This is a rush transcript from "The Beltway Boys", June 14, 2008, that has been edited for clarity.

MORT KONDRACKE, FOX CO-HOST: Coming up on "The Beltway Boys," skyrocketing prices are topic A in Washington and on the campaign trail, but is anybody really doing anything about them?

FRED BARNES, FOX CO-HOST: John McCain gets zinged on Iraq. And Democrats raise the age issue. Fair game or low blow?

KONDRACKE: Barack Obama cleans house and launches an anti-smear Web site.

BARNES: And the Supreme Court says the most dangerous terrorists can now challenge their imprisonment in U.S. courts.

KONDRACKE: All that on "The Beltway Boys" but first the latest headlines.

(FOX NEWS BREAK)

BARNES: I'm Fred Barnes.

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

Before we get to our hot story, obviously everybody in Washington is shocked and saddened by the death of Tim Russert, one of the best journalists of our time. He did magnificent things with "Meet the Press" and before that was an executive at NBC. Got the first U.S. TV interview with the pope. It was just a magnificent career.

BARNES: He had two careers. I've known Tim for 30 years. His first career was as a Democratic political operative, a press secretary for Patrick Moynihan and then Mayor Cuomo of New York. He was, I have to say, the best press secretary I had ever seen. Whenever you talked to him you always learned something. He was kind of a conniver too. He was a clever politician. Moynihan's re-election was all engineered by him. He knew publications where he could call and arrange for you to write a story for him. He did for me once. I was glad to get the opportunity. Boy, will he be missed.

KONDRACKE: Will he ever.

The hot story is gas pains. Voters justifiably enraged about the fact they're having to pay $4 and more for gasoline. There's really not much that politicians can do about this, anything significant at least in the short run.

So what are they doing? They're trying to blame somebody, cast the blame of themselves. The Democrats obviously trying to blame the Republicans and big oil companies.

And, here, watch what Barack Obama has to say about John McCain.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: Senator McCain wants to give billions of dollars in tax breaks to big oil. And opposes a windfall profit tax on oil companies like Exxon to help families struggling with high energy costs. I think that is exactly why we need to change Washington.

(END VIDEO CLIP)

KONDRACKE: Well, it will certainly come as news to John McCain that he's a friend of big oil. After all, he's in favor of cap and trade environmental legislation, which would considerably reduce what oil companies do.

But, you know, lots of other Republicans are blaming Democrats for pandering — I think justifiably — pander to the environmentalists by drilling in Anwar and drilling offshore, which we surely ought to do.

Here's ex oil man Dick Cheney followed by Ed Markey, one of the greenest Democrats of all Democrats, and what he said. Watch.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Given the high prices Americans are now paying, we should hear no more complaining from politicians who stood in the way of increasing energy production inside this country. They are part of the problem.

SEN. ED MARKEY, (R), MASSACHUSETTS: Our Republican friends say go drill in pristine areas like the Arctic refuge and in deep waters off the outer continental shelf. We simply cannot drill our way out of this crisis because we don't have the reserves.

(END VIDEO CLIP)

KONDRACKE: Well, he's just wrong. I mean, we do have the reserves. And if we signal we were going to start drilling sometime, it would have a modest effect on prices because the futures markets would, you know, figure there's a long run we would have energy. It would have a downward effect.

But at the moment, politically speaking, the Democrats are way up on this issue. A recent poll asked who could best handle the energy problem. 51 percent said Obama and only 30 percent said McCain.

BARNES: I don't make much of that poll. I think it reflects the generic advantage Democrats have. More say Democrats than Republicans answer the question that way.

More important, Mort — pay attention — more important is a Gallup poll says 57 percent of adults say drilling in coastal and wilderness areas off limits and 41 percent oppose. That was 57 to 41. Jot those numbers down. It really was surprising to me. I think it was surprising to the oil company.

And I disagree with you about whether anything can be done. And you seem — well, I guess you're not as agnostic as I thought you might be between the liberal Republicans and Democrats are saying.

