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This is a full transcript from "The Beltway Boys," on April 7, 2007.

FRED BARNES, "WEEKLY STANDARD": Coming up on "The Beltway Boys," the Democratic presidential field continues to generate excitement, and now, big-time money.

MORT KONDRACKE, "ROLL CALL": President Bush says any bill that sets timetables for a U.S. withdrawal from Iraq is DOA. We'll tell how the Democrats are responding.

BARNES: Nancy Pelosi takes a magical mystery tour through the Mideast. We'll tell you if her trip helped or hurt U.S. foreign policy.

KONDRACKE: And what's the real reason Iran's president let those British hostages go.

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 first "Hot Story" is blue tide. Not red tide, not crimson tide - blue tide. The Democratic tide, obviously.

BARNES: I get you.

KONDRACKE: I mean, you - you once said that - that there was Republican realignment under way. Well, if there was, it stopped. And I'm not about to say that there's a Democratic realignment under way, or that the emerging Democratic majority that some people talked about has finally emerged. But the tide definitely has turned, and the 2006 election results were the prime example of it. House and Senate went Democratic, obviously. The governorships are now majority Democratic. Three hundred state legislative seats went Democratic this time, net, and they - the Democrats now control about 55 percent - percent of them. And the prospects are very good for the Democrats in 2008. Certainly, there is an enthusiasm gap. I mean, the Democrats are really pumped about their major presidential candidates, and the Republicans have a distinct case of the blahs about - about theirs. I mean, they're still looking for Mr. Right. Now, Mr. Too-Far Right, but Mr. Just Right, you know?

BARNES: Yes.

KONDRACKE: And I don't know whether - whether they're going to get him or not. Now, there's further evidence - I know you also like me to - to cite numerical evidence of - of the cases that I'm making, so I've got some. The Democratic presidential field is outpacing the Republicans so far in the money race. They've raised $78 million - these are the presidential candidates - compared to 51 million for the Republican candidates, according to the first-quarter fundraising reports. And this is a reversal of tradition. Since 1976, the Republicans have - candidates have always raised more money than - than the Democrats in the primaries. And the Democrats also have an advantage in party identification. Back in 1990, only 44 percent identified as Democrats. And that was 1 point ahead of the - the number of Republicans. Now it's 50 percent, and only 35 percent call themselves Republicans. I think that's a bit exaggerated. That - that Pew result, 15 percent, I don't think so. But in the last election, it was 4 percent, and the Democrats have - have at least gotten to parity, and maybe they're a little ahead.

BARNES: Yes, well, that's exactly what's happened. Mort, of course, there was a Republican realignment that brought Republicans up to parity. And then, we became a 50-49 Republican nation with President Bush's reelection in 2004. But, as you pointed out, then we had the election in 2006, and I think that shifted it. It's still very close, but I would say we have a 50-49 nation with the Democrats ahead. Slight advantage. And this is - I don't know about a Democratic tide, but this is clearly a Democratic moment. And - and Democrats - everybody's eyes are on Democrats now. Republicans clearly aren't as interesting. And if they do well, there could be a blue tide. There could be a Democratic realignment of the kind - not quite the kind they had with Franklin Roosevelt in the - in the 30s, but one that gave them a solid majority across the country. But I think if they continue to overreach badly, way beyond what the voters want on Iraq and foreign policy and spending and taxes, then they're - it's going to be a different story. There will not be a Democratic realignment. Now Republicans - a lot of them I think were just - would like to sit back and see Democrats screw up and then - and then will be all right for them. They'll win the White House in 2008, and maybe even take the House or the Senate again. But - look, that - I mean, that's clearly not going to work. I think what Republicans need most right now is a strong finishing kick by President Bush, where Iraq is improved and Baghdad is secured and so on. That's what they need if they're going to hold the White House. If - if President Bush leaves with the level of popularity and support that he has right now, it's going to be hard for a Republican to win. He need - Republicans need the kind of finishing kick that Ronald Reagan in 1988, and of course George Bush Senior was elected president then.

KONDRACKE: Ronald - Ronald Reagan got his final kick with arms control, don't forget, which is a reversal of his first - largely a reversal of his first term.

BARNES: Arms control? He won the Cold War!

KONDRACKE: Yes, well - well, the Cold War wasn't over when he left. In any event - look, but I agree with you premise, that - look, if Republicans - if - if the country wins in Iraq, I think that the whole table gets reversed, and the Republicans have regained the advantage, which I'm afraid to say, is why the Democrats are so invested in American defeat in Iraq. I hate to say that, but it - it's true.

