'Special Report' All-Star Panel on inflating hitting 39-year high

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Ben Domenech: Inflation a bigger 'bump in the road' than Biden thinks

'Special Report' All-Star panel discusses the impact of runaway inflation on Build Back Better.

This is a rush transcript of "Special Report with Bret Baier" on December 10, 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've never had this kind of growth in 60 years. But inflation is affecting people's lives. So I think it really is -- it's a real bump in the road.

JARED BERNSTEIN, COUNCIL OF ECONOMIC ADVISERS: The building back better plan has no impact on the kind of inflation we are talking about right now. It doesn't make it better. It doesn't make it worse. What it does is it eases long-term inflationary pressure.

SEN. LINDSEY GRAHAM, (R-SC): Do not sell allied to the American people. It is a lie to say that these programs cost $1.75 trillion because it's a lie to believe they'll sunset. The combination of historic highs in inflation and the true cost of this bill should require the Democratic Party to abandon Build Back Better.

(END VIDEO CLIP)

EMANUEL: Consumer prices surged at the fastest pace in nearly four decades in November. Let's take a look at the numbers year-over-year. Overall, up 6.8 percent, energy up 33.3 percent, gasoline up to 58.1 percent, and beef up nearly 21 percent.

With that, let's bring in our panel, Ben Domenech, publisher of "The Federalist," Morgan Ortagus, former State Department spokesperson, and Juan Williams is a FOX News analyst. Panelist, welcome.

MORGAN ORTAGUS, FORMER STATE DEPARTMENT SPOKESPERSON: Thank you.

EMANUEL: Ben, lead us off on the issue of inflation.

BEN DOMENECH, PUBLISHER, "THE FEDERALIST": I think you have to start with an acknowledgment on the part of President Biden that this is a bump in the road. I still don't think that he understands how big of a bump it really is. The fact is that, Mike Emanuel, I turn 40 in January, congrats to me, and it's the largest increase of inflation in my lifetime. And I think that that is something that says a significant question should be raised about the way the Biden administration has approached trying to correct what they view as the economic woes in our situation.

And when it comes to the Build Back Better plan, the news that we got today from CBO really does vindicate every concern that had been expressed by Senator Manchin and others about the ultimate costs of this plan, what their expectations ought to be in terms of what should add to our debt. And it really can't satisfy any of the concerns among members who are deeply worried, at least behind closed doors, some expressing it publicly that the administration's approach to economic policy has only made these problems worse.

EMANUEL: You made reference to Build Back Better and Senator Joe Manchin. Here he is.

(BEGIN VIDEO CLIP)

SEN. JOE MANCHIN, (D-WV): We've got three major changes in this Build Back Better that we should all be very careful what we do. There's a major change in our tax structure, major change. There's a major change in the social services that we provide. And there's a major change in our whole approach to climate and the energy sector. That's major. We get any one of those wrong and we are in trouble.

(END VIDEO CLIP)

EMANUEL: Morgan, what does that say to you?

MORGAN ORTAGUS, FORMER STATE DEPARTMENT SPOKESPERSON: I think similar to the infrastructure bill, the problem the Democrats have had is the fighting has been within their own party on these bills. You can see it right here from Manchin. And so they drug the infrastructure negotiations out for months so that by the time they actually passed something it was met with a whimper.

And I think similar to Build Back Better, it's very hard even if they are able to pass this, it's hard for this to get through to the American people. You have got a CNBC poll saying that 56 percent of Americans disapprove of Biden's handling of the economy. And for voters who say that the economy is their number one issue, Republicans have over 20 points, almost 25-point advantage. That is not how you want to go into the midterms. And for whatever reason, whatever bills they are working on, the inflation and the other noise in the economy is just canceling out any wind that they get.

EMANUEL: Juan, hearing Senator Manchin's tone, does that suggest to you let's wait until next year and see where we are?

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: I think that what it suggests is that Joe Manchin is in a point of negotiation with Chuck Schumer and Joe Biden's White House, and he is holding a very strong hand.

Let's be clear here, inflation is real. I don't think -- transitory is now headed for the dustbins of history. But the reality is, and I think the White House will make this point, and they will make it strongly to Joe Manchin, that right now the job market is strong. We've seen very good numbers in terms of unemployment. We've seen good numbers in terms of wage gains. And we've seen good numbers in terms of the gross domestic product. So the economy continues to grow strong.

