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This is a full transcript from "The Beltway Boys," on March 17, 2007.

FRED BARNES, "WEEKLY STANDARD": Coming up on "The Beltway Boys," the long knives are out for Alberto Gonzales over the firing of eight U.S. Attorneys. We'll tell you if he'll survive.

MORT KONDRACKE, "ROLL CALL": Democrats step up efforts to derail President Bush's plan in Iraq amid some signs of progress on the ground.

BARNES: John McCain revs up his Straight Talk Express. But his campaign out of gas?

KONDRACKE: And Valerie Plame finds a sympathetic ear on Capitol Hill.

BARNES: That's all coming up in "The Beltway Boys." But first, the headlines.

(NEWBSREAK)

BARNES: I'm Fred Barnes.

KONDRACKE: And I'm Mort Kondracke, and we're "The Beltway Boys."

BARNES: "Hot Story" number one: "Hanging Party." And I give you credit for this idea of a hanging party, that the Democrats really want to be in this issue over the firing of those eight U.S. Attorneys by the Bush administration. Now the people they want to hang are, one, Alberto Gonzales, who's the Bush's attorney general, and Karl Rove, one way or another - of course, he's the most influential White House aide. Now here's my problem with President Bush on this: he's been an enabler. Bush has helped - I think is helping the Democrats on the way to the gallows here. The outrage in this whole flap is I think what Democrats are doing, trying to exploit a perfectly legitimate practice of presidential power in removing eight U.S. Attorneys, to exploit that for political gain based on no evidence whatsoever of wrongdoing. None. Zip. And instead of the president slapping down Democrats as he should, and should've several weeks ago, what he's doing is talking about, `Oh, we made mistakes in this case, and it was mishandled and so on.' Watch President Bush at his press conference Wednesday.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Mistakes were made. And I'm frankly not happy about it, because there is a lot of confusion over what really has been a customary practice by the presidents. U.S. Attorneys and others serve at the pleasure of the president.

(END VIDEO CLIP)

BARNES: Now what was the Democratic response to this reasonableness on the part of the president, this calm defense and so on, with no attack or repudiation of what Democrats are doing? What do you think it was? Watch Harry Reid, the Democratic majority leader.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: What is done is untoward, it's wrong, it's unethical, it's immoral. I believe it's illegal. And Gonzales should be fired, or he should resign.

(END VIDEO CLIP)

KONDRACKE: Off with his head.

BARNES: Immoral? Illegal? What in the world's he talking about? He's talking about what Democrats are doing, and it is a political jihad that has been, I think, accelerated by the president's passivity here on this thing. Now if president gives us, either Gonzales or Rove - even if he lets Rove just go testify before this show trial the Democrats want to have, I think it will badly weaken his administration and stain his reputation.

KONDRACKE: Yes. Well, look, Gonzales is on thin ice, especially because some Republicans now are calling for his - his scalp as well. Bush had every right, as you say, to fire these people. They're his appointees. But the - the Democratic Congress has every right and every responsibility to check in to - to charges made by some of the U.S. Attorneys themselves. There's suspicions by some of the U.S. Attorneys themselves, and charges made by some - some House Democrats that they were fired in order to obstruct investigations of Republican Congressmen and - and some governors.

BARNES: Yes. Yes. Don't forget about the zero evidence, Mort.

KONDRACKE: Well, there is no evidence yet. But - but the attorney general - the U.S. Attorney from Arkansas suspects that he was fired because he was investigating the governor of - of Missouri. Now that said, it seems to me that you do, as you say, have to prove wrongdoing before you take somebody's head off. This is a case of execution before trial. Now I have to say that mistakes were made, and the mistake was made by Alberto Gonzales when he testified that the White House had nothing to do with the - the discussions of - of firing these - these attorneys. And it turned out that Harriet Miers at a minimum did - and he may - he, Gonzales, when he was White House counsel, my have done it - may have done so himself. Now that.

BARNES: So what?

KONDRACKE: .appeared - wait - well, that appears to be disingenuous conduct on this part. Well, of course. I mean.

BARNES: Disingenuous is not immoral or illegal.

KONDRACKE: Senators feel they were lied to. And they also feel that they were lied to about the fact that his underling, the - the chief of staff of the - of the Justice Department was plotting to avoid Senate input into the replacement of these attorneys by their - by their successors.

