This is a rush transcript of "Special Report With Brit Hume" from May 21, 2007.

BRIT HUME, FOX NEWS ANCHOR: Next on SPECIAL REPORT, bloody fighting breaks out in Northern Lebanon as the Lebanese army takes on a terrorist group linked to al Qaeda, operating there out of a refugee camp. We'll show you the fighting and find out who these guys are anyway.

We'll also tell you what's next for that immigration compromise that now faces a storm of resistance. Can it pass?

Plus, something has happened to the presidential race. We'll tell you what it is and who is suddenly gaining ground. All that, plus our famous panel, right here, right now.

Welcome to Washington. I'm Brit Hume.

Lebanese troops again today pounded a Palestinian refugee camp in northern Lebanon. It was the second day of fighting in the worst internal violence since Lebanon's civil war ended in 1990. The Lebanese government says a militant groups, suspected of having links with al Qaeda, is holed up in that camp, which is virtually a city, near the port of Tripoli. Correspondent Greg Palkot is standing by in Beirut. Greg?

GREG PALKOT, FOX NEWS CORRESPONDENT: He Brit. That's right. There's been a second day of very tough fighting between the Lebanese military and this al Qaeda allied militant group, calling itself Fatah al-Islam. That fighting is happening to the north of where I am standing. But that group has threatened to spread violence throughout this city and then throughout the country and that is exactly what it is doing. That is what police are fearing. No responsibility has been claimed tonight, but the violence is spreading.

As we've rolled into Beirut, we heard reports of a bomb blast in the Muslim area of the city. A bomb was underneath a car, destroyed a variety of cars there, shattered windows. And the reports we are getting from the local media, one dead, 10 injured. There was another blast just one night ago as well here in the city.

But the main fighting, as you noted, Brit, around a Palestinian refugee camp, about 30,000 in size, to the northeast of the port city of Tripoli. Holed up inside that camp, these militant group members. Outside, through a long standing agreement between the Lebanese government and Arab groups, the Lebanese military. But they have got tanks. They have got mortars. They've got guns. They have been pounding positions inside that camp. And the militants have been returning fire.

The latest numbers tonight that we are getting from the fighting just today, three Lebanese soldiers killed, nine civilians killed, many injuries on both of those sides. No word on the militant casualties. This after yesterday, where we saw dozens on all sides killed and injured. Now, scenes of casualties like we're seeing in the hospitals there, means that the public here is having very, very little support for the group, but the group seems to be determined, determined to fight to the end, either to spread its al Qaeda message or just to destabilize things here, maybe with a little nudging from some friends, like neighbor Syria.

Now Brit, we're getting conflicting words on the cease fire situation here. There are some people, Palestinian groups, maybe even the Fatah group, pushing for that cease fire. The Lebanese military, however, is saying no, according to some reports. They are not ready to sign up. They might be going in to finish off this group, which has been threatening and also creating problems. Back to you Brit.

HUME: All right Greg, thank you. Returning to Washington aboard Air Force One this afternoon, President Bush said, quote, extremists that are trying to topple that young democracy, meaning Lebanon, quote need to be reigned in. So what exactly is this group Fatah al-Islam and what is it doing in Lebanon. National security correspondent Jennifer Griffin, who covered the region for years, has a closer look.

(BEGIN VIDEOTAPE)

JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT (voice-
over):
The group at the center of the fighting calls itself Fatah al-
Islam. It broke with Yasser Arafat's secular Fatah movement in the early 1980's and is now made up of hardcore al Qaeda sympathizers. It burst on the scene three months ago with a series of bus bombings in Lebanon's Christian neighborhoods.

Its leader, Shakr al Absi (ph), gave this interview in March. Palestinian by birth, 51 years old, a one time close associate of the late Abu Musab al Zarqawi in Iraq. Both were tried and convicted in absentia in Jordan for the 2002 killing of USAID administrator Lawrence Foley.

Al Absi claimed in his first interview not to be with al Qaeda, but his close relationship with Zarqawi suggests he is, as do the foreign fighters from Bangladesh and Yemen found killed in the last 24 hours, fighting alongside him. His number four, Saddam al Hash Deeb (ph), killed Sunday, was wanted by the German government for trying to blow up a train last summer.

Fatah al-Islam is using the Palestinian fight against Israel as a recruiting tool, choosing a teeming Palestinian refugee camp north of Tripoli in Lebanon to set up its base six months ago, after its leader, al Absi, was released from a Syrian prison. He was held for three years for plotting attacks against Damascus. Lebanese officials have accused Syria of exporting him to sow trouble in Lebanon.

