This is a rush transcript of "Special Report With Brit Hume" from July 29, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

GOV. TIM KAINE, (D) VIRGINIA: My mom loved seeing me on the list. That's fun for her. I've never taken it that seriously because, again, my motive is not to get anything or be anything except help him win.

(END VIDEO CLIP)

BRIT HUME, HOST: That's Tim Kaine, the popular Governor of Virginia, who is talking outside of one of our old news stations, a very popular old news station here in Washington about his being on the list of people who is being considered for vice president. He seems delighted by it, as you can see, and certainly his mother does.

And he's all the hot talk around Washington today. So let's hear talk from our people — Fred Barnes, Executive Editor of The Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Fred, what about this guy?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: When some guy says he doesn't take it seriously, that means he'd die for it! That mean he's desperate, and thinks it it's close.

And it may be close with Tim Kaine. He does add some things. I think Obama hinted that he wants somebody without heavy Washington baggage or connections, which would mean a governor, which would mean Tim Kaine of Virginia Kathleen Sebelius of Kansas.

One of the things you want as a candidate who you can look at him and say well, this will bring no harm to the ticket. That is one of the first things that matter, no harm. And he doesn't seem to.

Obama may be able to win the state of Virginia with him, but not automatically thought, because McCain has a lot of military, and he is pretty strong in Virginia.

But Kaine is a gut who endorsed Obama practically last century. He was one of the first governors or major Democrats to endorse him in something like February of 2007. He was the first, and he is obviously somebody McCain is very comfortable with.

HUME: You mean Obama.

BARNES: Obama is very comfortable with. So I think it will be Kaine or Governor Sebelius, although I have no inside information.

HUME: There is a question, though, that this is someone who, unlike Al Gore for Bill Clinton, does not bolster the foreign policy side of Barack Obama's credentials.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: That's true. And he, like Obama, is a relative novice to office. He has only been governor for two-and-a-half years.

And Larry Sabato, who knows more about Virginia politics than anybody except Fred, from the University of Virginia, says that he would rank Kaine in the bottom quartile of the governors that he has known since forever. And he doesn't have a good record of working across party lines with the Republicans down there.

Kathleen Sebelius is a possibility, but she doesn't have any foreign policy experience.

So I think there is a strong case is to be made for Evan Bayh, who a former governor, a two-term governor, a moderate — used to be head of the Democratic Leadership Council, was a hawk on Iraq in the beginning, is still pretty much of a hawk on Iran, understands foreign policy, and isn't exactly — won't light up the sky, but neither will Kaine, I don't think.

So —

HUME: Would he, in your judgment, put the state of Indiana, which has been voting Republican for president since the earth cooled, into play?

KONDRACKE: At various times Indiana has been close. Now, probably not, but, then again, you know —

HUME: Did LBJ carry Indiana? I guess he did.

BARNES: He may have.

HUME: That's about the last time.

BARNES: LBJ is the last Democrat to carry Virginia.

HUME: What do you think, Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: To hear Kaine say modestly he doesn't take any of the talk seriously is to make him the first governor in history of the Republic who doesn't aspire to higher office. So I guess that's a plus.

But, look, as you said, in the past when you had a nominee who was a novice in foreign affairs, you try to take somebody who complements you-a Gore, in the case of Clinton. Reagan, he took Bush, the elder, who had been the director of the CIA, ambassador to the U.N. and to China. Even Carter took Mondale, who had some experience in foreign affairs.

I think Obama is taking a risk if he goes with a governor who is actually a blank on foreign affairs. After all, this election is a referendum on Obama. And even though the vice president is not that important, the office is a lot more important today than it ever was.

I mean, we've never had the country hating a vice president, and that's because Cheney has had influence in power.

And having a novice who is in office, knowing that a vice president is going to be an advisor, I think he would — Obama would do well with a Sam Nunn or a Lee Hamilton, a safe old guy who has been there around the block, has a lot of experience on foreign affairs, and is not threatening in any way.

I'm not sure he will go that way, but I think he really ought to. It would help him.

HUME: Who else might be a player, Fred?

BARNES: I think the difference between somebody like Kaine and the two that Charles is talking about is whether you pick somebody who you think would be the best vice president or somebody who you think would be the best vice presidential candidate.

And those aren't the same thing. I mean, if McCain's picking, I think it's clear Mitt Romney would be the best vice president. He may not be the best vice presidential candidate, however.

And usually you pick the guy or the woman who you think will be the best vice presidential candidate.

KRAUTHAMMER: But after eight years of Cheney's influence in foreign affairs, people have a sense that that is an important office in a way that never existed 30 years ago.

And I think they might want to have a guy in the room unlike the Governor of Virginia who knows something.

KONDRACKE: And the president is not going to be able to do everything and ought to be able to rely on somebody close at hand.

Joe Biden is another person who is in the running, supposedly, and knows a lot about foreign policy and is a wonderful human being, but this would be doubling down on the big Iraq mistake that Obama is already making about the surge and all of that. Biden was in favor of splitting up the country that's now coming together.

