This is a rush transcript of "Special Report With Brit Hume" from May 16, 2007.

BRIT HUME, FOX NEWS ANCHOR: Next on SPECIAL REPORT, Rudy Giuliani shows some spring in his step after a presidential in which he saw an opportunity and took it. Mea nwhile, the president demonstrates some technology aimed at the immigration problem, as some farmers complain they can't get enough workers, legal or illegal. (INAUDIBLE)

HUME: Welcome to Washington. I am Brit Hume. The consensus after last night's Republican presidential debate appear s to be that most of the candidates, whether leader or trailing, emerged in about the same position as they held going in. But, as chief political correspondent Carl Cameron reports, front runner Rudy Giuliani acted today like a man who felt like he had helped his own cause.


CARL CAMERON, FOX NEWS CHIEF POLITICAL ANALYST (voice-over): The morning after the debate, GOP presidential candidate Rudy Giuliani was eager to remind people.

RU DY GIULIANI ®, PRESIDENTIAL CANDIDATE: I thought it was a more issue-oriented debate, where people could express themselves.

CAMERON: After trying for a week and a half to explain his pro-choice socially liberal views in a pro-life con servative party, Rudy Giuliani jumped at the chance to refocus on terrorism. The night's biggest applause came when the blasted long shot candidate Ron Paul, who suggested U.S. foreign policy provoked 9/11.

RON PAUL ®, PRESIDENTIAL CANDIDATE: They attack us because we've been over there. We've been bombing Iraq for ten years.

GIULIANI: Wendell, may I make a comment on that. That's really an extraordinary statement. It's an extraordinary statement as someone who lives through the attack of September 11th, that we invited the attack because we were attacking Iraq. I don't think I've ever heard that before, and I've heard some pretty absurd explanations for September 11th.

CAMERON: Second-tier candidates Jim Gilmore, Tom Tancredo and Duncan Hunter criticized Giuliani, John McCain, and Mitt Romney as insufficiently conservative. Romney took on McCain directly for working with Democrats on immigration and campaign finance reforms that most conservatives ardently oppose.

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE: And my fear is that McCain-Kennedy would do to immigration what McCain/Feingold has done to campaign finance and money and politics, and that is bad.

CAMERON: McCain, in turn, ridiculed Romney for taking pro-choice socially liberal positions as recently as two years ago as a Massachusetts state politician. But running for the White House now as a conservative.

SEN. JOHN MCCAIN ®, ARIZONA: And I haven't changed my position on even numbered years, or have changed because of the different offices that I may be running for.

CAMERON: After the debate, Romney continued the sniping on "HANNITY AND COLMES."

ROMNEY: Senator McCain knows about a lot of things, but I do not believe that he is the fountain of all knowledge.

CAMERON: Romney said he would double the size of the terrorist interrogation and detention facility at Guantanamo Bay, in a game of one-upmanship with the rest of the field on who would be tougher on terrorism. While Romney and Giuliani expressed support for enhanced interrogation techniques like water boarder, McCain, who was tortured in a North Vietnamese prison camp, set himself apart by opposing it.

MCCAIN: Do you know where that was invented? In the Spanish Inquisition, the Spanish Inquisition. Do we want to do things that were done it during the Spanish Inquisition?

CAMERON: During the debate, the biggest laugh of the night went to Arkansas Governor Mike Huckabee, who criticized Republicans for reckless spending in Congress, but made a Democrat the brunt of his joke.

GOV. MIKE HUCKABEE ®, ARKANSAS: We have had a Congress that spent money like John Edwards at a beauty shop.


CAMERON: There was a lot of criticism of Democrats, but what made the night distinctive was the questions and the way it prompted the candidates to criticize one another for the first time face-to- face. There will be a lot more of that in the weeks and months to come as the battle for the chance to represent the party and go up against Democrats next year, Brit.

HUME: OK, Carl, thank you very much. As the Senate prepares to take up the issue of immigration reform next week, President Bush says it is the government's job to help business owners make sure the people they are hiring are in the country legally. Today, the president helped to show off a system he says employers could use to comply with the law. Chief White House correspondent Bret Baier reports.


UNIDENTIFIED FEMALE: If it's a perfect match, then I would click yes. Then I would go to the next slide, and it tells me in the middle, if you can see, employment authorized.

BRET BAIER, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT (voice-over): President Bush got a demonstration of a computer program run by Customs and Immigration services that companies like Embassy Suites are now using to check the legal status of potential employees.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Employer verification, to make sure that you are not hiring someone you should not be hiring.


