This is a partial transcript from The Beltway Boys, Jan. 18, 2003, 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: I'm Fred Barnes.

MORT KONDRACKE, CO-HOST: And I'm Mort Kondracke, and we're The Beltway Boys .

Well, the hot story is that we are entering a very perilous period. One of these days we are going to have a smoking gun, and we're going to go to war with Iraq. And six months from now or so, we are going to live in a very different world than we live in now.

The optimists say that we can win this war in three weeks or less with minimum casualties. The pessimists say that chemical and biological weapons may get used, there may be terrorist attacks in the United States, we may get bogged down in, in the cities, friendly Islamic governments may be overthrown, there may be a regional war in the Middle East.

BARNES: Yes.

KONDRACKE: I mean, Bush is...and then there's North Korea...

BARNES: Yes.

KONDRACKE: ... which the Bush administration is not handling very well.

BARNES: Right.

KONDRACKE: I mean, Bush is, Bush's presidency is on the line.

BARNES: Yes.

KONDRACKE: Six months from now, he's either going to be a big hero or he's going to be very vulnerable in 2004.

BARNES: Yes, what do you think, hero?

KONDRACKE: I hope hero.

BARNES: Oh, yes, you, you, you ducked the question. He, he -- look, the problem is not winning the war in Iraq. That's going to be easy. The problem right now is Hans Blix, the United Nations inspector in chief in Iraq, who seems to think his job is containment. You know, he says these inspections are a form of containment, and he wants to keep the inspectors there as long as possible, it seems to me, and has even said so.

Listen to Blix, and then Bush's comments on the same subject.

(BEGIN VIDEO CLIPS)

HANS BLIX, CHIEF U.N. WEAPONS INSPECTOR: If they cooperate fully, if they give evidence and they really look around among their archives and their budgets, et cetera, and if they allow people to speak freely, it could be fast. If they stonewall, if they do not do this, then it may be very difficult. I don't say that it's totally impossible, but it will be very difficult.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Time is running out on Saddam Hussein. He must disarm. I'm sick and tired of games and deception, and that's my view of timetables.

(END VIDEO CLIPS)

BARNES: I think time is running out on Hans Blix as well, but...we'll see what happens. OK.

The other hot story is the Bush blues. Now...as noted earlier, the latest Gallup poll shows Bush dipping under 60 percent in job approval rating for the first time in 17 months. The FOX News poll, of course, has him at 63 percent. I'm reassured by that.

But what could be a major problem for President Bush, the FOX News poll shows 86 percent think the economic conditions are either fair or poor, while only 13 percent think they are either excellent or good. You know, but I think the latest dip over the last month or so is because of this dithering over North Korea, as you alluded to, and also the dithering of Hans Blix in Iraq.

Now, I think Bush is experiencing a period now that is the storm before the lull. You know, Bush likes to throw the long ball, and, and Washington's not used to it. I mean, big issues, regime change in Iraq, a big tax cut that you whine about all the time, opposing affirmative action and so on. I mean, what Bush needs to do and Republicans on the Hill and so on need to do is just remain steadfast. And the storm will pass, and Bush will prevail.

KONDRACKE: Well, I think Bush will get a bump from the State of the Union message, which is January 28. But the Gallup poll shows not only that there was a 10-point drop in Bush's approval on foreign policy since July, but an 8-point drop on the budget, on handling the budget...

BARNES: Right.

KONDRACKE: ... and 15 points on taxes. And what I think people are looking at is, here he is, cutting taxes at the very same time that they see their states are cutting back on Medicaid and can't...handle the new education responsibilities that they have and can't handle their homeland security responsibilities, which is a big issue. And they wonder, What in -- what is Bush cutting taxes for?

BARNES: Mort, you have such a visceral...

KONDRACKE: I do.

BARNES: ... reaction to tax cuts.

KONDRACKE: ... it's priority.

BARNES: Mort, Mort, I can see why...

KONDRACKE: It's priority.

BARNES: I can see why you get mad when anybody calls you a conservative, because you're not.

KONDRACKE: I'm not, I'm not.

BARNES: Right, OK.

KONDRACKE: Homeland security first, cut taxes later.

Click here to order the complete transcript.

Copy: Content and Programming Copyright 2003 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2003 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.