may be updated.


GOV. MARK SANFORD, R-S.C.: The bottom line is this — I have been unfaith ful to my wife. I developed a relationship with what started as a dear, dear friend from Argentina.


BRET BAIER, HOST: South Carolina Republican Governor Mark Sanford stepping down as the chair of the Republican Governors' Association after a s trange weekend that ended with him at a news conference today in Columbia admitting to an affair, apologizing to his wife Jenny, his four sons, and also to his staff that he said did not deserve blame for misleading statements about where he was — first that he was off writing, and then that he was hiking on the Appalachian trail, and then, in fact, he was in Argentina with this woman.

So what about all of this and the future of Mark Sanford?

Let's bring in our panel, Byron York, chief political correspondent of the Washington Examiner, Mort Kondracke, executive editor of Roll Call and syndicated columnist Charles Krauthammer.

We should point out that the state newspaper in South Carolina has just posted, and we have now posted on FOXNews.com, some pretty elicit emails between it appears Governor Sanford and this woman Maria that they say they have had since December. It's an interesting read.

We won't go into details here, but Byron, what about this story and how strange it has been?

BYRON YORK, CHIEF POLITICAL CORRESPONDENT, "WASHINGTON EXAMINER": Well, I think he's toast. It's been a bizarre scene over the last week.

South Carolina has just been a hotbed of rumors. I talked to someone in South Carolina a few days ago and said "What's going on?" And they said, well, the theory is it's either a Susan Boyle-type breakdown or another woman, or maybe both. And it seems to have kind of been both.

He has a large group of social conservatives in South Carolina who never loved him all that much who are very upset about this.

A reconciliation, a public reconciliation with his wife would be very popular with them, but the wife released a statement today saying that she had actually thrown him out a couple of weeks ago, and as part of that arrangement, he was not supposed to get in touch with the family, and thus when he disappeared, went AWOL, she didn't know where he was.

All of this stuff looks really bad, and a number of Republicans in South Carolina are saying this does not look good for him.

BAIER: And Mort, he was at one time considered to be in the running for 2012.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: I thought he was going to be the leading right-wing candidate, and he was setting himself up to do that by refusing the $700 million from the stimulus package and all that. It raised his profile among Republicans.

But look, multiple affairs did not stop Bill Clinton from being elected president, but that's because the Democratic Party is a lot more tolerant of licentiousness than the Republican Party is, and that's the rub for poor old Mark Sanford here.

You know, he — this, plus John Ensign's disclosure last week —

BAIER: Senator from Nevada.

KONDRACKE: Nevada — that he had an illicit affair is good news for Mitt Romney, for Bobby Jindal, for Pawlenty of Minnesota, for all the other candidates who might be running in 2012.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I would agree. I think he is toast politically.

And resigning from the Republican Governors' Association chairmanship is not going to do it, and the reason is that there is a dereliction of duty here. I know that's the titillation of the reason for it, but even apart from that, he is the governor of the state.

The governor of the state is chief executive, and if there is a disaster in the state, and this guy is incommunicado, he is nowhere to be seen and he doesn't transfer authority to his lieutenant governor who calls out the National Guard, you cannot recover from that. I think he doesn't last a week in the office of governor.

And the idea that he could actually have an affair in Argentina as an acting governor is sort of insane. If you go to Argentina, you have to have your passport stamped. You can't hide it.

I don't want to play psychiatrist on the show every night. However, the oddity of this and the self-destructiveness would suggest even to a layman that this is a near intentional political suicide.

BAIER: That's what I really don't understand about this story, the compartmentalizing your job as chief executive of state, and then this affair. This is a fair and balanced issue. You have Republicans and Democrats who have done this. But there's something that is going on, Byron?

YORK: He is not thinking straight right now. It's just very, very clear. These e-mails showed that he was, you know, head over heels for this woman.

He said at the news conference today that "I have spent the last five days of my life crying in Argentina." Now, who is that going to appeal to?

KRAUTHAMMER: Broadway fans.


YORK: So he doesn't seem to be thinking straight.

BAIER: So for Republicans, what does this mean? Does it take a little of the steam, the momentum that perhaps they were gaining as polls were changing?

KONDRACKE: I mean, to the extent that the conversation becomes all about, you know, affairs by Republicans, it's bad for the party.

But, you know, this is going to pass. I mean, we will be back to policy and disagreements and stuff like that in politics as soon as Mark Sanford disappears from the scene, which, I'm sure that his fellow Republicans hope will be soon.

BAIER: And he had, as you mentioned, Byron, a tough run in South Carolina with both Republicans and Democrats. Does he stay in that job?

KONDRACKE: You know, I think that unless there is some further malfeasance that comes up, I think he can survive. The Republicans in South Carolina are not happy, that's for sure. I even heard the state chairman sort of saying that they were going to have to revisit this and reconsider this and talk amongst themselves. But, you know, I think he can survive if he is clearly trying to reconcile with his wife, and, you know, makes further apologies, and stuff like that.

YORK: But members of his own party in the legislature are asking real questions — did his office lie to the people? Were any state assets used in this AWOL trip to Argentina? What was going on — specifically was he lying to his staff? Was his staff lying to the public? They have actual questions they have got to have answered.

KRAUTHAMMER: I agree. It's that trail of events, the construction of stories, the putting them out, the dissimulation, and just the weirdness of it all, which I think makes people think, can he really remain as chief executive of the state? And I think the answer is going to be no.

