This is a rush transcript from "Fox News Watch," January 30, 2010. This copy may not be in its final form and may be updated.

JON SCOTT, HOST: On "Fox News Watch," there were cheers, silent jeers and a bit of supreme displeasure, but how did the media react? And what is the state of the president and the press?

(BEGIN VIDEO CLIP)

THOMAS KEAN, FMR. N.J. GOVERNOR: Cracks were allowed to form and things got a little off track.

(END VIDEO CLIP)

SCOTT: The government's bungled effort with the underwear bomber gets the spotlight. And the White House gets a failing grade when it comes to preventing a terror attack. Are the media failing as well?

He could have been president, but his dirty secrets were exposed by the press. And now, the saga takes a new turn. Stay tuned.

A stellar athlete with strong faith and convictions stars in a new Super Bowl ad, but some in the media are calling foul. What could be so wrong?

And when it comes to trust, which news organization wins out?

Joining us on the panel this week, Ellen Ratner, Talk Radio News bureau chief; editor of the National Review, Rich Lowry; Jim Pinkerton, fellow, New America Foundation; and Newsday columnist, Ellis Henican.

I'm Jon Scott. "Fox News Watch" is on right now.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Unfortunately, too many of our citizens have lost faith in our biggest institutions, our corporations, our media, and, yes, our government. The more that TV pundits reduce serious debates to silly arguments, big issues into sound bites, our citizens turn away. No wonder there's so much cynicism out there. No wonder there's so much disappointment.

(END VIDEO CLIP)

SCOTT: President Obama delivering the State of the Union Wednesday night, placing some blame on the media for Americans losing faith in his campaign promise of change.

Ahead of the speech, some headlines pointed to the president's many challenges. The Baltimore Sun, for instance, calling attention to his murky message and shrinking public support. The Los Angeles Times pointing to a flawed approach in his handling of a weak economy, and The Raleigh News and Observer on his troubled agenda.

After his speech, in which he owned up to a few mistakes and took shots at the political process in Washington, the headlines and the overall coverage seemed to take a bit softer tone. The Philadelphia Inquirer has the president seizing the moment. The News and Observer, again, a humbler Obama tries to reconnect. And The San Jose News calling the speech feisty with the president on the defense.

Let's talk about it, Jim. Did the president win over the media with the speech?

(LAUGHTER)

JIM PINKERTON, FELLOW, NEW AMERICA FOUNDATION: He didn't win over Katie Couric, who I thought gave him a very tough interview, where she asked, you know, asked did the administration drop the ball and so and so on. But I thought the most revealing factoid of the last week was from the Center for Media and Public Affairs, which concluded, according to The Washington Times, that Obama got more favorable coverage than Reagan, Clinton and Bush 43 put together in their first years.

SCOTT: What about that moment, Ellis, in the speech where the president was lambasting the Supreme Court for its earlier decision in the week about campaign finance, and you catch Justice Alito seeming to mouth the words ‘not true’.

ELLIS HENICAN, COLUMNIST, NEWSDAY: Not true. Not true.

SCOTT: How was that covered?

HENICAN: First of all, it's a remarkable moment, right? We expect a political temperament from our politicians and Barack Obama gave us that. But we expect a judicial temperament from our judges.

(LAUGHTER)

RICH LOWRY, EDITOR, NATIONAL REVIEW: Oh, no.

HENICAN: And I'm afraid Samuel Alito fell short of that. Politicians, Rich, are supposed to give their positions on things.

(LAUGHTER)

Judges are supposed to keep their mouths shut.

LOWRY: He crinkled his nose and moved his lips, saying not true. And the fact is, Alito was right. And he would have been justified in a full-throated "you lie."

(LAUGHTER)

Because President Obama was wrong in just about every single aspect of what he said. The decision wasn't a century old that they'd tossed out, just from 1990, and it's wrong that it would open a flood gate for foreign money. That was just a demagogic, cheap shot.

SCOTT: Is that getting covered though, Rich?

ELLEN RATNER, TALK RADIO NEWS BUREAU CHIEF: Actually, it has been covered in several places, because one of the news media talked about the White House pushing back on this issue of that. It was not part of their century-old issue and that the White House also pushed back on the foreign affairs thing. But my favorite comment was Chuck Todd on — saying that it was the cable moment of Zen. And I thought it was. I mean, it was something that — and then it went on YouTube. I mean, it was interesting because one of the outlets, one of the blogging outlets put it on YouTube everywhere. and then everybody else saw it so it sort of got...