BAIER: The program is just one part of a comprehensive immigration reform bill being hashed out in the Senate. Negotiations led by Democratic Senator Ted Kennedy and Republican Senator Jon Kyl that the president called emotional hard work. But he insisted an elusive compromise is in sight.

BUSH: There is a good chance—I am optimistic that we can get comprehensive immigration reform.

BAIER: Optimism about a deal was the message in the White House briefing room.

TONY SNOW, WHITE HOUSE SPOKESMAN: We are very encouraged by the tone of the talks.

BAIER: And from Senator John McCain at Tuesday night's Republican debate.

MCCAIN: I can assure you we are very close to an agreement. I have been heavily engaged in it, and I continue to be heavily engaged in it.

BAIER: But after touting progress Tuesday night, this morning, Senate Majority Leader Harry Reid only gave a deal of 50-50 chance.

SEN HARRY REID (D-NV), SENATE MAJORITY LEADER: I got the office with a bunch of phone calls from people around the country quite disturbed about a number of things in this proposed piece of legislation.

BAIER: Specifically, calls from union and liberal groups that vehemently oppose a guest worker program that limits family members from tagging along. Reid wants to keep families together.

REID: Our immigration system is broken. And it certainly needs to be fixed. But in the process, we don't want to make it worse than it was to start with.

BAIER: Another key Democratic negotiator, Senator Ken Salazar from Colorado, was also pessimistic, telling Fox, quote, "I think we're still in a tunnel. I still don't see the light at the end." The proposed agreement would allow illegal immigrants already in the country to come forward and get what will be called a probationary Z visa, pay up to 5,000 dollars of fees and fines, return to their home country to, quote touch base, if they want to try for permanent U.S. residency. In the meantime, illegals who don't wish to become citizens would be allowed to renew the Z Visa every year for a fee, something conservatives call amnesty. Under the plan, the Z Visa program and a new temporary guest worker program could not begin until border security improvements and high-tech identification programs are completed, setting triggers for the rest of the reform.


BAIER: Republican sources say Arizona Senator John Kyl is the key to making this deal work, selling it to conservatives. And they say so far Kyl's pitch appears to be working. A draft of a bill could be circulated as early as Thursday morning with a vote Monday. Brit?

HUME: Thank you Bret. Some California farmers say a crackdown on employers who hire illegal immigrants is part of the reason they are worried that their produce rot in the fields for lack of workers to harvest it. They say legal farm workers are nearly impossible to get, and now even illegal workers are disappearing. Correspondent Casey Stegall report.


EDGAR TERRY, FARMER: As of today, we are probably 10 to 15, maybe 20 percent short. We are probably short on all of our ranches harvesting strawberries 30 to 40 workers.

CASEY STEGALL, FOX NEWS CORRESPONDENT (voice-over): Edgar Terry owns 1,400 acres of farmland in Ventura County, California. That's the southern tip of a region that supplies half of the nation's fruits and vegetables. He and other farmers here say they are facing a shortage that could seriously impact production.

TERRY: What we have right now is a total disaster. You can't get labor when you need it, and a lot of labor that comes across the border, who knows if it is legal or illegal.

STEGALL: Of the 500,000 workers needed for the summer harvest, at least half come into this country illegally. But because of tighter security along the border, increased enforcement away from the border, and no formal guest worker program, farmers say they simply can't find the bodies to do the work.

HENRY VEGA, VENTURA CO FARM BUREAU: The crux of the issue is that we have to have a guest worker program to be able to have sufficient, legal and timely labor.

STEGALL: Antonio Hernandez complaints field work is back breaking, and he would take a different job if he could find one. Many have. Construction companies, hotels and casinos are in the middle of a business boom, and it is taking laborers from the farms for easier jobs that generally pay better.

(on camera): The impact stretches way beyond the fields of California. It is simple supply and demand. If there are not workers to harvest the crops, then there aren't enough crops, meaning higher prices for you at the supermarket.

(voice-over): Higher prices, immigration activists say, could be avoided if Washington takes action on immigration reform.

JACK MARTIN, FED FOR AMER IMMIGRATION REFORM: The advantage of the guest worker visa system is you know you have a guaranteed supply of workers, but you do have to pay higher wages. And employers that are facing a competitive situation are more inclined to look the other way and simply hire whoever shows up with fake documents.

STEGALL: Peak harvest season begins soon, and, as things stand now, farmers worry thousands of acres of food will be left rotting in the fields. In Ventura County, California, Casey Stegall, Fox News.


HUME: Later in our program, the will he or won't he story about Britain's Prince Harry going to Iraq takes another U-turn. In the meantime, senators fight it on ending the Iraq war. There was a vote. We'll tell you all about it next.


