This is a partial transcript from Hannity & Colmes, December 22, 2003, that has been edited for clarity.

ALAN COLMES, CO-HOST: Fact or fiction? Democratic presidential candidate claims that back in September, frontrunner Howard Dean approached him with an offer to be his pick for vice president.

But Howard Dean says it never happened.

Could it be true, and if it is, is Howard Dean getting a little too confident for a man who has not yet won his party's nomination?

Joining us now, vice presidential -- former vice presidential nominee...

GERALDINE FERRARO, FORMER VICE PRESIDENTIAL NOMINEE: Yes.

COLMES: Too bad I have to put that "former" in there. Geraldine Ferraro. And former New York Congressman Rick Lazio.

Good to see you both.

FERRARO: Thank you.

COLMES: What do you think happened here? We started talking to Dick Morris about this. Do things get thrown out like before a campaign or during a campaign?

FERRARO: Actually, I think what happens is candidates will look at the potential of getting support from someone who they might think would be of assistance to them running in the primary and who would be assistance to them later on.

I recall in the primary in 1984 Gary Hart (search), you know, Gary Hart's people were whispering about a potential woman on the ticket, as did -- as was Fritz Mondale.

COLMES: Do you think something was whispered to Wesley Clark...

FERRARO: Who knows, you know?

COLMES: ... dangled in front of Wesley Clark.

FERRARO: This was before Wesley Clark actually got into the race, and maybe it was also some sort of an indication that he could stay out of it.

COLMES: And of course, you guys will make this, all of these Democrats are disorganized. They don't know what they are doing. You've got Dean, who's a lunatic leftist.

RICK LAZIO, FORMER NEW YORK CONGRESSMAN: No.

COLMES: You guys are trying to position Howard Dean as some left wing fringe person for the sake of Republican...

LAZIO: Well, I think, though, on this Clark situation it is probably is a matter of people hearing what they want to hear. And they were probably sounding one another out a little bit.

And Dean probably was probing to see if there was some interest and possibly Clark heard it as an offer.

But I think that's a side issue. That's a process issue and that's not going to...

COLMES: Let me ask you another question. Let me put up a poll. The Associated Press came out with this poll over the last couple of days.

Did the Bush administration make the right decision going to war in Iraq? Sixty-seven percent said it was the right decision. Twenty-nine percent say a mistake. Four percent say not sure.

How can an anti-war Democrat be successful if this really is the mood and reaction of America?

FERRARO: Well, I think that's the reaction that you're seeing once we've captured Saddam Hussein, once, you know, the war is over. There is very little that you can say about what's already gone on.

COLMES: Now you've got Gadhafi?

FERRARO: Absolutely. I mean, he is now turning around.

COLMES: So is this really trouble for Democrats at this point?

FERRARO: You know what? I think if you take a close look at the election, this is not -- that's going to be coming up, obviously. This is an issue now. That's a poll that was taken place within the last couple of days, right after Hussein was captured.

But you know what? It's a long distance between now and November. We still have troops there. We still have troops who are in harm's way. We still have to see if we're going to be able to put the peace in place, which we have not been successful at doing so.

We have to see what a commitment that is for us and the entire Middle East. And so I think there's a long distance between now and then.

OLIVER NORTH, GUEST-HOST: Geraldine, Rick, it's -- let me just jump in here real quick.

FERRARO: Ollie, you're so far away from us.

NORTH: I know. I'm down here. A safe distance. Listen, you've got you and Alan both up there. And I've left Rick holding the ground up there.

FERRARO: He's all right. Don't worry about him.

NORTH: He can cover himself.

I'm curious, Rick, about something you just said a moment ago. That it was a process issue, and yet there is a veracity issue here as to whether Clark really did hear an offer to become vice president.

One of the two of these guys, either Dean or Clark, has to be lying. Don't they?

LAZIO: Well, I give them the benefit of the doubt on this, quite frankly, Ollie. I think the bigger issues have to do with his statement on Hussein, that it's not going to make America any safer. Or I suppose it's OK that we got rid of Saddam Hussein, when there's 400,000 Iraqis are in mass graves.

You know, these are the kind of statements that I think are going to come back to haunt him.

I think he's going to have a huge problem when it comes down to playing to middle America and places like Michigan or down South. I don't know if they are going to buy it into. You hear people like Joe Lieberman (search) or John Kerry (search) on the attack. Sort of a circular firing squad right now with the Democratic nominees.

And they are saying, he's against everything. They are calling him Dr. Dean if Dr. No, according to Joe Lieberman. That's going to be haunting, I think, Howard Dean if he becomes the nominee.

NORTH: Geraldine, one of the folks that I thought was going to be doing far better than they've done so far is Dick Gephardt. I mean, it's almost like his campaign is non-existent.

Is that because he's ...

FERRARO: I don't think that's a fact. I do think that, you know, he's showing very well in Iowa. And he's also looking pretty good in the South, as well.

You know, there's that old story about the tortoise and the hare. I think if you take a look at this race, I think you might describe Dick Gephardt as the tortoise. He's going to keep pushing along. You know, don't count him out because he has a real potential to be the nominee.

