This is a rush transcript from "FOX News Watch," June 7, 2008. This copy may not be in its final form and may be updated.

JON SCOTT, FOX NEWS ANCHOR: This week on "FOX News Watch," the race for the White House is on as Obama takes on McCain. How will the press cover this historic campaign?

Bill Clinton takes on Vanity Fair. The ex-president flares up over rumors that he's fooling around again.

Has Matt Drudge become the media's guiding light for political coverage?

Plus, the end of the primary season gives late-night comics one last laugh.

First the headlines, then us.

(NEWS BREAK)

SCOTT: On the panel this week, Jane Hall of the American University, syndicated columnist Cal Thomas, Jim Pinkerton, contributing editor and writer for the "American Consumer" magazine, and Patricia Murphy, founder and editor of citizenjanepolitics.com, a nonpartisan Web site.

I'm Jon Scott. "FOX News Watch" is on right now.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R), PRESIDENTIAL CANDIDATE: I suggest the town hall meeting format, as I said, because I believe that it's the best way. I don't think we need any big media-run productions, no processed questions from reporters, no spin rooms, just two Americans running for the highest office in the greatest nation on earth.

(END VIDEO CLIP)

SCOTT: That's John McCain speaking on Wednesday. And as the press prepares to cover the general election between McCain and Obama, you can already see the candidates trying to manage the media if not the message.

Jim, you've been involved in a political campaign or two. What do you think about this proposal from McCain?

JIM PINKERTON, WRITER, CONTRIBUTING EDITOR, "THE AMERICAN CONSERVATIVE": I think it's a good proposal. I think the problem with the debates as they've been structured in the past 40 years has been the reporter asking the question, question and not a real debate.

The Lincoln-Douglas debates were Lincoln spoke for half an hour. The other guy spoke — one hour. The other guy spoke for an hour and a half and there's a rebuttal for half an hour. That's a true debate. That's a true art. I realize nobody in television would watch but interesting to hear give and take. Not just two people answering questions from some reporters.

SCOTT: So when McCain throws this out there, Jane, this idea, he's looking like the guy that's good the ideas?

JANE HALL, JOURNALISM PROFESSOR, AMERICAN UNIVERSITY: He is. And it plays to his ability to, you know, be spontaneous. He's sometimes made some gaps in the Middle East when Joe Lieberman had to whisper in his ear. He is much better off the cuff than he is behind giving a speech. He clearly hasn't really been taught about giving a speech. Obama, I think, has not been that good in debates. So it's a smart strategy.

CAL THOMAS, SYNDICATED COLUMNIST: It's not an original idea, of course. John Kennedy and Barry Goldwater had agreed to do this in the 1964 campaign. Obviously, Kennedy was assassinated and it didn't happen. Jim brought up Lincoln-Douglas. Bob Beckel and I wrote a book in which we suggested this very thing and we've written about it in our column in "USA Today."

I think it would be tremendous. The media would hate it because it would take all the egocentric journalists, like Chris Matthews and Olbermann, out of the picture, but it will actually allow the American people to find out what these people really believe instead of hearing it from them only in sound bites.

SCOTT: Talking about the media, Patricia, I saw the time stamp on the release that John McCain put out proposing these town hall meetings. One hour and one minute later there was a response from Barack Obama. Wasn't that long ago it would have taken you a good 24 hours to respond to that kind of thing.

PATRICIA MURPHY, CITIZENJANEPOLITICS.COM: Yes, and that's something that the McCain campaign is going to have to gear up for. One of the benefits to the Obama campaign now is they're so hot, so fresh on this campaign, they have their war room up and running. They are in rapid response mode. They're raising money like crazy. They are coming off a great gain for themselves. McCain is going to have to step up and be ready to go into rapid response like that.

PINKERTON: There's one answer to the question of how will the press play McCain's proposal. Let's see what the Obama does. If the Obama campaign spikes it and say, no, we want to do something else, the press will all, like tripping birds, say, yes, that's right, it's a terrible idea.

McCain is going to be the biggest surprise of his life. He's been getting good press, bashing Bush, Reagan, whoever, the last 20 years. Now that it's him versus Obama we're going to discover the most one-sided media operation since Bobby Kennedy in 1968 — actually Gene McCarthy against him in 1968 so you have to go back to John F Kennedy in 1960.

SCOTT: A history lesson too.

(LAUGHTER)

HALL: I think that McCain - I don't know if its going to be one sides, but I think what's going to be interesting to see is, if he makes mistakes, people are going to attribute it to his age or temperament. Is his experience in Vietnam going to be probed more than it already has? I think he's in for a surprise in terms of — the media loved him as a maverick Republican.

SCOTT: But a lot of people feel that the media loved Obama.

