This is a rush transcript from "FOX News Watch," April 26, 2008. This copy may not be in its final form and may be updated.

GRETCHEN CARLSON, FOX NEWS HOST: This week on "FOX News Watch," Hillary wins in Pennsylvania. Is the press campaigning against her?

Veterans go to war against Time magazine after it uses a doctored World War II photograph. Does the magazine owe them an apology?

Is Katie out at CBS?

Was the pope's trip in America an answered prayer for the TV networks?

Candidates and cocktails, a new twist on politics this week.

First the headlines, then us.

(FOX NEWS BREAK)

CARLSON: On the panel this week, Jane Hall of the American University; Juan Williams, senior national correspondent for National Public Radio; syndicated columnist, Cal Thomas, and Jim Pinkerton, contributing editor and writer for American Conservative Magazine.

I'm Gretchen Carlson. "FOX News Watch" is on now.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: Today, here in Pennsylvania, you made your voices heard. And because of you, the tide is turning.

(END VIDEO CLIP)

CARLSON: Senator Hillary Clinton speaking Tuesday night after her double-digit win in Pennsylvania.

We want to go to our panel to ask about the tide is turning. Is it really turning?

Let's go to Juan Williams first. Do you think the tide is turning with regard to the media? Some reports say maybe they are a little tired of Barack Obama and maybe they are on Hillary Clinton's side.

JUAN WILLIAMS, SENIOR NATIONAL CORRESPONDENT, NATIONAL PUBLIC RADIO: Let me start with an assumption I am sure lots of people disagree with. Let's say there's a liberal lean to most of America. Then let's say this. They realize Barack Obama is in trouble this week after Senator Clinton's win than ever before. And if you start to look down the road, they are doing a reassessment of Senator Clinton and saying maybe there is something here.

I think what has been overwhelmingly negative coverage, the polls indicate that most Americans think, when they hear anything about Hillary Clinton, it has the negative. I think you are starting to see a shift and reassessment.

CARLSON: Cal, soon, will we be seeing the media asking whether she needs a pillow?

CAL THOMAS, SYNDICATED COLUMNIST: Despite the media bias, the media loves something better than getting their candidate elected. They love the story line. The idea that Hillary might come back, that there might be a fight at the conventions this summer is great television.

Most of the conventions for the last 30 years have been dull and boring. The media would love to see a credentials fight. They would love to see a lawsuit over Michigan and Florida. This is manna from heaven for them.

CARLSON: What about the celebration, Jim? We saw her drinking the Crown Royal shot. I know you are going to say that was politics orchestrated but did it show maybe she is the non-elite contender in the same week Obama was seen as elite.

JIM PINKERTON, CONTRIBUTING EDITOR & WRITER, AMERICAN CONSERVATIVE MAGAZINE: I think it was a wise thing for her in getting Governor Rendell — it's a reminder getting a governor as an authority figure to endorse you — is a big help in these primaries.

I do think — I agree with Juan and Cal, the media, the liberalism in them wants Obama to win, the Democrat in them just wants Hillary to get the nomination because they think she is a better shot. I also agree the media want a long protracted story.

There's another story all of us in the news world are going to have to look forward to. I saw it on a blog called the Cable Game that made the point Reverend Wright, Jeremiah Wright, has an enormous stake in Obama losing. He has been saying for half a century white people are terrible.

Now if Obama wins the election, obviously America is not so bad. If Obama loses he says, see, I told you. Now with cable news stalking Reverend Wright every chance they get, they are saying say something outrageous, say something provocative. It will be good for Wright, good for Wright's world view and bad for Obama.

CARLSON: Since you brought up Reverend Wright and I want to get Jane Hall in the action, let's listen to the snippet of the interview he did with Bill Maher of PBS.

(BEGIN VIDEO CLIP)

REV. JEREMIAH WRIGHT: A failure to communicate is when something is taken, like a sound bite, for political purposes and put constantly over and over again, looped in the face of the public. That's not a failure to communicate. Those who are doing that are communicating exactly what they want to do, which is to paint me as some sort of fanatic.

(END VIDEO CLIP)

CARLSON: He also said he is the target of hatred, Jane. Isn't the case he gave the sermons to the general public, the videotapes were available to the general public. Do you believe it was different when we only saw short snippets of what he felt?

JANE HALL, AMERICAN UNIVERSITY: I have talk to people who saw him and say it wasn't always like this. He has to take responsibility for what he said. Unfortunately, this is going to be what is associated. It's like Willie Horton except Obama knew Reverend Wright. On FOX and other networks, he is visually linked. It gives one more excuse to rerun this incendiary footage.

I really regret that race, which Obama tried to transcend, is going to become an ugly subject in this race.

