This is a rush transcript of "Special Report" on October 7, 2021. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER, (D-NY) SENATE MAJORITY LEADER: We have reached agreement to extend the debt ceiling through early December.

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: The majority didn't have a plan to prevent default, so we stepped forward. The pathway our Democratic colleagues have accepted will spare the American people any near term crisis.

SEN. LINDSEY GRAHAM, (R-SC): I think this makes no sense. Putting it in December is another train wreck we have got it deal with that probably empowers Schumer more than us. So I think this is overrule a bad decision.

UNIDENTIFIED MALE: Mr. President, do you support the short-term debt ceiling deal?

(END VIDEO CLIP)

BAIER: Just to be clear, that was fingers crossed there from President Biden as they are hoping that there is a debt ceiling punt, if you will, to December, a deal to raise the debt ceiling by $480 billion, not chump change.

Meantime, Democrats are looking at the polls. The latest Quinnipiac poll, a trusted poll, out, the job approval rating president underwater significantly, 38 percent approve. If you look at the handling of specific issues, approve-disprove, you see coronavirus, the economy really taking underwater, taxes, and foreign policy. But the biggest, perhaps, is the issue of immigration and border security, immigration issues. You can see this, 25 percent, 23 percent approval. And this is, again, Democrats, independents, and Republicans.

So with that, let's bring in our panel, Amy Walter, publisher and editor in chief of the "Cook Political Report," Guy Benson, political editor at Townhall.com, host of "The Guy Benson Show" on FOX News Radio, and Jonah Goldberg, editor in chief of "The Dispatch." Amy these numbers scare any politician, but they definitely scare politicians going into elections.

AMY WALTER, NATIONAL EDITOR, "COOK POLITICAL REPORT": Absolutely. The history is midterm elections, especially recent history, as any president who has an approval rating that is under 50 percent, and for the last four midterms every single president has been under 50 percent, means they lose seats, in some cases a lot of seats.

Now, there is a long time between now and the next election, of course. But I think the bigger challenge right now for the president and his party is that people are just overall frustrated. We know that there have been a lot of issues. It's COVID, it's Afghanistan, it's the border. But overall, when the president ran as candidate, his message was I'm going to bring sort of normal back. Life is going to feel normal in whatever way you thought normal meant. And I think for so many people, certainly voters that I talk to, they are still waiting for normal to come. And whether that's on the economy, whether that's the end of COVID, whether that's the end of the divisive, dysfunctional politics, they haven't seen it.

BAIER: Guy, that's a good point. It feels a little chaotic, especially on Capitol Hill behind me. This deal is not done on the debt ceiling. As Amy mentioned, you had Afghanistan. You've got the situation on the border, inflation that people care about, crime in cities. There is a lot of stuff here that is all packed into these numbers.

GUY BENSON, POLITICAL EDITOR, TOWNHALL.COM: That's exactly right, and we're talking about this one Quinnipiac poll. That's a polling series that has actually favored Democrats pretty significantly in recent years. So, I would say that's extra eye-opening here.

But it would be one thing if it were just a lone wolf, right, or an outlier poll. Unfortunately, from the president's perspective, it's actually in line with a lot of the other data. This is really a trend. Morning Consult had a poll with the president now bouncing up into majority disapproval. Gallup had new numbers out this week with Republicans surging into significant leads on questions like national security and economic prosperity.

So you look at the polling data across the board, and it is pretty brutal for the president at the moment. And I would imagine that his party has to be pretty anxious, especially Speaker Pelosi with that razor thin majority in the House, and Chuck Schumer, for that matter, a 50-50 Senate. If the president is in this neighborhood a year from now it could be a very ugly midterm election for the Democratic Party.

BAIER: Yes, as Amy points out, we have a long time to go before that. But obviously there is a race in Virginia that's very consequential. We will talk about that next panel.

But Jonah, this Democrat on Democrat political back and forth, Bernie Sanders, Joe Manchin, Kyrsten Sinema and progressives, that can't help in this whole situation, especially if the president is not steering the boat.