HUME: The U.S. military in Iraq is now offering an award of 200,000 dollars for information on the three missing American soldiers. U.S. planes are dropping leaflets, written in both English and Arabic, over the area near Mahmudiya, where the three soldiers were captured Saturday. Loudspeakers are also broadcasting word of the reward. A group believed to be fronting for al Qaeda has claimed it has the soldiers, although it has offered no proof. Meanwhile, Democratic leaders in the Senate today took another vote that seemed mainly designed to measure support for ending the war in Iraq. It failed, as expected, by a wide margin. In discussing the outcome later, the Democrats claimed though that they are making progress. And the vote did put a couple of presidential candidates on the record. Chief Washington correspondent Jim Angle reports.


JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT (voice-over): Democratic leaders fell 31 votes short of advancing a bill by Senator Russ Feingold to pull funding from the Iraq war by the end of next March.

SEN. RUSS FEINGOLD (D), WISCONSIN: It is time to end a war that is draining our resources, straining our military, and undermining our national security. And the way to do that is by using our power of the purse.

ANGLE: The measure, killed on a procedural vote of 67 to 29, would have forced troops to start coming home within 120 days. All troops would had to be out by the end of next March, except a small force training Iraqis, those on targeted missions against terrorists, and any troops involved in protecting the others.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We in Congress must put the brakes on and stop the madness.

ANGLE: Though none of the 2008 Democratic presidential front runners spoke on the issue, all the candidates voted in favor of the bill, a significant change for Senators Clinton and Obama, who announced they would support the bill after Senator Chris Dodd started running an ad trying to shame them into supporting the bill.

SEN. CHRIS DODD (D), CONNECTICUT: Half measure won't stop this president from continuing our involvement in Iraq's civil war. Unfortunately, my colleagues running for president have not joined me.

ANGLE: But some Democrats, including Senator Levin, who voted to kill the measure, are nervous about any talk of pulling funding.

SEN. CARL LEVIN (D), MICHIGAN: Troops are going to be supported. We are going to support those troops. And we are not going to use a funding mechanism to cut off funding for our troops. ANGLE: Republicans couldn't help but note the effort to establish what they call a date for defeat did not come close to passing.

SEN. TRENT LOTT ®, MISSISSIPPI: The significant thing today is that the vote that would just surrender now basically only got 29 votes.

ANGLE: But several Democrats argue that was not the point.

SEN. JOE BIDEN (D), DELAWARE: That is all about keeping the pressure. So every single day the public picks up the newspaper and sees that we are trying to change the president's course of action in Iraq.

ANGLE: And other Democratic leaders sought to portray today's loss as a sign of progress as well. Feingold later hailed the fact that this is the first time he's even gotten a majority in his own party.

FEINGOLD: Today a majority of the Democratic senators said it is time to end the mission as we have it, and to bring this mistake to an end. That is a huge change.

ANGLE: But Republican leader Mitch McConnell argued this was just another distraction from the central issue.

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: The House and Senate have voted 30 times on Iraq amendments this year. The president's request for funding for the troops came up 100 days ago; 30 votes, 100 days, no money so far.


ANGLE: But today's action of Feingold and a Republican bill from Senator Warner to establish benchmarks, which also failed, clears the way for the Senate to pass a simple measure calling for funding the war. The details hardly matter, because the issue will now be the focus of three-way negotiations among the House, the Senate, and the White House. Everyone is committed to getting the funding passed and signed by Memorial Day. Brit?

HUME: Jim, thank you. The British treasury chief, known as the Chancellor of the Exchequer, Gordon Brown, is virtually certain to become the next British prime minister. His only challenger for the leadership of the Labor Party pulled out of the race today. Under the British system, the leader of the dominant political party becomes prime minister. Brown is expected to make a formal statement tomorrow. Prime Minister Tony Blair steps down at the end of June. And it looks as if things are heating up again between Israel and the Palestinians. And Israeli helicopter launched missiles at a Hamas command center in the southern Gaza Strip today, killing at least four people. Another air strike targeted a car carrying a group of militants, killing one. The strikes came after Hamas fired rockets into Israel. And Prime Minister Ehud Olmert said the country could not continue to restrain itself after the attacks. In the meantime, street fighting continued in Gaza despite a cease-fire called by the leaders of Hamas and Fatah. And tonight gunmen are reported to have opened fire on guards of Palestinian Hamas Prime Minister Ishmayel Haniya. At least 40 people have been killed in the past several days. And still ahead on SPECIAL REPORT, we will tell you how far Jerry Falwell's message has spread. You may be surprised. But first, should corporate jet passengers pay a bigger chunk of taxes, while those flying big airlines pay less? Stay tuned.


