This is a rush transcript from "Special Report," July 9, 2012. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: Welcome back to Prince William County. We're at Giorgio's family restaurant in Mont Clair. We are joined by a special local panel to talk about the issues that are important here in this swing county inside a swing state, really the Commonwealth of Virginia. We welcome Bob Lewis with the Associated Press, Julian Walker, The Virginian Pilot, David Sherfinski with the Washington Times. Gentlemen, thanks for being here.

This place has a lot of different factors, different demographics. Bob, why is this a swing county?

BOB LEWIS, ASSOCIATED PRESS: Well, it's got a -- it's just a diverse population. It swings one way in federal elections and it swings another in state and local elections. Most of the elected officials on the state level are Republican from here. Not just Republican, but very Republican. They include Bob Marshall, a delegate who is among the most outspoken anti-abortion, anti-gay rights members of the legislature. He is the guy who introduced the personhood bill in the general assembly this year.

But in federal elections, in 2006 Prince William went for Jim Webb. And two years later, with the whole country having a backlash against Bush, they went to President Obama. So you have a crucible here that, I think is sort of a bellwether for which way Virginia's going to go.

BAIER: Julian, in a lot of places the economy drives the day, I'm sure that's the case here. What other issues do you think are really important?

JULIAN WALKER, VIRGINIAN PILOT NEWSPAPER: Well one of the ones in Prince William, in this swing county, is immigration, where this county in fact several years ago had a local ordinance which essentially became kind of a model for the law that Arizona passed in order to allow local law enforcement to check the immigration status – the lawful presence or lack thereof -- of folks who were stopped in this county, detained by law enforcement for one reason or another. That became a very hot issue several years ago. In fact one of the candidates for statewide office next year, for lieutenant governor, Corey Stewart, who is now on the local board of supervisors here, he was kind of the architect behind that, the spearhead of that effort. And so here in Prince William County particularly that is an issue that is a hot button one.

BAIER: Do you agree?

DAVID SHERFINSKI, WASHINGTON TIMES: Absolutely, especially in the wake of the attention that immigration has gotten at the U.S. Supreme Court.

The issue has kind of been under the radar, I would say, over the past five years since the flash point of 2007 when the ordinance was first passed. But with Corey Stewart running for statewide office it definitely will be in play with both sides battling for the Hispanic vote.

BAIER: It's interesting that there are a lot of federal workers in this area, it's a bit further from Washington D.C.


BAIER: But there's a lot of commuters. So how does the cutting back on the federal government play with people in this place?

LEWIS: Well, if the federal government finally does actually cut back. But what you've got here are people who -- there is more private industry here, there's more private sector going on here than people realize. It's not just federally dependent and it's not as federally dependent as Fairfax County just to the north. I think there is a better balance here than there is up north. I think what you have got here is a stronger conservative base. And it leavens itself out when you consider the private sector growth and employment base here versus the federal workforce that's in Prince William County.

BAIER: When the Obama campaign though looks at this county, Julian, they probably look to 2008 where he carried it with 58 percent of the vote. What do you think they're going to be focusing on? You mentioned immigration, and obviously that will be a factor, but what other plays do you think they'll make here?

WALKER: Well, I think you mentioned it. I think the economy is one. Everybody, this is a kitchen table pocketbook election. People feel anxious now. They want to feel better, they want to feel encouraged that things are getting better. And that's the salesman job that he has to try to accomplish. So that's one thing.

Another thing that's big in Virginia is energy. Gas prices at the pump the thing that you see every day when you fill up your vehicle. But beyond that, we've got in Hampton Roads we've got a big ongoing debate about whether or not we should explore offshore for oil and natural gas. In the Southwestern part of the state you've got the coal industry, which is a big bedrock of this state and its economy. In the central part of the state, you've got the looming debate over whether or not to allow uranium mining. There has been a 30-year moratorium in Virginia on that. And so both the economy and I would say energy are the kind of key kitchen table issues that you're will see play out in this election.

BAIER: David, do you sense that this is kind of developing to be a center point for both ads and time for the candidates to spend?

SHERFINSKI: Oh absolutely, I mean, especially with a high stakes U.S. senate election between Tim Kaine and George Allen already reserving millions of dollars in air time in the costly Washington D.C. suburbs, this is -- this along with the Richmond area and the Hampton Roads areas, what's known as kind of the "urban crescent" or the "golden crescent" in Virginia where there are just so many voters to be had by each side.

BAIER: But yet unemployment is very low here, 4.7 percent. So I mean, obvious the economy drives the day, but overall people are working here.

LEWIS: Yeah. The economy here is good. You have pockets where the economy is not so good. Southside, in rural Virginia, in Martinsville, Pittsylvania County, Henry County, you've got horrible unemployment. Southwest Virginia, the unemployment rates are high, double digit. So the message has to be tailored differently in different places. And where the unemployment rate is high I think President Obama has a higher bar to clear. But David just mentioned, people in Virginia aren't used to an ad war like we're seeing here now already. We were a swing state in '08 but we didn't know it.

BAIER: Right.

LEWIS: And so you didn't see all these ads. And before that, the candidates sort of passed us by and said we know Virginia is going Republican. It has for 44 years --

BAIER: Right.

LEWIS: And now you see wall to wall advertising. It's not going to be safe to turn the television on by the time October gets here.

BAIER: It'll be something to watch. Bob, Julian, David, thank you very much for the time. Very interesting. We'll be back many times.

Stay with us. We'll go to our national panel next from D.C.

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