JONAH GOLDBERG, "THE DISPATCH": No, I think that's exactly right. To pick up on Amy's point, I think that it's not delivering normalcy. And the reason why he is not delivering normalcy is because he is not showing that he has the competence to handle politics, the political landscape as it is. And that gets to the fact that he was elected to unify the country, to return normalcy, and he picked an agenda that was wildly partisan, intensely progressive, in some very significant financial terms more ambitious than the New Deal or Great Society with a Congress that is the most divided in American history.

And the idea that you can with 50 senators bring in a new New Deal was just lunacy. And I personally think he should have dropped the mic when he got the bipartisan infrastructure deal through the Senate with 19 Republicans and called it a day, and said look, this is what I was elected to do, and I will see you at the midterms.

But, instead, he has tried to push an agenda that's not popular with voters, that he can't even get through his own party. Bernie Sanders likes to say two senators can't hold up 48 senators. But it's not two senators. It's 52 senators because it's a 50-50 Senate and there are two Democrats who are closer to Republicans on this issue. And Biden is incapable of reconciling all this.

BAIER: Right, and even though he ran as somebody who can bring all that together.

It's a gorgeous night here in Washington. But Amy, there are storm clouds ahead as we push this, if this deal gets done as expected, to the debt ceiling in December. It all then -- September was going to be horrible as far as negotiating goes. Now it's December and they're all pushing up against getting home for the holidays.

WALTER: And the government funding also runs out in early December. So you have debt ceiling, government funding, and then trying to get this legislation passed.

The Congress does love a really difficult deadline, or they do like the pressure of a deadline to get things done. Maybe we can think about it the way that a high school student procrastinates and waits to the last minute to do their homework. Not that I ever did anything like that.

(LAUGHTER)

WALTER: But Decembers traditionally been the times when a lot of this stuff gets done. Remember, in 2017, that's when the tax bill supported by Republicans made it through Congress, right before Christmas. We have had many deals to avert government shutdowns and debt ceilings.

BAIER: Former Speaker Boehner said that negotiation doesn't start until it has to and they start smelling the jet fumes that they have to get home.

Speaking of jet fumes, Air Force One landing at Andrews from the president's trip up to Illinois.

Panel, stand by. Up next, the politics of education, the Virginia governor's race we just mentioned, and the Pentagon looking for extremists within its own ranks.

As we go to break, some SPECIAL REPORT moments with a pair of commanders in chief and one man who wanted to be one.

(BEGIN VIDEO CLIP)

BAIER: With letting one of the big three automakers go to bankruptcy be a big mark on your legacy?

GEORGE W. BUSH, FORMER U.S. PRESIDENT: I'm looking at all options.

BAIER: This week?

BUSH: I'm thinking it through.

BAIER: No date then today.

BUSH: I think you're trying to make news. I'm not going to let you make news.

BAIER: You guaranteed that they are not going to be able to keep their doctor.

BARACK OBAMA, FORMER U.S. PRESIDENT: Bret, you've got to let me finish.

BAIER: At times you thought it would be a model for the nation.

SEN. MITT ROMNEY, (R-UT): You are wrong, Bret.

BAIER: No, no, there are statements --

ROMNEY: No, Bret, Bret. This is an unusual interview.

(LAUGHTER)

ROMNEY: All right, let's do it again.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PETER DOOCY, FOX NEWS CORRESPONDENT: Does the administration agree that parents upset about their kids curriculums could be considered domestic terrorists?

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: Let me unravel this a little bit, because the National School Board Association is not a part of the U.S. government. Regardless of the reasoning, threats in violence against public servants is illegal.

IAN PRIOR, FORMER TRUMP JUSTICE DEPARTMENT OFFICIAL: When I was at the Justice Department it was focused on going after MS-13. Now, apparently, it's going after parents of 13-year-olds.

(END VIDEO CLIP)

BAIER: A lot of concern about the Justice Department and what was announced about parents who stand up in school boards and speak out. The Senate Judiciary Committee, the Republicans on that committee sending a letter, "We urge you to make very clear to the American public the Department of Justice will not interfere with the rights of parents to come before school boards and speak with educators about their concerns, whether regarding coronavirus related measures, the teaching of Critical Race Theory in schools, sexually explicit books in schools, or any other topic."

We are back with the panel. Guy, this is touching a nerve. And we just get a ton of response to this from parents across political spectrums.

