This is a rush transcript of "Special Report With Brit Hume" from June 19, 2007.

BRIT HUME, FOX NEWS ANCHOR: Next on SPECIAL REPORT, a partisan fight breaks out in the Senate over the energy bill, which may now go down. But the immigration bill is still alive and now they're talking about ways to get the thing through the House. The White House budget chief leaves. So, does that mean the president's veto strategy on spending is off? We'll find out.
Can the Democrats running for president satisfy the anti-war left? We'll watch them try.
And have you heard about this thing called radical math? We will explain if we can. All that right here, right now. Welcome to Washington. I'm Brit Hume. Most of the energy behind a new energy bill in the Senate today appeared to go into finger pointing between the Democrats and Republicans. The bill is stalled, and as of tonight, it appears to have little chance of getting back on track. Congressional correspondent Major Garrett has both sides of the issue.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, FOX NEWS CONGRESSIONAL CORRESPONDENT (voice-over): Facing the possible collapse of their energy bill, Senate Democrats blamed Republicans.

SEN. BARBARA BOXER (D), CALIFORNIA: They may be trying to derail this bill. They haven't said so explicitly. But if you listen carefully, you will hear the echoes of obstructionism.

GARRETT: Democrats have railed against near record gas prices, but their bill, Republicans say, provides no relief.

SEN. JON KYL ®, ARIZONA: The energy bill before us doesn't do anything to produce another drop of gasoline or it doesn't do anything to reduce the price of gasoline.

GARRETT: Some Republicans also complained that the Democratically-led Finance Committee today approved a bipartisan bill assessing 29 billion dollars in taxes on the oil and gas industry.

KYL: It appears to me that the rule of the day is that if anybody tries to produce more gasoline, tax them.

GARRETT: The Democrats accused Republicans of opposing their heavily green energy bill out of a reflexive commitment to big oil.

SEN. CHARLES SCHUMER (D), NEW YORK: Now we have a chance to have a really good energy bill that breaks away from big oil, that helps reduce our dependence on fossil fuels. And what do they do? They obstruct.

GARRETT: Republicans are contemplating a filibuster to sabotage the bill's requirement that every state generate 15 percent of its electricity from renewable sources by 2020. This Renewable Portfolio Standard, or RPS, requires states to produce electricity with wind power, solar power, biomass or geothermal sources, thereby reducing greenhouse gases generated by burning carbon based fuels. Twenty two states have mandatory or voluntary standards that require generating between two percent and 25 percent of future electricity supplies from renewable energy sources. The best source of renewable energy is wind power, a scarce commodity in the south, where fears run high that utilities would have to buy renewable energy from other suppliers, thereby raising power rates. A vote to add nuclear and coal power to the renewable energy framework failed last week, but bill supporters fell short of the votes needed to break a threatened filibuster.

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: We didn't get 60 votes, so we are in the Senate, and so we are trying to work something out.

GARRETT: Democrats have another energy problem, namely bipartisan opposition to a proposed average Fuel Economy Standard of 35 miles per gallon by 2020, a 40 percent increase over current rules. The auto industry calls this unrealistic. Its new radio ad campaign, which can be heard at the website DriveCongress.com, features a so-called SUV mom fretting about Congress forcing her to drive a smaller car.

UNIDENTIFIED FEMALE: Why can't they let make me the choice. I am all for better fuel economy. But for me, safety is my top concern.

(END VIDEOTAPE)

GARRETT: The top concern of the Senate majority leader, Harry Reid, is passing an energy bill so Democrats can claim at least one big summertime domestic policy victory. But a victory here, with so many other Democratic domestic priorities, appears uncertain or out of reach entirely. Brit?

HUME: Major, thank you. In the meantime, the issue of immigration reform is on the back burner, but still simmering. Republicans, Democrats and the president all say they want a Senate bill with a real chance of passing and some House members are talking about ways to slice the issue into elements that might be easier to tackle one at a time. Correspondent Molly Henneberg explains.

(BEGIN VIDEOTAPE)

MOLLY HENNEBERG, FOX NEWS CORRESPONDENT (voice-over): In a march to the White House today, a number of immigrant families, backed by Democratic Senator Ted Kennedy, pressed for an immigration bill that, quote, keeps children and parents together. But how to do that when some of the family members may already be in the U.S. illegally is part of the debate vexing Congress. Although the immigration bill is languishing in the Senate and may not even come up in the House, some House members already are trying to stake out some ground on the matter. Today, Republican Representatives Peter King and Lamar Smith said they plan to introduce immigration legislation focusing on boarder security, as well as the resolution calling on the Bush administration to enforce laws already on the books.