HUME: Congressional Democrats have reached agreement on a 2.9 trillion dollar federal budget for fiscal year 2008. The plan allows many of President Bush's tax cuts to expire, although some cuts aimed at helping the middle class could be renewed. Democrats predict a balanced federal budget by 2012, but their five-year plan does not include any spending on military operations in Iraq and Afghanistan after 2009. The Office of Management and Budget calls the Democratic plan misguided. As lawmakers work on that budget, much attention is paid to who is getting a tax break and who is bearing an allegedly unfair burden. A case in point is a proposal by the president to reduce the taxes charged to passengers of the big airlines, and to increase the taxes required of small jet users. Correspondent Major Garrett reports.


MAJOR GARRETT, FOX NEWS CONGRESSIONAL CORRESPONDENT: Warren Buffett, third richest man in the world, wants the rich to pay more taxes. Last November, Buffett told economist and humorist Ben Stein, quote, "There's class warfare all right. But it's my class, the rich class, that's making war. And we're winning." Buffett opposed President Bush's 2003 tax cuts and in a 2004 letter to shareholders of Berkshire Hathaway, Buffett called for higher corporate taxes. But now that an actual tax increase has been put in front of Buffett, he balks. President Bush has proposed raising taxes on corporate jet companies, like Buffett owned Net Jets, and cutting them for passengers on commercial airlines. But Buffett says no, even though corporate jet taxes pay a fraction of air traffic control and airport costs.

JOHN MICA ®, FLORIDA: It all depends on whose ox is getting gored, or who's going to have to pay the tab here. Sometimes some of the fat cats are upset and concerned.

GARRETT: A commercial flight from Los Angeles to La Guardia Airport pays 2,800 dollars in airport taxes and fees. A corporate jet flying from Los Angeles to Teterboro, New Jersey pays only 543 dollars.

JIM MAY, AIR TRANSPORT ASSOCIATION: I have absolutely no trouble with Net Jets or Warren Buffett or Mr. Murdoch, for that matter, flying in a corporate plain. I think it is a terrific way to go. I just want them to pay for what they use.

GARRETT: The administration wants to cancel the current 7.5 percent passenger ticket charge for commercial jet passengers and impose higher fuel taxes and a per flight user fee on corporate jets, a tax shift of more than 1.5 billion dollars a year, one Buffett and his allies in General Aviation oppose.

PHIL BOYER, AIRCRAFT OWNERS & PILOTS ASSOC: We want to make sure that communities are going to have access to the air transportation system. Whether that is general aviation, or whether that is going to be the airlines, it is important, and that is really what the debate is about. It not about Warren Buffet or any one person.

GARRETT: In response to the administration's proposal, Congress is moving to impose modest fees on corporate jet services, a baby step, lawmakers say.

MICA: The most anybody's talking about is increasing the fee for one jet, at least one private jet, is the price of parking at any one of our major airports for a day. So we are not going to bring corporate America down.

GARRETT (on camera): There is a saying in air-traffic control circles that a blip is a blip is a blip. That means it requires the same amount of attention and cost to bring down that's a commercial airliner as it does a blip that's a corporate jet. The idea, make the passengers aboard the corporate jet pay a bit more, the passengers on the commercial airline a bit less. But Warren Buffett, with assets valued at more than 50 billion dollars, says no. Talk about class warfare. Near Reagan National Airport, Major Garrett, Fox News.


HUME: The legacy of the late Reverend Jerry Falwell spreads far beyond the church and university he founded down in Virginia. Falwell created outreach programs that have spread his message across the country and to some extent around the world. Students at Liberty University say they will miss him, but that his work will go on. Correspondent Molly Henneberg reports.


MOLLY HENNEBERG, FOX NEWS CORRESPONDENT (voice-over): Words of remembrance painted on a rock at Liberty University, "in loving memory of Dr. Jerry Falwell, the founder of the school." Students just called him Jerry.

HANNAH ESHUIS, LIBERTY UNIVERSITY STUDENT: He will be remembered for a man that loved the lord and wanted to serve him and loved his students so much. That's what we keep saying. Oh my word, I can't believe how much Jerry loved us. And we're going to miss him.

AISLINN PERPETE, LIBERTY UNIVERSITY STUDENT: Jerry Falwell was kind of like a father to all of us. He was an amazing man, and he is going to make a lasting impact on the world.

