This is a rush transcript from "Special Report," March 15, 2011. This copy may not be in its final form and may be updated.


RICHARD TRUMKA, AFL-CIO PRESIDENT: We won't go back. I can promise you that. We won't give up and we won't go back.

MARK MCLAURIN, SEIU LOCAL 500 POLITICAL DIRECTOR: It's a bipartisan message, quite frankly, and it goes out to Republican and Democratic governors, and that is that it is that it is important that they keep their promises to the public workers.

GOV. MARTIN O'MALLEY, D-MARYLAND: We are committed to staying at the table and to figuring this out and to moving together as one Maryland. You will not find in Maryland the sort of Midwestern repression that goes on in places like Wisconsin.



BRET BAIER, ANCHOR: Ah, Wisconsin. This is actually Maryland. Maryland's Democratic governor Martin O'Malley is starting the feel the heat as you can see there in a state facing $19 billion in unfunded pension liabilities. The governor is asking state employees to increase their contributions to their pensions, or take reduced benefits in the future, and thousands of employees converged on the capitol.

We're back with the panel. What about this, Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Well, Bret, ya know, I mean there's something -- there are not many things that Democratic politicians, particularly Democratic governors, fear more than being at cross purposes with organized labor. I mean this is a part of -- labor is part of their constituency and a huge part, and gives them all kinds of money. So it's tough for them.

And you look in California, even though Jerry Brown talked about this when he was running for governor last year, he's done nothing so far this year. Though he said, well maybe he will negotiate. He has a budget but it doesn't include anything about pensions.

In Illinois, Pat Quinn the governor has ducked the whole thing entirely, and leaving it to the House speaker to do it. And Andrew Cuomo in New York, another state with, ya know, a huge pension problem, will get to it after April 1. Well we'll see if he does.

Now, O'Malley's actually been, I think, fairly brave. Has real proposal. Look, it's not a huge increase in the contribution by the so-called public servants for their pensions. What it goes from 5.6 percent of pay to 7 percent of pay? That's not a lot. And yet he proposed it, and good for him, and showed up at the labor rally.

BAIER: Yeah, Juan, he did show up and, of course, mentioned the ominous name of Scott Walker in Wisconsin.


JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Scott Walker has become, you know, demonized in this debate. But to me what is interesting is that he showed up. Because why was the governor there? This was the public sector employees rallying against the governor, but the governor is there because he is a Democratic governor.

So it puts him in a difficult situation. It's almost a matter of hypocrisy. Here he is cursing out Scott Walker; in fact he's doing the same thing in his state. He's trying to cut back on the amount of money that the average citizen puts in to the civil servants pension plans and even raise the age of retirement. He is doing that in order to balance a budget.

BAIER: But the fact -- exactly. For the fact that this Democratic governor who has support of the unions is doing the same type of thing in dealing with these pensions to try to cut back benefits or increase contributions, does that signal that across the country we're gonna see this in state after state after state?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It tells you, A, how desperate is the situation of the states, and, B, how this is becoming "the" issue state to state across the country, how you deal with these overhanging liabilities that everybody knows are bankrupting the states.

And when you get a Democratic governor asking for a minor, minor adjustment of how much is put into the pensions and gets a rally like this, I would interpret his showing up negatively, as telling you how weak the Democrats are. They actually have to come and talk to their own demonstrators, assure them we're go easy on you, that if you really want a reform of pension and healthcare, you better elect a Republican governor, as in Wisconsin, that repressive Wisconsin or other states.

In fact, if I could just have one second to say that I want to thank Juan for acting as my interpreter.

WILLIAMS: Why, of course.

KRAUTHAMMER: At no charge. I would say to Fred, don't believe him. Go to the source. Ask me. [INAUDIBLE]


BAIER: That's it for panel. But stay tuned for a need possibly for a career change.

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