This is a rush transcript of "Special Report With Brit Hume" from June 6, 2007.

BRIT HUME, FOX NEWS ANCHOR: Next on SPECIAL REPORT, that highly controversial immigration bill survives another brush with a killer amendment in the Senate, but faces a danger ahead. We'll explain why. Romney says things about his Republican rivals he didn't say in last night's debate. And Rudy takes a risk on Iowa, McCain too. We'll explain. Republicans say Democrats dragged their feet on the Bill Jefferson case. We'll find out about that. Plus, will Scooter Libby get a Bush pardon? And Mr. Bush himself tries to calm troubled waters in Europe over missile defense. All that right here, right now. Welcome to Washington. I'm Brit Hume. As the Senate worked over the proposed immigration reform bill today, senators narrowly defeated an attempt to deny legal status to gang members, drunk drivers and habitual border crossers, adopting instead a less aggressive amendment targeting these and others offenses. But many other tough fights threaten the bill's future. As Congressional correspondent Major Garret reports, grass roots opposition to the bill is mobilizing nationwide.

(BEGIN VIDEOTAPE)

ROSEMARY JENKS, NUMBERSUSA GOVT RELATIONS DIR: Apparently Senator Reid is saying that he does not now believe that he has the votes to invoke cloture on the bill.

MAJOR GARRETT, FOX NEWS CONGRESSIONAL CORRESPONDENT (voice-over): No cloture would mean no immigration bill. And if the bill dies, volunteers like these NumbersUSA will be a big reason why. Armed with cell phones, talking points and Internet-powered faxes and emails, activists have tied up Senate phone lines for weeks, all in hopes of driving an electronic stake through the heart of a bill that seeks tougher border security, a path to legalization for 12 illegals here now and a guest worker program.

HALEN KIRKPATRICK, NUMBERSUSA VOLUNTEER: If the government doesn't know who is entering or leaving the country, how can they possibly have a guest worker program?

GARRETT: From its headquarters in Virginia, NumbersUSA conducted a nationwide virtual rally today, connecting itself to more than 7,000 activists and chapters across the country. In Atlanta, volunteers met in a hotel ball room to receive marking orders on the 63rd anniversary of D-Day.

JAN BARTON, NUMBERSUSA COORDINATOR: It marks the anniversary of a time that our brave soldiers helped end tyranny across the seas. We're facing the same kind of challenge today in protecting our borders. Lets make this a D-Day to remember. Start calling.

GARRETT:And call they did, dialing offices of Georgia Republican Senators Saxby Chambliss and Johnny Isakson, conservative backers of the immigration bill.
GERALDINE WADE, NUMBERSUSA VOLUNTEER: I have been disappointed, as most of his constituents are, that he tacitly supported it so far. And we hope he'll have a change of heart and vote down this bill. It's awful.
D.A. KING, NUMBERSUSA VOLUNTEER: I am calling once again to urge the senator to cease defense of the Senate immigration bill and to vote against cloture tomorrow. And I just wanted my voice to be heard one more time.

GARRETT:NumbersUSA mobilized the moment the Senate deal was announced, peppering the Capital with more than 700,000 faxes last month alone.

UNIDENTIFIED FEMALE: It certainly is a big border.

GARRETT:Grassroots opposition is taking other forms a well. This new TV ad pressures Congress to finish building hundreds of miles of border fence it promised to build last year.

UNIDENTIFIED MALE: Call the president and Congress today, and give them a message.

UNIDENTIFIED FEMALE: Where's the fence?

GARRETT:A new Rasmussen poll shows support for the bill, already tepid, has declined and is now down to 23 percent, with 50 percent opposed. The poll also found that less than a third of the country supports passing the bill with changes; 49 percent favor passing no bill at all. Aides to Senate Majority Leader Harry Reid said the immigration bill could collapse, but the majority leader delayed the vote to cut off debate, in hopes of saving the hard-fought bipartisan compromise.

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: We may have to work into the night tonight and tomorrow night and maybe even Friday, Friday night. And who knows if that will be enough time to get us over the hump.

(END VIDEOTAPE)

GARRETT:Tomorrow's vote on whether or not to cut off debate on the immigration bill looms as the most important by far. And activists with NumbersUSA and other groups are besieging the capital with faxes and phone calls, urging Republicans and a few Democrats to vote no, to keep the debate going and essentially kill this bill by perpetual amendment. All that will play out on the Senate floor tomorrow. Brit?

