This is a rush transcript of "Special Report With Brit Hume" from February 29, 2008. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's 3:00 a.m., and your children are safe and asleep. B ut there's a phone in the White House. Something is happening in the world.
Your vote will decide who answers that call. Who do you want answering the phone?
SEN. HILLARY CLINTON, PRESIDENTIAL CANDIDATE: I'm Hillary Clinton and I approve this message.
SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: We have seen these ads before. They're usually the kind that play upon people's fears and try to scare up votes.
I don't think these ads will work this time, because the question is not about picking up the phone. The question is what kind of judgment will you exercise when you pick up that phone?
(END VIDEO CLIP)
BRET BAIER, GUEST: There is Senator Obama responds to Hillary Clinton's ad that hit the airwaves today in Texas, questioning who is best to pick up that phone in the White House. The Obama campaign was so incensed about it, they put out their own ad today. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When that call gets answered, shouldn't the president be the one, the only one, who had judgment and courage to oppose the Iraq war from the start, who understood the real threat to America was al-Qaeda in Afghanistan, not Iraq?
(END VIDEO CLIP)
BAIER: So it's all about answering the phone at the White House today.
Some analytical observations from Fred Barnes, executive editor of The Weekly Standard, Juan Williams, senior correspondent of National Public Radio, and syndicated columnist Charles Krauthammer -- FOX News contributors all.
Fred, how about this back and forth over this ad? Is the ad effective, and what about the Obama response?
FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: The ad is not effective. I don't think Obama needed to respond. It is not a scare ad, a fear ad.
Remember, Walter Mondale used a similar ad, a red phone, in 1984 against Gary Hart. It worked. You know why it worked? Walter Mondale had been vice president. He had been a senator for many years. He had been involved in important national security decisions in the Jimmy Carter White House.
When Hillary Clinton says in this ad that she is tested and ready to lead with her 35 years of experience -- as what? A lawyer in Arkansas? As a first lady in Arkansas and the White House?
This is why this experience issue has never worked for Hillary Clinton, because her experience as a potential president just doesn't amount to much.
BAIER: So, Juan, is the Clinton campaign barking up the wrong tree with this ad?
JUAN WILLIAMS, SENIOR CORRESPONDENT, NATIONAL PUBLIC RADIO: No, because if you look at polls, when people are asked about concerns with Barack Obama, even his most ardent supporters, they say experience is their one reservation. And it is a problem for Barack Obama to overcome his age in the sense that he lacks this experience.
Fred and, I think, a lot of Republicans have a disdain for Hillary Clinton, they're all to anxious to get her off the stage here, but the fact is this is a powerful ad. It is an interesting ad in this way -- it is targeting women, and it is targeting women out of concern about their children.
It's a shift away from the kitchen table populist appeal that Clinton was using earlier. And in the final days here, where she's trying to close this sale, she's saying this is the key issue, and it is a big difference between me and Barack Obama. Think about it.
She is asking voters to think about it. And I think it will have impact.
BAIER: You mentioned polls. We have new FOX News opinion dynamics polls out of Texas and Ohio today. As you take a look at these polls, you see Clinton still holding on to a lead there, 46 to 38 in Ohio, but then trailing, within the margin of error, in Texas.
Charles, you were saying to me before the break that she doesn't have to really win by big margins in your sense, in Texas and Ohio, and eventually Rhode Island.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think if she wins either, even if it is a small margin, it would so upset up expectations, because she has been slipping and he has been gaining, that I think it will have the New Hampshire effect. And she will have the momentum regardless of the number of super delegates.
But I must say on the ad, I love this ad, her ad. She said her campaign has said a week ago that they're going to throw the kitchen sink at Obama. She tried that in the debate and it didn't work.
So what do you do after the kitchen sink? You drop the bomb. This is the A-bomb. This is the "Daisy ad." This is the one ran by Lyndon Johnson that was so scary it only ran once, but it had its effect.
This is about al-Qaeda in the middle of the night and a bomb in Manhattan, and it's all about that. And Obama says it is fear mongering. Of course it is, and the reason is we're in a war. And there are people out there who want to kill us.
And Obama himself has said, which is kind of a contradiction, that because of George Bush, Al Qaeda is back and is as strong as it ever was since 9/11, threatening us. It's a way to hit George Bush, but it concedes the premise of Hillary's ad, which is it's a dangerous world out there, and these guys want to hit us. Who do you want in the moment of truth?
And I agree with Fred -- her experience isn't what you want. This is a John McCain ad.
BAIER: Exactly. So we could see in the general election if Obama gets the nomination the red phone will come back.
