This is a rush transcript of "Special Report With Brit Hume" from November 10, 2008. This copy may not be in its final form and may be updated.

BRIT HUME, HOST: And so the president and his guest to the sound of countless shutters snapping walked down the colonna de and into the Oval Office. They were talking, as you could hear, but you couldn't make out what they were saying, and that was all we heard them say today.

And so we'll need to do a little tea leaf reading here with our panel, Fred Barnes, Executive Editor of The Weekly Standard, Mara Lias son, National Political Correspondent for National Public Radio, and the syndicated columnist Charles Krauthammer, all are FOX News contributors.

There has been a lot of talk about what this meeting probably was like. Your thoughts, Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: You really liked that walk, didn't you?

HUME: That was enjoyable! To see these guys together is a novel thing.

BARNES: I know. I agree. I thought it was terrific.

You know, I have a good idea that President Bush is going to touch on — did touch on foreign policy threats. You know, one of the things I know he believes in is that when Obama — forget about what Obama said during the campaign, but that when he gets into office and gets his daily intelligence reports —

HUME: Which he is already getting briefings.

BARNES: — which he is starting to get now, he is going to take a different view of the world, and that will shape his foreign policy more than anything he said during the campaign.

Now, I think that's what President Bush believes and will want to spur him along that way. And I suppose he did some of that.

The other thing is, you know, the Bushes are very gracious and decent people and are great hosts. And I suspect the Obamas had a pretty good time there.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: Yes, look, I think foreign policy is one of those areas where Obama isn't going to want to and doesn't have any plans to do anything in the drastic change department.

There are things he wants to do differently over time, certainly- -you know, maybe pulling U.S. troops out of Iraq faster than somebody else would have wanted.

But I think pretty soon you're going to see the last phase of the Bush administration foreign policy look a lot like the first phase of the Barack Obama foreign policy, mostly because Bush foreign policy has changed. It has changed over eight years and has gotten a lot closer to what Barack Obama was saying it should be, more multi-lateral.

HUME: It was interesting that sometimes during the campaign he was calling for things that were already happening.

LIASSON: That were already happening, yes.

But I also think just one other thing about this transition — this transition, by all accounts, so far, and it is very, very young, has been incredibly seamless and has been working the way that academics tell us a transition should work — maximum cooperation from the outgoing administration.

There was a new law passed in 2004 that actually lets the FBI speed up security clearances. They're using that to get the Obama people what they need.

And so far, it's working pretty well. No b's and o's will be removed from the keyboards.

HUME: This raising an interesting question, Charles, and I don't want to force your hand here, but what person on earth has more in common with Barack Obama and what he faces right now than George W. Bush? I would say no one.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, it is unique in the world and almost historically unique.

I mean, he faces economic issues not quite, of course, at the level of FDR, but a serious crisis which will allow him to do a lot. In fact, he will have a lot of freedom of action. In a crisis American's allow a president a lot of experimentation.

It is a little bit of an exaggeration to say he is being handed over two wars. It is not exactly World War II or Korea, when Eisenhower took over, where we were not doing well at all.

He is being handed a war in Iraq almost won that simply has to be managed in a way that we don't ruin it, and Afghanistan, which is going to be a chronic issue for this administration and the next administration, and, I think. the one after that.

HUME: So if you had to speculate about what this meeting was like and how the two men reacted to each other knowing what you know, what would you think?

KRAUTHAMMER: All of this stuff that you hear in the campaign goes away. I think Obama has a lot he wants to learn from the president about what the threats are out there in the world, what the actors are.

For example, Bush has spent a lot of time on the phone video with a lot of Iraqi leaders so he knows how they operate. Obama will be in a lot of difficult negotiations with the Iraqis. Nobody will know how to do that and what the interlocutors are like than Bush.

But I think even more interesting than having been a fly on the wall at the meeting today would have been at the meeting that Obama had on Friday when the head of the director of national intelligence Mitch McConnell-I think it was on Friday or Thursday.

HUME: Thursday was his first briefing.

KRAUTHAMMER: I have spoken over the last years occasionally with people who have come into high positions in intelligence or in national security, and almost all of them will tell you that at the first briefing their hair stands on edge when they get an idea of the density of the threats out there.

I think probably now less than a couple of years ago, I think the environment is safer. And I think Obama will also be impressed, either in the briefing or with Bush, on what the Bush administration has put in place, a lot of it clandestine, to fight and prevent the threats.

HUME: We did a little piece on that earlier in this broadcast.

KRAUTHAMMER: Exactly. And I think he will have a larger appreciation of what he is going to inherit. A lot of stuff that Democrats have railed against he will appreciate having as president.