The refugee camp that's now his base is home to 40,000 Palestinian refugees, who fled wars with Israel since 1948, and were never integrated into Lebanese society, never allowed to have jobs. Al Absi has about 150 fighters.

The clashes began when the Lebanese army tried to arrest Fatah al-
Islam members who had robbed a bank. They then encircled and laid siege to the camp. Until now, the Lebanese army had a hands-off policy towards all 12 Palestinian refugee camps, following a deal with our Arafat's PLO in 1969. Now the Lebanese army is, for the first time, asserting itself.

SCOTT MCCORMACK, STATE DEPARTMENT SPOKESMAN: The Lebanese armed forces are doing an admirable job in working on behalf of the Lebanese government and the Lebanese people to try to bring law and order back to this area of Lebanon.

GRIFFIN: U.S. and Lebanese officials are concerned these heavily armed Palestinian camps inside Lebanon, home to hundreds of thousands of refugees, are becoming ripe recruiting grounds for al Qaeda.

(END VIDEOTAPE)

GRIFFIN: Lebanese officials are not so sure that Fatah al-Islam is purely pursuing an al Qaeda agenda. Lebanon's national police commander today accused Syria today of using the group to destabilize Lebanon, something it has done before. And, of course, in the back of most Lebanese citizens minds is whether this chaos will be a pretense down the road for Syria to send its army back into Lebanon. Brit?

HUME: Jennifer, thank you. Israeli air strikes, meanwhile, continue to hit targets in the Gaza Strip today, after Palestinian rockets fell again in southern Israel. An Israeli woman was killed by one of those rockets, the first Israeli to die in a Palestinian rocket attack since November. Later, Israeli planes struck a car in the Jebaliya refugee camp, killing four Palestinian militants.

At sensitive moment, when Iraqi leaders are under pressure to reach an inclusive government, two key officials are out of the country for medical treatment. President Jalal Talabani, a Sunni Kurd, has arrived in Rochester, Minnesota for a three day stay at the Mayo Clinic. The 73-year-
old Talabani simply needs a medical check up and must lose some weight. And the leader of the largest Shiite party in Iraq, Abdul Aziz al Hakim, is in Iran being treated for lung cancer.

Iran, meanwhile, has charged a 67 year old Iranian woman with trying to overthrow the country's ruling Islamic government. Haleh Esfandiari is the director of Middle East programs at the Woodrow Wilson Center for Scholars here in Washington. She has been held in a Tehran prison since earlier this month. She came to Iran in December to visit her 93-year-old mother. Now Iranian state television says she and the Wilson center were conspiring to set up a network aimed at toppling the government.

Later in our program, we will tell you which Republican candidate is coming up from behind. But in the meantime, the Senate debate over immigration gets under way amid it's gloomy predictions for the outcome of that bill. Stay tuned.

(COMMERCIAL BREAK)

HUME: By a margin of 69 to 23, the Senate has voted to begin debating an immigration reform bill that almost no one seems to think will survive in its current form. But at the same time, many lawmakers say it is the first serious effort towards a bill that can pass both chambers, as well as get the president's signature. Correspondent Major Garrett reports on day one of a debate that promises to be lengthy.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, FOX NEWS CONGRESSIONAL CORRESPONDENT (voice-over): The Senate moved to begin debate on the biggest change in immigration law in more than two decades, a compromise that faces more political peril by the hour.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I was not heavily involved in the negotiations. Like some of my colleagues, I have reservations about the agreement that was reached.

GARRETT: The Senate Democratic leader criticized three parts of the compromise, a 400,000 strong yearly guest worker program, a point system awarding residency to higher skilled workers, and forcing heads of households to return home to apply for a green card.

REID: The problems I have outlined will be addressed here in the Senate.

GARRETT: There are many other Democratic doubters or outright critics, among them the number two Senate Democrat, Dick Durbin, California's Boxer, North Dakota's Dorgan, West Virginia's Byrd and Nebraska's Nelson. All these Democrats turned against the handiwork of Massachusetts liberal Edward Kennedy, who strongly defended the increasingly fragile compromise.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Our plan is strong, realistic, and fair. It is a common-sense immigration policy for our times.