KRAUTHAMMER: John McCain ought to run this ad, and he ought to answer the phone at the end of it.
BARNES: John McCain has been tested. He has been tested in war, and he passed that test.
When has Hillary been tested? She has been tested in her marriage. That's about it.
WILLIAMS: You're being very mean.
BARNES: No I'm not. I'm being honest.
WILLIAMS: She has been around. She has met world leaders.
BARNES: Being around isn't being tested.
WILLIAMS: Being around in the White House as Bill Clinton's wife. And I think the key point --
BARNES: So has George Stephanopoulos. He hasn't been tested. He isn't running for president.
WILLIAMS: I think the key point here to remember is that this is her now in her moment of desperation, deciding: win or lose, do or die on Tuesday. This is the card she's playing.
BAIER: Last word on this topic.
When we come back with our panel, the North American Free Trade agreement has been a political football for presidential candidates. The panelists will kick it around after this.
CLINTON: I will say we will opt out of NAFTA unless we renegotiate it. And we renegotiate it on terms that are favorable to all of America.
OBAMA: I think we should use the hammer of a potential opt out as leverage to ensure that we actually get labor and environmental standards that are enforced.
SEN. JOHN MCCAIN, PRESIDENTIAL CANDIDATE: Now, how do you think the Canadian people are going to react to that, who we are having now their enormous and invaluable assistance in Afghanistan, and we're going to abrogate a free trade agreement?
(END VIDEO CLIP)
BAIER: There you see Senators Clinton and Obama talking about the North American Free Trade agreement at the debate in Ohio this week. And today Republican John McCain hitting both senators over NAFTA, saying it would be a bad thing for our relationship with Canada, especially since Canada is helping so much in Afghanistan.
We're back with our panel. Charles, are we seeing a potential general election issue, first of all, and how does NAFTA play on the Democratic side if you have McCain continuing to hammer them on this issue?
KRAUTHAMMER: On economics, it might help the Democrats, but as a foreign policy issue, I think McCain played it right.
Look, the Democrats have gone around saying that they want a kinder, gentler foreign policy after Bush. They don't want a unilateral foreign policy, that they are against kicking around our allies, ignoring them, pushing them around, bullying them -- exactly as the Democrats are proposing that we do by unilaterally, as Obama says, use a hammer against Canada.
So Obama's foreign policy is against our two closest neighbors, the friendliest countries on earth to the United States, he wants to use a hammer and bully them. But, on the other hand, he wants to go around, shake hands, without preconditions, with Hugo Chavez, Raul Castro, and the dictator in Tehran who threatened genocide against an ally.
Well, that's a foreign policy you can wrap your arms around, and McCain will. And he started that with his answer by talking about how Canada will react in Afghanistan in a very clever way.
BAIER: Juan, Canadian television has a story saying that a senior advisor to Obama's campaign talked with Canadian officials saying all his talk on the campaign trail about NAFTA, if he gets elected, is not serious- -essentially, he doesn't mean what he's saying.
This is what the campaign said today, putting out a quote, Bill Burton saying "This story is not true. There was no one at any level of our campaign at any point, anywhere, who said or otherwise implied Obama was backing away from his consistent position on trade.
The only flip-flopping on NAFTA came from Senator Clinton, who talked about how good it was for America until she started running for president."
If it comes out that someone in the campaign had a conversation with Canadian officials and maybe suggested this, how bad is that for the Obama campaign?
WILLIAMS: The bad part would be, of course, if there was a lie told, if in fact they were having these conversations and then denying it because they're in the middle of a campaign in the state Ohio, where the economy is front and center, and people play in some ways on the idea that somehow NAFTA is responsible for job losses.
I mean, if you look at the reality, the numbers, NAFTA has brought jobs to this country, and it has had a disproportionate impact in some places, especially with blue collar industrial areas, many of them in Ohio.
But it's hard to argue that there a connection between job losses in Ohio going back to the 1970's and what we have seen in terms of NAFTA, which was passed well after that.
BARNES: I agree with Juan. It is pure demagoguery by Democrats. Ohio has lost these manufacturing jobs -- it isn't NAFTA. No state in the country has had a higher and more rapid rise state and local taxes than Ohio. It used to be a low-tax state, and now it is number five in the biggest tax burden. So why would a manufacturer want to go there?
There was a contract awarded today for this new supertanker -- a $40 million contract by the Air Force. Where is it going to be built? Mobile, Alabama.
So what does Alabama offer that Ohio doesn't have? Lower taxes, tax incentives -- they guarantee an educated work force, and it is right to work state. It is not a heavy union state. So that's where you go, not Ohio.
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