But the political impact is very real, Mike. And I think that's where you come to people like Joe Manchin and Build Back Better. Now, the economists still say, as we just heard on the program, that the Build Back Better program is not inflationary, and in fact it will help to get more people back into the labor force. We have a dearth of workers right now, so we can use that. And I think that is the message to Joe Manchin.

So it's not as if it's going to kill Build Back Better, but I think it gives Manchin a stronger hand to make more demands and shape the bill.

EMANUEL: His vote is critical. They need every Democratic vote to pass it in the United States Senate, and he is clearly managing a hard bargain.

Let's shift gears a bit and go on to this Texas abortion ruling in the United States Supreme Court. Here's some of the back-and-forth on that.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: The president is very concerned by the Supreme Court's decision allowing SB-8 to remain in effect. The ruling this morning is a reminder of how much these rights are at risk.

KEN PAXTON, (R) TEXAS ATTORNEY GENERAL: This case so far is really not about the substance of whether Roe v. Wade is going to be overturned. It's about whether the federal government and this other plaintiff have standing to sue me, the attorney general, who has no authority right now to actually implement any of this.

(END VIDEO CLIP)

EMANUEL: Ben, what is your takeaway from today's ruling?

DOMENECH: There are number of takeaways from today's ruling, and keep in mind, this is kind of a technical, legal ruling, as opposed to something about the merits of the law in question. They will allow continued challenges to emerge from it, but these attempts, including by the Biden administration to effectively short-circuit what Texas did ultimately failed.

Here's the thing to keep in mind -- no matter what happens in the outcome from the Mississippi case, which everyone should be focused on, within the next several months we are going to see abortion politics in this country change fundamentally. Either the court will rule in favor of Mississippi and ultimately send this issue back to the states where it will become a hot-button issue in many of the states across the country, if not all of them, or it will rule in a different direction, raising questions about the entire conservative legal project that has led us to this point of even having the question of abortion being before the court, potentially rolling it back to the states and allowing people to decide.

We are headed down a situation here which I think very few politicians currently understand and many are waking up to, that abortion politics in America is never going to be the same after next year. It is going to change fundamentally in one way or another.

EMANUEL: Final ruling expected of the end of the session right in the heart of the midterm campaign. Morgan, your thoughts?

ORTAGUS: So about one percent of voters right now are saying in the polls that this is an issue that they care the most about compared to other issues. And I think Ben hit the nail on the head. I think we are going to see that one percent tick up extremely on both sides of the aisle next summer.

EMANUEL: OK, Juan, let's get your thoughts before we move on.

WILLIAMS: I think the key point I think for people is that the law is allowed to remain in place in Texas, but the suits, as Ben were saying, are now allowed to proceed. So that's a partial victory, if you will, for the majority of Americans who think that abortion rights should remain in place, Roe v. Wade. But the reality is that everybody should be paying attention to that Mississippi case.

EMANUEL: It's Friday. Time for Winners and Losers. Ben, lead us off.

DOMENECH: My winter for the week is Joe Manchin who, as I said, it was vindicated by the CBO's ruling when it came to Build Back Better and the questions he had raised.

And my loser of the week is anyone who was naive enough within the media or the celebrity class to go out and defend Jussie Smollett whose case obviously resulted in the kind of conclusion that I think we can all say, this is actually what happened. Anyone who was out there defending him to the hilt has to be questioning things today.

EMANUEL: Morgan, you're up.

ORTAGUS: My winner of the week is Vladimir Putin. He is able to amass troops on the Ukrainian border. And he gets reprimanded but he suffers no real repercussions, no sanctions, and he gets face time with Biden.

My loser of the week is China. U.S., U.K., and others are doing a diplomatic boycott.

EMANUEL: All right, Juan, bring us home.

WILLIAMS: I think it's obvious Bob Dole is the big winner, his legacy, President Biden praising him as a great patriot.

This is a fun Friday, Mike, so she's no loser, but I think Taylor Swift suffered a loss of this week. She's going to have to go to court and testify in a copyright infringement case for her famous song "Shake It Off."

EMANUEL: My winner, Rutgers Scarlet Knights beating Number one Purdue last night. Panel, thanks.

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