LOWRY: It's part of a trend of big political events. It is often the stuff that's very minor and doesn't really matter so much that gets the attention. The Al Gore sighs during the debate or "you lie" with Joe Wilson, you know...

(CROSSTALK)

LOWRY: Justice crinkling his nose and then...

HENICAN: But the change. There is a change though. I'm old enough to remember when conservatives were known for good manners.

(CROSSTALK)

LOWRY: Oh, Ellis, the bad manner is attacking them falsely, the way the president did.

(LAUGHTER)

PINKERTON: Ellis is demagoguing here, but I think Rich makes a good point. That is, if the event itself was completely scripted and you have the transcript of the speech hours beforehand, and everybody's had a chance to Twitter out whatever is interesting in it, then the only thing left to cover is the random events that happen by accident or because the camera is watching everybody in the room like a hawk.

RATNER: Well, what wasn't covered and I didn't actually see covered, was commented on to some degree right after it happened, but not really focused on, was how many times the Republicans did not get up or didn't get up at all. How many times they might have gotten up under a Bush speech. None of that was really detailed. And I was...

LOWRY: Oh, there's a lot. I'd say there was commentary throughout the night about that.

RATNER: It wasn't intent.

LOWRY: And it is so boring, so rote. It's the same thing over and over again. And by ten o'clock, you know, you can barely keep your eyes open.

HENICAN: Good manners never hurt.

(LAUGHTER)

LOWRY: So don't attack the Supreme Court.

HENICAN: Good manners.

(CROSSTALK)

PINKERTON: OK, if we're talking about — if Ellis insists on talking character traits, another character trait to be opposed to is hypocrisy. For Obama to get up there and denounce banks and so on and have The Hill newspaper reveal that Secretary Geithner, at the Treasury Department, was holding briefings for all of the lobbyists, at the same time they're being denounced, that was a good scoop by The Hill.

SCOTT: Let me play for you — Ellen, I want to get your thoughts on this. There's this exchange between Diane Sawyer and George Stephanopoulos. Take a listen to this and then I want your reaction.

(BEGIN VIDEO CLIP)

GEORGE STEPHANOPOULOS, ANCHOR, "GOOD MORNING AMERICA": A little political symbolism in the wardrobes. You just saw the first lady in deep purple. Let's go back for a second to the Speaker of the House Nancy Pelosi, and Joe Biden, all wearing a shade of purple. Here's why it's symbolic. The president has to speak to the center of the country tonight, not red, not blue, but that mix, purple. I don't think that was entirely by accident, those wardrobe choices. I really don't think that...

DIANE SAWYER, ANCHOR, "ABC WORLD NEWS": Really, you think it's that level of calculation?

STEPHANOPOULOS: A little bit.

SAWYER: You do. All right.

(END VIDEO CLIP)

SCOTT: Ellen, what about that? Is that a little bit too much inside fashion.

RATNER: Not at all. Not at all.

SCOTT: Really?

(LAUGHTER)

RATNER: I actually do believe it was not by accident. They were right to comment on it. Particularly, since last time, Nancy Pelosi, in the fall, I guess, wore that green, which was a disaster. And I think that they did color coordinate. There's no — you can't have three people wearing...

LOWRY: Well, they definitely coordinated.

SCOTT: And...

LOWRY: But was it a point about their political strategy?

RATNER: Sure.

LOWRY: I mean, it strikes me — it strikes me as something...

RATNER: Absolutely.

LOWRY: You got to say something to fill the air before...

PINKERTON: Or it was an attempt about the "Don't Ask, Don't Tell" policy?

HENICAN: You know, what I don't understand, Jon...

SCOTT: Whoa.

HENICAN: ... why you turned to Ellen on fashion. I thought Pinkerton was the fashion person here.

(LAUGHTER)

SCOTT: I just happened to notice that Ellen is wearing purple.

RATNER: I'm wearing middle purple.

SCOTT: There you go.

HENICAN: Good answer.

SCOTT: Going for the middle of the country.

(LAUGHTER)

Time for a break.

