This is a rush transcript from "The Beltway Boys", October 13, 2007, that has been edited for clarity.

FRED BARNES, FOX CO-HOST: Coming up on "The Beltway Boys," no more Mr. Nice Guy. Barack Obama shows of newly sharpened elbows against Democratic front runner Hillary Clinton.

MORT KONDRACKE, FOX CO-HOST: Rudy Giuliani is feeling the heat as Mitt Romney steps up the attacks.

BARNES: Fred Thompson debuts in his first debate.

KONDRACKE: Al Gore wins the Nobel Peace Prize. Is a political campaign next up?

All that, plus campaign Carl Cameron, but first up, the headlines.

(NEWSBREAK)

KONDRACKE: I'm Mort Kondracke.

BARNES: I'm Fred Barnes. And we're "The Beltway Boys."

KONDRACKE: The hot story of week is one-on-one. Obama versus Hillary and Mitt versus Rudy.

First, Al Gore won the Nobel Peace Prize. Does it mean he'll run for president? What do you think?

BARNES: I don't think so. You know, Democrats, unlike Republicans, are happy with the presidential candidates they already have. Al Gore has never given any indication he wants to run for president. Besides, he has the Nobel Peace Prize.

KONDRACKE: Right. Oscar, too. Why would he want it? Okay. I agree with that. But he will get an up-air a little bit down further in the program.

Let's start with the Democrats. So Barack Obama is so far behind Hillary Clinton he's resorting to ordinary politics. Not abandoning the politics of hope, but he's doing what the candidates do, that is to attack their rivals. Especially somebody so far in front as Hillary Clinton.

Obama wrote an op-ed piece in the "Manchester Union Leader" and it said, quote, "Senator Clinton says he was merely voting for more diplomacy, not war with Iran. But if this has a familiar ring, it should. Five years after the original vote for war in Iraq, Senator Clinton argued her vote was not for war, it was for diplomacy or inspections. America needs a leader who will make the right judgments about matters as grave as war and peace. And America needs a leader who will be straight with them."

Obama is perfectly correct. Everyone knew at the time of the Iraq war vote it was a vote for war, not for diplomacy or sections.

On the other hand, here you have — Obama at the time against the war. He was state Senator, off in Illinois. A candidate for a future Democratic nomination for the U.S. Senate. He came out against the war. He didn't look at the intelligence. He wasn't here in Washington. He wasn't hearing the argument and so on. It was a reasonably easy call for him.

Now he goes on to say that Hillary is preparing the way for war again in Iran, by approving a resolution. All it does is declare the Iranian Revolutionary Guards to be a terrorist organization, which everybody knows they are. And it requires — it would presumably require sanctions. It didn't require anything on its face. He says it's a prelude to war.

I think its nonsense and it shows that he is really soft on foreign policy. Now, Hillary, her campaign responded. She didn't even respond directly to this, said, quote, "It's unfortunate that Senator Obama is abandoning the politics of hope and embracing the same old attack politics as his support stagnates. Senator Obama's attacks won't bring change. But Senator Clinton's strength and experience will."

When he was asked directly whether Obama was going too far on the negative, this is what she said. Watch.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: That's for every candidate to chose. I feel like people know me. They know where I stand. They know what I will do. And that's what I'm going to keep putting out there for the voters.

(END VIDEO CLIP)

KONDRACKE: Bottom line, I'm above it all.

BARNES: I like statement in her campaign, more in sorrow than in anger.

Obama is just striking out. He's not succeeding or getting anywhere by emphasizing the 202 vote on the war of hers. You — he's totally right in what he says about her fresh explanation.

Then this vote on Iran's Revolutionary Guards. It's just not taking him anymore. The main reason is she's too clever for him. She couples one vote, say her 2002 vote on the war, the hawkish vote, with a dovish vote. She voted for the Russ Feingold Amendment in the Senate. That would have reduced funds for troops in Iraq.