GARRETT: On the Republican side, Leader Mitch McConnell and his top deputy Trent Lott tilt yes, but both fear a bottom up conservative revolt, fuel for which may have been provided today by Robert Rector of the Heritage Foundation.

ROBERT RECTOR, HERITAGE FOUNDATION: I have worked in Washington for 25 years. This is the most expensive bill to the U.S. taxpayer I have ever seen.

GARRETT: Rector says data indicates half of illegal immigrants lack a high-school diploma and are statistically more likely to seek welfare benefits once they receive legal status. Rector says these workers will also consume more in Medicare and Social Security benefits than they will pay in payroll taxes.

RECTOR: The total cost of that to the taxpayers will be about 2.3 trillion dollars, that is trillion with a T. And when you think about this, how could it be otherwise? This is a group that is 50 to 60 percent high school dropouts. They will never pays substantial taxes in the U.S. system.

GARRETT: Conservative critics brand this the cost of amnesty. Under the compromise permanent residency would cost a 5,000 dollar fine over eight years. Not only do supporters reject the label amnesty, they plead for a credible alternative.

SEN. JON KYL (R), ARIZONA: Those who say amnesty is simply allowing these people to stay here, I think, have an obligation to suggest what they would do about it, how their proposal would not be amnesty. I do not think any reasonable person has suggested we could round up and deport 12 to 15 million illegal immigrants in the U.S. today.

(END VIDEOTAPE)

GARRETT: Just as the nation, the Senate was all geared up for a raucous immigration debate, the Senate leaders have just announced a timeout. They will hold this bill until after the Memorial Day recess to give it the Senate's full attention for a full two weeks. Brit?

HUME: OK Major, thank you. If an illegal immigrant has been in the U.S. for a long time, performing a useful or even essential work, what kind of documents will that person need in order to stay and what is the potential for fraud? Correspondent William La Jeunesse has a look at that.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: My daughter is 18 years old, and my boy is six years old, and my other boy is five years old.

WILLIAM LA JEUNESSE, FOX NEWS CORRESPONDENT (voice-over): Twenty years ago, Antonio entered the U.S. illegally to pick fruit. He married, had children, and got a higher paying construction job, the kind of person many lawmakers and pro-immigration activists say deserves to be legalized. Proposed immigration law says illegal who worked in the U.S. in 2006 or earlier are eligible to stay. For proof, you need evidence of employment or a sworn affidavit from non-relatives who have direct knowledge of the aliens work.

Government officials say this will strengthen enforcement of immigration laws, but critics call it an open invitation to anyone who can get past the border control.

RICK OLTMAN, IMMIGRATION BILL OPPONENT: When we hear Congress come up with these solutions, like temporary worker, you know, the amnesty that they're proposing, we see this as a horrible solution to a bad problem. That is what we hear. What the Third World hears is, if you can get to America, they won't get rid of you.

LA JEUNESSE: In 1986, the U.S. anticipated legalizing 1.3 million people. It got 3.5 million, more than one-third of whom, according to the GAO, used fake documents to qualify. Today, we are talking about legalizing 12 to 20 million.

(on camera): This is McCarthur Park in Los Angeles. On the street behind me, you can buy any documents you need to work in this country legally, a fake Social Security card, a birth certificate, union card or driver's license. And many feel the new ID requirements in this legislation will invite massive fraud. Many immigrants do not disagree.

UNIDENTIFIED MALE: There are fake IDs, you know that. There are fake socials. You guys know that. There's fake permanent residence cards. You guys know that. We're here for a job. We're going to get a job either way.

UNIDENTIFIED MALE: The government has to make sure that all the documents are legal and correct, so they don't give documentation to people who don't really deserve it.

LA JEUNESSE: Until the bill's language is finalized, agencies responsible for verifying paperwork can't comment on how it will be enforced. But lawmakers who have proposed tightening I.D. procedures in the past say it is easier to do today.

REP. DAN LUNGREN (R), CALIFORNIA: I would say that the technology available to us today is far advanced what it was 21 years ago. And we can, in fact, create a tamper-proof social security card or employment verification card for those who are not citizens.

LA JEUNESSE: But just two hours of background checking on 12 million immigrants requires 24 million federal man hours. One former INS investigator worries that won't be enough to weed out criminals or other potential security threats.

In Los Angeles, William La Jeunesse, Fox News.

(END VIDEOTAPE)

HUME: A federal judge in Texas has blocked enforcement of a new municipal law in the Dallas suburb of Farmers Branch. The ordinance would have required landlords to ascertain if potential tenants are U.S. citizens or residents. It was scheduled to take effect tomorrow, but opponents say private citizens should not be required to enforce federal law.

