This is a rush transcript of "Special Report With Brit Hume" from September 17, 2007. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

MICHAEL MUKASEY, ATTORNEY GENERAL NOMINEE: The task of helping to protect our security, which the Justice Department shares with the rest of our government, is not the only task before us. The Justice Department must also protect the safety of our children, the commerce that assures our prosperity, and the rights and liberties that define us as a nation.

SEN. CHARLES SCHUMER, D-N.Y.: The nomination of Judge Mukasey certainly shows a new attitude in the White House.

SEN. PARTICK LEAHY, CHAIRMAN, SENATE JUDICIARY COMMITTEE: I stand ready to work with him in the coming weeks to get the material we need. And then once that material is available, to find an appropriate time to schedule a hearing.

(END VIDEO CLIP)

BRIT HUME, HOST: That was Judge Michael Mukasey, a retired judge, named today to be the new Attorney General by President Bush, and reactions by two critically important Democrats.

Some thoughts on all this now from Fred Barnes, executive editor of The Weekly Standard, Mara Liasson, national political correspondent for National Public Radio, and Mort Kondracke, executive editor of Roll Call — FOX News contributors all.

Well, Mort, you heard Senator Leahy say that he would be prepared to schedule hearings after the administration had produced material that the committee needs. Is this material pertaining to the background and judicial record of Judge Mukasey, or is it something else?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: It is not. This is fighting old battles.

Senator Leahy and other Democrats have alleged that the Justice Department is in a shambles, not being managed well, people leaving, all of that, and it has to be brought back up and running.

So, here the president, and I have to say, Josh Bolten as well, the White House Chief of Staff, in another great talent pick, it seems to me, found Judge Mukasey, and put him —

HUME: You don't know so much about him.

KONDRACKE: I have read a lot about him, actually. I haven't said his name — Mukasey.

He is a tough guy on terrorism. He is a conservative, but he has the respect of people like Chuck Schumer. And it seems that he is a real winner and that he ought to be confirmed.

HUME: What is the material they want?

KONDRACKE: That was all the stuff that deals with the U.S. attorney fight that —

HUME: The firings that the White House has up to now refused to provide.

KONDRACKE: Right. And they may well want the bodies of Karl Rove and Harriet Miers before them — permission to get those people. They are going to demand a lot, and my guess is that there will be a face off here, and the administration is not going to give it to them.

MARA LIASSON, NATIONAL PUBLIC RADIO NATIONAL CORRESPONDENT: Yes, and there has been an ongoing fight over how much information the administration will give to Congress. They are probably want information on warrant-less surveillance, and all sorts of other intelligence activities.

But, the bottom line is he will get confirmed —

HUME: Really? How can you be so sure?

LIASSON: I think he is going to be confirmed. When you hear Chuck Schumer and Pat Leahy —

HUME: When the Chairman of the Senate Judiciary Committee says he won't even schedule hearings until the administration has provided information that it allowed its previous Attorney General to go down, refusing to provide that information, how can you be so sure that it will ever come to a vote?

LIASSON: I think there will be a fight, but I think, in the end, the Democrats will not hold up to get every single thing they want. Maybe they will come to some kind of a deal with —

HUME: A compromise — Mort will be ecstatic about that.

FRED BARNES, EXECUTIVE EDITOR, WEEKLY STANDARD: There is no compromise to had. And I agree with Mara, they will have to back off.

It's the Democrats who have said there is a crisis at the Justice Department, it is dysfunctional, it is in disarray. We have to have a new Attorney General immediately. Are they the ones to say except we can't have a new Attorney General until we get some documents —

HUME: Documents that don't relate to him.

BARNES: — the bogus U.S. attorney scandal that don't relate to him?

I don't think they can pull that off. This is a ploy that Senator Leahy may try in the beginning, but this guy is not a crony of President Bush. He is not a Texan. He is a conservative, but not a movement conservative. He is now a partisan Republican. He is distinguished.

It seems like every time he is mentioned the word "respected" comes up. And it is obvious why Bush nominated him in the first place. Here is a guy who agrees, basically, with the president on the only issue that really matters, and that is the legality of certain things like wireless surveillance that are used in the war on terror.

LIASSON: And he can get confirmed.

BARNES: And he could probably get confirmed, too.

HUME: So you think it is a good choice?

BARNES: I think it is a brilliant choice.

HUME: Mara?

LIASSON: Yes, I think it solves the problem. He found somebody who agrees with him, who can get confirmed. That is what you need. It is a year-and-a-half appointment.

KONDRACKE: Based on what I have read, and, basically, his op-eds that he has written for the Wall Street Journal on the Patriot Act and the Padilla case, he is perfect for George Bush.

He is smart, he thinks clearly, he writes well. He's absolutely derisive about the left worries about the Patriot Act and the American Library Association and all of that.

