This is a rush transcript from "The Beltway Boys", June 7, 2008, that has been edited for clarity.

FRED BARNES, CO-HOST: Coming up on "The Beltway Boys," Barack Obama makes history. But was it Hillary Clinton who stole the show?

MORT KONDRACKE, CO-HOST: We'll tell you how Obama is trying to unify the party and tip toe around efforts to put Hillary on his ticket.

BARNES: John McCain wastes no time issuing his first challenge to the new Democratic nominee.

KONDRACKE:And Bill Clinton launches a parting shot at the media and at Barack Obama.

BARNES: That's all coming up on "The Beltway Boys," but first the headlines.

(FOX NEWS BREAK)

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D), FORMER PRESIDENTIAL CANDIDATE: The way to continue our fight now, to accomplish the goal for which we stand, is to take our energy, our passion, our strength and do all we can to help elect Barack Obama the next president of the United States.

(END VIDEO CLIP)

KONDRACKE:I'm Mort Kondracke.

BARNES: And I'm Fred Barnes. And we're "The Beltway Boys". And the hot story, good-bye.

KONDRACKE:Whose would that be?

BARNES: Hillary Clinton finally did what she had to do. She has suspended her campaign. She endorsed Barack Obama. And she promised to work hard and long for his election this fall against John McCain.

I thought the speech had almost familiar Clinton touches that we've come to expect and sometimes frown at. Obviously, she was late. The Clintons are always late. It was mostly about her, the speech, not about Obama. But I think in this situation it was understandable. It was her crowd there that she was speaking to.

She hedged her bet a little bit. No criticism of John McCain, Obama's opponent. I think she figures, look, McCain's either going to be president or back in the senate with me and he's a guy I can do business with. She didn't want to jump on him too much.

And then there was this, Mort. Watch.

(BEGIN VIDEO CLIP)

CLINTON: Although we weren't able to shatter that highest, hardest glass ceiling this time, thanks to you, it's got about 18 million cracks in it.

(END VIDEO CLIP)

BARNES: Glass ceiling, please.

KONDRACKE:You don't think there is one?

BARNES: Wait a minute. Glass ceiling. She's saying she lost because she's a woman. That's ridiculous. That's not the reason at all. Obama was a better candidate. Certainly, more likeable. He ran a smarter campaign. No question about that. He planned for the long run and she didn't. And above all he had the right theme: change. And she had the wrong theme: experience. That didn't work. So glass ceiling? Ridiculous.

KONDRACKE:Well, there's the glass ceiling because no woman has been president before.

BARNES: That's not a glass ceiling though, Mort. That's...

KONDRACKE:Any way, any way, basically, what you say is true. And I thought that what she did was closer to the minimum than it was to the maximum. I mean, there was not a lot of praise in that speech for Barack Obama. In fact, this is about as far as she went. Watch.

(BEGIN VIDEO CLIP)

CLINTON: I've had a front row seat to his candidacy, and I have seen his strength and determination, his grace and his grit. In his own life, Barack Obama has lived the American dream. As a community organizer in the state senate, as a United States senator. He has dedicated himself to assuring the dream is realized.

(END VIDEO CLIP)

KONDRACKE:You know, at least she did not indulge in the Clintonian habit of fibbing by saying Barack Obama is going to make one of the great presidents of the United States. She doesn't believe that for a minute. She doesn't think he's qualified to be president as a matter of fact.

So what she was doing was talking more about elects a Democratic president in order to accomplish her goals than she was actually about praising Barack Obama. But she did use his slogan, yes, we can. And she did say she was going to work her heart out for the Democratic ticket?

BARNES: Do you really think she will?

KONDRACKE:Yes, of course. Absolutely she will, because she does not want to be accused of causing his defeat. And besides that, I think that all that feminist talk that you were referring to was a not too subtle bid to have her be on his ticket.

BARNES: As veep?

KONDRACKE:Yes.

BARNES: Obviously, that issue's out there and Obama talked about it. Here's how he describes his selection process. Watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: This is an important decision. It's not one that I take lightly. It's not one that you want to make in the heat of the moment right after you got out of a nomination. And so we're going to take our time. Senator Clinton would be on anybody's short list, obviously.

(END VIDEO CLIP)

BARNES: I guess she is. That's a long short list. A long short list. And, well, let we talk about the pros and cons of Hillary Clinton as Barack Obama's vice president running mate. If she is, the pros are, one, she'd unify the party. Two, there would be a calm convention. And, three, she is a plausible president should something happen to Obama. And those matter.