REP. LAMAR SMITH ®, TEXAS: Immigration enforcement has failed primarily because administrations for 20 years have not enforced sanctions on employers who hire illegal immigrants.

REP. PETER KING ®, NEW YORK: If current law were enforced, this problem could be very much brought under control. Certainly, it would be nowhere near the crisis proportions it is at today.

HENNEBERG: In addition, some House Democrats have suggested breaking up the immigration issue into smaller pieces of legislation to get passable bills through first, perhaps on border security, and then dealing with more controversial matters, such as a path to citizenship for illegal immigrants. But the number two Democrat in the House says the leadership is trying to avoid that.

REP. STENY HOYER (D-MD), HOUSE MAJORITY LEADER: It is a possibility, but I'm neither opposed nor for that. I am for a comprehensive bill if we can work out the appropriate provisions of that bill.

HENNEBERG: Over in the Senate, immigration won't get to the floor until senators finish with energy legislation. But Majority Leader Harry Reid says he hopes to be finished with the immigration bill before the July 4th break. In the meantime, members of Congress will continue to be pounded with opinions from those supporting immigrant rights, to those pressing for tougher border security first, such as this new ad chiding Congress and the president for not building the full 700 mile border fence promised in the 2006 Secure Fence Act.

UNIDENTIFIED MALE: Where is the fence? Where's the fence?

(END VIDEOTAPE)

HENNEBERG: Republican Senators Jeff Sessions and Elizabeth Dole say they are joining like-minded House members and introducing a Senate resolution that calls on the president to enforce existing immigration laws before Congress attempts to pass new ones. Usually these types of resolutions go to committee and are not heard from again. Although Senator Sessions says he will send a copy of it to the president. Brit?

HUME: Thanks Molly. White House Budget Director Rob Portman is resigning and President Bush has nominated former Iowa Republican Congressman and Former House Budget Committee Chairman Jim Nussle to succeed him. Nussle has been working as an advisor to Rudy Giuliani's presidential campaign. Today, the president praised him as a man of integrity and vision and asked the Senate to act quickly to confirm him. Portman also is a former Congressman and has served as U.S. trade representative. He is going back to Ohio to spend more time with his family who stays out there. We'll have more on what Nussle's nomination says about future White House fiscal policy and strategy a little later in the program. The Department of Homeland Security and the FBI say that a new video from terrorists in Afghanistan is more likely propaganda aimed at frightening people than an actual threat. Taliban leader Mansour Dadullah is shown allegedly sending some 300 recruits off on suicide missions to the U.S., Canada, Great Britain and Germany. Experts say though that terrorists typically do not issue warnings before they attack. And Homeland Security Secretary Michael Chertoff told Fox News it may actually be a recruitment video.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I don't want to put emphasis and somehow give credibility to the video or validate it. But what it does tell us is that the enemy is constantly looking to recruit, that they are looking to recruit people who come from all parts of the world as they try to penetrate our defenses.

(END VIDEO CLIP)

HUME: Later in our program, could there be another Republican candidate for president? And after a break, the Internet, the bloggers, and where all the Democrats who want to be president must be seen this week. Stay tuned.

(COMMERCIAL BREAK)

HUME: In the world of presidential politics, there are some bases that a candidate simply must touch on the way to the nomination. And so all the Democratic candidates are making appearance at this week's Take Back America conference here in Washington. Chief political correspondent Carl Cameron reports everyone who is anyone in left-leaning politics seems to be there.

(BEGIN VIDEOTAPE)

(SINGING)

CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT: From the anti-war Code Pink singers to an Internet row with the nation's most liberal blogs, the annual Take Back America Conference in Washington amounts to an invitation Democratic presidential candidates cannot refuse to court the left.

SEN. BARACK OBAMA (D), ILLINOIS: This is a war that should have never been authorized, a war that should have never been waged. So many of us knew back then, even when it wasn't popular to say so.

CAMERON: One of the most eyebrow raising moments in Obama's appearance came during his introduction when African-Americans, a key Democratic voting block, were reassured of his being authenticity.