On Iran, she does the same thing. Votes for Revolutionary Guards and co-sponsors a bill that says, look, President Bush cannot attack Iran under any circumstances without first coming to Congress. She is extremely clever and gets away with it even though - it's not the fault of the press. They're reporting her on the one hand, on the other hand. Obama needs a new line and he touched on it last week. It was good. Something to the effect she's Washington, the establishment, she's the status quo, and I'm not. I love that Reagan line. I forget how it came about during his presidency, but he was asked about change and he said, "We are the change." That's what Obama needs to say. I am the change. You see it when I get to Washington, because here is how it will manifest itself.

KONDRACKE: I think the country wants change, but Hillary has also made herself into a change agent, too, successfully, so far.

Meanwhile, on the Republican side, Mitt Romney sees that Rudy Giuliani is catching up to him in New Hampshire. And New Hampshire is must-win for Romney. Because it's next door to Massachusetts where he was. As you can see, Romney is only 4 points ahead.

So, now we have Mitt going on the attack against Giuliani. On the rather arcane ground that Giuliani challenged the line-item veto that Congress gave to Bill Clinton in the Clinton presidency. And, you know, the Supreme Court actually found in Giuliani's favor. Here was the exchange between Romney and Giuliani at the debate last week in Michigan. Watch this.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R), PRESIDENTIAL CANDIDATE: We're both guys in favor of keeping spending down and keeping taxes down. We're not far apart on that. The place we differ is on the line item veto. I'm in favor of the line item veto. I'd have never gone to the Supreme Court and said it's unconstitutional.

RUDY GIULIANI, (R), PRESIDENTIAL CANDIDATE: I'm in favor of the line- item veto, but you have to do it legally. As the mayor of New York, if I let President Clinton take $250 million away from the people of my city illegally, I wouldn't have been much of a mayor.

ROMNEY: That's what it was about. That's what it was about.

GIULIANI: I took President Clinton to court and I beat him. I don't think it's a bad idea to have a Republican presidential candidate who actually has beat president Clinton at something.

(END VIDEO CLIP)

KONDRACKE: He's good.

BARNES: He is very clever.

KONDRACKE: He's very clever. And McCain has taken up the attack on Giuliani and the line-item veto, too. I did not see anything in the debate that diminishing Giuliani's front runner status, including the arrival on the scene of Fred Thompson. Thompson did OK, but Giuliani I think still running ahead of everybody else.

BARNES: There was that other difference between Giuliani and Romney. Remember after Romney answered that question about what — would he seek Congressional approval if he would attack Iran and he said he'd check with the lawyers. And I don't know. That didn't strike me as a good answer. But, and Rudy zinged him. You have to watch Romney's explanation later and then Rudy back at him again. Watch this.

(BEGIN VIDEO CLIP)

ROMNEY: That's a phony issue. I made it very clear, of course, I'd put the interest of the safety of the American people first. I'd make my decision based on the safety of the American people.

GIULIANI: Mitt made a mistake. He made a mistake. This is one of those moments in a debate — and we probably have all had them or are going to have them, which is you say something and you kind of go like this. Oops, I didn't mean to say that.

(END VIDEO CLIP)

BARNES: Well, you know, Romney — Romney, we'll say the fact that most of these issues, you called them arcane, hat come up months before the primary and caucuses begin are forgotten by the time voters wake up and pay attention and start getting ready to vote.

Rudy better hope that true also of the case of Bernie Kerik, his business partner and sidekick for years, his police commissioner, corrections commissioner, as mayor of New York. Bernie Kerik is in big trouble. The "New York Daily News" says he will be indicted on a number of counts.

When Rudy Giuliani came by FOX this week, he didn't — he had one as well. He said it was a mistake on his part, to recommend Kerik go to President Bush to be Homeland Security secretary. And it was a mistake as well he didn't check out Kerik's background.

KONDRACKE: It raises question about his judgment in people, however.

