This is a rush transcript of "Special Report With Brit Hume" from December 22, 2008. This copy may not be in its final form and may be updated.

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ED GILLESPIE, WHITE HOUSE COUNSELOR: This is cocktail party chatter in Georgetown or Manhattan masquerading as reporting. The fact is that they say that the president's deregulatory policies stoked the housing crisis when in the article itself it notes that the president was calling for stiffer regulation of Fannie Mae and Freddie Mac.

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BRIT HUME, HOST: So what is this story that so agitated the White House that not only did it send a Sunday response in the form of a statement, but also sent, as you saw there, Ed Gillespie, the president's political advisor, out on the north lawn to talk about it again today.

The story says in part, quote, "He," speaking of President Bush, "his housing policies and hands off experience to regulation encouraged lax lending standards. He pushed hard to expand home ownership, especially among minorities in an initiative that dovetailed with his ambition to expand the Republican tent and with the business interests of some of his biggest donors."

Well, that statement is correct. So what's all the grumbling about? Some thoughts on this now from Fred Barnes, executive editor of The Weekly Standard, Nina Easton, Washington bureau chief of Fortune Magazine, and the syndicated columnist Charles Krauthammer — FOX News contributors all.

Fred, what's the — the quote I read, which lies at the heart of what The Times claimed, is, standing by itself, correct. So what's the fuss about?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: It is correct, but I will mention that program and the president's efforts to increase homeownership.

The problem with the story is it blames everything on President Bush and pretends like nothing happened before he became president. You can go back to the Community Reinvestment Act under President Carter and all the things that President Clinton did and what Fannie Mae did announcing in 1999 that they would buy up loans, home loans that were made by banks to people who hadn't qualified before.

They didn't have much — they weren't going to be able to put much down and couldn't provide much proof that they were going to be able to pay off their home loan and so on.

And then you go to 2003 and four and five, and, as Ed Gillespie, says, the Bush administration was pushing hard for a tough crackdown on the practices of Fannie Mae and Freddie Mac, and so on.

I mean, it was just one of the most breathtakingly one-sided, narrow story with blinders on that I have ever seen before that can only be motivated by an effort to get President Bush. I mean, you wouldn't write that piece otherwise.

Look, it's not that the Bush administration bears none of the blame. They do bear some. But this story is utterly ridiculous.

When I was writing a book about President Bush, oh, when was it? A couple of years ago — and I wrote a chapter on the ownership society. And so I looked into the homeownership program that the Bush administration had, and it was puny. It wasn't much at all. I barely mentioned it in my chapter on the ownership society.

And one of these pieces I read today said that that was the core of the ownership society idea of the Bush administration. No, it wasn't. Social Security investment accounts and so many other things were. It wasn't.

So the problem with this story is it blames a person who is only partly, and smaller than other people, to blame, and mentions no one else.

HUME: Nina?

NINA EASTON, WASHINGTON BUREAU CHIEF, FORTUNE MAGAZINE: As someone who is not part of Fred's media blame club, usually, I have to say that I was flabbergasted when I read this story, flabbergasted.

There are three sections to blame for this crisis we're in. You can blame Alan Greenspan and the Federal Reserve easy money supply. You can blame this whole risky slice, dice, and pass mortgages packages up the food chain so no one has responsibility for it. And, frankly, regulators should have been looking at. You can blame that.

And you can blame affordable housing policies. You cannot write a story about affordable housing policies and blame it on George Bush instead of the Democrats. It's outrageous.

You cannot go through — as Fred said, the Democrats were so tied to Fannie Mae and Freddie Mac —in 1999, the Clinton administration pressured Fannie Mae to get into this more risky business of affordable housing, meaning you give loans to people who can't afford it. You take the normal credit, normal lending standards off the table. People don't have the required income and so on, so that you can expand affordable housing.

And in The New York Times article at the time, it said this could lead to a savings and loan crisis. Every Bush administration official that I have interviewed in the past couple of years has always pointed to Fannie Mae and Freddie Mac being out of control, we need to rein them in, and they couldn't get the Democrats to do it.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: The only surprise I had in reading this is why it took The Times so long to getting around to blaming the entire collapse on George Bush. After all, it blames everything else on Bush, from the droughts in Kansas to hurricane Katrina.

Look, the truth is that there were two realities here. One is that we set as a national goal 30 years ago expanding homeownership, especially for low income and minorities. And it was accelerated in the Clinton administration.

And the Bush administration, Bush, who defined his ideology as compassionate, continued it.

And the other truth is that in his administration, he continued it, but he did try to regulate it the out-of-control Fannie and Freddie, who were really at the root of this explosion.

We had Franklin Raines in 1999, the CEO at the time of Fannie, boasting that they had lowered the down payment requirements and were now going to lower the interest rates paid by these lower income, subprime people, which was obviously a huge risk. And it was ignored, and it led ultimately to the calamity that we're in today.