ROGER WILKINS, OBAMA SUPPORTER: I want to tell you a secret from me to you, this man is black enough. I guarantee you.

CAMERON: It was a who's who of liberal interest groups, though some prefer to be called progressive. The sponsors list amounted a roster of grassroots activists that make up much of the Democratic primary electorate. The Net Roots were there too, representing the Internet buzz that fueled Howard Dean's failed 2004 presidential campaign. And the Draft Al Gore group was out in force. Michael Moore, Howard Dean and Hillary Clinton all address the conference tomorrow. John Edwards tried to tap liberal frustration against Democrats in Congress, including Clinton and Obama, for not fighting the GOP enough.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: No more triangulating. No more broken promises. No more pats on the head. No more we'll get around to it next time. No more taking half a loaf. No more tomorrow.

CAMERON: One prominent liberal was notably unimpressed. Ralph Nader continues to mull an independent bid, and considers the Democratic party and its presidential candidates sell-outs.

RALPH NADER (I), FORMER PRESIDENTIAL CANDIDATE: I think they are indentured. Even if they have other progressive views, once they get the nomination, they're indentured to the corporate cash and the corporate influence that pervades the Democratic party.

CAMERON: On the subject of Iraq, all of the candidates called for a withdrawal of U.S. combat troops, and with one exception acknowledged that they would leave a small residual force. A long shot, trailing in both polls and campaign cash, New Mexico Governor Bill Richardson tried to set himself apart.

GOV. BILL RICHARDSON (D), NEW MEXICO: I would leave zero troops behind. Not a single one. Not a single one.

(END VIDEOTAPE)

CAMERON: Privately, the Democratic candidates and their aides often complain that the anti-war left, and their blogs in particular, are too demanding and politically extreme. Though at cattle calls like this, it often feels like a contest of who have can lead the herd with the most liberal red meat. Brit?

HUME: OK Carl, thank you. The latest Rasmussen Reports poll finds still undeclared Republican presidential candidate Fred Thompson now in a virtual tie with former New York City Mayor Rudy Giuliani at 28 and 27 percent respectively. It's the first time this year that any name other than Giuliani's has been at the top of that poll. Mitt Romney and John McCain, as you can see, each get 10 percent. And a new Mason Dixon poll out today shows Senator McCain trailing other Republican presidential candidates badly in Iowa, way down in fifth place with only six percent support. No other poll, however, has shown McCain that far behind. And, in fact, the last American Research Group Poll, back on May 27th, found him at the front of the pack, leading among likely Republican caucus-goers with 25 percent. Could yet another prominent Republican be considering a run for the White House, though not necessarily as a Republican? New York City Mayor Michael Bloomberg is out in Los Angeles attending a conference on bipartisanship and bridging the political divide. And while he denies having any plans to enter the fray, others are talking about what kind of presidential candidate he would make. Correspondent Anita Vogel reports.

(BEGIN VIDEOTAPE)

ANITA VOGEL, FOX NEWS CORRESPONDENT (voice-over): New York Mayor Michael Bloomberg is sounding a lot more like a national leader than a local mayor. In California, as he stood next to another politician known for reaching across the aisle, he criticized the partisan atmosphere in Washington.

MICHAEL BLOOMBERG (I), NEW YORK MAYOR: If our country is going to meet the challenges of the 21st century, all of us who care about progress more than political parties have to take responsibility for ending the corrosive and culture of partisanship that really has paralyzed our government.

VOGEL: And in an appearance yesterday, he suggested political parties should take a back seat to good governance.

BLOOMBERG: But joining a party doesn't mean you should stop thinking for yourself. Neither party has god on its side, a monopoly on good ideas, or a lock on any single fiscal, social or moral philosophy. Anyone who says their party does and the other one doesn't is either a fraud or just not a very good student of history.

VOGEL: Bloomberg reminded listeners of his 70 percent approval rating in New York City, despite rising property taxes 20 percent and income taxes on top earners. Today, he aligned himself with centrist Republican California Governor Arnold Schwarzenegger, who thinks other politicians should follow their lead.

GOV. ARNOLD SCHWARZENEGGER ®, CALIFORNIA: We ought to send a tape of everyone's speeches here today to our presidential candidates so they stay in course of the campaign and they will be focused on the things that are really important, rather than to attack each other.

VOGEL: Some Democrats say the mayor could make an interesting presidential candidate.