HUME: Major, thank you. Candidates vying for the Republican presidential nomination are back on the campaign trail fresh off their debate in New Hampshire. Front-runner Rudy Giuliani today seemed to feel he had done pretty well. Giuliani and Senator McCain, who also said thought he did well, say they are skipping a traditional milepost along the way. Chief political correspondent Carl Cameron explains.

(BEGIN VIDEOTAPE)

CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT (voice-over): The morning after the debate, Rudy Giuliani held a town-hall style meeting in New Hampshire touting his performance.

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE: I felt last night's debate was a good one and we're really happy about the outcome.

CAMERON: The moment in last night's debate came when he was asked about a Rhode Island bishop's criticism of his pro-choice views, and as he answered, lightning struck. GIULIANI: The Catholic bishop—For someone who went to parochial schools all his life, this is a very frightening thing, this happening right now.

CAMERON: Giuliani has been criticized in the lead off states of New Hampshire and Iowa for not campaigning there aggressively enough. Today he announced he would not attend the Ames, Iowa straw poll, an unofficial vote that often eliminates weaker caucus candidates. Immediately after Giuliani's announcement, John McCain said he too would skip the Iowa straw poll. That's just fine with Mitt Romney. He lead the polls in the first caucus state and couldn't wait today to compare his own assertion in last night's debate that the Republican Party should stand for a strong defense, strong economy and strong families. Giuliani, in his response last night, left families out.

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE: Those distinctions are going to be memorable and probably set a bit of the course for the future of this campaign.

CAMERON: Romney also lashed out at McCain.

ROMNEY: I think he has been wrong on key issues. He was wrong to vote against the Bush tax cuts in 2001. He was wrong to vote against the tax cuts in 2003. He was wrong on the McCain/Feingold. And I believe he is wrong on McCain/Kennedy.

CAMERON: While 10 candidates debated, the 11th was absent. Fred Thompson, who is already third in some national polls, appeared on "HANNITY & COLMES" and shrugged off early criticism of his candidacy.

FRED THOMPSON ®, FORMER TENNESSEE SENATOR: So it's a badge of honor to get attacked by some of these bozos.

(END VIDEOTAPE)

CAMERON: Thompson's leaning against participating in the Ames, Iowa straw poll, but aides say it's still really undecided. Both the Giuliani and McCain camps say Mitt Romney was already heavily favored to win. So now that he is out, it's almost certain that he will win against the rest of the field. And if Thompson bails, then the question is, with three of the four top contestants out, what would that victory really mean? Brit?

HUME: OK, Carl, thank you. Later in the program we tell you how a backlog at one government agency could put a major crimp in your summer travel plans. And next, we look into the tactical dance in the House over corruption, ethics and Bill Jefferson's indictment. Stay tuned.

(COMMERCIAL BREAK)

HUME: House Republican and Democratic leaders are now debating how to deal best with their indicted colleague, Democrat William Jefferson of Louisiana, who faces more than a dozen charges of bribery and corruption. Chief Washington correspondent Jim Angle reports they are trying to work out how to reconstitute a nearly moribund ethics investigation.

(BEGIN VIDEOTAPE)

JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT (voice-over): The indictment of William Jefferson has unleashed a torrent of activity in the House, where the Democratic leadership had let an existing ethics investigation of him inspire.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: The latest broken promise has been on their issue of holding members to the highest ethical standards. They did not continue the effort that was started last year of the investigation in to the Bill Jefferson case.

ANGLE: Last year a bipartisan investigation was underway, but it had to be renewed when Congress reconvened in January. And Speaker Nancy Pelosi failed to name new Democratic members to restart the ethics investigation until Tuesday, the day after the indictment. One analyst says letting the investigation languish dented Speaker Pelosi's claims to preside over the most ethical Congress in history.

JAN BARAN, ETHICS ATTORNEY: And that is embarrassing because it shows that they really haven't even taken a very preliminary step to organize the ethics process in the House.

ANGLE: Though the Ethics Committee had been doing nothing to examine Jefferson's actions, Stephanie Tubbs Jones, the Democratic chairwoman of the Ethics Committee said Tuesday she and Doc Hastings, the ranking Republican, were reopening the investigation as she took a swipe at pressure from others to act. "We have agreed to proceed as we have done in the past," she said, "to form an investigative committee. It is inappropriate for any other member to impose on these proceedings." But Hastings disputed her statement, saying he had been trying to get an investigation back underway since early this year, but one had yet to be convened. Nevertheless, the day after Jefferson was indicted, the Congress moved with warp speed after Republican Boehner introduced a resolution to force the Ethics Committee to investigate Jefferson and report within 30 days on whether he should be expelled.