HUME: There was talk of compromise in the Senate this afternoon on energy legislation. We'll talk about that when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R) OHIO, HOUSE MINORITY LEADER: I don't think there should be a recess. The American people want us to do something about the high price of gasoline, the high price of energy.

(END VIDEO CLIP)

HUME: Well, there will be a recess, it appears. It will start later this week, and it's not clear that anything will get done on energy.

In the meantime, as the Republicans in the Senate have been having a field day politically with the issue of energy and the Democrats refusal really to allow any amendments to speak of on oil drilling.

One of the senior most Republican in the Senate, Ted Stevens of Alaska, a leading figure on the Appropriations Committee for years, and a man who was not shy about spending, has been indicted on multiple counts of lying about benefits he received from a construction company in Alaska, mostly benefits to his house, although there was a land rover swapped for an old Ford that has deemed to be one of the things.

He denies it, but what is the effect of this, Fred?

BARNES: Republicans have always said that even though Ted Stevens has a tough race for reelection this year at age 84, he will win unless he's indicted. He has been indicted now.

And I think this is significant for this reason. Look, the key to the next Congress is whether Republicans have 45 senators or more, because when they get below that number, they will not be able to carry out many filibusters and block liberal legislation.

You just can't get 41. When you have 49 as now, you can do it most times, but 45, 44, 43. There are four Republican senators who are behind. This would be the fifth seat that you would have to say would be leaning democratic now. There are a couple of others that are very close.

HUME: OK, got it.

BARNES: So this would Republicans in bad territory.

KONDRACKE: Agreed. And you'd think that Stevens would withdraw at some point, or maybe lose the primary, because the Democrats thought they could beat him anyway with Mark Begich.

KRAUTHAMMER: With three months until the election, there's no way he will be able to clear his name between now and then, if ever, but certainly not between now and then. He should resign. Otherwise Alaska, which I think hasn't had a Democratic senator since Mike Gravel a quarter- century ago, may have a Democratic senator again.

HUME: It appears that he is not being indicted for the act of receiving these gifts, but for-

KRAUTHAMMER: It's always telling the FBI —

HUME: Cover up.

KONDRACKE: Not signing a financial disclosure statement that he —

HUME: On to energy, where does this stand politically, Charles?

KRAUTHAMMER: It is gift from heaven for Republican in a year in which economic issues are all on the Democratic side. It turns out in a poll in The Wall Street Journal that the most important economic issue to Americans is energy and gasoline. And on this issue, the Republicans have it on drilling. Americans understand you got to drill.

The Democrats have offered a weak compromise, offering four amendments dictated by Harry Reid. The Republicans ought to turn it down and say it's our amendments, we'll make them. Otherwise we're going to ask the president to call the Congress back in August.

KONDRACKE: I think the Republicans will accept it, but it's 60 votes required to pass any of these amendments. And so they're not going to pass the Senate.

If they pass the Senate, they wouldn't pass the House, because Nancy Pelosi won't allow any votes on any kind of drilling, unless —

HUME: She's trying to save the planet.

KONDRACKE: Right, I know — unless the polls begin to show that this is really biting against Democrats. Right now the Democrats still have a 16-point lead on the whole energy issue. If it begins to close, she might have to get off that.

And maybe even Barack Obama might change his mind about it. And if that happened, then the party would be free to do it

BARNES: I would be surprised if they came up with a new plan.

Republicans will accept these votes, I think, at some point. But one of the things the Democrats, why they don't want these votes, because they don't want Barack Obama to have to vote against nuclear power, to vote against more drilling, to vote against more exploration of oil shale in the Rockies. They want to protect —

HUME: He would have to come back to the Senate.

BARNES: Right. They want protect Barack Obama on these things.

And so now Harry Reid, while he said they could have these four votes, now he is hearing from a lot of Democratic senators saying wait a minute, don't do that. Let's see whether he really offers them or whether the actual votes take place.

And in any case, it is not going to happen in the House.

HUME: Let's assume that Mort's scenario holds, that they get the votes and the stuff doesn't pass. Does the issue then go away?

BARNES: It doesn't go away at all. The votes are the Democrats against drilling, against any things like that, against oil shale, offshore drilling, nuclear energy. Those are huge votes for Democrats.

Every Republican senator is using that issue. I think it is turning dramatically in favor of the Republicans. I don't know where Mort gets his crazy poll number. It's meaningless.

KONDRACKE: The Wall Street Journal.

BARNES: Well, it's a meaningless number at the moment, because if you look at what's going on the ground, this is turning against the Democrats.

What the Republicans need is a presidential candidate who will use this issue every day, and they don't have that in John McCain.

HUME: He has been using it some.

BARNES: Not enough.

KONDRACKE: I think this is another Obama judgment question. Here you've got — we're going to be dependent on fossil fuels. Are you going to be the president who stands against using fossil fuels and lowering the price of gasoline?

HUME: That's it for the panel,

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