HAROLD FORD JR. (D), FMR. TENNESSEE REPRESENTATIVE: He certainly wouldn't hurt the race, in terms of offering a freshness, offering a vitality, offering a vibrancy, and, most important, offering a model of leadership that the country would have a chance to assess.

VOGEL: But Bloomberg insists that he is happy right where he is.

BLOOMBERG: I have no plans to announce a candidacy because I plan to be mayor for the next 926 days.

VOGEL (on camera): Whatever his plans, the popular New York mayor could quickly mount a viable campaign if he chose to. The billionaire is one of the only politicians in the country who could self-finance a presidential bid. And research shows he has the credibility, if not the number yet, to make it a horse race. In Los Angeles, Anita Vogel, Fox News.

(END VIDEOTAPE)

HUME: And this just in, the A.P. is reporting that Mayor Bloomberg says that he has changed his party registration from Republican to unaffiliated. Coming up later, is author Salman Rushdie's life in danger again? And the troop surge in Iraq gives the U.S. manpower for a big new anti-terrorism operation. Stay tuned.

(COMMERCIAL BREAK)

HUME: In Iraq today, some 10,000 American soldiers launched a huge new overnight offensive against al Qaeda in Diyala Province. That's northeast of Baghdad. At least 22 insurgents were killed, as troops battled their way into a terrorist stronghold in operation called Arrowhead Ripper. Items such as handcuffs, swords and electric cables, apparently used as instruments of torture, were seized from militant safe houses. In Baghdad, at least 78 people were killed, 200 others injured, when a truck bomb struck a Shiite Muslim mosque. The explosion hit worshipers as they were leaving afternoon prayers. Back at the White House today, President Bush and the Israeli prime minister agreed to support the new Palestinian government led by the Fatah faction and to do what they can to isolate the more militant Hamas. But neither man suggested that the way forward would be easy. Chief White House correspondent Bret Baier reports.

(BEGIN VIDEOTAPE)

BRET BAIER, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT (voice-over): During his meeting with Israeli Prime Minister Ehud Olmert, President Bush said both leaders agreed to bolster the moderate government of Palestinian President Mahmoud Abbas, a man who President Bush said offered a reasonable voice in a neighborhood of extremism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our hope is that President Abbas and the prime minister, Fayyad, who's a good fellow, will be strengthened to the point where they can lead the Palestinians in a different direction.

BAIER: For his part, Prime Minister Olmert said he is willing to talk to Abbas, with the understanding that any major progress will hinge on Abbas setting up a, quote, more serious and credible administration that fights terrorism.

EHUD OLMERT, ISRAELI PRIME MINISTER: They will have to fight terror in the most effective way, something that they haven't done, unfortunately, up until now.

BAIER: 1.5 million Palestinians live in Gaza, now under Hamas's control. President Abbas and his Fatah party control the West Bank and another 1.5 million Palestinians, with Israel in the middle. Hamas leaders called the move to form an emergency Palestinian government, kicking out Hamas, unconstitutional. Senior aides say President Bush is happy to deal with Abbas' new government. They say whether Abbas' move was legal or not is a Palestinian issue. But President Bush made clear today Hamas' bloody takeover of Gaza has become an international problem.

BUSH: It was Hamas that attacked the unity government. They made a choice of violence. It was their decision that has caused there to be this current situation in the Middle East.

BAIER: Senior administration officials concede they were surprised when Hamas won the January 2006 Palestinian elections and most didn't expect that Abbas' unity government with Hamas to last that long. White House aides believe the images from Gaza in recent days will show Palestinians Hamas' true colors as a terrorist organization.

TONY SNOW, WHITE HOUSE SPOKESMAN: If you're in Gaza, and you have seen people who pretend to be, quote, liberators and governors, slaughtering people in the street, it is probably going to change your view of them.

BAIER: Middle East expert Jon Alterman said the split between the Palestinian territories is a real problem, because while the U.S. and Israel will try to ensure that Fatah is successful in the West Bank, Alterman says it is something money can't fix.

JON ALTERMAN, CTR STRATEGIC & INTL STUDIES: Fatah wasn't very good at governing. Fatah wasn't very good at campaigning. Those weaknesses don't go away.

(END VIDEOTAPE)

BAIER: To truly strengthen Abbas, experts say Israel will likely have to dismantle settlements, release Palestinian prisoners and relax travel restrictions and those Israeli concessions will likely take some strong U.S. prodding to get done. Brit?

