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This is a full transcript from "The Beltway Boys," on February 3, 2007.

MORT KONDRACKE, "ROLL CALL": Coming up on "The Beltway Boys," the 2008 presidential race is off to a fast and early start.

FRED BARNES, "WEEKLY STANDARD": We'll rank the candidates on both sides of the aisle, and tell you who we think has the best shot to win their party's nomination and the White House.

KONDRACKE: We'll also take a look at next week's showdown between President Bush and Congress over Iraq.

BARNES: And Senator Al Franken? The comic says he's in the Minnesota Senate race.

KONDRACKE: That's all coming up on "The Beltway Boys," right after the headlines.

(NEWSBREAK)

KONDRACKE: I'm Mort Kondracke.

BARNES: And I'm Fred Barnes. We're "The Beltway Boys." The "Hot Story" - number one, anyway - is "Pre-Season Rankings." And Mort, of course, we're going to set the stage for a presidential campaign that's actually already begun, with candidates running hard. But we're going to rank, as you would, you know, a pre-season basketball team or a football team, give - give you the rankings, starting with the Democrats. We think Hillary Clinton is the undisputed frontrunner, followed by John Edwards, Barack Obama and Al Gore. Of course, Gore hasn't said whether he's going to run or not. But I think we agree he'd be a top-tier candidate we he to get in. And then there - of course, there are all those Democratic dark horses, Bill Richardson, Tom Vilsack, Chris Dodd, Dennis Kucinich. Maybe I left out five or six of them.

KONDRACKE: I don't care.

BARNES: I know. But - but there are a lot of them. A lot of Republicans, too. Here's the latest FOX poll, and we know these FOX polls are pretty good, even - even this early in the game. The poll shows Hillary Clinton holding a huge lead over the rest of the field. Hillary's at 43 percent. You know, I'm kind of surprised at that, Mort. Barack Obama's No. 2 with 15; I thought he'd be higher. And John Edwards at 12; I thought he'd be a little higher, too. Al Gore is at 11, which is pretty good when you're not even running. And the rest of the field is in the dust. Now Hillary's lead is really lopsided. But I think there's a flaw in her campaign. Mort, you and I have watched her in her six years in the Senate, and - and she has really moved to the center after having this reputation as a big-time liberal. She's moved to the center, particularly on national security. Spent all those hours at the Senate Armed Services Committee meetings and hearings and so on, longer than other - other senators. Really become conversant on defense issue, was a supporter for a long time of Donald Rumsfeld, voted for the war in Iraq and so on. And - and has become more centrist on other issues.

And - and she sort of encapsulated in - in this one statement. Watch.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK: I grew up in the middle class, in the middle of America, in the middle of the last century. So by definition, I'm middle of the road.

(END VIDEO CLIP)

BARNES: Well, there you have it. But the - the - I think - I think she's jeopardizing by being in the - in the middle of the road, I think that makes her very electable as a president in the general election, but I think she's jeopardizing that by veering - sprinting to the left on Iraq. All of a sudden - she spent the month of January with one statement more and more and more in opposition to the war in Iraq, a war she had voted for. And here's her latest on Iraq, in her speech to the Democratic National Committee on Friday. Watch.

(BEGIN VIDEO CLIP)

CLINTON: If I had been president in October 2002, I would not have started this war. I would not. If we in Congress don't end this war before January 2009, as president, I will.

(END VIDEO CLIP)

BARNES: Look, Eisenhower in '52 only said he'd go to Korea. Now she's saying she will go - not only maybe go to Iraq, but she'll end the war. Look, that's, I think, a pretty dangerous statement for her. She wants credibility as a commander - a potential commander in chief. I think she may be jeopardizing that, and making herself less electable. A lot less electable.

KONDRACKE: Yes. She made that statement about being middle of the road at the New America Foundation, which is a radical center think tank, my kind of people, you know?

BARNES: Radical center? I don't even know what that is. I know center.

KONDRACKE: Center, and - and - and exciting new ideas.

BARNES: All right.

KONDRACKE: But we'll talk about that some other time. She - she did not repeat "middle of the road" when she made her speech at the Democratic National Committee, even though she did cite all that stuff about being middle class and all that kind of - the whole pack, the whole Democratic pack, is surging to the left as - as fast as it can. Hillary is just behind the - the - the - the — her two major rivals, Obama and - and John Edwards. She is in favor of capping the number of troops in - in Iraq, not necessarily pulling back, although she says we should have a phased withdrawal. And she's threatening the Iraqis with the loss of aid if they don't measure up to certain earmarks. John Edwards and Obama are further to - to her left. Edwards is in favor of an immediate pullout of 40,000 troops, and - and wants Congress to cut off the money. And here's what he said at the Democratic National Committee on Friday. Watch this.