But, of course, there are the cons, Mort, to having her on the ticket as well, namely her husband Bill. Then there are the — I'll call them the trust issues between Obama and Clinton. And then there's the fact that Hillary is not popular outside the Democratic Party. My view is the cons out weigh the pros.

KONDRACKE:The cons way out-weigh the pros. I think it would be amazing if he ultimately picks her.

Hillary's women are most likely to vote for Obama anyway because they tend — they are Democrats. And they don't like Republicans, and especially don't like pro-life Republicans. And John McCain is a pro-life Republican. I'm not so sure that even if she were on the ticket she could get these working class males, white males that voted for her. I think they voted for her because that was the choice, between her and Obama. I think if he wants to get them with a running mate, that he's more likely to pick somebody like Jim Webb, senator from Virginia, or Chuck Hagel from Nebraska.

BARNES: Those would be bold picks. I think he's going to do something much more conventional, pick a governor of a state the Democrat - - the presidential candidate has to win. That's means it's down to two people, Governor Ted Strickland of Ohio and Governor Ed Rendell of Pennsylvania. One of those. Both backed Hillary so it would be unifying to pick one of those.

All right. After the break, our own Major Garrett will be here to talk about Hillary Clinton's event today and what role she may play in the Obama campaign. Stay with us.

(COMMERCIAL BREAK)

KONDRACKE:Welcome back to "The Beltway Boys."

Joining us to talk about Hillary Clinton's concession speech today and speculation about an Obama-Clinton ticket is our own Major Garrett.

Welcome back, Major.

MAJOR GARRETT, FOX CORRESPONDENT: Glad to be with you, boys.

KONDRACKE:Hi. Let me ask you the question that Fred asked me, I mean, is she going to work her heart out for the Obama ticket and what might she want in return?

GARRETT: She's going to work as hard as she can and as hard as she's going to be allowed to, Mort and Fred. And that's still the big question, is she's on the ticket, yes or no? If not, the Obama has to find a capacity for Hillary that they're comfortable with and she's comfortable with.

Remember, Hillary Clinton is the thing that basically fulfills the negative impressionable Obama. There's certain constituencies he can't win. By putting her on the ticket or out on the campaign trail, conspicuously for him, he's validating that assumption. The Obama campaign would just as soon not. They believe they can get those Hillary Clinton constituencies with or without her. They will if they need to but they want to prove they can get them without her first.

KONDRACKE:She will certainly want to campaign a lot. Where would she be the most effective among — he'll get the women anyway, won't he? So where would she make a difference?

GARRETT: She believes she would be most effective in Florida, Pennsylvania, Ohio, Michigan. Because she was there and she fought for those two places, Florida and Michigan. She will say or they believe that Obama didn't.

The Obama campaign believes they can catch back up in Pennsylvania, Ohio. They can probably use Hillary Clinton's help in Florida and probably Michigan.

The other thing is, the Obama campaign always talks about this 50- state map that they're going to expand and get into McCain and Republican territory. They can do that. They believe they can do that on their own without Hillary.

Hillary provides so many complications. I just want to identify one. I started talking about this two weeks ago. You began seeing it in the "Wall Street Journal" and elsewhere this week. Remember, during this campaign, the Obama campaign said one thing and one thing specifically about Clintons and their paper trail. They must release all records about the foundation and the library. Well, if they're going to bag Hillary Clinton as a vice president running mate, that's question number one. They may not be willing to do it and that could end the conversation then and there.

BARNES: That's an interesting one there. I agree. But I have another question though. And that is, while Hillary Clinton spent her campaign, endorsed Obama, she did not release her delegates. Why not?

GARRETT: I have three letters: H, L and M. Let me take them in order. H is for hedging. She's hedging her bets. Something could happen to Obama. The polls can crater. There can be a sense of distress among Democratic Party. And though it's extremely unlikely, she holds on to her delegates. She still goes to Denver with the delegates in her pocket, could be put back on the ticket. Highly, highly, highly unlikely, but she hasn't rule it had out, so hedging is one thing.

Leverage. In all conversations about debt, vice president, how to use them in the campaign. Universal health care being strong in the platform. Her delegates in her back pocket give her leverage.

Last one, M, is for money. She wants to keep her campaign alive so she can continue to raise money, try to buy down some of that debt. Three e-mails went out from the Clinton campaign in the last 24 hours, all about the speech, a video of the speech. Everyone at the bottom has the same red and white button: contribute now. There you go.

