This is a rush transcript from "Special Report," August 22, 2011. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. MAXINE WATERS, D - CALI.: This is a tough day. You can't be intimidated. You can't be fr ightened. As far as I'm concerned, the Tea Party can go straight to hell. And I intend to help them get there.

MICHELE BACHMANN, R - PRESIDENTIAL CANDIDATE: When you take the Tea Party movement and you add together the fiscal conservatives and you add together the national security conservati ves and the social social conservatives, I am just here to tell you, we are an absolute powerhouse that can't be beat.

JON HUNTSMAN, R - PRESIDENTIAL CANDIDATE: When you find yourself at an extreme end of the Republican Party, you make yourself unelectable.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Targeting the Tea Party. It seems popular in some quarters. We're back with the panel. Democratic Congresswoman Maxine Waters, Juan, lashing out at the Tea Party. What about that statement?

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Well the statement's offensive. I mean, that is just, ya know, I think excessive rhetoric and not very -- I don't think it's the kind of rhetoric that we want in the country and it should be condemned by people on the left.

BAIER: Yeah, but ya know, after Governor Perry said what he said about treating Bernanke --

WILLIAMS: And that was condemned. Treason -- treason and all that.

BAIER: Pretty ugly, that got a lot of coverage.

WILLIAMS: Yeah. And this is getting coverage. But what I'm saying is, if you look at the roots of this, much of it has to do with the liberal coalition in the Congress, feeling that they were abandoned, totally left out in the debt ceiling negotiations that we just went through. And people like Maxine Waters and a lot of the members of the Black Caucus on that left side of the Democratic caucus in the Congress felt that they were absolutely ignored. I mean she's made it --

BAIER: Outmaneuvered.

WILLIAMS: Yeah. Not only outmaneuvered, ignored, that the president was not responding to them. He was responding to those 87 freshmen Tea Party Republicans, and that they were dominating the conversation. And not only that, Maxine Waters feels the president was out in the Midwest, talking to everybody, never stopped in an urban environment, never talked to any blacks. I think for Maxine Waters at this moment, she feels like the politics of the day, despite the fact that there is an African- American Democratic president, have gone by her. And she -- that is what you are seeing there.

BAIER: Charles, Tea Party folks say that they've struck a nerve, and people are reacting to it, not only on the Democratic side but within the Republican Party.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: That's true, and the Waters statement is another example of the Democrats upholding the standards of civil discourse that they have insisted on since Tucson because she actually only said she wanted them to go to hell. She didn't say they are terrorists, which is the mean that others have used, including, reportedly, Vice President of the United States.

Look, they are very upset because they lost the debate; they weren't even in the debate on the debt ceiling. But I do think that it works for liberals to talk to liberals in that kind of dismissive and sort of angry tone about Tea Party, it's sort of accepted on the Upper West Side. But it doesn't work in the general election. And I think that's why you get less of that out of the White House. Tea Party involves a lot of independents, a lot of disaffected Democrats. And when you insult it or really get vile about it, you are alienating people you are gonna need if you want to win. I don't expect to see Obama do this in the campaign.

BAIER: Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I do expect to see the Democrats do quite a bit of this in the campaign because they don't have a positive argument to make on behalf of the policies that the White House and fellow Democrats have made. But if this were effective, we wouldn't have a Republican majority in the House. I mean this is exactly what Democrats did all throughout the summer and throughout the fall of 2010 and Republicans won in record numbers. Simply beating up the Tea Party is not a good electoral strategy for Democrats.

KRAUTHAMMER: But that's why I think it's not gonna happen at a presidential level, because it won't work.

BAIER: Congressman Paul Ryan, Steve, announcing today that he will not seek the presidential nomination, the party's nomination for president, saying that he is hopeful that party nominates a candidate committed to a pro-growth agenda of reform and restores promise and prosperity to our exceptional nation. Surprised?

HAYES: I'm not terribly surprised. I mean the real question with whether Paul Ryan was going to run is did he actually want to be president? And there were very few indications that he wanted to be president. And having said that, by all accounts, and I talked to a total of more than ten people who had had conversations with him about this. He was very strongly considering a run for president, he consulted with Republican strategists, he talked to high-dollar Republican fundraisers, he had meaningful talks with his own family, apparently got the blessing of his wife Janna for a run. Spent some time this week in Colorado talking to Bill Bennett, who's a mentor, about a run. So he was clearly struggling with this decision starting back in late May all the way through the summer and has finally decided not to go. He is a conviction politician and this wasn't what his conviction told him.

BAIER: Quickly Juan, Sarah Palin, Governor Chris Christie, the last two that are -- it appears on the fence. Governor Christie said he'd have to commit suicide to say he's not running.

WILLIAMS: Yeah, I don't see Governor Christie coming in Bret, but I do think that Sarah Palin is displaying all the behavior of somebody who wants to get in the race.

KRAUTHAMMER: I would agree. Palin in, Christie out.

BAIER: That's if it for panel. But stay tuned -- well, just stay tuned.

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