This is a rush transcript from "Special Report," September 2, 2011. This copy may not be in its final form and may be updated.

CHRIS WALLACE, GUEST HOST: Every week viewers vote for you choice online in our Friday lightning round poll. This week Charles' pick won. Now it is up to 60 percent of the vote. We're back with the panel. Charles, your acceptance speech and choice for bigger loser of the summer.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: First of all, I'm humbled. Second, I want to congratulate my competitors. They ran a clean campaign. It was about issues not personalities.

WALLACE: But 60 percent is a landslide.

KRAUTHAMMER: Absolutely, but I have to be humble.



KRAUTHAMMER: The question is who had the worst summer this year?

There are a lot of candidates. It could be Tim Pawlenty or Adam Dunn. But it would be Al Qaeda number two who got snuffed, whacked, terminated by a predator. This country has no idea what to do with the terrorists it captures, but it knows what to do with the terrorists on the run. Justice swiftly delivered from the air.

WALLACE: Kirsten?

KIRSTEN POWERS, THE DAILY BEAST: That was the correct answer. My is Mitt Romney. I think he had pretty much had a lead in the presidential race with this Rose Garden strategy or what's been called the "Mittness Protection Program" and stayed out of things and left the field wide open for Rick Perry to come in and take it over.

WALLACE: Not a good summer but not as bad as a guy that got killed by a drone.

STEVE HAYES, THE WEEKLY STANDARD: With all due humility you are both wrong. These are the kinds of answers you expect from an inside-the-beltway crowd. The right answer is obvious to most Americans and everybody watching tonight. It's Barack Obama. This guy started with approval rating of 48, and he now at 42, 50 disapproval. That is 12 points in 12 weeks. But that's not the reason he is the biggest loser of the summer. The reason is because of why his approval numbers have turned out. His policies, despite Kirsten's game effort to defend them, have collapsed. They didn't work. It's been a failure. That's why he's in trouble.

WALLACE: Second topic, operation fast and furious, the administration trying to end or get a hold of this scandal. They replace the acting head of the ATF. They replaced the U.S. attorney in charge of the operation in Arizona. Is this scandal going away or getting bigger?

HAYES: I don't think so. You take one step in that direction and you take another step in another direction. The word in the past couple of days is that the e-mails have reached the White House. We don't know what they say. We don't know how high it goes. But there is more there.

POWERS: I remember sitting actually here and discussing this before when I was told by the White House they knew nothing about this and never had contact whatsoever. Now we find out they did have contact.

WALLACE: There were e-mails to member of the National Security Council. That puts it inside the White House.

POWERS: There were people briefed on the national security staff. Now it's come down to what they said. What did they know? They say the words "fast and furious" was not actually used. But the problem is this is a different story that they were told. I expect this to grow.

KRAUTHAMMER: Iron law of scandals, it's never the original act. It's always the cover up. You could argue the original act is a compound of stupidity and negligence. And I assume that the administration thought control of House and Senate they could have a cover-up. Well, they lost control of the House, which allows these inquiries with subpoena power, and now it's going to come out.

WALLACE: OK. We have a little time so lightning responses, Charles. The Obama White House is already asking for $5 billion more in federal emergency relief fund. This is before all the bills come in for Irene. Republicans talk about if you spend more on that, you have to offset it. Good or bad idea for Republicans to be talking about budget when Americans are suffering?

KRAUTHAMMER: It's a bad idea to make at it big issue now. People are in the midst of reconstruction or recovery right now. Obviously in the end, you have to have it paid. But it's a bad political move to talk about it.

POWERS: It's bad. Eric Cantor is leading the charge on this. I was reading the things he was saying. He is moving in Newt Gingrich circa 1995 territory of just seeming very, just sort of mean frankly, toward people who really are suffering. At the same time he has gone after federal funds in 2004 when there was a tropical storm that hit his district. So now suddenly he has a different opinion.

HAYES: Please, the house has already passed $1 billion in emergency Senate. The House has done its job. In addition, President Clinton according to the "National Review" four times signed disaster legislation with offsets. There is nothing wrong to tell taxpayers we want to see where it goes before distributing it.

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