BARNES: Let me just add one thing, and - which I think is discouraging, and you remember it, too. Remember when Democrats, mainly, pulled the plug on Vietnam in 1975, yanked the jaws of the - out of the jaws of victory, they yanked defeat. And they didn't pay much of a price for it politically at all.

KONDRACKE: I.

BARNES: That's discouraging.

KONDRACKE: Well, as you know, I fear that the same thing is happening right now. Coming up, President Bush says 'no way' to a war-funding bill that includes a timetable to get U.S. troops out of Iraq. "Hot Story" number two is straight ahead.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." "Hot Story" number two: "Leftward Ho!" And President Bush, you know, with Congress out of town, the Democrats gone, spent about the whole week promising to veto that Iraq and Iran - Iraq and Afghanistan funding bill for the troops that has these timetables in it for withdrawing that Democrats have put in there. He says he's going to veto it. He said that over and over again. Meanwhile, the Democratic presidential candidates are moving further and further to the left - thus, "Leftward Ho!" - on - on this question of challenging Bush on this veto, and evacuating our troops from Iraq. More to the left almost everyday. And I'm - I'm going to run down the top ones with you, starting with John Edwards. Watch John.

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: If the president chooses to veto, it's the president of the United States who's deciding `I'm not going to provide that the troops need in Iraq.' And not only that - not only that, if he vetoes it, they ought to send it back to him.

(END VIDEO CLIP)

BARNES: You know, that's easy for him to say now that he's not a senator anymore and has to vote on it. But what - what I think people like John Edwards miss is that the American people didn't say in the election, when they obviously voted Democratic because they were unhappy with Iraq - they didn't say, `Don't give victory a chance at all. And of course, General Petraeus is now in Baghdad with a new counterinsurgency strategy that seems to be working, at least in the beginning.

KONDRACKE: Yes, well, I think Edwards is emerging as the furthest left of the three top candidates across the board. And he's rapidly becoming the darling of the left-wing bloggers. And I would bet that of the three of these, that he is the most likely to sign on early to the Feingold-Reid proposal, which would cut off all funding for military activity in - in - well, not all military activity, but most military activity, in Iraq, a year from now, regardless of what is happening on the ground. I mean, that's a - that - that's the sound of retreat, and - and I would guess that he would - he'll join the - the clack.

BARNES: All right. Let's turn to Hillary Clinton. Watch.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: The president has said he will veto that. And I challenge him to reconsider that. You know, this is vetoing the will of the American people. This is not just the Congress.

(END VIDEO CLIP)

BARNES: Well, it's not just the Congress. It's the Congress and the political left in America. But it's not the American people. I mean, look, the American people didn't vote for a mandated defeat. They didn't say, `Congress, whatever you do, attach things to the funding bill,' or something like that, that - that - that will guarantee defeat in Iraq. I think the American public - and there are polls that show this - would still like to see a victory, and think it's possible.

KONDRACKE: Ah, I have a poll for you. I mean, the Democrats really ought to heed - this is the liberal organization the Democracy Course, Dan Greenberg and James Carville, asked the question, 'Are you more concerned that the Republicans will stay in Iraq too long, or the Democrats will leave too soon?' And it was 49-45, which is very nearly 50-50 - I mean, the country doesn't know which it's - which it's - which it's more worried about, the Republicans or the Democrats.

BARNES: Yes. I'm more worried about the Democrats. All right, Barack Obama. Watch.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We will constrain you in a different way. For example, we may not give you all the appropriations you want. We'll give you enough appropriations for the next four months, until the next - next budget cycle. And we will then review the situation. And if you have not initiated the withdrawal at that point, then we put you on an even shorter leash.

(END VIDEO CLIP)

BARNES: Did you see the audience there? It looks like he hypnotized them, mesmerized them. But in any case, I think his idea is - you know, of limiting funding is too cute. Look, if you want to cut off funding, cut off funding. You - I mean, go ahead and do that. Of course Democrats don't for one reason: they fear there would be a backlash among the American people.

KONDRACKE: Yes. Well, you know, Obama, initially, right after the Bush veto threat, showed some guts. I mean, he said that - that the vast majority of Democrats and he did not want to cut off funding for the troops, and that Congress might have to, in the end, vote for a - a - a clean supplemental, the way the president wants. For that he got savaged by the - by the left-wing bloggers for a day or two, where they accused him of - of surrendering to Bush. And then, of course, he caved.

