This is a rush transcript of "Special Report With Brit Hume" from October 5, 2007. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENTIAL CANDIDATE: We cut taxes by over $9 billion. We took the income tax and reduced it by 24 percent. And by the time I was finished, we were collecting 41 percent more revenues from the low tax then we used to collect from the high taxes.

So don't tell me that tax cuts do not work.

FRED THOMPSON, PRESIDENTIAL CANDIDATE: This concept of lost revenue tax cuts — look how much revenue the government has lost, look how much revenue we have lost. When you have tax cuts the revenue is not lost. The tax taxpayer knows where it is. It is in his pocket.

(END VIDEO CLIP)

JIM ANGLE, GUEST HOST: Those were some of the proceedings today at a conference in Washington with fiscal conservatives, something Republicans are a little touchy about these days. Some thought on all this from Fred Barnes, executive editor of The Weekly Standard, Bill Sammon, senior White House correspondent for the Washington Examiner, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Fred, we look at these guys, and this is something I hear Republicans say all the time — we have lost our way on cutting spending. Not so much on taxes, though they are going to phase a problem with a Democratic Congress because a Democratic Congress is determined to roll back the Bush tax cuts or let them expire in 2010.

FRED BARNES, EXECUTIVE EDITOR, WEEKLY STANDARD: They will probably have to let them expire because, obviously, now if they roll them back President Bush would veto that.

Now, conceivably, if there is a Democratic president in 2009 and a Democratic congress, they wouldn't have to wait until 2010, but I suspect they will anyway, and just say we did not do it, these tax cuts expired.

The truth is Republicans did let spending get out of hand, and they have been good on tax cuts. And there you get around to what is the definition of a fiscal conservative.

Frequently in the media, fiscal conservative can mean somebody who wants to raise taxes like a madman, allegedly to balance the budget and get rid of the deficit. Tat is not my definition of a fiscal conservative, who is someone who wants to keep taxes low and spending low, and that is what I think these folks mean.

And when you see the record of tax cuts, that seemed to always work. The Kennedy tax cuts, which came in under Lyndon Johnson worked. The Reagan tax cuts worked. The Bush tax cuts have worked, clearly. And when we see when Bill Clinton raised taxes in 1993, it did not lead to a recession, but it did lead to downturn in the economy, which grew less. But then when they reduced the capital gains rate in 1997, you saw the stock market really boom.

BILL SAMMON, SENIOR WHITE HOUSE CORRESPONDENT, WASHINGTON EXAMINER: This is certainly a good day to talk about the virtues of tax cutting, a day when unemployment declined, many more jobs were created, the S&P 500 hit a new high, the dollar actually increased against the Euro finally, thank heavens.

And the federal budget deficit was projected to be the lowest in five years. So clearly all the Republican candidates for president are pushing for low and lower taxes.

ANGLE: They are falling all over themselves to say I would cut taxes more than he would.

SAMMON: I would be lower.

But I think the interesting, and I think it is a big fight between Romney and Giuliani over who is the bigger tax cutters — there is an interesting difference between the two which didn't come out today, which was that Giuliani has not signed the no tax increase pledge while Romney has.

Giuliani says it is irresponsible for him to do so. What happens if there is another major war, for example?

ANGLE: Or, perhaps, on Social Security.

SAMMON: Or on Social Security. Romney, however, is more playing to the base. The question is are these just throwing red meat, or are they actually making proposals that we can rely on for guidance with that there policies are when they are president?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: They are throwing a few red herrings, because Romney is so intent on creating an issue between him and Giuliani that he has gone after him on the grounds that Giuliani refused to allow the repeal of a commuter tax when he was the mayor of New York and the line item veto — he fought to retain it all the way to the Supreme Court.

He was the mayor of this city, and the commuter tax pours millions of dollars into the coffers of his city from people who do not live there. What mayor on earth is not going to defend that kind of tax? It doesn't matter if he believes in it, he is a fiduciary, he is a lawyer. It is a freebie.

But on the line item veto, the first item that President Clinton and vetoed was a couple hundred million for New York hospitals. Of course the mayor of New York will fight it all the way to the Supreme Court.

The Republicans all agree on cutting tax rates and that is a difference with Democrats. Democrats have not learned the difference between cutting a rates and cutting revenue. And if you cut the marginal rate of taxation, you get an increase in growth, an increase in the pie, and often a flood of revenues, as we have had with in the last few years.

ANGLE: Last word?

SAMMON: Just quickly — Giuliani took the right tack. He did not go after Romney, he attacked Clinton and the Democrats running for president, because, clearly, there is a big distinction between the two.