PINKERTON: And further, Obama stuck up for Reverend Wright. Reverend Wright stuck up for him. Wright, on the Moyers show — even Dan Abrams on MSNBC had to admit, gee, Wright really threw Obama under the bus.

CARLSON: Exactly.

That was going to be my next point, Juan. It is ominous timing for Obama. He has to answer a lot of questions based on the Pennsylvania laws. And you have the Wright story back in the front pages again.

WILLIAMS: He has tried to be the transcendent candidate, to go beyond race. That's why he attracted a base of young white people who were just thrilled with his idealism.

Somehow now, what Reverend Wright has done, and also his wife in her statement, the fist time she is proud to be an American, it's also...

CARLSON: Michele Obama, you mean.

WILLIAMS: Michele Obama. It also the performance in the debate. And the elitist statement, the one about guns and church that I think have really pulled him down.

It's interesting because they could make the case it's racism at play and now Barack Obama has misstepped. But it might be liberalism and it might be the argument you're starting to hear from Republicans in their ads that say, you know what, he's not as patriotic. His judgment is off. He becomes the flawed candidate.

HALL: You have Hillary Clinton unfavorably comparing him to John McCain. It used to be the Republicans were the ones attacking the patriotism. She has gone after him in a way that, no matter what happens. a lot of young people are going to stay home if she is the nominee. It is so ugly. The Democrats are right to be concerned.

THOMAS: Something else that's cropping up now, I have been reading Bob Herbert and Maureen Dowd and my friend Frank Rich in the "New York Times," there's a familiarial atmosphere that's being — that's starting to creep into the big media. Could the Democrats blow it? Could they hand it to John McCain? What is going on here? I think there's great fear in the liberal community that this warfare is going to hand the election to John McCain. They are worried about it.

CARLSON: Reverend Wright just did not do an interview with PBS. He is now going to be speaking at the National Press Club. So here we go again.

THOMAS: And the NAACP convention. He is all over the place. It's Obama's worst nightmare.

Obama, I understand from Juan Williams, who told us, tried to get him on a plane to go away some place like a four-month fact finding tour. He didn't do it. This is great stuff for John McCain and the Republicans.

PINKERTON: By the way, when it comes to patriotism, Juan and Jane might be referring to the fact that Obama refuses to put his hand over his heart at the events.

HALL: Or the flag pin.

PINKERTON: He is doing everything wrong in terms of assuring Americans he is in the patriotic mainstream of this country. You don't get elected if you're not.

CARLSON: Yet, he remains extremely popular.

All right, we are going to take a quick break here but we're going to keep talking during this break. We are? I bet we are. If you want to hear what we are talking about, you can go to foxnews.com/foxnewswatch.

We will be back in a few minutes with this:

ANNOUNCER: War veterans on the war path about this controversial cover. Why won't Time say sorry to upset vets? Next, on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD MATES, IWO JIMA VETERAN: And I think that Time magazine owes every Iwo Jima survivor, the widows of the dead, children, grandchildren, I think they owe them a full apology.

(END VIDEO CLIP)

CARLSON: Just one of the veterans upset of the controversial cover. The magazine's managing editor doesn't have any plans to apologize.

On Monday, he told an audience at the University of Mississippi that, quote, "One way to break through this, in this journalistic environment, is to have a point of view, have an opinion and to state it fiercely. I didn't go to journalism school but this notion that journalism is objective or must be objective is something that has always bothered me because the notion about objectivity is in some ways a fantasy. I don't know that there is such a thing as objectivity." Wow.

Let's have Jane Hall about this one.

Is it the case that because magazines are a dying breed, newspapers, dinosaurs, that now we are not going to question objectivity. We are going to put whatever the heck we want on the cover.

HALL: I think they were trying to make a point. News magazines are losing circulation. they are getting thinner and thinner as you buy them. To take this image — I do think there are certain images in America that are sacred images — at a time of war in this country, to somehow say that the environmental cause is the moral equivalent of world war ii, and these thousands of soldiers dying, is such a misreading. That's what got me. I thought it's one of these things people, say, who are they talking to. Nobody at the table making the decision had any idea this was a bad idea.

PINKERTON: The answer is they are talking to each other.

HALL: Exactly.

PINKERTON: And each other consists of sort of post-patriotic bicoastal liberals in the media who think saving the polar bears is the equivalent of beating Hirohito in World War II.

I would say that anybody who doesn't take this argument seriously ought to go see Clint Eastwood's movie from a couple of years ago, "Flags of our Fathers" or read the book behind it, and get a taste of what Iwo Jima was really like. Sitting in a movie theater 60 years later is not like getting shot at, but you have some sense of what the Marines went through on that island.

(CROSSTALK)

WILLIAMS: Hold on. Hold on. This is so ridiculous. I just have to say stop the show because, wait a minute, we are sitting here on FOX News channel where we all have opinions, and we let our opinions be known, and we are condemning Time magazine for engaging in expressing an opinion?

