This is a partial transcript from The Beltway Boys, Jan. 11, 2003, that has been edited for clarity. Click here to order the complete transcript.

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FRED BARNES, CO-HOST: Extremely disappointed. I mean...and then his secretary of state, Colin Powell, says it's not a crisis. It is a crisis if North Korea, which sells arms to everybody in the world it can, has nuclear weapons. We cannot tolerate that at all.

Is it OK now to go the ups and downs?

MORT KONDRACKE, CO-HOST: Go ahead.

UP: Mississippi Judge Charles Pickering

BARNES: With Republicans back in control of the Senate, President Bush renominates Pickering to the Fifth Circuit Court of Appeals, sparking a bitter fight. Watch this.

(BEGIN VIDEO CLIPS)

SEN. CHARLES SCHUMER (D), NEW YORK: The White House and the ideological hard right that's way out of the mainstream understands if they control the courts, they can continue the rollback of civil rights in this country. And so we regret this moment.

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: This controversy, if there is one, about Judge Pickering, I submit to you, this has nothing, to do with race and everything to do with the ideology of a few liberal Democrats who oppose a man who has bipartisan support...

(END VIDEO CLIPS)

BARNES: Mort, you wrote last February in Roll Call that Judge Pickering is not a racist and should be confirmed. Do you still feel that way?

KONDRACKE: I absolutely, I absolutely believe that. He -- this -- this is a guy who sent his kids to, to newly integrated public schools in Mississippi when there was a white, you know, independent school down, down the street. Heck, most liberals in Washington, white liberals send their kids...

BARNES: Yes.

KONDRACKE: ... to private schools...

BARNES: Right.

KONDRACKE: ... you know, to, to avoid the, the all-black D.C. schools. He fought against the Ku Klux Klan, he, he has the, most of the, the black leadership, including Charles Evers in Mississippi behind him, and he was listed as well qualified by the ABA. I, I am fed up with the Democrats on this one.

BARNES: Yes, you know, Mort, the McCarthyism of our era is calling somebody a racist wrongly, and that's exactly what's happened in the case of Judge Pickering. And the way to stop that, and it ought to stop right away, the best way to stop it is by confirming Judge Pickering.

UP: Senate Minority Leader Tom Daschle

KONDRACKE: Considered to be among the top tier of Democratic presidential hopefuls, Daschle put his Senate job first, nixing a White House run. Here's Daschle on Tuesday.

(BEGIN VIDEO CLIP)

DASCHLE: This is my passion. I'm very honored and gratified to have the opportunity to be Democratic leader. And the fights, the important debates, the cause, the agenda, the things we believe in are going to be fought out every single day with the people behind me. And I'm proud to be one of them.

(END VIDEO CLIP)

KONDRACKE: I, I don't really think Daschle had really wanted to be...run a residential -- president race at all.

BARNES: Yes.

KONDRACKE: What, what he deserves credit for is, is agreeing to run again in 2004 for his Senate seat instead of becoming a rich Washington lobbyist.

BARNES: Yes...his wife.

KONDRACKE: Yes, he was the only one who could have kept that, that Senate -- you know, could, could keep that Senate seat for, for the Democrats. But immediately the chances of the Democrats ever taking control of the, of the Senate again were, were dashed by the decision of Zell Miller for -- conservative Democrat from Georgia, not to run again.

BARNES: Yes.

KONDRACKE: And so that seat probably...will go Republican.

BARNES: Yes, the -- I don't think this was a great sacrifice on Daschle's part, staying in the Senate and not running for president. But I think he made a wise choice. He is a very capable legislator, particularly good at obstructing legislation.

KONDRACKE: No forgiveness there.

BARNES: All right. Oh, come on, that's what he does best.

DOWN: The nation's governors

BARNES: Already facing big-time budget shortfalls, governors got another dose of bad news this week. President Bush's proposed economic plan shuts them out of any financial aid and threatens to shrink state tax revenues further by proposing elimination of stock dividends taxes.

KONDRACKE: Yes...now, I think that ultimately there will be some state aid in whatever stimulus package gets passed after the, the Congress gets, gets through with it, and there should be, based on effort to control spending and bring budgets under control, calibrated.

And also, Bush in the State of the Union will probably argue that by passing a prescription drug benefit, that will help states...

BARNES: Yes.

KONDRACKE: ... pay their Medicaid bills...

BARNES: Yes.

KONDRACKE: ... for elderly seniors...

BARNES: Yes, that'll be enough.

KONDRACKE: ... poor seniors.

BARNES: I mean, I mean, I mean, what you want, Mort, is state fin -- you -- is aid by the federal government to states that have spent wildly, been -- profligate in their spending, particularly California, a state that kept up this big spending when the economy had tanked, and...news were not coming in any more, and you want to subsidize that kind of behavior. I think that's totally wrong, to get the states that were frugal and responsible to pay off these states that weren't, bad policy.

KONDRACKE: I'm for profiglacy -- profigously....Never mind.

UP: Sport utility vehicles

KONDRACKE: Two thousand two sales reports show that SUVs are continuing to be the most powerful -- pop -- popular motor vehicle in this -- for the second year in a row, despite an effort to link gas guzzlers to terrorist funding. Check out this ad produced by The Detroit Project, which is actually based on Hollywood, of course. Watch.

(BEGIN VIDEO CLIP, TV COMMERCIAL, THE DETROIT PROJECT)

UNIDENTIFIED FEMALE: This is George. This is the gas that George bought for his SUV. This is the oil company executive who sold the gas that George bought for his SUV. These are the countries where the executives bought the oil that made the gas that George bought for his SUV. And these are the terrorists who get money from those countries every time George fills up his SUV.

(END VIDEO CLIP)

BARNES: Do you like that reasoning? By that reasoning, the people like yourself who oppose...

KONDRACKE: I know.

BARNES: ... oil drilling in ANWR, you know, the, up in Alaska...

KONDRACKE: I'm not, I'm not one of them.

BARNES: ... OK, well, other, other people who oppose oil drilling in that wildlife preserve in Alaska, who oppose oil drilling off shore, off California and Florida, those people, they are sponsoring terrorism, helping the terrorists. It's, it's stupid reasoning. I have three SUVs, just bought a new one, plus a minivan. I'm keeping them all.

KONDRACKE: I'm for, I'm for drilling, and I'm for taxing SUVS, and, and, gas, and gas-guzzling does help Saudi Arabia, which helps terrorists.

BARNES: No, it doesn't either.

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