HALL: Absolutely. I agree. Both of them have had very good coverage. Now we'll see what happens.

THOMAS: Here's one question that the media ought to be asking McCain but never will. If conservatism and conservative principals and low taxes and less spending worked so well for Republicans under Ronald Reagan, why are you beating such a quick path to the middle and the left? They'll never ask that question. By the way, the media have been for McCain simply because they think he's easier to beat. That's why they've been for him.

SCOTT: Patricia, what about Hillary Clinton? It seems for a long time there was a drum beat in the media, why won't she drop out, when is her campaign going to end. Now it's come to an end. What do you think of the coverage?

MURPHY: I think that she pushed back so hard against the media that the media took a good look in the mirror and said, you know, what, maybe we've told you to get out every single election night. I think she was effective in that way. Although now it's time for her to get out.

(LAUGHTER)

I will say really quickly - I mean it is finally time for her to get out. But I will say really quickly that having been around a lot of reporters covering Obama, because of the historic nature of this race, reporters want to cover history, not just politics. I think that is drawing them to Obama in a way McCain is going to feel painfully.

SCOTT: Jane?

HALL: I think that she — I noticed on CNN, Gloria Borger was absolutely visibly angry that Hillary Clinton did not concede. A lot of people feel that that really hurt her. The commentary was really - reporters being drawn into the drama and not the history. And I agree with you, they focused on that.

SCOTT: You mean on Tuesday night?

HALL: Yes, on Tuesday night.

PINKERTON: Isn't it infuriating when politicians don't do what reporters want them to do?

HALL: I mean, it was shocking. That's what was so funny about it.

SCOTT: The "Chicago Tribune" says race is the ultimate barrier. Do you think race will ever be covered as a topic in this country?

THOMAS: Of course, this hadn't been a barrier to Obama. He's the nominee of the Democratic Party. As far as the media are concerned, they would rather be known as woman-hating misogynist than racist. They see this race by Barack Obama as an opportunity for the purification of the sins of white males of America.

SCOTT: I got to get out my thesaurus.

HALL: Get out your hymnals.

THOMAS: Go to public radio. They'll tell you.

SCOTT: Cal Thomas, thanks.

Time for a break. But first, if you want to hear what we talk about during the commercial break, check out our Web site, foxnews.com/foxnewswatch. We'll be talking, and we'll be back in two minutes with this.

ANNOUNCER: Bill Clinton cries foul as "Vanity Fair" thinks he's still involved in hanky-panky. The ex-president lashes out at sleazy journalism. That's next on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: He's a really dishonest reporter. And one of our guys talked to him. And I haven't read it. But he told me there's five or six just blatant lies in there. But he's a real slimy guy.

(END VIDEO CLIP)

SCOTT: That's former President Bill Clinton telling us how he really thinks, what he really thinks responding this week to questions from a reporter for the Huffington Post Web site. Clinton was asked about a profile of him that appears in this month's "Vanity Fair" magazine. The article written by former "New York Times" White House reporter, Todd Purdum, who covered the Clinton White House. He insinuates that the former president is possibly engaging in extra marital affairs and running with a, quote, unquote, "fast crowd."

The problem here, Cal, a lot of unattributed sources, nameless quotes, that kind of thing.

THOMAS: Well, this is like coming to the conclusion that Jack the Ripper had a problem with knives. Where have these guys been? When conservatives are writing these things — this is terrible. This was character assassination.

(CROSSTALK)

SCOTT: And this is a former "New York Times" reporter.

THOMAS: Yes, they didn't have a problem with him when he was at the "Times."

PINKERTON: A former "New York Times" reporter, now works for "Vanity Fair." Not exactly a conservative publication. Who's married to Dee Dee Myers, who was Bill Clinton's press secretary for his first term so there's - look, Todd Purdum is not a slimy right wing guy. He doesn't like Clinton very much. But now Bill Clinton welcomed to media the way Republicans have experience it, which is anonymous sources trashing you behind your back. May or may not be true. Who knows? We'll never a way to find out.

But the media now have in their heads that Hillary Clinton and Bill Clinton are worse than the Republicans and they had to get them out of the way to help Obama.

HALL: That's what Maureen Dowd said about that the Democrats - which I think are still separate from the media — would rather lose to Obama than win with the Clintons.

I think it's really interesting. I had heard how bad this piece was and I read it. It's quite good and, unlike the part about the sex, which you can talk about, whether he still has a problem with that, his dealings with people, his money he's taking...

SCOTT: Where did that $109 million bucks come from?

HALL: Where did the $109 million come from and how loaded up is he with questionable connections? Those are very serious issues if she becomes the nominee. I think he slimed Todd Purdum. I think it's a pretty darn good piece.