BARNES: That was a pretty sweeping answer. I'll try it again on this one. Why didn't she mention McCain and attack him. Look, he's Obama's opponent. And she didn't mention him today.

GARRETT: The Clinton campaign, as I understand it from senior advisors, knew this speech was going to be very heavily scrutinized. They felt that if they put McCain in the speech, there would be some Democrats, possibly in the Obama camp that would say, ah-ha, she hasn't given it up the idea of being the nominee. That's our job to attack McCain.

They wanted to basically do two things in this speech, talk to supporters and explain the historic nature of this first woman getting so close, 18 million votes, et cetera. Also endorse Obama unequivocally with lots of language that people could point to that she supports him. That's all they wanted to do. They thought McCain would be extraneous and open her to criticism. They believe she's had far too much of that.

KONDRACKE:Major, let me ask you about what happened between Tuesday and today. I mean, Tuesday was all about her and she didn't concede and so on. Did her people say, wait a minute here, if you want to get anywhere, you've got to do this. And what was the process? And, also, did she really try to make a play to push him to put her on the ticket?

GARRETT: She says no and her people say no. But I think it's pretty obvious to all of us that if you asked on Tuesday, the day Obama's going to get the nomination by dent of winning the necessary number of delegates, and you're asked would you be open to the vice presidency, you could say I'm not going to talk about that now. That's not for today. Instead, she said, yes, I'm open to it, elevating that speculation, far past speculation and making it alive issue.

She could have answered differently. That she did not obviously means she made a conscious effort at some level to inject herself into that conversation. What happened from Tuesday until now is, it wasn't her staff that told her to change. It was members of Congress. Her friend, Charlie Rangel of New York, Norm Dicks of Washington and Barney Frank of Massachusetts, among others said this has got to be wrapped up sooner rather than later. You've got until Friday to make an announcement and this weekend to end it all.

BARNES: Major, John McCain has proposed that he and Obama do 10 town hall meetings together and, you know, it will be all the new politics and so on this summer. Obama's campaign does not seem to be real excited about that. What are they going to do?

GARRETT: I think they were taken a bit off guard by that. At one level, they were excited because they figure the challenge, the one who always believes is trailing, is the one who says "I want to debate you more." So on that level, they felt it was a tactical win. But the idea of these town halls sort of left them a little off guard. They said, well, how about Lincoln-Douglas? Well, look, not only does no one in America remembers Lincoln-Douglas but that's not really a very spontaneous or free-flowing format. That's about the most ridge it format you can have. That was their place holder response. They can have an open dialogue, they say, with McCain about this. Bottom line, you gentlemen both know this, debate decisions are made on a trajectory of polls and where your campaign is and where you expect it to be in six to eight weeks. The Obama campaign does not have a sharp read on that for two weeks, maybe three.

KONDRACKE:Thanks, Major.

Coming up, Bill Clinton's parting shot at the media and at Barack Obama. And John McCain challenges Obama to a series of town hall-style debates. We'll tell you why we think it's a smart move for McCain.

(COMMERCIAL BREAK)

KONDRACKE:Welcome back to "The Beltway Boys." Let's check out the "Ups and Downs" for the week.

Up, John McCain. His challenge to Obama to join him for a series of town hall-style debates is a smart move. Check out McCain in a formal speech versus McCain in a town hall setting. Watch.

(BEGIN VIDEO CLIP)

MCCAIN: Both Senator Obama and I promise we will end Washington's stagnant unproductive partisanship. But one of us has a record to do that and one of us doesn't.

I walked by this one great big guy, bigger than Fred, carrying a sign. He looked and said, say, have anyone every told you, you look a lot like Senator John McCain? I said, yeah. He said, doesn't it just make you mad as heck?

(END VIDEO CLIP)

BARNES: He does have a weird sense of humor. I kind of like it. He's good at the town hall meetings. Obama I don't think is quite as good, though he's not bad. But McCain's particularly not good at set speeches and that's Obama's strongest suit. We saw the one on Tuesday.

And besides in the proposed town hall meetings where they go together, it's really playing on Obama's theme, the new politics, no more politics as usual. Hard for Obama onto say no, although I think he's quite capable if it if he thinks he's going to win the presidency without it.

Lincoln-Douglas debates, as we just heard from Major, they're the most structured of all. One guy talks for an hour and the next guy for 90 minutes and the other guy 30 minutes. There's no spontaneity? Nothing. No questions or anything.

There is a way to have a town hall meeting that Obama might agree to? That is going to limit the subject matter that they can be asked about, nothing about Reverend Wright, nothing about Tony Rezko, nothing about any of those Israel haters who are friends or backers of Obama.