BOEHNER: Find out whether he has violated rules of the House. That is different than whether he violated laws. And then, in fact, hold him accountable.

ANGLE: Of course Republicans have had plenty of their own ethics problems, Mark Foley, Duke Cunningham, Bob Ney, among others, which prompted Democratic Majority Leader Steny Hoyer to argue that his Republican colleagues are recent converts on this issue.

REP. STENY HOYER (D-MD), HOUSE MAJORITY LEADER: So I say to my Republican friends, we welcome them to this focus on holding accountable members who violate the trust of the American public.

ANGLE: Hoyer also offered his own resolution, which directs the Ethics Committee to begin an investigation within 30 days of any member who is indicted.

(END VIDEOTAPE)

ANGLE: But since everyone is presumed innocent until proven guilty, ethics experts, such as Jan Baran, say it would be unprecedented to expel someone who has not been convicted of anything. A simpler solution is one now proposed by a handful of Democrats, who are calling on Jefferson to resign for the good of his constituents. Brit?

HUME: Jim, thank you. Former White House aide Scooter Libby had barely left the courthouse yesterday when speculation began about whether President Bush might pardon him. Libby was sentenced to 30 months in prison in that CIA leak case. The subject even came up in last night's presidential debate. But as chief White House correspondent Bret Baier reports, the president is so far keeping his own council.

(BEGIN VIDEOTAPE)

BRET BAIER, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT (voice-over): Before meeting with German Chancellor Angela Merkel at the G-8 summit in Germany, President Bush was asked by reporters in an off-camera question session whether he will pardon Scooter Libby, the vice president's former chief of staff, who was sentenced Tuesday to two and a half years in prison and a 250,000 dollar fine for lying and obstructing the CIA leak investigation. The president gave no hint about his possible pardon plans, calling Tuesday a very sad day for Libby, adding, quote, "my heart goes out to his family. And it wouldn't be appropriate for me to discuss the case until after the legal remedies have run its course." Libby's former boss, Vice President Cheney, was less guarded in his statement, released Tuesday night, saying about Libby's sentence, quote, "the defense has indicated its plans to appeal the conviction in the case. Speaking as friends, we hope that our system will return a final result consistent with what we know of this fine man." The politics of a possible Libby pardon are already in full swing. In an exclusive interview with Fox, former Senator and not yet official presidential candidate Fred Thompson was asked if he would pardon Libby?

THOMPSON: I would, absolutely. It's a gross injustice perpetuated in large part by this CIA and this Justice Department and this special counsel who they appointed. And it ought to be rectified.

BAIER: The same away question was put to the declared GOP candidates in Tuesday night's debate. Yes or no, pardon or no pardon?

GIULIANI: The sentence was grossly excessive. I would see if it fit the criteria for pardon. I would wait for the appeal. I think what the judge did today argues more in favor of a pardon.

TOMMY THOMPSON ®, PRESIDENTIAL CANDIDATE: To me it's not fair at all. But I would make sure the appeal was done properly and then I would examine the record. ROMNEY: You have a prosecutor who clearly abused prosecutorial discretion—

SAM BROWNBACK ®, PRESIDENTIAL CANDIDATE: Yes, the basic crime here didn't happen.

BAIER: While the Justice Department has a list of strict guidelines for the normal pardon process, under Article II of the Constitution, the president's power to pardon federal crimes is essentially unrestricted. Conservative blogs and online magazine editorials started calling for a pardon minutes after Tuesday's sentence, in part because they say the political damage would be contained.

RICH LOWRY, "NATIONAL REVIEW": The people who are going to be angriest about this will be the vocal critics of war, the people who are already very angry at President Bush. It is hard to see how they could hate him much more. But if you pardon Libby, we will find out.

(END VIDEOTAPE)

BAIER: Libby's lawyers are filing legal briefs tomorrow, arguing that their client should remain free while his appeals play out. Now if the judge denies that request, Libby could be ordered to report to prison in a matter of weeks, a move that would quickly increase the pressure on the president to make a decision about a pardon. Brit?

HUME: Bret, thank you. A group of House Republicans is calling for an investigation into leaks reported by ABC News claiming the CIA is conducting covert actions in Iran. ABC News reported last month that President Bush has ordered a campaign of propaganda, disinformation and financial manipulation in Iran. Republicans complain that such leaks about covert operations, quote, tip our hand to help our enemies. Still ahead on SPECIAL REPORT, the case of the doctor and some X-rated videos at a U.S. military academy. And after a break, President Bush tries to smooth down Vladimir Putin's raised bristles. Stay tuned.