MURPHY: But I do feel like you have to — if you put out 15 pages, you don't get to a single main source until page six and that's John Podesta defending Bill Clinton. I would have really liked to see who are these people talking about. If it's really true, just put your name to it. It was unfair.

(CROSSTALK)

PINKERTON: Would you like to see where Clinton got all the money for his foundation from. In addition to the $108 million, there's all the money for the foundation, not itemized, not disclosed.

THOMAS: To pick up on what Patricia was saying, Bob Carroll had a really good column on Friday, in which - he's the editor of the "American Spectator," also wrote a lot of books about Clinton during the Clinton administration, "Boy Clinton" and a number of others. And he said a lot of these sources seemed to be sources that he had. A lot of these stories that Purdum had seemed to be stories that he had. He's basically saying welcome to the club a little late. Now that Clinton is out of the way in terms of power, it's OK to say what we were saying for years.

SCOTT: Now that it's in a glossy supermarket, you know, cover.

THOMAS: With lots of boobies on the cover, of course.

SCOTT: For sure.

THOMAS: Not that I noticed.

SCOTT: Angelina Jolie, I think it was.

THOMAS: Yes, I read it for the articles.

SCOTT: One of the interesting things for me was not so much about the sleazy people that he's accused of hanging around with, but his sort of level of mortality. He goes into some depth about Bill Clinton's health.

HALL: It's interesting. You know that old joke, who are you going to believe, me or your own eyes. You know that old line? I think I a lot of people had noticed that Bill Clinton seemed angry, seemed pallid, seemed a lot of things. And again, we didn't give that much disclosure about his health. I don't think anybody wishes him to be in ill health but this was not raised until this article as far as I know.

MURPHY: The quote they have is from a doctor that has not treated him. Again, I think all these are very valid issues, but there's no substantiation to the level that...

(CROSSTALK)

PINKERTON: Except the catastrophic nature of Bill Clinton's campaign on behalf of his wife. I mean, everybody that Bill Clinton would be this big asset and he'd make her get nominated. It was the reverse. He was terrible for her. You have to therefore search around for some explanation about open heart surgery or something that so damaged him as a candidate.

SCOTT: Would she be the nominee were it not for the former president, her husband?

PINKERTON: Nobody knows. But it certainly — given the fact that everybody thought she was going to be the nominee a year ago and now she's not, we have to search for explanations, including a lousy campaign. But he'll get a lot of the blame as well.

THOMAS: The major point of this piece is not just about the sex. It's about, as you indicated, the sleazy connections, the kinds of people - you've got Ron Burkle and a number of others, the questionable connections, strange money passing around through various hands, going to the Clinton Foundation in return for what? Private airplanes, landing in countries where uranium deals are done and all of this. I'm not sure that Hillary could have survived the vetting.

MURPHY: And that may keep her from being vice president, are those exact issues - nominee.

SCOTT: Time for another break. We will be back with this.

ANNOUNCER: As the race for the White House picks up speed, why is Matt Drudge more important than ever? Answer's next on "News Watch."

(COMMERCIAL BREAK)

SCOTT: More than ten years after breaking the Clinton-Lewinsky story, Matt Drudge remains more powerful than ever with his website, the drudgereport.com. A recent article on the politico.com raises questions about the role Drudge will play as the campaign moves into the general election. Is Drudge starting to lean to the left and will that hurt McCain?

Patricia, what do you think about that? There are some Republicans who are complaining, surprised I guess, that they say Drudge has become more of a problem for them than he is for Democrats.

MURPHY: I would say, to borrow a line that we heard earlier, welcome to the Democrats' world. But also there is an interesting quote from Matt Drudge when Hillary Clinton looked to be the presumptive nomination. She was getting a lot of good coverage by Drudge. He said Hillary Clinton is my bank. He said there was a Democratic strategist who said Matt Drudge can add, he knows where the numbers are. And if Obama looks like he's - well, he is going to be the nominee. If he were going to be president, that's where the story is. So we are starting to see more coverage of Obama, more favorable coverage.

SCOTT: But why this turn on McCain?

PINKERTON: Well, I think he may be reflecting just where the country is. The country is 81 percent on track in terms of the incumbent situation. So maybe Drudge feels that way, too.

It is striking when you go through a newsroom and you see every computer there and the home page is the Drudge Report. All these quotes from Mark Halperin and John Harris about how Drudge is the god of our world. As reporters, they're not entirely wrong. It is an agenda setter.

SCOTT: Cal, I've got to ask, what's your home page?

THOMAS: My home page is actually a picture of my grandson. But that's another...

MURPHY: Did you say politics.com.

