This is a partial transcript from The O'Reilly Factor, January 29, 2002. Click here to order the complete transcript. 

BILL O'REILLY, HOST: I'm Bill O'Reilly, Thanks for watching this updated edition of THE O'REILLY FACTOR. President Bush, giving an upbeat speech this evening, saying that Americans are up to the challenges that the economy and the terrorists pose. The president's speech was fairly general, except when he pinpointed some nations that are bothering him.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: North Korea is a regime arming with missiles and weapons of mass destruction, while starving its citizens. Iran aggressively pursues these weapons and exports terror, while an unelected few repressed the Iranian people's hope for freedom. Iraq continues to flaunt its hostility toward America and to support terror. The Iraqi regime has plotted to develop anthrax and nerve gas and nuclear weapons for over a decade.

(END VIDEO CLIP)

O'REILLY: And the only other controversial part of Mr. Bush's speech was when he demanded that Congress pass an economic stimulus bill, and that it accept permanent tax cuts. Joining us now with analysis of the State of the Union address are former vice-presidential candidates Geraldine Ferraro and Jack Kemp.

You liked the speech, Ms. Ferraro.

GERALDINE FERRARO, FOX NEWS POLITICAL ANALYST: I liked the speech, I liked the delivery. I though President Bush did precisely what he had to do tonight, which is fill in everybody on what was happening, as far as national security is concerned. He say, you know, he was talking about things that -- what they found in Afghanistan. I didn't know all that stuff, and I was glad that he filled us in on what the future terror is. I thought he did a phenomenal job tonight.

O'REILLY: Phenomenal? Wow!

FERRARO: I really enjoyed it.

JACK KEMP, EMPOWER AMERICA CO-DIRECTOR: I thought it was intuitive force. I think Bush has come into his own, has shown the maturity that Geraldine alluded to. And after reading David Mccullough's book on Truman, I see similar pattern at work in Bush' life. He is Trumanesque, maybe Reaganesque. It was a great speech.

Do you realize, however, it was carried on Al Jazeera? That is really interesting that it was carried on Al Jazeera into the Islamic world...

O'REILLY: Translated on the screen?

KEMP: We don't know how it was done. But I think he was reaching out to nation-building for Afghanistan. He made some tough comments about state-sponsored terror --

O'REILLY: That surprised me. That was the one thing in his speech, because he basically sent a message to these three countries, saying hey, you know. And you really don't see that in State of the Unions too often. You know, they keep to generals, well, we want to get this...

FERRARO: Well, it wasn't only to a domestic audience. It was for an international audience.

O'REILLY: That's right. But it was to the American people that you can expect trouble in these three areas. You can expect it, because he never would have named those -- he embarrassed those countries, did he not?

KEMP: He did.

FERRARO: And he also stayed away from the things he doesn't really want to talk about, which is too much of a recession. I mean, a big question of the speech was national security, you know, homeland security.

KEMP: But give him credit.

FERRARO: But some of the things he talked about, I thought was very interesting.

KEMP: But give him credit. He did say we'll not only defeat terrorism, we will defeat this recession.

(CROSSTALK)

FERRARO: Easier said than done, yes.

(CROSSTALK)

KEMP: Well, he said we ought to pass the stimulus package, we ought to...

O'REILLY: But nobody knows what the stimulus package is.

KEMP: But he did say the House -- well, I'll tell you what it is. He said the House has passed accelerated rate reductions, and they did. Accelerated depreciation schedules, and to the death tax. And he said, I want to see the Senate act. He challenged the Senate.

FERRARO: He also talked about -- yes, but remember he said...

(CROSSTALK)

FERRARO: He said, you have to -- everything will happen if we don't spend a lot of money. And then he talked about more money on education, more money on health care.

(CROSSTALK)

FERRARO: More money on drugs for senior citizens. I mean, he went through...

O'REILLY: The comic, besides Hillary Clinton's new hairdo, which I liked, by the way -- it was kind of American Bandstandish, but it was fun, I liked it.

(LAUGHTER)

FERRARO: I think she looked great.

O'REILLY: The greatest guy tonight was when President Bush said, "And we want Congress to be fiscally responsible in spending." And who leapt to his feet and applauded? Charles Rangel! Charles Rangel, who never had a dollar he didn't want to spend, that's right, we're EGA to be fiscally responsible. That's how carried away everybody got.

But, look, I gave the speech a B, because again, he says we have a big problem with the borders. Would everybody agree here, that we have a big problem with the borders?

FERRARO: Yes.

O'REILLY: But he didn't tell me how he's going to beef them up.

KEMP: That's not the place to do it, though.

O'REILLY: No, it's not?

KEMP: It is not the place to do it. The other day in "The New York Times" there was a lead story about the INS...

FERRARO: He got specific when he was talking about some of the stuff, for instance, in Afghanistan.

KEMP: No, I mean at the border, though.

O'REILLY: Why isn't it the time?

KEMP: Let me make a point.

