This is a rush transcript of "Special Report With Brit Hume" from November 3, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT BARACK OBAMA: Immediately after I become president, I'm going to confront this economic crisis head on by taking all necessary steps to ease the credit crisis, help hard-working families, and restore growth and prosperity.

The one thing I can say with certainty is that we are going to need to see a stimulus package passed either before or after inauguration.

(END VIDEO CLIP)

BRET BAIER, HOST: It was his first news conference as president-elect, standing in front of his economic advisory board, talking at first about the economy. And it came at a backdrop when new jobs numbers came out and the country lost 240,000 jobs in October and the unemployment rate rose to 6.5 percent, the highest level since 1994.

So what about what was said at this news conference today? Some analytical observations from Fred Barnes, Executive Editor of The Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and syndicated columnist Charles Krauthammer, FOX News contributors all.

Charles, your overall impressions? Obviously, they are pushing for a second economic stimulus package, if not now, the in the first days after he takes office.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think that was sort of assumed. The Democrats are in favor of that. He obviously is.

But I thought what was most interesting is how he tried to be reassuring. First it was that scene of those many establishment economic figures standing behind him, and, secondly, his reassuring tone.

But I found it interesting that he signaled that he is ready to bail out states and municipal governments and the auto industry.

Now, what's interesting is that the Bush administration has been using the funds, the $700 billion, on the assumption that you have to bail out the financial sector because it's kind of a utility. You can't shut down the electric company. Everything stops. You can't shut down the credit.

So even if it's helping auto companies, it does it through the GMAC, through its financial arms.

Obama is signaling that he has a broader view of the rescue. He wants to save large institutions as a way to prevent a huge recession or depression. So he talked as if he's going to nationalize the auto industry. He speaks about it as a partner.

Look, in the Second World War, Detroit turned out tanks. He's going to have it turn out, you know, hybrids.

So, he has a broader vision. He didn't signal he wants to revolutionize our economy, but I think he will do everything as a way -- he sees jobs as the index of what he has to save, not credit, per se, which is what I think the Bush administration was doing.

BAIER: Mort, this comes as General Motors announced they lost $4.2 billion expected for this quarter. He did mention the auto industry numerous times in his remarks, and Governor Granholm was right behind him, the governor of Michigan, in view. Your thoughts on that?

MORT KONDRAKE, EXECUTIVE EDITOR, ROLL CALL: Well, look, if you start bailing out the auto companies, who do you not bail out? As Charles says, the financial institutions are like a public utility.

Now he said that under the industry is the bedrock of the American manufacturing. That may be true, but, nonetheless, there are a lot of other manufacturing companies that will be going under. And what about retail stores and the retail industry? They're going under, too.

I don't see why you can't let General Motors go bankrupt. It's not going to cease to exist. There will still be a General Motors. It would be reorganized. There would be better management, presumably. They could get rid of some of their debt, maybe loosen up on their labor contracts, and so on.

Obama has only been president-elect for about 65 hours so you can't expect everything out of him today, but it would have been helpful, I think everything if he had named the Treasury Secretary today. That would have indicated that he is really on top of things, as opposed to standing back and studying what he's going to do.

BAIER: Fred, at one point he was asked by a reporter about a tax plan, and whether, in fact, in this economic situation he will raise taxes for people making over $250,000 a year. Take a listen to his answer.

(BEGIN VIDEO CLIP)

OBAMA: My priority is going to be how do we grow the economy, how to we create more jobs. I think that the plan we put forward is the right one. But, obviously, over the next several weeks and months, we're going to be continuing to take a look at the data and see what's taking place in the economy as a whole.

But, understand, the goal of my plan is to provide tax relief to families that are struggling, but also to boost the capacity of the economy to grow from the bottom up.

(END VIDEO CLIP)

BAIER: So, Fred, he left himself some wiggle room there.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: He left a lot. "I like my plan, but maybe I will abandon it later, depending on the economic data." Which only adds to the uncertainty in the economy and financial markets, and so on.

Look, he could have done more in this press conference. I certainly agree with Mort that he should have named a Treasury Secretary. He's deciding among some very mainstream economists and financial leaders who would be very reassuring to financial markets, to Washington, to entrepreneurs, to industries all over the country.

And it would help if he did that and to remove some of this uncertainty.

I won't even go into the stimulus package, which as written now won't stimulate anything. It's ludicrous. They're proposing things that have never worked in the past, the things that FDR tried and we know at the end of the New Deal in the late '30's, unemployment was as high as it was at the beginning of the New Deal, things that just don't work but they satisfy certain Democratic interest groups like organized labor.

