This is a rush transcript from "America's Election HQ," March 18, 2008. This copy may not be in its final form and may be updated.

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SEN. HILLARY CLINTON, PRESIDENTIAL CANDIDATE: It's an important topic. Now, issues of race and gender in America have been complicated throughout our history, and they are complicated in this primary campaign.

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Video: Watch the interview

BILL HEMMER, HOST: From earlier, this is now a former Clinton advisor Dick Morris. You can read his column and newsletter for free at Dickmomorris.com. Good evening to you.

The effect of this speech on his campaign is what now?

MORRIS: Well, he's been in freefall. I mean, he's lost 17 points in favorability over three or three and a half weeks, and he can't say what I think the reality is.

HEMMER: And that's?

MORRIS: Which is that he was a politician from a mixed marriage running in Chicago who graduated from an Ivy League college, an Ivy League law school and he would be challenged in Chicago's society for not being black enough, and he joined this church probably to build up the bona fides in the black community.

Then, I think, he did develop a personal relationship with Wright that isn't based on Wright's politics. It's based on his theology. The guy is a pastor, not a politician. And the half of what he said, which is that I can't disown him because it's a theological connection makes sense. The half when he talked about how — where he didn't talk about his pragmatic motivation, obviously he can't.

But listen, what he should do is he should get up there and say, look, I am very interested in Reverend Wright's views about reincarnation. I'm very interested in his views about the afterlife. I'm fascinated with his views about gay marriage and abortion, but I could care less what this guy says about politics, and I know he talks about it during the sermons.

My hairdresser talks about politics when she's cutting my hair. I don't care what she thinks. I don't care what he thinks. And I've got nothing to do with either of those.

HEMMER: Think about last Friday when he put out a statement saying he was never in the pew during the fiery sermons. Listen to part of that from today that runs concurrently. Watch and listen here.

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SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. I did ever hear him make remarks that could be considered controversial while I sat in the church? Yes.

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HEMMER: In the church. Did it change much?

MORRIS: Well, I think, his last performance on the Olbermann show where he said I wasn't there, I didn't hear it and I had nothing to do with it is such a brittle defense because it puts you back with John Kerry in Vietnam.

I was sitting next to him in the pew when this and this was said. No, you weren't. Yes, he was. And he'll never get out of that alive.

I think that you have to bear two things in mind. First of all, he is the Democratic Party nominee. There is no way that Hillary Clinton is going to either beat him in elected delegates or persuade the superdelegates. He is the Democratic nominee.

And secondly, this thing is going to stay with him throughout the whole campaign. It's going to be the basis of a swiftboat kind of thing, which I think will be legitimate, and he did not put that to rest today among independent voters. He probably did enough today to survive the remaining Democratic primaries, which even if he loses by a lot, he's still got this nomination.

HEMMER: In 30 seconds here, here's the test for Obama and we'd been asking this all day: Do voters believe he has the views of his pastor, or do they separate the two?

MORRIS: Oh, they'll separate the two, but that begs the question as to why he hangs out with this guy. If this guy were Ku Klux Klaner and Obama was a white candidate, what he said today wouldn't be enough. The guy you just had on your show was right, and I think that, therefore, among independent voters, this is going to be a big deal.

HEMMER: DickMorris.com. Dick Morris, it's nice to see you. Thanks for taking time for us.

MORRIS: Thank you. Appreciate it.

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