And he also says the Padilla case is the proof that our criminal justice system should not be handling — ordinary criminal justice system should not handle these terrorist suspects. That it needs a special court, a national security court. He is very tough, and I think he's very persuasive on the —

LIASSON: And he is also tough on the administration in the Padilla case when they weren't giving him a lawyer and doing other things. He seems like an able guy. They certainly are not going to be able to poke holes in his qualifications.

BARNES: If Mort likes him, he is bound to be confirmed.

HUME: When we come back with the panel, former Federal Reserve Chairman Alan Greenspan's new book and what he really said or meant in the context. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The administration went to war saying it was all about weapons of mass destruction.

ALAN GREENSPAN, FORMER CHAIRMAN, FEDERAL RESERVE: I believe that they believe that. I'm not saying that they believed it was about oil, I'm saying it is about oil, and that I believe it was necessary to get Saddam out of there.

(END VIDEO CLIP)

HUME: Because you see, said former Chairman Greenspan, Saddam Hussein and his regime were a threat to world oil supplies. And if he had remained in power, he said in interviews and elsewhere, the price of oil, which is at whatever it is now, very high, could have gone to $130 a barrel.

The chairman also had some unpleasant things to say about the president's economic policies. He suggested that he was in favor of a tax cut, but not necessarily the one the president passed, and that he was certainly not in favor of all of the spending.

Back with our penal. So what are we to make of this, Alan Greenspan. Alan Greenspan is a conservative, if there ever was one — a one time disciple of Ayn Rand, who goes back in terms of service and friendship with Dick Cheney and Rumsfeld and all those guys back to the Ford years, and, yet, here he is.

What about it, Mort?

KONDRACKE: He was treated as god when he retired, a financial god. And he did preside over, or at least keep the economy on track during a lot of crises. There was the Black Monday, and the 9/11, and all of that stuff.

Now there is —

HUME: What explains his book?

KONDRACKE: I think it is totally irresponsible for him to have written the Iraq war is all about oil the way he said. Now he's saying "Well, that was my opinion, not their opinion."

But, if you read the lines in the book, it sounds as though he is imputing that to the Bush administration, which plays into the hands of all the nay-sayers about the war, and the Islamic terrorists who say, "Aha, they are just trying to get our oil." But he corrected that mistake.

But what is really interesting now is the criticism that he is coming in for from people who say that he kept interest rates too low for too long and it is the cause of the bubble, all the bubbles — the housing bubble —

HUME: You mean both the housing bubble and the dot.com bubble?

KONDRACKE: Right, and there is a very strong case to be made for that. He says no, he couldn't have perceived it. But other Fed governors, apparently, did say "Wait a minute, we have to do something about this," and he refused.

LIASSON: I think that Alan Greenspan is someone who, as Mort said, has so much credibility that everything he says in the book is going to be taken as very credible. And I wonder if he had any idea of what kind of a stir that comment about it being all about oil would cause at the time.

And that is a puzzling thing to me. He certainly wanted a stable oil supply, he makes that clear. But he definitely suggested, or leaves the impression, that that —

HUME: Well, he said it was about oil, and it was a good idea. But he certainly doesn't argue that it is about the United States getting control of Iraq's oil fields.

LIASSON: Yes, which are two very different things.

BARNES: Alan Greenspan is one of the cleverest political operatives ever in America. He is very, very smart politically. Look what he had to deal with, and Mort mentioned part of it.

On the one he hand the dot.com bubble, when it burst. It did more than anything else to wipe out the projected budget surplus.

HUME: How so?

BARNES: By wiping out all of the capital gains earnings and the corporate profits, and all this stuff that was really — and built up an actual surplus in the late 1990's, and we had this projected surplus. When the dot.com bubble burst it was gone.

Then the housing bubble, which has given us the subprime mortgage mess and a credit crisis.

OK, that is on the one hand. So how do you not make that the big story, and in some stories, like the one by Bob Woodward in the Washington Post, neither of those were even mentioned. How do you get around that? You follow the infallible rule that if you are a Republican, you attack other Republicans.

It always works. It always works with the media. If a democrat attack a Democrat, eh, no story. But when a Republican attacks a Republican, that person is a statesman, and it is big news, and that person had something to say. And most of the press fell for it.

I will say there is one person who didn't, though, and, frankly, I was surprised — Leslie Stahl on "60 minutes" grilled him on the housing bubble, on the dot.com bubble, on his going around now as a private figure talking about recessions, and that stirs the market as well, when he shouldn't be saying that.

KONDRACKE: Well, I agree with what Fred said. I do think that you have to take — you do you have to take seriously, though, what he said about the Republicans, that they were elected.

HUME: They're acting like drunken sailors.

KONDRACKE: Exactly.

BARNES: We knew that.

KONDRACKE: But I think he is now backing off.

He fueled the size of the Bush tax cuts. He gave testimony that sounded as though it was an endorsement of the Bush tax cuts. Now he says "Oh, no, I was only in favor of a tax cut."

BARNES: Mort — you know about the tax cuts? They worked.

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