(COMMERCIAL BREAK)

HUME: At the site of the G-8 Summit in Germany today, President Bush tried to ease the rhetoric, if not the tensions, between Washington and Moscow over a proposed missile defense system in Eastern Europe. White House correspondent Wendell Goler reports Mr. Bush has decided to let talk of a new Cold War cool down a little bit.

(BEGIN VIDEOTAPE)

WENDELL GOLER, FOX NEWS WHITE HOUSE CORRESPONDENT (voice-over): As leaders of the world's richest nations gathered in Germany, President Bush tried to douse fears that sparks from his conflicts with Russia over a missile defense system would ignite a new arms race. Hours before Vladimir Putin arrived, Mr. Bush told reporters in a pen and pad interview, the West won't respond to what Putin's aides now say was a hypothetical threat to retarget Europe with missiles the Russians turned away after the end of Cold War. "There needs to be no military response," Mr. Bush said, "because we are not at war with Russia." At the same time, the president said Iran's recent warning that its nuclear program cannot be stopped is another reason to build the missile defense system. Mr. Bush said Putin's recent harsh comments toward the West suggests he may be trying to build support for his party in advance of next year's elections, and the president saw that as positive. He said, quote, "When public opinion influences leadership, it is an indication that there is involvement of the people." The president promised European leaders he would try to ease U.S./Russian tensions in one on one talks with Putin, but there are other tough negotiations ahead. German Chancellor Angela Merkel hoped to enlist other European leaders to push for an agreement to halve greenhouse gas emissions in the next 50 years. Outgoing Prime Minister Tony Blair says the leaders need to agree to set a target, even if they can't decide what the target is. The president last week unveiled a plan for setting a target that might take the next year and a half, though today in a meeting with Japanese Prime Shinzo Abe, he vowed it won't undermine Merkel's goal.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We discussed ways to develop a framework that has the flexibility and at the same time the goals, so we can encourage the world to move in that direction.

GOLER: Outside the summit site, about 10,000 protesters sporadically clashed with police. They were able to block roads used by reporters and some of the leaders aides, but not the leaders themselves. One group, dressed as clowns, joined the other demonstrators, who were complaining that the powerful leaders here are making unilateral decisions that will affect smaller nations. Chancellor Merkel seemed sensitive to that concern.

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): We would like to send a signal as to how we wish to shape globalization, in the sense that we would like to give it a human face.

GOLER (on camera): The president can expect some pressure from Tony Blair tomorrow in what aides expect will be their last one-on-one meeting before the British prime minister leaves office. And Mr. Bush will make a personal appeal to Vladimir Putin, though a more serious attempt to ease the Russian leaders concerns is likely to come when the two meet in Maine early next month. In Rostock, Germany, Wendell Goler, Fox News.

(END VIDEOTAPE)

HUME: Doctors targeted by sectarian violence, a system crippled by rampant corruption and a huge shortage of needed medication; these are just some of the many obstacles for Iraq's struggling health care system. Correspondent Clarissa Ward has the story from Baghdad.

(BEGIN VIDEOTAPE)

CLARISSA WARD, FOX NEWS CORRESPONDENT (voice-over): This is one of the better hospitals in Baghdad. Not everyone has a bed, but the water is clean and the equipment works. The hospital in general is good, this woman tells me, but they don't have the facilities. The medicines is rare. Drugs are scarce in most Iraqi hospitals, a result of rampant profiteering and poor organization.

BRIG GEN MICHAEL WALSH, US ARMY CORPS OF ENGINEERS: They're still trying to learn the logistic systems, you know the just in time, when do I need to make sure that the drugs and the serums, the needles, the oxygen are in the right place at the right time. So they're struggling whit that.

WARD: That's where the U.S. comes in, taking old hospitals, refurbishing them and training the local staff on how to maintain them.

(On camera): By the time the refurbishment of this hospital is finished, the U.S. government will have spent about 4.5 million dollars here. The hospital will then be handed over to the Ministry of Health, at which point the U.S. will cease to have any oversight.

(voice-over): And that's where the problems start. Corruption has long been an issue in the Ministry of Health. As early as 2003, doctors were protesting against mismanagement and dishonesty. Since radical Shiite cleric Moqtada al Sadr's political party took over the ministry, allegations of sectarianism have also surfaced. In February, the deputy health minister was arrested by U.S. forces, accused of funneling millions of dollars from the ministry into al Sadr's Mahdi militia. The president of Iraq's Society of Surgeons, and advisor to the government, says they are aware of the problem.

DR. QURAISH ALKASIR, GOVERNMENT ADVISOR: What we had in so many hospital, from the destruction, which was done by the corrupt people, by the criminals, we are tying to reconstruct.

