This is a partial transcript from "Your World with Neil Cavuto", January 27, 2004, that was edited for clarity.

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NEIL CAVUTO, HOST: Now to Jack Kemp (search), who says all of [the Democratic presidential candidates] are shooting themselves in the foot on taxes (search). Jack Kemp, of course, ran for vice president on Bob Dole’s ticket in 1996. He’s co-director of Empower America, former secretary of Housing and Urban Development. What a resume.

Jack, good have you.

JACK KEMP, FMR. VICE PRESIDENTIAL CANDIDATE: Thank you, Neil. Glad to be with you.

CAVUTO: I’ve followed a lot of your columns over the last year or so, talking about this issue and how Democrats, more to the point, could be hurting themselves on it. But they’re going to keep pushing the deficit and saying, tax cuts, big tax cuts, to big folks, big deficits. You don’t think it’s going to register?

KEMP: Well, I think the problems and one of the reasons that Tony believes that they are going to stay pretty neck-and-neck through the next many primaries is they basically all stand for essentially the same thing: deficit mania, they wanted to raise taxes, and they want to raise tariffs. And they basically buy into kind of the McGovern wing of foreign policy. So if you combine McGovern’s foreign policy with Mondale’s tax increases, and Herbert Hoover’s tariff increases, you’ve got a recipe for slowing the economy down, if not bringing on a recession.

CAVUTO: But do you think Republicans are vulnerable on this issue, Jack? Because one of the issues that you have said, you are all for tax cuts, and a lot of people are, but your own party has really lost its spending resolve here. Four hundred billion-dollar Medicare prescription plan now, billions more to deal with this immigration plan of the president’s. They want to send a man to the moon and then Mars. Who knows how much that’s going to cost.

So I don’t see the resolve on Republicans’ part to watch spending.

KEMP: There is a spending wing of the Republican Party, no doubt about it. I think the president, though, has steered a pretty good course. But clearly, with the economy recovering, without any inflation, unemployment dropping to 5.7, it has to go lower. But the growth of the economy is expanding.

And I want to make one more point about the Democrats. There is not a kind of a John F. Kennedy wing of their party, or even Bill Clinton wing of their party. Bill Clinton cut tariffs. You have Mack McLarty on here next, and he’s a good friend, but he would acknowledge, I think, that Clinton got the capital gain tax on welfare reform, pushed NAFTA, cut tariffs, and had a strong economy.

There is no strong economic growth message coming out of the Democratic Party and the candidates. There’s no "let’s get America moving again" candidate. I think that is a mistake for them.

CAVUTO: But it is interesting. It comes at a time -- just a couple seconds ago, Jack, we got word that Kraft Foods is going to be laying off 20,000 people. So this jobs recovery, or jobless recovery, more to the point, is still an issue the Democrats are going to pounce on. They have in Iowa, they have in New Hampshire.

KEMP: Oh, yes.

CAVUTO: Do you think it is an issue that’s going to resonate in the fall?

KEMP: Well, I think it resonates. I don’t know how much it will resonate in the fall.

Clearly, we haven’t had the job growth that we want. But that is basically a lagging indicator. If the economy continues to grow, Neil, at five to six percent, for one or two or three more quarters, you’re going to see unemployment drop into the four percent range, which is too high for Jack Kemp, because I believe in full employment. But nonetheless, I think it will take that issue away from the Democratic Party.

CAVUTO: All right. Jack Kemp, thank you very much, sir. Appreciate it.

KEMP: Thank you.

CAVUTO: Former vice presidential candidate, Jack Kemp.

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