This is a rush transcript from "The Beltway Boys," on July 29, 2007. This copy may not be in its final form and may be updated.

FRED BARNES, "WEEKLY STANDARD": Coming up on THE BELTWAY BOYS, the Democratic presidential race takes a decidedly nasty turn as Hillary Clinton and Barack Obama trade insults.

MORT KONDRACKE, "ROLL CALL": Rudy Giuliani flexes some political muscle while Fred Thompson's non-campaign could already be in trouble.

BARNES: Democratic senators up the ante in their battle with Attorney General Alberto Gonzales.

KONDRACKE: Plus, one Democratic senator wants President Bush censured over the Iraq War. We'll tell you what's going on.

BARNES: THE BELTWAY BOYS are next. 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, first "Hot Story", anyway, is smack down.

And I'm talking about the battle that's going on between Hillary Clinton and Barack Obama in the Democratic field.

What got it all started is the CNN-YouTube debate this week, which was actually pretty good. It was good television, where one questioner asked the candidates, would you be willing to meet with a bunch of dictators, including Ahmadinejad and Fidel Castro and Hugo Chavez and so on, without pre-conditions in the first year of your presidency. And here's the way Obama answered and then Hillary. Watch.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I would, and the reason is this, that the notion that somehow not talking to countries is punishment to them, which has been the guiding diplomatic principle of this administration is ridiculous.

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I will not promise to meet with the leaders of these countries during my first year. I don't want to be used for propaganda purposes.

(END VIDEO CLIP)

KONDRACKE: So then Hillary told a newspaper that Obama's remarks were naive and irresponsible. And then Obama retorted with this. Watch.

(BEGIN VIDEO CLIP)

OBAMA: I don't want a continuation of Bush-Cheney. I don't want Bush-Cheney light. I want a fundamental change. It's time to turn the page on how we do business.

(END VIDEO CLIP)

KONDRAKCE: Now, look, I think that Hillary was right. I don't think it was irresponsible what Obama said, I think it was naive. I mean, Hillary Clinton demonstrated in this debate that she's been around the Oval Office quite a lot, as a matter of fact, and she had it exactly right.

You don't guarantee that you're going to meet with all these people in your first year without preconditions. I thought she should have said more about the way she would handle meetings with dictators, namely that I would try to get leverage, I would try to get them to stop doing what they're doing and so on.

But fundamentally her answer was absolutely right. And this isn't the first time Obama has demonstrated naiveté and unreadiness for the Oval Office. In an earlier debate, Obama was asked, how would you react if America got hit by a terrorist attack, and his immediate answer was, well, you would make sure the emergency responders were ready.

And she said what was correct, namely, I would prudently figure out how to retaliate.

BARNES: So you think that's strike one and strike two, the way our friend Charles Krauthammer said it?

KONDRACKE: Pretty close.

BARNES: Look, Mort, in your effort to drive Barack Obama out of the Democratic presidential race .

KONDRACKE: You know I'm not doing that.

BARNES: I know you're not. But you did neglect a couple things.

One was his I thought very unfortunate interview he did with the Associated Press last week in which Obama said genocide was not a good enough reason to keep U.S. troops in Iraq, saying, quote, "If that's the criteria by which we're making decisions on the deployment of U.S. forces, then by that argument you would have 300,000 troops in the Congo right now where millions have been slaughtered as a consequence of ethnic strife - which we haven't done . We would be deploying unilaterally and occupying the Sudan, which we haven't done. Those of us who care about Darfur don't think it would be a good idea."

You know, I think that's a huge mistake on his part. Averting genocide, that certainly is a legitimate reason for having troops in Iraq and keeping some of the there.

Then it was, Mort, how could you neglect the polls, the new polls? This is the first time on this show you .

KONDRACKE: I'll get to some.

BARNES: . haven't cited some poll that furthered your argument. In the latest "Washington Post" ABC News shows that among Democratic voters, Hillary Clinton has an 11-point edge over Obama. That's up four points since last month.

Now here's what I would say, not necessarily in Obama's defense, but just trying to describe what happened, and these were both strike one and strike two, snap answers during these debates. Well, you don't really get the flesh out of what you think. And you don't really get to describe how you would do things if you were making policy as president.