BARNES: Yes, look.

KONDRACKE: Then he surrendered to them.

BARNES: Yes, but I'll tell you who did show some guts: John McCain - this week went to Baghdad and said exactly what the mainstream media didn't want to hear: there is actually improvement in Baghdad, that there are - are areas of the city now where you can actually walk around without get shot at or blown up. Well, and - and he said, of course, that the mainstream media's not reporting this. Well, there was apoplexy among a number of reporters over there. But I'll have to say, John McCain was backed up by Terry McCarthy of ABC, Brian Williams of NBC has said the same thing earlier. And a number of military officials have as well said the same thing, not declaring a trend, not declaring victory, not saying Baghdad is secure, but that there has been progress. I don't know - why does the mainstream media hate to hear that?

KONDRACKE: Well, you know - you know the answer to that.

BARNES: They're invested in defeat?

KONDRACKE: I - I'm afraid that they are. I think the only person with credibility in this administration - well, maybe two people: David Petraeus and - and Bill - Bob Gates still has - has some credibility on this - on this subject. Those people - I mean, they - they - they don't want to overstate the - the progress. But whatever progress there is, they've got to make the case for it, and especially Petraeus needs to come back here every once in awhile to - to testify before Congress that progress is being made.

BARNES: You know, I'd like to see Petraeus gave a speech to - in the congressional chamber, give a speech to Congress at some point. Now maybe this will come the end of the summer, when you can say, 'Look, there is a trend here; we are winning, and we are winning big,' if that's the case. If not - well, I guess you can't give that speech.

KONDRACKE: Do you - do you - do you think Nancy Pelosi and Harry Reid would invite him to do that?

BARNES: I haven't thought of that. I guess it - I guess he'll have to testify before a committee. All right. Coming up, Nancy Pelosi visits axis of evil member (sic) Syria over the objections of the White House. We'll have the damage assessment. "Ups and Downs," they're next.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to "The Beltway Boys." Let's take a look at the "Ups and Downs" for the week. Down: Nancy Pelosi. The - the speaker took it upon herself to reach out to foreign leaders during her trip to the Middle East, including the president of Syria. The White House was none too pleased about it. Here's Vice President Cheney. Watch.

(BEGIN AUDIO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: She is not entitled to make policy. She - in this particular case, by going to Damascus at this stage. It serves to - to reinforce, if you will, and reward Bashar Assad for his bad behavior. I'm obviously disappointed. I think it is, in fact, bad behavior on her part. I wish she hadn't done it.

(END AUDIO CLIP)

KONDRACKE: He - Nancy Pelosi was completely over her head on her trip. I mean, she - she was out there playing Henry Kissinger, and evidently without preparation, the kind of, you know, years and years of being a diplomat that he - you know, before he undertook shuttle diplomacy. And she evidently thought that - that making peace in the Middle East is easy, and that she would, you know, launch a new era of - of - of peacemaking out there. And if she didn't know better about this, Tom Lantos, the chairman of the House Foreign Affairs Committee, certainly should have. But he was encouraging her and enabling her. You know, and he - and in fact, he said that - that we have an alternative Democratic foreign policy. Well, you know, the Democrats are so determined to do everything to the exact - the exact opposite of whatever George Bush is doing that they're going to get themselves into trouble. And it sort of reminds me of George Bush. When he came into office, what - what did he - he started out by doing everything opposite of Bill Clinton. And he got himself in trouble. He did.

BARNES: Mort..

KONDRACKE: Ignored terrorism, for one thing.

BARNES: Mort, only you. Look, let no one call you an apologist for Nancy Pelosi. On the other hand, you're one of the few people I know, when Nancy Pelosi has a pratfall in Damascus, as "The Washington Post" called her visit there to Bashar Assad, can find a way to attack President Bush. When he told her not to go.

KONDRACKE: Well, when he deserves it, I do it.

BARNES: She - but I think that brings new definition to the - the phrase.

KONDRACKE: "Fair and balanced"?