NORTH: At least he hasn't reduced him to using four letter words to describe things, like Mr. Dean and Mr. Kerry?

FERRARO: I have to tell you, Ollie, you're old enough to remember 1984. Now, do you recall a debate that I had with one George Bush? And do you recall what George Bush said the day after the debate was over? Do you remember?

NORTH: Yes, I do, but I'm not going to say those words.

FERRARO: Yes? Well, he said to a bunch of steel workers out in New Jersey, he said, "I kicked a little ass last night."

And people turned around and said, "Oh, my goodness." I just said, this is not something to get upset about.

In addition to that, do you remember what Barbara Bush said about me? It was a tougher word.

NORTH: Barbara Bush wasn't running for office.

FERRARO: At the same time, she was making her statement heard. And so those are the things that you take a look at these silly things about...

NORTH: Do you think John Kerry's language is appropriate?

FERRARO: I have to tell you, John Kerry and Wesley Clark and every single one of those guys, for them to use an expletive every once in awhile is not going to upset anybody. Look at their policies.

COLMES: We've got to...

FERRARO: Those are the important things.

NORTH: Geraldine, I want to come back to something from just a moment ago. We talked about profanity and whether or not this works as an issue.

Does Howard Dean at this point now go and say, "Look, they just elevated the terror alert level to high. And I told you before, that we're no safer than we were before 9/11?"

Does he try that as a tactic?

FERRARO: I don't know. I mean, Howard Dean has not called me up and asked me about that. I would suggest that...

NORTH: You probably have more sense than he does. That's why.

FERRARO: I would suggest that that's not probably the direction to go. People are getting very skittish and feeling very skittish, as much as we're told to take it easy and let your life go on as the way it has.

Everybody is a little bit nervous about this. And I think to move the thing politically at this time is not such a good idea.

NORTH: Rick Lazio, is there an issue on which George Bush is vulnerable, like the deficit, an old Republican issue?

LAZIO: If you look at the landscape right now, Ollie, and you've got the power of incumbency. The president is raising a lot of money.

The Dow is back over 10,000. The economy is roaring. Every month since the tax cut, the unemployment has gone down.

We have Saddam; we have gotten rid of the Taliban (search) regime. We've gotten rid of the Ba'athists.

It's going to be pretty hard to beat this president. I think he has established himself with a record of success.

Now, saying that, the country is polarized. It's not going to be a run away. I think it will be a tight race. I think the Bush people will be the first people to tell you that they expect to go out there and earn these votes. So it's going to be a down to the wire campaign.

FERRARO: On the flip side of that, Ollie, we're still with 43 million Americans ... are uninsured with health-care.

NORTH: That's true.

FERRARO: We also have a huge budget deficit and what we're ending up doing is passing that along to our children, grandchildren and our great- grandchildren.

It will go on for years and, in addition to that, you know, the economy is doing great for a bunch of us, but it's not doing so great for middle America yet. And we've got to see that happen.

Almost 2.9 million jobs have been lost.

NORTH: You see these as the issues?

FERRARO: I see the economy as the big issue still, even -- no matter what the stock market is doing right now because again, because again, that's that two percent that's involved in that.

It's got to go a long way to recover what -- a lot of the losses that people suffered when their pension plans went kaput over the last number of years.

NORTH: it's still the economy, stupid? I'm sorry.

FERRARO: As long as, you know, you have interest rates held down artificially, it will continue to be OK. But it's going to be interesting to see what happens over the next six to eight months. Remember, we're a year away from the election.

NORTH: Let's hope Alan Greenspan (search) makes it.

FERRARO: He's been good on this issue.

NORTH: It is clear to me, obviously, that the big issues that they thought they were going to bite on, aren't going to work.

And I think you can hear some of the frustration when you've got people like Madeleine Albright (search) suggesting that somewhere out in Afghanistan you've got Usama bin Laden hidden in a box that George W. Bush can pop him up somewhere in October of 2004.

LAZIO: It makes serious people say silly things. I think you're absolutely right. The president, with the capture of Hussein and the economy roaring on, you know, Geraldine has made her point but the truth, is that unemployment has been dropping every month since the attacks relief package through.

FERRARO: That's high. It's huge.

LAZIO: And starting from when the president took over, quite frankly, during the Clinton regime. And we've had productivity that's at a 20-year high. We've had our growth rate, economic growth rates at a 20-year high. This is great news.

COLMES: You know what? Why bother? Why bother having an election? Why bother having an election? We know what the outcome will be.

LAZIO: I think -- No, that's obviously being facetious.

But the truth is that, you know, there are a number of people that are banking on bad news for America in order to win. I'm not saying who they are.

COLMES: But that's always the case. I mean...

LAZIO: But that's...

COLMES: Wait a minute. Didn't Republicans talk down the economy going into the 2000 election?

FERRARO: Right.

LAZIO: There was never a Republican who was hoping for American foreign policy to fail and for the economy to fail.

COLMES: And there's no Democrat hoping for that either. You don't know...

LAZIO: ... in order to win.

