This is a rush transcript from "Special Report with Bret Baier," December 24, 2019. This copy may not be in its final form and may be updated.

[BEGIN VIDEO CLIP]

Bernie Sanders, Democratic presidential candidate: All of those candidates who say, "You know, we don't need bold ideas. You don't have to energize young people at work," you're not going to have the kind of turn out that you need in order to defeat Trump.

Pete Buttigieg, Democratic presidential candidate: Here's what won't work: We're not going to beat Donald Trump with an equal and opposite Donald Trump.

Joe Biden, Democratic presidential candidate: I have every reason, more than anyone else running for this operation, this office, to be resentful of and angry with the Republicans.

President Donald Trump: All I know is my poll numbers are the highest they've ever been. Our fundraising in the Republican Party is the highest it's ever been.

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Mike Emanuel, Fox News: Heading into a presidential election year, let's take a look at the RealClearPolitics averages, both nationally and a couple of the critical early states. Nationally, you've got Vice President Joe Biden leading the pack. But a lot of this race will come down to those early states and who builds momentum. You've got Pete Buttigieg, the mayor of South Bend, leading in Iowa and Bernie Sanders with a narrow lead in New Hampshire.

With that, let's bring in our panel: Ben Domenech, publisher of The Federalist; Katie Pavlich, news editor at Townhall.com; and Steve Clemons, editor at large for The Hill. So, Steve, the state of the 2020 race, here we are at Christmastime.

Steve Clemons, The Hill: We're seeing a polite civil war in the Democratic Party where you've got Elizabeth Warren and Bernie Sanders trading people back and forth as we see her numbers slip a bit and we're seeing Bernie surge right now. And those that want to identify with more of a centrist tradition are either lining up behind Biden, who is, as you pointed out in the key early races, not beating Pete Buttigieg. So, you've got an interesting contest in both, in both wings of the party and you've seen nothing to resolve those wings between the party right now.

Mike Emanuel: Katie, your thoughts.

Katie Pavlich, Townhall.com: Yeah. Based on the early state polling, there's no clear nominee at this point. I mean, Pete Buttigieg and Bernie Sanders have the momentum going into Iowa and New Hampshire, but then they completely hit a brick wall when it comes to South Carolina. So, that's what the Biden campaign is banking on.

Steve Clemons: Right.

Katie Pavlich: That's why they've said they don't need to worry about Iowa and New Hampshire. But there is a momentum issue, as we saw with Elizabeth Warren. She had a moment where she was gaining momentum. She's desperately trying to hold onto power, which is why she you saw her attack, Pete Buttigieg in the last debate, because she wants to gains momentum in Iowa to go into New Hampshire. But when it comes down to where this whole thing goes, Democrats are still having a very hard time figuring out where they're going to be able to solidify their support against Donald Trump. The president has been able to take a large chunk of the formerly Democratic base who have a number of manufacturing jobs, gas and gas and oil in places like Michigan and those people say, look, I'm a Democrat I vote locally for Democrats but I didn't just vote against Hillary Clinton I voted for President Trump and I plan to again. And they haven't been clear about how to get those voters back.

Mike Emmanuel: Big issue once again, of course, will be the economy. Take a listen to this.

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Elizabeth Warren: It is time for a wealth tax in America two cents baby wealth tax in America.

Male Speaker: The economy is on fire well, she's going to treat it like a four alarm fire and bring the trucks and hose it all down. I don't think we want to hold the economy down we'd like to keep it lit up.

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Mike Emmanuel: Ben your 2020 thoughts.

Ben Domenech, The Federalist: I think that, you know, as we've seen since the beginning of this process, Biden has continued to skate above the rest of the fray by having the kind of well built up support that he has and a lot of different communities, particularly among African American voters. I think the real thing that Democrats need to deal with is the possibility, one that doesn't really come up all that often but I think one that they should wrestle with seriously, that Bernie Sanders could go a lot further in this race than they'd like to think. He does actually excite a lot of young people with his ideas. He clearly has been one of the boldest and most consistent progressives in the country over the past several years. He's got a lot of built in respect among that community and I think that oftentimes in this whole process, he has his chances were played down by a Washington conventional wisdom that looks at Bernie as kind of the cranky old grandpa at the end of the table, when in reality he's someone who has a lot more support than that across the country.

Mike Emmanuel: Speaking of economic issues, you got USMCA, which should help Speaker Pelosi allow her members to go home and say we put something across the finish line. It also gives President Trump something to run on. What about the USMCA Steve?

Steve Clemons: You know, both sides win. I mean, I think labor unions were satisfied with what they got of it. Those who want to be critical of President Trump say it's not that different than what we had with NAFTA. But essentially, the business community, those people who were in cross-border trade, did had a lot invested in the Canada and Mexico relationship wanted to see that there. So President Trump can deliver for the business community, Nancy can deliver for the labor community it's a win on both sides. Be great to see more things like that, actually.

Katie Pavlich: It also makes it a little bit easier not that it will be easy for the Senate in 2020 to 2020, but Senator Joni Ernst, for example, was getting a lot of pressure on USMCA. She was getting attacked for it now she can deliver on that. As something that the president has been pushing through and of course, in all of these counties that the president has been campaigning and will be campaigning in democrats are again, are trying to take back he's being able to deliver that and forced Democrats to give him the win again on the economy, which is a very tough thing for them to argue against.

Ben Domenech: Wouldn't it be nice if at the Christmas dinner table tomorrow, you could have a lot of families who have divisions on both sides come together to a great degree to celebrate together as one. That's something that I'm hopeful for and I'm hopeful we'll see more of in the New Year.

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