Updated

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

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST OF "THE LATE SHOW": Here we go. Number ten -- proposed bill to change Oklahoma to Okla-bama. Number nine -- offer Bush $20 for the "Mission Accomplished" banner --

(END VIDEO CLIP)

BRIT HUME, HOST: Well, that little clip, courtesy of our friends at Worldwide Pants, which produces "The David Letterman Show." When the late night comics are talking about something, you know it's in the bloodstream.

Some thoughts about this question about Barack Obama and his alleged overconfidence now from Fred Barnes, Executive Editor of The Weekly Standard, Mara Liasson, National Political Correspondent of national Public Radio, and Mort Kondracke, Executive Editor of Roll Call, FOX News contributors all.

Well, he stood up before the group in Berlin and he said "People of the world, this is our time." What about this question-is Obama beginning to act a little like he's already won, and he's now carrying out his mission to save the world, or what?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: Look, this campaign is largely about who is this guy, Barack Obama? Is he fit to be commander in chief? Does he share our values, and all that kind of stuff.

So he goes to Europe and he tries to act like a commander in chief, and he, admittedly, overdoes it. He requests the Brandenburg Gate, where Ronald Reagan and John F. Kennedy once were. He compares himself in his speech in Berlin to them. He has that quote that you cited, and so on.

And he drew up a faux presidential seal for his campaign. He's got "President" written on the back of his chair. I think that's a little bit over the top, yes.

HUME: There is the seal on the right there, and that slogan down there, I guess it's-

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: It's Latin for "Yes, we can."

He was actually quoting, I think, the Mayor of Berlin, who, at the time of the airlift, addressed the people of the world. But the point is that it came off as if he was kind of the chosen one.

I think that certainly has been the narrative this week, that Obama is getting too big for his britches, he's too presumptuous.

But I don't know. What I'm trying to figure out is this going to hurt him or not? In other words, is this a fruitful line of attack for John McCain, who has been attacking him for this and running ads skewering him for doing this?

And I think not, unless Obama does something that's so baldly arrogant and really is offensive to people. I think people who don't like him think he is already arrogant.

I think it might cost him, on one level, some goodwill with the traveling press corps, who are already getting a little antsy at the fact he doesn't talk to him, there is very little access. The campaign is being run in a little bit more of an imperious manner.

But, so far, I don't see it heading into the danger zone.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: The danger zone is when the late night comics get a handle on you. Bush is dumb, McCain is old, Clinton was a horn dog, all those. They just have one joke about you.

And you can see it now beginning to be the joke about Obama is, as Mara says, too big for his britches, putting on airs, swelled head. It is not "overconfident." That's not the right word. That's not a strong enough word-"puffed up."

And if it continues, if this is one they decide through the magic of however these things are decided, that that's who he is and they could talk about him that way, then that doesn't help him.

HUME: What about it? Is it legitimate, or is it just a series of an unfortunate confluence of events that create a false impression?

BARNES: Well, I don't know. Here is a guy that never admits he is wrong, won't admit that the surge has succeeded, says that he is for public financing, but then turns down public financing and say what I am actually doing is -- you know, all that stuff. And it does seem like he's getting pretty puffed up.

But the European trip was bad for him. I'll tell you why. Iraq, Afghanistan, Jordan, Israel -- that was fine.

HUME: It was, after all, a congressional delegation.

BARNES: That's right. But when you get to Europe, it's all about Obama. And then he gives the speech in Berlin. And then with Sarkozy he has this big event, and they hug, and Sarkozy goes through all this stuff.

Just think, though, Brit, no speech in Berlin, private meetings, low-key, and then comes back to the U.S. We would look at that trip completely differently. We wouldn't think of him as a citizen of the world.

HUME: It raises this question, Mort -- his campaign was paying for it, as it did for McCain when he and visited those people in the same kind of low-key way, although Obama certainly got nice photo ops out of it. What was the purpose of a campaign event in Berlin?

KONDRACKE: Well, I think he wanted to make the point that Europeans love America, and love certain Americans, and that he --

HUME: And they love him.

KONDRACKE: And that he can restore the friendship that we used to have between allies.

I think, again, having 200,000 people -- it was a U.S. campaign rally using Berliners as props. And it didn't work like they thought it was going to work, because he didn't get the bounce that he thought he was going to get out of the trip. He got no bounce at all as a matter of fact.

