This is a rush transcript of "Special Report With Brit Hume" from January 15, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: This is the day that's going to change, I believe, the politics in the nation as we get ready to select our nominee. I think Michigan is vote for Romney again. I'm planning on it.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: We think it's important, and we're competitive, and we're doing well in South Carolina, we're doing well nationwide. But a month ago we would have had a very different assessment.

(END VIDEO CLIP)

BRIT HUME, HOST: Usually when one candidate says he's going to win, the other one says he expects to do well. That's sign somebody is playing down expectations. But after what happened in New Hampshire, and perhaps elsewhere, nobody is relying on that sort of thing very much.

Some thoughts about this Michigan primary now from Fred Barnes, Executive Editor of "The Weekly Standard," Mort Kondracke, Executive Editor of "Roll Call," Bill Kristol, Editor of "The Weekly Standard," and Nina Easton, Washington Bureau Chief for "Fortune" Magazine, FOX News contributors all.

We can get a quick look here at the way the average of polling stood as the people went to vote today in the Michigan Republican primary. There is no real contest on the Democratic side because Hillary Clinton is the only name on the ballot.

But there you see it, by contemporary standards, that is no margin at all. So it looked to be a toss up going in.

We do know a little bit, however, now about how people voted in what groups and why. So what, Fred Barnes, are we learning from the voting patterns we've seen as a result of the exit polling? It is an incomplete sample. It certainly doesn't tell us who won the race, but we know something about voting patterns.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Right. I think the single most important thing is that the voters in the Republican primary believe that the economy is by far the biggest issue, over half of them.

And so what you need is an economic message. You need to appeal to economic conservatives, who are what the Republicans are: economic conservatives.

And the truth is Romney has a stronger one, particularly just for Michigan, which is the one state that is the worst of the 50 states. I think it is the worst off economically in the country, even worse off than Louisiana. And Louisiana has the excuse of Katrina. Michigan doesn't have an excuse. It's an economy in a real tailspin.

And Romney focused on that, you know, particularly --

HUME: He came out in New Hampshire and started talking about the economy.

BARNES: Right away. And, unfortunately, McCain doesn't seem to have adjusted to this economic issue here --

HUME: At least immediately.

BARNES: Well, no, I don't think at all, actually.

HUME: Really?

BARNES: Well, look, what is he talking about? He has talked about we're going to -- he's arguing -- he's now saying that when he voted against the Bush tax cuts that that was the right vote. If you saw him, he's ducking his argument that he used to have.

He used to be very strong for entitlement reform in the debate that FOX had him a few days ago. He was talking well, we'll have a commission. For economic conservatives, they know that when you have a bipartisan commission, that is a cover for raising taxes.

And McCain -- the truth is, Romney has had a better message here for Michigan conditions than McCain has.

HUME: So the fact that voters were most concerned about that would favor Romney?

BARNES: Absolutely.

HUME: Not necessarily decisively, but would favor Romney.

MORT KONDRAKE, EXECUTIVE EDITOR, ROLL CALL: There is not contest on the Democratic side, but you can vote for "uncommitted." Hillary Clinton is the only person with a name on the ballot, and you can vote for "uncommitted." And it looks as though African-Americans loaded heavily in favor of "uncommitted" over her, which suggests a protest vote against this racial stuff that's been going on back and forth between her and Barack Obama and their supporters.

So that is the interesting thing to watch tonight.

HUME: On the Democratic side.

KONDRACKE: I agree with Fred that Romney had a message focused at the rehabilitation, the economic rehabilitation of Michigan, much stronger than McCain did.

At the end of the game, McCain started talking about how green technology would bring back the Michigan economy, but it was late in the game, and Romney, whose father, after all, ran American motors at one time, and was the governor here, identified himself as a hometown boy, and also said it was personal.

Now, was his message conservative? I mean, he says that Washington will make it its responsibility --

HUME: Who?

KONDRACKE: Romney -- Washington will make it its responsibility to help out the auto industry. Well, why not the textile industry? Why not the mining industry, et cetera?

HUME: Bill.

BILL KRISTOL, EDITOR, "THE WEEKLY STANDARD": He'll probably say that Washington should help out the textile industry in South Carolina, and it will probably work.

I think on economics, Fred is absolutely right. What McCain has gotten so much good press for -- global warming; he is the most liberal or green Republican on that -- CAF standards.

HUME: You mean fuel economy standards mandated by the government..

KRISTOL: Right, which would impose a burden on automakers in Detroit.

Michigan has 7.4 percent unemployment and a lot of people losing jobs in the auto industry and satellite industry, suddenly being a great hero of environmentalists doesn't work so well.

And, secondly, he didn't make it Commander-in-Chief election in Michigan. It was an economics election, and I think Romney probably got an edge on him.