COLMES: You don't know any Democrats.

LAZIO: But that's why Lieberman is calling Dean Dr. No.

COLMES: All right. Let me ask you this. Geraldine, given what Rick said, calling him Dr. No and Gephardt calling...

LAZIO: Joe Lieberman calling him that.

COLMES: Joe Lieberman calling him that. And Gephardt calling Dean inconsistent on Iraq. Dean says Clark was never up for the V.P. One of them is lying. Lieberman says Dean doesn't have the experience.

FERRARO: A primary. That's what it is.

COLMES: My question is, how do Democrats then come together and sing "Kumbaya?"

FERRARO: You know, how did the Republicans come together after the 2000 primary? I mean, you had, how did George Bush in 1980 come together with Ronald Reagan? He called what he was doing 'voodoo economics.' I mean, then all of a sudden he's his vice president.

It happens.

COLMES: Right. It happens.

FERRARO: This is politics.

COLMES: By the way, here's what Howard Dean said. He said, "The capture of Saddam is a good thing." This part of the quote never gets mentioned. "And I hope -- very much hope it will keep our soldiers safer."

That's what he said. Then he said, "But the capture of Saddam has not made America safer."

Now we're hearing...

LAZIO: It's ludicrous to say that. It's ludicrous to say that Hussein, the capture of Saddam Hussein does not make America safer.

COLMES: We're on 'Orange Alert.'

LAZIO: Every month that that guy was out on the loose was a tough month for American servicemen and service women who are over in Iraq.

COLMES: Yes, the service people.

LAZIO: Because people thought he was coming back.

COLMES: Yes. We hope the service people...

LAZIO: For a guy who was funding terrorists, the Palestinian terrorists, $35 million to terrorists, in payments. I mean, this is a guy who was providing aid and comfort, was developing weapons of mass destruction. Used weapons of mass destruction, chemical weapons, on his own people.

FERRARO: Which we have not found yet. That was the reason we went to war.

LAZIO: He used it on his own people.

COLMES: Wait a second.

FERRARO: That was 12 years ago. He did have them.

LAZIO: You have him out of power and you have him in a prison. That Americans are not safer, that's a crazy statement to make.

COLMES: He used weapons of mass destruction, gassed the Kurds during the Reagan administration. They did nothing about it. The Bush administration did nothing about it.

Why didn't he use it, if he had these weapons, during the war that just got completed? Why didn't he use it?

LAZIO: Because he was probably taken off guard.

COLMES: He knew...

LAZIO: They're finding out right now what's going on. But he gassed his own people, gassed the Kurds.

LAZIO: But we know that he had them. He had the capacity to use them.

COLMES: Why didn't he use them?

LAZIO: So you're saying that he would not have used them against us?

FERRARO: We don't even know if he had them. We don't even know if he had them. We've been looking. Remember, that was the main reason why we were going to war.

LAZIO: So the question...

FERRARO: And wait a minute. Let me say something else.

LAZIO: There are 400,000 Iraqis that are in mass graves. Is that not enough to save them from a moral standpoint?

FERRARO: I wonder how many are in North Korea. I wonder how many are in Libya. We haven't gone after these very bad people, too.

LAZIO: They are very bad but why is it some people who are out there who are so critical of George Bush weren't taking full page ads out saying, "We ought to do something about Saddam Hussein" when tens of thousands of people were being executed, when they were using rape as a -- systematically using it as a weapon.

FERRARO: Remember Burundi? We didn't do it in Rwanda. Why did we stand around and not do anything? Are we policing the world? It's the...

LAZIO: Who are out there talking about...

COLMES: Hold on. Let me ask you a quick question. I think its great that Moammar Gadhafi has now said he's caving in.

FERRARO: Absolutely.

COLMES: Doesn't this show, we've been talking about it for months if not years. Doesn't this show that negotiation can work...

FERRARO: Absolutely.

COLMES: ... and that war is not always necessary to accomplish the very same ends?

LAZIO: It shows when you execute a policy of consequences, that then there is action.

There is no possible credible way that Gadhafi and the Libyans, would ever come to the table and say, "Come in and inspect us," if they didn't see what we did to Saddam Hussein.

LAZIO: There is no credible way...

COLMES: And Geraldine...

LAZIO: ... that the Iranians or the North Koreans would be coming to the table if it wasn't for the fact that we have deposed Saddam, removed the Ba'athists.

COLMES: We're wrapping it up. Geraldine, please.

FERRARO: The thing about it is, this all started with Moammar Gadhafi 10 months ago, before we went into Iraq.

But you keep saying that America is safer. The whole problem that we've had since September 11, is that we are concerned about al Qaeda.

Tell me that we have done anything other than give these people a little bit more enthusiastic move on this whole thing.

COLMES: Geraldine...

FERRARO: Now they are stationed all together in Iraq. They have become unified. We should have gone after Usama bin Laden before going after...

NORTH: Geraldine, I just got back from over there. I just -- Geraldine, I just got back from over there. I want to thank you very much for taking time. Merry Christmas to both of you, Geraldine and Rick Lazio. Thank you very much.

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.