This is a partial transcript from The Beltway Boys, January 5, 2003, that has been edited for clarity.

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MORT KONDRACKE, CO-HOST: Here we go with the first set of ups and downs for 2004.

UP: The U.S. Terror Alert Status

It's still on high, or code orange, even after the worldwide successes on New Year's celebrations. U.S.-bound international flights have been delayed or canceled seven times in the past week due to security issues, so potential terrorism threats and security concerns continue.

Well, look, I'm worried on several counts. Usama bin Laden (search), wherever he may be, is looking at Colonel Qaddafi and Saddam Hussein basically chickening out in favor of the United States, and now, he says, it's up to me. If anybody's going to bring down the United States, it's going to be me. So he's got lots of motivation.

Secondly, the U.S. remains very vulnerable to a terrorist attack. One thing that the Democrats and Howard Dean are right about is that Bush has not done enough to harden us against homeland security threats. And, you know, this could happen at any time.

And third, you know, a well-timed, well-placed set of attacks on this country could really undermine the U.S. economic recovery, and even affect the outcome of the 2004 presidential election.

So, I mean, I, you know, as far as I'm concerned, we're orange through the year.

BILL SAMMON, GUEST CO-HOST: Mort, you're starting to sound like Congressman Christopher Shays, the Connecticut ... Republican...

KONDRACKE: No, I stipulate, I would have gone to Times Square (search).

SAMMON: He is the Connecticut Republican who said it would not be a good idea to go to Times Square, that he would never be caught dead going to the Times Square, which was exactly the wrong political attitude. The opposite tack was taken by New York City Mayor Michael Bloomberg, who said ... Look, party at will, leave the security to the experts, and let us worry about that.

Now, granted, the experts have had to do a lot of worrying lately, what with the extended, the heightened security alert, the canceled flights. But I think what that shows us is that it's working, that all of this worrying and all of this active ferreting-out of plots is actually bearing fruit.

Now, think about this. We are now in the year 2004, and we have not had a catastrophic terrorist attack on U.S. soil since the year 2001. Nobody would have thought of that after 9/11.

Granted, it's still a dangerous world, 2004 is going to continue to be a very dangerous year. And the last thing the administration needs to do is let its guard down.

So I don't think they will. But I also think that it's hard to criticize Bush for not doing enough.

UP: Democratic Presidential Candidate Wesley Clark

Clark's new campaign ad is not wink-wink, I repeat, not an endorsement from former president Bill Clinton. Take a look at this ad, Mort.

(BEGIN VIDEO CLIP, POLITICAL AD)

ANNOUNCER: What if we could have a president who, in his lifetime, has seen ordinary people do extraordinary things, because he believed in them, who was decorated for valor and for service to our country, who helped negotiate a peace, and has dedicated his life to protecting our country, because, like you, he believes America is ready to do great things?

A new American leader.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: I'm Wes Clark, and I approved this message.

(END VIDEO CLIP)

SAMMON: This ad should put to rest once and for all, Mort, the question of whether Clark is the Clinton candidate. He is the Clinton candidate. And, you know, but it's interesting, he is smart enough to sort of stake out the centrist turf of the Democratic Party, that is, the Clinton wing, as opposed to the left-wing turf, which is, of course, the Dean wing of the Democratic Party, because that's already taken.

And I think it sets Clark up as the clear alternative to Dean, if Dean stumbles. The timing is great, because, guess what, Dean is stumbling, as we've discussed earlier in the show. The guy is having a very rough patch.

Secondly, the press, which has a collective personality, is now spoiling for a horse race. They are playing up everything that Dean does wrong, and every bit of progress that one of his rivals makes, because it's boring for them to cover a coronation. They want to see a horse race.

The other thing, good thing about this ad that I like in terms of what it does for Clark is that it plays up his original greatest strength, which are his national security credentials.

I mean, think about it. This guy has on his resume the job title Supreme Allied Commander of NATO. I mean, can you imagine having that on your resume?

This is the strength that Clark should play to. But having said all that, you got to remember, this is one ad, this is one fleeting image of Bill Clinton, who doesn't speak any lines in this ad, and it will not single-handedly make up for the stumbles that Clark suffered early on in his campaign. In fact, the one thing that Clark's shares with Dean, one characteristic that they share, is a penchant for self-inflicted wounds.