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: We cannot be satisfied with passing non-binding resolutions that we know this president will ignore. We have the power to stop the escalation of this war.

(END VIDEO CLIP)

KONDRACKE: And then Obama said that - that he wants to star withdrawing troops in May of this year, and he wants them all out by April of - of 2008. Here's - here's his statement on the Senate floor on Wednesday. Watch.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: This plan would not only place a cap on the number of troops in Iraq and stop the escalation. More importantly, it would begin a phased redeployment of U.S. forces with the goal of removing all U.S. combat forces from Iraq by March 31, 2008.

(END VIDEO CLIP)

KONDRACKE: Yes. The left-wing magazine "The Nation" wrote about all this - about Obama: "With his latest announcement on Iraq, Obama can now be considered the major anti-war candidate. Obama's move could be devastating to John Edwards."

BARNES: I doubt that.

KONDRACKE: Well, actually, I think what - what we've got here is a game of hopscotch, where everybody is going to go - is going to bounce over the other guy. Now Obama's real problem is what we heard a business executive from Chicago say to us last week, that the presidency is not an entry-level job.

BARNES: Well, I hope the voters think that. Look, when we - remember in 1984 when all the Democrats were leapfrogging each other to say who was first for the nuclear freeze - which turned out to be a terrible idea. Actually, it was from the beginning. Here's what I wonder about: what are Hillary Clinton and John Edwards and Barack Obama and all the rest of them going to say if the counterinsurgency strategy with this new surge of troops actually works to secure Baghdad and make Iraq viable as a - as a stable country? What are they going to say? I think I know what they're going to say. And - and you know what it is, Mort? They're going to ignore success. Same thing Democrats did in '74 and '75 in Vietnam. They're going to ignore it and pretend like their opposition to the war is all that matters.

KONDRACKE: Yes, I'm afraid you're right. You know, among the dark horses this week, Joe Biden, senator from Delaware, stepped in it at the - at the very outset of his - of his campaign with this remark about Barack Obama. Watch - listen.

(BEGIN AUDIO CLIP)

SEN. JOE BIDEN (D), DELAWARE: ".the first sort of mainstream African- American who is articulate and bright and - and clean - and a nice-looking guy."

(END AUDIO CLIP)

KONDRACKE: Yes, well.

BARNES: I could barely hear that.

KONDRACKE: Well, he said - you know, that Barack Obama is the first African-American candidate, and a clean, articulate guy. You know, it - it - it - it were ambiguous (ph) comparisons to other African-Americans who - who have run for president. But he also was very refreshing about the other candidates, including Obama's lack of experience, and Hillary and John Edwards as chaotic - the chaotic consequences of their plans for Iraq. Of course, I think that Obama - that Biden's plans would lead to chaos, as well. Coming up, Fred and I will handicap the Republican field for president in 2008. Does anybody have the right stuff for the GOP nomination? Find out after the break.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to "The Beltway Boys."

Now, let's - let's take a look at the Republican field for 2008. We think that John McCain should be in the top spot, followed by Rudy Giuliani, Mitt Romney and Newt Gingrich. In the FOX poll, Rudy Giuliani is leading the field with 34 percent; John McCain with 22; Gingrich third at 15; and - and Romney is a surprisingly low 3 percent.

There are a whole slew of Republican dark horses, that you can see them here - here on the screen.

Now, if Democrats are surging to the left, I would say that - the - the main Republicans are sort of meandering to the right.

BARNES: Yes.

KONDRACKE: You've got John McCain trying to cozy up to the religious conservatives that he - that he formerly dissed. And Mitt Romney is reversing himself on - on abortion and gay rights and - and so on.

The - the Gallup poll shows that among Republican voters, Rudy Giuliani is regarded as more likable than John McCain, better in a crisis, a better speaker, better understand the problems of ordinary Americans, and would be - do - do better in a general election. So then why are we picking McCain over - over Giuliani?

By the Kondracke rule of Republican primogeniture. That is, the next- oldest guy in line gets to be the king. So that's McCain.

BARNES: You mean like Bob Dole in '96.

KONDRACKE: And Ronald Reagan before that.

