This is a partial transcript from The Beltway Boys, November 16, that has been edited for clarity. Click here to order the complete transcript.

Watch The Beltway Boys Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

FRED BARNES, CO-HOST: Welcome back to The Beltway Boys.

Joining us to talk about how the recent elections will impact President Bush's agenda is White House political director Ken Mehlman.

Welcome to the show, Ken.

KEN MEHLMAN, WHITE HOUSE POLITICAL DIRECTOR: How are you today?

BARNES: Good.

Ken, let me show you a quote from the generally astute political writer Ron Brownstein in The L.A. Times this week. He says, "By and large, Democrats held their own in Gore territory, especially the affluent socially liberal suburban counties outside the South that tilted from the GOP to Democrats under President Clinton," unquote.

Now, I have two questions coming out of that. One is, why were Republicans unable to break through in these blue Gore states, and don't you have to break through there to achieve a real realignment?

MEHLMAN: Well, I would respectfully disagree with that analysis. The numbers I've seen have shown that Republicans actually won the suburbs by about 19 points, which is truly historic. We as a party have in past years had a really problematic gender gap. In this past campaign, Republican congressional candidates lost the female vote only by 2 percent. Among Hispanics we got 39 percent nationally. And among union members, we significantly reduced our deficit with Democrats.

So I'm not sure what he's looking at, but I think if you look across the board, you found some very strong Republican performances.

BARNES: Well, does this suggest that if Bush wins a strong re-election in 2004, that that could be a realigning election with real breakthroughs in these blue states?

MEHLMAN: Well, I think what you, you -- you're in a place now where obviously small, incremental changes, provided that they are persistent, are very significant. And what you saw in this past campaign was small, incremental changes that were very significant.

For the first time since 1994, Republican candidates for House, for Senate, and for governor all broke the 49 percent barrier and got 50 percent or more running for office. That's a very significant change.

BARNES: Indeed.

MORT KONDRACKE, CO-HOST: Now, the Democrats are saying that the reason that you won this election and that they lost it was that their message was not clear, that your turnout was, was way up, and that their base was, was depressed. I mean, you seem to be saying that no, you've won, you've taken pieces out of their base and added them to the Republican coalition. Is that...?

MEHLMAN: Well, I don't think we know yet. But I do think we know certain things. First of all, we know that those voters who voted on the economy, a lot of voters did that, they like the Republican proposals on the economy. Polls, some indicate Republicans actually won the issue, others said it was close.

The ultimate test that we did well on the economy was that large number of Democrats who actually ran on the Bush tax cut, ran television ads on that.

KONDRACKE: Now, your boss, Karl Rove, at the, at the White House has this theory that George Bush's election two years ago was the equivalent of William McKinley's election in 1896, launching a, a long Republican run. He has never really spelled that out. What's the basis of that?

MEHLMAN: Well, I think Karl has -- what Karl has said and what Karl continues to believe is that we have an opportunity, that the 2000 election provided an opportunity, and this past election did as well. And Republicans now will be judged on the basis of their performance. And if we're able to accomplish our compassionate conservative goals, if we're able to strengthen the economy, protect the homeland, we'll be rewarded politically.

Karl believes that good policy is good politics, and I agree with him.

BARNES: I want to show you, Ken, a quote from majority, soon to be minority, Senate leader Tom Daschle.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: I think we have to question whether or not we're winning the war. We haven't found bin Laden, we haven't made any real progress in many of the other areas involving the key elements of Al Qaeda. They continue to be as great a threat today as they were a year and a half ago.

So by what measure can we say this has been successful so far?

(END VIDEO CLIP)

BARNES: Here's my question, Ken. Is that a politically useful critique offered by Senator Daschle, or is he just still mad about the way the election turned out?

MEHLMAN: I don't know why he said it. I think it's a little bit disappointing. One of the things that's been very important about this war effort is that we have been united, and that both parties have come together. When the -- when 9/11 occurred, President Bush was very clear. He said this is not something that will be solved in the short term. There are people that have been planning this for many, many months, and frankly, many years.

And so what we need to do is continue to come together to work to protect our homeland and to be united as a world, quite frankly, and the president's done a good job of doing that, against weapons of mass destruction and against terrorists. And we ought to think about politics after that.

KONDRACKE: Ken, the, the liberal Democratic team of James Carville, Stan Greenberg, and Bob Shrum, you know, issued a report after, after the election, and they said that when, when they asked, when they put two rival tax cut plans on the table and asked voters to choose, namely, extending and making permanent President Bush's tax cuts, which is what he said he wants to do, and a Democratic message of canceling the tax cuts for the highest 1 percent and giving the money to, to, to the middle class, that the Democratic version wins by 69 to 43.

Now, that's...

BARNES: That's more than 100 percent.

KONDRACKE: ... that's a -- I mean, yes, I -- it's a huge...

MEHLMAN: That's a ... fuzzy math, more than 100 percent...

KONDRACKE: Right, exactly. Fuzzy math. But seriously, I mean, are - - do you think that you have a mandate for though, for extending the president's tax cuts?

MEHLMAN: Well, I think that people very strongly believe that the president's tax cuts ought to be extended and made permanent. I think you saw that in the last campaign. And ultimately, this isn't about one political party or another. It's a fundamental question, do you want to improve the economy by increasing and continuing to increase consumer spending? You do that by letting people keep their own money.

KONDRACKE: Ken, thanks so much for being with us.

MEHLMAN: Thank you.

Click  here  to order the complete transcript.

Copy: Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.