(CROSSTALK)

LIASSON: I think that he went there -- he is betting on the fact that the American people want Americans' image abroad to be improved, and that they think they can convince them that he's the man to do it.

HUME: When we come back, the CIA gets tough with Pakistan, or tries to, over its ties to insurgents. We'll talk about that situation after a break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE PRESS SECRETARY: We are going to continue to work with them. We are trying to work with their military. We have had good relationships with Pakistan over the years. But this is a tense time for everybody as we work to do more to combat terrorism.

(END VIDEO CLIP)

HUME: The terrorism, of course, that she is talking about is mostly occurring in Afghanistan along the border there with Pakistan, from which militants, as their euphemistically called, filter into Afghanistan and cause no end of trouble.

The CIA and the Chairman of the Joint Chiefs have delivered the message, as Jennifer Griffin reported earlier during a visit there not long ago, that Pakistan needs to be do more. Pakistan insists it is.

The public is now seized with this issue. Look at this on which is the more important issue, Afghanistan or Iraq-Barack Obama will be cheered by this-44 percent say Afghanistan, 38 percent say Iraq.

So what about this question? Barack Obama is in the process of making a very big bet on Afghanistan. Is this wise politically, Fred?

BARNES: Well, you know, Democrats ought to put him in this bind by saying Iraq shouldn't have been there. Their talking point for several years was we shouldn't be in Iraq. We ought to be in Afghanistan. And he adopted that.

And the truth is we have won in Iraq and we haven't won by a long shot in Afghanistan.

HUME: Which is strategically more important?

BARNES: Obviously Iraq is.

HUME: Why is that obvious?

BARNES: Because it's an important country, an educated country in the heart of the Middle East, and not some remote backwater where-you know, look, if you have Usama bin-Laden hiding in some cave where he can't communicate except by sending out runners somewhere, then you're in a lot better shape than if he's has a whole country where he can function and use the airport and fly people in and out and so on.

But, look, the problem is that Afghanistan is a country that we don't want to lose to the Taliban and al-Queda and have it become a sanctuary again. And there are problems with the Pakistanis. Their prime minister was just here, and he talks a great game, and then they don't do anything.

And you have these problems with NATO where you have not a chain of command but chains of command. And there are a lot of problems there.

There are a lot of things that need to be fixed. And maybe they will be, but they aren't fixed today.

LIASSON: Look, I think they're both important for the war on terror. There is that area in Pakistan where it's not just the Taliban -- the Taliban, we're told, doesn't really have worldwide ambitions. They just want to take over Afghanistan. But there is al-Queda.

And now there is apparently western Europeans who are moving -- al- Queda recruits who are moving freely in those tribal areas of Pakistan. It is an important area.

There is a consensus that more should be done about Afghanistan. John McCain and Barack Obama both want to commit more troops. The question is, do you look at that as an either/or situation -- get out of Iraq and focus on Afghanistan, only Afghanistan is important, or do you think that both --

HUME: Which is what Obama basically seems to be saying.

LIASSON: -- basically says, although I don't think he can actually enact. If he is president, he will have to fight a two-front war.

KONDRACKE: We clearly want the Pakistanis to do more.

But it's very strange. You have this Prime Minister Gilani coming to the United States. He wants to -- what they want to do is have more development aid in those areas and try to fight terrorism that way, and the Bush administration isn't going to give it to them.

But, meantime, they also have this CIA don't(ph) today, where the big story, as Jennifer Griffin reported on it, that all of a sudden the CIA has discovered that the ISI, the intelligence service there, is hooked up with militants and terrorists.

They have known this for years. As a matter of fact, the CIA was in cahoots with the ISI, with the Mujahedin, and all that kind of stuff.

HUME: When they were trying to run the Soviets out --

KONDRACKE: Yes. Why embarrass Gilani while he's here? He had to go on television and say no, the ISI is an upstanding organization. This couldn't be true.

Benazir Bhutto's party has known for years and has complained for years that the United States did nothing about separating the Musharraf and the ISI from the terrorists. As a matter of fact, Benazir's party thinks that the ISI was partly responsible for killing her.

Now, why embarrass the Prime Minister while he is here? I don't understand it.

BARNES: Because it was aimed at something else Mort -- to embarrass the Bush administration in dealing with these people.

HUME: The CIA was?

BARNES: Yes, of course.

HUME: That's it for the panel.

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