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This is a full transcript from "The Beltway Boys," on March 10, 2007.

FRED BARNES, "WEEKLY STANDARD": Coming up on "The Beltway Boys," the Scooter Libby conviction adds to President Bush's second-term slump. We'll tell you if he can turn it around.

MORT KONDRACKE, "ROLL CALL": Democrats unveil a new plan to bind the president's hands on Iraq. But the anti-war left is still complaining.

BARNES: A prominent evangelical takes aim at Rudy Giuliani. We'll tell you how his honor's (ph) past is coming back to haunt him.

KONDRACKE: And what's really behind Newt Gingrich's Jimmy Swaggart moment?

BARNES: That's all coming up on "The Beltway Boys." But first, the headlines. (NEWSBREAK)

BARNES: I'm Fred Barnes.

KONDRACKE: And I'm Mort Kondracke, and we're "The Beltway Boys." Well, the "Hot Story" of the week is "Woe Is Bush." The pall that hangs over the Bush administration, obviously, is - has mostly to do with the failure to win in the Iraq. But lately, there's a bunch of other troubles that are besetting him. And the first in line is the Scooter Libby conviction, and the Democrats are trying to make the most of it. Here's what Harry Reid had to say about it: quote - "It's about time someone in the Bush administration has been held accountable for the campaign to manipulate intelligence and discredit war critics. Lewis Libby has been convicted of perjury, but his trial reveals deeper truths about Vice President Cheney's role in this sordid affair. Now President Bush must pledge not to pardon Libby for his criminal conduct." Now there's going to be at least one congressional investigation conducted by Henry Waxman of - of California into this whole thing, trying to prove - trying to penetrate the quote - unquote - "cloud over Dick Cheney" or around Dick Cheney. And Waxman is going to have as his star witness next Friday Valerie Plame, the woman whose - whose name was revealed as the - sort of this - the trigger to the - to the whole scandal. Now my theory about this is that special prosecutor Fitzgerald new full well, of course, that - that the original Bob Novak leak of Plame's name was the State Department and not from the White House, but that Fitzgerald was pursuing a possible separate conspiracy run out of the White House, maybe out of Cheney's office, to - to expose Valerie Plame. And that's how he got into the - to the Scooter Libby line of - of inquiry. And that's what the Democrats will go at.

BARNES: Well, you know what? He didn't find this separate campaign to go after Valerie Plame or her husband, Joe Wilson, who had falsely made claims about the White House. Now look, I don't think this whole thing is a problem for Bush at all. I don't think it's a problem for Cheney. I don't think there's a cloud over Cheney at all. If - and - and look, Fitzgerald, the prosecutor, Mort, actually interviewed Cheney and everybody else at the White House. He didn't find any evidence at all of this so-called conspiracy or campaign led by Cheney. So he ought to completely let go of that. If there's a cloud over anybody, it's over Fitzgerald himself, for having pursued this very, very marginal prosecution against Scooter Libby. And - and all that stuff that Harry Reid, that was totally nonsense. I don't even know what he was talking about. He's in some parallel universe. This was about an individual set of crimes that Scooter Libby was convicted of. He wasn't convicted of any institutional crime. There was no White House crime here at all.

KONDRACKE: Yes. OK, second political headache for President Bush: the Walter Reed Army Hospital scandal, which is actually a—more of an outpatient scandal than a - than an inpatient scandal, because the troops do get care. But as I said last week, this is worse than Katrina in its incompetence and with - without any state or local officials to - to - to partly blame for it. But at least, to Bush's credit, there were no, `You're doing a hell of a job, Brownie" moments connected with this. The minute it was exposed, people started getting fired. And there's going to be a big investigation commission appointed - that the president appointed Bob Dole and Donna Shalala that are going to get to the bottom and presumably improve, from top to bottom, the veterans' health care system.

BARNES: Mort, even you pointed out, just now why the Katrina analogy is so preposterous. Because in this one - I mean, the problem with Katrina, supposedly - I think the problem was you had a - a poor mayor and a bad governor in Louisiana - but the White House was accused of acting too slowly. Here, as you pointed out, they acted swiftly. They really moved on this in a hurry, and - and - and they should get some credit for that, firing all kinds of people. You're right about the - the inpatient care at - at Walter Reed is - is matchless, particularly dealing with these wounded soldiers who need artificial limbs. The outpatient, it's typical government health care. Bureaucratic - and it's inexcusable in this case, but it shouldn't be surprising.