BARNES: Yes, I buy that. That's pretty good. Look, none of these guys is actually locking up the dominant conservative base in the Republican Party, particularly in these Southern primaries. They've - you know, they've picked off people - well-known people. But the - but - but they haven't gotten anyway. You know, truth is, they - to his credit, Romney is the only one who's made some in - some inroads among conservatives, significant ones, I think. And when he was on "FOX & Friends," the morning show on FOX the other day, he in one, I thought, really effective statement, defended his Mormon faith, and allied himself with Christian conservatives and pro-lifers, and indeed the whole social conservative movement, which is huge in the Republican Party. Watch this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I believe in God. I believe that - that all of his children are - are around us, in the various nations and in this great nation. I believe in the sanctity of human life. And I believe that if people want to understand the nature of my life, they can look at my wife and me and our family. They can see that our faith has made us better people, better Americans. And we share the - the values of the other citizens of this great land.

(END VIDEO CLIP)

BARNES: Woo! That was pretty good, if you're running a Republican primary. Wouldn't help you much in the Democratic primary. Now I - I - I - I want to have - mention one other guy, and that's Newt Gingrich, who says he'll wait around for a draft, and he'll decide next September of something. If Gingrich got in the race now, he's a guy that I think could really, with that dazzling speech he gives and so on, really grab a lot of these conservatives who are holding back. The - his personality tends to scare people off, but he has great potential as a Republican presidential candidate, I think.

KONDRACKE: Yes. You know, all the major Republican candidates are in favor of Bush's surge. John McCain is the most out - out in front on this. But he does have an explanation for - in case it doesn't work, why it didn't work, and why things could have gone better if he'd been president. And that is, that we didn't have enough troops there from the beginning. And I think it's a - it's a valid explanation. Now what's fascinating to me about this Republican race is that here you have Chuck Hagel getting all this adoring publicity from the mainstream media for opposing.

BARNES: Right.

KONDRACKE: .Bush on the surge, and he is nowhere in the polls.

BARNES: You know who is.

KONDRACKE: It's astounding.

BARNES: You know who is really extraordinarily popular, and even as a potential presidential candidate among Republicans? Jeb Bush, the former governor of Florida. Of course, he's not running.

But think of this, Mort: a John McCain for president, Jeb Bush for vice president ticket. I think that would be a winning ticket in the general election.

Now who do you think's going to win the general election? I mean, if I - if I held a gun to your head?

KONDRACKE: If you held a gun to my head - in the general election?

BARNES: Yes.

KONDRACKE: I'd say, 'Shoot.'

(LAUGHTER)

KONDRACKE: I'm not ready to say.

BARNES: All right.

Coming up, President Bush braces for a bipartisan rebuke of his Iraq plan. We'll preview the showdown.

Stick around; our "Ups and Downs" are next.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to "The Beltway Boys." Let's take a look at our "Ups and Downs" for the week.

Down: Republican Senator John Warner of Virginia. Last week, he said he wouldn't compromise with Democrats on a resolution condemning President Bush's plan for Iraq. This week, it's a different story.

Here's Warner with Democratic co-sponsor Carl Levin. Watch.

(BEGIN VIDEO CLIP)

SEN. JOHN WARNER (R), VIRGINIA: This is not to be construed as saying, `Mr. President, you cannot do anything.' We just suggest you look at options by which we could hopefully have maybe substantially less U.S. involvement of troops in what we foresee as a bitter struggle of sectarian violence.

(END VIDEO CLIP)

KONDRACKE: Well, there's a big question about whether this - how this will - this resolution will get voted on. Whether it's going to need 60 votes, or 51 votes. If it needs 60 votes, it may - it might not pass.

But Democratic dove Chris Dodd, candidate for president, said what's correct about this Warner resolution: that it ratifies the status quo. It's - it doesn't say less troops. It doesn't say pull out the funds. It says, you know, we don't like what the president's going to do: more troops.

Now everybody agrees that the status quo is a total failure. So what are they proposing? They're not proposing anything but the - but the failed policy.

BARNES: Yes. Well (INAUDIBLE) unanimously send off General Petraeus to - to apply his counterinsurgency strategy to Baghdad. But then - now they're against sending him the extra troops that he wants in order to make it a success.

Look, I think we're seeing a lot - an awful lot of profiles in political cowardice here, led by John Warner, but lots of other Republicans as well. Actually, the Democrats, most of them, are ideologically opposed to this war now. But there are a lot of cowards there, too.

Look, they're - all - all they're doing is just running with public opinion, which has turned against the war because of the - there's not victory in sight.

I believe that if - if - if this war were going a little better and public opinion were in favor of it, these guys wouldn't be out there passing resolutions and so on. I mean, and - and for them to posture as if they're taking some great moral stand and so on is obnoxious, I would say.

