• This is a partial transcript from "Your World with Neil Cavuto," June 8, 2005, that was edited for clarity.

    NEIL CAVUTO, HOST: Mr. President, welcome to FOX. It's great to have you.

    GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you, Neil.

    CAVUTO: We were thinking of you, Mr. President, we knew you had won the election and now we have heard that you had better grades than your opponent too in college.

    (LAUGHTER)

    CAVUTO: What did you think with the release of those transcripts?

    BUSH: I didn't think much about it. You know, I've always tried to lower expectations, and I feel like if people say, well, you know, maybe, you know, I don't think you handle the tough job, and when you do, it impresses people even more. But my view is the campaign is over.

    CAVUTO: Yes. He was billed as the intellectual, though, and you had better grades in college.

    BUSH: Yes. Well, as I said, I like to lower expectations.

    (LAUGHTER)

    CAVUTO: On a more serious note, Mr. President, this morning we got word of an Al Qaeda-linked (search) cell potentially broken up in California. One of the participants in that cell supposedly was taking target practice off a picture of you. What did you think when you heard it?

    BUSH: I think that our FBI and Homeland Security people are working hand-in-glove to protect America on a daily basis. I was briefed on some of the particulars about the matter you just described. I can assure the America people that we're following every lead, that we're doing everything we can to keep us protected.

    The best way to protect America is to keep on the offense and bust up these terrorist networks overseas by doing two things: one, committing our troops and intelligence services to the task, and also spreading freedom.

    The way to defeat hatred and hopelessness in the long term is to lay foundations for peace by spreading freedom. So we've got a dual strategy that requires a lot of effort, a lot of sacrifice, but it's working.

    CAVUTO: Do you suspect there are other such cells still operating in this country?

    BUSH: You know, I don't know. I really don't know. The one thing I do know is that a lot of people are looking for them and that we're running down every possible lead, that we're doing a better job of sharing intelligence now between the CIA and the FBI as a result of the Patriot Act (search). That within the FBI, there is better intelligence-sharing. That there's a lot of really good people who are spending a lot of time on potential terror cells.

    Today Mike Chertoff (search), who's the secretary for Homeland Security, and Director Mueller were in the Oval Office, briefing me about this group of folks in California.

    I was very impressed by the use of intelligence and the follow-up. And that's what the American need to know, that when we find any hint about any possible wrongdoing or a possible cell, that we'll follow up — by the way, honoring the civil liberties of those to whom we follow up. In other words, we're just not going to pick up the telephone and listen to somebody without a proper court order. That's protecting the civil liberties of Americans.

    CAVUTO: Speaking of civil liberties, one of your predecessors, Jimmy Carter, was very critical of our operations at Guantanamo Bay (search), saying they should be shut down, that abuses there, if proven true, are dragging our name through the mud globally. What do you make of that?

    BUSH: Well, I first of all want to assure the American people that these prisoners are being treated in accordance with the Geneva Convention. I say in accordance with because these weren't normal, you know, military-type fighters. They had no uniforms. They had no, you know, government structure. These were terrorists, swept up off the battlefield in a place like Afghanistan, for example.

    And it's in our nation's interest that we learn a lot about those people that are still in detention, because we're still trying to find out how to better protect our country.

    Secondly, that anytime there's an allegation of abuse, we investigate. That's what transparent societies do. We've got a press corps that's constantly asking tough questions about prisoner treatment, for example. You just asked one. And that's what open societies do, they answer the questions by saying...

    CAVUTO: But now President Carter has said, sir, shut it down. Joe Biden said shut it down. Do you think it should be shut down?

    BUSH: Well, you know, we're exploring all alternatives as to how best to do the main objective, which is to protect America. What we don't want to do is let somebody out that comes back and harms us.

    And so we're looking at all alternatives and have been. And when there have been questions of abuse and allegations like the Koran, the Pentagon went through a full investigation and then released the data for everybody to see.

    And I will tell you that we treat these prisoners in accordance with international standards. And that's what the American people expect. When somebody put out that Amnesty International report, they asked me about it. I said it's just absurd to equate Gitmo and Guantanamo with a Soviet gulag. It's just not even close.

    CAVUTO: Let me ask you about the economy, sir. Almost any objective read tells you that we're still doing very, very well. Productivity is very high. Had a strong GDP report. Retail sales are very, very strong. The unemployment rate, at 5.1 percent, used to be considered full employment when Hubert Humphrey (search) was alive. Do you think you get a bum rap in the media on the economy?

    BUSH: No, I don't think so. I think that when the numbers are good, the media puts it out there. Housing starts are strong. Unemployment's down to 5.1 percent.

    I do think there are some troubling signs in the economy. One is the fact that we haven't passed an energy bill in four years, and we're dependent on foreign sources of energy, and therefore, gasoline prices are up. I think that troubles the American people.

    CAVUTO: So you think the fact that we're dealing with these high gas prices is wiping out whatever benefits we're seeing in other areas?

    BUSH: You know, I think polls are polls. I mean, they're just kind of snapshots of the moment. And to the extent that some say, well, I'm unsettled about the future of our economy, they're basically, I think, reflecting the fact that gasoline prices have risen quite dramatically. And I'm concerned about that, too, because I understand a gasoline price rise is like a tax. It's a tax on families. It's a tax on small businesses.

    And I understand why gasoline prices are going up, and that is because we're dependent upon foreign sources of energy. And the price of crude oil is going up, which is the main price driver for gasoline.

    CAVUTO: But you've been warning about this, Mr. President. Four years ago, you said this. But you've had a Republican Congress to push these things through, and nothing.

    BUSH: Well, listen, I share your frustration. We haven't had a national energy plan for years. And as a result, we're dependent. And so four years ago, I called upon my administration to come up with a strategy and then to go to the Congress for that part of the strategy that required law. And you're right, it's been stuck in the Congress for four years.

    CAVUTO: Do you ever get mad at of your fellow Republicans?

    BUSH: Well, no. Part of the problem is that, in a certain body in Congress, a minority can block anything. But I do believe we'll get an energy bill. The House passed a good bill. And by the way, the House passed a bill more than one time.

    CAVUTO: That's right.

    BUSH: And the Senate passed a bill out of committee. They'll get it on the Senate floor. I'm confident we can resolve the differences. And we'll get us a good energy bill.

    Now, an energy bill is not going to immediately solve the problem. What the energy bill will do is put America on the course of using technology to diversify away from the hydrocarbon world in which we live.

    You know, for example, I went out to a facility that refines soybeans. Twenty years ago, that was a pipedream. Today, it's reality. It can work. Soy diesel works. There's got to obviously be more market development for that type of product, more diesel engines that can use a soybean extract. But nevertheless, it's coming. Bio-diesel will be a reality, which would mean we're diversifying away from foreign sources of oil.