HUME: Bret, back to another matter, Jim Nussle is apparently in; Rob Portman out as budget chief. What does this mean for the rather aggressive strategy the president appears to have adopted on spending in his dealings with Congress? BAIER: Well aides say Nussle is the perfect choice for this. He's the former chairman—a former chairman of the House Budget Committee. He is scrappy and he is committed to a veto strategy.

HUME: All right Bret, thanks very much. With Palestinian land divided into two separate territories, Palestinians hoping to flee the violence in Gaza must go through the Israelis to get to the West Bank. But the Israelis are not allowing everybody who wants to leave to get through the area's crossing. Correspondent Mike Tobin explains.

(BEGIN VIDEOTAPE)

MIKE TOBIN, FOX NEWS CORRESPONDENT (voice-over): Hundreds of Palestinians connected to Fatah are attempting to leave Gaza and cross through Israel into the West Bank. They fear violent retribution if they stay in Gaza under the rule of Hamas.

ABU HANI EL MASRI, FORMER POLICEMAN (through translator): Hamas is attacking my house with stones every day. And they are threatening us for not dealing with the Hamas government. Gaza is more than a hell for us.

TOBIN: With children and all their belongs in tow, they have been waiting for five days. Conditions in the tunnel between Gaza and Israel have become putrid. Militants loosely affiliated with Hamas attacked the border crossing, resulting in two deaths and about 10 injures. Today Israel sent tanks and armored bulldozers to ward off another attack.

(on camera): Israel says some of the Palestinians in that tunnel are wanted Fatah militants from the al Aqsa Martyrs Brigade. Some of them were involved in the standoff at the Church of the Nativity in Bethlehem several years ago and were deported to the Gaza Strip. It is not a question of when the crossing will open for them, Israel says it won't.

(voice-over): The locked down crossing created one heart-breaking scene of a Palestinian man, whose 3-month-old son died in an Israeli hospital. Unable to cross back into Gaza to bury his son, he wandered the crossing aimlessly carrying his dead son.

NAEEM ALIAN, GAZA RESIDENT (through translator): I asked and they said get out of here or I will shoot at you. I don't know what I'm going to do. Go back to the hospital? Sleep here? I don't know.

TOBIN: Eventually he was allowed to cross but his case is isolated. Most of the people here are trying to leave Gaza, not return.

UNIDENTIFIED FEMALE: We will never go back to Gaza. Even if we died, we would never go back.

TOBIN: But officials say they won't have much choice. Almost all of them will be refused entry into Israel. At the Erez Crossing, Mike Tobin, Fox News.

(END VIDEOTAPE)
HUME: We've got to take a break here for sponsors and other lines. But stay tuned folks, because when we come back the Grapevine is next. And wait until you hear the first story. Stay tuned.
(COMMERCIAL BREAK)

(NEWSBREAK)

Click here for the "Political Grapevine."

HUME: And now for the wonderful world of education. You may have thought if any subject was safe from being linked to a teacher's political views, it would be math. But if you did think so, you have miscalculated. Wait until you hear correspondent David Miller's report on a new math program.

(BEGIN VIDEO CLIP)

DAVID MILLER, FOX NEWS CORRESPONDENT: These kids are learning high school math the old-fashioned way. But a number of public school teachers across the country are trying something new that critics say it adds up to trouble. It's called "Radical math." The teaching technique combines mathematics with social, political, and economic issues. Sample lessons posted on a Radical Math Website for teachers suggests the following assignments: Calculating the average number of casualties in Iraq, computing baseball stats to determine if all star voting is tainted by racism, and exploring how much tax money is spent on government agencies, including 30 percent for the military. Seattle high school teacher Larry Steele says "Radical Math" is an effective way to teach kids not only arithmetic but also how to make important decisions in their lives.

LARRY STEELE, HIGH SCHOOL TEACHER: We look at both sides. I mean, how do you feel about wearing shoes that were probably made by a person who makes a dollar a day? Do you feel OK about that?

MILLER: Critics of "Radical math" say the program unfairly imposes left-wing values on students.

SOL STERN, MANHATTAN INSTITUTE: A social justice agenda, meaning a conclusion that America is a racist country, America is an exploitative country, America is an imperialist country, and that our capitalist system is per se unjust.