And certainly Clark inflicted a lot of wounds on himself.

KONDRACKE: Well, and Clark has been implying that, and even stating that George Bush should have done something about 9/11 that, you know, he said it's his responsibility, he said that he was warned by the Clinton people that Usama bin Laden was the greatest threat and then did nothing about it, and all that kind of stuff.

And, and stuff that really has not yet been proved, although it's interesting, it's interesting speculation.

Anyway, on this Clinton point, one of Dean's other gaffes was to diss Bill Clinton big time, and then, of course, pull it back, you know, implying that, that Bill Clinton was somehow doing Republican-style governing.

SAMMON: Absolutely.

KONDRACKE: During his presidency. And, to further the point, Dean's big campaign video was prepared by Linda Bloodworth, who is, an old...

SAMMON: And from the Clinton White House, right.

KONDRACKE: ... Clinton ally, Clark is from Arkansas, it goes on and on.

And Clinton, Clark does have the advantage of being the number two Democrat in fund raising, has almost as much money in the bank, as Howard Dean does, and he is inching up to the point where he is almost number two now to Dean in New Hampshire. He's a couple, only a couple points behind John Kerry. If he passes John Kerry and becomes the runner-up to Dean in New Hampshire, then...

SAMMON: He's the alternative.

KONDRACKE: ... then he's the alternative to Dean...

SAMMON: Yes, absolutely.

KONDRACKE: ... February 3.

SAMMON: Absolutely.

DOWN: U.S. Attorney General John Ashcroft

KONDRACKE: This past Tuesday, Ashcroft added to his list of recent flaps by recusing himself from the probe over leaked information that led to the identification of undercover CIA agent Valerie Plame, wife of Bush critic and former ambassador Joseph Wilson.

Here's U.S. Deputy Attorney General James Comey on Tuesday on Ashcroft's decision.

(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY ATTORNEY GENERAL: The attorney general, in an abundance of caution, believed that his recusal was appropriate based on the totality of the circumstances and the facts and evidence developed at this stage of the investigation. I agree with that judgment.

(END VIDEO CLIP)

SAMMON: Although I agree that Ashcroft has gone through a rough patch in recent months, and especially some of these court decisions that went against the Justice Department, I think that was actually a good thing that he recused himself, politically, from this investigation. And I'll tell you why.

The Democrats and the press have been whining for months that he is not capable of objectively investigating the White House. Let's face it, he has close ties to George W. Bush and the White House. So I think it was politically the right thing for him to do, step aside and let a special outside counsel, whatever you want to call it, prosecutor, take over.

The bad part of this is that while it may be politically expedient, it is never a good thing for any administration to cede authority to an outside special prosecutor.

I remember during the early years of the Clinton administration, when there were voices inside the White House telling Bill Clinton, Just appoint a special prosecutor and get rid of this Whitewater thing, and we know what that morphed into, the Monica Lewinsky (search) case, which ended up ...

KONDRACKE: You think there's going to be Monica Lewinsky?

SAMMON: Well, no, I don't think this will be. But it never -- sometimes these things end very badly, and sometimes, you know, they seem politically expedient at the moment, and then they end up disastrously.

I don't think it's going that way, but it always gives you pause when you appoint your first special outside counsel.

KONDRACKE: Yes. Woe, woe be to the leaker here, because the special counsel in this case is Pat Fitzgerald, the U.S. attorney in Chicago, who has the reputation of being relentless and highly effective.

UP: President of Pakistan Pervez Musharraf

Not only did Musharraf survive multiple assassination attempts in 2003, he has managed to extend his presidency via a special constitutional amendment.

KONDRACKE: Look, President Bush, you know, is all for democracy around the Islamic world, but in -- this is one case where he's not pushing very hard, because Musharraf, what the alternative to Musharraf could be chaos in Pakistan, nuclear armed chaos.

SAMMON: Well, you got to remember, Musharraf is a military general who came to power in a military coup. So it is significant for him to be giving up his title as commander in chief of the army. But he gets a lot in return. He gets to stay in office through 2007, he gets the power to sack the parliament, and in fact, some of these former prime ministers of Pakistan say that it was giving too much power to Musharraf.

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