KONDRACKE: Well, inexcusable and Katrinaesque. OK, and there's the hubbub surrounding the firing of eight U.S. attorneys. Critics say that it has more to do with politics than performance - Democratic critics. Now these attorneys serve at the pleasure of the president. They are presidential appointees. He can fire them - fire them whenever they want to. And as you pointed out to me, Bill Clinton, when he became president, fired every single U.S. attorney in the entire country, regardless of what important investigation or case that they - they might have been working on. I think there's only one out of these eight that even merits an inquiry, and that's the one in New Mexico, where Senator Domenici and Heather Wilson may have intervened. And I think it's worth checking out.

BARNES: Look, I don't even think that one amounts to much. In that case, Pete Domenici, the senator, who's running for reelection next year, and Heather Wilson, who's a - obviously running for reelection every two years, called the U.S. attorney there to find out if an indictment was going to be handed up in a case involving a Democrat by Election Day. Now the U.S. attorney didn't have to answer. I think he did. But he could have said, `Buzz off.' And - and if he felt intimidated or threatened by this - if he followed the rules, he would have immediately notified the Justice Department. Obviously, he didn't think it was very serious, because he didn't notify the Justice Department.

KONDRACKE: And then the latest thing is that there's a story that the FBI improperly and maybe in some cases illegally used the Patriot Act to secretly obtain personal information about American citizens. This has to do with national security letters. Now despite what you would hear from - from Congress, that somehow the FBI is acting like the Gestapo here - the more you know about it, the more it looks like it's a cleric screw-up. Now the FBI stumbles around about a lot of things, but there is no evidence that anybody was - was really injured by this, or that there was any particular malevolence involved.

BARNES: That's true, but, you know, the - you would think at the FBI, they would be sensitive to the Patriot Act, knowing there's been so much criticism of it, and there's been - the left-wing in America has fanned all these flames that Americans are being investigated. I mean, here's one area where they should have been so much more careful. I - I suspect you agree with that, and - and they obviously weren't. My fear is this: that this could lead to the critics of these national-security letters using this - these offenses here - as unimportant as they may be - to try to eliminate these national-security letters, which are very important in terrorism cases.

KONDRACKE: Yes. Well, the bottom line here, has to do with polls. You know I could not get through - through a program without - without some polls. But here's a - here's a look at President Bush's job-approval ratings over the last few weeks. Real Clear Politics has his average at 34 percent. Now, bad as that is, it's not the lowest that a presidential approval rating has ever been. There you can see that Bush is hanging in. He's still beating his - his father, in fact, by five points.

BARNES: You know, you talked about woe with (INAUDIBLE), "a pall over the White House" and so on. You would be surprised, Mort, if you looked into it, as I have, the way this has affected - all these things we've mentioned, the way they have affected President Bush and his staff. And the fact is, they remain upbeat. They remain optimistic, particularly about Iraq, where the President has said there would be progress. The press just gets furious when they see Bush in public, particularly at press conference, acting all upbeat and vigorous and everything. They think he should be a broken man and he should act like a broken man. He's not a broken man at all, and - and his critics hate every minute when he's out in public not being broken.

KONDRACKE: Now listen, I was - I was talking to somebody who was a former White House official who was in the White House mess the day that Scooter Libby was - was convicted, that he said that - that it was - it was silent. Normally, there's a.

(CROSSTALK)

BARNES: They were saddened. He was a good friend there.

KONDRACKE: I think they're - I think there's some.

BARNES: Your point?

KONDRACKE: I - look, you can't have approval ratings as low as Bush's is with no end in sight without being worried at least.

BARNES: Well - yes, worried. But broken? Bush is upbeat and optimistic; so is the staff. Read my piece in The Weekly Standard.

(CROSSTALK)

KONDRACKE: Oh, I will. I wouldn't miss it. I wouldn't miss it.

BARNES: All right. Coming up, Democrats unveil new plans to bring U.S. troops from Iraq. But does anyone understand them? Well, I don't. Stick around; our "Ups and Downs" are next.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." Let's check out our "Ups and Downs" for the week. Down: Nancy Pelosi. The early reviews of her plan to get U.S. troops out of Iraq are in, and they're not too good. Some say the plan's too complex, while others, especially the left-wing of her party, say it doesn't go far enough. Watch.