MILLER: Well it is difficult to gauge just how much teachers across the country use "Radical math," it is especially popular in New York City. Recently more than 400 educators met here for a conference on teaching math and social justice. City education officials even gave one of the organizers a $3,000 grant. But one question students probably will not be quizzed anytime soon is if that money could have been better spent. In New York, David Lee Miller, FOX News.

(END VIDEO CLIP)

HUME: The Web site you tube, wildly popular, as you know, is going global. Cofounder Steve Chan says you tube will make nine new sites available in Brazil, France, Ireland, Italy, Japan, the Netherlands, Poland, Spain, and the U.K., with translations into the local language where necessary. Chan says this is something he always wanted to do but couldn't afford until Google bought the company last year. He says most visitors to the website already use computers located outside the U.S. Word that the author Salman Rushdie has received a British Knighthood has ignited a new firestorm of rage among some Muslims in Iran, Pakistan, and Great Britain. They have never forgiven for his book "The Satanic Verses," written back in the 1980s, and the Knighthood, they say, adds insult to injury
Correspondent Greg Palkot has that story.

(BEGIN VIDEO CLIP)

GREG PALKOT, FOX NEW CORRESPONDENT: Anger on the streets of Pakistan, protestors chanting "kill him, kill him," an effigy of Britain's Queen Elizabeth burned in the crowd. This followed similar protests in Iran, protests prompted by Salman Rushdie, British Indian author of a book branded blasphemous by Muslims, would be awarded a knighthood for literature. Angry sentiments echoed by top officials. The Pakistan Religious Affairs Minister was quoted as saying a suicide bomb attack would be a justified response to the royal honor. Today he adding "The west is asking for it."

PAKISTAN RELIGIOUS AFFAIRS MINISTER: Here is the west, putting fuel on the fire whenever there is an opportunity they get.

PALKOT: All of this is familiar ground for Rushdie. The late 1980's publishing of his controversial book "The Satanic Verses" started brutal protests. And the Fatwa, or religious edict, from then Iranian leader Ayatollah Khomeini, called for the death of Rushdie. It was Europe's first real taste of extreme Muslim reaction. The author went into hiding for a decade until the danger diminished. Some people don't forget.

NAZIR AHMED, BRITISH PARLIAMENTARY MEMBER: Just because he becomes abusive to Islam should not be the qualification of honoring someone.

PALKOT: All this as the U.K. deals with rough relations with the Muslim world. A recent event at the British embassy at Iran turned into a nasty confrontation. The U.K.-Pakistan ambassador told officials the knighthood was meant to honor an author with a number of well-regarded books, not to offend.

UNIDENTIFIED MALE: It is simply untrue to suggest that this is in any way an insult to Islam or the prophet Mohammed.

PALKOT: The U.K. is concerned with escalating rhetoric. With more protests planned, the fear these demonstrations could take on the global scope of last year's uproar over the Danish cartoons of the prophet Mohammed. Then, too, Muslims felt offense, and vented. The actual awarding of the knighthood honors to author Salman Rushdie will be presided over by the Queen here at Buckingham Palace. That ceremony could be at least weeks away. It's probably hoped here that a potentially king-sized clash of civilizations could be headed off by then. In London, Greg Palkot, FOX News.

(END VIDEO CLIP)

HUME: Next on "Special Report," how much influence do the left wing, left-leaning blogs have, and who is most influenced by them? Well talk with the FOX all-stars when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MATT STOLLER, LIBERAL BLOGGER: Traditionally it's seen as Democrats who listen to these ideas, but Republicans listen to them as well. So, by arguing, and organizing, and engaging in intellectual debate, and elevating the level of discourse, I think blogs on the left are really changing the political landscape.

(END VIDEO CLIP)

HUME: Well, they certainly can attract candidates. And this conference, the "Take Back America" conference this week in Washington features what is called, I guess, blog boulevard, which is a comfortable place for the bloggers to sit. And there you see, you get a sense of it. There are plenty of them there, and they are influential with the Democratic Party. They attract prominent candidates, and a number of them, as you heard in Carl Cameron's report earlier. Some thoughts on all of this now from Mort Kondracke, editor of "Roll Call", Mara Liasson, national correspondent for National Public Radio, and the syndicated columnist Charles Krauthammer, FOX News contributors all. Well, they do turn out, and they do matter, these bloggers. I mean, the candidates turn out, and the bloggers appear to really matter, don't they?