(CROSSTALK)

HALL: No, I am not condemning them.

WILLIAMS: And in addition to which, it's not about the journalism. we are talking about the cover shot. Cover shots are intended to hike news stand sales.

(CROSSTALK)

CARLSON: But at what cost? It's an iconic image. So is it up for grabs to any one or is it sacred?

WILLIAMS: It wasn't sacred. It's not a religious image. You can argue, as Jane rightly did, it's iconic, for a generation. I don't think that means it's out of bounds.

(CROSSTALK)

PINKERTON: What if the magazine had taken a picture of Martin Luther King and put him in a Ku Klux Klan hat?

WILLIAMS: That's offensive. There's nothing similar about that. That's offensive.

(CROSSTALK)

THOMAS: Hold a second because this feeds an underlying belief in the public that the media are largely unpatriotic, antireligious and don't care about the values of Middle America. That's what the real story is. Objectivity is impossible, as David Brinkley said, so we must try to be fair. Objectivity is another issue. This big question is I want to know is, was this issue printed on recycled paper?

(LAUGHER)

CARLSON: But is it OK to make fun of the war and veterans and religion, those two areas seem to be...

(CROSSTALK)

THOMAS: ... used to do this in the "L.A. Times."

CARLSON: No, I'm asking it, not in a good way. I'm saying...

THOMAS: Paul Conrad, The L.A. Times cartoonist, a Pulitzer Prize winner for many years, used to outrage readers, many cancellations of the "L.A. "Times" when he did cartoons involving the cross of the Star of David. It outraged Jews and Christians. But they don't care.

CARLSON: We will continue to debate something else when we get back. But no doubt we won't forget about this cover on "Time."

We are going to be back to talk about the fate of the tiffany network. You know what I am talking about, CBS, Katie Couric.

ANNOUNCER: Katie ratings bottom out again? Is Couric headed for the exit at CBS? And how did the media respond to Pope Benedict's mission? Answers next, on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KATIE COURIC, CBS NEWS ANCHOR: Hi, everyone. I'm very happy to be with you tonight.

(END VIDEO CLIP)

CARLSON: Well, that was Katie Couric making her debut as anchor of CBS Evening News back in September, 2006.

Now, fast-forward to April 14, 2008. The CBS Evening News bottomed out last week, 5.4 million views, the lowest number the broadcast has gotten since 1987.

That's dismal, Jim, is it not for Katie Couric. All the rumor, all the talk that she's going to be leaving the chair.

PINKERTON: Yes, there's a word for this. It's called schadenfreude. It's enjoying other people's suffering. And it's hard to feel joy at people suffering who are poor and starving. But somebody making $15 million a year who is falling on her you know what in public, is very schadenfreude. And I think the knives are out for her at CBS, I think, across the entire community. I'm shocked that Les Moonves, the president of CBS, who is a smart guy, promised her — look at we invested. We'll make it all different. And then it turned out as the exact same liberal crapola. And now she's failing.

CARLSON: Well, I'm not sure that politically they promised to change the news cast.

They did promise, Jane, to make it more humanistic and use some of the attributes that she had in morning television. This certainly couldn't be all Katie Couric's fault, could it?

HALL: No, it's not all Katie Couric's fault. And I think CBS's Les Moonves won't want to admit that he made a mistake.

I used to cover CBS. It is very sad to me to think Walter Cronkite's legacy is now down to 5 million people. It's a very complicated issue having the first woman to really do this by herself.

But they said they were going to do a different kind of show. In a 20-minute newscast, you can't do the "Today" show in 22 minutes. And you'd think that people who make millions of dollars would have known that. I know that. They could...

(LAUGHTER)

CARLSON: You're putting yourself up for a job, right.

Cal, let me ask you this. Is it the beginning of the end for CBS because there were some rumors that maybe they should just disband with the whole news division?

THOMAS: Well, they need a partner. No question. They could use a cable partner. This has been discussed for many years in the business. But whether they will or not, who knows.

But here is CBS's problem. They came out of Dan Rather as their anchor since Walter Cronkite. Walter had a distinctly left-wing image. And the whole business with Bush and National Guard burnished that.

What they needed to do was a counter ideological programming. They needed somebody in there, a commentator, a reporter or somebody who would shore up their conservative base that didn't really exist and bring in new viewers. They didn't get that. They got Katie Couric, who is a liberal as well as all the other broadcast network anchors. And they made a mistake.

But being in management, as Jane said, means never having to say you're sorry.

HALL: I don't either.

WILLIAMS: I don't this had anything to do with liberals or conservatives. I got to tell you what I think — I think it was...

CARLSON: You think her personality, the fact that she was more attuned to the morning show audience?

