This is a rush transcript from "The O'Reilly Factor," March 13, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight, [reaction to Obama's controversial pastor]. Let's bring in Dr. Wendy Schiller, who teaches political science at Brown University. She's in Washington, as is FOX News analyst Juan Williams.

All right. Juan, I'm going to just let you go. I think it's a problem for Senator Obama. Am I wrong?

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: No, it's a big problem. And it's the big problem because Obama has come across to the American people very successfully as someone who is able to cross over the racial divide and speak of racial healing and optimism in this country. He really has become the personification of a better view on race relations. And he is very close to Reverend Jeremiah Wright.

If you'll recall, Bill, when he was debating with Hillary Clinton, he said, you know, when it comes to Farrakhan, he renounced, he dejects, whatever because he's not close to Farrakhan. They may live in the same city, but that's about it. But when it comes to Jeremiah Wright, you've got him right there in the pulpit, in the pews, listening, supporting Jeremiah Wright. The title of his book, "Audacity of Hope," comes from a sermon by Reverend Jeremiah Wright. He knows of this hateful rhetoric that you just saw. He knows of the divisive, explosive, race-baiting language that Jeremiah Wright uses.

But you know, the fact is that Barack Obama wanted Jeremiah Wright to justify himself, to make himself authentically black when he moved into Chicago. Now that he's in a different life and trying to be the national Barack Obama candidate for president, presidential candidate, he's turning away from Jeremiah Wright. He didn't want him when he was announcing for president in Springfield, Illinois. Now he's, you know...

O'REILLY: Yes, but as late as...

WILLIAMS: ...he's like a crazy uncle in the corner. But he's not the crazy uncle. He knows him.

O'REILLY: As late as December though, just a couple of months ago, Reverend Wright was on Barack Obama's African-American committee. So Dr. Schiller, what I'm asking you is the same thing I pretty much asked Juan. How big a problem is this going to be for Senator Obama? And what would you advise him to do?

DR. WENDY SCHILLER, POLITICAL SCIENCE PROFESSOR, BROWN UNIVERSITY: Well, I think it's a problem on two levels. The first problem is that he's running a campaign on judgment. This is what he wants to tell the American people. He doesn't have as much experience as the other two big candidates, McCain and Clinton, but he has judgment.

The question here is: What is his judgment on Jeremiah Wright, on his reverend? I mean, he's been his pastor. He's been in a church. You know, has he listened to any of these sermons? Has he been in the room when he's been giving this kind of sermon with this kind of language? He's got to show the American people that he has the judgment about who he associates with. And that's fair game for the American people to ask about.

We want to know who will be your associates when you become president, if you become president. So the question is: Who will be advising you? What views do you share? What views do you reject? And this is a very big problem for him because it's the basis of his other level of his campaign. Come together, trust me, I have judgment, but the people I associate with, these lately...

O'REILLY: All right.

SCHILLER: ...aren't showing very good judgment.

O'REILLY: Now I'm going to employ both of you to be Barack Obama's senior adviser this evening. Now you saw what the campaign did. They issued the statement that they've issued before. He doesn't agree. He is a friend, doesn't agree, deplores.

But now, as the doctor pointed out, and I thought it was a very good observation, it's about judgment. It's about judgment. Obama's saying that his judgment on the Iraq war and everything is better, but when you have a close relationship with a man who hates America, as Reverend Wright does, how do you explain that?

So you're his adviser, Juan. I'm going to give you 60 seconds. Then I'm going to give the doctor 60 seconds. What do you tell them to do?

WILLIAMS: Well, it's a tough one, because he can't turn away from Jeremiah Wright in such a way as to alienate African-Americans, who say, you know what, Jeremiah Wright is speaking of some of the pain of being black in America.

But what he's got to do is separate it out and say Jeremiah Wright is from a past. And he's from a hateful past. And it's not about who I am now, and yes, I was in the pew, and yes, I supported this church and I've been in the pulpit. But right now, I'm telling you now, Jeremiah Wright is wrong. And he's not some crazy uncle, not trying to pretend, oh, I don't know this guy, or this guy's weird. But say you know what? For the longest time, I was under the influence of this guy, but I have grown past it. And it's wrong. And I'm here to tell you it's wrong. And you could tell by the way that I talk tonight that I want to be the president of all America.

O'REILLY: You're telling him to be proactive, to go out there and confront the situation? What are you going to tell him?

WILLIAMS: Yes, and you know what you're going to see, Bill? The real question is does the American press hold him to the same standard they would hold Hilary Clinton to...

O'REILLY: No.

WILLIAMS: ...for Geraldine Ferraro's comments.

O'REILLY: I can tell you right away. The story broke today, and the American press pretty much — the left-wing press ignored it. So I can tell you that.

Now tomorrow...

WILLIAMS: That would be wrong. That would be hypocrisy.

O'REILLY: Well, that's what's going to happen. Tomorrow, they'll have to cover it. All right, doctor, you're the adviser. You've got 40 seconds to tell Barack Obama what to do. You tell him what?

SCHILLER: Change the subject. What Obama has to do is give people something else to talk about.

O'REILLY: Oh, come on, doctor. You can't change the subject on that.

SCHILLER: Yes, he can. And here's how you do it. Here's how you change the subject. You stop apologizing for things like Rezko and Jeremiah Wright. I mean, the reason that he gets stuck, that this stuff sticks to Obama — nothing has stuck to him so far — it's because there's nothing else to talk about about Obama. Let's get his campaign message back on track.

O'REILLY: I don't think it's going to be enough. Not that.

SCHILLER: Change the subject. If he doesn't want to be the black president...

O'REILLY: All right.

SCHILLER: ...then just show America why he wants to be president and change the subject.

O'REILLY: I think Juan had the best advice. He's got to be pro-active. He's got to go out. He's got to define it. And he's got to be aggressive in doing it.

Doctor, Juan, thanks very much.

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