This is a partial transcript from The Beltway Boys, May 10, 2003, that has been edited for clarity. Click here to order the complete transcript.

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FRED BARNES, CO-HOST: Mort, the hot story, and indeed a big and very hot story, Bush's big win on the tax cut in the Senate (search). Now, this tax cut victory, I think, is bigger and more important than most people in Washington or the political community realize. Why?

Because Bush got almost all the elements of his original tax proposal are in this bill that passed the Senate, you know, the individual rate cuts, the -- importantly, the elimination of the, of the tax on stock dividends, minimizing the marriage penalty, increasing the child tax credit, and so on.

And the Senate version, I think, is likely to prevail in next week's House-Senate conference, because I think the White House is going to like the Senate version more, and so with Bush being a player in this conference, there's a good chance it will be the one that will prevail.

Now, listen to the argument from the Senate floor on Thursday, Thursday night, between a, a Republican and a, a Democrat, Max Baucus (search) the Democrat, and Don Nickles (search), the Republican, and, and then I'll explain to you what you can learn from what they're saying.

MORT KONDRACKE, CO-HOST: OK.

(BEGIN VIDEO CLIPS)

SEN. MAX BAUCUS (D), MONTANA: This is a huge Yo-Yo tax provision.  Now you see it, now you don't. Fifty percent one year, 100 percent the next year, 100 percent another year, then zero. You tell me if any corporation's going to be able to plan on whether or not to pay dividends or not with a tax policy like that....they're going to wait for the 100 percent, and they're not going to know whether it's going to be continued along or not. This is absurd.

SEN. DON NICKLES (R), OKLAHOMA: It's much more robust than we have in the underlying bill. It's what the president wants. I think it will grow the economy and create jobs. And I urge my colleagues to vote in favor of the amendment.

(END VIDEO CLIPS)

BARNES: All right. Let me talk about Max...Baucus first. He described it perfectly, you know, 50 percent, and then 100 percent...the entire tax is gone...

KONDRACKE: ...zero.

BARNES: ...but then it doesn't go to zero...

KONDRACKE: Yes, I know.

BARNES: ... there's where he's wrong. It's going to be almost impossible to reinstate it. I mean, there are zillions of stockholders in this country now who get dividends, and they're not going to sit by and allow it to be reinstated.

Now, Max -- rather, Don Nickles said this is a robust tax cut. But you would think, Gee, it scored at only a loss of $350 billion in tax revenue, and the House billion is $550 billion. So shouldn't the House bill be better?

Not necessarily, because it's the incentives to work, save, and invest that are in the bill that matter the most. And that's why the Senate bill is probably better, even at this lower price.

KONDRACKE: Well, there's no question but what this was a political victory for Bush, as you say. And -- because he got all the...he got the dividend tax cut, the way, the way he wanted to, and it won't sunset the way, the way...

BARNES: Yes.

KONDRACKE: ... it's supposed to. Therefore the cost of it will be much greater. The liberal group, Center for Budget and Policy Priorities, estimates that the bill will be...something close to the $726 billion that Bush initially wanted.

But this is a victory a lot like the Iraq war. Now Bush has got to deliver, growth, jobs, prosperity, before the 2004 election, you know. If he doesn't deliver, then he has got no excuses, no one to blame. It's all on him.

OK, the other hot story is the Saudi snooze. The bombing of -- in Riyadh of a residential community, killing 38 people, 34 people, I believe, eight...

BARNES: Americans.

KONDRACKE: ... Americans, you know, the Saudi reaction to that reminds you of, What? Al Qaeda? Which al Qaeda? Oh, that al Qaeda...

BARNES: Yes, yes.

KONDRACKE: ... you mean that al Qaeda. This -- suddenly they've realized that the terror, that they've got a terrorism problem...

BARNES: Yes.

KONDRACKE: ... and they're vowing to crack down. I will believe that when I see it, based on their record. And it does raise questions about all the assurances that we've been getting from the Bush administration...

BARNES: Yes.

KONDRACKE: ... ever since the first attack by al Qaeda, that, that the Saudis have been doing everything that they possibly could. Clearly they did not do...as much on security.

BARNES: Right.

KONDRACKE: Now, all this is developing into a, into, in an American domestic political issue, thanks to Bob Graham, the senator from, from, from Florida, who just...

BARNES: Thanks?

KONDRACKE: Well, I mean, he's, he's, he's the one who's raising it, and listen to him.

(BEGIN VIDEO CLIP)

SEN. BOB GRAHAM (D-FL), PRESIDENTIAL CANDIDATE: As I said last fall, I thought the priority for the United States should be to win the war on terror before we took on other evils in the Middle East and Central Asia.  If we had done that, al Qaeda would not have had the opportunity to regenerate...

(END VIDEO CLIP)

KONDRACKE: Well, I think that Graham might have traction with that argument if this attack had occurred inside the United States, and everybody was paralyzed by fear that al Qaeda was, was really on the comeback, as he's -- as he alleges.

I think at the moment, the country is where President Bush is.

BARNES: Yes.

KONDRACKE: Watch this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll stay on the hunt until we have totally dismantled the al Qaeda network.

And part of the war on terror was dealing with the dictator in Iraq.

(END VIDEO CLIP)

BARNES: Yes, you know, I think Graham's wrong about that. You can fight the war in Iraq and the war on terrorism at the same time, as the Bush administration has successfully done.

Now, where have the two big terrorist al Qaeda-led or al Qaeda- contracted out attacks occurred since September 11, 2001? Indonesia and Saudi Arabia, two countries that did not take the terrorist threat, the al Qaeda threat, seriously, even though, for the Saudis, Al Qaeda's a homegrown terrorist organization.

So and then the U.S. here, we do take it seriously. Bob Graham does, President Bush does. And, and we said it even more now, because it's clear that the customs and immigration people are going to require an interview prior to giving anyone from any country to get a visa into the United States.

And some people who have been getting them won't be getting them any more.

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