WARD: Building up Iraq's medical system faces another challenge. In the last four years, 2,000 doctors have been murdered and 250 kidnapped in Iraq. And approximately 12,000 of them have left the country. That's almost a third of Iraq's doctors.

ALKASIR: Yes, some of them lived and some of them are still in their houses, hiding from the problem of violence.

WARD: In an effort to reverse the brain drain, the government has reinstated a law from Saddam's time, whereby medical school graduates cannot receive their diplomas until they have worked in Iraqi hospitals for six years.

ALKASIR: It's for the benefit of the student. But I think once he has graduated from the medical school, he should take some clinical work to be trained by his doctors.

WARD: But for many, this law leaves them with a difficult decision, leave Iraq without a medical diploma, or stay in their country and work with the risks and frustrations which that entails. In Baghdad, Clarissa Ward, Fox News.

(END VIDEOTAPE)

HUME: There was considerable confusion today over a report that Turkish troops had staged a large scale incursion into northern Iraq. Turkey denied it. Iraq had not seen it. Even the State and Defense Departments denied it. But one Turkish military sources said it would not be unusual for a limited number of troops to cross the border in hot pursuit of Turkish rebels. About 4,000 members of outlawed Kurdistan Workers Party, or PBK, are said to be hiding in the mountains of northern Iraq. Defense Secretary Robert Gates attended a ceremony in Normandy, France today to mark the 63rd anniversary of D-Day. Those bloody landings on the beach by American and allied troops helped turn the tide of World War II. Gates and the French defense minister dedicated a new visitors center at the site of the Normandy American Cemetery, where nearly 9,400 war dead are buried.

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY: We build memorials like this to remind us of the past, so that successive generations will know the enormous cost of freedom, so that our children and grandchildren will never forget the stories of those who fought here, so that the package of time and the thinning of their ranks will never dim the glory of their deeds.

(END VIDEO CLIP)

HUME: We have to take a break here to let our sponsors talk to you a bit. And we will update the other headlines as well. When we come back, New Haven City officials say they are just looking out for the best interests of illegal immigrants there. We will tell you what they are doing next on the Grape Vine.

(COMMERCIAL BREAK)

Click here to read the "Political Grapevine."

HUME: Are you planning to leave the country any time soon? Got your passport all ready? Well, if not, correspondent James Rosen has a story you need to hear and a word of warning you're probably not going to like.

(BEGIN VIDEOTAPE)

BRIGITTE: I cried for days and days and days.

JAMES ROSEN, FOX NEWS CORRESPONDENT (voice-over): Brigitte and Adam Deel of Merrillville, Indiana spent a year planning a wedding of their dreams and the honeymoon to go with it in sunny Los Cabos, Mexico. But that trip never happened because one suborn couple invited more than 10 weeks in advance didn't make it on type—the newlywed's passports.

ADAM DEEL, FRUSTRATED TRAVELER: It surprises me that they tell you it'll be there and it's not there.

ROSEN: The Deel's are like many Americans forced, this year, to cancel vacations and swallow hefty fees because of the Western Hemisphere Travel Initiative, a Homeland Security rule that went into affect last January and now requires all Americans flying to Canada, Mexico, Caribbean or Bermuda to carry a passport. The new rule has caused huge delays, one senator's office processed 76 pleas for passport help last year and more than 220 in the last five days.

SEN JOHN CORNYN ®, TEXAS: This is caused a real bottleneck because of the failures of the federal government to adequately plan for and then implement his new program.

SEAN MCCORMACK, STATE DEPT SPOKESMAN: We have opened up at least one new passport processing center that I know of. And folks are working around the clock to get through what has been a backlog.

ROSEN: The State Department expects to process 17 million passports this year, an increase of 30 percent over last year, but the lines are only getting longer at local passport offices.

BRIDGETTE DEEL, FRUSTRATED TRAVELER: They kept telling us that there was nothing that they could do. ROSEN: Charlene Glimp of Austin, Texas will wing her way to Manitoba for a fishing trip on Friday, but only because she got an aide from Senator Cornyn to intervene.

CHARLENE GLIMP, PREPARED TRAVELER: And within three days he told me my passport was on the way. I would have a passport.

ROSEN (voice-over): If you are traveling abroad this year, apply for your passport early. Leave at least 12 weeks, possibly 16 for delivery, and attention travelers, passports will soon be required for the same destinations, even for those going by sea or land. In Washington, James Rosen, FOX NEWS.

