This is a rush transcript of "Special Report With Brit Hume" from June 30, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: Throughout my life, I've always taken my deep an abiding love for this country as a given. It was how I was raised. It is what propelled me into public service. It is why I am running for president.

And, yet, at certain times over the last 16 months, I have found for the first time my patriotism challenged — at times as a result of my own carelessness, more often as a result of the desire by some to score political points and raise fears and doubts about who I am and what I stand for.

(END VIDEO CLIP)

BRIT HUME, HOST: In fact, Barack Obama today rejected fears and doubts that might have been raised by one of his own supporters, that being General Wesley Clark about John McCain.

Wesley Clark had said on Sunday morning television that John McCain's experience as a POW and later as a squadron commander in the Navy did not really necessarily qualify him to be president because he hadn't been a commander in time of war. And he went on to remark that being aboard a plane that is shot down and being captured doesn't qualify you to be president.

Some observations on all this now from Bill Sammon, senior White House correspondent of The Washington Examiner; Mara Liasson, national political correspondent of National Public Radio, and the syndicated columnist Charles Krauthammer — FOX News contributors all.

What about all of this, Charles? What do you make of today's developments? The McCain people, of course, were only too happy to be the wounded part in this exchange about Wesley Clark, and the Obama people obviously wish it would go away. And, indeed, Obama said he explicitly rejected what Clark had said.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And he did so in his speech explicitly as well when he talked about McCain's heroism. I thought the speech was very interesting. It pushed all the right buttons. It was, I thought, a very good speech on patriotism. It had the left of center approach, which is to put a heavy emphasis on the patriotic elements in dissent, which is OK.

It had one cheap shot at government of Iraq, where he grouped Iraq with three countries — Zimbabwe, where they hack people to death who are your political opponents, Burma, where tens of thousands are dying because the regime will not allow aid. Dissing the government of Iraq, which is essentially today our ally in the war on terror was, I thought, a cheap shot.

But overall it was a fairly good speech. But what Obama said — people challenged his patriotism because of his own carelessness. It's not carelessness that you spend 20 years in a church whose pastor says "god damn America." It's not carelessness if you have your children baptized by a man who blames 9/11 on America's sins.

And he says people have doubts about who he is — they have doubts because they hear this speech and the great speech he gave four years ago at the Democratic Convention, and they see that last year he gave $26,000 to a church whose preacher had said despicable things that many of us have heard, and incites his congregation into race hatred by accusing the government of creating an AIDS epidemic.

All of these things are what make people question him. It's not his race. It's not the scurrilous issues about his upbringing in Indonesia. It's the stuff he said, and it's not carelessness.

HUME: What is carelessness?

MARA LIASSON, NATIONAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I assumed when I heard that that he was talking about his decision at one point not to wear the flag pin, and even how he talked about that decision.

He was wearing it today. He started wearing it again. He had been on a kind of values offensive. He has this new ad where he talks about his values and his upbringing and his grandparents.

And he's going to be going on the trip to Europe and to Iraq and Afghanistan. That's part of this — it's for national security.

But at the time when he was questioned about why he didn't wear his pin, he said after 9/11, I thought it became "A substitute for true patriotism, and I decided I won't wear that pin on my chest." But instead, he said I will talk to this country about my values, and that will be a testimony to my patriotism.

For the past 20 years, countless millions of dollars have been spent by Democrats on consultants and focus group so they could take back the symbols of patriotism that they felt the Republicans had unfairly stolen — like the flag, like the pledge of allegiance.

And this flew in the face of that. I think he decided that was careless, and now he's going to get back into the mainstream of patriotic speech and values.

BILL SAMMON, SENIOR WHITE HOUSE CORRESPONDENT, WASHINGTON EXAMINER: But the point was he wanted to portray himself as the victim today. He wanted to be out there.

You know there are these smears, and they are fighting the smears in the news cycle today. And instead McCain ended up being portrayed as the victim, because Wesley Clark made this political blunder.

It was a gift to McCain, because it allowed the focus to shift to McCain's military record. The guy was five-and-a-half years in the Hanoi Hilton. He was tortured. He refused early release.

And it allows now the topic to shift to his military service, and implicitly the lack of military service by Barack Obama. We're back in 2004, folks. We're talking about searching for the truth. John Kerry is back in the mix. This is not good for Obama.

HUME: Do you think that's right?

KRAUTHAMMER: I'm not sure. I think of the statement by General Clark was politically in-artful. But you can make an analytic argument that being a war hero or prisoner isn't a reason you ought to be president, otherwise George McGovern or General Macarthur would have been president. In and of itself —

SAMMON: But it one of those "politically — "

LIASSON: McCain doesn't say that that is one of his qualifications.

KRAUTHAMMER: Exactly. And that's why I thought it was sort of irrelevant.

The war heroism is an issue of character. It's not a question of leadership. And character is extremely important in thinking of McCain and in his own persona.

HUME: What does this do to Wesley Clark, who had been on some short lists for vice president?

LIASSON: If he is on a short list, he is on a short list for show. He is not on a real short list.

HUME: Let's assume for the sake of discussion that he has been on a short list for real.

