'Special Report' Panel on Race for Key Battleground States

This is a rush transcript of "Special Report With Brit Hume" from July 4, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: There are more and more independents who are not tied to a political party, and I want to make sure that he we are reaching out to them. Because I think there's the possibility of a significant realignment, politically, in this election.

SEN. JOHN MCCAIN, PRESIDENTIAL CANDIDATE: I think that it's going to require us to really do a good job in motivating our base and reaching out to independents and finding the older new Reagan Democrats. We're doing that.

(END VIDEO CLIP)

BRET BAIER, GUEST HOST: There you see Senator Obama and Senator McCain talking about the changing political landscape in this presidential race.

Let's take a look first at the latest polling, the daily tracking poll from Gallop. It has Barack Obama at 47 percent, John McCain, 43 percent, plus or minus two is the difference there.

Then you look at some key states like Montana, a key battleground state — Barack Obama, 48; John McCain, 43 — traditionally a red state, Montana. Colorado, look at that poll — 49 percent to 44, Obama over McCain.

How is this race shaping up, and what about the key battleground states? Where will it be fought?

Some analytical observations from Fred Barnes, executive editor of The Weekly Standard, Mort Kondracke, executive editor of Roll Call, and Michael Barone, senior writer of U.S. News and World News — FOX contributors all.

Michael, let's start with you. Barack Obama in Montana today, North Dakota yesterday — some interesting states for the Democratic to be hitting.

MICHAEL BARONE, SENIOR WRITER, U.S. NEWS AND WORLD REPORT: That's right. If the Obama campaign was just operating off the theory of some in Washington, that, hey, just look at the 2000, and 2004 results and extrapolate from there, they wouldn't be in those states, because those are states that George W. Bush carried — North Dakota by 27 points, Montana by 20 points.

But I think Barack Obama is right. I think it's time to throw out that old map of the red and blue states. And I think there's some very interesting dynamics going on, different groups of voters moving in different directions. And so this new math is going to look different.

I was just consulting a book last night on the 1976 campaign between Gerald Ford and Jimmy Carter, and they say, well, we've narrowed it down to 18 states with 400 electoral votes. That was the first of October.

I think we could be looking at more than 20 states that are seriously in contention, because when you look at the polling, as I've done in each state from February through June, North Dakota is just two points for John McCain, Montana, the average there is about four points for John McCain. And the latest poll, Rasmussen, as you showed, showed Obama up five.

What I see happening is that some of the rural areas that were so heavily for Bush are not reliably Republican anymore.

BAIER: Mort, is it shifting out west? Is that largely where it is?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: It is not just in the west, but is in the west.

Montana, by the way, has a Democratic governor and one Democratic senator. North Dakota has two Democratic senators.

So, then you get Nevada and Colorado and New Mexico, all those states are in play. But so are states like Virginia, and even Alaska is in play.

So, I, frankly, think it's partly because of the economy. You know, a bad economy hits the whole country, and people are more receptive to a Democrat's appeal.

BAIER: Talk strategy. If you're in the McCain campaign and you're looking at Barack Obama going to these states like Montana and North Dakota, are you worried about those states?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: You wouldn't worry about Montana, but you would worry about Colorado and New Mexico. I was out to Colorado earlier this week, and somebody pointed out to me if Obama wins to New Mexico and Colorado, he could lose Ohio and still win the presidency.

I think there are two battlegrounds, there is the Midwestern battleground, the Pennsylvania, Ohio, Michigan, Wisconsin, perhaps, although that looks pretty good for Obama. And those are states Michigan, Ohio, and Pennsylvania, where McCain can do better than Bush did.

But when you get out to the four-state area of Arizona, Colorado, New Mexico, and Nevada — obviously McCain is going to win Arizona, but the other three are states where Obama could do very well.

Colorado is a state that has changed a lot. I think it is one to watch. Bush won it by about ten in 2000, only four or five in 2004. It was one of the few states where he lost ground.

And now we're in 2008. Obama is ahead, as he's ahead in New Mexico. So he doesn't need much of a breakthrough there in order to put himself over the top.

BAIER: Quickly, Michael.