Still ahead on SPECIAL REPORT, New York City's mayor sues gun stores in Virginia. We will tell you what that is all about. But first, President Bush calls Congressional efforts to push out his attorney general, quote, political theater. That story too.

(COMMERCIAL BREAK)

HUME: Congressional Democrats are trying to keep up the pressure to force the U.S. Attorney General Alberto Gonzales out of his job. They're proposing a vote of no- confidence, but in reality such a vote would have no legal effect. And today President Bush said lawmakers should have better things to do. Chief Washington correspondent Jim Angle reports.

(BEGIN VIDEOTAPE)

JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT (voice-over): With Democrats in both houses of Congress threatening a no confidence vote on the attorney general, President Bush made it clear it will have no effect on him.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I stand by Al Gonzales and I would hope that people would be more sober in how they address these important issues, and they ought to get the job done of passing legislation, as opposed to figuring out how to be actors on the political theater stage.

ANGLE: A no confidence vote would be non-binding, so it would have no legal impact on Gonzales' tenure, and the president argues there is no reason for such a vote in any case.

BUSH: There has been enormous amount of attention on him. There is no wrong-doing on his part. He has testified in front of Congress. I, frankly, view what is taking place in Washington today as pure political theater.

ANGLE: In one hearing after another, Gonzales has been unable to explain how the decision was reached to ask some U.S. attorneys to resign, but no one has shown that he acted improperly either.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I don't believe there is any evidence of illegal behavior on the part of the attorney general. If the president wants to keep him in his job, I will work with them. The Congress is at 29 percent. The Congress is at 29 percent because we are playing all of these gotcha games.

SEN. CHARLES SCHUMER (D), NEW YORK: The bottom line is the only person who thinks that the attorney general should remain attorney general is the president.

ANGLE: Schumer, one of the sponsors of the no-confidence vote in the Senate, says the president's power to keep Gonzales is besides the point.

SCHUMER: He has the constitutional power to do it, but we have the constitutional power to try to pressure the president to understand that Gonzales is no good.

ANGLE: And one key Republican notes that six members of the party have called for Gonzales to resign and predicted the attorney general may resign before such a vote.

SEN. ARLEN SPECTER (R), PENNSYLVANIA: Because of the likelihood of a very substantial vote of no-confidence and I think that if he sees that coming that he would prefer to avoid that kind of an historical black mark.

(END VIDEOTAPE)

ANGLE: In spite of all the talk of a no-confidence vote, it is not clear when one could be held. Both houses have plenty of issues on their plates. And then, of course, there is the battle over how to fund the wars in Iraq and Afghanistan before Memorial Day, which is why Speaker Pelosi this weekend skirted a question about the vote, saying she has a fuller agenda to worry about. Brit?

HUME: Jim, thank you. If you are a fan of horse racing you saw Curlin come from behind to win after stumbling out of the gate at the Preakness on Saturday, you may appreciate what's happening to Republican presidential candidate Mitt Romney. In the meantime, New Mexico's Democratic governor announced today that, as expected, he is getting into the presidential race. Chief political correspondent Carl Cameron has both stories.

(BEGIN VIDEOTAPE)

CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT: After slowly but steadily rising in the polls through four and a half months in the exploration stage of a White House bid, New Mexico Democratic Governor Bill Richardson, who would be the nation's first Latino president, made it official.

GOV. BILL RICHARDSON (D), NEW MEXICO: I am running for president because this nation needs a leader with a proven track record.

CAMERON: He brings up his record a lot, boasting as does an unparalleled resume among Democrats. He's a governor from a western state. He's been a congressman, a cabinet secretary, and a U.N. diplomat. And yet he remains a long shot, though he optimistically casts himself as an accomplished work horse against largely inexperienced show horses.

RICHARDSON: There are a lot of candidates out there with a lot of good ideas. Some are rock stars. I am not. But I have a proven record.

CAMERON: After starting the year as a virtual unknown outside New Mexico, Richardson became the first Democrat to run ads in Iowa, the lead off caucus state, and just could not wait to announce that he has got some momentum going now.

RICHARDSON: Last night, we achieved double digits in both Iowa and New Hampshire in polls. So we're moving.

CAMERON: Getting out of single digits in the "Des Moines Register" poll does not lift Richardson into the top tier yet, but he is getting attention and getting closer.