But first, do you want to hear Jim Pinkerton unplugged? During the breaks, we keep the cameras rolling in here in the studio. Go to our web site after the show, Foxnews.com/Foxnewswatch.

We'll be back in two minutes to talk about coverage of the terror threat.

ANNOUNCER: More missteps by the government in the war on terror. And Washington's effort to protect us from weapons of mass destruction gets a failing grade. Is the press paying attention?

Plus, John Edwards was on the rise, setting his sights on the White House until the press popped his bubble and exposed his dirty deeds. Score one for the good guys, all next, on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS, R-MAINE: The Department of Justice, as we learned at our last hearing, unilaterally decided to treat him as a common criminal, as an American citizen, advise him of his right to remain silent and grant him a lawyer at taxpayer's expense. It is outrageous that our nation's top intelligence officials were never even consulted on this vital decision.

(END VIDEO CLIP)

SCOTT: Senator Susan Collins of Maine there at the Senate committee hearings on Homeland Security about the failed Christmas day plot to blow up a jetliner over Michigan. The handling of the aftermath of that case by Attorney General Eric Holder and others in the administration's national security effort, causing a stir on Capitol Hill and getting some play in the press.

Also getting attention, a new report on how prepared we might be for a terror attack with weapons of mass destruction. The administration received a big fat "F" for its plans for preventing a bioterror attack, and when it comes to recruiting and training the next generation of national security leaders and workers, another "F."

I think that surprised a lot of people when those report cards came out, Rich. And it raises the question, is the press doing enough reporting on our preparedness.

LOWRY: The press is always a little backwards looking. After a nuclear bomb explodes in a U.S. city, then you'll get great coverage of all the failures of preparedness that lead up to it.

But I think the Mutallab story has been fascinating. It's mostly been driven, the story line, that he shouldn't have been Mirandized, has been driven by Republican politicians, and Scott Brown in Massachusetts, it was a big factor in his win. And that's created the media interest in it. The AP did a great tick-tock the last week or so, showing that he was babbling like a kid to everyone that was around him, until the decision came down from the Justice Department to read him his — to tell him he had a right to remain silent, and then guess what, he was silent. And now it's a major scandal.

SCOTT: What about the heat that Eric Holder, the attorney general, has taken this week, Ellis, for his decision to put the Khalid Shaikh Mohammed and some of the other 9/11 accused conspirators on trial in civilian courts? Has that — is that being driven by the press?

HENICAN: Well, it's gotten a ton of coverage. I don't think there's ever been a venue issue in federal court that's received quite the coverage that this has. What I've noticed though is, as the coverage has gone along, Jon, the American people may be getting a little more mature about this. We understand eventually that, you know, we want to do all the smart stuff to protect us, but frankly, there probably isn't anything the government can do to protect us from every single threat out there.

RATNER: You know, The Detroit News came out and almost called it a keystone kops. They were pretty good about that. But you know what was missing is there was no decision tree that was printed. Nobody talked about, if this happens, then the federal government had this decision maker or this decision maker. And nobody's really covered that, as to how the decisions are made when they have an effect or....

LOWRY: Well, now you have a big whodunit. Who in the Justice Department made this call to Mirandize him and shut him up? It's very likely Eric Holder, but it will be — now you have the press seized of that kind of whodunit.

PINKERTON: Right. Meanwhile, hats off, I think, it was to The New York Daily News. It was the first to have the story that the Obama administration was to take back their Khalid Shaikh Mohammed trial decision up in New York. As I predicted, they would on this show late last year. I think the big hinge though for the news coverage was Bloomberg. When Bloomberg, who had seemed to kind of be for it back when it was first announced, changed his mind. I think reporters, who frankly respect him a lot, and also all want to work for Bloomberg News will have to quit.

(LAUGHTER)

HENICAN: He has nothing to do with that company anymore.

SCOTT: When security costs a billion dollars, as it's suspected it could, it got the mayor's attention.

All right, time for another break.

First though, if you come across a story in your local paper, for instance, that you think smacks of media bias, let us know. Send us an e- mail at newswatch@Foxnews.com.

When we come back, can you see through this White House? We'll talk about the transparency we were promised by the Obama administration and more.

ANNOUNCER: A presidential wannabe gets sacked by the press for bad behavior. And now, more details grab headlines and attention.

Plus, will the news media ever have access as promised?