KONDRACKE:Look, I think it was a good ploy on McCain's part. I think that Obama has to pick up the challenge or else it looks like he's ducking. But I think Obama is entirely capable of answering any question. The quicker he gets questions about Wright out of the way, again, let people ask him whatever they want, and he can handle it. He's good enough at those. Now, McCain is also spending a lot of money on the national security ad that basically adopts the old Bush theme that I can make you safe. Implying that Obama can't. This is at a time, however, when topic A has switched decisively to the economy, especially with this week with the stock market going down 400 points on Friday and oil prices spiking up again and the unemployment rate going to 5.5 percent. I think McCain's got to get to the economy and prove that he's got something to say there.

BANRES: Yes, he will. But he has to a win the national security argument as well, as some point anyway.

Down, Bill Clinton. He lost it this week when a "Vanity Fair" piece surfaced that repeated rumors about his alleged womanizing and questionable business relationships. Mr. Clinton called "Vanity Fair's" Todd Purdum, quote - I'm going to smile here — "sleazy, dishonest, slimy and a scumbag." But Clinton also said the article had political motives, Mort. And he had a harsh accusation for Barack Obama. Listen.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Part of the national media's attempt to nail Hillary for Obama. It's just the most biased press coverage in modern history. It's just - it's another way of helping Obama. They had all these people standing up in his church, cheering, calling Hillary a white racist, and he didn't do anything. The first day he said, `Ah, well,' Because that's what they do. He gets other people to slime her."

(END VIDEO CLIP)

KONDRACKE:Well, I think Clinton had a case against Todd Purdum, who acknowledged in his own article that he had no proof about these sex rumors that he proceeded to unfold in lumping detail.

BARNES: Yes, it didn't stop him.

KONDRACKE:Finishing the article. He's right. The media has been in the tank for Obama. But I don't think that Obama had any obligation to counter what Father Pfleger said about Hillary Clinton in that thing. What Obama's job was and he took it was to get out of that church as fast as he possibly could. That was last straw. He was late on that move.

BARNES: Bill Clinton is the big loser in this campaign, remember he entered it backing his wife, as one of the most popular - as the most popular Democrat in America. He exits it as much, much less popular in his political career. I don't know what it might have been anyway but it is really over. And she could have had one if Obama fails as president. It's not over for her.

KONDRACKE:Down, California Democratic Senator Barbara Boxer. Her climate change bill died over in the senate this week over fears that the capping of greenhouse gases will push up already sky-high energy prices.

Here's an almost giddy Mitch McConnell, Republican leader, on that prospect this week. Watch.

(BEGIN VIDEO CLIP) SEN. MITCH MCCONNELL, (R), KENTUCKY: With gas prices being the number one issue in America, they bring a bill, as Senator Alexander pointed out, that objective analysis concludes it's going to raise gas taxes 53 cents. We're happy for this debate. We're thrilled about it. I've never seen my members so excited in recent times over getting out on the floor and talking about a really, really bad proposal.

(END VIDEO CLIP)

BARNES: Mort, I think you can drop the word almost. He said almost giddy. I think he was giddy and he should. Just on the politics of this. An incredible mistake to bring up a global warming bill that would increase gas prices over time, at a time when gas prices are the thing that infuriates the public the most at $4 a gallon. And Republicans have now got an issue. They're in favor of dealing with supply and demand by increasing production here in the United States, offshore, Alaska and so on. And Democrats are against increased oil production. You know why? Because they're the wholly subsidiary of the environmental lobby.

KONDRACKE:I agree that cap and trade is a lousy system. But the Republicans were demagoguing this issue. That bill would not raise gasoline prices until 2012. It doesn't take affect until 2012.

BARNES: All right. Don't go anywhere. "The Buzz" is coming up next.

(COMMERCIAL BREAK)

BARNES: What's "The Buzz," Mort?

KONDRACKE:Remember I buzzed about Representative Mark Kirk's proposal to put Israel in the U.S. missile defense system? It's going to happen.

BARNES: It wouldn't surprise. It's a good idea. It surprised me this week that the absence of a senate majority in favor of the global warming bill. A majority is not there right now. Then we have 10 Democrats saying the bill has to be changed enormously. McCain says it has to have nuclear power stuff in it. It's going to be hard to get one next year.

That's all for "The Beltway Boys" this week. Join us next week when the boys will be back in town!

Watch "The Beltway Boys" Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

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