HUME: But he did have one ace in the hole, which is what helped him so much eight years ago, and that was the fact that independents and, indeed, Democrats can vote in the Republican primary out there. The early voting tells us something about that -- Nina?

NINA EASTON, WASHINGTON BUREAU CHIEF, "FORTUNE" MAGAZINE: And no surprise, Independents will be going for McCain.

I think the big question -- I have to do my full disclosure that my husband works for Romney -- but the big thing to watch tonight is how McCain does with Republican voters. He lost them, keep in mind, by one point in New Hampshire.

Regardless of whether he is a victor or not tonight, how will he do on core Republican voters?

HUME: Right, and do we know --

KONDRACKE: What's important on that score is that down the line, you will get into primaries where Independents can't join in the contest. It's a Republicans only primary, and if Romney can capture the regular Republicans he's got a chance to win the nomination.

KRISTOL: Romney is winning Republican's easily.

If you look at the exit polls, they don't look that different between New Hampshire and Michigan. The same basic pattern --

HUME: So the question is the Michigan Independent vote.

KRISTOL: Right. Michigan has a bigger Republican vote relative to the Independent vote, it looks like. And the Michigan electorate seems to be a little more conservative than the New Hampshire electorate.

HUME: OK.

When we come back, speaking of getting economies going, is Washington going to work up an economic stimulus package? The president says he's considering it. The Democrats are all for one. We'll talk about what it might be next.

(COMMERCIAL BREAK)

HUME: That's the opening bell on Wall Street. Look at end of the day. The final number, I think, was 277, but as the closing bell rang, it was sitting on 281 down. That, folks, is a bad day.

And that sort of thing has Washington worried, and indeed much of the country worried that we might now be headed into an undeniable recession.

Back with our panel on that -- Washington on both ends of Pennsylvania Avenue, there is talk of a stimulus package. Where is this likely to go? We've been here before. There have been a lot of stimulus packages passed. What about it, Nina?

EASTON: We forget that there was a downturn at the tail end of an election year in 2000.

And, look, I'm not an economist, and I don't play one on TV, but I did talk to a lot of economists recently about this, everything that's going on, and the concern is that where we're heading with these tax rebates, it's very similar to the 2001 initial tax package where the reliance was on the short-term stimulus -- you get a $600 check in the mail.

A lot of the talk that is going on today both among Democrats and some of the administration is that short-term money in the economy --

HUME: Barack Obama is talking $250 for everybody?

EASTON: For everybody, and another $250 Social Security on top of that for Social Security recipients.

But the problem when you talk to economists is that in 2001, it didn't do anything. What really mattered was the long-term -- once the long-term tax cuts kicked in, which some of them were also passed in 2001, more in 2003 -- once those kicked in, and cuts an capital gains an dividend cut and personal income cuts, that helped turn around the economy by 2003.

KRISTOL: Bush should call for making those making those cuts permanent, and will, certainly, in the State of the Union. I think the White House will go for a stimulus package. I think they are right to, politically. I think it is a total win-win.

HUME: What about economically?

KRISTOL: Economically it's not going to make much difference. But it won't do much damage, it's not like the deficit is so great. And people could use a little more money.

I would do a tax credit for people who work, something refundable against FICA, against a Social Security tax. If Bush can get a deal with Pelosi and Reid, and they agree that we're going to have a mostly tax cut, not too much government spending type of to a stimulus package, it's great for the administration.

I think it takes the economic issue away from the Democrats to some degree. They just agreed on a stimulus package, they can't going around beating up the president or the Republican Party so much. And it probably would help a little bit to get some money into people's pockets.

But it has to be a tax cut heavy stimulus package, not a spending package.

HUME: Aren't the Democrats the one that you have to have pay as you go, and that any spending or tax cutting you do has to be offset by other tax increases or by spending cuts? What happened to that talk? That's gone out the window.

KONDRACKE: That's what you do if you don't think you're headed into a recession, you can go for pay-go. But if you believe in Keynesian economics, and all the Democrats do --

HUME: It sounds like Bill does, too.

KRISTOL: To some degree, a nice combination of supply side and Keynesian economics.

KONDRACKE: -- then you want deficit spending, and deficit spending is perfectly all right.

The danger would be as what happened in 1992 when George Bush had a Democratic Congress and the Democrats insisted on short-term money in people's hands, and he insisted on capital gains taxes, and vetoed what they did. The economy did go into a recession, and Bill Clinton won the election, declaring that this was the worst recession since the Great Depression.

But if we do go into a recession, it's going to be bad for Republicans, presumably, in the general election. And so that's another reason why Bush, I think, will consider it.

HUME: Quickly, Fred.

BARNES: The problem when they sent out the checks in 2001, $600 to couples -- listen if they send them out again this year, I promise to spend the money!

HUME: OK.

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