BARNES: Mm-hmm. Look, I mean, Democrats who are on a political jihad - their feelings were hurt because they thought they were - they were lied to. Look, Mort, you know what they're up to. They have no basis at all for - for doing this. The moment Karl Rove's name was mentioned just peripherally, they all - you - you - you can see their - their drooling at the mouth with eagerness to get up there so they can pillory him in Congress. Now, it - look, President Bush - I don't think he can allow either Gonzales to be fired or Rove even to testify, much less be fired, and maintain his administration. And - and - and maintain the support of Republicans. It - it will so weaken it, it will be horrible. Now I don't think he's going to do either one. I think he's going to stand firm on both Gonzales and Rove.

KONDRACKE: Well, I - I would think it's almost certain that he will not let Rove testify. This is a matter of executive privilege. White House aides who aren't subject to Senate confirmation usually don't testify before Congress. Now on the Gonzales - Gonzales has got to testify, because he - he is subject to - to the Judiciary committees of both chambers. He's going to be up there constantly. He is going to be pummeled like a - like a punching bag. Now the question is: what evidence is there? If there is any more evidence of wrongdoing on his part - any kind of wrongdoing - be gone. I'm telling you, the - because Republicans are going to demand for his resignation.

BARNES: The wrongdoing has to be in the case of the firing of the eight, not some snafu in the handling of the case.

KONDRACKE: Lies - lies will do it. Lies will do it.

BARNES: Oh come on, that's not - that's not the issue, Mort. You're - you've got it completely wrong.

KONDRACKE: Coming up, the Senate rejects Democratic plans for a quick pullout from Iraq. Don't go anywhere; "Hot Story" number two is straight ahead.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to "The Beltway Boys." Hot Story number two: "Impervious." That's the reaction of House and Senate Democrats to what evidently is some good progress in - in Iraq. Here's Major General William Caldwell, the spokesman of the U.S. troops in Iraq talking about it. Watch.

(BEGIN VIDEO CLIP)

MAJ. GEN. WILLIAM CALDWELL, U.S. MILITARY SPOKESMAN: We've obviously seen little positive indicators at the moment already. As General Petraeus has said, once all the forces in - are in place, he in fact then expects to start seeing a more significant difference in the levels of violence and activities that occur within the city of Baghdad and the surrounding area.

(END VIDEO CLIP)

KONDRACKE: I mean, violence is - is down, in - in Baghdad. We're able to patrol Sadr City. It remains to be seen whether the Mahdi Army, you know, is just ducking for cover, or will - will come back eventually. But nonetheless, there are good signs. And even the Maliki government is taking steps, albeit rather slowly, to achieve reconciliation with the Sunnis. So all - you know, all that's happening. But - and the motto of the United States government, Republicans, Democrats and everybody else, ought to be, `Give Petraeus a chance to succeed with his new counterinsurgency strategy.' Give Maliki a chance to see whether he can stand up or not. That's not what the Democrats are doing. The Democrats are doing everything they possibly can to undermine this effort. You can - you can hear that with - from Joe Biden. Watch this.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), DELAWARE: Let's get on with this. This is the only rational way to move. All this malarkey about cutting off funds - this is about the mission. Mr. President, you're leading us off a cliff. Stop.

(END VIDEO CLIP)

KONDRACKE: Now - well, that was in furtherance of a Senate resolution to set a deadline - not a hard deadline, but a - a soft deadline for withdrawal of American troops from - from Iraq, which is to say, `We're getting out of here, Iraqis, U.S. military. We're getting out of here.' Now it - it failed. It got only 48 votes. It didn't even get - came nowhere near 60. The House Democrats are going to try their attempt at - at a pullout resolution based on cutting off funding, which he called "malarkey" - cutting off funding next week.

BARNES: You know, I don't think the House Democrats have the votes. And I - and they may have to - because they don't, they may have to postpone the vote that is scheduled for next week. They have trouble on the left with, you know, a handful - maybe a dozen or so lefties who don't think the thing goes far enough, who want to get out of Iraq yesterday. And then you have some moderates who think it's too strong, among the Democrats. They need Republicans to join - I think right now they have about one or two. So, I mean, they don't have the votes; Republicans are pretty confident. You know, this is the story of Democrats in 2007. They overstated their mandate, and they overreached. And, you know, the mandate appears to be vanishing entirely on the issue of Iraq. They've lost in the Senate, and don't have the votes in the House. Now I think Democrats are dishonest. And - and - and you mentioned a couple of things that shows they - they are dishonest. They deny that there is a new strategy of counterinsurgency put in place by General Petraeus. Well of course it's there. But they deny that it is. They deny that Maliki has done anything at all. And in fact, I agree, he's been slow. He's not my idea of a great democratic leader. But in fact, he does have - three brigades of Iraqi troops are in Baghdad now, or two and a half if you quibble. They've got this oil law; they share the oil revenues with the Sunnis and the Kurds and so on - and the Shiites. That at least - it at least has been drafted and is moving toward enactment. And - and they fired all the - all the - all the death squads that were in his interior ministry. So, you know, he's done some things. He should have done them sooner. But General Caldwell talks about indicators, and I think that's a good word to use. He - he's not overstating. He's not saying, `Boy, we have an irresistible trend going on here,' because we don't know whether they have their (INAUDIBLE) or not. I think Democrats fear that there might be a trend, and the trend would upset their - all their political plans, which are based on losing in Iraq. I don't think they're trying to lose in Iraq purposely. I think that would be the effect of their policies. But that's their - but that's their problem. It may not be a loss there.

