This is a rush transcript of "Special Report With Brit Hume" from November 5, 2007. This copy may not be in its final form and may be updated.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: We made it clear to the president that we would hope he wouldn't declare the emergency powers he declared. Now that he has made that decision, our hope now is that he hurry back to elections.

SEN HARRY REID, SENATE MAJORITY LEADER, D-NEV.: By staying so bogged down in Iraq's civil war, President Bush has made it harder to respond to the Pakistani problem and other challenges throughout the world.


BRIT HUME, HOST: That's Harry Reid's view of what is causing the trouble in Pakistan, or at least the problem for the president.

Some thoughts on all this now from Fred Barnes, executive editor of The Weekly Standard, Mort Kondracke, executive editor of Roll Call, and the syndicated columnist Charles Krauthammer — FOX News contributors all.

Well, the administration is saying that it wants Musharraf to knock it off, to shed his military uniform and authority, and move quickly toward elections. How much pressure are they really willing to put on a man who clearly has been an ally in the war on terror, Mort?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: I don't think half enough. President Bush ought to be calling Musharraf himself and delivering the message instead of having Condi Rice do it.

Or — the pattern on this is that if you really want to get Musharraf's attention, you send somebody over there to read him the riot act. After 9/11, we got Pakistan to turn against the Taliban by sending Richard Armitage over to threaten all kinds of terrible —

HUME: But wait a minute — he was the deputy at the time.

KONDRACKE: That's all right, but he went there.

Dick Cheney went in February to read the riot act to Musharraf because Musharraf was playing footsie with the tribal chiefs who was playing footsie with Taliban in the northwest territories.

So dispatch Cheney. Have him go there and say we want elections next January. We want you to get back on track here.

The question then is "Or else what?" Well, that's a big question, because I don't think we're going to cut off aid, because Musharraf —

HUME: Would you recommend doing so?

KONDRACKE: I recommend that Dick Cheney put up a good act to make it sound like we might

HUME: You mean a good-sounding empty threat, right?

FRED BARNES, EXECUTIVE EDITOR, WEEKLY STANDARD: Yes, I think you should consider cutting of some aid, because Musharraf is not fighting terrorists. That's what the money is supposed to be used for.

So what does he do? He declares a state of emergency, martial law, and says it's —

HUME: He didn't say "martial law."

BARNES: OK, well, it is martial law. That's pretty picky, Brit.

But in any case, he says it is all this Muslim terrorist activity that's doing it. So who does he go after? Does he go after them? No, quite the contrary. He goes after the people who are his potential allies — lawyers and judges and so on, and people like that.

And instead of going after the Taliban in the northwest territories, he makes a deal with the Taliban up there. He doesn't attack them. He makes a new deal. He releases some of their terrorists in exchange for troops.

And then reaffirms his treaty from a couple of years ago where this peace pact with the leading Taliban guy there that says we will leave you alone as long as you don't attack Pakistan troops, but you can have all the foreign fighters you want who come in here — meaning Al Qaeda — and you can let them in and they can attack American troops in Afghanistan, and so on.

This is a disaster. He is not doing anything that helps American interests or freedom or anything like that at the moment.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, we talked about the Shaw that way in the late 1970s, and we got rid of him, or his people did, and we stood by. And we know what succeeded him.

We have to be really careful in Pakistan. We have only a single interest in Pakistan, and that is stability. And we don't have the right answer as to how it is to be achieved.

Yes, Musharraf had a truce , but that's over. He sent his troops into the northwest territories again, and they have not succeeded.

But he is an ally in the war on terror. He flipped after 9/11 under our pressure, but we have to grow up and realize not every issue and crisis in the world is a result of American action or Bush action, or —

HUME: Inaction.

KRAUTHAMMER: — inaction, or, to take it to the extremes of Harry Reid, who often does, into absurdity, the war in Iraq.

This is an internal problem, where what you have in Pakistan are three factions — the Islamic extremists and the two westernized elements — the army, and the elite represented by Bhutto and the lawyers and others.

And the catastrophe is that the two westernized elements are now attacking each other as the Islamists sit and watch and wait to either attack or cause chaos or take more terrorism action.

KONDRACKE: But Musharraf has been an enabler of the Islamists. By suppressing democratic opposition he has allow the Islamist to assume the mantle of being the opposition.