HUME: Remember, I guess, it's fair to recall that the relationship that developed almost immediately between Lyndon Johnson and Richard Nixon following the Nixon election on Vietnam and some other issues.

BARNES: It's not just the Iraqi leaders that Bush has special knowledge of. But he has particular ways of dealing with Putin and Sarkozy, and —

HUME: Who can you count on and who can you not?


HUME: And who will stab you in the back by telling you think privately and another thing publicly. He will get to know all that.

So what's next for the Republicans who will still be in Washington next year? There are not all that many of them. Some thoughts about that when we come back.



REP. MIKE PENCE, (R) INDIANA: Having dealt with the Democrats on Capitol Hill, and knowing the policies of the president-elect, we're going to have some pretty vigorous disagreements, and there are going to be along traditional fault lines, and we are going to cheerfully provide that loyal opposition.

REP. CHRIS VAN HOLLEN, (D) MARYLAND: They are obviously having a discussion within their own caucuses as to what lessons were learned in this campaign and how they want to move forward. And I hope that it's not the rejectionists or obstructionists that prevail.


HUME: It's a good question. And our own Fred Barnes has written something about how should the Republicans as now the minority on Capitol Hill in both chambers and a smaller minority than they were before, behave — Fred?

BARNES: Well, look, here are two things for sure — nobody likes a sore loser, and don't act like you're a winner either when you actually lost.

And, look, Republicans, they don't have to do anything right now. The ball is entirely in Obama's court. Look, this is the biggest thing that has happened to the American presidency in decades, I think, since Ronald Reagan. He's going to have a honeymoon that we will get tired of, but boy will it get big.

And just wait around for him to make mistakes or start to go through the liberal agenda, much of which is very, very unpopular.

All Republicans need is a little patience. They don't need to take potshots at every nominee that Obama makes. I mean, that just makes them look small and petty. Just hold your fire, and they're going to be plenty of chances for Republicans to make a strong case against unpopular liberal issues, which will reduce the popularity of Obama as well.

LIASSON: I agree with Fred in the short term. That's a perfectly sensible short-term plan.

I think in the long term the Republican Party does have to think about how it is going to address all these new issues for which it either has no position or at least it has an unpopular position.

HUME: Such as?

LIASSON: Immigration, global warming, income inequality. There are a lot of things.

I think the Republican Party set the agenda for a long time in this country, on taxes, crime, on welfare and defense. Guess what? Now that's the consensus. Barack Obama ran as a tax cutter. He attacked John McCain's healthcare plan for raising taxes.

It might now have been a true attack, but the fact is that it was delivered from Republican turf.

And I just think that over time the Republican Party, which had a lot and used to be the idea party with big ideas, has to come up with some new ones.

KRAUTHAMMER: I think, look, given the size of the mandate Obama has, what he has in congress, the fact that he is the first African-American, which gives him historic importance, no one is going to remember the substance of what Republicans do over the next year or two, but they will remember the tone.

And that's going to be, I think, the most important issue. They should be respectful, and they should have a sense of he is our president. And —

HUME: And mean it.

KRAUTHAMMER: And mean it, unlike the Democrats, who, eight years ago, never accepted Bush as legitimate, looked at him and called him a usurper. Remember the bumper stickers, "Re-elect Gore in '04."

HUME: "Re-defeat Bush."

KRAUTHAMMER: Or "Re-defeat Bush."

And then after a brief interlude after 9/11 and the success in Afghanistan, turned on him in a way that is unbelievable vicious and delegitimized him.

I think that is something that Republicans have to stay away and understand the historic importance of Obama. And also —

HUME: What about Mara's point on the idea front, though?

KRAUTHAMMER: It will come in time. You can't invent an agenda.

Also, our economy, under this crisis it is going to end up different. The social compact is going to change after the bailout. Who knows how large it will be? Who knows how deep and long our recession will be? It could be the '30's, it could be the '80's, who knows?

But I think you have to be open to new ideas. But to think today about how we are going to do an agenda on x, y, and z is a mistake.

I would, for example, have a single, principled argument about expansion of the bailout. If the Democrats, for example, want to nationalize the auto industry, Republicans can make a case of rescuing the financial sector because it's kind of a utility, but not to get engaged in industrial policy, winners and losers, lemon socialism.

You make an argument on the big one, not on the small issues.

BARNES: The Republicans, I don't think you need to worry about the long run. Most politics is the short run, about 90 percent to 95 percent of politics.

And I agree with Charles about the tone. Paul Ryan, the rising star of House members, a young Republican, said we shouldn't be anymore the angry white guy party. We should be happy warriors. People like happy warriors. Eventually they reelect them.

LIASSON: They need to have some other people other than white guys, also. That would be a good idea.

HUME: That's it for the panel.

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