This is a rush transcript of "Special Report With Brit Hume" from August 5, 2008. This copy may not be in its final form and may be updated.

SEN. BARACK OBAMA, D-ILL., PRESIDENTIAL CANDIDATE: Senator McCain is taking a page out of the Bush-Cheney textbook. John McCain is offering an oil company plan, a gas company plan, but that's not the plan we need. We need a people plan to deal with energy.

SEN. JOHN MCCAIN, R-ARIZ., PRESIDENTIAL CANDIDATE: I saw that Senator Obama his latest attack has got to do with oil and campaign contributions.

I think he might be a little bit confused, because when the energy bill came to the floor of the Senate full of goodies and breaks for the oil companies, I voted against it. Senator Obama voted for it.

People care not only what you say, but how you vote.

(END VIDEO CLIP)

BRETT BAIER, GUEST HOST: Senators Obama and McCain on the energy issue today on the campaign trail.

Every day this issue is the top issue out there on the stump. What about that? Some analytical observations from Fred Barnes, executive editor of The Weekly Standard, Juan Williams, senior correspondent of National Public Radio, and syndicated columnist Charles Krauthammer — FOX News contributors all.

Charles, you heard the back and forth today. Was there a winner?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: When Obama goes out there and tries to paint McCain as a creature of big oil, it's silly. People know he's not.

People know if anything about McCain is that he he's a maverick. Conservatives know it and because he drives us nuts on all of these issues in which he has opposed the party line.

So it doesn't ring true. And to say we need a people plan when what the real issue is — is drilling — people understand what drilling is about. Obama now is shifting on drilling. He understands the way the winds are blowing, and he says I am still against it, but I might allow it in a comprehensive plan.

McCain ought to hit him again on that, and say, OK, you will allow it grudgingly and you want to restrict it. But why? What's wrong with it? Is there a national security reason we shouldn't drill? Is there an economic reason?

You're the guy who wants to pour hundreds of billions into pie in the sky public works to produce new energy. All you have to do is release this oil offshore and in the Arctic.

Well, he can't say "Arctic," but if he says all you have to do is release the oil offshore, you could have hundreds of thousands of jobs created in America without the government intervening. So he's got a good case and I think he's going to make it.

BAIER: Juan, this comes on the backdrop as Nancy Pelosi, House Speaker, continues to prevent votes on domestic drilling on the House floor, and Republicans continue to protest that, some coming to Washington on the House floor to say she should come back and get Congress back in session.

Is this hurting Obama on the trail in his case to lay out his energy plan?

JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: Let's put it this way — it's helping John McCain. This issue has been a godsend for John McCain and the Republicans. It is an issue in which polls indicate a large majority of the American people favor drilling.

And the argument about are you a serious country, are you willing to do what it takes in order to maintain reasonable gas prices has taken precedence over, to my mind, all of the internal debate about whether or not we should have environmental protection, does it make sense, is it really going to impact the overall demand for oil, which is growing because of expanding middle class in places like China and India.

But what we are seeing from Barack Obama is that he is not really attacking John McCain, and I think McCain was wise to say you voted for some of the tax breaks that went to the oil companies that you are now condemning, and John McCain did not. But Senator Obama is attacking President Bush and vice president Cheney, and making the suggestion to the American people that the Republicans have been in charge, look at the difference in your gas prices between when George Bush took office and today. They had a plan. It was the big oil company's plan.

That's what Obama is saying, and he is hoping it can somehow rebut the power of John McCain, the maverick.

BAIER: Speaking of that, a new ad back and forth today. First a McCain ad came out, and now a Barack Obama ad has come out. Let's take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Only McCain has taken on big tobacco, drug companies, fought corruption in both parties. He will reform Wall Street, battle big oil, make America prosper again. He's the original maverick.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: The president and I agree on most issues. There was a recent study that showed that I voted with the president over 90 percent of the time.

UNIDENTIFIED MALE: John McCain spores Bush's tax cuts for millionaires but nothing for 100 million households. He is for billions in new oil company giveaways while gas prices soar, and for tax breaks for companies that shift jobs overseas.

The original maverick, or just more of the same?

OBAMA: I'm Barack Obama, and I approve this message.

(END VIDEO CLIP)

BAIER: And that ad, that last ad, just came out. That's the response.

Fred, what is your take?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I don't think either one of those ads gets anywhere, but particularly John McCain's.

There is a simple fact of politics that you get more votes from mobilizing and activating your base than you do from trying to persuade the undecided, and particularly emphasizing some point that everyone knows anyway, as Charles said.