KONDRACKE: Yes. So, look, the bottom line here is that from - from now and for several months, `Give Petraeus a chance' is going to be the de facto policy of the United States government. Bush can persist with this, because the Democrats are not going to cut off funds. But the danger is, that if at a certain point - and I'm not exactly sure when it is, but probably somewhere late in the summer or early in the fall - if this supplemental appropriation that the House Democrats are working on right now doesn't pass, Bush is going to lose his ability to transfer money around within the Defense Department account, and not be able to support the troops. At that point, you know, somebody deserves a lot of blame. If we - if we start - if we start having to withdraw troops on the basis that we don't have the money, you know, I - it seems to me that that's a tragedy.

BARNES: If there are improvements in Baghdad. If - if the city's becoming secure, there won't be any trouble getting that money, Mort. By the way, I - I praise you for your choice of words, "impervious." Very good. I would add one thing that you've heard me say before, and that is, I - I have finally concluded that when people say they support the troops - they're against the war, they support the troops - you know what that means? It means they don't support the troops. All right. Coming up, John McCain is back on the bus and hoping to steer his campaign out of an early rut. Don't go anywhere; "Ups and Downs" are next.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." Let's check out our "Ups and Downs." Up: outed CIA agent Valerie Plame. She's got a book deal and a movie deal, and now a very sympathetic ear on Capitol Hill. Here's Plame testifying Friday.

(BEGIN VIDEO CLIP)

VALERIE PLAME, FORMER CIA OPERATIVE: It was not common knowledge on the Georgetown cocktail circuit that everyone knew where I worked. But all of my efforts on the behalf of the national security of the United States, all of my training, all of the value of my years of service, were abruptly ended when my name and identity were exposed irresponsibly.

(END VIDEO CLIP)

KONDRACKE: Look, she was a dynamite witness, and she was under oath, as you hoped that she - that she would be.

BARNES: Sure, which she should be.

KONDRACKE: And she utterly blew to smithereens the notion that she was not a covert, classified employee of the CIA when she was outed by - by Bob Novak, thanks to a leak from a Richard Armitage in the State Department. Now look, this is one of the most secretive administrations we have ever had in American history. President Bush has even tried to lock up the papers of past - past presidents, for heaven's sakes. But this - this administration played fast and loose with the identity of a covert officer. And if they didn't know that she was covert, as they're using as a defense, they should have assumed she was covert, and - and - and protected her, in the - in the first instance. You had Armitage who leaked her name to Novak carelessly. You had White House aides who - Karl Rove and - and Ari Fleischer and Scooter Libby, who were talking to reporters about her, presumably to discredit Joe Wilson, her husband. Then you had the CIA, which should have protected her better, by telling Bob Novak, 'Look, this is a secret employee. Don't use - don't - don't use her name.' So look - but, you know, what I've said from the beginning was, this - this was botched from the beginning. Dick Cheney, if he didn't like what Joe Wilson had written in the - in "The New York Times" about the Niger-uranium case, should have written his own op-ed piece in "The New York Times," and just done it in public, instead of wreaking all of this.

BARNES: I agree with that. That should have been the first thing they should have done. They should have gotten up and - and - and said that every - practically everything that Joe Wilson wrote was wrong. And it was wrong. I - I hope this same House committee that brought Valerie Plame will now bring Joe Wilson, her husband, and put him under oath. Because we know, when he's under oath, as he was before the Senate Intelligence Committee a couple of years ago, that his story changes entirely. He collapses. And this phony thing about how the administration and the president and Dick Cheney had both gotten the intelligence from him, and then they had ignored in the State of the Union address in 2003, that's a lot of baloney. So put him under oath. I'd like to see that. You're so much in favor of these - of these oversight hearings . (CROSSTALK)

KONDRACKE: .I hereby stipulate, `Put Joe Wilson under oath.' And, you know - and I'd put some other people under oath, too.

