This is a partial transcript from The Beltway Boys, August 2, 2003, that has been edited for clarity. Click here to order the complete transcript.

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FRED BARNES, CO-HOST: Our guest tonight is Indiana Senator and DLC chairman Evan Bayh. As you saw earlier in the show, Senator Bayh was the keynote speaker at the Democratic Leadership Council's annual conversation in Philadelphia this past Monday, where he had some harsh words for Howard Dean (search) and the liberal left-wing Democrats.

Welcome back, senator.

SEN. EVAN BAYH, D-IND., CHAIRMAN OF THE DEMOCRATIC LEADERSHIP COUNCIL: Good to be back, Fred. Thank you.

BARNES: You know, there was a moment I was told about at that Philadelphia conference when you were asked by a reporter what was responsible for Democratic woes, or what was more responsible, was it Republican attacks or Democratic mistakes? And you answered, "Assisted suicide," which silenced the room, I'm told.

What did you mean by that, exactly, and could you elaborate on it?

BAYH: Sure, Fred. What I meant by that is that if we go off to the far, far ideological left, we will have played into the hands of those who want to do us in. And I'm sure that the Republicans would be happy to hit us over the head with that, with Karl Rove (search) starring in the role of Jack Kevorkian in this case.

MORT KONDRACKE, CO-HOST: Well…what is so far left? Tell us specifically what it is that the candidates are saying that can be described as far left.

BAYH: I'd say there are three things we have to watch out for, Mort. First, on the security issue, I don't think the American people will listen to us if we're not credible on national security following 9/11. Things have fundamentally changed. And while the Bush administration has made its fair share of mistakes, and we are right to point those out, I don't think we should overreact and go back to passivism or isolationism (search).

I think we need to have a robust posture for defending America...

KONDRACKE: Stop.

BAYH: ... in the finest tradition...

KONDRACKE: Just stop.

BAYH: ... of the Democratic Party.

KONDRACKE: Just stop right, stop right there. Who is saying what that makes you sound pacifist?

BAYH: Well, when people, I'm not going to name names here, Mort, I don't think it's good to personalize this. But when people don't know whether it's a good thing that Saddam is gone or not, whether his sons...

KONDRACKE: That's Howard Dean.

BAYH: ... have been killed or not...

KONDRACKE: That's Howard Dean, right there, yes.

BAYH: Well, I think…I'd prefer to focus on the positive, and that is, whether you were for the war in Iraq or against the war in Iraq, you have to explain that in terms of an aggressive policy of defending our national security at home and promoting freedom abroad, in the finest traditions of Harry Truman (search) and John Kennedy (search) and FDR (search) and Woodrow Wilson (search).

I mean, if…for a generation or more, the Democratic Party has been synonymous with strength and security and freedom abroad. I think we need to advocate that going forward.

BARNES: Yes, one of the other two things, you said there were three things. You mentioned security. What are the other two?

BAYH: Well, the other two things, Fred, would be for all the problems of the fiscal policy with the current administration, and they are substantial, I don't think we can afford to be seen as a tax-and-spend party or for big government just for big government's sake. I think we need to be for accountability and producing results. So that's on the fiscal side of things.

And on…for lack of a better term, there's a cluster of issues that involve values. I don't think our party can be…afford to be seen as a…an elitist party that takes a condescending view of people who are devout, for example, people who are patriotic, folks who hunt and fish, things like that.

BARNES: ... wait a minute…I want to just go to this poll that was conducted by the DL…for the DLC by former Bill Clinton pollster Mark Penn that shows the Democratic Party has some perception problems among voters, and it shows majorities thinking that the party stands for big government, is too liberal, is dominated by special interests…and is out of touch with mainstream values.

I suspect you've seen this poll, which seems to represent exactly the problem you're talking about, senator.

BAYH: Well, that's it in a nutshell, Fred. You know, we've made some progress during the '90s in convincing the American people that Democrats could be trusted with their money, that we stood for results and accountability and efficiency, and not just…we didn't just measure success in terms of how much we spend, but instead of…what does that expenditure produce?

I think that's very important. And in terms of economic growth, I think it's important to understand that before you can help the less fortunate by redistributing wealth, you first have to create it. So an understanding of what leads to investments and job creation, what does it take to be competitive in the global marketplace of today and tomorrow, I think all of those things are important for the Democratic Party to advocate and understand.

KONDRACKE: Now, senator…I don't know of a single one of the Democratic candidates who is not talking about repealing at least part of President Bush's tax cuts…isn't any of them going to be vulnerable to the charge that he's, that he's increase taxes?

BAYH: Well, I think those who advocate across-the-board repeal, including for working-class families, including for married couples, including the child credit that helps families with children, I think they're more vulnerable, to be sure.

Mort, my take on this would be to say, look, we need to get our fiscal house in order. But let's first focus on things that we can do to save money by making the government more efficient. Let's plug up loopholes, for example, that allow corporations to move their…just by opening up a mailbox in Bermuda, to slash their, their tax burden by millions of dollars.

Let's focus on those things. And then if you have to look at repealing some of the tax cuts, we'll have that debate later. But it's a matter of priorities. And I think we're at risk when we run out and say, By gosh, the first thing we're going to do is just raise taxes across the board, including on middle-class families, folks who really could use a helping hand.

BARNES: Well, is it harmful for the Democratic Party to have its leading candidates of the presidency actually debating how much they're going to raise taxes? Nobody's talking about cutting them. But one says, I'm going to raise them a lot, and another says, Well, I'm not, I'm not going to raise them quite that much.

BAYH: I happen to agree with those, Fred, who focus on preserving middle-class tax cuts and expanding middle-class tax cuts. So this doesn't become a debate in terms of who's favor in higher…in favor of higher taxes or lower taxes. Instead, it's a question of which kind of tax cuts? What will do the most to stimulate the economy? What will do the most to create opportunity and fairness in our society?

I think that's how we get out of that box.

KONDRACKE: The, the subject of gay marriage (search)…has come up, as you know. Do you expect that that is going to be a wedge issue in…this campaign? And where…how, how do you think your party's going to stand on it?

BAYH: That's a great question, Mort, and I hate to say I don't know, but I don't know. I suspect that the Republican Party will try and make it a wedge issue in this election. And how that will play out for us will all depend on what our nominee has to say on the subject.

You know, I go back to the 19...

KONDRACKE: Does favoring civil unions, as many of your candidates do…will that be…make you vulnerable?

BAYH: I don't know. I suspect…I was about to say, you know, Bill Clinton championed the Defense of Marriage Act, and I, I supported that. I suspect most of our candidates will support that. When it comes to trying to give economic fairness to, to gay couples, I think that's a different issue and not as great a vulnerability.

KONDRACKE: Thanks, senator.

BAYH: Good to be with you.

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