(CROSSTALK)

KEMP: The other day "The New York Times" said that we have over five or 600,000 students in the United States from foreign countries, and we don't know where they are, we don't know if they're in school, we have no database way of managing that pool of information. And it's very clear that this country has got to come to grips with the fact that we allow students in, and some of them don't even go to school. And two of the hijackers were supposed to be in school, weren't. INS has got to be tightened up. We've got to have a database management system.

O'REILLY: All right, but he didn't say all that.

KEMP: That's not the place to do that.

O'REILLY: No?

KEMP: That's not the place to do that.

O'REILLY: I don't know, I think he can make specific points. Ms. Ferraro?

FERRARO: Yes, I think that when he wanted to be specific, he was specific. I think that there are some places where he just doesn't have a program in place yet, and the domestic part is still the weakest part of this whole thing. Right now, because of the support that he's getting from around the world, as well as in this country, from both parties, from everybody -- you saw that in the response as well.

(CROSSTALK)

O'REILLY: All right, listen to a little bit of -- but again, he was generalizing.

FERRARO: He got into specifics, as far as campaign finance reform is concerned, as far as pension portability is concerned, as far as health care is concerned. And again, as far as jobs are concerned.

KEMP: He didn't reveal the tax cut, though, did he?

O'REILLY: No. But here's the deal. When Americans are looking for, is they're looking for -- and again, they like Mr. Bush. There's no question. And they're rooting for Mr. Bush, which is an enormous victory for any politician, as you know. I mean, there's not a cynicism attached, outside of the pinheads who live in New York and Georgetown...

FERRARO: Oh, stop!

O'REILLY: The regular folks want him -- so he's got room. He's got room. But he's not introducing new ideas into the fray. He's just not. And that's why I gave him a B, rather than an A. Poise -- A, all right? Directness, A.

KEMP: What's your definition of a new idea?

O'REILLY: Well, for example, we have a lot of problems with getting a handle on how to stop the Mexicans from coming across the border.

KEMP: That is something that has to follow, in terms of immigration and illegal immigration.

O'REILLY: But he doesn't seem to have a plan to do it.

KEMP: But that's not the place to do it. He's got to come up with it. We all agree with that.

(CROSSTALK)

KEMP: I thought Dick Gephardt did a good job, and he said something I want to endorse. I hope this doesn't ruin his chances of getting it through.

(LAUGHTER)

KEMP: He said he'd like to see a national summit on economic growth, with a major effort placed upon simplification of our tax code. Our tax code. as Paul O'Neill said, is a disgrace to a 21st Century country, and...

O'REILLY: Well, that's your issue.

(CROSSTALK)

FERRARO: Know what he said to major emphasis, because even when he was reading it, it popped out a little bit.

O'REILLY: All right, well, that's Mr. Kemp's issue. All right, let's take a break. We come back, Ms. Ferraro, I want to ask you about the perception that Mr. Bush is in the pocket of big business, and his comments tonight about that people have to have some safeguards against their companies going down.

More of Ms. Ferraro and Mr. Kemp in a moment, and then, will DNC chief Terry McAuliffe get caught up in a financial scandal? We'll have that report in a moment.

(COMMERCIAL BREAK)

O'REILLY: We continue now with our analysis of the State of the Union address. We're talking to former vice-presidential candidates Geraldine Ferraro and Jack Kemp.

Now, all day today the pinhead press was screaming, oh, President Bush is not going to mention Enron. And if I were President Bush, I wouldn't mention Enron, either. Why empower Enron? He had nothing to do with it. But he did say something that surprised me. I want to get your feeling on it. He said that the government should assure that workers don't get hosed on their 401(k)s if an Enron or a Global Crossing go down a drain. That sounded like a Democrat to me.

FERRARO: Well, he had to address the issue. I mean, Enron is becoming a huge issue, not only for the people who have lost all their pension money, but literally, for the country. I mean, you can't watch television the last couple of days, without seeing...

(CROSSTALK)

FERRARO: So he couldn't ignore it, so he had to talk about what could be done...

O'REILLY: But that's not a really Republican position, is it?

FERRARO: Well, except that you turn around and these are people who are unregulating, he got a look at accounting practices. I mean, if you took a look at what Gephardt -- Gephardt specified Enron.

O'REILLY: That's what Democrats do. They want closer supervision, but Republicans usually don't.

FERRARO: And what they're talking about, is he's also talking about making sure you deal with the pension plans and the regulations and everything else that has to be put in place now, because Enron got away with...

(CROSSTALK)

O'REILLY: There's a problem with that, Mr. Kemp, and you're, as a Republican, you know that. The government is going to start to mandate...

KEMP: I don't know why you say that's a Democratic issue. I mean...

O'REILLY: But it is.

KEMP: Protecting people's paycheck and their 401(k) and their pension, and providing portability, is ubiquitous.

O'REILLY: But the Republican philosophy is, stay out of the big business face. Let them operate...

KEMP: You can't run a free enterprise economy without certain rules, transparency...

O'REILLY: Oversight. You need oversight.

KEMP: Oversight. And the consumers must be protected, but the ultimate protection is competition.

O'REILLY: But, if you're going to guarantee that every company in the country that you put stock in there and that stock goes down, the government is going to pay for it...