(END VIDEOTAPE)
HUME: A doctor, who formerly served at the U.S. Naval Academy in Annapolis, Maryland, is accused of secretly videotaping Navy midshipmen having sex in his home. But his lawyer says the doctor was set up. Correspondent Malini Bawa has that story—Malini.

MALINI BAWA, FOX NEWS CORRESPONDENT: Good evening, Brit. The allegation is that Naval Academy students took their dates to a Navy physician's house and had sex in guest bedrooms until they discovered they were being secretly videotaped. The military has charged Commander Kevin Ronan with 18 counts relating conduct unbecoming an officer and obstruction of justice, also with violating federal and state laws on secret recordings. Ronan was a medical officer at the academy and a doctor for some of its athletic teams. The videos were allegedly recorded earlier year and last year at Ronan's Annapolis home, not far from campus. His attorney, Bill Ferris, admits the doctor did have a surveillance camera, but says Ronan had nothing to do with making any tape.

(BEGIN VIDEO CLIP)

WILLIAM FERRIS, ATTY FOR CMDR KEVIN RONAN: He did not know that videotapes were being produced. He was aware that there was a camera and it was put in the home for purposes of making sure that's there wasn't any untoward activity, but—in the home. But it wasn't designed to record anything.

(END VIDEO CLIP)

BAWA: Ronan also participated in the school's sponsorship program. The sponsors are local families who are supposed to mentor student adjusting to life as midshipman and provide them with a home away from home in Annapolis. Ronan's maintains a former student whom his client sponsored was the one who made the videos and was using them to shake down the doctor.

(BEGIN VIDEO CLIP)

FERRIS: It's our belief that this individual may have been filming these things for his own purposes, but when he was expelled, then he decided that he would use these tapes to try to extort money from Commander Ronan.

(END VIDEO CLIP)

BAWA: A military hearing is scheduled for Monday at the Washington Navy Yard to determine whether the charges will go forward. Ronan no longer works at the academy; he has a different assignment here in Washington—Brit.

HUME: OK, Malini, thank you very much. Next on SPECIAL REPORT, the FOX all-stars will be here with thoughts on last night's Republican presidential debate and the fate of the Iowa Straw Poll. That's been a big deal. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: When Senator Clinton says this is Mr. Bush's war, that this is President Bush's war—when President Clinton was in power, I didn't say that Bosnia, our intervention there was President Clinton's war. When we intervened in Kosovo, I didn't say it was President Clinton's war. What he does - what Senator Clinton doesn't understand that presidents don't lose wars, political parties don't lose wars, nations lose wars...

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE: During the debate the other night, the Democrats seemed to be back in the 1990. They don't seem to have gotten beyond the Cold War. Iran is a threat, a nuclear threat, not just because they can deliver a nuclear warhead with missiles, they're a nuclear threat because they are the biggest staged sponsor of terrorism and they can hand nuclear materials to terrorists.

(END VIDEO CLIP)

HUME: A couple of sample himself from the comments made last night in the Republic debate in New Hampshire from the two candidates who, most the morning after commentary, seems to think they had particularly good nights. Some thoughts from all this now, from Fred Barnes, executive editor of the Weekly Standard; Mara Liasson, national political correspondent of National Public Radio; and Mort Kondracke, executive editor of Roll Call—
FOX NEWS contributors, all. Well? What be it—Fred?

FRED BARNES, WEEKLY STANDARD: Well, I thought you picked out the two guys who did the best. McCain—McCain later in the—in the two hour debate, in the second half when they were sitting in chairs, you know, get up and answer a question by a very lovely young woman whose brother had been killed in Iraq, and she asked whether he had died in vain, and whether there was, you know, they were going to find a way to win and to get the troops home? And he got out of his chair and walked up to the edge of audience and looked at her right in the eyes and gave this really compelling, strong answer. It was the best moment in the thing and it—and look, John McCain needed a good debate. There have been three now and this was the one he was really good in. No question about it. I mean, they're not winners and loser here, but McCain looked good and Giuliani, you know, he's been leapfrogging the rest of Republican candidates by going after Democrats in a very, very effective way. You had McCain doing it as well, but it's mainly been Giuliani who's done that. He is really good in format, I'll have to say. You wouldn't think one guy could stand out, you know, with nine other candidates there, but he does. He's really mastered it and so for that reason, hey—oh, the other thing I wanted to say about Rudy was notice how he has now answers the abortion question without raising more questions than he answers. He's done it very well now...

HUME: Of course at the moment when the lightning knocked the lights down and he make a joke out of that. BARNES: Yeah, that was about the criticism from the Catholic bishop in Rhode Island. But he's mainly speaking now—he's the guy, national security is his issue.

