This is a partial transcript from The Beltway Boys, August 16, 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

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will view this rolling blackout as a wakeup call, a wakeup call for the need to modernize our electricity delivery systems, and we'll respond.

(END VIDEO CLIP)

MORT KONDRACKE, CO-HOST: Well, nobody's quite sure what caused the blackout all over the Northeast, but the parties are beginning to finger point right way. Dick Gephardt (search) and Hillary Clinton (search) both blamed the Bush administration (search). On the other hand, you know, Bill Clinton was president for eight years before 2001, and presumably the problem was developing during, during those days too.

FRED BARNES, CO-HOST: Yes.

KONDRACKE: And it is environmentalists who have largely been blocking the building of, of new power lines.

BARNES: Yes, right.

KONDRACKE: So it…I…on the other hand, I do think that, that the Bush administration was a little slow reacting, and especially the Energy Department. You had Bill Richardson, Clinton's energy…secretary, was all over the television network, and Spence Abraham was nowhere to be seen.

What…one thing that this will do, though, is, as President Bush said, provide a wakeup call. There is going to be action on this, on this problem pronto. There needs to be.

BARNES: Yes, so that's the hot story.

KONDRACKE: Yes.

BARNES: Yes, power grid.

KONDRACKE: Power grid, power grid.

BARNES: All right, OK. But look, I think, you know, looking at this, and I'm not an expert on electricity transmission, and I don't think you are either, but there's one fact that stands out to me, and that is that demand for power is up 30 percent, and transmission capacity is up only 15 percent. That seems to me to be a recipe for a problem.

We need some incentives to…for private power companies to build more…transmission lines, and, I don't know, you're going to have to do something about the NIMBYs and the, and the environmentalists to get them from blocking these things.

Two other things struck me. One, I thought Mayor Bloomberg of New York did a wonderful job. He was calm, but he was also very informative, you know, told us first that terrorists were not involved.

And secondly, though, I am so tired of these stories. There was one on the front page of The Washington Post of how resilient and patient and wonderful New Yorkers are. You know, this orgy of self-congratulation about New Yorkers, how they struggle through these horrible times.

This was not 9/11, where they did do fine. How about the people in Cleveland? Let's hear about them, or the people in Detroit.

KONDRACKE: ... because the media is not based...

BARNES: I know, I know…OK.

Hot story number two is…and this is the real hot story…recall reality. Now, the recall in California is important not just because Gray Davis (search), the governor, is toast, or because he may be replaced as California governor by Arnold Schwarzenegger (search), the famous actor.

There is a big picture here, Mort, and it's why I'm for the recall, in principle and in practice. I mean, it is an extraordinary tool, but these are extraordinary times. And three big questions may be answered with yes by this recall.

Number one is, will the political class in Sacramento be ousted? Number two, will the budget mess be fixed? And number three, will California's decline be reversed? With Davis out and maybe Arnold Schwarzenegger in, the answer to those could be yes. And there is no alternative to the recall. It is the only hope for California in the short run and maybe the long run.

KONDRACKE: Yes, I have no quarrel with the recall. After all, Gray Davis would have been ousted in, in the last election...

BARNES: Right.

KONDRACKE: ... had the Republicans nominated a decent candidate...

BARNES: Yes.

KONDRACKE: ... which they did not.

BARNES: They did not. OK.

Let's look at the major contenders, starting with Governor Gray Davis, who, I think, the only thing you need to know here is that he is less popular in California than Richard Nixon (search) was at the pit of Watergate (search).

KONDRACKE: Yes, the best line I've heard about Gray Davis is that, that he is the coin-operated governor. Special interests put the money in...

BARNES: Yes.

KONDRACKE: ... and the policies come out.

BARNES: Yes, right...

KONDRACKE: Pay to play, right.

BARNES: OK, Arnold Schwarzenegger. Now, he is lining up a lot of big-name endorsements of smart people, Warren Buffett, the world's greatest investor, George Schulz, former secretary of state. I still think he's got to come up with some of the right policies.

Now, if he listened to Warren Buffett on taxes, Warren Buffett indicated in that Wall Street Journal interview that he wanted to raise property taxes. That is a loser for Arnold Schwarzenegger. He needs to get some other economic advisers, not from a stock picker.

KONDRACKE: Arnold Schwarzenegger is not your kind of conservative.

BARNES: Yes, well, I know that.

KONDRACKE: Look, he, he believes that you're going to restore the economy. You know what to do? To provide...

BARNES: Right.

KONDRACKE: ... services. My lord. I mean...

BARNES: Yes.

KONDRACKE: ... I like that, that kind of…the…that kind of ideology...

BARNES: Yes, yes.

KONDRACKE: ... the question is, can he deliver? That's the question.

BARNES: Lieutenant Governor Cruz Bustamante (search), you know, he's using this complicated no/yes argument, no on the recall, yes on me. I think he's got to, to convince Democrats that forget about Gray Davis. The only Democratic hope is me, Cruz Bustamante.

KONDRACKE: Yes, well, I think the Democrats and the unions behind them are going to stop saying no to the recall and start saying Cruise with Cruz, and just forget about Gray Davis, because he's gone.

BARNES: OK. Republican State Senator Tom McClintock (search), who's been around fighting the political class in Sacramento for a long time. I think he's an impressive guy. He threatens to drain votes from…Schwarzenegger, and he's not going to drop out.

KONDRACKE: Yes. I think some Democratic fat cats and maybe some unions are going to steer money to McClintock...

BARNES: Yes.

KONDRACKE: ... in order to tap votes...

BARNES: Yes.

KONDRACKE: ... away from Washington.

BARNES: Yes, might do that.

OK, finally, Bill Simon (search), who, the businessman, who lost to Gray Davis in the election last fall. You know, I think in the end he might drop out. He's not a party wrecker, he's not a Terminator wrecker, a Terminator terminator, and he really doesn't have a chance of winning this time.

KONDRACKE: So you think McClintock is a party wrecker?

BARNES: No, but I just think he thinks he was there. Look, he's been there a lot longer than Schwarzenegger has. He's been fighting these fights. He thinks Schwarzenegger should defer to him.

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.