This is a rush transcript from "America's Election HQ," September 17, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: At various stages of the campaign, some commentators have deemed me too black or not black enough. What they're going to try to do is make you scared of me. "Oh, he's not patriotic enough. He's got a funny name. He doesn't look like all those other presidents on those dollar bills."

(END VIDEO CLIP)

HEATHER NAUERT, HOST: With Barack Obama potentially becoming our very first African-American president, the issue of race has been brought up throughout the race, even by the candidate himself as you just heard. Well now, Kansas Governor Kathleen Sebelius is saying that Obama's race could be a factor in the election.

Video: Watch Heather Nauert's interview

The Democrat responding to a question about why the race is so close saying, quote, "I think the notion that, 'By the way, have any of you noticed that Barack Obama is part African-American?' That may be a factor. All of the code language, all that doesn't show up in polls, and that may be a factor for some people."

Here now to talk about it, we are joined by FOX News contributor and former Maryland Lieutenant Governor, Michael Steele, and Obama supporter and former finance chair of the DNC, Michael Brown. Welcome to you both.

OK. So we're going to attempt to weigh into this sort of prickly and sometimes uncomfortable issue. But one of the things that surprised me here, this was asked of Kathleen Sebelius just yesterday amid the markets, amid the turmoil, why is the race so close for the president? She didn't say it was Palin. She didn't say it was the media, but she said it was Barack Obama's race.

I'd like to get from both of you, Michael Steele, starting with you, your reaction to Kathleen Sebelius bringing race into this.

MICHAEL STEELE, FORMER LIEUTENANT GOVERNOR OF MARYLAND: I find it very fascinating since Barack started this campaign trying to make this very clear that race would not be a factor here, that he did not want to make this about his skin color, but rather, his views on the issues and his leadership and all of that.

And the reality of it is, just for the record, everybody knows race is a factor. It's going to be a part of this campaign right to the end and it will be a part of this post-campaign climate as well. But having said that, the reality of it is, it was an unnecessary answer to a question and you just have to scratch your head and go, "Why is that a factor? Where are all these terms and the language and all that you are referring to that have been played out to make this race as close as it is?"

NAUERT: OK.

STEELE: I don't think it's as big of a factor as she is making it at this point.

NAUERT: OK. Michael Brown, how do you feel about this?

MICHAEL BROWN, FORMER FINANCE CHAIR OF THE DEMOCRATIC NATIONAL COMMITTEE: Well, first of all, I have to agree with some of the things my good friend Lieutenant Governor Steele said and I have to disagree with some others.

First of all, I do agree that race plays a factor in everyday life in America whether it's business politics — it doesn't really matter. Race is still a factor. Gender is still a factor.

But I think where I disagree is race is playing a role, I think, with these poll numbers. But first of all, you have to put aside for a second that the last several presidential races have been very close. And America is just very split when it comes to presidential politics.

It's been very close. We both know what happened in 2000. Clearly, '04 was close, and obviously '08 is going to be close. But race is probably may be playing a factor. I think the governor was exactly right when she points out that maybe people don't tell the truth to pollsters.

NAUERT: On the other hand ...

BROWN: I don't think it takes rocket scientists to figure that out.

NAUERT: On the other hand, race can play a factor in another way, and that there are some African-Americans who just flat out wouldn't vote for Hillary Clinton because she's not an African-American who wouldn't vote for John McCain. So it cuts both ways in a sense.

BROWN: Absolutely. I agree. I think that's the point. I mean, any time we break away from the norm, which is breaking away from white males being president of the United States, clearly you're going to get different statistics on these polls. But I think that's exactly right.

NAUERT: But if you can't blame Sebelius, why are you bringing up this issue? With all that is going on in our country, why this?

BROWN: Well, I think the question was — that she got was, which a lot of folks are getting, "Why is this race so close?" With the economy —

NAUERT: Do you really think the race is so close because of Barack Obama's race?

BROWN: No, no, no. I just thought I said I think it's close because every presidential race as been close. I think we're just a close country when it comes to presidential politics but race is a factor. To try to put it aside and say race has nothing to do with what's going on is ridiculous.

NAUERT: Michael Steele?

STEELE: I don't think we're putting it aside. I think your question, Heather, is the key question. Why would you answer the question the way you did with race? And I think in some sense, it is diversionary, and in another sense, yes, it does speak to a truth that people don't necessarily tell pollsters everything that they need to know. But, you know, let's not get into this box where, "If I don't support Barack Obama, then I'm a racist," because that's the next step ...

BROWN: I agree.

STEELE: ... in Kathleen Sebelius' argument.

BROWN: But I can't go that far.

STEELE: And this is about the difference between, you know, John McCain, and Barack Obama on the issues that affects me and my family, whether you're black, white, blue or purple.

BROWN: You're right. Absolutely correct.

NAUERT: All right. Gentlemen, thank you very much, Michael Brown and Michael Steele, a pleasure to have you both.

BROWN: Michael, I agree with the last part of your comment.

STEELE: Thank you, Michael. It's good to see you.

BROWN: Yes, sir.

NAUERT: Got it. Registered. Thanks, guys.

Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC (www.ascllc.net), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and ASC LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation