Updated

This is a rush transcript from "Special Report," December 27, 2021. This copy may not be in its final form and may be updated

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: We went from no over-the- counter tests in January to 46 million in October, 100 million in November, and almost 200 million in December. But it's not enough. It's clearly not enough.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: I would make sure we move in the direction of rapid testing, investing in rapid testing.

I will take care of this. I will end this. I will make sure we have a plan.

We need to scale up testing so anyone who needs one can get a test. After 10 months of the pandemic, we still don't have enough testing. That's a travesty.

Seeing how tough it was for some folks to get a test this weekend shows that we have more work to do, and we're doing it. Provided we had known, we would have gone harder, quicker if we could have.

Look, there is no federal solution. This gets solved at a state level.

(END VIDEO CLIP)

BAIER: Well, that meeting between President Biden and the nation's governors about COVID-19 and his administration's response was really eye- opening if you think about what candidate Biden had said for quite a long time on the trail, and then President-elect Biden said. You heard some of that. But here's a tweet from August, "Donald Trump is not responsible for COVID-19 but he does bear full responsibility for the failed national response. We've got to hold him accountable this November." And you heard President Biden with the governors saying today that there is no federal solution, that it needs to be solved at a state level.

Let's bring in our panel, syndicated radio host Hugh Hewitt, Susan Page, Washington Bureau Chief at "USA Today," and Byron York, chief political correspondent of "The Washington Examiner."

Hugh, is it just me or is that kind of a stunning juxtaposition of those two things?

HUGH HEWITT, SYNDICATED RADIO HOST: It's not just you, Bret. That was quite the montage and quite the retreat that the president has had to mount. I was reading "The Telegraph" before coming on tonight, that's the United Kingdom paper. They're up 300 percent in cases. The good news is hospitalizations are down 50 percent over the last year. But the president is being overwhelmed by, I would call it a hoard out of the Asian Steppe. Omicron is everywhere. It's sweeping all before it, and all of his promises are being trampled underneath that sweep.

BAIER: Susan, politically, how COVID is handled from the administration level is really the biggest political challenge for this president, considering all the things he's facing, inflation and Build Back Better and the repercussions from Afghanistan, but really this is the biggest.

SUSAN PAGE, WASHINGTON BUREAU CHIEF, "USA TODAY": I totally agree. There was no other issue more important than COVID in getting Biden elected, criticism of how President Trump had handled this global crisis. And there is no issue on which his presidency is going to be judged more first and foremost than getting a handle on the pandemic.

And one problem is he declared, I think, victory prematurely. Remember July 4th he said Independence Day from wearing mask, we had beaten the virus. That turned out not to be true. And then this latest issue of not having enough rapid tests is one I think is very serious because it's made the administration look so reactive to events. That's something we had hoped we had put behind us by now.

BAIER: Yes. We heard the soundbite back from December, Byron, about it's a travesty, there aren't tests. But now there is another report from "Vanity Fair" that says "The Biden administration rejected an October proposal for free rapid tests for the holidays. An administration official who attended the meeting told "Vanity Fair" that while everyone present shared the same goal of expanding rapid testing as soon as possible, the plan could not be implemented at that time. Quote, "We did not have the capacity to manufacture over-the-counter tests at that scale." The problem, in essence, was twofold. The FDA had authorized only a handful of different home tests and those it had authorized could not increase manufacturing fast enough." Byron?

BYRON YORK, CHIEF POLITICAL CORRESPONDENT, "THE WASHINGTON EXAMINER": Yes, well, the idea of mailing out rapid tests has been around for quite a while. President Biden himself admitted that he was surprised by how many tests were needed. So I think the "Vanity Fair" report, which the White House denies, really gets at the idea that Biden was not prepared.

Now, what's happening here is reality has intruded again on the Biden presidency. His disastrous handling of the U.S. withdrawal from Afghanistan revealed that Joe Biden was not the expert in handling foreign affairs that he claimed to be during the campaign. He had been in the Senate a million years and said he knew how to do this stuff.

Now this latest turn in the COVID crisis has shown that he was not the expert that he claimed to be during the campaign. This has shown an extraordinary contrast between candidate Biden and President Biden, and for President Biden to say there is no federal solution, that is the kind of thing he would have blasted President Donald Trump for saying, and now he is saying it himself.

BAIER: Well, I think he may have, if I go back to the tape, about the ventilators and a meeting that President Trump had with the governors talking about states needed to get the ventilators. There was a lot of headlines and repercussions from that, that statement.