All right. Down: CEOs. President Bush went to Wall Street this week, whacking corporate executives for their lavish salaries and bonus packages, and thrilling Mort.

Here's the president Wednesday in New York.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America's corporate boardrooms must step up to their responsibilities. You need to pay attention to the executive compensation packages that you approve. You need to show the world that America's business are a model of transparency and good corporate governance.

(END VIDEO CLP)

BARNES: Jeez. The president just.

KONDRACKE: Yay (INAUDIBLE)

(CROSSTALK)

BARNES: .bandwagon here on this CEO pay stuff. You know, and - and - and the bandwagon that he joins with Jim Webb, the senator from Virginia, the Democrat, who - who thrashed him in his response to the president's State of the Union message.

Look, the president should know better. All he's doing is - is helping Democrats lay the groundwork for raising taxes on upper-income Americans, a tax - a tax hike that would - I think even you know - you probably don't, but - but people.

KONDRACKE: I'm for it.

BARNES: People who understand economics know that that would be incredibly economically counterproductive. It would be terrible policy.

Look, CEOs are paid a lot because that's what the market says they should be paid. And you know what happens to them? And - and for them, they get a lot of money if they succeed. But if they fail, and they're - and they're tested every quarter by what - how their stock price is doing, for most of them - if they fail, they are out the door.

KONDRACKE: Yes, with $100 million .

(CROSSTALK)

BARNES: No. No. No. Most of them don't.

KONDRACKE: The - the president had it exactly right, that - that the - the compensation committees of corporations ought to judge their - on - on performance, and not on - not on pay agreements.

Look, Bush was not just following Jim Webb; he was following his own treasurer secretary, Hank Paulson.

BARNES: Yes.

KONDRACKE: .who acknowledged some months ago that inequality is a big problem in America. And I'll tell you, this is going to be, next to Iraq, the biggest issue of the 2008 campaign: the - the hollowing out of the middle class, and the fact that - that - that ordinary wages are not keeping up with the cost of health - of - of health care and - and college tuition. Big issue.

BARNES: Mort - Mort, for President Bush on this issue, my advice is: butt out.

KONDRACKE: Up: Al Franken. The outspoken former Air America host is finally putting his mouth - money where his mouth is. He says he plans to challenge Republican Senator Norm Coleman of Minnesota next year.

Now, Al Franken is a very funny guy. Minnesota can be a very liberal state. Norm Coleman won - beat Walter Mondale by 50 to 47 percent. His approval ratings are down below 50 percent. Al Franken could take him.

BARNES: He could. But I - I'd really he rather not. And I think Coleman has made his mark here in Washington. He's gone a little squishy on Iraq, but he's done pretty well.

Now look, I'll tell you, I actually admire Franken jump - jumping in this race. He has a lot to lose, you know? I mean, a well-known guy who could lose. He could be humiliated. But I think he has a fallback position. If he loses, he can write a very funny book about how it happened.

KONDRACKE: Absolutely.

OK, stay right where you are; "The Buzz" is up next.

(COMMERCIAL BREAK)

KONDRACKE: Here's "The Buzz," Fred: there's a flap over Nancy Pelosi - House Speaker Nancy Pelosi's wanting a bigger - bigger Air Force plane than Dennis Hastert ever had to get - he used to - take him back and forth to his district. She wants a big plan that not only goes to California with herself, but she wants staff and family, and she also wants to take it on political trips, such as the - the retreat, the Democratic retreat, at Williamsburg, this - this past week, which the Pentagon wouldn't - wouldn't give her the - a plan for.

And Dennis - her - her pal John Murtha is apparently pressuring the Pentagon to - to let her have the plane.

BARNES: What do you think some of the other Democrats like Steny Hoyer think about this? Mmm? Mmm? What do you think? I think they think she's actually like a tsarina.

Look, Mort, I know the budget when it comes out - the president's budget, when it comes out on Monday, won't thrill you. But, you know, we've heard all these stories about - and - and the press doesn't - and hasn't caught on. I - I know you have on - to the deficit, which has been shrinking, and will down to zero in 2012, when this budget - with all - still a lot of spending on education. No new taxes.

KONDRACKE: And cuts to Medicare and Medicaid?

BARNES: No.

KONDRACKE: Yes.

BARNES: No. No. No.

That's all for "The Beltway Boys" this week. Join us next week, when the boys will be back in town.

Stick around; "FOX News Watch" is straight ahead.

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