Among Republicans, Mitt Romney's ad blitz has clearly helped. He has been on the air steadily for months and appears to have a remarkable surge under way in Iowa, one even rival campaigns privately admit caught them off-guard. The latest Register poll shows Romney at 30 percent in Iowa, fully a dozen points ahead of both John McCain and Rudy Giuliani. They are locked in a statistical dead heat for second in the teens, while the rest of the GOP field is far back in single digits.

Equally impressive about Romney, he has the highest favorability rating in the entire GOP field at 74 percent, and his unfavorable at 13 percent, are half those of Giuliani and McCain and the lowest overall.

(on camera): Critics say Romney's Mormon faith and pro-choice history could be a problem with Christian conservatives, but in the last week Dr. James Dobson, one of the most influential evangelical conservatives nationwide, indicated that he may be able to support Romney, but not Giuliani or McCain.

In Washington, Carl Cameron, Fox News.

(END VIDEOTAPE)

HUME: The supreme court has declined to intervene in cases of three men who were convicted by a federal judge in Virginia of charges in connection with what they claim would be holy war against the United States. The three American Muslims were part of what prosecutors termed a Jihad network that wanted to join the Taliban in Afghanistan. Two of them men say they were never told they had a right to an impartial jury, and two claim their sentences were too harsh, 55 years in one case, and life plus 420 months in another.

The website MySpace.com says it will share data with law-enforcement about sex offenders who use its site. MySpace is a social networking site popular with young people and is owned by the parent company of this network. It has agreed to compile with subpoenas from at least 14 states. It says it had always planned to share information on sex offenders it identified and has already removed about 7,000 profiles out of a total of around 180 million.

We have to take a break to hear from sponsors and update other headlines. When we come back, did former President Jimmy Carter help himself or dig himself in deeper over his criticism of the Bush administration? A look into that next on the Grape Vine. Stay tuned.

(COMMERCIAL BREAK)

Click here to read the "Political Grapevine."

A sting operation in the state of Virginia, plus a few other states, has raised some hackles in the old dominion because it was initiated by a city mayor in another state. The mayor was Michael Bloomberg of New York City and the sting had to do with the sales of guns that he says end up being used in crimes in his city. Correspondent Molly Henneberg has the story.

(BEGIN VIDEOTAPE)

MOLLY HENNEBERG, FOX NEWS CORRESPONDENT (voice-over): Bob Moates has owned the store in Virginia for 47 years, now he's being sued for illegal gun sales by the mayor of New York City, Michael Bloomberg, which Moates said came as a surprise.
BOB MOATES, BOB'S SPORT SHOP OWNER: We didn't know who Mayor Bloomberg was.

HENNEBERG: He does now. Last year Bloomberg OKed undercover operations targeting gun shops in six states: Virginia, Georgia, South Carolina, Ohio, Pennsylvania, and New York, trying to catch dealers permitting what are called straw sales. That is when a person, often a woman, who can legally buy a gun fills out the federal forms, maybe even makes the purchase for someone, often a male with a criminal record, who cannot legally buy a gun.
Mayor Bloomberg said undercover private investigators from Virginia were able to do just that at Moates' store. But Moates disagrees. He says the female investigator who filled up the federal paperwork to buy a gun like this one was asked if she was the actual buyer of the gun, the form even more against buying a gun for someone else.
MOATES: You have to answer yes or no and she answered yes, so if she wasn't the actual buyer she was in violation of the law. So, she is the criminal, not us.
HENNEBERG: New York City officials say they had to take aggressive measures since 90 percent of guns used to commit crimes in the city, come from out of state, with Virginia being the top source. So, they traced some guns back to the point of sale and then sent undercover teams into the stores.
JOHN FEINBLATT, NYC CRIMINAL JUSTICE COORD: Our data pointed us and the right direction, 82 percent of them sold. Luckily, a couple didn't and they recognized that they were straw sales and through our investigators out of their businesses.
HENNEBERG: But the state of Virginia is not pleased, saying it can't allow undercover "vigilante operations" trying to enforce laws in Virginia. In fact, the state's attorney general recently sent a letter to Mayor Bloomberg informing him of a new law takes effect on July 1. The letter says that ".such non-law enforcement activities related to undercover illegal firearm purchase will be punishable as a felony in Virginia."
ROBERT MCDONNELL, VA ATTORNEY GENERAL: To have a mayor launching an undercover private sting operation for the purpose of setting up civil lawsuits, and doing it by making misrepresentations by legitimate Virginia gun dealers about the true nature of the transaction, is disturbing.
HENNEBERG (on camera): Bob Moates says he's fighting the lawsuit against him because he says he followed a law to the letter in his store. About half of his legal fees have been paid for by donations, he's paid the other half. By the way, Moates says business in his store has doubled since supporters found out Mayor Bloomberg was suing him.
Molly Henneberg, FOX NEWS.
(END VIDEOTAPE)