WILLIAMS: That's right. And that was their idea, that they would bring her in, that she would appeal to women, that she would appeal to younger people, that she would bring a fresh look to the evening news package, which by the way, on every channel, is losing viewers. It's going out of style because black people, and especially young women, don't watch it.

CARLSON: But I do think viewers pay attention to the political persuasion to the person delivering the news. Do you think so, Jane?

HALL: Well, I think it's political.

WILLIAMS: Well, not back when — not back when Walter Cronkite was doing it. He was trusted because he was seen as cross...

(CROSSTALK)

CARLSON: But now that mainstream media...

(CROSSTALK)

PINKERTON: Now they've got an alternative, you know, Rush Limbaugh, Bill O'Reilly, whoever. And Cal's exactly right. They'd gone a different direction, they would have had a chance to really break through. Instead, they tried to do it, as Jane said, tried to squeeze three-hours of the "Today" show in 22 minutes. You can't do it. They have Katie in front a fireplace and sitting on a couch. Well, it's just the news moves too quickly to allow for that.

CARLSON: OK, I want to allow a little bit more time for the pope because he, of course, had a huge visit to the United States. We took a time-out with politics in the media, especially on the cable channels. It was 24-hour coverage on the pope. It was good coverage. Do we all agree with that?

THOMAS: We do. And the reason it was good coverage was because the pope made a confession on his plane on the way to the United States about the sex abuse scandal in the United States.

CARLSON: Interesting.

THOMAS: He said it more than once. that immediately defused that as an issue and allowed his message to break through. That was a very clever media event for the pope.

Jane, do you have any thoughts on it? I have to say when I watch the different cable channels I did that CNN, in particular, would talk about what the pope was doing and immediately have on the first guest as a sex abuse survivor.

HALL: There was times on the coverage where I wanted the commentators to get out of the way and see what was actually being said. I did think his message, that the — first of all, his opposition to the war on Iraq I thought people didn't really talk about. It was sort of danced around. But also his message about we should help each other was sort of a heartening message. I think he did manage because, as Cal said, he met with victims as the abuse scandal. Once he did that, he was allowed to get his ecclesiastical message out there, not his political message.

PINKERTON: I agree.

WILLIAMS: Hang on. There were political tones to this. It was not only what he did with the sexual — survivors of sexual abuse. He also said he thought immigrants were an important constituency and that men needed to be dealt with in a human way. He said third world countries were going to have terrorism unless they deal with that and those issues in a humane way. There was a political tone to it.

But I don't the coverage reflected that reality. I think the coverage, in some sense, focused on the spirituality. For those of us who have a deep religious faith, it was satisfying, a sort of uplifting positive coverage. News media in the country always goes to the negative. The difference in this coverage was they didn't in this case.

PINKERTON: One example, FOX, for example, when the pope went down the ramp into the pit at Ground Zero, instead of chattering away, Shepard Smith and Father Jonathan and the other guys just said — stone silence. It was quiet. They had a cello playing there. Instead of the usual blather, they let the sacred moment speak for itself.

But I will say this. There's a reason the Catholic Church survived for 2000 years. They know something about managing their image. When the pope said, in contrast to some clergymen we know, God bless America, I...

CARLSON: That's a good way to wrap it up, God bless America.

We have to take one more break. Wait until you hear this.

ANNOUNCER: Cocktails and candidates? Guess what mixologists are serving up at tonight's big White House Correspondence Association predinner bash.

(COMMERCIAL BREAK)

CARLSON: There is a big shindig, the White House Association dinner. It is like the Oscars for politicians and the reporters that cover them. As a nod to all the politics this year Reuters will serve up these cocktails at its pre-dinner bash this evening.

Here's how the wire service describes what's on the bartender's list. And we should add the names are real but we can't confirm the ingredients are.

Number one, Hillary's Bosnian Bull Shooter. Reuters said if you hope to get intoxicated from this drink, run for cover. A single shot will keep you honest. It's nothing more than distilled water imported from Tuzla.

Number two, Barack Obomber. According to Reuters, more popular than ever with the younger set. The Obomber is sure to bowl you over for a truly religious experience. Polish it off and savor another.

You'll be singing its praises and Wrightly So. It is a vodka, jagermeister, Red Bull energy drink with a lime wedge. I don't think I can do that one.

And the Senior Moment. This one packs such a punch you will have a distinguishing one extremist group from another. Scotch on the rocks, no twist.

To all our friends at the dinner tonight, cheers.

That's all the time we have left this week,

Much thanks to Cal Thomas, Jane Hall, Juan Williams and Jim Pinkerton, armed with their water glasses.

I'm Gretchen Carlson. Thank you for watching. Keep it right here on the FOX News Channel. The "FOX Report" is coming up next.

For more information and exclusive content related to "FOX News Watch" go to www.foxnews.com/foxnewswatch

Copy: Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.