Updated

This is a rush transcript of "Special Report" on November 3, 2021. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. JOE MANCHIN, (D-WV): To see what happened and how close and how divided, I hope it's a wake-up call for all of us.

NANCY PELOSI, (D-CA) HOUSE SPEAKER: Well, the people have spoken. We accept the results. I'm very sad for Terry McAuliffe.

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: The American people have had enough of all of this excess, and I think they sent a message yesterday.

SEN. MARK WARNER, (D-VA): I'm worried not just in Virginia. I'm worried across the country. We have got to show that we can deliver in a pragmatic way that effects people's lives.

SEN. TED CRUZ, (R-TX): I hope we see Democrats actually say, all right, take the foot off the accelerator here. The American people don't like the direction we are going. Let's move in the direction of reasonableness.

(END VIDEO CLIP)

BAIER: Well, reaction here on Capitol Hill to the Virginia shocker of Republicans winning three statewide races there, plus the close race in New Jersey, just called for the Democrat there.

What happens next? Let's bring in our panel, Ben Domenech, publisher of "The Federalist," Katie Pavlich, news editor at Townhall.com, Harold Ford Jr., former Tennessee Congressman, CEO of Empowerment and Inclusion Capital.

Harold, I want to start with you. You heard Senator Joe Manchin talk about the impact of this. And from his words, it's pretty significant and may mean a pumping the brakes from his point of view.

HAROLD FORD JR., FORMER TENNESSEE REPRESENTATIVE: You did a good interview. You had a good interview with him. I want to remind him and let him know that I'm a member of his party, and anyone that wants to criticize him should get to meet him first before doing that.

I think there are a couple lessons from yesterday, and I thought Senator Manchin outlined them fairly well. I'd go a little further. I think Democrats have to realize that the country is fatigued with some of the playing with the food on their plates and not having a lot to show for it. I think Senator Warner tried to capture that in his comments.

Two, you have to respond to voters' concerns. You can't place the priorities of your party over that of the people whom you represent and who voted for you. There may be great ideas that Democrats have. And there are some ideas in this Build Back Better plan that I think if Democrats talked about it, they might generate more support for it.

But the country wants an infrastructure bill. They are happier, should say we're settled on a number that Democrats and Republicans agreed to several months back. They should grab that victory and vote for it. Three, Donald Trump, Democrats and Republicans shouldn't focus too much on him. Glenn Youngkin's victory demonstrated and proved that there is a path to victory without embracing him fully. You can embrace some of the good and shun some of the bad. Democrats have to learn from that as well.

There was one positive for Democrats yesterday, and we just learned one now, Phil Murphy won. Congratulations. But Eric Adams win here in New York, a guy who was against defunding the police, a guy who said we have to prioritize small business and not make it so expensive for businesses in New York to open, those are the kinds of things Democrats have to get back to, in fact, those are the lessons I think they should draw from yesterday's election.

BAIER: Katie, talking to some people up here in the halls on Capitol Hill, some characterize it as a repudiation of progressives. Others see it differently. How should they see it?

KATIE PAVLICH, FOX NEWS CONTRIBUTOR: It is a repudiation of the far left, which Joe Biden has allowed to take hostage and Speaker Pelosi has allowed to take hostage of this legislation. It is true that the infrastructure bill is bipartisan. It was voted on earlier in the summer in a bipartisan fashion in the Senate. It's something that Republicans and Democrats can agree on.

But just a week ago, you had the White House release a statement through Jen Psaki essentially siding with the far left in the House in saying that Joe Manchin is the one who needs to come along. And so they should see the election results in New Jersey as well, even though the Democrat won there, as a rejection of far left governance. And Democrats, if they want to win, are going to have to get back to reality-based proposals, not these academic proposals of socialist utopia that are coming out of the Budget Committee chaired by Senator Bernie Sanders.

BAIER: Ben, that's not the message that you are getting on the House side as they are plowing forward with this bill. And you just heard Senator Manchin saying he has got a lot of things in these bills that are nonstarters for him. That's significant. Take a listen to President Biden before this race and today.

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: I think we're going to win in Virginia. I've not seen any evidence that whether or not I am doing well or poorly, whether or not I have got my agenda passed or not, is going to have any real impact on winning or losing. Even if we had passed my agenda, I wouldn't claim we won because Biden's agenda passed.

I think we should have passed before Election Day, but I'm not sure that I would be able to have changed the number of very conservative folks who turned out in the red districts who were Trump voters.

(END VIDEO CLIP)

BAIER: Ben, thoughts?

BEN DOMENECH, PUBLISHER, "THE FEDERALIST": If I was a moderate Democrat in the House I would be tearing my hear out today because no one seems to be listening to me in terms of warning about the danger of this radical agenda. But when I think you look at the Virginia result, which I think is more instructive than the New Jersey result, which is just kind of a backlash against Joe Biden and what's going on in the economy and the like, I think what you see is a candidate who was very savvy when it came to Glenn Youngkin's approach to run on kitchen table issues, pocketbook issues, like the grocery tax, the various things that are raising costs for people in a time of inflation, but also, to lean in to these culture war hot button issues without any kind of fear, without any hesitation.

