This is a rush transcript of "Special Report With Brit Hume" from August 6, 2008. This copy may not be in its final form and may be updated.

BRET BAIER, GUEST HOST: Barack Obama on the campaign trail responding to the McCain campaign's newest ad — the new one there called "Family" out today.

What about the ad wars back and forth and the reaction of both campaigns? Some analytical observations from Bill Sammon, Senior White House Correspondent of The Washington Examiner, Mara Liasson, National Political Correspondent for National Public Radio, and syndicated columnist Charles Krauthammer, FOX News contributors all.

Charles, the back and forth — the McCain camp privately believes the ads are hitting home and they are having an effect on the polls. What is your take?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It is only August, and nothing else is happening, so they have to focus on this.

I think it's having an effect. I think it's Obama himself who brought it on with his little overreaching on the European trip, and I think he invited it, this kind of ridicule about the grandiosity, the coolness, the distance, the self-confidence, overconfidence.

The problem with the ads, I think, for McCain is that he is sort of stepping on a story that was developing on its own independently in the media, and he may be overdoing it.

I think what you want to do in this kind of ridicule is you have to keep it light. The minute it gets heavy, it looks kind of weird.

I thought the winning ad here was Paris Hilton. She had a brilliant ad in which she, essentially, gave the best energy plan — you drill, and do you do renewables. Given all that, I would make her Secretary of Energy. She would do at least as good of a job as Bill Richardson.

BAIER: We are watching the Paris Hilton ad right here, and she calls John McCain, a something —


BAIER: The McCain campaign, though, Mara, says they welcome-

LIASSON: They like the ad, yes, because the thought that she endorsed their plan, which is to do everything, drill, conserve.

I don't think it's great when Paris Hilton gets a lot of attention, since John McCain featured her in an ad, calls him a wrinkly white haired guy, although he does make jokes about himself.

I think that it wasn't so much that Barack Obama brought this line of attacked advertising on himself. I think it's that McCain felt that this was the only way that he could get back in the game, that he was shut out in the free media because they were so fixated on Obama.

And the McCain campaign believes that the tightening of these tracking polls and some of the other polls is as a result of what they have been doing. In other words, they have used humor and something that is a little outrageous and something they definitely have taken hits for, for being kind of silly and negative, but they feel that the bottom line is that this has helped and it has tightened the race.

I think it's tactical still. I think that the McCain campaign still has a bigger strategic problem.

And I do think that there was one set of ads this week where they tried to bring McCain back to his old image, and they talked about him as the original maverick. And Obama campaign immediately put up an ad saying, he is the original maverick, well — they played a clip of him saying that 95 percent of the time he is with George Bush.

And every time the Obama campaign can say "We're for change, he's for more of the same," that is a good day for Obama and a bad day for McCain.

BAIER: Is that quick response a direct result of the swift boat ads, and everyone's sensitivity to swipe back right away.

BILL SAMMON, WASHINGTON EXAMINER: Oh, yes. I think the lesson we learned from the Kerry experience is that if you don't fight back, you will be defined in a negative way.

BAIER: Can you go over the top, I guess, in the response?

SAMMON: I think you can, but I don't think we have seen that so far.

I disagree with Charles. I think the ad wars have been a big plus for McCain. I think John McCain has gotten his mojo back in the last week or ten days largely because of these ads.

I think up until then he spent weeks and weeks walking on eggshells, like how am I going to attack Barack Obama. He was hesitant.

And I think the campaign made a decision, Steve Schmidt and other in the John McCain campaign made a decision to go for a frontal assault, go after his inexperience, go after-paint him as defeat — arugula eating, works out at the gym three times a day, that kind of thing, go after his liberalism.

And don't be afraid to use humor. I think that was a key decision. They went for the mockery, for the ridicule.

And I think these ads have had a light touch. When you throw in a fleeting image of Paris Hilton and don't mention her name, you don't put the words Paris Hilton under it, you just have a fleeting, subliminal image.

The really funny one was the Moses one, when Barack Obama, during one of his speeches, said "we will have the ocean levels fall." He literally said this, and then they interspersed this with a shot of Charlton Heston parting the Red Sea in "The Ten Commandments," is funny. I think it has worked.

BAIER: Mara, the McCain campaign has a $6 million ad buy during the Olympics, the Obama campaign has $5 million. Are three wasting money at this time before these conventions?

LIASSON: First of all, it is unprecedented, and there is a question, especially now that everything is played endlessly on the web and on You Tube, and maybe free advertising just doesn't pack the punch it used to.

However, McCain has an imperative. He has a lot of money he has to spend before the day he is nominated, because then he is going to take public financing. He is still under the primary system campaign fundraising laws until that moment. So he has an incentive to spend a lot of money now.

The problem is going to be for McCain. Right now he can match him dollar for dollar and even outspend him at the Olympics in ad buys, but come September, Obama will have so much money.

KRAUTHAMMER: Which is why he is doing all this attacking in August. I think it is a good idea to go on the Olympics.

But Obama's strategy is to say McCain is more of the same, which is not a credible charge, and McCain's charge is to say that Obama is an empty suit.

He doesn't have a resume like McCain, but he is an author. He is a senator. He is something. So you've got to be really careful with this implication that he's entirely empty and hollow, and you got to go light on it.

BAIER: Last word on this panel.

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