MARA LIASSON, NATIONAL PUBLIC RADIO: Well, what's interesting is he is free to attack the Democrats because, even as a frontrunner, nobody seems to be going after him. Usually it's the frontrunner who has the target on his back, instead it's been McCain and Romney who've been sniping and I thought what was interesting about last night was McCain really was kind of on the hot seat about immigration and he very forcefully defended the bill that on the floor of Senate. Giuliani called it a typical Washington mess, it's just a big compromise. Of course, that's what McCain says is what you're sent to Washington to do

HUME: So how did—you've followed watched—you've followed Romney's campaign with some fascination, how'd you think he come out?

LIASSON: Well, I think Romney comes out fine, I don't think he necessary hurt himself. I do think that he has yet to develop a kind of intellectually coherent position on the immigration bill, something that he supported a more lenient version of last time it was up. Now that it's gotten more draconian he's decided it's amnesty, but last night he said, for instance, that the answer—the answer to the problem of the 12 million illegals in the country is to merely enforce the current law. The fact that it is not being enforced or can't be is why we have this new legislation in the Senate, now.

MORT KONDRACKE, ROLL CALL: Yeah, but the whole idea that Romney is not going, basically, to try to force out 12 million people is simply ridiculous. Look, the—I don't see how you can look at these debates and not gain an administration for John McCain. I mean, he was the truth-teller about the war in Iraq and he said that the Bush policy was not working against what his own president—he's backed up the Bush surge and now on immigration he is not giving an inch. He believes in comprehensive—solution, which I think is the only—sailing against the wind. And Rudy Giuliani, you know, once upon a time was one of the most pro-immigration mayors in the country. He refused to allow the New York police department to go pick up people on the basis of their illegal immigration status. Romney was pro-immigration at one time, too. Now that they—the base is furious at so-called amnesty, they flipped. McCain has not.

HUME: All right, let's talk for a minute about the decision made by McCain—by Giuliani and then followed by McCain to skip Iowa Straw Poll. Now, the Iowa Straw Poll, obviously, sounds like small potatoes, but it has been a turning point in the early season for a couple of cycles now and has been a place where candidates got weeded out. Does this thing now become meaningless because two of those guys are out?

BARNES: (INAUDIBLE) it allowed somebody who's not a top tier candidate to really shine. Remember Pat Robertson won in 1999, won the Straw Poll. And look, I think Giuliani and McCain did the write thing. He realize that no matter home how many people they got in there, Romney was going to bus in a lot more was going to win the thing.

LIASSON: It's about money...

HUME: So, this concedes the Iowa Straw Poll to Romney...

LIASSON: I think it effectively does and of course at the same time Giuliani and McCain hope to undercut its importance.

HUME: Any development, that we're looking at now, this debate—the Straw Poll—does anything seem likely that—to winnow some of the people out of the field? I mean, it doesn't appear that the people like Jim Gilmore or Tommy Thompson or Ron Paul are making any real inroads

KONDRACKE: No, no it doesn't.

HUME: And then maybe they are, but it's hard to see it.

KONDRACKE: At some point, you know, they have to decide whether this is really worth it for all of them to keep, you know, plotting on when they don't get out of below five in the polls. I mean Tommy Thompson is banking, by the way, on being able to invite in a whole bunch of motorcycle enthusiasts from Wisconsin.

HUME: Well, he's one of them. He doesn't look like it, but that's what he is.

KONDRACKE: Yes. I know.

(CROSSTALK)

BARNES: He's a smart guy.

KONDRACKE: ...The Iowa caucus—he is a smart guy. When some debate sponsor says if you are not above existing in the polls, you are not on stage, I think that will be—

HUME: Quickly.

LIASSON: I'll tell you what's going to win on the field. When some debate sponsor says if you are not above X percent in the polls, you're not on the stage, I think that will be—be the turning point.

BARNES: Until then...

LIASSON: Until then it's...

HUME: Until then we're...

BARNES: Debates are free. You have to pay for ads on TV, but the debates are free and you get a big audience.

KONDRACKE: One other point here, I think what is being set up here is a decisive general election issue over the idea of going to war with Iran. All the Republican candidates last night seemed to think it was just fine to use tactical nuclear weapons against an Iranian...

BARNES: They said they wouldn't take it out of table. What debate were you watching?

(CROSSTALK)

LIASSON: Wouldn't take it out of table.

KONDRACKE: No, no, they wouldn't take it off the table, but believe me, you know that the Democrats don't want to go to war with Iran, they want to stop...