Even apart from the, again, the titillation and the moral aspects of his behavior is simply the irrational elements here.

BAIER: We will follow it.

The immigration reform debate is back. The panel discusses where it may be headed, when we come back.



SEN. CHARLES SCHUMER, D-N.Y.: When the president asks me whether Congress can pass comprehensive immigration reform this congress, I will smile and say "Mr. President, yes, we can."

HOUSE MINORITY LEADER JOHN BOEHNER, R-OHIO: Being in Congress this year has been like standing in front of a machine gun. Whether it's the proposal on taking over our healthcare system, a national energy tax, and now somebody is going to suggest that we're going to try to do immigration reform in the midst of all this? How much is enough?


BAIER: Well, not just somebody, President Obama is meeting with lawmakers tomorrow at the White House to talk about the way forward for immigration reform. It is back, and Capitol Hill is preparing for yet another legislative fight amid a lot of other fights going on.

We're back with the panel — Mort?

KONDRACKE: Well, the leaders of the Congress, Harry Reid in the Senate and Nancy Pelosi and Steny Hoyer in the House, say that immigration has become job number three after health care and climate legislation. It's moved ahead of financial regulation even as the job.

Now, the question is going to be is Obama going to say that tomorrow after this meeting? Is he going to line it up in that order? I don't know the answer to that, but if he does, then there's going to be a big push for it this year.

It's not Chuck Schumer, who is the chairman of the subcommittee and the Senate Judiciary Committee on Immigration taking over from Ted Kennedy, said this Congress, which means this year or next year, and as I understand it, the schedule is going to be that there are going to be hearings in September, which does not mean that they think they can pass it this year.

BAIER: Because, frankly, when you're dealing with the massive healthcare legislation that requires a lot of details, you're dealing with energy, and you're dealing with all of the bailouts that Congress has been dealing with —

KRAUTHAMMER: And you have got a Supreme Court nominee. There is no question there's not going to be legislation this year. As you say, all of these bills, huge restructuring of the American economy, health care and financials, all of this stuff, they're stacked up like planes at La Guardia. And a lot of them aren't even going to take off.

But what immigration reform debate does is it helps Democrats. They don't have to have a bill. All they have to have is hearings in the fall because that helps Democrats. And a hint of that you got when you heard Eric Cantor, the number two guy in the House for the Republicans, who said today at the prayer breakfast, the Hispanic prayer breakfast, that there has been some overheated rhetoric on the issue of immigration.

And he said that some of the undertones, meaning undertones of what Republicans have said, have alienated Hispanic constituencies. So Republicans are sensitive.

And I think it's smart on the part of Democrats. If you're not going to pass a bill, but you could have discussion of it which could help to solidify the gains among Hispanics that Obama had made last year, why not?

BAIER: Byron, with border security first, the Republican talking point, can they make a compromise that they agree with?

YORK: That is now the Democratic talking point. You played that brief quote from Senator Schumer today. Senator Schumer comes out and says the very first thing we have to do is secure the border, and he actually said "When we use phrases like "undocumented workers," we convey a message to the American people that their government is not serious about combating illegal immigration."

Senator Schumer used that in his own book, and President Obama used the phrase last week in his prayer breakfast speech. So the Democrats have, I think, learned rhetorically what they have to do with this. But the idea of bringing in, legalizing workers who are here, and bringing in the perhaps millions of new workers, it didn't fly at a time when unemployment was maybe 4 or 5 percent a few years ago. It will be doubly difficult to do at a time when it's almost 10 percent.

KONDRACKE: I don't think that's true anymore. The AFL-CIO, which was opposed to guest worker programs in the past is now in favor of it if you have some sort of a commission that will evaluate the labor needs of the country and allow in under visas a certain number of workers. So the opposition is fading.

And furthermore, the polling on this has improved, actually. People look at this as a question of can the government actually solve the big problem? And can — they want illegal immigrants to pay taxes, pay their proper share of taxes.

If they have full jobs in the open where they're being paid a good salary, then they will be paying taxes accordingly. And the government, the CBO scored the old Kennedy-McCain bill as a big revenue gainer based on the taxes that illegals would pay.

BAIER: Is this part of flood the zone with as much as possible, and this stuff gets through?

KRAUTHAMMER: I guess so. If you give them a lot — the energy, the carbon tax bill, is over 1,000 pages. You can be sure that no one in the House or Senate is going to read it.

But if you have that and health care and immigration and financial reform, some of it will get through in a way that would not happen if it were stand-alone and were examined and sort of dissected with a lot of time and care.

Using the volume of this, I think, is something Obama is doing rather smartly.

BAIER: Byron?

YORK: Immigration is — I think there is more approval for it. It polls better when it is not a live question. If it becomes a live question again, then it becomes a very hot issue.

Also, Republicans are going to be more opposed to it this time around. When George Bush wanted this bill, it absolutely split the Republican caucus right down the middle. When a Democratic president does the same thing, they are going to be much more opposed to it.

KONDRACKE: But, look, the Republican Party went into the trash can with the whole Hispanic community, which is the fastest growing demographic group in the whole country. If they do that again, it's just crazy on their part.

KRAUTHAMMER: But as long as — if it comes to the crunch and the passing of the bill, the amnesty issue will rise, and it does then work both ways. It's not just a Democratic issue. It works against them as well. It helps with Hispanics, but it hurts them with others.

So that's why I think it's smart for a Democrat if it stays as a discussion and not as real legislation.

BAIER: That is it for the panel.

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