THOMAS: No, no. Look, I think people go with the flow. The flow right now, as Jim indicated, is toward Obama, the story line and the rest. As things begin to turn, I think the Drudge Report will turn. This is an easy one-stop shop for journalists. You can go anywhere in the world, newspapers, columnists, including...

SCOTT: All kinds of links.

THOMAS: All kinds of things. It's a cafeteria. It's an easy place to start from. I hope people don't ends there but it's not a bad starting point.

THOMAS: And I suppose your students probably...?

HALL: You know, my students don't go there.

SCOTT: Really?

HALL: No. I think it's the journalist narcissism site. It's journalists with the links and journalists looking — one thing he has done, of course, is when the news organization is holding a story, like the Lewinsky scandal or the McCain story, he was talking to journalists who were saying the "New York Times" was having trouble with the story and McCain was going — I believe he broke that story as well. So when the news organizations are holding things, he seems to be very important (ph).

PINKERTON: The reporter can go to the editor and say, look, if you won't print it, I'll give it to Drudge.

HALL: I'm going to Drudge if you won't print it.

MURPHY: But the Democratic campaigns have spent quite a bit of time reaching out to Drudge in the way that they have to, with kind of back panels and not being too obvious about it, but they've spent a lot of time figuring out how to break into that world. and it's starting to yield results for them.

SCOTT: Here's a surprising development that I want to talk to you all about. Young people suffer from news fatigue. A new study from the Associated Press says 18 to 34-year-olds, quote, "yearn for quality and in- depth reporting and they are not getting it."

Jane, what's going on?

HALL: This was music to my ears in a way. Because I — it said that one of the problems is that they don't really know how to weed out a lot of the noise. My students read online. And what they were suggesting is that if you give a headline and then a second layer and a third layer to point young people towards here's where you can go to something more investigative, you can get a jump in your website. I thought that was heartening for news organizations.

SCOTT: Patricia, you're in business because old-fashioned newspapers are sort of going away with the buggy whip.

Sorry, Cal.

THOMAS: I went to one of those places recently!

SCOTT: But I've been under the impression that young people just grab little snippets of information from the Internet. I was really surprised that they're saying — at least according to the A.P. — we want deeper stuff. We want more quality.

MURPHY: I think the way that young people live their lives, there's a little bit of the problem that they have here. Most kids, when they have the Internet up, they also have their instant messaging up. They have their Blackberries in their pockets. They have - they are messaging with friends all the time. I don't think they have kind of news deficit, they have information overload. and they are just trying to figure out what to focus on at what time.

PINKERTON: Let's also bear in mind, there's one rule about young people — they get older. As you get older, you start paying taxes. That was an experience for me. You start thinking more about political issues. I think, let's say it, Obama has done a lot to get young people acclimated in politics.

SCOTT: It'll be interesting to see if they show up on, what is it, November 2nd?

HALL: Fourth.

SCOTT: Fourth, OK

THOMAS: By the way, if being part of the buggy whip generation, having more than five newspapers and having a column in "USA Today" hit me again. But look, I think there's a whole 1834 thing, this demo business is a myth. If they're not watching, if they don't like what they're getting, why are we doing bimbo news most of the time?

SCOTT: All right, we have to take one more break. When we come back...

ANNOUNCER: Hillary's out, McCain's in. And late night has the last laugh at the presidential race this week next on "News Watch."

(COMMERCIAL BREAK)

SCOTT: The primary is over. Here is how late night handled it.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, "LATE NIGHT WITH CONAN O'BRIEN': Barack Obama, of course, wrapped up the nomination last night. That's the big story. Yes, that's big. Yes. Now that Barack Obama is the Democratic nominee, Americans will have to choose between the 46-year-old Obama and the 71-year-old John McCain. That's the choice, yes. Right. In other words, it is a choice between the Hillary defeater or the Wal-mart greeter.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

STEVEN COLBERT, HOST: No denying it. Last night was truly historic. For the first time in the history of American politics John McCain stayed up past 7:00 p.m. And McCain's rally, well over a dozen people electrified the atmosphere. After the third chant, they forgot his name.

SEN. HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: I have been fighting for you my whole adult life. I sounded the alarm on the home mortgage crisis. I want what I have always fought for. I want universal health care. I promise. I am honored. I will keep fate. I have met. I have seen. I am so proud. I see you. I wanted to help you. I want. I want. I have been working. I have been fighting. I have been thinking of a woman. I hope you will go to my Web site at HillaryClinton.com.

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": But enough about my Hillary Clinton Web site. What does your Web site say about me?

(END VIDEO CLIP)

SCOTT: And I am out of time for this week.

Thanks to Jane Hall, Jim Pinkerton, Cal Thomas and Patricia Murphy.

I'm Jon Scott. Thanks for watching. Keep it here on FOX News.

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

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