(BEGIN VIDEO CLIP)

REP. MAXINE WATERS (D), CALIFORNIA: We want a simple plan. We want a plan that will fund the safe and secure exit of our troops from Iraq in a reasonable period of time. And that's not asking too much.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. LYNN WOOLSEY (D), CALIFORNIA: Ours is the mainstream position. We deserve our place in this debate.

(END VIDEO CLIP)

BARNES: Hers is not the mainstream position. I mean, that - it's basically one of evacuating Iraq as soon as possible without any concern for the consequences, for America, for Iraq, for the Middle East or anywhere else. Look, Mort, I have heard you criticize Republicans so many times, sometimes accurately even, when they were pushing some piece of legislation that they knew wasn't going to become law. And you would call that political posturing. Well, Nancy Pelosi is pushing this anti-war business knowing full well that it's not going to be enacted. And I would say it's merely political posturing. And, for her though, there's an added element where she's got some of her - her leadership at stake, because it's a - there's a very big question of whether she can get enough Democrats - and there won't be many Republicans dissenting - to actually pass this darn anti-war resolution in the House.

KONDRACKE: It - yes, it is very complicated. Now there was a hilarious moment that was caught on YouTube this week, where David Obey, the chairman of the - the House Appropriations Committee, was confronted by two ultra-left - he's pretty liberal himself - ultra-left anti-warriors in a - in a - in a congressional hallway. Watch this.

(BEGIN VIDEO CLIP)

REP. DAVID OBEY (D), WISCONSIN: Well, we're trying to use the supplement (ph) to end the war. You can't - you can't end the war by voting against the supplemental. It's time these idiot liberals understand that.

(END VIDEO CLIP)

KONDRACKE: It's time that the idiot liberals understand it. Well, what he was saying is, `We don't have the votes.' Now, look, what - what - seriously, what really worries me, is that as we go through this - this - this process, that - that the supplemental appropriation, which is going to be the vehicle for all this, is going to get either delayed or blocked, either by a filibuster in the Senate, or a presidential veto and having to revisit it in the House. And this is the money that's required to - to - t to finance our troops in the field. Now, I think what the Democrats, if confronted with this, ought to back off and just pass a more or less clean, supplemental and - with maybe some more money for Afghanistan and some more money for veterans.

BARNES: I agree.

KONDRACKE: OK, down: John Edwards. He's once again folding under pressure from the far-left liberal bloggers, this time by refusing to debate fellow Democrats at a FOX News-sponsored forum in Nevada this summer. Now this tells you a lot, FOX or no FOX. This tells you a lot about what the moveon.org, Daily Kos kind of left-wing liberals are all about. I mean, they are not in favor of free speech and free debate if FOX, you know, was embarrassingly right wing or something like that, it would be plain for all to see. They just want to stop any of their - any Democrats from participating in this, because - because it is a FOX thing. And they're willing to - to intimidate them to do it. I - you know, this is junior-grade Stalinism on their part.

BARNES: Stalin?

KONDRACKE: Stalin.

BARNES: All right. I - I agree. In an interview beliefnet.com this week, Edwards said: "I think that Jesus would be disappointed in our ignoring the plight of those around us who are suffering, and our focus on our own selfish, short-term needs. I think he would be appalled, actually." You know, I think Jesus would be appalled at the $6 million that Edwards himself has just spent to build this Taj Mahal of a residence, I think in North Carolina. I mean, that and - and - look, Edwards' plan is, he wants to deal with poverty and suffering with other people's money. Not his.

KONDRACKE: Fred, judge that you - be - not - not be judged. Now look, I think - I think that Jesus would be - would - would say exactly what John Edwards said about our failure to - to address the poor. However, Jesus probably would also say that it's easier for our camel to go through the eye of a needle than for a trial lawyer to get into heaven. Coming up, social conservatives start bringing out the heavy artillery against Rudy Giuliani. Don't go anywhere; more "Ups and Downs" are next.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." We're continuing with our "Ups and Downs." Down: Rudy Giuliani. I think that's the first time we've had him down. We've had him up a lot. He's catching more flak from the right wing, this time over his highly publicized and bitter divorce from Donna Hanover back in 2003. Richard Land of the Southern Baptist Convention told the AP this week quote - "This is a divorce on steroids. To publicly humiliate your wife in that way and your children. That's rough. I think that's going to be an awfully hard sell, even if he weren't pro-choice and pro-gun control."

