This is a rush transcript from "Special Report," August 26, 2011. This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: Every week, viewers vote for your choice online in our Friday lightning round poll. This wee k, what's next for Rubio, won with 46 percent of the votes. And we're back now with our panel. So this week, we're talking, of course, about Marco Rubio, the junior senator, but the charismatic senator from the state of Florida. He tried to laugh off speculation as it continues about his possibly be ing a vice presidential running mate. Take a look at his comments.


SEN. MARC RUBIO, R - FL.: I have no interest in serving as vice president for anyone who could possibly live all eight years of the presidency, so...All kidding aside, I'm -- it's a great honor to do it. I really love being - [INAUDIBLE] delayed reaction.



WALLACE: But for all the jokes, he is a very serious candidate, don't you think?

RICK KLEIN, ABC NEWS: Oh no question. Look, he saved Nancy Reagan, Ronald Reagan's widow from an almost tragic fall. What else can you do to achieve icon status? There is nothing that's gonna make this speculation stop. There's a lot of folks who will still put the odds at even or better that he's going to be on the presidential ticket as the vice presidential running mate regardless who the top of the ticket is.

I don't think we're there yet, but we are seeing a careful rollout, I'd say a rollout that's roughly similar to that of Senator Barack Obama, where he came out and stepped on to the national stage tentatively at times, but was careful to cultivate the right kind of resume that would allow him to run for national office. I think that's where we're going to see Marco Rubio, at some point maybe sooner rather than later.

WALLACE: And Charles Lane, I mean, let's talk about his credentials -- very attractive and charismatic politician, strong Tea Party credentials, first -- if he were to be named, the first Hispanic named on a national ticket. And if he were able to carry his home state of Florida, the big swing state, that would be worth his nomination right there.

CHARLES LANE, WASHINGTON POST: Former speaker of the House of Florida, although he does need to be reminded the presidential term is only four years, not eight.

WALLACE: Well, of course, if he's running with a president, he'll serve two terms.

LANE: Yes, yes. But, no, he fills in a lot of boxes for the Republican Party. The Latino population in this country is the fastest-growing segment. They've got to erode the Democrats' advantage in that segment of the electorate. Rubio's an obvious choice. And bear in mind, this speech, which he was opening with that joke, was the second in a series of three major policy addresses he's giving now. So Rick is absolutely right. There's a rollout going on.

WALLACE: Charles?

KRAUTHAMMER: He checks all the boxes. We saw his charm. He's got the right ideology. He's well spoken. He's got a great story, second generation immigrant. I mean he gives a story of hope and restoration, which be I think his theme. I think he's prohibitively the favorite for number two. And at the very least he'll be the keynote speaker if he's not going to be number two.

WALLACE: All right, let's switch to the economic news. Fed Chairman Ben Bernanke very highly speculated about speech today in Jackson Hole to an economic group. He said he's not going to take any more steps, at least right away, to try to boost the economy. It's basically he said up to the president and Congress. And the implication seems to be, I've done about everything I can do, now you've got to do it on the fiscal side. Is that the right decision for him to make?

KRAUTHAMMER: Well, he doesn't have a lot of weapons left. He's essentially announced we're gonna have the low-interest rates, zero interest rates, for two years. That's really something that we've never seen before. That's a lot. He tried quantitative easing, printing money twice. He's out of bullets.

Essentially he's saying to the president and congress, we need a budget. He spoke about that, having a budgetary process that's a credible one. The Senate has had one in two years, and the president doesn't have one on the table. So he's calling for some logic and order on the part of the Congress and the presidency.

WALLACE: Charles, all of this comes against the backdrop of another revision in GDP growth for the second quarter from 1.3 percent, which was lousy, to one percent, which is even worse. So, I mean, if this is a recovery it's just barely above water.

LANE: Not only that, Chairman Bernanke today conceded that his own forecasters are going to mark down their projections for the second half of the year.

There was something about this speech that made me think it wasn't the speech he wished he could give. He wished he could give a speech saying quantitative easing part two, QE2 was a success, and we have self- sustaining growth going on. He can't give that speech. Instead he has to focus on what he regarded as the long-term prospects of the economy, which are still bright. And I bet he wished he could have said something more favorable about the short run.


KLEIN: This is a grim speech if you really look at it. Him saying there's nothing else I can do. It has to be Congress. I think, the prospects are better for more seismic activity right here in Washington than for Congress to actually get something done when it comes to job creation and economic development over the next year and a half or so.

This is tough. And Charles is right. There's just nothing else that he can do from the Federal Reserve standpoint. If you can't do it there, you put it back on the political process, which we've seen has not been a model of efficiency.

WALLACE: So, we don't have much time left, but the really big news this weekend of course is going to be Hurricane Irene, which is supposed to hit here in the Washington area sometime tomorrow afternoon and I think is really going to hit just about when I'm on the air on "Fox News Sunday." Real quickly, got about a minute left. Are the Kleins doing anything to prepare?

KLEIN: I've got some extra water in the house just in case, but I wasn't able to find D-cell batteries in downtown Washington today. Whether that's a sign of something or not. I wanted to make sure I had extra batteries for the flashlights. Otherwise I think we're just going to stay in and stay dry.

WALLACE: Charles?

LANE: Well, I'm trying to reassure my mother-in-law, she's visiting from Germany, and it's taken me a long time --

WALLACE: So you're stuck for this weekend in the house with your mother- in-law?

LANE: No, I love my mother-in-law. But I've been trying to reassure her about the safety of America for her daughter and her precious grandchildren. And what do I get, I get an earthquake and a hurricane. So that's undone all my work of the last few --

WALLACE: Now Charles, I have this vision that's sort of like Adam West with the bat cave or something, that you have a batcave beneath the Krauthammer mansion where you can be safe with your family.

KRAUTHAMMER: Gingrich is right. Gotcha questions, left and right.


WALLACE: Stop with your Mickey Mouse answers.

KRAUTHAMMER: Look, I spent a fortune on a generator this winter. I want to amortize it. I have mixed feelings about this hurricane if it hits. Let's see if that machine works.

WALLACE: All right. You turn it on in any case.

LANE: We're coming over to your house Charles.

WALLACE: That's right. That's it for the panel. But stay tuned to see a stupid pet trick gone horribly wrong.

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