。
She says she's happy.
Literal
She [topic-は] happy is [quotative-と] is-saying.
幸せである uses the literary copula である in place of plain だ — a slightly elevated, formal register typical of news, essays, or reported speech in narrative. Combined with quotative と and the ongoing-action 言っている ('is saying'), the sentence becomes a formal report: 'she is making the claim that she is happy.' The choice of である over だ here matches the slightly heightened register of indirect reporting.