BARNES: All right. Coming up, Carl Cameron will give us the inside scoop on the Thompson and Giuliani campaign. Don't move a muscle.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." The race for the White House kicking in to high gear, you're going to see a lot of the guy on the "The Beltway Boys." He's Carl Cameron, who joins us from the campaign trail in Bedford, New Hampshire.

Carl, I have a question for you about Fred Thompson. Is he being squeezed out of the Republican race as Rudy Giuliani and Mitt Romney squabble with each other and gobble up the press attention?

CARL CAMERON, FOX POLITICAL ANALYST: Well, they really are. They're sucking up all the oxygen on the Republican side and leaves Fred on the sideline. Not at all like what happened in the debate when you saw Mitt and Rudy going at it. Fred put in a reasonable performance, but he wasn't making the headlines they were. He is not only squeezed by Giuliani and Romney, but he's squeezed by the calendar. That's not a lot of time here. Fred Thompson tends to take a lot of days off. His work days aren't as busy as others. He's got to get something going and he has very little time to do it in.

KONDRACKE: Carl, Romney has been on television a lot in Iowa and New Hampshire. Giuliani has not been on television with ads at all. Leaving him with a lot of money to spend. One, what is Giuliani's plan for ads? Two, is he going to contest Iowa? Or let Mitt win it and finish up in later states?

CAMERON: Yeah, the ground game question. Where the ground game is doing, in terms of what they do in advertising and things like that, it began for Giuliani just after Labor Day when they began radio ads and direct mail in Iowa and New Hampshire. If you look at the trend line on the polls, that's what he began to climb.

It's also when Mitt Romney began to dip. Rudy Giuliani has begun to see results from going up on radio and using direct mail. The TV stuff, they're in no rush for. They kind of compare it to where the rest of the campaign is. Mitt Romney spent millions and millions and he hasn't got much to show for it.

Fred Thompson in a solid second. He's not on the air with anything spectacular and hasn't even given a major speech yet. Giuliani is comfortable right now keeping his powder dry, not spending a lot of money. They have the ads on the shelf ready to go as soon as he sees a significant dip in the polls.

KONDRACKE: Let me ask you one thing quick. I thought I noticed Mitt Romney died his hair in the Michigan debate. Was I imagining something or is it the latest makeover?

CAMERON: Mort, I noticed it, too. At one point in the debate I thought hmm, governor must have gotten his hair done that afternoon. He was clearly had a new do. We see him all the time. It did look a little bit darker, but I don't think you're going to get anybody copping to hair dyeing at this point.

KONDRACKE: I doubt it. Thanks, Carl.

Coming up next, Democrats face reality on the Iraq war. And Al Gore is basking in the afterglow of his Nobel Peace Prize win. Do voters really want him on the campaign political stage? We talk about that next.

(COMMERCIAL BREAK)

KONDRACKE: Welcome back to "The Beltway Boys." Check out the "Ups and Downs" for week. Up: Al Gore, as promised. President George H.W. Bush called him the ozone man, but Gore got the laugh last when he received the Nobel Peace Prize for his efforts to combat global warming.

BARNES: It puts Al Gore in an elite class of world leaders that Bill Clinton and George W. Bush, Ronald Reagan and others have not gotten to. They didn't give it to Gore alone. It was gave it to the Intergovernmental Panel on Climate Change. Interesting, that the IPCC takes a more reasonable science-based view of global warming than Al Gore does. They say this century, sea levels will rise due to climate change one foot. Gore says 20 feet. I think where Gore comes down is he is to global warming what Tom Tancredo is to immigration. He's hysterical. This is supposed to be the Nobel Peace Prize. What in the world does Gore's crusade against global warming have to do with peace?

KONDRACKE: The argument would be that the disruptions caused by drought and flooding and so on that would produce conflict between people and solving the problem would keep the peace.

BARNES: That's pretty lame, don't you think?