HENNEBERG: Part of the impact includes Liberty U, the largest Christian Evangelical university in America, with 10,000 students studying on campus, 17,000 more online, and 122,000 alumni.

RONALD GODWIN, LIBERTY UNIVERSITY EXEC VP: To prepare people for a myriad number of careers. But we want to encourage each one of those people to carry their Christian faith into their careers.

HENNEBERG: Dr. Godwin, who had breakfast with Dr. Falwell the morning he died, says Liberty sends hundreds of students over sees on mission trips each year.

GODWIN: One group just returned from a trip to the Amazon, where they traveled by boat down the Amazon River, and treated native people's health conditions, their teeth. So our nursing students and other students were involved in such a trip. A group is leaving next week to help build churches in India.

HENNEBERG: The church Falwell founded next to Liberty University, called Thomas Road Baptist Church, also funds a number of ministries started by Falwell. According to one long-time friend, when Falwell saw a problem, he tried to remedy it.

DAVID BENOIT, EVANGELIST/FALWELL FRIEND: He saw a problem for alcohol, so now he's got the Elam Home For alcoholics. And he said there was a problem with abortion. And he didn't just say there was a problem. He started a home for unwed mothers, where women could come, girls could come, 13, 14 year old girls could come. And they could give their babies up or they could have their babies. And he would provide everything for them.

HENNEBERG: Efforts that his admirers believe will continue to resonate on Earth and in heaven.


HENNEBERG: Falwell's funeral will be held here at the Church behind me, Thomas Road Baptist Church, next Tuesday. In the meantime, Liberty University says its graduation will go on as scheduled this Saturday, and the graduation speaker, as plan, will be Newt Gingrich, a possible 2008 Republican presidential candidate. Brit?

HUME: Molly, thank you. We've got to take a break to let our sponsors talk to you and update the other headlines. When we come back, wait until you hear who's giving President Bush a psychiatric going over. That's next.


Click here to read the "Political Grapevine."

The official title for the job Lieutenant General Douglas Lute is expected to take is a mouthful. If the Senate confirms him, Lute will become "assistant to the president and deputy national security adviser for Iraq and Afghanistan," that's war czar for short. National security correspondent Jennifer Griffin looks Lute's record and what he's expected to do.


JENNFIER GRIFFIN, FOX NATIONAL SECURITY CORRESPONDENT (voice-over): The Pentagon does not want him called "wars czar," some feel it sounds too authoritarian and powerful, which raises questions about just a powerful new position, created by the president, will actually be. Lieutenant General Douglas Lute, a Gulf War veteran, former commander on Kosovo, a former operations chief at CENTCOM under General John Abizaid, and currently head of the Pentagon's joint staff operations, was asked by the president to serve as his advisor.

"In his new position, General Lute will be the full-time manager for the implementation and execution of our strategies for Iraq and Afghanistan," President Bush said in a statement.

General Lute was not the White House's first choice. At least three four-star generals were approached about the job and said no thank you. General John Sheehan, General Joseph Ralston, and General Jack Keane. There were even suggestions the defense secretary was approached.

UNIDENTIFIED MALE: I don't want to be a czar of anything.

GRIFFIN: The job would be to coordinate among the Pentagon, states, and other departments, and with generals such as David Petraeus currently commanding the surge. It's still unclear whether General Lute himself, favors the surge. In a 2005 interview, Lute indicated he favored drawing down in Iraq, not sending more troops. "We believe at some point, in order to break this dependence on the.coalition, you simply have to back off and let the Iraqis step forward. You have to undercut the perception of occupation in Iraq, it's very difficult to do that when you have 150,000-plus, largely Western foreign troops, occupying the country."

The White House today pointed out the comments were two years old, and a lot had changed.

TONY SNOW, WHITE HOUSE SPOKESMAN: General Lute not only supports the way forward, but he also thinks that there is—that we're making progress and now it is his job to work in a coordinating role.

GRIFFIN: But can a three-star general give orders to a four-star general? Pentagon spokesman Brain Whitman says the normal chain of command will remain, which means, no. Many suggest the problem won't be from the military.

KATHLEEN HICKS, CTR FOR STRATEGIC & INTL STUDIES: As a military officer, he's not going to be entirely trusted by civilian agencies.

GRIFFIN: And then there are other so-called czars who have come and gone before, be it for the war on terror or the war on drugs. Some suggest Lute's job will be as difficult as herding cats.

MAJ GEN BOB SCALES (RET) FOX NEWS MILITARY ANALYST: Frankly, I am skeptical about the ability of not just Doug Lute to do it, but anybody to do it given the current dysfunctional structure within our government.


