This is a rush transcript from "Special Report," December 25, 2018. This copy may not be in its final form and may be updated.

PRESIDENT DONALD TRUMP: I can't tell you when the government is going to be open. I can tell you it's not going to be open until we have a wall, a fence, whatever they'd like to call it. Yesterday I give out 115 miles worth of wall, 115 miles in Texas. And it's going to be built, hopefully rapidly. I'm going there at the end of January for the start of construction. That's a big stretch because we are talking about 500-550 miles. It's a 2,000-mile border, but much of it has mountains and region where you can't get across. There may be the case of an Olympic champion who can get over the wall, but for the most part you're not able to do it. Very high. It's going to be 30 feet.


MIKE EMANUEL, HOST: After calling our troops all over the world on this Christmas Day, President Trump still has a lot to battle over the border on his mind. And the president tweeted a short time ago writing, "I hope everyone, even the fake news media, is having a great Christmas. Our country is doing very well. We are securing our borders, making great new trade deals, and bringing our troops back home. We are finally putting America first. Merry Christmas! #MAGA."

With that, let's bring in our panel, Eli Lake, columnist for "Bloomberg" Opinion, national security analyst Morgan Ortagus joins us up the road in New York City, and Charles Lane, opinion writer for "The Washington Post." Good evening, and merry Christmas. So your thoughts on the battle at the border, Chuck?

CHARLES LANE, OPINION WRITER, "WASHINGTON POST": Well, the president, it's interesting how this wall sort of changes shape and length and name. It's sometimes called a fence, sometimes called a wall, sometimes called money for border security. I was interested to hear him say we don't need the wall for all, whatever it is, 2,000 miles. Just the 500 some odd miles that aren't mountainous.

And I think what we are seeing is we've already heard that he's modified his ask of the Congress to get a deal in the shutdown is that notwithstanding all the protestations he's putting out, he is modifying his position on the wall, possibly in the interests of bringing it into this partial shutdown. All along, this has been about posturing on both sides towards those parts of the party base that want to see a struggle over this. Possibly in between the lines of that statement, you see the beginning of the end of this crisis. But it could go well into next year.

EMANUEL: Morgan, your thoughts on where things stand with this battle over the border and the shutdown?

MORGAN ORTAGUS, NATIONAL SECURITY ANALYST: I don't think anything's changed on Christmas, so when people come back tomorrow from having opened their presents from Santa, the government will still be shut down, unfortunately.

And it doesn't look like either side is really willing to take a loss on this. What we saw earlier last year with the quote-unquote "Schumer shutdown" where they walked away from the table because of the bad PR spin.

So I think the only way out of this is a broader immigration -- though I don't think they're going to get a full comprehensive package, but the president is going to have to put something on the table to get them to move. Once they go into the new Congress, as we know, the Democrats are even going to have even more power as they'll be in control of the House.

So what I'm looking for is a long few weeks going into the new year where we are trading a lot of back-and-forth. But until the president and his team put something like DACA on something on the table that will make Democrats salivate, I think we are going to be at status quo.


ELI LAKE, COLUMNIST, "BLOOMBERG VIEW": What's more important right now for President Donald Trump, and for that matter, for Nancy Pelosi, is to get a deal or to get the wall, or is it to show your core supporters that you are willing to shut down the government in order to fight for that wall. I would say for both the shutdown actually plays into their interests at this point and shows that they are not willing to capitulate, whether it is they're not willing to capitulate in order to get a wall, or in the case of Nancy Pelosi, Chuck Schumer, not willing to capitulate in order to give the wall. But it doesn't matter at this point. Actually, the shutdown works in the political interest of both sides.

EMANUEL: Of course, you are talking about a quarter of the federal government that is shut down right now. And President Trump today had a message for those of workers. Take a listen to this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think they understand what's happening. They want border security. The people of this country want border security. It's not a question of me. I'd rather not be doing shutdowns. Many of those workers have said to me, and communicated, stay until you get the funding for the wall. These federal workers want the wall. The only one that doesn't want the wall are the Democrats.


EMANUEL: Chuck, does any pressure build on any one side or the other between now and January 3rd, or are we looking at Nancy Pelosi being elected speaker and then getting serious at that point about reopening the government?