LIASSON: I think he would be on the very bottom of that list, in danger of falling off altogether.

HUME: Because of this?

SAMMON: The list got shorter by one name today.

LIASSON: He has made this kind of argument before in The Huffington Post conference call. The fact is that it is a custom now to attack an opponent at the point of their greatest strength. Maybe that is what Wesley Clark thought he was doing.

John McCain never said the reason he is qualified to be commander in chief is because of his experience in Vietnam. So I don't know why he was saying that just because he has flown a fighter plane, you're not qualified to be president.

HUME: Last word, Bill.

SAMMON: It was interesting watching McCain react. When is very restrained when he attacks Democrats, but when a Republican, someone in his own party goes off and say something dumb, like that Bill Cunningham talking about Barack Hussein Obama, he is unleashed. And that drives conservatives crazy.

HUME: When we come back, we will talk about the War Spending Bill President Bush signed today, what's in it and what's not. Stay tuned.

(COMMERCIAL BREAK)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: We owe these brave Americans our gratitude. We owe them our unflinching support. And the best way to demonstrate that support is to give them the resources they need to do their jobs and to prevail.

(END VIDEO CLIP)

HUME: That's part of what President Bush said today in signing a new War Supplemental Spending Bill to support the operations in Iraq and Afghanistan.

Nancy Pelosi said she was happy the president signed the Bill, because it was a G.I. Bill of Rights that she was happy about. Tom Harkin, Democratic Senator from Iowa, said it was because of the flood relief it contained.

Neither of these politicians mentioned the fact that, by the way, it also continued funding the war that they all swore to stop when they were up for reelection a couple of years, or at least when the Democrats took control of Congress two years ago.

So what about this Bill and what does it tell us? Where are we now in all this — Bill?

SAMMON: I agree. Two years ago it was completely the conventional wisdom this funding would not continue for the war. When the Democrats took over Congress, it was only going to be a matter of time.

Now Bush will be able to end his presidency saying he not only had the number of troops that he wanted to the bitter end and into the next presidency, but also he was able to fund those troops. I think that is the seminal accomplishment of the Bush presidency.

HUME: The seminal accomplishment?

SAMMON: A seminal accomplishment.

LIASSON: I think what this really means is thank goodness this debate is now over. The Democrats tried and tried, and now it is finished for the rest of the Bush term. I think they long ago decided that de-funding the war was not a good idea.

And this is the way you pass a Bill. You put all sorts of goodies in for various interests, and everybody signs on. This gives a breather to the next president. He doesn't have to do anything for a couple of months at least on funding.

I think this has been kind of a resolution of this issue once and for all for this administration.

KRAUTHAMMER: It's a great political success for the president, especially, as was just indicated, two years ago, after the election, the Bush presidency was declared dead. Well, for a lame duck, this guy got a lot of quack left in him.

He passes this, which means he has had control of Iraq policy over the two weakest years politically of his presidency, and is succeeding in getting an extension of the war effort and the funding into half a year into the next president, which means that it will be the middle of '09 before it comes up again, at a time when, if events continue on the ground as is in Iraq, it could be a closed issue. Iraq will be near success and nobody will want to withdraw unconditionally and on a timetable, even Obama.

At the same time, he is going to get a bill on eavesdropping, on FISA, which is another seminal accomplishment. I think it is quite an achievement.

I happened to see the president this morning with a bunch of columnists. He was in great shape. He was in such good shape that 90 percent of that meeting is off the record. But I think for a man who's got six months left in his presidency, the one adjective that you would not apply to him is "wistful." This is a man who is active, who feels he has affected history in our response to 9/11, which was essentially his task. It was his time and his hour. He thinks he put us on the right road. And I think probably history will vindicate him.

HUME: Does he believe, from what you can tell, that the course he has chosen will have to be to a great extent stayed by the next president, that he will have to stay on it?

KRAUTHAMMER: I think so, but it is because of the success. It is not because he said so, but because he made a choice on the surge and he turned it around.

HUME: How do we get to this pass?

LIASSON: He changed his strategy.

HUME: But the people opposed to the strategy — it was the Democrats who were opposed to the strategy that was in place didn't like the new one any better.

LIASSON: No, but there was nothing they could do about it.

HUME: Wait a minute. There was something they could do about it, and it looked like they had the high card. What happened?

LIASSON: They didn't have the votes — you mean to de-fund the war?

HUME: Right.

LIASSON: They couldn't do it. They tried and tried and they gave up.

KRAUTHAMMER: They were afraid to do it because it would have been a disaster —

HUME: Because you can always pass no Bill. That de-funds the war.

LIASSON: Sure, but they didn't want to do that either.

What I think is going to happen is that, lo and behold, there is not going to be that much of a difference in either a President Obama or President McCain in terms of how fast they can adjust the troop levels. Obama if he is elected will have to bring them down to a certain extent, but not as fast as —

HUME: You get the last word, Bill.

SAMMON: Bush told during an interview that he is doing some of the heavy lifting for the next president — funding the war, getting FISA passed- -so that the new guy doesn't have to reinvent the wheel and fight all these political battles. Some of these tools will be in place for him already.

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