GRIFFIN: The problem former Pentagon planners suggested is whether the civilian agencies that the Pentagon has criticized in the past for not pulling their weight during this war, whether they will listen to the General Lute once he is war czar—Brit.

HUME: Thank you Jennifer. The fate of World Bank president, Paul Wolfowitz, appears to be in the balance tonight amid what appears to be a stand off between him and the bank's board over whether and how he will leave his job. Correspondent James Rosen has the latest—James.

JAMES ROSEN, FOX NEWS CORRESPONDENT: Brit good evening, the World Band board has finished deliberating over the future of its president for today and will resume those deliberations tomorrow morning at 9:00 Eastern. Paul Wolfowitz's attorney, Bob Bennett, is dismissing as premature published reports today saying he is negotiating his clients a swift resignation in exchange for an acknowledgement by the World Banks board that the ethics committee of the bank is also at fault in this matter. At issue, are steps Wolfowitz took two years ago to deal with a potential conflict of interest involving his companion, longtime bank employee Shaha Riza, which led to Riza's being reassigned to the State Department under a lucrative terms. Bennett told me today Wolfowitz "is not going to resign with this ethical cloud over his head," while a source close to Wolfowitz added: we are not negotiating a verdict, here. The embattled president is said to be waiting at decision by the banks board before cutting any deals to resign. An ad hoc committee of seven of the board members has found Wolfowitz did violate bank rules. By all account however, Wolfowitz did consult extensively with the bank's ethics committee throughout the process of his girlfriend's reassignment—Brit.

HUME: James, thank you. The on again, off again mission of Britain's Prince Harry is off again. The British army chief of staff says there have been specific threats against the prince, threats that would endanger not only him, but those around him. The 22-year-old prince, third in line to the throne, is a tank commander who is trained to lead a 12 man team. Next on SPECIAL REPORT, the FOX all-star as will weigh in on last night's Republican presidential debate. Stay tuned.


JOHN MCCAIN (R-AZ), GOP PRESIDENTIAL CANDIDATE: We let spending go out of control. We spent money like a drunken sailor, although I never knew a sailor drunk or sober with the imagination of my colleagues. By the way I receive. (LAUGHTER)




REP RON PAUL (R-TX), GOP PRESIDENTIAL CANDIDATE: Have you ever read about the reasons of they attacked us. They attacked us because we've been over there. We've been bombing Iraq for 10 years.

RUDY GIULIANI ®, GOP PRESIDENTIAL CANDIDATE: That's an extraordinary statement as someone who lived through the attack on September 11, that we invited the attack because we were attacking Iraq. I don't think I've ever heard that before, and I've heard some pretty absurd explanations for September 11.



HUME: Well, that got a big round of applause and when the debate was over, it was clear that Rudy Giuliani, at least—or the people around him, at least, felt that he had seized a good opportunity and taken it. And for some people, that was the moment of the night. Some thoughts on all this now from Fred Barnes, executive editor of the Weekly Standard; Nina Easton, Washington bureau chief of Fortune magazine; and the syndicated columnist Charles Krauthammer—FOX NEWS contributors, all. Well, let's talk first about those who were widely considered to be the first-tier candidates: Giuliani, John McCain, and Mitt Romney. First of all, is the consensus that Giuliani had a good night, Charles, do you think, well-founded?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, it was and it had to do that moment. It wasn't just the content of what Giuliani had said, but it is basically what had happened. When Paul made that statement, it was like—to use an basketball analogy—it was and air ball, and all the other candidates stood around with jaws agape and nobody moved, they were frozen. Giuliani rushes in, he grabs the ball, he jumps up and does a slam dunk and then a sneer afterwards.

(LAUGHTER) And all of the other candidates, and you see, it wasn't—that was Giuliani on 9/11. Everybody else on that day, including the president, to some extent, was frozen out of that picture, the president for obvious reasons, he had other things to worry about, but Giuliani stepped up there, he grabbed the mic, he reassured his city, and that's who Giuliani is. So that was in character and that's why it resonated and it was the old Giuliani of 9/11. He also handled himself well, substantially, on the issue of abortion where he'd gotten tripped up in the earlier debate. He put that behind him to a certain extent, and he came out the clear winner.

