This is a rush transcript of "Special Report With Brit Hume" from June 11, 2008. This copy may not be in its final form and may be updated.

BRIT HUME, HOST: And so Jim Johnson steps aside as the chairman, I guess you'd say, or at least a senior member of the vett ing team for Barack Obama's vice presidential search.

The Obama campaign put out a statement that said "Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee. So he has made a decision to step aside that I accept." That's from Barack Obama.

John McCain's campaign responded in a statement from Tucker Bounds, "The American people have reason to question the judgment of a candidate who has shown he will only make the right call when under pressure from the news media. America can't afford a president who flip-flops on key questions in the course of 24 hours."

Jim Johnson later today put out a statement himself. "I would not dream," he said, "of being a party to distracting attention from this historic effort," meaning Obama's, "and therefore I withdraw from the v.p. selection process. This withdrawal should in no way imply that I accept the blatantly false statements and misrepresentations that have been written about me in recent days," end quote, Jim Johnson from today.

So some thoughts on all this now from Fred Barnes, Executive Editor of The Weekly Standard, Mara Liasson, National Political Correspondent for National Public Radio, and Mort Kondracke, Executive Editor of Roll Call, FOX News contributors all.

Now, first of all, we have a discrepancy. The McCain camp clearly thinks Obama did this and made the right call. All Obama says he did was to accept something that Jim Johnson wanted to do. And Jim Johnson's statement appears to back that up.

Question — did Jim Johnson get out on his own, or did the Obama campaign push him out? What do you think, Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I suspect Jim Johnson did it on his own, saying I'm not getting paid, what do I need this for? I'm getting pounded in the press everyday, front page of The Washington Post. That could be a killer. I think that did it, and that did it for him.

HUME: Your view, though, yesterday, was that unless McCain didn't jump on it, it wouldn't have any legs.

BARNES: Well, I was wrong.

HUME: It was not just The Washington Post. The New York Times ran a story, and The Wall Street Journal, which originated the story and then didn't say anything about it for three had a tough editorial.

MARA LIASSON, NATIONAL CORRESPONDENT, NATIONAL PUBLIC RADIO: The interesting thing about the coverage today — it was all new. In other words, The Washington Post was not talking about his below market rate loans. They were talking about something else, his big compensation package when he was at Fannie Mae.

The New York Times was talking about something in addition to that, which was his work on these compensation committees of corporate boards, where he approved these huge pay packages for CEOs that subsequently have been the subject of investigations, and that Barack Obama has not only criticized but even introduced legislation, called "Say on Pay," to basically try to make these packages more transparent and give shareholders more control over them.

So he, in the end, didn't meet Obama's standards. The problem is is that those standards are probably going to catch a lot more people. It's pretty hard to want to change politics and try to find people that have nothing to do with the old kind of politics.

HUME: This raises a deeper question here. There has been a tremendous amount, from both sides, McCain's as well, treatment of people who lobby in Washington, which is, after all, a constitutional protected form of activity, they have been demonized and treated as the bad guys.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: It is Obama who started this, let's face it. This is a case of outsider arrogance. You claim to be purer than everybody else. You're not from Washington. You haven't been here a long time. Everything that goes on here is just terrible, and I'm going to clean the stables.

And then you get caught with somebody who is one of the grubby insiders, and everybody says ah-ha, you're a hypocrite.

The premise is simply wrong. It is not the lobbyists who are to blame for what is going wrong in Washington. It is the politicians. The lobbyists are the representatives of various special interests. What they do is now pretty much in the open, pretty transparent thanks to legislation that's recently been passed.

It's the failure of the politicians to balance these interests and work them out that causes the gridlock in town.

And so for Obama — Obama is also being phony about this whole thing. He won't accept money from lobbyists. He won't them let them be paid participants in his campaign, but he is allowing them to be volunteers or unpaid advisors. He won't disclose who they are and what they do, and so, he's going to deprive himself, once more, when he gets into office of their expertise.

These lobbyists know a lot about stuff, and he won't let them work in their areas of expertise.

BARNES: It isn't just Obama. For years now, and Hillary Clinton is one of the worst offenders, American corporations have been demonized by Democrats. Think of the ones that Hillary Clinton and other Democrats, too — who do they blame for high oil prices right now? The oil industry. And who is at fault in the housing crisis? It is the mortgage lenders.

And why is health insurance so high? It's because of the insurance industry. And then there is the pharmaceutical industry that Hillary Clinton, particularly, hates.

Think about this for a minute — why were there so few lobbyists in Washington in the '50's and '60's. I was here then. Brit, you were here. Mort, you came in the '60's. Why were there so few, and why are there so many now?

HUME: There were a few compared to now.

BARNES: And there's a simple reason — because the federal government now goes into every nook and canny of American life, particularly American business life, and companies, they're regulated, they're limited, they're taxed, all these different things, and they want to be represented in Washington to lobby for their interests.

And it's perfectly legitimate for them to do that, and they shouldn't be demonized.