HUME: Folks, it seems that this is not your father's New York Times.

Up next, the income incoming vice president has big changes in mind for the office he will inherit in a few weeks, and that's not sitting too well with the current one. The all-stars on rising tension next.

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VICE PRESIDENT-ELECT JOE BIDEN: I think we should restore the balance here.

The role of the vice president of the United States, as I see it, is to give the president of the United States the best, sagest, most accurate, most insightful advice and recommendations he or she can make to a president to help them make some of the very, very important decisions that have to be made.

VICE PRESIDENT DICK CHENEY: If he wants to diminish the office of vice president, that's obviously his call. I think that President-elect Obama will decide what he wants in a vice president, and, apparently, from the way they're talking about it, he does not expect him to have as consequential role as I have had during my time.

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HUME: Indeed, Barack Obama and Joe Biden have both said that they don't want the kind of activist vice president with a range of assigned areas of responsibility and tasks and duties that have been the case with Vice President Cheney. And so you have this long-distance exchange between the two men on Sunday television yesterday.

It is in keeping with Mr. Obama's assertion that executive power has grown too much under President Bush and Vice President Cheney, and they want to rein that in as well.

So, Charles, what about this?

KRAUTHAMMER: I'm not sure Obama will give up a lot of the power that Bush has created, particularly in the war on terror. I think he will be happy that he will be able to actually listen in on the bad guys, for example.

But I think the role of the vice president is going to shrink. Biden spoke about restoring a balance. One of his aides is quoted as saying it should return to its traditional role.

One of the most famous expressions of its tradition role was FDR's vice president John Gardener, who called it the equivalent of a pitcher of warm spit. And that's a cleaned up version of that.

Look, the vice president didn't even have an office in the Oval Office in the west wing until Walter Mondale, and Hubert Humphrey, who has been a great senator, was routinely humiliated by his president. So it became an important office over the last 30 years. It expanded under Cheney, a, because he was extremely experienced and smart and able, and it was a war on terror.

And now, with Biden, I think Obama had spoken about him. Obviously, he had been chosen because he had experience in foreign affairs. Well, with Hillary appointed at State department, he's not going to have a role at all in foreign affairs.

So his role is going to shrink, I think, and it will suit the man.

HUME: Nina?

EASTON: Well, I think in terms of a model — first of all, Dick Cheney created a historically powerful vice-presidency I don't think we're going to probably see again for awhile.

But I do think when you look at Biden —

HUME: Isn't it fair to say, though, Nina, that President Bush really created that —

EASTON: By giving it to him.

HUME: Yes. The vice president doesn't have much inherent power in the executive branch except that ceded to him by the president.

EASTON: Absolutely.

Put it this way — the Cheney vice-presidency was more powerful than I think we're going to be seeing in the near future, certainly with Biden.

But I do think with Biden you need to think Al Gore. His chief of starve staff is Ron Klain, who was al gore's chief of staff. Ron Klain is no shrinking violet. He was featured in that film "Recount." He was the lawyer for the Democrats during the recount in Florida.

And a number of the people that Biden is putting around him are very senior people that were around him in the Judiciary Committee. These are not people who are going to be happy just sitting around and once in a while advising the president.

I think he is going to be more activist than he claims he is. I don't think it's going to be on Cheney levels, but I think it will be more like an Al Gore style.

BARNES: I agree with that, but I think Biden's aides will probably be more powerful than Cheney's aides. But I don't think it goes beyond that.

What a vice president does depends entirely on the president's respect for him and his admiration for whatever qualities he has. We can go back now to the campaign and remember that Obama muzzled Joe Biden and had him hidden from the press. That is not a decision that shows great respect for Biden.

And his fellow Democratic senators say "You can't come to our weekly meetings, our weekly luncheons." The Republican ones were attended for eight years by Dick Cheney. Again —

HUME: Even thought he has a role presiding over the Senate.

BARNES: Indeed. He has been dissed both by Obama and by his Senate colleagues. And I think he is going to have a very small role.

I agree with Charles. Hillary Clinton is not going to let him butt into foreign policy very much. I really don't know what he will do. I think he probably will go back to — I'm trying to think of a particularly — maybe back to Hubert Humphrey, where the president just doesn't have much time for you to do anything and doesn't want you to.

HUME: What about the role, though? Was it wise to have a vice president with this much influence? Biden argues it's not a good idea.

BARNES: I know, but how much power did he have? It's vastly overrated. Clearly Bush regarded Cheney's advice very seriously in a way that Obama does not.

HUME: And you agree everything flows from that, right?

BARNES: Yes.

EASTON: And he didn't always take it, and Rumsfeld was a perfect example of that, firing Rumsfeld.

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