You wouldn't make it the way you do in a debate like that. And then there's the question of foreign policy experience. No doubt, Hillary has more than Obama does. On the other hand, I don't think that particularly helps her in this race. Voters don't seem either in the primaries or in the general election, voters just don't seem to care about experience. They go for candidates that they like. And candidates in their party, and so on.

Look, if they cared heavily about experience, they wouldn't have elected Bill Clinton in 1992, or Ronald Reagan in 1980. Still, I'll have to say, Hillary did get the better of Obama in both of those debates.

KONDRACKE: But look, you're talking about presidents elected in the pre-terrorism period.

BARNES: The Cold War was going on, at least in 1980.

KONDRACKE: Yeah. Except that the Cold War was something that had been going on for 30 years. And compared to Jimmy Carter, who were we going to elect but Ronald Reagan? I think in the post — as you've said yourself, in the post-9/11 era, I think foreign policy does count, and it's not that .

BARNES: I haven't said that .

KONDRACKE: Yes, you have.

BARNES: No, I said it's the position on dealing with terrorism that matters.

KONDRACKE: In any event, Obama keeps jabbing at Hillary over the fact that he authorized the Iraq War and he didn't, as though that makes him a superior foreign policy thinker. In fact, he was there back in the Illinois State Senate, he had no intelligence information, no briefings, no nothing and he basically made a seat of the pants judgment that turns out to have been right.

Now I have a question for you.

BARNES: OK.

KONDRACKE: Suppose Hillary wins the nomination but Obama finishes a strong second in all the primaries. Does she have to put him on the ticket in order to avoid offending African American voters?

BARNES: No. She'll win African American voters anyway. She's the Democratic nominee. Easy.

KONDRACKE: If she turns to Bill Richardson, I think African American voters will be angry.

BARNES: Mort, that was a very easy question.

KONDRACKE: Coming up, things go from bad to worse for Attorney General Alberto Gonzales.

And Fred Thompson's wife Jeri made her mark among political spouses this week. We'll tell you how, next.

(COMMERCIAL BREAK)

BARNES: Welcome back to THE BELTWAY BOYS. "Hot Story" number two, it's Thompson time. And at long last it looks like Fred Thompson is really going to jump in officially into the presidential race.

And Mort, I'll bet he does it in time for the September 5 Fox News Republican presidential debate in, I think it's in Durham, New Hampshire. It's at the University of New Hampshire. And none too soon.

I've had for the last few months great things to say about his unannounced campaign, about how well it's doing. Well, in the last few weeks, it has not been doing well, and maybe his real campaign can do it.

You look at can a campaign be ready and do better than this unannounced campaign. Look what happened. He tried to get Ed Gillespie, the lobbyist and Republican strategist and so on, to run his campaign. Ed went to the Bush White House instead as a top counselor there.

And then there's the question of his wife. His wife Jeri, I'm told is actually very smart about politics and a very good strategist.

On the other hand, if your wife is second-guessing your other advisors and is hiring and firing people, that means your campaign isn't going to work. It's just something that - your campaign will implode.

And so, Fred Thompson does have a number of problems, but I think the biggest one is this: he's got to have something to say, he's got to have some big things to say. Just doing a tour of various conservative positions and values isn't going to be enough. He's the guy that's going to come in and run away with the race, he's got to be interesting and exciting.

KONDRACKE: Yeah. Well, what he is saying on radio talk shows and in blogs and stuff like that is pure pander to the base. I mean, for one thing, after the Virginia Tech shooting, he said that college students should be able to carry guns on campus. Well, can you imagine what that would be like on a Saturday night at drunken frat parties, people walking around with their pieces?

And if you believe in global warming, it's like you're a member of the Flat Earth Society.

BARNES: I like that one.

KONDRACKE: And here's one you won't like, the immigration bill was a legislative pig with lipstick on it. You don't like that.

BARNES: You're right, I don't.

KONDRACKE: But this act is helping him gain on Rudy Giuliani. The latest Real Clear Politics average of national polls shows that Giuliani just has a seven-point lead over Fred Thompson nationally with McCain and Romney trailing.