MORT KONDRACKE, ROLL CALL: Well, I think they do. And they are the leftward pressure on the Democratic Party that the right-wing talk show hosts are on the Republican party. And between the two of them they manage to polarize even further an already polarized politics, making it increasingly difficult to get any American problems solved, like health care, or the war in Iraq, or sensible terrorism policy. And all of the candidates are pandering to them. I mean, the democratic candidates are pandering to them just as much as the Republicans candidates are pandering to the right. And they were doing it again today.

HUME: Which group, would you say, is more influential with in their respective party?

KONDRACKE: No, I think a pox on both their houses.

LIASSON: 4.27 Inside their own party?

HUME: Which party is most influenced by its bloggers?

LIASSON: I would say the Democratic Party is most influenced by its bloggers. I think that the liberal blogosphere has become an important constituency group in the Democratic party, just like the labor unions, or the civil rights groups, the way that Harry Reid, the Senate Majority leader meets with them like he would any other constituency group in the Democratic party. I think that they have, as Mort said, have been responsible for making the Democrats more partisan, more confrontational, and pushing the party to the left.

HUME: And the sources of their influence, is it their readership or is it something else?

LIASSON: I think it's both. They have both been able to raise a lot of money.

HUME: The bloggers?

LIASSON: Yes, the bloggers and the internet—
HUME: Are you talking about the bloggers or the activists websites?

LIASSON: Well, I'm talking about both. The activist websites like Moveon.org—Moveon.org along raised $27 million in the last cycle. And Moveon.org members, there are three million of them, every cycle give about $100 million on their own to candidates, all of them, presumably, Democrats. So they raise a lot of money, and they also create a kind of echo chamber, and they do keep stories alive that would otherwise die. And, look, we saw this on the right, the swift boat veterans, that was on the internet, too.

HUME: But they really started by purchasing ads, old-fashioned TV ads.

LIASSON: Well, Moveon.org purchases ads, too.

HUME: They sure do.

KRAUTHAMMER: Mort's right that talk radio is conservative and the blogosphere tends to be more liberal. I'm not what that tells us other than conservatives like to talk, and liberals like to type. But they have a disproportionate influence. It is interesting, there are conservative blogs, but I think, at least the ones I read, they are more analytical and restrained. The more liberal blogs are a lot more pungent and profane, but political. They are actually active in politics, raising the money, and mobilizing the base in a way you don't have in the right-wing blog. What is interesting is that this meeting, the "Take Back America" meeting, where all of the candidates have appeared, they have an annual award named after Paul Wellstone, the late liberal senator. It's their Oscar, it is kind of the best performance by a liberal. And the man who presented it is Ned Lamont. Now who is Ned Lamont? A man who was a creation of the liberal blogs, found, recruited and financed by the blogs.

LIASSON: Or by himself.

KRAUTHAMMER: Yes. But they were the ones who went out there raising the—

HUME: He was the guy who ran against Lieberman.

LIASSON: Beat him in the primaries.

HUME: Beat him in the primaries.

KRAUTHAMMER: His job was to run against and destroy Lieberman. So what he did is he wins the primary, he loses the general election. Which tells you that the overall effect, I think, is that they will pull the Democrats left, which will in the end endanger their objective of winning general elections.

LIASSON: Well, talk radio didn't endanger Republicans from winning.

KRAUTHAMMER: The country is more conservative than it is liberal. It's angry with Bush, but, if you look at the ideological shift over the last 30 years, it is to the right, it's not to the left.

KONDRACKE: Well, the fact is that there are more conservatives in America than there are liberals. The polls all indicate that—

HUME: Isn't that why liberals refer to themselves now as something else.

KONDRACKE: Progressive.

HUME: Progressive.

KONDRACKE: But the swing group is the independents. And both the nominees, I'm afraid, are going to be so far out, that the independent are going to throw up their hands. Frankly, I would like to see Michael Bloomberg get into this.

HUME: Well, he's acting like we knew he was going to, he's reputed the Republican party, or at least disaffiliated himself. He is now unaffiliated as of tonight. When we come back with the panel we'll discuss the Energy Bill, what's in it, what could be left out, and what are its chances. That's next.