BENSON: Yes, Bret. And you have been now referencing in the previous segment leading into this one the gubernatorial race just across the river from here in Virginia. This is a potent issue in that race, especially in northern Virginia, the suburbs, sort of blue trending areas if not blue areas all together. I just had the Republican candidate in that race, Glenn Youngkin, on the radio yesterday. And I brought up education. Before I could even ask him about this DOJ, FBI intervention involving school board meetings, he proactively raised it, because he called it outrageous. He thinks that this is chilling speech. It's intimidating people. It's trying to delegitimize legitimate concerns that parents have.

And I think when you talk to Youngkin himself or his campaign, they are very eager to attack on this issue, to be on offense on this issue, to litigate education broadly. And between some comments from Terry McAuliffe, the Democrat, and now this particular controversy from the Justice Department, it's fueling the narrative that I think the Youngkin people are really hoping will bring them to victory in a few weeks.

BAIER: Yes, and we should point out we have invited Terry McAuliffe on this show numerous times. Let's put up the polls. Our latest poll has it about tied roughly, if you look at the margin of error, plus or minus three. Amy, this is harbinger. We often talk about races, but in purplish Virginia, it is a big race to watch, and this issue is a big issue to watch.

WALTER: Absolutely. And the suburbs are clearly going to be a place that we want to watch not just for this gubernatorial race but 2022 in terms of, again, Democrats made big gains in the suburbs during the Trump era. Can they hold on to those suburban gains when Joe Biden now is in the White House, not Donald Trump.

The interesting thing is that Terry McAuliffe is very interested in nationalizing this race, and quite frankly politics has become more nationalized. It's not as localized as it once was. The challenge for McAuliffe right now, though, is even though Donald Trump is very unpopular in the state of Virginia and Biden won the state by 10 points, Joe Biden is not that popular either if we go back to our previous discussion about job approval ratings. So McAuliffe wants to nationalize the race. At the same time, he doesn't have the tailwind behind him that would be a popular sitting Democratic president.

BAIER: And he is also saying publicly now that he is running in a race that Virginia does not particularly love Joe Biden. In Virginia, Jonah, what about the substance of this policy and what it means?

GOLDBERG: Yes, so I'm a little nuanced. I agree with everything Guy and Amy said. If you read Merrick Garland's letter, he does say the right to free speech needs to be protected and all of that. The real criticism to me is that local politicians and local officials get threatened all the time, and rarely does the DOJ come down on the side of one group the way it is on the side of teachers. And a lot of PEOPLE feel like they have been jerked around by teachers for 18 months because of the pandemic. So it makes nerves raw.

And at the same time, you shouldn't threaten teachers. You shouldn't threaten violence to anybody. And everybody needs to sort of ratchet down. But for me it's the selective attention that the DOJ is applying to one constituency when they wouldn't necessarily have done it for any other.

BAIER: Yes, good point.

Panel, when we come back, tomorrow's headlines.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a look at tomorrow's headlines with the panel. Jonah?

GOLDBERG: In response to congressional subpoenas for the January 6th commission, Steve Bannon, who was not working for the president on January 6th, surprises court by invoking friendly podcaster privilege to defy subpoenas.

BAIER: Amy?

WALTER: A December to remember, Democrats trying to bring Christmas to President Biden by delivering not just on his legislative agenda but ensuring that the government doesn't shut down, too.

BAIER: All right, Guy. Lightning here?

BENSON: My headline is FOX dominates in the ratings. It's an easy prediction to make and a happy one to make on this day, the 25th anniversary of FOX News Channel. Honored to be a part of the team dating back even into the intern days.

BAIER: Nice.

Here's my headline, tomorrow's headline. Dave Rankin (ph), SPECIAL REPORT's only lighting director, one of the most beloved crew members on this show, is getting married to his match in kindness and generosity, Melania (ph). Congrats to them on this, our 25-year anniversary. That's one place that makes this place great. It's basically been a family since day one. People care about people. Hopefully that translates on air.

Thanks for inviting us into your home tonight and every night for the past 25 years. That's it for this SPECIAL REPORT, fair, balanced, and still unafraid. I took five seconds of Ben Domenech's time on "FOX NEWS PRIMETIME," but I had to get that out.


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