HUME: We're going to take a quick break. When we come back, should the U.S. look for more oil off its shores? The battle on that is raging now on Capitol Hill.



REP. EDWARD MARKEY, (D) MASSACHUSETTS: Our Republican friends say go drill in pristine areas like the Arctic refuge and in deep waters off the outer continental shelf. It sounds like a simple answer, but like so many other simple answers, it's misleading and it is wrong.

REP. TODD TIAHRT, (R) KANSAS: We talked about the "Pelosi premium." This is evidence of the "Pelosi premium." Here we had a chance to bring down the price of gasoline, and because of partisan issues we were unable to do that.


HUME: And perhaps not just a partisan issue, this has been a disagreement between Democrats and Republicans for a long time. Republicans very much want to drill, with important exceptions including John McCain, for oil in American territories. Democrats feel that the environmental risks of doing that are too great, and they oppose it.

So how is this issue playing out now, Mort?

KONDRACKE: Well, all the polls indicate that the Republicans are behind the curve on this one, that when gas prices — this goes way back to the Nixon administration — every time gas prices spike, whether it's the in party's fault or not, the in party gets blamed for it, and there's a Pew poll that indicates that Republicans are behind by 15 points, and McCain behind 18 points, even though his policy is not much different from Obama's on this issue.

HUME: It should be noted, by the way, that the effort was made today to open up these areas for drilling in a House Committee and it was blocked on a party line vote.

KONDRACKE: On the merits — look, we should have been drilling a long time ago. ANWAR can't come online for seven years, so it's not going to do any good for immediate gas prices.

On the other hand, the Republicans haven't done very much on the demand side. They have not limited demand in any way. They never were in favor of raising gasoline prices to enforce conservation or make alternative fuels more economical. They haven't been in favor of raising CAF_ standards for automobiles.

So they're both to blame, and they're both getting blamed, but the Republicans more.

BARNES: Look, I don't think it's going to wind up that way at all. Republicans are on offense on this issue, and, frankly, I don't believe that Pew poll. The most amazing thing is that very few people blame the oil industry. That's who the Democrats blame — it's all the oil industry's fault.

HUME: The number of people doing that has declined by something like 20 percent.

BARNES: And yet if you talk to a member of Congress who has gone out and talked to a town hall, what are all the questions about? They are all about gas prices. People are concerned about it.

And one thing is that they want drilling. They want to drill for more oil domestically, because not only do they want lower prices, they want some energy security.

They have been convinced by all the politicians that — Mort, clearly, they have done nothing practically up until now, both parties — convinced that it is a bad idea to send $400 billion a year, or something like that, to the Saudi Arabians and the Iranian and other people who don't have our best interests at heart.

What was interesting about that vote in that House Subcommittee today was — what were they voting on? They were voting on opening up summary outer continental shelf starting 50 miles offshore, out to 200 miles.

Look, this wasn't, as Senator Bill Nelson of Florida says — he's against opening up the OCS outer continental shelf because it will ruin the beaches of Florida. Well, 50 miles offshore, and yet all the Democrats voted against doing that.

LIASSON: In Florida, this is very unpopular. I think that on this narrow —

HUME: What is unpopular? The idea of drilling even 50 miles offshore?

LIASSON: Yes. People are nervous about it.

Look, I think on this narrow question of should we drill more, should we get more domestic resources, I think the are Republicans have an edge. Whether it is a big enough edge to overcome their bigger deficit on this issue in general, I don't know.

HUME: And how much is the Republican's position on this hurt by the fact that John McCain doesn't appear to be for any of it?

JENNIFER GRIFFIN, NATIONAL SECURITY CORRESPONDENT, FOX NEWS: Well, it is not helped, because he is on the same side of this as Obama. So, in that sense, they don't have a unified message on this.

But this is what the opposition party should be doing, hammering away at something people care about and trying to explain why the Democrats aren't coming up with a solution.

HUME: In fairness, most of those Republicans have always been for doing this.

LIASSON: Yes, but this is a much bigger push.

BARNES: It is a bigger push because gas is $4 a gallon. That's the reason. And the Democrats are against any increased production domestically, not only in ANWAR. Ed Markey, the Congressman, says it is a simple answer. It is a simply answer — drill. And it is the right answer.

KONDRACKE: Even if Barack Obama or John McCain gets elected president, the price will continue going up because —

HUME: Isn't that something Democrats have basically been for because they believed it would retard demand and lead to conservation?


HUME: So is it fair to say that the Democrats are not as disappointed about these prices as Republicans?

KONDRACKE: As Obama himself says, the problem is that it is going up too fast, that it should have been going up more gradually.

HUME: Is that a position that he can carry through the general election?

KONDRACKE: Not with these prices that high, no.


BARNES: No. I think he'll —

HUME: But with McCain where he is on the issue —

BARNES: Well, McCain can get a little better.

HUME: Yesterday you wanted him a lot better. Have you given up on that?

BARNES: I want him to be a lot better, but he will say we can drill offshore, but only if the states say it's OK.

Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.