This is a partial transcript of "The Big Story With John Gibson," January 20, 2005, that has been edited for clarity.

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(BEGIN VIDEO CLIP)

PRESIDENT GEORGE W. BUSH: I ask our youngest citizens to believe the evidence of your eyes. You have seen duty and allegiance and the determined faces of our soldiers. You have seen that life is fragile and evil is real and courage triumphs.

Make the choice to serve in a cause larger than your wants, larger than yourself, and in your days you will add not just to the wealth of our country, but to its character.

(END VIDEO CLIP)

JOHN GIBSON, HOST: The inaugural parade (search) is officially over. The president has left the reviewing stand and President Bush's second four years are officially now underway.

Let's talk about the Inauguration and his agenda with former Oklahoma Congressman, J.C. Watts, who is here with me, and Democratic Strategist, Chris Lehane.

First of all, J.C., just because you're in the cold, I'll go to you first.

J. C. WATTS, FORMER CONGRESSMAN, OKLAHOMA: John, they told me you could turn the thermostat up.

GIBSON: Yes, you see how effective I am at that.

The president has an ambitious agenda and in the second term, a president is limited. In two years, everybody will say he's a lame duck (search); we're not going to pay a lot of attention to him. How much of this can he get done?

WATTS: Well, I think some of it he can get done, some of it is going to be some very heavy lifting. I think the Social Security thing is going to be extremely heavy lifting, in spite of the fact that I think the president is right.

We will never be able to do anything about our deficits until we can get some entitlement spending reforms: Social Security, Medicare, Medicaid, et cetera. But it's going to be heavy lifting.

Now, the ownership society? I agree with that. He's done much in the last four years. I think you'll see him continue to press that to create that ownership society, and I think members of Congress will follow him on many of those agenda items.

GIBSON: Chris, how much time does a president have to use the levers of power before Democrats go, "Well, wait a minute! We don't have to pay any more attention to him. He's going to be gone in a little while."

CHRIS LEHANE, DEMOCRATIC STRATEGIST: His speech was pretty clear on this. The President beginning his second term literally has about 18 months to get things done.

And it's not only the opposing party, but his own party, which has already been raising concerns about issues like Social Security, which are going to be a problem, because they're going to be running in two years.

You know, it's interesting. If you look at his speech today, there was one thing that was missing, and that was the word Iraq. Iraq is going to continue to be a brooding, omni-presence over this administration and is going to really impact not only his legacy, but his ability to get anything done up on the Hill.

GIBSON: Well, we have an election coming in a little while, and then you're going to hear from him again immediately following the Iraqi election in the State of the Union.

J.C., what about that? Maybe Chris is right. Maybe the balance of the president's term in office is going to be trying to take care of Iraq.

WATTS: Well, John, I think Iraq is another threshold that the president would have crossed. Last June 30, when he turned power over, or when power was turned over to the Iraqis, that was a milestone. I think this election's going to be another milestone.

Those things are feathers in the president's cap. I think the more — as has been said all along — we can Iraqi-ize the situation in Iraq, the better off we're going to be.

So in making that happen, this election in a couple of weeks is going to be another milestone toward that objective.

GIBSON: But I get a sense from Chris — Chris, you'll probably correct me if I'm wrong — that the Democrats are going to make the end of Iraq not be an election or an Iraqi government, but the return of American soldiers.

LEHANE: Well, I think it is not only a political point, I think it's a question of good policy.

We saw a CIA report that was reported on over the last couple of days talking about how Iraq is now becoming a magnet for these terrorists and a breeding ground for terrorists, and a very, very pessimistic projection of what's going to happen here.

So, if we're really concerned about our nation's security and the world's security, we need to make sure that things are turned around in Iraq. Politically, it's no coincidence that this President goes into the second term with some of the lowest numbers ever for a second-term president; lowest in, I think 30 or 40 years.

There's a reason for that. And that is because people see Iraq and are not happy with it. It continues to be a political millstone around his neck.

GIBSON: Yes, but J.C., what the president is saying is, while it may be a millstone that if Iraq can be a democracy, if it can be, it will be less of a terrorist breeding ground that Chris referred to. If Iran could be, if Saudi Arabia could be, if Egypt could be, all those places would be less of a threat to us here if they could be free and democratic.

WATTS: No question, and John, that's why it's a breeding ground. You see all the terrorists coming from all over the world into Iraq because, as has been said before, this is the Super Bowl. They know once they lose this, this is the final blow in many respects to the terrorists.

So they've got to put up a good front but the president talked today, he has talked all along, about staying the course, having the resolve to see this thing through.

The president understands, John, that every person in this world — I don't care if they're in Iraq, in the United States, anywhere in Africa; we are born with the mechanism within us that says, "I want to be free." And he talked today about encouraging that, strengthening that, trying to get people to come along.

I think it's going to happen and, again, I think this milestone at the end of the month, the election, I think that's a huge victory for the president in this effort.

GIBSON: J.C. Watts, Chris Lehane, thanks to both of you. Appreciate it, you guys.

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