This is a rush transcript from "Special Report," July 10, 2012. This copy may not be in its final form and may be updated.


OBAMA: Governor Romney has experienced owning companies that were called pioneers in the business of outsourcing.

ROMNEY: This president has been outsourcing a good deal of American jobs himself by putting money in to energy companies, solar and wind energy companies that end up making their products outside the United States.


BRET BAIER, ANCHOR: The issue of outsourcing, how does it play on the campaign trail? The Obama campaign has been going forward with a Washington Post report that said Mitt Romney was the king of outsourcing at Bain capital. Independent fact checkers question that report. Now there is another Washington Post report that the Romney campaign is touting which says that liberal groups are upset that the president has let jobs go out to China. What about this? We're back with the panel. Mara, how is this playing?  Is it playing?

MARA LIASSON, NATIONAL PUBLIC RADIO: I think that the charge against Romney that he was a kind of heartless corporate executive that shipped jobs overseas -- which is part of -- that's the whole frame they want to put on him -- has been having some limited effect in the battleground states where they have been heavily advertising with that attack, now but it hasn't moved the numbers very much. Romney has come back now to say well so are you.

I think this whole discussion about outsourcing is completely confused and disingenuous. First of all if you believe in free trade, jobs are going to be outsourced. The low-end jobs are going to go somewhere else so supposedly we can make higher end jobs, it's a more efficient use of corporate resources. So for Romney to say he is against outsourcing, outsourcing is what corporations to do to become more efficient and profitable.

He is running with a very hard line on China, which he has accused the president with being too soft on.

BAIER: And the president came out with his own hard line.

LIASSON: And I think neither of them are talking about whether outsourcing is good or bad, I guess we should assume that all outsourcing is bad according to these two guys. But I think it's not going to be an important issue. It's a symbol, and how the economy is doing is going to matter a heck of a lot more than --

BAIER: The RNC put out a website that lists all the money in stimulus funds that went to countries and companies overseas and then touts the Solyndra spending as part of all of that as well. Charles, does the electorate comprehend the good, the bad, the ugly about outsourcing and how this all plays?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST:  Well, I'm not even sure economists can make a unanimous judgment on outsourcing. I think Mara is exactly right. As an economic issue, it's complicated. It often helps the economy, sometimes it hurts the economy. It's a subtle issue. But clearly Obama is using it simply as a way to paint the character of Romney, because the implication that somehow if Romney outsourced, as the head of a minor corporation outsourced jobs, assuming he did, it's an allegation I'm not sure holds up, but assuming he did in the 1990's, what kind of effect is it going to have on the economy today? Zero effect. It's all about character assassination, or if you like, a negative portrayal of Romney as the heartless plutocrat.

But as a real issue, I think it's nonsense either way. I'm glad the Republicans are saying I told you so. You too. I think the main problem with outsourcing jobs in the stimulus is not so much that the jobs ended up who knows where in Finland but it was a waste of money even if the jobs had been here. The Solyndra jobs were a waste to produce nothing and it went bankrupt. So, it's a simple waste on energy that is not ripe, it's not going to happen. And it's a form of crony capitalism. But outsourcing itself, I think is not a serious economic issue in the campaign.

BAIER: Chuck, there are some Republicans, some conservative groups even that have charged that Mitt Romney cannot keep just talking about the economy and saying -- painting it as bad as a means to run this campaign. However, when he is on the trail, he talks about it again and again and again, and it's some of his biggest applause lines. Take a listen.


ROMNEY: I know that last week, the middle class of America got a kick in the gut. When the jobs numbers came out and we found out we'd created only 80,000 jobs. Our nation needs to create about double that if we're going to keep up with the population growth of our nation. And so we are falling further behind under this presidency. And that's one reason why we are going to change it and get someone in there who will get this economy going.



BAIER: It went on the say it was another kick in the gut with the tax plan the president came out with.

CHARLES LANE, EDITORIAL WRITER, WASHINGTON POST: You know, there are a lot of Republicans who say that he needs to talk about health care, especially now after what the Supreme Court did and so forth.  But let's face it, that is a tricky one for Mitt Romney and always has been.

I'm not so sure this is a bad strategy for him, because if you look at, you mention our Washington Post poll today, that number for him was very strong. That he was strongly favored over Obama, I think it was 56 to 44 percent, as having the better ability to deal with the economy. And conversely, that is where Obama's approval rating is lowest, on managing the economy. It is his strong suit.  He isn't running a wide ranging campaign. That is true. And that could end up being a weakness.

Just going back to a final point on this outsourcing thing, it's been an onslaught for couple of weeks, but the polls that came out today show that it hasn't moved the needle. The needle is still there. It's a dead even race. And I think that speaks volumes.

KRAUTHAMMER: I think it's an Obama investment in the future. You paint the character now you try to frame the man so that it's harder for him later in the campaign to undo the image. It could be a subliminal one.  But I think it has an effect and it's working.

LIASSON: Maybe. But that Washington Post poll is tighter than it was before by a little bit in the direction was to Romney.

KRAUTHAMMER: It's a depth charge. It goes off later.

LANE: Yeah, well of course Romney has piled up all kinds of money now. He has outraised Obama, I think two months in a row. He could be saving that up to counter --


BAIER: He can't spend a lot of that money now. He's still in the primary spending of the primary money. You can't spend the general election money until he gets the nomination officially.

LIASSON: Early money is better spent early.

BAIER: That is it for panel. But stay tuned to see why timing is sometimes everything in television.

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