On the auto industry, let me say one thing about the auto industry-it is thriving in America, just not in Michigan, where there are high taxes, where it's a union state, where there is also been incredibly inept leadership and management at General Motors and the other companies.

But then you have these lavish contracts for labor that there is no reason for the taxpayers to bail them out. I mean, it will reward failure. And you should reward success, not failure.

KONDRACKE: I think he should have specifically said in 2009, raise taxes, no way! You know, in the middle of a recession to raise taxes on anybody is crazy.

BAIER: So what else was discussed during that news conference and how did the president-elect do overall answering what the reporters were serving up? We'll have that when we come back.

(COMMERCIAL BREAK)

OBAMA: I will be reviewing the letter from President Ahmadinejad, and we will respond appropriately. It's only been three days since the election.

Obviously, how we approach and deal with a country like Iran is not something that we should, you know, simply do in a knee jerk fashion. I think we've got to think it through.

But I have to reiterate once again that we only have one president at that time.

(END VIDEO CLIP)

BAIER: That was president-elect Obama today responding to a question from a reporter who asked about this letter that the Iranian President Mahmoud Ahmadinejad apparently sent to Mr. Obama, and congratulating him for his win. That was the answer.

We have some more from that news conference. Back with the panel. Fred, did we learn anything else from the question and answer session here in this news conference?

BARNES: Well, I found that answer on Ahmadinejad to be quite reassuring, and it shows that Barack Obama has learned a lot since he answered that question in one of the early debates during the Democratic primaries where he said without thinking at all when he answered in somewhat of a knee jerk fashion that he would meet with Ahmadinejad and Hugo Chavez and a lot of others, the Castro brothers, without preconditions.

Well, he said something quite different today, as he should have. I think that was the right answer, and it was a presidential answer, even though, as he said, he is not president yet.

Mort and I, and I think Charles, agrees that there are some things that even as president-elect that Obama can do to help the economy. But as president-elect, you really don't want to get into foreign affairs.

KONDRACKE: He did. He did say -- he was bracing towards the Iranians. He said it was unacceptable for them to build a nuclear weapon and it was unacceptable for them to continue with terrorism.

So setting the agenda for the talks when they occur, he was making it clear that he was going to be a tough negotiator.

(CROSSTALK)

KONDRACKE: I want to get into the dog issue. Here are my recommendations. He said that he wanted a mixed-breed dog for the girls, and a hypoallergenic dog. Poodles and all poodle breeds are hypoallergenic and they're really cute, like snoodles, a cross between a schnauzer and a poodle.

(CROSSTALK)

Cockapoos are nice. Labradoodles, they're all great dogs. The girls would really like them.

BAIER: He did answer a question about the potential first dog possibilities. And we saw Barney yesterday very upset about his role in this whole deal.

There was another interesting question, Charles, in which he was asked whether he had been talking to former presidents. Here is how he answered it.

(BEGIN VIDEO CLIP)

OBAMA: In terms of speaking to former presidents, I have spoken to all of them that are living. Obviously, President Clinton -- I didn't want to get into a Nancy Reagan thing about, you know, doing any seances.

(END VIDEO CLIP)

BAIER: Now, he was trying to make a joke there. He is obviously referring to Nancy Reagan consulting with an astrologer after President Reagan had an assassination attempt. So she met with an astrologer to go over Reagan's schedule.

There were no seances, though. How did that come off?

KRAUTHAMMER: Let me first say on the canine issue that I'm way out of my depth, but would suggest a black lab.

If you look at the transcript, the questioner asked "Have you spoken to any living presidents"-a rather odd way to phrase it because he wouldn't have spoken to any dead ones.

So he was roguely answering it. And then he realized, you could look in his eyes and he heard that laugh. He realized he had just created a Leno sound byte. So he recovered the way he often does by throwing someone else under the bus. This time it was Nancy Reagan, who, as you say, in fact, had not had a seance.

That actually was Hillary Clinton, who had spoke about channeling Eleanor Roosevelt in her times of trouble.

But, look, this is a very smart, nimble man who knows how to answer. He knows what he knows. He knows what he doesn't on Iran. He was accurate and careful. And I think conducted himself very well and carefully today.

BAIER: But maybe the joke didn't go over so well.

KRAUTHAMMER: Well, he recovered.

BAIER: All right, Charles. That's it for the panel.

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