It served two purposes. It both activated the conservative base, which was angry about these issues, and it reached out to a lot of suburban parents who had been lost in the last election cycle, who really came back to the Republican line. And that's the kind of thing that I think should really put the fear of God in Democrats. If you can get a coalition that has truck driving people with Trump stickers on the back of their pickups and people who are driving Subarus that have the honor roll middle school sticker on the back, that is a dangerous coalition for them. And I think that parents really came out and made the difference for Youngkin in a significant way that should really put the fear into Democrats going forward into 2022.

BAIER: Let alone the truck driver in New Jersey who beats the state senator who has been there for decades by spending $153. All right, up next.

DOMENECH: And Dunkin' Donuts.

BAIER: Yes, and Dunkin' Donuts.

Implications of all of this, who is getting it, whose now, and what's next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's now official FOX News is calling the Virginia governor's race for Republican Glenn Youngkin.

UNIDENTIFIED MALE: Republican Glenn Youngkin has been elected governor of Virginia.

GLENN YOUNGKIN, (R) VIRGINIA GUBERNATORIAL NOMINEE: All righty, Virginia, we won this thing.

UNIDENTIFIED FEMALE: Terry McAuliffe thought all he had to do was talk about abortion rights and all the women would fall into line.

UNIDENTIFIED MALE: Democrats are coming across in ways that we don't recognize that are annoying and offensive and seem out of touch.

KAMALA HARRIS, (D) VICE PRESIDENT OF THE UNITED STATES: What happens in Virginia will in large part determine what happens in 2022, 2024, and on.

(END VIDEO CLIP)

BAIER: No word from Vice President Harris today about that statement before the election, and there was all kind of reaction from all kinds of pundits about Virginia and New Jersey.

We're back with the panel. Katie, it was quite something to watch.

PAVLICH: It was incredible to watch everything come together in Virginia, a state that hasn't been red in a very long time. And Glenn Youngkin worked on a campaign where he really talked about unity. He didn't talk in terms of Republican versus Democrat. He talked about giving parents back their rights.

And Democrats in this state and states around the country have really abused their power, whether it's locking parents out of school boards or Terry McAuliffe at a debate telling parents that they really have no role in the kinds of books that go into their children's libraries. Glenn Youngkin was able to get women to come out for him. He got 54 percent of the Hispanic vote in Virginia. And the ticket that he ran on with Winsome Sears now as his lieutenant governor is diverse.

And Terry McAuliffe desperately tried to paint Republicans and Glenn Youngkin as a white supremacist and completely failed. And we're seeing that strategy work all over the country as Republicans run minorities in districts where they are going to win, and they are flipping seats away from Democrats.

BAIER: Harold, first female black lieutenant governor, very impressive, on Martha's show this afternoon. And yet some of the punditry was that the reason Youngkin won was because he upset white parents about not teaching black history. Your thoughts on that?

FORD: So I think Democrats should not narrowly think about these races. As someone who has stood for public office and been on the ballot six times, I can tell you that all elections are different, but there is a huge common denominator. If you are not responding to people, if your vision is not crafted in a way that's looking to help and advance people, that you want to represent, you won't win. That's what Democrats have to get back to.

The coalition that Ben so eloquently pointed out, those are the coalitions that helped Democrats and Republicans who have won in the past. That's how you win elections. If I'm a Democrat in the House or the Senate or I'm a strategist right now, this Youngkin victory, you put him in and Tim Scott, I don't know who would be president or vice president, that's a formidable ticket. You've got to think about how you appeal to everyday Americans, pocketbooks and wallets, how you incorporate the racial and social and societal concerns and issues that have always been present in American politics, and how do you craft a message that pushes us forward?

You cannot look backwards. You cannot draw on the former president or even former presidents. I have to remind everyone on the panel, Barack Obama and Bill Clinton lost the midterms, and they both came back to be reelected. This White House needs to regroup, reset, and call on Congress to pass the legislation in front of them.

BAIER: You know I said last night to Martha that eventually because of this win that Glenn Youngkin was going to be whispered about the presidency at some point. I just didn't know it was going to happen Wednesday with the panel. Ben, your thoughts.

(LAUGHTER)

FORD: We follow your lead, Bret.

DOMENECH: I think that when it comes to what Harold is saying there, there is a lot of truth to it. One thing that I think is really very clear for the Democratic coalition going forward, you cannot continue this agenda that just sort of says, when we lose an election it means America is racist. Somehow yesterday America proved that it was racist again, or something like that.

Glenn Youngkin was smart enough to run into the teeth of that, to take arrows for it, to reject it. And I think what we're going to find is that he was rewarded by Hispanic voters, by Asian voters, by other voter continues in Virginia that made the difference for him ultimately. We cannot continue this kind of race-based agenda that creates a hierarchy for children, in particular suggesting that in some way meritocracy or being good at math is a vestige of white supremacy or the like. People hate that, and they want to move away from it. Glenn Youngkin was part of that, and I think Republicans are going to lean into that going into 2022.

BAIER: We'll see the reverberations for this for quite some time. Panel, thank you very much. A special thank you to Senator Manchin for coming on the show tonight with that long form interview. You can see it on the Web site.

Tomorrow on SPECIAL REPORT, Dr. Anthony Fauci and CDC Director Rochelle Walensky answer lawmakers questions right here on Capitol Hill.

Thanks for inviting us into your home tonight. That's it for the SPECIAL REPORT, fair, balanced, and still unafraid. "FOX NEWS PRIMETIME" hosted by Rachel Campos-Duffy starts right now, with four second to spare. Rachel?

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