BARNES: No, "a reach." That was a big reach. Anyway, look, that - I mean, when "The Washington Post" - I mean, not me, not "The Weekly Standard," not even you calls it "a pratfall," and says her shuttle diplomacy between Israel and Syria was foolish. You know, she ought to sit back and think about this, and maybe an alternative foreign policy is not what the American people want or what can possibly work. And of - and of course, it can't work. And I think you're absolutely right in saying she seemed to think that Middle East diplomacy is easy. It's about the hardest single thing in the world. You can't just sit down and - and say some nice things to Bashar Assad, who is a hardened thug, and expect him to respond in any way that's going to be helpful to the peace process in the Middle East. And of course, she got nowhere - and while pretending that she did. All right. Down: Iranian President Mahmoud Ahmadinejad. He tried to look magnanimous when he declared the release of those 15 captured British soldiers, calling it "a gift" to the U.K. But the West, and increasingly the world, can see through Ahmadinejad's theatrics. I think he reinforced not just the image of Iran, but the reality - reality of Iran as a - as a country that's a - a pariah country run by extremists who don't care whether they break the law or they kidnap people. They've done it before a number of times, most famously in 1979 with all those Americans who were held for 444 days. But they don't care. This is the kind of stuff they do. But as bad as that was, and I - and I think the Iranian there - they were hurt in their - the way people around the world view them, particularly the Europeans. Look at the pusillanimous reaction - I know that's a big word for you - but the cowardly reaction by the Europeans. The British asked for some help - you know, some economic help from the Europeans and the Germans. They got none. And then those poor, sad souls - those British - those 15 British sailors, who seemed to without much prodding by the - by the Iranians decided they'd make all these false confessions and thank the Iranians (INAUDIBLE). Take the diddy (ph) bags with them. I mean, they were pretty pathetic.

KONDRACKE: Yes. Well, I do think that Iran blinked in this confrontation, evidently because the - the mullahs thought that the - the Revolutionary Guards and Ahmadinejad had gone too far, and were threatening to isolate them in - in - in world opinion. But you're absolutely right about - about those British sailors. I mean, they did not even do a John McCain look-alike act for 10 minutes before they - before they caved in and gave the Iranians everything they wanted. It was - it was a - it was an embarrassment to the proud tradition of - of the British military over the - over the centuries. Now - and - and about the Europeans - I mean, look, if George Bush in the first Bush administration went too far and too fast in using military force, what you have to say about the Europeans, is that they are just mired in a - in a culture of appeasement. I mean, they just give in at the - at the - in the first instance, without - without making any kind of threat at all. I mean, so what is left? You know, the United States has got to carry the burden in this stuff.

BARNES: Whatever happened to the stiff upper lip?

KONDRACKE: I don't know. Up: Tommy Thompson. The former Wisconsin governor and Health and Human Services secretary officially joined the Republican presidential campaign this week. Now, Tommy Thompson, I've got to say, is one of the most energetic, fireball idea people I have ever seen. And he was a great governor of Wisconsin, and a good Health and Human Services secretary. A pioneer of welfare reform, of education choice, stem-cell research, science in general. I've got to say though that his - his campaign technique - his tactic, or strategy I guess it is of flooding the Iowa caucuses, and - and before that straw polls with Wisconsinites from - from across the border as a means of winning, I think, is a little problematical shall we say? And - and I think he needs a better slogan than "A Responsible Conservative."

BARNES: On the other hand, if he sends enough of these people, and they - in that August 11 Ames straw poll, and wins or comes in second or something like that, it'll put him on the map as a candidate who will be taken seriously. What I wonder is, what is the actual rationale of a Thompson presidency. I think he needs to tell us what it is, because it doesn't leap right out at me, anyway. All right. Stay right where you are; "The Buzz" is up next.

(COMMERCIAL BREAK)

BARNES: Here's "The Buzz," Mort: I now know why John McCain's fundraising for his presidential campaign faltered so badly in the first quarter of 2007. I have in my hand the worst fundraising letter ever sent out. It's by Peter G. Peterson of the Blackstone Group, a former Commerce secretary. Here's what he says in the letter - "At a time of intense political pressure for a Medicare prescription drug benefit, McCain voted against it." That's one of the most popular programs in the last half century. And then he says, "John McCain believes all of the challenges will require some of the American people to give up something, or to pay something for the longer-term general good." John McCain's going to raise your taxes, he says? That's supposed to help McCain? McCain says he's not gonna.

KONDRACKE: Yes. Stem cells come up for a vote in the Senate, and it looks like there are 66 votes minimum to expand President Bush's limits on embryonic stem-cell research, one short of what it takes to override a veto. In the House, they were 30 votes short, and it looks like Bush's veto will be sustained. But what I wish Bush would do would be to expand his own program, and allow funding for stem cells derived since 2001 - I mean, that's when he set the deadline - he could expand it for that. That's all the time 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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