HUME: Next on SPECIAL REPORT, illegal immigrants wait while the Senate debates at their future in this country. We'll get thoughts from the FOX all-stars on that bill. Stay tuned.
(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HARRY REID (D-NV), SENATE MAJORITY LEADER: Like some of my colleagues, I have reservations about the agreement that was reached. The bill impacts families in a number of ways I believe are unwise.
SEN JIM BUNNING (R), KENTUCKY: This bill will grant amnesty to millions of illegal immigrants all over this country.
SEN DAVID VITTER (R), LOUISIANA: If the American people fully understood what was buried in this bill. There would be a massive outcry against it.
(END VIDEO CLIP)

HUME: Well, I think some people would say there was — already has been — have guessed it might add up to a massive outcry. That's sort of a bipartisan sample about the thinking of this compromise unveiled between — among Senator Kennedy, some Republicans, some other Democrats, and the White House, last week on immigration reform.
Some thoughts it now from Fred Barnes executive editor of the Weekly Standard; Mara Liasson national political correspondent of National Public Radio; and her colleague, Juan Williams more, senior correspondent of National Public Radio. All are FOX NEWS contributors.
So, what is the likely — at the rate this is going — Fred, you follow this issue carefully, does the size of the reaction to it — negative reaction surprise you?

FRED BARNES, WEEKLY STANDARD: It did surprise me, actually. I didn't think conservatives, you know, from national review to people who just don't like immigrants would be as strong as it is. On the other hand, there's very broad base support for this measure in the Senate, and I think when some changes are made to, there'll be even more — there will obviously have to be some made, there are complains about the worker program, there are complaints about that there weren't benchmarks...

HUME: You're talking about that so-called "Z visa" part of it.

BARNES: Well, there are complaints about the "Z visa."

HUME: "Z visa," by the way, would be available to people who are here illegally now and who could sort of, overnight, become legal.

BARNES: No, no. No, no. They can't over the — then they will get a probationary period leading in about a year-and-a-half.
HUME: But they'd be legal in that probationary period?

BARNES: They'd be legal during that period, but there would be — they would have to step forward, they'd have a preliminary background check, I believe, they'd have — and they would get a card which would allow them to continue working. And then the "Z visa" comes a year later, then they get a full background check, they have to pay a find, they have to do all kinds of things. It's not what I would call amnesty, but it is...

HUME: But that is a provision that has given rise to the calls and cries of amenity.

MARA LIASSON, NATIONAL PUBLIC RADIO: Well, that is what people point to when they say amnesty. Now the question is, is there anything short of deportation that would satisfy people who considered this particular set of obstacles, amnesty? And I don't — I think for many of them, there isn't anything.
I do think one of the things that could be fixed which might bring in some more support is if it allowed for an easier process in the guest worker program, more illegal immigration, for more immigration for employers, because employers are key to this and they were part of the original coalition and a lot of them are nervous about what's in here now.

JUAN WILLIAMS, NATIONAL PUBLIC RADIO: Well I think, you know, the question is, how can the center hold? And from my — what I saw today it looks like there's a lot of posturing going on. I understand it, politically, you got to play to the right, you got to play to the left. I think that's what we saw when you just saw that bite from Harry Reid.
Harry Reid's a guy who says listen, they got 10 to 12 million so-
called illegal immigrants living in this country and asks a basic question: what are you going to do with them? As Mara says, you going to kick them out? are you personally going to go take them out? And the idea is, of course, that you have some reasonable compromise, here, and the thought was to push it quickly. Now they're going to wait until after Memorial Day.

HUME: To really debate it.

WILLIAMS: To debate it. But the problem is, I think, you know, you can hear things like this Robert Rector suggestion, oh it's going to raise taxes because these people are not — these people are picking apples. These people are in states with lots of farms and the like and tending to peoples' lawns. Exactly how is that going to drive down the American economy? The American economy relies on so much of this low-skill labor. In fact, I think the criticism that comes from Harry Reid and others, which is to say are we creating a subclass of workers by saying you can only stay two years, no path to citizenship, whatsoever.

