This is a rush transcript from "Special Report," January 19, 2012. This copy may not be in its final form and may be updated.


RICK SANTORUM, R - PRESIDENTIAL CANDIDATE: We can win elections. We can organize. We can put together an effort to pull our - pull the resources together to be able to be successful in being the person that can defeat Mitt Romney, because guess what. We defeated Mitt Romney in Iowa.

MITT ROMNEY, R - PRESIDENTIAL CANDIDATE: He is giving a speech today. Guess where he is going to be giving the speech? Fantasyland. He may bump into Speaker Gingrich down there in Fantasyland.

RON PAUL, R - PRESIDENTIAL CANDIDATE: It is true in a free society. If you have your freedom you might make mistakes, but the whole thing is it's bet you make your own mistakes and suffer the consequences than the politician making the mistakes and everybody suffering.


BRET BAIER, ANCHOR: Sounds from the trail today. One interesting note as we talked about in the first panel, the Iowa caucus went for Rick Santorum, even though it wasn't official-official. The Santorum campaign said that Governor Romney called Senator Santorum and congratulated him. The campaign then took that to be a concession. Then the Romney campaign put out a statement saying it was not a concession. He was just calling to congratulate Santorum. That's where we were on that.

We're back with our panel. Jonah?

GOLDBERG: Again, my apologies for blowing up the organization here.


JONAH GOLDBERG, AT LARGE EDITOR, NATIONAL REVIEW ONLINE: The way I took the Romney thing is maybe they think that sort of at the Olympics you have the three tiers, that they were congratulating Santorum for joining him on the gold pedestal or something like that. The only place where I sort of disagree a little bit with Charles [INAUDIBLE] with the Iowa thing in particular, is that I think the fudging out of whatever happened in Iowa looks bad for Romney, because now Romney only has one win in the state of New Hampshire, where he is a favorite son and campaigned for six years. And it makes him look weaker and less of a juggernaut than he did even a few days ago now.

And now we are going to South Carolina where I think Newt Gingrich has a very good shot and the odds on favorite to beat Romney, which means you set up a Romney versus Gingrich battle for the states ahead.

BAIER: This is -- go ahead.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I disagree on Iowa. If the state Republican officials announce that the ballots are missing and we will never have them or know the outcome, then you can't have a concession and you can't have a winner or a loser. What you have is what we had at the beginning, essentially a tie. I think it alters nothing. I think Santorum has to make sure that he doesn't finish last, because if he does behind Paul, he's gonna have to step away.

BAIER: Quickly, as we do this potpourri of panel topics, Rick Perry, the skyrocketing he saw and when he got in the race August 13. He squelched Michele Bachmann's straw poll win in Ames. He was leading Mitt Romney by double digits. He had a bumpy road at the beginning. Some supporters said if he had delivered the speech he delivered today and had the last three debate performances he had at the beginning this would have been a different race.

KRAUTHAMMER: He showed why it's important to actually start out in the minor leagues. Normally, a candidate will spend six months on the hustings before the debates and before he goes national where he works out all the kinks, he develops a speech and knows how to answer stuff. And Perry didn't. He started at the major league level in the all-star game and he had trouble at the beginning.

But I think by getting out the way he did now before he would have ended up last in the state that he really ought to do well in, I think he sort of saved himself, as well as the way he performed in the last debates and the last month. He was a lot stronger. He had become a laughing stock after the "oops" moment he had, but I think he redeemed himself. And though he slightly diminished, I think he returns home with his dignity restored, and he can be and he will be I think a candidate again in the future.

BAIER: I mean, arguably that speech today was well-delivered, Juan, and --

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: It was a nice speech. But it's all about money. I think he gets out now he still has some of his money. Remember, he was the biggest spender in Iowa and he came in fifth, right? Ok, so now he still has some of the money on hand. He can use it in terms of creating some kind of PAC, some kind of effort. But I think, you know what, he is diminished. And I don't think there is getting away from it. And I think his wife was pushing him and she wanted a dignified exit and I got that today.

BAIER: Going back to Charles about the battle here, as you look at the polls if it shapes up like this on Saturday, this one-two battle, Romney/Gingrich or Gingrich/Romney, whichever, and then Santorum/Paul. And who finishes third?

WILLIAMS: It's really damaging to Santorum if he loses. But it looks like according to the polls he will come in behind Ron Paul, who has not, by the way, been very aggressive in his campaigning in South Carolina.

But again, I come back to this point. At this juncture, it looks like Santorum versus Gingrich to be the anti-Romney. And Santorum is the one who has not gained traction. Gary Bauer endorsed him, he's gotten some of those evangelicals, but it hasn't worked with the South Carolina audience. The power, the punch has all come, as I know well, from Newt Gingrich.

BAIER: James Dobson endorsed today, which is a big deal in the evangelical community.

GOLDBERG: Yeah, but it just -- it has this feeling -- I talked to some people in South Carolina today. It has this feeling that Santorum is just fading behind. He doesn't have the buzz. And what is interesting, is if he gets out or if he loses in fourth right, all of those evangelicals that supported Santorum, it's not like they're gonna then flock to Romney. It is shaping up to be a Romney/Gingrich --

WILLIAMS: This is what happened in '08 when McCain won by the evangelicals splitting their vote.

BAIER: It should be an interesting Saturday. We'll have it all covered.

That is it for the panel. But stay tuned for review of a change we made Monday night.

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