BARNES: So would I.

KONDRACKE: OK, down: John McCain. The Arizona star seems to be losing some of his luster, as Rudy Giuliani continues to gain ground with conservatives.

BARNES: Look, I - I kind of feel sorry for McCain, because he has a more conservative record than either Giuliani or Romney, his - his two main opponents. But he always finds a way to alienate conservatives. And now we see Fred Thompson, who backed him really strongly in 2000 - remember back to the McCain presidential campaign then - now he's standing on the sidelines, I think waiting to replace McCain, if the McCain campaign just, you know, craters completely. I don't think it will. I think we're - and look, this is a guess on my part - that there will be, over the next five or six months, some real improvements in securing and pacifying Baghdad. And McCain will get a good bit of the credit, and he will deserve it, and they'll have a - a political recovery and be a real player in the presidential race again.

KONDRACKE: Whatever you think about John McCain—if you're a conservative, and you're worried about, you know, campaign-finance reform, or not voting for Bush's tax cuts or whatever - all that renegade stuff - this is a guy who says what he thinks, and - and follows his - his instincts. And I got to say, he is the most gutsy character about the war in Iraq. I mean, he stood up to the firefighters and, you know - and said what is the truth: we lose there, and we're in deep trouble. This is not - this is not fun and games we're playing. He is the most out front on that issue of anybody. Now, Giuliani is leading because he's a phenom. I mean, he's sort of the Barack Obama of the Republican Party. And John McCain, who's carrying around some baggage - ideologically baggage - is sort of the Hillary Clinton. But if Giuliani - you've said yourself that there's a lot of gauntlets (sic) that - that Rudy Giuliani has to follow through - you know, personal and - and - and positionwise. And if Giuliani doesn't make it through the gauntlet (sic), McCain's right there, back up at the top.

BARNES: You know, what's the most important thing a president has to do? Protect the national security. McCain's great on that; no question about it. Down: Venezuelan President Hugo Chavez. The anti-American dictator did his best to steal the spotlight from President Bush, but his protest during Bush's tour of Latin America turned out to be merely a sideshow. You know, Bush basically ignored him, as a - as a - you know, a little puppy nipping at his heels or something. And I've thought about this, and - and I thought Bush did the right thing, and - and I don't mean, since I already criticized Bush pretty strongly, whose presidency I've written favorably about for sure - but I think he was wrong. I think he should have attacked Chavez, just laid it to him as a dictator who's ruining democracy, who's going to bring Venezuela to poverty again, who wins friends by buying them, not by really winning them. And - and then proclaimed the good news, that most of South America that matters - whether it's Brazil or Chile or Colombia, the main - Mexico - the main countries - even Argentina - they're not going with Chavez.

KONDRACKE: Yes. Well, this was a - this was a South America-Latin America "we love you" tour, and here's what - here's all the things we've done for you. I think he should have put some - some bites on - on Chavez, and demonstrated - and I believe that Latin America believes this - that left-wing socialism, of the - of the Chavez-Castro variety is ruinous to economies. I mean, even the - even the populists don't want to go as far as Chavez.

BARNES: Yes, indeed. Stay right where you are; "The Buzz" is up next.

(COMMERCIAL BREAK)

KONDRACKE: Here's "The Buzz," Fred: I used to be pretty confident that the No Child Left Behind bill was going to be reauthorized without a lot of trouble. But suddenly, there's a groundswell of opposition to it, not just from the teachers unions, where you'd expect it, but even from some House Republican leaders, like Roy Blunt and - and Eric Cantor. Now this is standard-setting for education. And do you realize that only about 30 percent of American students at the moment are proficient in reading and math? How are we ever going to compete with the rest of the world if that's - if we don't improve our schools?

BARNES: Mort, I like No Child Left Behind, but I also like Roy Blunt and Eric Cantor, and I - I just happen to disagree with them on this. Mort, you know, there's ongoing debate at the White House among - between the communicators, who want Bush to be nice and soft and - and - and not tough on Democrats, and - and those who want him to be tough. The communicators are winning, and Bush has been soft.

KONDRACKE: That's all for "The Beltway Boys" for this week. Join us next week, when the boys will be back in town. Stick around; "FOX News Watch" is coming up right now.

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