ANGLE: OK. When we come back, the president says you cannot believe everything you read in the papers, and the U.S. does not torture. And FOX obtains a CIA memo that says Congress was repeatedly briefed on the interrogation techniques that are now a controversy.

The panel returns to talk about that after a break.

(COMMERCIAL BREAK)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: And when we find somebody who may have information regarding a potential attack on America, you bet we are going to detain them. And you bet we are going to question them, because the American people expect us to find out information, actionable intelligence, so we can help protect them.

REP. NANCY PELOSI, HOUSE SPEAKER: There is a legal definition of "torture" that believe this would fit. And the president says it is not. Again, we have to see the degree and what he is talking about. Because again, to answer on the basis of something that has been reported in the press, that the president has deemed is not torture, it is not, I just cannot give you an informed answer on that.

ANGLE: OK. That is some of the comments today on a New York Times story that first broke yesterday that the administration had legally justified some interrogation techniques against terrorists that included head slapping, exposure to cold, and simulated drowning.

Lawyers said those techniques are legal and that they were, as the CIA said in a memo we obtained today, that they were fully and repeatedly briefed to members of Congress. I could not quite tell whether Speaker Pelosi was admitting she had been briefed or not.

KRAUTHAMMER: It was a pretty incoherent answer. I think the answer was the top leadership in Congress knew about this.

But it is a question of the principle itself, of the activities. People quibble about the word "torture," let's call it "harsh interrogation techniques." They should be outlawed I think, with two exceptions.

One is the ticking time bomb, which I think everyone agrees, even John McCain, that ultimately you do what you have to do to get information if there is going to be an imminent attack.

The other is more problematic one, which is the question of Khalid Sheikh Mohammed, the high level terrorist operative who knows about stuff. It may not be imminent attacks, but it is real attacks on real Americans with real deaths.

And the question is what do you do? This is not harshly interrogating an ordinary soldier, which you would not do, or even an ordinary terrorist who does not deserve a protection, but to whom you would give protection. It is the question of a Khalid Sheik Mohammed.

And you have to weigh it. On the one hand are the lives of say 3,000 Americans in a second 9/11, on the other hand is a had afternoon for Khalid Sheikh Mohammed. Given that choice, I give old Khalid the bad afternoon.

SAMMON: I think it is clear that the Intelligence Committee was briefed. The question is what are in the use two memos in 2005? What really did they say? And I do not think that is an unreasonable thing to find out.

Because as many as a hundred suspected terrorists —

ANGLE: Well that what —

But it wasn't just one person, or a couple of people, but a whole dozens, and to read that memo I think is not out of the realm of, it is not ridiculous to ask for. Especially if you suspect that real torture may have been allowed.

One of the suppositions here is that almost anything was allowed in at least one of those memos.

ANGLE: For what we understand, and from what, in effect — let's just play something that one Republican member of the House Intelligence Committee said today, Pete Hoekstra, about this issue.

(BEGIN VIDEO CLIP)

REP. PETE HOEKSTRA, R-MICH.: They had the opportunity to give feedback and tell the president. And they have the responsibility to tell the president as to whether they agreed or, most importantly, if they disagreed with the actions that this administration was taking.

(END VIDEO CLIP)

ANGLE: And Senator Bond told Wendell Goler that, in fact, they were not only told all the interrogation techniques, but they tried to demonstrate them to some extent.

There is a difference between that and I think what you're talking about, which is some members of Congress want to see the actual legal memos, the legal reasoning which, obviously, they are not usually eager to share because they are internal administration documents. What is your take on this, Fred?

BARNES: There are two reasons — one, the are very sensitive documents, and, two, it is a lawyer at the Justice Department giving the president his opinion as his client. That is the president's lawyer.

And I would not hand them over if I were president. I certainly agree with Charles that, in a pinch, in a ticking time bomb case, you will always use very, very harsh interrogation techniques.

But with the Khalid Sheikh Mohammed, a guy who knows everything, of course you're going to be pretty rough with him. And, frankly, if they slapped him, if they made him cold, and if they used water boarding, which is simulated drowning, in his case, I think those would be proper, and I suspect they did use them.

KRAUTHAMMER: (INAUDIBLE) has said that the information garnered from the interrogation of terrorists like Khalid Sheikh Mohammed yielded more information than any other method of information gathering. And as a result we have had six years without a second attack. That ought to weigh heavily in any moral evaluation of what happened.

ANGLE: And not only that, but they say we were also able to warn the Europeans with some of the things from that and from eavesdropping.

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