HUME: What do you think is the likely fate of this bill?

WILLIAMS: I happen to think, and I remain very optimistic about this, I think the center will hold because there are enough big players. Dick Durbin, you know, who's No. 2 in the Senate on the Democratic side, says he's opposed, he's got these concerns, but ultimately, do you really believe Dick Durbin's not going to side with Ted Kennedy? And I believe the same is true of Harry Reid.

BARNES: Yeah, you're right about Kennedy, you're right about Harry Reid; you're right about many of the Democrats because if Teddy Kennedy's there, they're going to be here. It means the Hispanic groups will be there among others, and other ethnic groups for whom Senator Kennedy has been the greatest ally in the Senate for a generation or more, so they'll be there. You have a broad base of support. You know, it goes to people like Johnny Isakson and Saxby Chambliss, conservative senators from Georgia to the most important Republican in this was Jon Kyl of Arizona. These were people who opposed the McCain-Kennedy bill last year and I think based on what Republicans complained about last year and the year before.

HUME: These critics, David Vitter and others, they're going to need something to allow them to say OK, the bill has been sweetened to my satisfaction. What is that likely to be?

BARNES: Well, Brit, we've only heard what they say, no matter what the bill, unless we go and take 12 million people and get the moving vans to get the troop carriers and take them back to Mexico or to Ireland or wherever they were from, unless we do that, any bill that doesn't do that, they will call an amnesty bill, no matter how big the fine...
HUME: So those people — so what you're saying is it's going to be passed without the votes of people like that.
BARNES: Exactly.

LIASSON: I think that's right. I think the big question is what happens in the House where Democratic leadership is requiring 65 or 70 Republican votes and that is where you always — don't forget the Senate passed something, they passed something more liberal than this when there wasn't a Democratic Congress. So, I don't think the Senate is the problem. I think that what's going to happen in the House where you have a lot of Republicans that are even more against this then in the Senate — and also you have a lot of nervous Democrats. Democrats have to decide is this a good thing for them to do right now?

WILLIAMS: And is it good for, you know, even the hardliners on the Republican side, you look back at the '06 election, people who took the hard-line against immigration did not fare well. One last thought on this is, I think business has not been hurt from it. I'm just curious as to when business kicks in and says, hey we have a stake here, if we value these workers, we're willing to take the precautions and we're on the side of this. And I think their presence in terms of support for Republican candidates.
HUME: In the end, pass or not pass?

WILLIAMS: Well, it's you know, who has a crystal ball? I'd say past.

LIASSON: Pass the Senate.

BARNES: Yeah.

HUME: Maybe House?

LIASSON: Unclear.

BARNES: Remember what happened last year that the Republicans who controlled the House would not even take their bill into a conference with the Senate. This time Democrats control the House. There will be a bill passed there, it will have momentum coming out of the Senate and I think we have a pretty good chance of getting a final act of legislation.

HUME: When we come back, former President Jimmy Carter, today, tried to soften the impact of his criticism of the Bush administration. We'll have more on what he said and what he said he said, that's next.

(COMMERCIAL BREAK)

JIMMY CARTER, FMR U.S. PRESIDENT: I think as far as the adverse impact on our nation around the world, this administration has been the worst in history.
What I was actually doing was responding to a question about foreign policy between Richard Nixon and this administration. And I think this administration's foreign policy compared to Richard Nixon's was much worse.
(END VIDEO CLIP)

HUME: Huh? So what he says was the worst in history, he didn't really mean he meant it was only worse than Nixon's. Well, OK, but this is not the first time, of course, that former President Jimmy Carter has stirred controversy by strong comments made.
Fred Barnes, you covered the Carter White House, as I recall.

BARNES: I did.

HUME: What about this? And in the end, does it matter that he says things like this?

BARNES: Well, in the end it doesn't matter, but you know, he's become a bitter, unhappy ex-president. And you know, Ronald Reagan's diaries have just come out. Reagan found that he couldn't warm up at all to Jimmy Carter. He'd beaten Jimmy Carter in 1980, of course, by 10 percentage points and just did not find much to like their. He found that there were a couple of awards to, posthumous to — one to maybe John F. Kennedy, maybe it was two, and another to Hubert Humphrey, that had actually been enacted or issued during the Carter administration; Carter didn't award them to the families and Reagan had to do it. I think he's a bitter guy.