Look, the Democrats are not going to be able to make the sale that with McCain it will be the third term of President Bush. That is just not factually true, and it's not possible for them to do that.

I think the mistake that Obama made today was going back to the tire gauge. He said, oh, no, I was right about that, we're going to save all this, and we're going to save all this gasoline, and it will be as good as all the oil we save.

But you look at the numbers, and it just doesn't add up. The government says only about a fourth of the people have under inflated tires. Actually, I have been looking at tires driving around at how full people's tires are. Mine are. Are your tires inflated, Juan? Have you been checking?

Visually. This is not a scientific sample. But, anyway, you do the math, and you would save about 60,000, 70,000 barrels a day—

WILLIAMS: but that's not the entirety of his plan.

BARNES: No, but what he said, what Barack Obama said is you would save enough from inflating, everybody having properly inflated tires, as you would from the offshore oil that would be produced if the moratorium were lifted.

WILLIAMS: That is not entirely his plan, that's all I'm saying.

BARNES: No. Look, he is way off base on this. He better drop it, or McCain will send out another supply of tire gauges.

BAIER: When we come back, what role is race playing in the presidential race? We'll analyze that next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: He brought up the issue of race. I responded to it because I'm disappointed, and I don't want this issue to be part of this campaign.

OBAMA: I'm young. I'm new to the national scene. My name is Barack Obama. I am African-American. I was born in Hawaii. I spent time in Indonesia. I do not have the typical biography of a presidential candidate.

(END VIDEO CLIP)

BAIER: Both candidates talking about race in this race. Both campaigns say they don't want it to be an issue in the campaign, but yet talk about the race card is really all over the place.

We're back with the panel. Juan, it's not going away despite both campaigns saying that it should go away.

WILLIAMS: Because both of them see that — they are worried and they are trying to play it. Clearly, from the McCain perspective, he does not want to be cast as a racist. I can tell you his campaignees(ph) don't want to be cast in that light.

But at the same time they are aware it is out there, and they are aware that there may be a certain percentage of white voters who are just not being forthcoming about how they intend to vote and their inhibitions about voting for a black person for president.

BAIER: And some examples are pretty extreme, but the media has covered this issue?

WILLIAMS: And then you have the other side, where I think racial paranoia flows over. You have Bob Herbert, the columnist for "The New York Times" saying that in an ad featuring Britney Spears and Paris Hilton, that its white women somehow are being held up, and the suggestion of a black men and white women and appealing to white voter anxiety over this. I just think it's madness.

But this is the paranoia that's flowing out there, and Barack Obama, initially, I think, he was trying to be proactive and say don't attack me on the basis of race. But he didn't have a case, and he made John McCain into a sympathetic figure who was being unfairly attacked.

BAIER: So how do the campaigns treat this moving forward, Charles?

KRAUTHAMMER: Everybody wants to stay away because it's toxic, which makes you ask why did Obama start it when he said John McCain is going to scare you by saying I don't think that's the guy on the dollar bill?

Now that is an accusation of racism. And in our country, given our history, that is a serious accusation, and you better have support.

The fact is that McCain has never done that, and he was rightly offended. And I think his response was absolutely accurate — it was a playing of the race card.

It was illegitimate, and I think it will stop because Obama knows that if he portrays himself as a victim he will lose all the good will he had when he announced himself to the country four years ago as a man who was trans-racial and beyond race. It made him attractive. It made people admire him, and now he could undermine that in portraying himself as a victim without any warrant.

BARNES: I think there is a race factor, but I think it is a very small one. Stop and think for a minute if Barack Obama was a conservative Republican or even a centrist Democrat. Think if he were someone who said, announced tomorrow "I'm against racial preferences. I oppose them as a matter of principle."

That's not what he has done. He favors racial preferences, and put an ad on TV in Michigan, as I recall, in favor of them.

Just think, as Juan suggested in a very good piece in the Wall Street Journal yesterday, if he really made a pitch on issues like crime to tell lower middle class voters, a lot of them white, that he shared their values. The problem is on an issue like crime, he doesn't share their values.

He was never — when crime was an issue in Illinois when he was a senator, he was never hard-liner on crime issue.

So there is a racial factor, but I think it would be erased for a black candidate who was a conservative.

WILLIAMS: Yes. I think it is not unheard of for the GOP to play racial politics, but Obama jumped the gun here, and now he has himself in a trap.

BAIER: Last word for the panel.

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