So the choice is going to be between Giuliani, pro-choice, three times married, a tough guy, former mayor of New York, versus I think an ex-trial lawyer, a good ole boy movie actor with a wife who runs his campaign.

What's the choice? When asked in an ABC poll which candidate would have the best chance to beat the Democratic nominee? Forty-five percent say Giuliani. And that's 30 points higher than his nearest competitor who happens to be Fred Thompson. And I agree with that. Giuliani.

BARNES: So you think that Rudy would have the best chance of beating a pro-abortion, vindictive, conspiracy-imagining woman who is trying to ride her husband's coattails into the White House. That Rudy would have the best chance of beating that candidate.

KONDRACKE: It would be a very good race, actually. The two of them deserve each other.

BARNES: Coming up, Harry Reid calls President Bush the worst president ever. And pressure mounts against Attorney General Alberto Gonzales. We'll tell you if he'll survive this latest round of attacks.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to THE BELTWAY BOYS.

Let's take a look at the "Ups and Downs" for the week.

Down, Attorney General Alberto Gonzales. Forget those firings of federal prosecutors. Gonzales has a new problem to worry about. Potentially contradictory testimony about the administration's spy program and a perjury probe launched by Democrats. Democratic Senator Charles Schumer says they had no choice.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER, (D) NY: This is the straw that broke the camel's back. It's not just one instance. If it were one instance, I would think every one of us would say give him the time to explain, nobody is perfect, et cetera. It happens over and over and over again.

(END VIDEO CLIP)

KONDRACKE: Chuck Schumer said that he was very sad to be calling for a special prosecutor. I don't believe that for a minute.

BARNES: Shedding crocodile tears.

KONDRACKE: Schumer did get some help this week when the director of the FBI, Robert Mueller, did seem to contradict Gonzales as to what NSA spying program, there was a flap about the 2004 at the Justice Department. And it works against Gonzales.

Now it's still unclear exactly what's going on here. And a lot of it is secret and classified and so on.

But as long as that's the case, then President Bush is not under a lot of pressure to appoint a special prosecutor as Schumer is demanding. However, if it ever can be shown that Gonzales really did lie to Congress, then Bush has got to appoint a special prosecutor, it's the only way out or ask for Gonzales' resignation. We're not there yet but it could happen.

BARNES: Well, look, he'll never have another prosecutor. Might ask for the resignation, though I doubt that.

And look, I'm not sure that the FBI chief Mueller actually was talking about the same thing that Gonzales had talked about when he said there was no dissent inside the administration or something. It's very confusing. The discrepancies are minor. They're not significant. If they're lies, they're not significant lies. I don't even think they're lies. It's a very fuzzy area.

There — Some places, it's just the semantics of what I think you mean by dissent which I admit is a little like what the definition of the word "is" is.

KONDRACKE: There was dissent in the Justice Department.

BARNES: OK. There might have been some. But for Schumer and Democrats to score - to start screaming perjury and demanding a special prosecutor at this moment is, I think, terribly revealing. Because it shows what they're really after in subpoenaing White House aides.

Because their idea is to get as many White House aides or administration officials as possible to bring them in on this bogus investigation of the U.S. attorney firings and then find discrepancies in their testimony, and you can always find those, and then claim perjury, and then call for a special prosecutor. That's what they're doing.

It represents something, Mort, that you have condemned and so have I. And that is the criminalization of normal politics and policy making. And this is a great example of it.

KONDRACKE: Yeah. Republicans used to do it too when they were in charge. Bill Clinton, impeachment.

BARNES: Mort, the guy lied to the American public. You endorsed the investigation that was going on.

KONDRACKE: Lying about sex is not a high crime and misdemeanor.

BARNES: All right. We'll debate that later.

Down: Senate Majority Leader Harry Reid. He's taking shots at the president for poor leadership but can't square that with his paltry congressional accomplishments so far. Here is Reid crowing about what Congress has done so far.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) MAJORITY LEADER: We have had 100 hearings on Iraq and we're going to have 100 more, and we're proud of it.

That's in preparation for us to get our valiant troops to come home.

(END VIDEO CLIP)

BARNES: Did you enjoy that one?