HUME: Why? He's regarded by many — many, not all, but he's regarded by many as having had this very successful post-presidency.

BARNES: Yeah, but that's the post-presidency. He's a failed president. Here's a guy who did not understand the Soviet threat, was shocked when the Russians invaded Afghanistan, the economy was in stagflation and worse during his administration. Things that Reagan dealt with easily, with tax cuts and deregulation and energy decontrolled, when he took over. I think he's just a bitter guy.
WILLIAMS: I do not think he's a bitter guy, but I think he's no historian, I mean makes — I don't know how he gets to make this judgment, I guess he is a former president, and in that level, that's where you say he just does not like George W. Bush. He thinks that — he's a guy who loved treaties, you know, SALT-2 and the like, and here's a guy, he says, this president goes out and violates all the environmental treaties, he's alienated much of the — much of Europe and the Western world...

HUME: You're saying that or he's saying that?

WILLIAMS: That's what President Carter said. That's what he said in this interview. And I might say it's an interview that was supposed to be about his book on Sundays and plans or something, about religion. How this got going, I don't know, but I think he stepped it.

LIASSON: Well, he clearly tried to kind of revise his remarks, today. And you know, it's interesting Ex-presidents have a lot of choices on how they conduct themselves and Jimmy Carter has been very outspoken about a lot of things and he's gotten in trouble before for some of his comments. But then you've that Bush and Clinton who have become, you know, boon companions, practically.

HUME: You mean the first President Bush?

LIASSON: Ayah, the first President Bush — who give commencement addresses together, and do charitable works together and it's quite a different model. Of course, you know, President Clinton has some long- range political plans that are still live and active and Jimmy Carter doesn't. But, you know, I think Carter clearly felt that he went too far with these remarks and tried to...

BARNES: Yeah he didn't — but I think he believed them though. That's what he does think about Bush. Look, Carter's remarks were unprecedented. These are the harshest ones from him. They may be the harshest that an ex-president has aimed at.

HUME: At the sitting president.

BARNES: At a sitting president. And there used to be two things that former presidents didn't do, they didn't criticize their successors and they particularly didn't criticize them when they were overseas.

HUME: Well, he wasn't overseas.

BARNES: Well, he wasn't this time, but he has done that in the past.

HUME: All right, let's get a quick round with you all on the fact that Mitt Romney has made this dramatic upsurge in the polls in Iowa and now is leading by double digits over both McCain and Giuliani. Juan, what do you think? Do you think that's real? Do you think it's just a temporary blip? What you make of it?

WILLIAMS: It is a blip that's caused by advertising, he's the leader in terms of money, and he's had an extraordinarily intense round of advertising going in his favor.
LIASSON: Yeah, I do not think it is a blip, on the other hand, I don't think we should put a whole lot of stock in a poll that comes out at this point in the race, but one thing about Romney is he does have a plan.

HUME: We didn't put a whole lot of stock in it. It's last minute for this panel.

(LAUGHTER)

LIASSON: He has a plan, he's carrying out the plan, and there are an extraordinary number of Republican insiders who think that in the end he'll be the last on standing.

BARNES: And I am not one of those Republican insiders, who thinks he'll be the last man standing. Blip.

HUME: That's it for the panel. When we come back, who's afraid of Hillary Clinton? You might be surprised. Stay tuned.

(COMMERCIAL BREAK)

HUME: There's no doubt that Hillary Clinton's a formidable force in American politics. Republicans are weary of her and Democrats running for president fear her massive campaign machine. And now even some non-
politicians are expressing concern.
(BEGIN VIDEO CLIP)

DARRELL HAMMOND, COMEDIAN: I don't know her personally. Just that I get a little scared of her is all.

(LAUGHTER)

CONAN O'BRIEN, LATE NIGHT: You find her a little intimidating?

HAMMOND: I do. The good news about that is the bad guys would be afraid of her, too.
O'BRIEN: You think the bad guys would be afraid of Hillary?

HAMMOND: Oh yeah. Sure they'd pull up to the airport, be creeping up, you know, and guy would be like: Hillary Clinton is the president. OK, get back in the van!

(LAUGHTER)

(END VIDEO CLIP)

HUME: And that's SPECIAL REPORT for this time. Please tune us in next time and in the meantime, more news is on the way — fair, balanced, and unafraid.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. EST.

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