Meantime, Hugh, there is good news in that the CDC has announced a quarantine time from 10 days to five days if you are asymptomatic, and you have to then wear masks, or it's recommended around folks. But this potentially deals with what we're seeing massive numbers of people leaving work because they have to quarantine.

HEWITT: It's very good news, especially if you want an airline to be staffed adequately so that they can make their takeoff and touchdown times. The problem with overpromising and underdelivering has crippled a lot of employers, crippled a lot of people who want to go back to work. Moving to five days is a recognition of what most of us have heard from friends and family, that these cases are milder, that they go away much more quickly. Now anecdotal evidence is evidence of anecdotes. You can't extrapolate from it. But increasingly the CDC is coming around to the idea that has generally held that this Omicron may be far more virulent, far more contagious, but it's just not as bad. That's good news, and the CDC is recognizing it tonight.

BAIER: Yes, and Susan, some health experts are saying that's how you get to endemic stage is that Omicron, over time it just gets less severe, and we eventually don't have to deal with COVID the same way we have been dealing with it. Let's hope.

PAGE: We are going into what year three of COVID in few months, and I think we have begun to learn what we need to do to try to balance living our lives with being healthy and keeping people safe. You see that on nothing more seriously than do you on education where you know the initial instinct was to shut down schools. And we have seen the costs that can have to kids and to their families in the way that schools can be opened in a way that it keeps kids safe and doesn't subject them to too much danger with COVID. All of these are things that we are sorting out because, you know what, there is no sign that COVID is going to go away any time soon.

BAIER: That's right. Up next, panel, thank you. Stand by if you would. The fate of President Biden's Build Back Better agenda and its impact potentially on the midterm elections.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KAMALA HARRIS, (D) VICE PRESIDENT OF THE UNITED STATES: I'm not giving up, the president is not giving up. And frankly, the stakes are too high.

SEN. BEN CARDIN, (D-MD): I think we can reach that sweet spot. Look, a lot of us are going to be disappointed, but we are not going to let perfection be the enemy of getting something done. So we need to get something done.

REP. BYRON DONALDS, (R-FL): In Washington, nothing is ever dead. There's a possibility for any bill to come back. And there's one thing is crystal clear is that Joe Biden and the radical left are not going to give up on this bill. They don't have the votes right now, but they are going to find any possible way to get this across the finish line.

(END VIDEO CLIP)

BAIER: The president's massive tax and social spending bill, they call it Build Back Better, basically dead because Senator Joe Manchin said he was not going to vote for it in current term. But there's efforts to bring it back, or piece of it, or possibly do it another way. Here are two op-eds, opinion editorials, one from progressive Representative Jayapal in "The Washington Post," "Broken promises cannot deter the path to Build Back Better. On December 20th, Senator Manchin went back on his commitment of the president, seemingly killed the bill on national television. In a town where your word is everything, this was a stunning rebuke of his own party's president. We're calling out the president to use executive action to immediately improve people's lives. Taking executive action will also make clear to those who hindered Build Back Better that the White House and Democrats will deliver for Americans."

And then "The Wall Street Journal" editorial, "Joe Manchin and child poverty," "Democrats tried to rush Build Back Better into law without policy debate or compromise. The left thought it could do by beating the living crap out of Mr. Manchin, as he put it in a recent interview. He has no treason to apologize for asking that a bill to transform America be subject to regular congressional order."

Two different takes. Back with the panel. Byron, what about this executive action push? This is a bill where you are actually spending money, that is the job of Congress. What do progressives think can be done with executive action in that frame?

YORK: Well, first of all, we are seeing that no magical solution presented itself over Christmas. The problem remains the problem. A number of progressive thinkers have proposed ways to use executive authority to solve problems that they have not been able to solve legislatively. For example, Elizabeth Warren, Senator Elizabeth Warren and others have suggested that the president could unilaterally with the stroke of his pen forgive a large amount, not all, but a large amount of student debt in this country. So they are fighting for that to relieve student debt or cancel large amounts of student debt.

There are other areas in which they believe Joe Biden can stretch the limits of executive authority and do that. That would, of course, be an admission that they have failed to actually pass it through Congress. I'm not sure that Biden, who does have an essential caution in him, would be willing to go along with some of these plans.

BAIER: Susan, we saw in President Obama's term the pen and the phone, and that effort. Some of them were challenged in court. Others were erased when another president, President Trump, came along, and that executive chose differently. Most likely, do you think that it's a scaled back versions of Build Back Better that starts anew after the new year?