LANE: I don't know where he gets the idea that the only people in America who don't want the wall are the Democrats, because obviously there are a number of Republicans who are not big on the wall either, although it's true the Republican base seems to support it.

No, I think Eli and I have kind of agreed on this point already, but it's worth repeating. For the time being, this is about demonstration to your party base that you're willing to have this fight over a big matter of principle, which is either wall or not wall. And I also agree that if it's ever going to be resolved, it would have to be with some sort of bigger solution than just a small amount of money over here or a bigger amount of money over there. So these two parties are locked in a struggle that is both internal about proving themselves to their bases, and external with each other.

EMANUEL: Morgan, the Senate comes back on Thursday. Is that when we start to get some serious talk, or much later?

ORTAGUS: I think we are seeing something. Something is going on behind the scenes. We are getting lots of reports. We saw Mick Mulvaney saying on the of a Sunday shows that there is a number that the administration has presented that is somewhere in between the 1.7 and the five that they have offered.

I think what we are seeing here, as your other panelists have pointed out, we are seeing here a real fight, I think an ideological fight. But it strikes me, five years ago, you probably would have been able to make a deal over border wall funding much easier, because as the president has pointed out several times, these key Democrat leadership, most Democrats have voted for some sort of wall or fence or whatever you want to call it.

But really what I'm saying is we go into this 2020 fight, you are seeing mainstream Democrats who are running for the presidency saying things that used to be deemed pretty radical about abolishing ICE and other -- calling the wall very tough names, very tough criticism from the same people who voted for it. So I think we are seeing a really ideological fight as we get closer and closer to people running for 2020, I expect the Democrat party to run further left of this, not more moderate, not more mainstream.

EMANUEL: All right, let's leave it there. Next up, it's time for Panel Claus, who gets presents and who gets lumps of coal. They've got their picks, so stick around.


EMANUEL: It's time to figure out who our panelists want to give gifts to and who they want to give lumps of coal to. Eli, why don't you start us off?

LAKE: For gifts, I'm going to go with Jim Mattis. He just resigned, but I think it's very important to note that he resigned over his differences in policy and values, and instead of sticking around and undermining the president and tugging at that civilian control of the military, he made it a clean break. And I think that is a big win for the Constitution. And so I give him a gift for that.

And I also would say Syrian Kurds who in 2015 when no one on the ground was capable of going after ISIS as a partner, Syria's Kurds were. And unfortunately, it looks like they're about to be betrayed. So in my view, they deserve a gift and hopefully a reversal of this terrible policy decision.

For my lumps of coal, the former bus driver, now tyrant of Venezuela, who is presiding over an unthinkable economic collapse in Venezuela. It's hard for us to understand this, but at this point the average wage is the minimum wage, which has the purchasing power of around two eggs a day. So people who are working a full day cannot even afford enough calories for themselves, let alone their families. That is a terrible crime, and at some point I would hope that he faces some sort of justice.

My second would be Recep Tayyip Erdogan, the leader of Turkey. And I put him in the coal category because he has rolled, unfortunately, President Trump. He still has American hostages, he still has Turkish nationals who worked for the U.S. who are still detained. He is waging a terrible war against his own Kurds in Turkey and now he is threatening to slaughter the Kurds of Syria. So I put him in that category as well. He deserves more ostracization.

EMANUEL: That sounds pretty legit. Morgan, let's go up the road to you in New York City. Your gifts and your lumps of coal?

ORTAGUS: I have to give gifts to the California firefighters. What we saw in the past few months as it relates to the fires that hit the west just really was I think disturbed all of us on a level. We saw our fellow Americans burned alive from these fires. And here you have American firefighters, California firefighters going in and risking their lives. Once again, they run towards the fire, they run towards the calamity, not away from it. So to all the families of the firefighters, the people who lost their loved ones in their fires, my heart is with all of you this Christmas.

Also, this has got to be a first for SPECIAL REPORT. I am going to give a president to present to none other than Kim Kardashian. It's hard to believe. But in an instance of a celebrity using their force and their power for good, Kim Kardashian worked closely with the president, with his team, and with many Democrats. Mind you, the Democrats get a lot of credit for coming to the table here to work on criminal justice reform. So thank you, Kim Kardashian, and merry Christmas.