(BEGIN VIDEO CLIP)

OBAMA: Your question points to a legitimate mistake that I made.

(END VIDEO CLIP)

ANNOUNCER: Details next, on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: I would welcome participating in a paternity test, be happy to participate in one. I know that it's not possible that this child could be mine.

(END VIDEO CLIP)

SCOTT: Two-time presidential candidate, John Edwards, during an interview on ABC's "Nightline" back in 2008, basically denying that he fathered a child with his mistress, Rielle Hunter. Now, fast forward to the cover of People magazine this week: "Elizabeth's breaking point." Mrs. Edwards reportedly had enough. Their 28,000 square-foot house isn't big enough it seems. The couple reportedly now living apart in separate domiciles. Her decision to separate from the former presidential candidate just might have something to do with his admission he really is the father of another woman's child and other startling new revelations about John Edwards in a new book written by his former aide, Andrew Young, who, by the way, originally claimed to be the father of that baby.

"The Politician: an Insiders Account of John Edwards' Pursuant of the Presidency and the Scandal That Brought Him Down" is due out this week. In the book, Young reveals Edwards and his pregnant mistress made a, quote, "repelling sex tape."

I guess I never thought we'd be discussing sex tapes on this show, but it raises the question, should the press — I mean, this is a guy who came within a whisker of being vice-president. He certainly did pretty well in the presidential sweepstakes, could have been president. Should the press have done more digging a year or two or three ago?

RATNER: The press — first of all, Andrew Breitbart came out and said that the president — that the Enquirer should win a Pulitzer. Well, I don't know that they should quite win a Pulitzer. But I want to know why the press didn't do what we actually did under Clinton, which is to pound away at it and ask him to take a paternity test.

SCOTT: Why do you think they didn't do that? You said you don't know why.

Anybody want to hazard a guess?

PINKERTON: Because, Jon, he was fighting for the poor.

(LAUGHTER)

RATNER: No, that has nothing to do with it.

HENICAN: Also, he was a nothing by the time we learned the story. He wasn't the president of the United States.

LOWRY: No, no, no, no. No, no, no. The National Enquirer broke this one. It still mattered when he's still a going concern in the Democratic primaries, and the mainstream press ignored it. And now they've left on it when he doesn't matter and he's a nothing. I'll say this in defense of The National Enquirer. At a time when we're all about commentary and punditry, they do real shoe-leather reporting. And they just nailed this guy.

HENICAN: That's right. They did a terrific job on this and they deserve some credit.

SCOTT: Moving on. Here is another question for you, or maybe the president? Where is the transparency?

(BEGIN VIDEO CLIP)

OBAMA: Your question points out to a legitimate mistake that I made during the course of the year, and that is that we had to make so many decisions quickly in a very difficult set of circumstances that, after a while, we started worrying more about getting the policy right than getting the process right. I think the health care debate, as it unfolded, legitimately raised concerns, not just among my opponents, but also amongst supporters, that we just don't know what's going on.

(END VIDEO CLIP)

SCOTT: Well, despite candidate Obama's pledge that his administration would be the most transparent ever, there have been more lawsuits against the government for failing to release federal records during President Obama's first year in office than there were during each of the last two years under the Bush White House.

So we've seen this increase in Freedom of Information Act requests. Does that suggest the president is not living up to his transparency promise?

HENICAN: Jon, 25 years as a reporter, I've never once met a politician of any party, anywhere, who I thought was adequately transparent, and I believe that's true of this one as well.

PINKERTON: Hats off to Ed O'Keefe at The Washington Post, who took note of the fact that the Obama administration was releasing all these data bases and stuff and saying this is our transparency. And so he interviewed people from CREW and the Project for Oversight on Government and the Sunlight Foundation, and they all said, no, this is just junk they're handing out, not the real stuff we really want.

SCOTT: Let's move on to another message, Super Bowl ads. When you think of the Super Bowl, you certainly think of the interesting ads, like this one from Victoria's Secret. Beer commercials are always present. You can't have a Super Bowl without a cold one, of course. Performance enhancers have become a part of the tradition. Always interesting to watch those in mixed company.

And when it comes to positive sports figures, someone you can look up to, well, that list is shrinking.