KONDRACKE: Not necessarily. But, look, in the 106-year history of the Nobel Peace Prize, a lot of god people got it, Martin Luther King, George Marshall and so on. Scoundrels got it, too, like Yasser Arafat. Dubious people, like Jimmy Carter, I would put in that category. And Al Gore fits in the third category. He deserves credit for raising awareness to global warming. Everyone almost agrees that warming itself is a problem. But he's completely overstated the consequences of it.

And he also, his prescription, which is a drastic pull down on carbon emissions in a swift way, would cause disruption of its own — economic disruption, poverty all over the industrialized world — and would not include the developed world or developing world, like China and India, in the process, and would not cure the problem. He's somewhere in between.

Anyway, down: Democrats. They're getting hounded from their left wing base on the war in Iraq as they put the debate on troop withdrawal on hold again.

BARNES: We could give an up arrow to Republicans but they don't see or understand how decisive the victory is on the war in Iraq. I was with Nancy Pelosi this week with other people and she said, "When we said we would end the war, we never said we had the veto pen. I'm proud of the ratings that the Democrats have on every issue you can name. I don't disagree with the public evaluation that we have not done well ending the war."

They haven't. Of course, as the surge began to take effect, reduce violence in Iraq and the Sunni now abandoned their insurgency, it stiffened the back of Republicans and they stood with Bush.

Pelosi is right saying we'll move on to other things. We have no common ground and we'll move to education and health care, which have been good issues for Democrats.

The problem that was created, though, was letting — acting as if in dealing with the left wing anti-war base of the party, acting as if they could end the war in Iraq, when they'd never be able to do that.

KONDRACKE: It's not just the anti-war base. It's a question of who the Democrats are on foreign policy. They've not abandoned position, nor have the Democratic presidential candidates abandon the position that the war is a loser. My fondest hope is we emerge from Iraq successful, mostly for itself, because on its merits, that the conflict. But also to show up the Democrats being weak on foreign policy, which they are.

BARNES: All right. Down: Turkey. U.S.-Turkish relations are nearing a breaking point after a house committee called the Ottoman Turks' massacre of Armenians back in 1915 genocide.

KONDRACKE: Continuing that last point, Rush Limbaugh is saying that the Democrats are promoting this resolution in Congress in order to disrupt our relationship with Turkey. Not get the supply — to limit supplies from Turkey to the troops in Iraq and cause a defeat in Iraq.

I don't think it's the case, but the Democrats should be careful proceeding with the resolution, because the effect will be, or could be that the Turks will stop allowing supplies through. That will hurt the troops.

BARNES: I think it would be the effect. I don't think the Democrats are doing it intentionally. All they're doing is serving what they consider an interest group. A lot of Armenians in the United States. They're wonderful people. They've done well. They tend to be Republicans actually. But they're really insistent on having the Turks officially declared as perpetrators of genocide. They're responding to them like you would to an interest group. Even though the down side from doing this could hurt America and the world and jeopardize our relations with an important ally, Turkey.

All right. "The Buzz", it's up next.

(COMMERCIAL BREAK)

BARNES: What is "The Buzz"?

KONDRACKE: The White House is amazingly upbeat on a lot of fronts, one of which is — this is a legitimate point, I think - the cost of the Medicare Prescription Drug Program was $4 billion less last year than was anticipated to be. And that is proof that the free market works in health care.

BARNES: You know, I've been amazed how many issues all of a sudden the president seems to have and Republicans have a slight advantage on for one reason or another. Iraq is one. They defeated the Democrats on that. The surge goes on. Free trade, there are the four trade treaties and we'll get a couple of them. The budget, which I think the president, may wind up vetoing, and presidents always have the advantage there. Electronic surveillance of terrorists in trying to make that more difficult. Democrats are in trouble. Then there's the new attorney general, who will probably be fairly easily confirmed. You know, as I said, Bush may not have much influence, but he does have power.

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

Watch "The Beltway Boys" Saturday at 6 p.m. ET and Sunday at 1 and 6 a.m. ET

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