(CROSSTALK)

KEMP: No, no, he's talking about accounting, as Geraldine pointed out. Accounting practices, that have to be cleared up and cleaned up. They've got to separate consultants and accountants...

O'REILLY: Right.

(CROSSTALK)

O'REILLY: And again, this is micro-oversight.

KEMP: No, it's not.

O'REILLY: Yeah, it is.

KEMP: It's making the rule of the game, so that you know that there's 100 yards, and there's officials on the sidelines protecting you from...

O'REILLY: I'm for it, but it didn't sound Republican to me.

KEMP: It sounded Republican...

O'REILLY: I thought I saw Dick Cheney wince.

KEMP: It sounded populous.

O'REILLY: No, I thought I saw him go...

(LAUGHTER)

O'REILLY: Like that, you know.

(CROSSTALK)

FERRARO: He was nervous.

O'REILLY: Oh, he was just nervous? Is that what it was?

KEMP: He has nothing to apologize for.

O'REILLY: Yeah, I was waiting to see which guy was going to fall down first, Kennedy or Cheney, because they had to stand up and down so much. But I was surprised by that -- and I think that was a smart move for Bush to make.

KEMP: I agree.

O'REILLY: To get on the side of the people, and to get off the corporate side, because the Democrats are trying to demonize him as a corporate tool. That's what they're trying to do.

KEMP: That's been an historic attempt to do.

O'REILLY: Right. It's not working with Bush. But if they can find a linkage, which is why...

KEMP: There is no linkage.

O'REILLY: Well, you don't know that. Cheney's got exposure on that secret list.

KEMP: Oh, come on, that secret list!

O'REILLY: Yeah, well...

(CROSSTALK)

KEMP: How do you come up with an energy plan without talking to energy producers?

O'REILLY: Well, then, let us know where they are!

KEMP: Why?

O'REILLY: Well, because we're the people! We pay for the meeting!

KEMP: You know he talks to energy...

(CROSSTALK)

O'REILLY: We pay for the meeting! Don't you want to know?

FERRARO: By the way, I'm staying out of this fight.

O'REILLY: Don't you want to know who's...

FERRARO: Absolutely.

(CROSSTALK)

O'REILLY: If I paid for the meeting, I want to know.

(CROSSTALK)

KEMP: ... is to turn this into a major scandal.

(CROSSTALK)

O'REILLY: It is. Should we put the list out?

FERRARO: It's probably nothing. Why is Cheney uptight about this?

KEMP: He's not uptight.

FERRARO: Look at (UNINTELLIGIBLE)...

(CROSSTALK)

O'REILLY: Yeah, let him know.

KEMP: Let me assure you, I talked to the man today. He is not uptight.

O'REILLY: Of course, because he's sitting there saying he's not going to let us see the list. I don't want shadow government. I disagree with the onus. Now, the last thing about president --

KEMP: I don't either want shadow government. I want some shadow. I want the federal open market committee tomorrow to have their meeting televised.

O'REILLY: Let's see the list.

KEMP: That's how open I want it.

O'REILLY: This time next year, if the economy doesn't improve, if -- and everybody is saying it is, but I'm not so sure. If it doesn't improve, the mood is going to be darker toward President Bush, even if he continues to have success in the war on terror?

KEMP: He has to focus on the economy. He is, he announced tonight that he is going to win the war on the recession. I think he's got to do more. And he is exerting -- I think going to the American people tonight and telling the American people that the Senate has failed to act on a major tax cut stimulus package was an important thing to put responsibility --

O'REILLY: Well, Reagan used to do that all the time.

KEMP: He had to.

O'REILLY: Right, but it never worked.

KEMP: Sure, it did.

(CROSSTALK)

KEMP: I was there.

O'REILLY: That he might get a compromise. But the Democrats in the Senate, as Ms. Ferraro well knows -- they don't want the tax cuts. I mean, they simply don't want them.

FERRARO: They are fine with tax cuts. Jeff and I had this discussion before we came in here.

(CROSSTALK)

FERRARO: But I think -- and you said, what will happen if the recession happens to -- and I think it will. It's already moving up out of the recession, but some of it will be back. But a lot will depend upon what happens with this whole war.

O'REILLY: Do you think so?

FERRARO: Oh, yeah.

O'REILLY: So, the better it goes for us, the better the economy will be?

FERRARO: Well, no, I didn't link the two. I'm talking about I think the -- if he's able to handle the war, if something happens with the recession that it doesn't bounce back to the degree that we expect it to, or would like it to, he'll be given a little bit of latitude. He'll be forgiven for some of the stuff...

O'REILLY: We got to go.

FERRARO: Though, I have to tell you again, his -- as far as the polls are concerned, his numbers have gone down.

O'REILLY: You guys are great. We've got to go. The one thing he didn't mention tonight was Usama bin Laden. I didn't think he would. But you know, what are you going to do with this guy?

KEMP: I wish he (UNINTELLIGIBLE)...

O'REILLY: I'd like to send Greenspan in a cave to get bin Laden. All right, thank you very much. Next, like Enron, Global Crossing files for bankruptcy, but not before DNC chief Terry McAuliffe is involved. We'll be right back.

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