Updated

This is a rush transcript from "America's Election HQ," October 15, 2008. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Inside the "Strategy Room" we go. New, tonight, Democratic Pennsylvania Congressman John Murtha says some people in his state are, are quote, "racist." Murtha telling the "Pittsburgh Post Gazette," quote, "There's no question western Pennsylvania is a racist area. The older population is more hesitant."

So could this lead to a backlash at the polls? Joining us now on the left, former White House counsel to Bill Clinton, Lanny Davis. And on the right, FOX NEWS contributor and former Pennsylvania Senator Rick Santorum. Hello, gentlemen.

FMR. SEN. RICK SANTORUM (R-PA), FOX NEWS CONTRIBUTOR: Hello, Megyn.

LANNY DAVIS, FORMER WHITE HOUSE COUNSEL: Hi. How are you, Megyn?

Video: Watch Megyn Kelly's interview with Rick Santorum and Lanny Davis

KELLY: All right. So this just broke a half hour before we came on the air. You got John Murtha coming out here, calling people in his home state racists, suggesting that those racists aren't going to vote for Barack Obama. So Sen. Santorum, how does this reflect, if at all, at the polls on voting day?

SANTORUM: Well, as western Pennsylvanian, I can tell you the depth of disgust that I have for Jack Murtha and what he said there. The folks he's talking about are the folks who voted for Hillary Clinton, are the folks who were upset that they were pejoratively referred to by Barack Obama as folks, you know, holding on to their guns and religion and sort of out of date with his modern liberalism.

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Yes, they're traditional values people. They are folks who believe in patriotism and love America. And they saw Barack Obama not wearing his flag pin and his condescending remarks as someone who is not them.

And yes, it's going to take a long time for them to come around. But it has nothing to do with his race. It has everything to do with the way he treated them and his policy positions which are not consistent with the values of western Pennsylvania voters.

KELLY: How about it, Lanny? You know, is Sen. Santorum right that this guy - he's dismissing legitimate concerns people may have about Barack Obama to - "Oh, they're racist," or does he have some sort of a point?

DAVIS: You know, Sen. Santorum, though we disagree on issues, I admire him greatly. He has got this one exactly right. Congressman Murtha may hang around with people who are racist, may know of instances of racism. But for him to characterize a whole region is simply unjustifiable and he owes western Pennsylvania an apology.

KELLY: Yes. We'll see whether that's forthcoming. Don't hold your breath. Before we move on, I just want to say, Sen. Santorum, Obama just gave an interview to the "New York Times" and called his comment, the one that you referred to - you know, when he referred to the small towners as clinging ...

SANTORUM: Yes.

KELLY: ... to their religion and guns and so on as the most boneheaded thing he has done in this election. Might Murtha's comments inadvertently put that comment back on the front pages?

SANTORUM: There is no question it puts that comment back on the front pages. It was boneheaded but that doesn't necessarily mean it wasn't truthful. The fact is that, as we know in a lot of cases, when you're in a small crowd and you've got your guard down and you're not following your script or teleprompter, you say things that actually you believe sometimes that you know better than to say publicly.

And yes, it was boneheaded, but it may have been a window into how he really looks at people who, you know, aren't his quiche-eating, wine-drinking folks from California that have been supporting his campaign from the beginning.

KELLY: You know, Lanny, he also takes a shot at FOX NEWS saying that if you watched FOX NEWS, you would think he was a quiche-eating, et cetera, that the senator has pointed out. You came on FOX NEWS. You are a big supporter of Hillary Clinton. Do you think that Sen. Obama has gotten a fair shake here?

DAVIS: Sen. Obama himself on "O'REILLY FACTOR" did a great job. And I think he complains about some of the things that are said about him on FOX NEWS on certain programs. But I can say, personally speaking for myself, that the words "fair and balanced" have applied to me. And the fact that Rick Santorum and I can have our time to speak without you shouting over us, Megyn, which is not the case on one-sided coverage on other networks, to me, substantiates that this is a balanced presentation.

I just think Congressman Murtha is way over the top here and he owes people an apology. And we have a lot more important things to talk about, I hope.

KELLY: I feel like having a group hug.

(LAUGHTER)

DAVIS: Thanks, Megyn.

KELLY: Unfortunately, I can't, because they are wrapping me. But we'll leave it at that on a happy note. Lanny, Senator, thanks so much for being here.

DAVIS: Thank you.

SANTORUM: Thanks.

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