That is tough criticism. Now Richard Land is somebody that a lot of people may not have heard of. But he is an important figure in conservative circles, widely respected, including by me. I happen to know him. So this is meaningful criticism in the political race. Now I think it's suggestive of the gauntlet (sic) that Rudy Giuliani's going to have to go through if he's going to - a gauntlet where not only his social liberalism will be brought up, and conservatives will use it against him, and the other candidates as well will use it against him - but also all these personal issues involving his family and his divorce and so on. I think all of those are going to be out there. It - it's going to be tough. But if he survives this gauntlet, which will be over a period of months, then he may be the nominee (INAUDIBLE).

KONDRACKE: Yes. Well, what Richard Land, and I - I know him and respect him, too - was talking about, about this "humiliation on steroids" - was a press conference at city hall in which he surprised his wife with the fact that he was leaving her for - for another woman. This is on videotape. We will see this videotape before this campaign is over. And then there's other video of his wife denouncing him and also implying that he was having - also having an affair with a press aide. Whether that's true or not, I don't know. But.

BARNES: It turned out not to be.

KONDRACKE: Yes, well, anyway. Up: Newt Gingrich. He came clean this week on a host of personal peccadilloes, including his own extramarital affair, conducted President Clinton's impeachment trial. Gingrich's Jimmy Swaggart moment came during a radio interview with a prominent conservative, James Dobson, president of Focus on the Family. What is it with the Republican Party? All of a sudden, you know, we've got all these candidates running for president who have - have Clintonesque morals, you know, fooling around all the time. And at least, for all Bill Clinton's peccadilloes, at least he stayed married to the same woman, and is still married to her, in fact.

BARNES: You want to elaborate on that (INAUDIBLE)? You want to - you want me to dig deeply into that - into the whole Clinton (INAUDIBLE)

KONDRACKE: No, I want you to talk about the Republicans.

BARNES: OK.

KONDRACKE: What is it with them?

BARNES: Look - well, I - look, here's what interesting: among the top tier of Republican candidates running for the presidential nomination, the one who's had the fewest wives is the Mormon: 1. Actually Mitt Romney; he's had one. Newt's had three, and - and Rudy Giuliani's had three.

KONDRACKE: And McCain's had two.

BARNES: And McCain's had two. So - so much for this Mormon business. Look, I think what Gingrich was trying to do - and maybe you agree - he was just trying to clear the air way ahead of the serious part of the presidential candidate about these peccadilloes if you want to call them that, so they won't all of a sudden lurch back to haunt him some time later, when, say in September, when he says he'll decide whether to run or not. He'd rather try to get rid of them now. You know, sometimes that sort of preemptive strategy works.

KONDRACKE: It does. So, is - is Newt going to run?

BARNES: I think he probably will - will not run. I think he's a great leader of - of the Republican Party and conservatism in ideas. Whether he'd make a great candidate or not, or a great president, that's another thing.

KONDRACKE: A font (ph) of ideas he is.

BARNES: All right. Stay right where you are; "The Buzz" is up next.

(COMMERCIAL BREAK)

KONDRACKE: Here's "The Buzz," Fred: immigration restrictionists are criticizing a bill that they haven't even seen, sponsored by John McCain and Ted Kennedy, as being even more pro-amnesty than the - the Senate bill that they sponsored last year. The fact is that when it comes out, it's going to be tougher on border enforcement and on employment - employer enforcement.

BARNES: You know, when they use the word "amnesty," I stop listening, because it - usually what's being proposed is not amnesty at all. But along that line, you know, what the White House would like to do now is get more Republicans, particularly in the Senate, to vote for a - a full-blown, comprehensive, immigration reform bill. And one of the things they're looking at, and may attract Republicans, is the idea by Senator Johnny Isakson of Georgia, where you would sort of stagger the implantation of - you'd have border security, followed by the creation of a - of a - a temporary worker plan, followed by earned citizenship, where people who are already here illegally can now find a path to citizenship.

KONDRACKE: The administration is working very hard on Republicans. However, these new Democrats, you know, who were elected from - from Republican districts are hard-line on immigration. It's going to be - it's going to be tough. That's all for "The Beltway Boys" for this week. Join us next week, when the boys will be back in town. And stick around; "FOX News Watch" is coming up in just a few seconds.

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