This is a partial transcript of "The Big Story With John Gibson," Nov. 8, 2004, that has been edited for clarity.

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(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (search) (D), NORTH CAROLINA: You can be disappointed but you cannot walk away. This fight has just begun.

(END VIDEO CLIP)

JOHN GIBSON, HOST: Oh really?

Democrats still licking their wounds after last week's defeat, but they're not about to roll over. So what is their game plan and how will Republicans respond?

Joining me in Washington, the Republican Strategist, Rick Davis. He was Senator John McCain's Presidential Campaign Manager. And here with me, in New York, Lanny Davis, White House Special Counsel during the Clinton administration.

I can't tell you how many million hours I have spent on TV with Lanny Davis and it's the first time we have met in person.

LANNY DAVIS, FORMER WHITE HOUSE SPECIAL COUNSEL: You're better looking in person.

GIBSON: Thank you very much, Lanny. I appreciate it.

L. DAVIS: Sucking up already.

GIBSON: Yeah. So, Lanny, do I suspect that the Clinton wing of the Democratic Party is now going to reassert itself and say, "You guys that want to run far, far left, you blew it, it didn't work, now come back to the center with us."

L. DAVIS: No.

GIBSON: Oh, come on, Lanny.

L. DAVIS: John Kerry, to his great wisdom, was and adopted the Clinton centrist strategy and, in fact, the new Democrat Clinton strategy still prevails.

Hillary Clinton is in favor of balanced budgets, did vote for the resolution on the war, didn't think the President would take us in under misleading circumstances.

But I think you're going to find the Democratic Party still commands the center. I hope President Bush goes back to the center where he belongs and governs from the center.

GIBSON: Rick Davis, Hillary Clinton (search) — we'll ask Lanny about it in a second but let's warm him up here — would you guess that Hillary Clinton is the present standard-bearer of the Democratic Party?

RICK DAVIS, REPUBLICAN STRATEGIST: Oh, I think she was probably the standard-bearer of the Democratic Party before the last primary cycle. She just chose not to run.

And I think the question that will haunt her throughout the course of the next two years, especially, is: "Are you running for president or are these ideas that you are going to promote to the good of the nation, not your own political good?"

So, she's got a lot of pressure on her and everything the Democratic Party does: get rid of Terry McAuliffe (search), keep Terry McAuliffe; get rid of new leadership in the Senate, keep old leadership in the Senate. All of this is going to be framed by her interests, and so she's been under a lot of pressure.

GIBSON: But Lanny, look, she said — and I guess it was judged by both her and Bill Clinton — that it was too early for her to run for president. She had not served a full term in the Senate and so forth, so forth.

So, somebody else ran, somebody else lost. Now the fog has cleared, hasn't it? What else is there for the Democrats but a return to the loving arms of the winning Clintons?

L. DAVIS: Well, I think it's the Clinton administration policies that we're reaffirming because John Kerry ran on those policies and despite all of the chatter here...

GIBSON: Then what was missing, personality?

L. DAVIS: A couple of percentage points, the war on terror, changing commanders in chief in the middle of the war, and terror made it pretty tough for John Kerry (search). I thought he was going to win because the President never got over 50 percent in approval ratings.

GIBSON: It was very close, it could have gone.

L. DAVIS: So, let's just say that I think Senator Clinton's best strategy is to be a good senator. Remember, she ran strongly in rural upstate New York, what you would call red state areas of New York. I think that Senator Evan Bayh (search) is an outstanding senator.

We have some governors. We have to talk to people in the red states but we also have to remember what our base is and, just as President Bush promised to govern from the center, we have to stay in the center.

GIBSON: OK. Rick Davis, do us all a favor: offer Lanny some advice. Which issue should he keep, which should he throw overboard?

If he is running the Democratic Party — and he is about as close as we're going to get in here — what do you get rid of and what do you keep in order to get a little more red into your color?

R. DAVIS: Well, I think aside from the issues — I mean he mentioned Senator Bayh — I thought Senator Bayh had a right attitude about this. He said that the Democratic Party has become too defined by their own resentments. And that's right.

They have been against so many things for so many years that they have to learn how to be for something. And I think there are a lot of issues they can be for. They've got to shred some of the cloak that has surrounded them on being captive of the trial lawyers.

They have to vote for some of these reforms in medical malpractice, and things like that to make...

GIBSON: Lanny is a trial lawyer.

R. DAVIS: But Lanny has got his grip around the Democratic Party just like the other trial lawyers do.

So on some of these things, they have to think about what is beyond their limited constituency and how do they branch out. These are sort of simple, easy to understand things that, yes, it will hurt them in the short run with their fund-raiser but it will help in the long run with...

GIBSON: OK, Lanny, so once again, if you could give up something that was a loser for the Democrats this time around, what would you do?

L. DAVIS: Well, first of all, I like Rick's last name. So, let's just start with that.

GIBSON: Cousin Davis.

L. DAVIS: And second, I am in favor of tort reform. I think it's long overdue. I think the Democratic Party ought to take a lead tort reform.

And, finally, I think that we are the party now of fiscal responsibility. We have a deficit spending administration that has to find a way to reduce this deficit.

I think we ought to help President Bush with a bipartisan solution on Social Security and remind people we are a party of strong national defense, and there are issues that President Clinton stood for: free trade, and I certainly think welfare reform, is all under Hillary and Bill Clinton's leadership.

And that's what we need to remind the American people of.

GIBSON: Can you cook up a "don't ask, don't tell" policy for marriage?

L. DAVIS: What was that question. That is a Gibson question, Rick. Will you help me on that?

R. DAVIS: I can't wait to hear him get out of this one.

GIBSON: I mean, no, but doesn't it — Rick, this is my point.

L. DAVIS: I'm in his studio and he's aggravating me.

GIBSON: Lanny's problem and the Democrats' problem is they have — in the Democratic constituency, there are opposing views. There were pro-war Democrats, anti-war Democrats. There were...

L. DAVIS: As opposed to the Republican Party?

GIBSON: Well, but much more uniform in the Republican Party.

R. DAVIS: Nothing is more documentable than their bicoastal, cultural disclosures. In Massachusetts and in San Francisco, the moral debate of this election started with marriages of gays.

And that began the election cycle.

GIBSON: I have to give Lanny the last word on that because we are going to run out here.

L. DAVIS: Excuse me, Arnold Schwarzenegger (search) and Rudy Giuliani (search), pro- choice, pro-gay marriage. Certainly Arnold Schwarzenegger said he had no problems with it.

The Republican Party is now gripped by the far Christian right. They've got to return to the center. That's where George Bush began.

GIBSON: Lanny, you want their votes, you can't call them names. Lanny Davis, thanks. Rick Davis, thanks to both of you.

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