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.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: My administration has repeatedly called on Congress to expand domestic oil production. Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal. And now Americans are paying the price at the pump for this obstruction.

REP. RAHM EMANUEL, (D) ILLINOIS: Supply is part of this. That's why we encourage the oil companies, and we have legislation to encourage the oil companies to drill on the 68 million acres you already own, are not drilling, and there is 14 years worth of supply in the United States. Use it or lose it. It's that simple.


BRIT HUME, HOST: The fact is that those leases on 68 million acres are already under a use it or lose it process in which if they—they don't own them, for one thing. They lease the rights to drill for such oil as may be found there. There are no proven reserves to speak of when the process starts.

So they lease the acreage in the hopes of finding oil there, and if they don't end up doing it, the leases expire. It is use it or lose it.

Nobody can seem to tell us tonight where the number that Rahm Emanuel and other Democrats are using that says 14 years worth of supply in the United States exists underneath that land. Nobody seems to be able to determine where exactly that comes from.

In addition, another Democratic member of the House said this today.


REP. MAURICE HINCHEY, (D) NEW YORK: Do we own refineries? No. The oil companies own refineries. Should the people of the United States own refineries? Maybe so. Frankly, I think that's a good idea.


HUME: So it appears at least one member wants to nationalize the oil refinery capacity.

Some observations on this issue now from Fred Barnes, Executive Editor of The Weekly Standard, Mara Liasson, National Political Correspondent of National Public Radio, and the syndicated columnist Charles Krauthammer, Fox News contributors all.

The public opinion climate, as we have noted in poll after poll, has changed on this issue. The public does not seem to blame the oil companies as it always used to for the oil price spike, and it seems to want more drilling.

So where is this debate going? Is there any chance the president will get any of this that he is asking for? He wants drilling on a range of areas, oil shale production. He wants drilling offshore. He wants drilling in ANWR, and so forth—Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Only if the Democratic Congress goes along, because they have to lift the moratorium that exists. And I suspect they won't unless gas gets a little higher. Four dollars has brought out the public's in favor of drilling, but Democrats aren't.

HUME: If these matters are brought to the floor of the House, for example, allowing for this, will Democrats I large numbers vote against it?

BARNES: Democrats, Brit, oppose any increased use of fossil fuels. That is the position of the environmental lobby, and that is the position of most Democrats, at least at four dollars a gallon. If it goes higher, they may change.

On the one hand Democrats says that the oil companies are greedy and want to have bigger and bigger profits. But somehow they're not, with the price so high, they are not putting on the market this oil that they could get out of the 68 million acres. It makes no sense.

And the truth is these leases, when they lease something, it does not mean they have already explored it and found oil there—it means that they have a chance to explore it. And sometimes they find oil and sometimes they do not, it takes a long time.

My understanding is these 68 million acres are being explored right now. They are trying to find out if oil is there, and if there is they drill for it and produce it.

LIASSON: The higher the price of gas, the more this debate changes. I do not know in the end who will win, but the Republicans do not have an answer now, a solution that seems to be more and more popular with the country.

I do not think they will the votes of people who care first and foremost about the environment. Those people are probably going to vote Democratic no matter what. But I do think you will see Democrats having to come up and answer about supply, and also Republicans are going to have to make arguments about why dong more drilling is still safe.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: The Republicans have stumbled upon their first good issue in terms of economics of the last year, and it is a very strong issue.

I think the president made a good case. He has to keep making it again. The Democrats are flailing. As Fred indicated, the idea that the oil companies when oil is at the highest price in the history of the world are hoarding oil is absurd.

What the Democrats are saying is let's go to speculative areas and let's work on wind and solar at a time when we have proven reserves of oil in the Arctic, huge proven reserves. It is not speculative. It is somewhere between six and 16 billion barrels a day. If you take the average, about 10, that means a million barrels a day coming in everyday for 30 years.

And remember, it is Democrats who opposed this, oppose it now. Clinton as president vetoed it 12 years ago after Republican Congress wanted to open it up.

The history here is clear, the logic is clear, and the politics are clear. I think it is an issue that Republicans have that essentially came out of nowhere, and it is a way to make the Democrats stay on the defensive.

HUME: Republicans are climbing all over Barack Obama for having said that he would prefer a more gradual adjustment, which suggests that he favors these high oil prices. Is that unfair to him to say he favors these high oil prices?

