This is a rush transcript of "Special Report With Brit Hume" from June 5, 2008. This copy may not be in its final form and may be updated.


SEN. DIANNE FEINSTEIN, D-CALIF.: I welcomed them. I had a chance to talk to R 12; Hillary and came early. I had a chance to talk with her a little bit. And then Barack came, and I seated them in comfortable chairs by the fireplace, and some water, and I went upstairs to work.

And when they were over, finished, he called up, and I came down and said, "Goodnight," and that was it. That was it.

QUESTION: They didn't tell you anything?

FEINSTEIN: No, and I didn't ask.


BAIER: She didn't ask?

Senator Dianne Feinstein talking about the clandestine meeting between Barack Obama and Hillary Clinton at her house here in Washington. But, apparently, she did not get in any details about that meeting, didn't listen in, didn't ask.

But what about that meeting and the fallout from it and what it means for this race? Some analytical observations from Fred Barnes, executive editor of The Weekly Standard; Mort Kondracke, executive editor of Roll Call, and syndicated columnist Charles Krauthammer — FOX News contributors all.

Charles, this meeting, secret. The Obama people put all the reporters on the press plane. They start taking off for Chicago, and there's no candidate on the plane. The secret meeting happens in D.C. What do you make of it?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Feinstein won't say anything, but I suspect the bidding started at $20 million, which is her debt.

Look, she came into that meeting, and she still is a very strong Democratic personality. As I was saying last night, she is not an ordinary loser. She has come closer than any runner up since Reagan in '76, a lot closer than Kennedy did in 1980 when he stole the limelight in the convention from Jimmy Carter.

Look, in normal circumstances, somebody who comes in in what is essentially a dead heat would be the obvious choice to be on the ticket. You would split it. The guy who wins gets the top spot, she would get the second.

It can't happen in her case because of the antipathy between them, and because of the ham handed way she has lobbied openly for it. And, of course, most importantly, because her husband is an ex-president of the United States, who is also an impossible human being who is impossible to cage.

Because of that, she won't be number two. But there is a lot I think he owes her. She represents a constituency that he is going to have to have, and he is going to have to tiptoe and show her respect in a lot of ways.

BAIER: Mort, she met with her campaign staff at her house today in D.C. She is going to make an announcement tomorrow, a speech. What do you forecast?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: The people I have talked to in the Clinton campaign, who obviously are anxious to protect her, explain her behavior this week as follows — that she was exhausted from all the campaigning — stop laughing, Fred, I'm telling you what they said — that she was exhausted from campaigning, that she was going through the stages of grief — denial, anger, and all that kind of stuff.

She has got all these supporters saying go, girl, go, on to Denver, and all that. She does not think that Barack Obama is qualified and, therefore, she was egged on, and took the egging on, and made that terrible speech on Tuesday night.

However, they now say, she has come to her senses, ministered to by some of her aides, even Harold Ickes, who said you have to drop this stuff. And so now she is going to knock herself off the ticket. And tomorrow's speech will be the complete opposite of the Tuesday night speech.

And I think she understands that she's not going to be vice president, but she does want other stuff, like her debt paid off, and probably a roll call at the convention just to make it clear that she was the runner-up, and so on. But the conclusion will be foregone, and so on.

But if she wants something after the election, it will be contingent on good behavior, and on really working for the ticket.

BAIER: Fred, what do you think that conversation sounded like? Dianne Feinstein didn't provide any details, but what do you think the fireside chat really developed?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: I don't know that Hillary Clinton could say much because she was so overcome with exhaustion and grief, and having gotten all this bad advice, having been egged on.

Did they really say that? That is just amazing. That is pathetic. I'm surprised. Maybe she had an upset stomach. Maybe she stubbed her toe on the way up to the room where they talked.

I don't really think they said much of anything. I bet it was mainly pleasantries. When they make some deals on the things that Charles talked about, and they definitely will — the $20 million and what kind of role her supporters might play in the administration — that will be done by underlings who will have meetings of this, and probably they already are.

I think tomorrow we're going to see a 180 degree shift. She will go from someone who said he's not fit to be president, to be commander and chief, to someone who will say he will be wonderful as president and commander in chief, and then she will attack Bush and McCain.

BAIER: Is she still pushing for number two?

BARNES: The way she pushes for number two is the opposite way that she did before — before it of hardball, now it's being nice. That's her tactic.

KRAUTHAMMER: She's going to hope. And the only way to get it is to underplay. But I think it is impossible. There is no way he would give it to her. It would look as if he caved to her pressure. It would utterly ruin him as a candidate, and it would utterly ruin him as a president, having the Clintons traipsing around the White House.

You would have three presidents serving at once.

KONDRAKE: I completely agree with that. There is no way she is going to be vice president.