HUME: When we come back with the panel, Republican and Democratic senators successfully compromise on a proposed immigration bill. But what about getting it to a vote? How's it going? That is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GERALDINE WADE, NUMBERSUSA VOLUNTEER: I've been disappointed as most of his constituents are that he passively supported it so far and we hope he'll have a change of heart and vote down this bill—it's awful.

D.A. KING NUMBERSUSA VOLUNTEER: I am calling once again to urge the senator to cease defense of the Senate immigration bill and to vote against cloture tomorrow and I just wanted my voice to be heard one more time.

(END VIDEO CLIP)

HUME: That is a sample that our correspondent Major Garrett report on earlier tonight of what a group called NumbersUSA, which has apparently been able to generate some pretty big numbers of phone calls, faxes and other communication to congressional offices in option of immigration bill now on the floor of Senate. It has been learned that President Bush is going to go up to the Hill next Tuesday when me gets back from the G-8 Summit with immigration high on his agenda. That's something that doesn't happen very often—the president making a big push, here. What, in light of what we all see, is the state of play of this bill in the Senate and in the Congress, generally—Mort.

KONDRACKE: Well, it looked last night as though the whole thing was going to blow up because Harry Reid, the Democratic leader, was going to impose a cloture vote, I believe it was going to be today, now it's going to be tomorrow...

HUME: And the votes weren't there to invoke cloture, right?

KONDRACKE: And the Republicans thought that he was trying to stifle their ability to put in amendments and he was accusing them of trying to kill the bill, et cetera, et cetera, et cetera. It now looks as though the Republicans will get a lot of amendments, an opportunity to offer a lot of amendments and it's not resolved yet, but it looks as though there will be cloture vote sometime tomorrow and that question will go through.

HUME: Will the amendments get adopted and will any of them that are really killer deal-breaker amendments pass?

KONDRACKE: Well, it looks like killer amendments will not pass. I mean, so far...

HUME: Mara, as you agree with it...

LIASSON: Yeah.

KONDRACKE: The bipartisan coalition that wrote this bill, Senator Kyl...

HUME: Has the vote so far.

KONDRACKE: Is holding together. Yeah, quite nicely.

LIASSON: I think it is kind of marching forward against a pretty strong headwind, but it's moving forward and I think it's going to get out of the Senate.

HUME: It is in fact, I think, Fred you'd agree, that no lobbyist, no lobbying organization on earth, really is quite as powerful as an aroused public. We got an aroused public here, don't we?

(CROSSTALK)

BARNES: Well, we have an aroused part of the public, that's for sure, certainly the conservative base of the Republican Party is aroused and that -- and look, all the intensity, out in the public on this issue, is against the Senate bill. It was against immigration reform. There's no question about that even House members, I talked to a couple of them today, the bill hadn't gotten to the House an won't for a long time, or a bill won't, and they're getting these phone calls, you know, hundreds and hundreds a day, massively negative. And even in—some of the senators who had seen the calls fall off now they are back up again and they're not supportive.
On the other hand it is going to pass. They knocked off...

HUME: Senate.

BARNES: The Senate's going to pass and I think the Republican opposition in the House is already beginning to crumble some and House members I talk to don't want all these amendments that might get in the bill that are conservative amendments in the bill. They'd rather do them in the House, they want the chance to shape the House bill for the better by their—from their perspective.

KONDRACKE: I think it's really significant, there was a Rasmussen Poll that indicated that a huge—that something like 48 percent to 26 percent opposed the Senate bill. That's—but...

HUME: It's now 50-29, I believe.

KONDRACKE: OK, but 65 percent of voters would be willing to support a compromise including a path to citizenship, a long path to citizenship, and fines and so an and so father. I mean they—what's—the guts of the bill, the public supports they done like—they don't think that Congress can deliver anything. This is a test of whether our political system, this polarized political system can produce anything to solve the national problem.

HUME: That's it for the panel, but stay tuned to find out what happened when George W. Bush met Ronald Reagan. That's next.

(COMMERCIAL BREAK)

HUME: Finally tonight, an excerpt from the diaries of Ronald Reagan that may show you a side of our current president you've not seen before.

(BEGIN VIDEO CLIP)

ANNOUNCER: July 12, 1983, Vice President Bush came to lunch today with his son George W. A few minutes in, George W. put one of the rolls on his head and began shouting, "Look at me, I got a bread hat." This has been an excerpt from the Reagan Diaries.

(END VIDEO CLIP)

(LAUGHTER)

HUME: That's SPECIAL REPORT for this time, please tune us in next time, 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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