This is a rush transcript of "Special Report with Bret Baier" on September 27, 2022. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PETER DOOCY, FOX NEWS CORRESPONDENT: Does President Biden think America's big cities are safe?

KARINE JEAN-PIERRE, WHITE HOUSE DEPUTY PRESS SECRETARY: It is not -- it is not a -- it is not a yes or no question. What matters is that is that we have the funding and we have done the work, put the policy forward. And that's what this president has done, again, without the help of Republicans.

JESSICA ANDERSON, HERITAGE ACTION FOR AMERICA: Of course, crime is surging because there's no protections in place to keep people safe and secure. Who is going to keep our community safe? Who is going to keep our kids safe? And we are looking for alternative, and that's really what it is going to come down to on the ballot is who is going to actually talk about and commit to these issues.

(END VIDEO CLIP)

BAIER: Well, crime is one of those issues that's actually ticking up as we get closer to the election and people deal with what is happening in different cities, not just big cities but across the country. If you look at our latest FOX News poll about issues that Republicans are succeeding at, GOP handling better than Democrats, border security plus 22, crime plus 13. And there you see inflation and foreign policy.

With that, let's bring in our panel, Guy Benson, political editor at Townhall.com, host of "The Guy Benson Show" on FOX News Radio, Olivia Beavers, congressional reporter for "Politico," and Matthew Continetti, fellow at the American Enterprise Institute. Matthew, it seems like crime is having an impact, but we don't fully have a sense of it yet. But the administration is not talking about it a lot, but it has an impact.

MATTHEW CONTINETTI, AMERICAN ENTERPRISE INSTITUTE: Absolutely. For 30 years crime gave the advantage to Republicans in a national political context. Of course, crime's impacts are felt will he local level, at the municipal level. But politically it has big national consequences. And so what we are seeing is crime surges, as violent crime surges, Republicans are reaping the benefits.

Now, I would also say, too, of course, it's liberal policies that are creating this crime surge, whether it's on incarceration, whether it's on policing, whether it's on addiction, on homelessness. All of this is creating a crisis in the cities. And even though there aren't many Republicans in the cities, Republican will benefit nationally.

BAIER: Olivia, there was this effort for this piece of legislation on crime up on Capitol Hill. And it seemed like an effort for politically for Democrats to solve their problems. It seemed clunky, though, as it kind of moved forward.

OLIVIA BEAVERS, "POLITICO": Right. And while we are in the midterms, and right then you see that Democrats are trying to make a push, but right now they are actually just trying to not mess up anything as they head into the midterms after they were able to pass a series of legislations that they think is helpful.

But when Democrats are talking about crime, as you pointed out in the polling. They know it's a problem. They are trying to pivot and say Republicans don't care about crime because look how they handled January 6th. Or crime is a problem because of the way that there is enough not control about access to guns. And so they are pivoting. And when you talk to some of the swing state Democrats, they are saying it's a problem. Whether or not they are going to get the legislation done in time for the midterms, it doesn't appear so.

BAIER: Guy?

GUY BENSON, POLITICAL EDITOR, TOWNHALL.COM: I found it very interesting, I believe it was yesterday, that Karine Jean-Pierre was confronted by our colleague Peter Doocy with the words of her predecessor Jen Psaki, who now has a new role, a competitor of ours. And she was making the completely correct point that crime is a problem for Democrats and a big vulnerability. And Peter asked the easy question, which is why would she say that if it weren't true? And Jean-Pierre's only response was to at least try to pretend that Peter had taken Psaki out of context or mischaracterized her words when I believe the exact quote was crime is a major vulnerability for Democrats.

You can't really get around it, and so we got some talking at the edges. But when it comes down to it, they know it's making an impact nationally and in certain specific races as well. The Senate race in Pennsylvania comes to mind, specifically.

BAIER: Matthew, do you think that things are baked in the cake now, or that there can be a lot of variabilities before November?

CONTINETTI: Structurally, Bret, this election favors Republicans when you look at the president's job approval, we you look at voter assessments of the economy, when you look at historical precedent. Usually, the first midterm does very poorly for the president's party. But we are still about six weeks out, which means that there's always room for one of those candidates to mess it up with a gaffe or some unplanned act, and you can always count on one or two of them to do exactly that.

BAIER: Exactly, shoot themself in the foot. OK, here is Senate Minority Leader Mitch McConnell talking about permitting reform and back and forth with Senator Manchin.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: It is much too difficult to build things in America and unleash American energy. Liberal regulations and red tape are a huge, huge part of the problem.

SEN. JOE MANCHIN, (D-WV): I think there will be a time he looks back if he really evaluates this will that we never had this opportunity to take a major step forward that we are all in sync tonight.

(END VIDEO CLIP)

BAIER: And just tonight, Olivia, they pulled this permitting out of this bill for funding the government. Manchin said, "A failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like Putin who wish to see America fail. For that reason, and my firmly held belief that we should never come to the brink of a government shutdown over politics, I have asked Majority Leader Schumer to remove the permitting language from the continuing resolution we will vote on this evening." Boy, it just seems like he got rolled.

BEAVERS: He was deal with two different factors playing against him. One he had Republicans like McConnell who, my colleagues reported, was whipping against. And when McConnell, Leader McConnell puts his mind to something in terms of whipping against it, he usually is pretty successful.

The other one is there were some progressive Democrats in the Senate who didn't like it for energy purposes. So you saw Bernie Sanders, Tim Kaine --

BAIER: And that was always going to happen.

BEAVERS: -- right, coming out against it. But he had a very hard time getting to 60, especially after that vote for the Inflation Reduction Act that put Republicans -- pitted them against him. So --

BAIER: Manchin's point, though, Guy, is that if you don't do it now, and you have got this deal, push it through, even if it's just Republicans, why not do it for the good of America? Republicans saying we don't like the deal that you made. We're going to wait for Senator Capito's permitting bill when we control Congress, is that the deal?

BENSON: Yes, they have more leverage here. The Democrats don't have their own ducks in a row on this. So why help them on this? And if it's an opportunity to maybe force Manchin to twist in the window a little bit because of the deal he made with Schumer and the Democrats where they said, don't worry, this is going to happen, and now it might not, Manchin would say there are maybe a few more bites at the Apple down the line before the year is over, maybe in a lame duck session.

But I remember he was interviewed by you on "FOX NEWS SUNDAY" and he was confident that the Democrats were going to keep their word on this. He said if not, there would be consequences. Here is the first swing and a miss by the Democrats. We'll see if they swing and miss a few more times. What are those consequences?

BAIER: We don't know, and I think that that's a great question for him to answer.

Lastly, Matthew, the energy question, as we see Europe dealing with what looks like an energy Armageddon coming this winter, how much do you think that factors in?

CONTINETTI: It might break the alliance against Putin. I hope not. I think Europe has done a good job with the reserves.

To Guy's point, the consequences that Manchin promised are for us with more inflation thanks to that vote for the so-called Inflation Reduction Act. Bottom line, we need to open the spigots of American energy. Biden has taken us from energy independence to energy dependence in less than two years. Things need to change.

BAIER: Panel, thank you very much.

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