BARONE: Well, the old economic rules aren't working in this campaign. McCain is running about as well as Bush in economically distressed Michigan and Ohio, that was a three-point Kerry state, a two two-point Bush state.

But in Virginia and North Carolina, which have been booming, clearly are moving toward the Democrats. Those were safe Bush states in '04, and now we're looking at very narrow margins.

So new rules are working there, and us political pundits will have to work a little overtime to figure out what they are.

BAIER: We know you will.

That's it on this panel, but up next, we'll look back at the long life and career of Jesse Helms, who died today in North Carolina.

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BOB DOLE, FORMER SENATOR: It in his time, no question about it, he was the conservative leader in America. Nobody doubted that. And Jesse would say, shucks, I don't deserve this or that. He is one of these guys that I really admired that didn't try to take credit for everything that happened in Washington.

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BAIER: Former Senator Bob Dole, former presidential candidate Bob Dole talking about Senator Jesse Helms, who died today at 86.

Here is what the White House, President Bush and the first lady said about Jesse Helms. "Jesse Helms was a kind, decent, humble man, and a passionate defender of what he called 'The Miracle of America.' So it is fitting that this great patriot left us on the Fourth of July."

He was once asked if he had ambitions beyond the United States Senate. He replied "The only thing I'm running for is the kingdom of heaven." Today Jesse Helms has finished the race, and we pray he finds comfort in the arms of the loving god he strove to serve throughout his life.

Thought about Jesse Helm's life and career, Fred?

BARNES: I knew Senator Helms pretty well. As a matter of fact, I once wrote a piece for "The Weekly Standard" and on the cover we had a picture of Helms Mt. Rushmore, actually. That was a great cover! It made liberals mad, and it even made people like Mort mad.

But Helms was just an implacable conservative. He didn't go along to get along. He was in Washington to push what he wanted. And a lot of them were issues that were cultural and social issues that the Georgetown types didn't want to hear about — abortion and gay rights, and particularly racial preferences.

Now, the majority of Americans opposed racial preferences. Jesse Helms put that in an ad which you showed earlier on Jim Angle's piece. And that just infuriated so many people. But not Ronald Reagan. Ronald Reagan wouldn't have been president without Jesse Helms saving him in North Carolina in '76, which Helms Tom Ellis, his buddy, did on their own. They put this ad together from a Reagan speech denouncing the Panama Canal Treaty, putting it on the air all over North Carolina and he won, a big surprise, and then went on to win a lot of other primaries.

He didn't beat Gerald Ford for the nomination, but he was put in place to be the nominee in 1980, and we know what happened after that.

BAIER: I covered Jesse Helms race against former Charlotte mayor Harvey Gantt, and he ran against him twice. I covered it in '96. Gantt was, obviously, an African-American. The race dealt with race, and Helms was not short of controversy throughout his career.

KONDRACKE: Absolutely. He was a personally gracious and courtly man, soft-spoken and all that, staunch anti-communist, a United Nations reformer, and all that.

That said, to be balanced, you know, he was not a Dixie-crat. He was a Dixie-publican. He was practically a confederate. He was opposed to civil right legislation. He was opposed to integration. He said that civil rights consisted of taking rights away from some people and giving them to others.

He was opposed to the Martin Luther King holiday. He tried to filibuster a voting rights act. There are plus things you can say about him, but, unfortunately, on the day of his death you could also see some negative.

BARONE: I just point to a couple of events that bookended his 30 year career in the Senate. Fred has already mentioned his role in reviving the Reagan campaign, and we might not have had a President Reagan without Jesse Helms in his defense. The year before that, 1975, he pressured Secretary of State Henry Kissinger, President Gerald Ford, his own party, about not allowing Alexander Schultz to be interviewed at the White House. They thought this would interfere with the policy with detente and the Soviets would cross us, and so forth.

Helms stood up, despite some of those regrettable stands that Mort mentioned, for the forces of freedom that, of course, prevailed, ultimately, in the Cold War.

In his last term in office, he worked on a bipartisan basis with Joe Biden of the Foreign Relations Committee on things like U.N. reform. But he got particularly involved in stopping AIDS in Africa. He was a major leader in this.

People said that he was antipathetic to black people, and so forth. His motive was that as a Christian he felt he had to save children's lives. And that was two big impacts.

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