For the people getting coal, I have to go with one of my least favorite world leaders this year, President Moon of South Korea, who I think is doing more to unify the peninsula in a negative way then Kim Jong-un probably could have ever imagined. I think he's been an incredibly weak leader of South Korea. His poll ratings are plummeting, and he continues to turn the country over to the North Koreans for the benefit, I'm assuming, of some set of land bridge to China.

My other lump of coal is for the crown prince of Saudi Arabia, Mohammed bin Salman. It's not only the controversy of, of course, "The Washington Post" journalist who was killed this year, but the continued blockade of Qatar, the continued war in Yemen, the arrest of Hariri, the Lebanese prime minister, among other things. I hope that this young man can get back to being the reformer that he claimed that he was going to be, the person that was going to take Saudi Arabia into the next generation, into this new century. I hope we can get that that the crown prince. But so far it's a lump of coal.

EMANUEL: All right, Morgan, thanks very much. Chuck, your gifts and your lumps of coals?

LANE: There is sort of an implied decision here about who's been nice during the previous year and who's been naughty. As far as nice goes, I think we all have to tip our hat to the international team from Britain, from the United States, and of course from the Royal Thai Navy who rescued those young soccer players and their coach, a total of 13 people, from this horrific situation where they were trapped inside a flooding cave that transfixed the world last June and July with sort of a Christmas miracle in July, and I'm bringing it back to mind here at the real Christmastime because it was such an inspirational moment.

And my second nice guy who deserves a present, in the age where everybody is complaining about media getting things wrong and some people accusing the media of being full of fake news, we had a story just last week where one organization, "Der Spiegel" got caught, publishing a lot of fraudulent stories, many of them quite unfair with regard to rural Americans and so on. But the hero of that story was another journalist also working for "Der Spiegel," a man called Juan Moreno, who blew the whistle on his own institution and pushed to have this fake reporter, Claas Relotius, exposed. And so I think he really deserves recognition by everyone who believes that journalists should try to get it right.


LANE: I do agree with Morgan that Mohammed bin Salman was very naughty in 2018 and really has discredited himself in a way that's probably very lasting. And although I would never put him quite on the same level, I'm going to hand out a lump of coal to our very own president, because I think over the course of 2018, he has continued to be gratuitously disruptive, he's made misstatements, he's insulted people right and left. And in November, it didn't really produce the results. He sowed a lot of division in this country and still ended up losing for the Republican Party, so maybe he'll have a better 2019.

EMANUEL: All right, very briefly, my gift, the Washington Capitals for delivering a championship to the city when people didn't think it was possible. My lump of coal, by New York football Giants. Not a very good year, but there's always next year.

When we come back, a holiday message from Bret and his family. They're all on the set with her own unique holiday greetings.


EMANUEL: Finally tonight, a message from Bret and his family thanking you for sticking with us all these years, and, of course, wishing you all a very merry Christmas.


BRET BAIER, HOST: Hey, everybody. Merry Christmas and happy New Year from my family to yours. We wish you the best this holiday season. Believe it or not we've been doing this for almost 10 years. Some of the video is pretty funny.

UNIDENTIFIED MALE: We have a lot of things to be thankful for. Merry Christmas and happy New Year.

BAIER: We are excited for the holidays, very excited for Christmas, and we are going to get through it how? Fair, balanced, and unafraid.

Altogether -- fair, balanced, unafraid. At the end. OK, we'll try --

UNIDENTIFIED MALE: Oh, come on, that was perfect.

BAIER: That was a good one.


BAIER: So as you can see, the family has changed over the years a bit. And what are you doing?

UNIDENTIFIED MALE: Hello, merry Christmas.


BAIER: We didn't even plan it. Amy?

AMY BAIER: Wishing you a very merry Christmas from our family to yours and a blessed 2019.

BAIER: Daniel?

DANIEL BAIER: Wishing you and holly, jolly Christmas and a happy New Year.

BAIER: Paul?

PAUL BAIER: Wishing you a very merry Christmas and a happy new year. One year older and one year wiser.

BAIER: There you go, wiser.

And we want to do it fair, balanced, and unafraid.

And do you guys want to sing your way out?


BAIER: OK, fade to black.



EMANUEL: A little singing. Merry Christmas to the Baiers and merry Christmas to all of you. Thank you for inviting us into your home tonight. That's it for “Special Report” on this Christmas Day.

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