NINA EASTON, FORTUNE MAGAZINE: I think that's right, I think—and I need to issue a disclaimer that my husband works for McCain, but Giuliani, I think, you know, if debates are moments—made of moments, especially a debate where you've got this huge cast of characters, it's the moment that people take away and Giuliani dove into that moment, and I think you're right, Charles, he knew how to react. He also—it could—it showcased his strength, but it also, to some extent, put the abortion issue, you know, aside, at least, it's settled. We now know where he stands on abortion. He's not fumbling all over on it. You may hate him for it, you may go with him for it, but, you know, that's where he is, and in fact, by the way, Richard Viguerie now is saying he plans to take Rudy Giuliani down — Richard Viguerie being the right of the Republican Party. So, I do think you're seeing the rumblings.


HUME: .Viguerie have influence in the Republican Party in a long time? EASTON: But you're seeing the rumblings of a revolt already which shows Giuliani's strength. The other thing, I think, we saw was last night was the beginning of the rivalry between Romney and McCain, so we had McCain criticizing Romney, saying you know: I don't change my positions every two years.

HUME: Well, who got the better of that in your view?

EASTON: I think it was probably—came out pretty even.

HUME: What do you think—Fred.

FRED BARNES, WEEKLY STANDARD: She is afraid to say McCain because her husband works for McCain, but that's the right answer. I thought McCain did, because he had this jab from Romney and he jabbed back even harder, you know, saying, I don't change my, basically, I don't change my positions depending on what even year it is.

HUME: Meaning election year.

BARNES: At what election running for, meaning an election year. I mean, it was pretty good. I thought McCain was better than he was in that first debate. Romney, not as good and Giuliani I agree with...

HUME: How was Romney not as good?

BARNES: Well, I'll tell you why he wasn't as good, because the big issues in this debate were national security and terrorism. And the truth is McCain and Giuliani are better on those issues, they have more experience, they have more credibility than Romney does. It was—they were playing on their turf and not on Romney's turf. But Giuliani, I mean, it really did come down, I agree entirely that these things are moments. I mean, what is the sound bite you played? I mean, the other 89 minutes of the debate were great, Brit, and you did a wonderful job, but that one minute or so with Paul...

HUME: what about this question that was raised with McCain which has a question he's dealt with before on the treatment of prisoners? He was almost alone among the candidates who spoke up on that issue. Certainly, he and Giuliani gulf of difference between them. Giuliani said he'd do whatever it would takes sort of torture, McCain says he equates with the administration has done and the so-called enhanced interrogation techniques, he says they are torture. What about that? How did that one work?

BARNES: Well we know it worked.

HUME: Right, but well if they know that—how did that work for Senator McCain?

BARNES: Well, that is McCain's position and he's consistent on that position, he obviously, when he says, you know, this is about America, this really matters, that's his position, it's not the position, I think, most Republicans take and are in favor of torture under the circumstances you particularly outlined in that scenarios.

KRAUTHAMMER: But there is an inconsistency, because in the Newsweek article he wrote a couple of years ago and in the debate, he conceded that in what he called the one-in-a-million scenario, which is the one you had raised, he said...

HUME: Well, he thought I raised.

KRAUTHAMMER: Well, you know, the one which there's a ticking bomb. He said the president has to take responsibility, which essentially is—and what he said explicitly elsewhere is the president ought to do what has to be done—anything, anything. He wouldn't write explicitly into law, but he would say presidents would—he would essentially say, yes, torture, but then...

HUME: Do you think that be as a position that might well be satisfactory, then, to Republican voters who might otherwise think he is soft on this issues?

KRAUTHAMMER: Well, he won't make it explicit, but in essence, all of the people in the panel, in that debate, had said yes, in this scenario, yes. But what McCain says is I wouldn't write it into law.

HUME: Right, you got a final thought on this.

EASTON: But they were hairsplitting too, Giuliani and Romney, because they said we don't support torture but we support aggressive techniques, and it wasn't clear—they don't have time—then, where they're going to draw the line.

BARNES: I didn't think Giuliani made that distinction, and I think what McCain needs is to have Charles to explain it for him. He did it a lot better than McCain did.

HUME: We're going to talk about the others who had some moments last night as well, in a moment. Stay tuned.


TANCREDO: This had gone off in the United States, more were planned and we're wondering about whether water boarding would be a bad thing to do? I'm looking for Jack Bauer at that time, let me tell you.





MIKE HUCKABEE ®, GOP PRESIDENTIAL CANDIDATE: What we've done is what Senator McCain has suggested. We've had a Congress that spent money like John Edwards at a beauty shop, and it's high time.



HUME: Well, that was the biggest laugh of the night by far, Mick Edwards, I mean, Mike Huckabee referring to the fact, of course, that John Edwards got a couple of $400 haircuts along the way. Back with our panel, now. There was some thought of the seven other candidates that were up there on the stage last night, that Huckabee had the best night. Any thoughts on that?