(LAUGHTER)

Florida Gators star quarterback, Tim Tebow, should be on the list, an amazing athlete, positive person, has strong beliefs and convictions. And yet, Tebow finds himself surrounded by controversy and negative media coverage over his appearance in an ad. The ad, paid for by the group, Focus on the Family. It has a pro-family message. The script for the 30-second ad, approved by CBS to air during the Super Bowl.

The ad features Tim and his mother. Rich, I guess you could describe it as pro-family. and yet, it has raised all kinds of ruckus in the media even before it ran, why?

LOWRY: It's a heart-warming story. I mean, she was urged to get an abortion, advised to get an abortion, didn't, and has this wonderful son who one a Heisman trophy and is a role model for millions of people. And you have these pro-choice groups complaining about it. It almost makes you think, Jon, that they're really pro-abortion, that they would object to an ad about a woman having a child.

RATNER: Wait a minute.

LOWRY: What is the problem with that?

RATNER: Wait a minute. My problem is — first of all, my problem is that CBS did not tell anybody that their policy had changed in terms of the kind of ads that would accept. And frankly, I haven't seen in the media anyplace that has outlined the history of the Super Bowl ads and how they have actually shut out advocacy ads before. Nobody — they said it in one line, but nobody has actually talked about the policy, and that's my problem.

SCOTT: All right, we have to take one more break.

When we come back, can you believe the letters you read in your local newspaper?

ANNOUNCER: When it comes to trusted news reporting, who gets the passing grade? That answer next, on "News Watch."

(COMMERCIAL BREAK)

SCOTT: Almost no matter where you are in the country, if you are a fan of the Letters to the Editor section in your local paper, you might have seen this name, Ellie Light. It seems Ellis sent letters to 69 different publications across the country, praising President Obama to those papers’ readers, and stating some version of this quote: "The president is being attacked as if he promised that our problems would wash off in the morning. He never did. It's time for Americans to realize that governing is hard work and that a president just can't wave a magic wand and fix everything."

Well, The Cleveland Plain Dealer gets the credit for exposing Ellie, who is actually some guy named Winston, and how letters like these just get into papers without any scrutiny.

What about it, Rich, you're the publisher of a national magazine, editor of a national magazine. Should there have been more attention paid, or is this just one of the things that slips through the cracks?

LOWRY: It's one of the things that slips through the cracks. I don't think many news organizations, and this is evidence of it, pays much attention to who writes the letters. Ideally, yes, they should. But it's not the most important feature of any publication.

RATNER: There's only like three or four letters a day. Why can't they just Google the name?

PINKERTON: Well, they do everything, but they are all being laid off. But I do think Ellie Light, whoever he is, had a plan for getting caught. It was so obvious that he was planning a book or something or a made-for-TV movie about his life as an imposter. That's why he made it so easy to catch him.

HENICAN: If we’re going to get rid of all of the investigative staff, let's not start them on the letters page. What do you say?

(LAUGHTER)

SCOTT: Let's get rid of Letters to the Editor. How about that?

HENICAN: Let the people speak, I say.

SCOTT: When it comes to trusting your source of news, a new nationwide poll by Public Policy Polling shows something interesting. 49 percent of Americans trust this network, Fox News, 10 percentage points more than any other network.

What do you think about that, Jim?

PINKERTON: PPP is a Democratic-leaning polling firm as James Poniewozik — I apologize for getting his name wrong — at Time magazine put it. This speaks for itself.

RATNER: But he also says he thinks it's bad if that's where journalism is heading. I mean, that was...

PINKERTON: He had to say that.

RATNER: Well...

(LAUGHTER)

LOWRY: As Charles Krauthammer put — likes to point out, Fox had this brilliant vision of taking a certain market, which was half the country. The fact is a lot of the public just doesn't share the assumptions and biases of the mainstream media. So, of course, they trust Fox.

RATNER: And 30 percent of Democrats thought Fox was more trustworthy than CNN.

HENICAN: I think it's best explained by the five of us.

SCOTT: The most trusted name in news has a new address.

(LAUGHTER)

That is a wrap on News Watch for this week.

I want to thank our panelists, Ellen Ratner, Jim Pinkerton, Rich Lowry and Ellis Henican.

I'm Jon Scott. Thanks for joining us. Keep it right here on Fox News Channel. And we'll see you again next week for another edition of Fox News Watch.

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