Now, it is not a hopeless situation yet. One, Benazir Bhutto was allowed back into the country. Two, she has not been arrested, and she is still communicating with everybody that she wants to. He has not ruled out elections by January.

This is all coming to a head this week, as she is going to preside at a meeting of opposition leaders. And then she's saying that if he does not go on television and say that these elections are going to happen, free and fair by January, that she's going to bring her people into the streets.

Now, that is going to be the moment of truth. Does he arrest her?

HUME: What do you think will happen?

BARNES: He will probably arrest her.

But, look, Charles is right. Musharraf is an important ally in the war on terror. We need an ally in the war on terror, and sometimes he is and sometimes he isn't. Right now he isn't.


KRAUTHAMMER: Right now he's all we have. And we ought to broker a deal if we can between him and Bhutto, which we tried and failed. Otherwise, you don't throw away an asset who is the only guy around standing right now.

HUME: When we come back, the Republican presidential horse race — is Rudy Giuliani the only Republican who could beat Hillary Clinton? And is there a bombshell waiting in the wings for him? Stay tuned.



RUDY GIULIANI, PRESIDENTIAL CANDIDATE: You take those two broad principles — strong national defense, fiscal restraint, growth principles, free trade, lower taxes, smaller government. That makes us a majority party. Those are the two things that get us above the 50 percent mark and make us a 50 state party.


HUME: And so argues Rudy Giuliani — espousing those principles to the nation will help him go places and possibly carry states that no other Republican nominee can hope to do, and therefore, the argument goes, he is thereby best equipped to take on Hillary Clinton and the Democrats, and better to do so than anybody else in the party.

Fred, what about it?

BARNES: There is an argument in favor of that, that he could win New Jersey, a state that has trended Democratic over the last couple of decades. I guess Ronald Reagan won it in his landslide, but it has become a Democratic state.

Maybe Connecticut, New Hampshire, which has been moving Democratic, Maine, a bunch of states you can think that Rudy might have a better chance of winning —

HUME: New York and California?

BARNES: There is a poll that shows him trailing Hillary by five or six points in New York. He is in the ballgame in New York. I was surprised it was that close. California, I don't know.

But on the other hand, there are problems with him. And as the candidate, if he scares away the social conservatives, then he'll lose the general election.

But there is an upside in the general election for Rudy Giuliani that other candidates may not have.

HUME: That assumes that she's the nominee.

BARNES: Probably.

KONDRACKE: All the national polls indicate that of the Republican candidates that he is the best able to beat Hillary, although he is still running behind her by about three-and-a-half points. But that's better than the others.

One factor here is that Giuliani's nomination would completely eliminate the Bill Clinton issue. I mean, here you have Bill Clinton where the Republicans would like to revisit the Clinton infidelities, and somebody is going to play the tape, a videotape of Rudy Giuliani announcing in a press conference in Gracie mansion that he was divorcing his second wife, and her press conference after that saying that she was kicking him out of Gracie mansion.

Bill and Hillary are still together after all the nonsense. In this case, whatever damage there is from the Bill aspect doesn't work with Giuliani.

HUME: Well, it might work on the level of what role Bill would have in the administration.

KRAUTHAMMER: Look, in the 90's when nothing was happening, we were living in a golden age, that mattered. In the middle of a war that is not going to matter.

HUME: Either way?

KRAUTHAMMER: Either way it is not going to be an issue.

The Bill issue is not about sexual infidelity. It is about a co- presidency with an ex-president in the White House wielding influence, and essentially electing a marriage rather than a single person, which would be new in American history.

But Giuliani has the advantage, obviously, because he is more of a centrist. And also, he is Mr. 9/11. Again, in the middle of a war when the war on terror is the major issue of our time, he is the guy who acted as the sheriff. America saw it and trusts him and his strength over that. And that is an asset that nobody else has.

Yes, he will lose a finite number of social conservatives, but Romney will lose a finite over his religion, and McCain will lose a finite number over his immigration and other policies. So that's a wash, I think. But he attracts centrists and Democrats in a way that no other Republican will.

KONDRACKE: Of course, first he has to get the nomination. And the news that Romney is actually catching up in South Carolina, where Giuliani has been ahead.

HUME: Romney, it should be noted, is leading in both New Hampshire and Iowa.

BARNES: It will be hard for Giuliani if Romney wins in Iowa and New Hampshire, that's for sure. But he's got money.

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