Look, as you once said about Senator George Allen of Virginia. You called him a doofus. I kind of think Harry Reid is a doofus. But I admit there is an alternative interpretation of what he's doing with all this Iraq stuff and the alternative is he's much more crafty than he appears out front and he's dwelling obsessively on Iraq. A hundred hearings, a hundred more every week. More votes on Iraq and so on. And keeping it in front of the American people.

And obviously it's an issue that helps Democrats and hurts Republicans, or at least it has up to now. And so what's he got in mind? He's got in mind the 2008 election where if Iraq is still around as a big issue, and a lot of Republicans fear this, if it's still around as a big issue then Reid can win three or four more Democrats in the Senate and give himself a larger, workable majority that can maybe overcome some of the filibusters and then secondly lay the groundwork for the election of a Democratic president in 2008. So maybe there's method in his madness, or maybe it's just madness.

KONDRACKE: No, I think there is method and there is madness and regardless of which it's always over the top. You can always depend on Harry Reid never to understate anything, right? The latest is this. Watch.

(BEGIN VIDEO CLIP)

REID: The American people already know that President Bush is the worst president we've ever had.

(END VIDEO CLIP)

KONDRACKE: I mean, you know, the president is a liar, the president is a loser. The war in Iraq is lost. And last week, he had to apologize on the Senate floor for throwing a tantrum. And that was his expression, that he threw a tantrum the day before.

And he is postponing the passage of the defensive authorization bill depriving the troops in the field of equipment and pay raises that they deserve in order to play politics with the Iraq issue over the August recess.

BARNES: So you're endorsing the alternative theory.

KONDRACKE: If he thinks George Bush is the worst president in American history, the question needs to be raised, is he the worst Senate majority leader in history? After all, the polls indicate that the public has less trust in the Democratic Congress than it does in President Bush.

Down, Senator Russ Feingold. The Wisconsin Democrat says the president is guilty of impeachable offenses but he is only pressing for a censure resolution against him. Here is Feingold's explanation of that. Watch.

(BEGIN VIDEO CLIP)

SEN. RUSS FEINGOLD, (D) WI: I have a lot of sympathy for those who are interested in impeachment, but the Constitution does not say you must impeach. It gives the option of impeachment. And in this case exercising the option is not necessary given the fact that we can censure this president who frankly will not be in office that much longer.

(END VIDEO CLIP)

KONDRACKE: Now look, if he really believes the president has committed high crimes and misdemeanors, then it seems to me irresponsible on his part to just go for censure resolution which is basically a political statement without effect. What he ought to be doing is going to members of the House to file articles of impeachment and see if he can prove that the president committed those crimes and that there was criminal intent behind it. I think the worst you can say about Bush is he has had bad policies, that he has had terrible communication and that he has made misjudgment.

But high crimes and misdemeanors? I don't think so.

BARNES: What would you think if General Petraeus when he reports back from Iraq and how the counterinsurgency and the surge is going in September and he says, you know, it's amazing what we've been able to do, we've been really crushing Al Qaeda, and we are winning, I think we can actually win overall in Iraq, what do you think people like Feingold will say? Will they acknowledge that?

KONDRACKE: Of course, they'll ignore him. Or dispute him.

BARNES: Yeah.

Hang on to your hat. "The Buzz" is up next.

(COMMERCIAL BREAK)

BARNES: Here's "The Buzz", Mort. Gordon Brown, the new British prime minister replacing Tony Blair will be in America for the first time Sunday night, goes to Camp David , meets with the president. Monday, they'll have a press conference. And we'll find out something we're all wondering about, then there'll be a lot of buzz about this, whether he's really as pro-American as he says he is, and like Blair, or whether he's like the Cabinet members that he's named who seem to be anti-American.

KONDRACKE: Yeah. It's leftward ho for the Democratic Party. No big surprise but new evidence. The Democrat Leadership Council, the centrist group that launched Bill Clinton's presidency is having its annual convention this weekend in Nashville, and not a single Democratic presidential candidate is going to talk to them.

But in August, Daily Kos, the left wing blog is holding a convention in Chicago and they're all going there. All this is going to hurt them in the general election.

BARNES: All right. That's it for THE BELTWAY BOYS this week. Join us next week when the boys will be back in town.

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