KRAUTHAMMER: Well, he did, but that's not saying a lot, considering how the rest of them did. You know, to use another.

HUME: So you agree with that, though, basically?

KRAUTHAMMER: Yeah, he was the best. I mean, that was a pretty good line.

HUME: Do you think he was the best of the others?

EASTON: He won the VP sweepstakes for the night.

HUME: Do you think?

BARNES: No, he'd be a great late-night talk show host. He's not going to get—you don't get jokes—that doesn't get you the nomination for anything.

HUME: I know, but bar the.


That was a piece of it, but I mean, it wasn't just that. I mean, do think.

BARNES: Afterwards he said, you know, if I paid $1 for cutting every hair on my head, it wouldn't get to $400.

KRAUTHAMMER: To use another sporting analogy in NCAA, he won the play in game, in other words, he won the game that allows you to enter the tournament and get squashed by the No. 1 seed of your first game. He won here by a nose, and it's not saying a lot, because after all, the other six did not.

HUME: Well, let's go through them. All right? First of all, certainly got a lot of time and a lot of attention: Ron Paul. How did Ron Paul do?

BARNES: Well, he sounded like a left libertarian. I didn't—you know, he took this left-wing view of American foreign policy. You know, America's always at fault. I didn't think that helped him.

EASTON: That's right, he was taking up space on the panel that should be occupied by somebody like Newt Gingrich. That would make it really interesting.

HUME: But it has been suggested today that Rudy Giuliani might ought to send him a campaign contribution, because he's the one who teed him up.

KRAUTHAMMER: He should put him on the payroll. I mean, that was a hell of a favor, and maybe he'll make him secretary of something after he becomes president.

BARNES: Not the feds.

KRAUTHAMMER: Paul is the classic isolationist libertarian. And isolationists don't want to do anything abroad, and if anything bad happens, they blame it on the fact that America is involved abroad, it's part of their isolationism.

HUME: Sam Brownback?

EASTON: Sam Brownback, I have to say, I think he comes over better in person than on television. I don't think he resonates in anyway, he.

I thought he had his game, thought, I mean, last thing—he seemed composed and he spoke with, you know, articulation—I thought he was fine. Of course, I was seeing in the hall, which is not what others were experiencing, so I don't...

EASTON: I just think he knows his stuff, he takes some interesting positions that aren't always predictable, like on immigration, but you know, compared to a Huckabee, who I thought had a very vibrant presence last night—and it wasn't just a joke. He also—Huckabee also went into his whole—his—the bit about the culture of life. But it was very good.


HUME: OK, quickly.

BARNES: Tommy Thompson.?

HUME: Tommy Thompson.

BARNES: Tommy Thompson drove me crazy. Remember he was asked that question, great question by Wendell Goler: Name three programs that you would cut. He never named one.

HUME: Anybody disagree that with—Tommy Thompson didn't have a great night?


OK, quickly now, he got to.

KRAUTHAMMER: Look, he was a good governor, and he's diminishing himself.

HUME: Duncan Hunter?

KRAUTHAMMER: He shouldn't stay in this race.

BARNES: He always does well because he's good on the issues of defense, in particular.

HUME: Jim Gilmore? Make any headway?

EASTON: Gilmore has the Rudy—Mitt Romney jab.

HUME: Yeah, but that's old.

EASTON: But that was, yeah.

KRAUTHAMMER: He didn't make any headway at all.

BARNES: He was talking to a.

HUME: Tancredo make any headway at all?

KRAUTHAMMER: No, after all, his issue is immigration and Hunter's the one who hit that one out of the park.


HUME: That's it for the panel, but stay tuned to find out why there's more than one reason that cops should not break the law, that's next.


HUME: Finally tonight, the story of a policeman who didn't think there was anything so bad about making a little personal use of some confiscated contraband.


UNIDENTIFIED FEMALE: No charges have been filed against a police officer who admits to confiscating marijuana from suspects and then baking it in brownies. But once he and his wife were full and high, they thought they'd overdosed and called 911.

OFFICER: I think I'm having an overdose and so is my wife.

911 OPERATOR: Overdose of what?

OFFICER: Marijuana. I don't know if there was something in it. You can please send rescue.

911 OPERATOR: Do you guys have fever or anything.

OFFICER: No, I'm just—I think we are dying.

911 OPERATOR: OK, how much did you guys have?

OFFICER: I don't know. We made brownies and I think we're dead. Time is going by really, really, really, really slow.



HUME: That's SPECIAL REPORT for this time, please tune us in next time and in the mean time more news is on the way—fair, balanced, and unafraid.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. EST.

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