BARNES: I just want to say that the next time I say something in anger here on the panel, I was exhausted.

BAIER: That's the last word. When we return, debate on the Global Warming Bill was choked off almost before it got started. Good news for your wallet or bad news for the planet? That's next with the all starts.



SEN. BARBARA BOXER, D-CALIF.: This issue is front and center on the minds of the American people, 89 percent of whom say it needs to be addressed. And now, because we did this, we got a good Bill out of our committee, and Senator Reid had the courage to bring it to the floor, we now see that people are engaged.

SEN. MITCH MCCONNELL, SENATE MINORITY LEADER: My suspicion is there was never any great desire to seriously address what they think is the most important issue affecting the planet because of the way it's been handled. I think they realize they made a colossal blunder and wanted to get it up and get it out of here as quick as possible with minimal exposure of their members to bad votes.


BAIER: That was Senator Barbara Boxer and Senator Mitch McConnell talking about the global warming Bill that died in the Senate today. So what about this Bill, and the prospects going forward to, possibly, the next congress?

Mort, let's start with you. Why did it die, first of all, and what about McConnell's thoughts about the motivation behind it?

KONDRACKE: It never had a chance to pass anyway. And if it had passed the Senate, the House wasn't ready to take it up, and the president was going to veto it. So this was kind of a marker for the future.

Both John McCain and Barack Obama favor cap and trade. You will have a much more Democratic Congress in 2009, so, probably, we're going to get cap an trade as the solution to the global warming problem, which I think is crazy, frankly. I mean, this is the most bureaucratic, the most government-heavy, the most dishonest way to do conservation.

What you want to do is what Charles wrote a column about today, is have a gasoline tax or a carbon tax, raise the price, let the market determine, what the alternatives are, use the proceeds of a gasoline tax to do intensive research, and maybe some startup money, but not subsidize the way this Bill would do.

This Bill would collect trillions of dollars over time to be invested by the government in various ways, which will be lobbied for. It will be politically determined. Escape hatches will all be politically rigged. It is a terrible way to go.

BAIER: Republican opponents, Fred, said it would dramatically raise the cost of gasoline at the pump. And, today, we saw prices go above $138 a barrel for crude, and the stock market took a dive. So was that all factors in in how this Bill was doing, the price at the pump?

BARNES: That was the main thing. It had nothing to do with unemployment jumping up in the report that came out this morning. It had everything to do with the price of gas. Charles wrote about this today.

This was a colossal blunder — McConnell's right about that — by Harry Reid bringing up a Bill that would raise gasoline prices have a lot of hidden taxes, and all the things Mort talked about, but mainly boost gasoline taxes at the time it is $4 a gallon.

This was crazy. Democrats can't get rid of this Bill fast enough. They didn't lay down a marker. They laid down, well, I won't say.

But this was a huge defeat for them. They don't have a majority for the Bill, despite what Barbara Boxer said, a bunch of people who voted with Harry Reid aren't for it, and I think it is going to be tough next year.

Cap and trade is taking a brutal beating, as you hear from Mort, intellectually and politically, and it's going to be hard for them to revive it next year.

But you know what the most fun thing to watch? Total role reversal. You have Democrats who, supposedly, want to talk about climate change, and they can't get rid of it fast enough. Republicans want to prolong the discussion and consideration of this, because they think it helps them.

BAIER: All three senators involved in the presidential race — McCain, Obama and Clinton — said they would support this Bill, although they were not there to vote on it.

KRAUTHAMMER: The Bill is a travesty.

The one thing you have to know about it is this — it was read on the floor of the Senate. The reading took the ten hours — ten hours of rules, regulations, loopholes, exceptions, mandates, out of the hat numbers, throwing darts at a dartboard is a way to arrive at goals. It is an invitation, as Mort has said, to unbelievable corruption and intervention.

And the other important news is a statement that came out of the Indian minister in charge of these affairs, not Navajo Indian, but South Asian Indian, who yesterday said explicitly that India will not reduce the greenhouse gases if it impedes development and alleviation of poverty, which obviously it does.

India is not going to act, China is not going to act, which means anything that we do here in this Bill would destroy our economy, would be utterly useless. Until India and China join a world regime of cap and trade or taxation or reduction, any action here is complete economic suicide.

And here I'm trying to speak with restraint about how bad this Bill is.

BAIER: Holding back, huh, Charles?

KRAUTHAMMER: I'm trying to restrain myself. It is unimaginable. And the invitation to corruption and lobbying is really on a scale never seen.

KONDRACKE: But it is a symbol of the dysfunction of this government that we all acknowledge that we need to be energy independent, that we need to conserve energy, that we need to produce more domestic — increase domestic production — and control, I think, control global warming, and this government can't come to a solution.

BARNES: The Bush administration wants to increase domestic production, Democrats are fighting it.

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