(COMMERCIAL BREAK)

SENATOR BARBARA BOXER, (D) CALIFORNIA : I'm concerned that they may be trying to derail this bill. They haven't said so explicitly, but if you listen carefully, you will here the echoes of obstructionism.

SENATOR JON KYL, ® ARIZONA: We ought to be addressing what is on the taxpayer's mind, namely getting gasoline prices down, and not simply passing more taxes under the guise of an energy policy.

(END VIDEO CLIP)

HUME: The energy bill, folks, is in real trouble tonight. The Democrats, as you heard, accusing the Republicans of obstruction. Democrats accuse them of trying to solve everything with a tax increase, in this case it would be the ending of certain tax breaks for the oil companies, and the Republicans arguing that the bill does not do anything to curb gasoline prices or produce more fuel. What about it?

KONDRACKE: Well, that is right. It looks as though this Energy Bill is going to go down to defeat because, again, there is no bipartisanship. An example, two bills today, rival bills, to promote liquid coal, right? One, the Democrats all voted for, sponsored by the Senator Tester of Montana, and the other the Republicans all voted for. Neither bill got 60 votes. They couldn't bring them together, they couldn't make an agreement on a bipartisan basis that might have gotten 60 votes, so it is all going down in defeat. It looks like Senator Bingaman's renewable standards requirement is not going to get 60 votes. Or if it doesn't that will bring down the bill. And it will add these taxes—

HUME: A renewable standards bill would mean that every state you have to have a certain percentage of the fuel that was generated there.

KONDRACKE: By so-called renewable sources.

HUME: And the people from the south say, look, we haven't got, that is most easily done, apparently, by wind farms, and the people in the south say we don't have wind down here to do that. It hurts us disproportionately.

KONDRACKE: So Senator Domenici says well let's include in this renewable definition nuclear and hydroelectric power. Oh no, can't do that. So they voted that down. I mean, there was just no agreement on anything.

LIASSON: Yes, there definitely doesn't seem to be a center on energy policy. You also have got Republicans here, Jon Kyl said we have to bring the gas prices down. Well, there is no way to bring gas prices down in the near-term. We have see them go up and down over, fall over the last year. But, look, the democratic base, you know, which was at that conference today that we talked about, they want big drastic energy policy changes, And I think that if this fails, this will be a problem for the democratic leadership in congress, which was sent to Washington.

HUME: What kind of big changes do they want?

LIASSON: I think they want real fuel economy standards to go up. They want some kind of a cap on carbon emissions. They want a big push to be less dependent on foreign oil.

KRAUTHAMMER: Look, Mort is lamenting the absence of a center to pass this bill. I rejoice in the absence of a center. It is a lousy bill, and all of these ideas are lousy ideas. For example, liquid fuel out of coal. This is picking and choosing, probably, the losers the way that Carter picked shale oil in the 1970's. Let the market decide what is economical and how it's going to work, and not have an arbitrary picking and choosing in Washington. Secondly, it is mandates. What failed in the Senate was the 15 percent, which, as you pointed out, is absurd. It has to come from solar or wind or geothermal. Solar is incredibly expensive, wind largely absent in the south, and I don't see any Yellowstones in Maryland where I live. And the senators assume that if you mandate it, it's going to happen, like the field of dreams. What going to happen is it's going to increase the price of electricity. And what you get is a hidden tax. Instead of being honest about all of this and taxing things openly to get the reductions in usage or new sources of energy, what do you is you mandate—hide a tax and higher prices. It going to happen in alcohol, in the biofuels as well. And it going to happen in the raising the mileage standards, which is a fight in the House, which is going to raise the price of cars. You have got to—either the market does it, or you get a mandate of something simple that requires no regulation, like increasing oil imports these days, and have people do it.

HUME: Is the bill dead in your view? KRAUTHAMMER: It should be and it will be.

HUME: You think so, Laura?

LIASSON: At the moment, it looks that way.

KONDRACKE: There will be no energy Bill this year, I think.

HUME: You heard it here first. That's it for the panel, but stay tuned, because we have new information about the plan for the so-called gay bomb that the Pentagon says it rejected next.

(COMMERCIAL BREAK)

HUME: And finally tonight, there was a round of guffaws when it came out the other day that the Pentagon considered by rejected developing a gay bomb, so-called, that would render enemy forces so smitten with one another, they would forget about fighting. It turns out, though, that the thing has been tried, and the results may surprise you. And 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.

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