PAGE: Yes, maybe after this cooling off period of the holidays, because the one legislation that they could get passed is legislation that fits Joe Biden's parameters and that progressives accept, so that nobody defects, and it gets through. And that could still be a very significant package of $1.75 trillion. That is not $3.5 trillion, but it is still a lot of money that would enable you to do some big programs.

And the question is, will Democrats -- will there be a Venn diagram where the most that Joe Manchin accepts is the same as the least that the progressive will accept, because that's what could get through Congress. The fact is you cannot use executive action to find yourself $1.75 trillion. You need Congress to allocate that money.

BAIER: Meantime, Hugh, you have got this battle for voting rights, and talking about changing the filibuster in some way. Right now they don't have the votes. Manchin and Sinema from Arizona saying they don't want to do it that way. But here is John Yarmuth speaking about this.

(BEGIN VIDEO CLIP)

REP. JOHN YARMUTH, (D-KY) HOUSE BUDGET COMMITTEE CHAIRMAN: The founding fathers never thought that the minority should prevail, but that's what we are dealing with right now. If we want to move this country forward, and if we want to save our democracy, we have to make a change. Do you think that you have the right to deny progress to the other 331 million people based on your assessment of what West Virginians need or want?

(END VIDEO CLIP)

BAIER: I have heard a lot of arguments for the filibuster changes, but one of them not being that he is representing West Virginia, and Joe Manchin he is talking about, and he is representing what he thinks his voters want. And he looks like, according to the polls, is right.

HEWITT: He is representing what his voters want.

I went back and read your transcript of Senator Manchin's interview on December 19th. And he was very clear the filibuster is not on the table. Senator Sinema says it's not on the table. Like the filibuster, as with Build Back Better, there are stages of political grief. And I think we remember there is anger, denial, bargaining, depression, eventually you get to acceptance.

Democrats aren't going to get anywhere until they actually accept the fact that on voting rights, which are not really voting rights but a massive expansion of federal power, and Build Back Better, the ball is in the court of their two Democratic friends, Joe Manchin and Kyrsten Sinema, and they should just say them. And I think Susan and Byron would be as hard-pressed as I've been to recall, I've never remembered two senators with this much authority. They ought to just ask them what will you do, because you've got the ball. Take a shot. Otherwise, nothing is going to happen, and they will never get to acceptance.

BAIER: And by nothing happening, Byron, that is a dramatic impact, potentially, on the 2022 elections.

YORK: It is. The basic problem that Hugh is referring to is the fact that Democrats do not control a majority of seats in the U.S. Senate. It's 50- 50. They have to get a perfectly unanimous Democratic Party to get to a tie, which then the vice president can break in their favor. And I think one thing they have to worry about, and this connects to what we were talking about the COVID in the earlier segment, is presidential job approval is a major predictor of how a party does in midterm elections. Joe Biden's is going downward. It's probably going to go downward on COVID as well. And if he does not have these legislative achievements to talk about, it will probably go downward further. So this is something that is a major, major worry for Democrats right now.

BAIER: Susan, last thing quickly, and I have asked this to a number of panels. What do you think the Biden administration is doing well or very well right now?

PAGE: I think they have made some progress on COVID. We shouldn't discount that. They have brought some sense of normalcy back to the government after the time of great turmoil and tumult during the Trump administration. So I think there are some things that they have -- they also got through the infrastructure bill with a bipartisan vote, and that early COVID relief bill last March. So, you can't say they have done nothing. But the problem is there are still some more things to be done.

BAIER: Yes, they really never got credit to the infrastructure bipartisan infrastructure bill because they tied it to the other bill, which is not going anywhere, it doesn't seem.

Panel, stand by, if you would. When we come back, tomorrow's headlines.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a look at tomorrow's headlines with the panel. Hugh, first to you.

HEWITT: Ominous news out of China, Bret, 13 million Chinese in the city of Xi'an under the strictest house arrest, a lockdown we haven't seen since Wuhan. Very bad news.

BAIER: Byron?

YORK: Mine is coming off the president's surprising no federal solution statement today. Biden to governors -- not my problem. You guys deal with it.

(LAUGHTER)

BAIER: Susan?

PAGE: My headline, Americans divided about almost everything agree they are glad that 2021 is almost over.

BAIER: I hear you there. That's a big headline. All right, panel, thanks so much. Have great night.

Content and Programming Copyright 2021 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2021 VIQ Media Transcription, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of VIQ Media Transcription, Inc. You may not alter or remove any trademark, copyright or other notice from copies of the content.