BARNES: I do not think it is unfair. If he wants to say he does not—he referred to a gradual adjustment—that is basic to the environmentalist, Democratic position, that we like high prices because that drives people to get out of their cars and to mass transit and so on.

This question about oil spills, something like that, was ridiculous after the experience of hurricanes Katrina and Reena in the Gulf of Mexico where more than 100 of these oil platforms were destroyed with no significant oil spills. And the drilling was done there, in some places, nearly two of miles offshore.

LIASSON: The thing about the price of oil—what Barack Obama was true but impolitic. In others words, as the price of oil goes up, people will turn to alternatives as they should, and so should the United States be exploring every possible alternative to Middle Eastern oil.

However, it is not a good idea to sound like you are for having Americans pay more at the pump.

KRAUTHAMMER: Obama is a stumbling on this issue as all Democrats. When you get a Democratic member of Congress proposing nationalizing refineries when that is the solution that Hugo Chavez has instituted in Venezuela, you know the Democrats are in trouble on this issue.

HUME: That may prove to be a position not widely held, even among Democrats.

Up next, the search for Barack Obama's running mate. Did he tip his hand with a key staff hire this week? We'll talk about that next.



BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: Patty Doyle, I think, is a terrific, experienced campaign hand. She is going to be a terrific adviser and offer insight and judgment that will help us win in November.


HUME: She is also the woman that Hillary Clinton fired as her campaign manager after being with Hillary Clinton for many, many years. And, of course, the word when this announcement was made this week that Barack Obama had hired her to be the eventual chief of staff to whomever he chooses as his running mate, that had tongues wagging.

They all thought this was another thumb in the eye of the Hillary Clinton. Fred, was it?

BARNES: My tongue was not wagging.

I think most people, and I distinguish most Hillary supporters from last-minute diehards who stayed until the end, will regard this as— this was a woman who worked for Hillary, an effective chief of staff but a lousy campaign manager, and Obama is doing this to bring the party together.

I do not see how you can treat this as a slap in the face. That is exactly the kind of thing that Obama does not want to do now. Why would he want to anger the Hillary Clinton supporters.

HUME: But he did, didn't he Mara?

LIASSON: The reason he angered some of them is because they took this to mean, well, somebody that Hillary fired could never be her chief of staff. Therefore it is another sign that he might not pick her as the vice president. I don't think Barack Obama is going to pick Hillary Clinton, and it has nothing to do with Patty Doyle coming on board.

First of all, she has strong ties to David Axelrod, she is from Chicago, and they wanted to give her a big job, and there were not a lot of big jobs left. Here is this one that was as yet unfilled, that to be named vice president's chief of staff, and they hired her for that.

I think there that were good reasons to do it. It is a sign of unity. He will be hiring a lot more Hillary people after this. Just because he hired one that Hillary let go, that is taking this interpretation to an extreme.

KRAUTHAMMER: It did not set my tongue wagging, either, but it set my tail wagging. I am always happy when I see dissension and conspiracy theories among Democrats.

I think it was at least a bit of a slap. You are hiring someone who was fired, who apparently is not on speaking terms with Hillary. How would you have somebody's chief of staff who won't speak to the candidate?

He will not take Hillary, anyway, but it was adding a little bit of a nail in the coffin there. And I do not think it helps. It can be explained in other ways, but it certainly had meaning. You just vanquished another candidate, and you are choosing for a high job somebody who got canned.

BARNES: When there are a lot of explanations, go with the simple, obvious ones.

LIASSON: Never before has the chief of staff to the to-be-named vice presidential candidate gotten so much attention.

HUME: And never before has one been named ahead of time before the person is even chosen.

KRAUTHAMMER: Why would you name that person ahead of time if you do not even know who it is? You might actually want to ask the vice- president who would like to have?

BARNES: I did not say it made sense, I just said it was not a kick in the teeth for Hillary.

HUME: Anybody have a quick idea who it might be for Obama?

BARNES: I still think Ed Rendell of Pennsylvania makes sense. Obama would win the state, one he has to win.

HUME: He's up twelve there. Who do you think might be an A- lister for him?

LIASSON: Somebody like Sam Nunn, Evan Bayh.

KRAUTHAMMER: Sam Nunn—elder statesman.

HUME: That's if for the panel,

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