This is a rush transcript from "Special Report," January 16, 2019. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: Nancy Pelosi wants to cancel the State of the Union.

REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: There requires hundreds of people working on the logistics and the security of it. Most of those people are either furloughs or victims of the shutdown.

HAYES: She wants to give the president a dollar for the wall.

MITCH MCCONNELL, R-KY., SENATE MAJORITY LEADER: One dollar -- talk about taking border security seriously.

REP. STENY HOYER, D-MD.: What this suggests is a real security problem unless we've opened up the government. And we haven't gotten a reply from the president and his thoughts, so it's not officially off.

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BRET BAIER, HOST: Not officially off, State of the Union, scheduled for Tuesday, the 29th. We'll see. No response from the White House as of yet. That is where we will begin this panel on the partial government shutdown, Jonah Goldberg, senior editor at "National Review," Mollie Hemingway, senior editor at "The Federalist," and Charles Lane, opinion writer for "The Washington Post." Can't you be senior editor?

(LAUGHTER)

BAIER: It would be so much easier. Listen, Steny Hoyer in this interview suggested that, yes, there is a compromise possible. Yes, we can get something on the table, yes, it's possible. But then spent a lot of time talking about how walls don't work and kind of talked himself in circles a bit.

CHARLES LANE, OPINION WRITER, "WASHINGTON POST": Look, the Democrats are loving this. This is pure energy for the base. And by the way, all the energy in American politics right now, to my mind, is on the left. They are riding high after November. They feel they have Trump on the run. This is a pure base pleasing exercise for the time being. And the polls tend to show, as is often the case, the Republicans are getting blamed for the shutdown. Democrats seem to be paying no price with the broader public.

And frankly, I don't think there is a broader public anymore. We have a right, we've got a conservative base, we've got a liberal pace, and they just don't talk. And so I don't see the incentive she has to compromise unless and until this thing goes so critical that both sides realize, OK, it's even more in our interest to cut a deal than to let this mess continue.

BAIER: What did you take away, Mollie, from all this today?

MOLLIE HEMINGWAY, SENIOR EDITOR, "THE FEDERALIST": I'm not sure if I agree with what Charles is saying here about how this is playing out. I don't think it's particularly good to take over the House of Representatives and immediately have a government shutdown that you don't seem to care about, that you have your members vacationing in Puerto Rico or working on other issues. I don't know if that shows a level of seriousness that is particularly good.

There's also the issue that I think this is kind of unlike any other shutdown that we've had before in that 75 percent of the government is funded, so I think the polls show that only six percent of American voters even say that the shutdown has affected them negatively. Most people aren't even aware of it. So I'm not sure that it is quite the same situation that we have dealt with before.

At some point I think people are going to have to stop thinking about who gets credit or blame, who does this help or hurt, and just remember there is a government that shut down. There is a fairly modest proposal on the table for border security and other issues that will help with the inflow of drugs and other problems that happen over the border. And at some point, the adults are going to have to actually take it up and move forward.

BAIER: There is a messaging issue on the Democratic side. Here's Hoyer on the wall.

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HOYER: My own view is that this is not an issue of morality. A wall is immoral if it tries to imprison people who shouldn't be imprisoned.

BAIER: OK, do you think a wall, a barrier, is racist?

HOYER: Look, Bret.

BAIER: Listen, Mr. Leader, here's the --

HOYER: I don't talk in those terms. I don't think that's the way we ought to look at it.

(END VIDEO CLIP)

BAIER: He went on to say walls work in some places and he wouldn't take the walls down that exist currently.

JONAH GOLDBERG, SENIOR EDITOR, "NATIONAL REVIEW": There so much stupidity in the way we talk about the wall stuff. They're inanimate objects. They are literally tools. Sometimes they are useful, sometimes they are bad, sometimes they're good. But we're treating them talismanically.

And both sides have turned the wall into what in Hollywood they call a MacGuffin, which is just what the hero wants, or, according to the Democrats, what the villain wants. And the reality is, I think Mollie is right. There are enormous, easy, low-hanging fruit public policy solutions here. There are lots of serious immigration restrictionists who would take Visa reform and E-Verify and all these kinds of things in exchange for some of the wall. The Democrats are in favor of border security where it exists, they just don't want it anywhere else. The problem is it's just so symbolic that it's become zero sum. If they win, we lose.

BAIER: So that is the thing. If you don't have a compromise position to put on a table, yes, it fires up your base, and politically you're not being hurt by it at least for this time, but if you haven't put a compromise on the table, eventually doesn't that come back and haunt you?

LANE: Again, if we have a situation in which there is a large body persuadable people in the middle of our political spectrum who might go either way depending on the facts of this, I would agree with you. But we don't have that. We have 42 percent of America that's for Trump whatever he says. And over here you've got, I don't know, whatever it is, 54 percent who disapproves of him.

BAIER: We have 800,000 workers who are not getting a paycheck. And they're like, hey, listen, I don't care what happens, give me a compromise!

HEMINGWAY: And we have a majority of Americans who care about border security.

LANE: I get it, guys, but I'm trying to tell you what is going on here politically. This is just a pure partisan squabble. The Democrats I think are not losing it politically and have no incentive to get out of it. Trump for his part is responding only to his base. This is purely about showing, I promised you a wall, I will fight to the death. He is the one, I think it was today who said this could go on for a lot longer and I've got no problem with it.

HEMINGWAY: It's a bigger issue than that, though, too, in that we've had decades of people saying we promise we're going to work on border security. We promise that if you allow this easing up of whatever restriction is happening with immigration, we will get to the border security. We will care about borders, we will care about rule of law, and that that never happens. And so at some point Congress actually has to step up and do its Constitutional duty of handling these issues.

LANE: But first they have a 2020 presidential election they want to fight over.

BAIER: We're always one election away from solving things. Does the State of the Union happen?

GOLDBERG: Personally, I really hope not.

BAIER: Just because it's an annual event you hate.

GOLDBERG: I dislike the State of the Union. Trump can do it from the Oval Office. FDR did his 1955 State of the Union as a fireside chat from the White House. It was a tradition created by Woodrow Wilson to deliver it in person. Woodrow Wilson was the worst president of the 20th century. That was not his greatest crime. But we've turned this whole thing into pomp and circumstance as if the president is a king. I think Nancy Pelosi's explanation for why she doesn't want to do the security thing buys into the idea that it is a ceremony for a king, and it's lame and dumb. It's not a security concern. Congress is supreme. If she doesn't want him there, she should say we don't want you and own it.

BAIER: Does it happen or not?

LANE: I think it might not happen because she is taking this position where she can't really back down by saying OK, it's fine. I invite you.

HEMINGWAY: The constitution requires it, so it will happen one way or the other. Whether it happens in person is still to be seen.

BAIER: Panel, thank you very much. When we come back, a very special homecoming.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a sweet reunion between a military couple.

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(LAUGHTER)

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BAIER: Army Second Lieutenant Jamie Douglas served in Iraq before she returned to Texas. Her mother drove her from Fort Hood to Fort Sam Houston so she can surprise her husband, Security Lieutenant Jordan Pruitt while he was receiving medical training. The teacher said, what a way to end the class. Congratulations. We love those get togethers.

Thanks for inviting us into your home tonight. That's it for this SPECIAL REPORT, fair, balanced, and unafraid. "The Story" hosted by Martha MacCallum up in New York starts right now. Hey, Martha.

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