One thing that can be done immediately is what McCain and Hillary Clinton also have advocated, lifting the federal gas tax this summer. It would save some money.

KONDRACKE: Not much.

BARNES: Not much, but some. It's something that can be done.

Then, I agree with you, if — think if this administration or the next one of Congress announced an emergency effort to increase oil production in the United States as part of the national mission to reduce our reliance on middle east oil. I think that would have an effect and ease fears about supply disruptions on oil markets.

Look, it is a simple fact what Democrats want, which is to apply much bigger taxes on oil companies, will reduce the amount of oil we get. We had a windfall profits tax, what, two, three decades ago. That's exactly what it did. It reduced the amount of oil. Punished the oil companies. Look, we need more oil, not more punishment.

And drilling in Anwar and in other federal land and offshore isn't going to produce more oil immediately but it's a safe bet it's going to produce some in five to ten years and we'll get a lot of it. That is a much safer bet than waiting until somehow magically we develop these alternative fuels that can replace fossil fuels, if they ever do.

KONDRACKE: Well, I think the Republicans could make head way and should try to make head way on this issue because the voters do understand the law of supply and demand. That if you produce more supply, the price will be — downward pressure on the price. And they ought to blame the Democrats for having blocked opportunities to increase supply.

There's just one problem with the Republican strategy and that's John McCain, you know, who, as I said, is not only the favorite cap and trade but against drilling in Anwar, against drilling offshore.

Here's his lame response on the issue. Watch.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R), PRESIDENTIAL CANDIDATE: I respect the rights of states to control what goes on off the shores of those states along their coast. But I think that we ought to tell the state of California and tell the state of Florida that we will drastically increase the amount of revenue that they, those states, will receive if they will allow exploration along their coast.

(END VIDEO CLIP)

KONDRACKE: He's not the only Republican. Some of your heroes, Jeb Bush, always against drilling offshore and Mel Martinez and Arnold Schwarzenegger.

Democrats do have a case that if George Bush had started by an increase in gasoline tax seven years ago, we would have less demand for energy and the price — there would be a downward pressure on the price, too.

BARNES: We'd have a lot of oil too if Bill Clinton hadn't vetoed what, 12 years ago, authority to drill in Anwar. Then you probably have other names you can cite.

But you're right about John McCain. Republicans need help. They need somebody who will champion more drilling, someone who can get national attention, command the national audience. That is John McCain. He is not there at the moment on this issue.

One other thing I want to add. McCain and others are living in the past. The new oil technology means you can drill 50, 100 miles offshore. It's not going to pollute the beaches and it's not going to produce oil spills. Thinking of like things were 40 years ago when we had that is just wrong. It's as simple as that.

KONDRACKE: There's also nuclear.

Coming up, Barack Obama moves quickly to dispel rumors about him and his wife. And are Democrats making an issue of John McCain's age? Yes, they are. What's the McCain campaign saying about it? We'll take a closer look.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." Let's check out this week's "Ups and Downs."

Down, John McCain. He gets a wrap for this exchange on the "Today Show" earlier this week. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED HOST: This is working, senator? Do you now have a better estimate when American forces can come home from Iraq?

MCCAIN: No. That's not too important. What's important is the casualties in Iraq.

(END VIDEO CLIP)

BARNES: That's not all Democrats were saying. There was another example of McCain senior moment. John Kerry, the senator from Massachusetts and a Democrat in a conference call said, well — listen.

(BEGIN VIDEO CLIP)

JOHN KERRY, (D), MASSACHUSETTS: It is really becoming more crystal clear to a lot of us that John McCain simply doesn't understand it. That he confuses who Iran is training. He confuses what the makeup of al-Qaeda is. He confuses the history going back to, you know, 682, of what has happened between Sunni and Shiite and how deep that current runs.

(END VIDEO CLIP)

KONDRACKE: This is such a bum rap. John Kerry in 2004 wanted John McCain to be his running mate and now he's turning on him like that. That's about what we expect.

Anyway, the Democrats pick up of that remark to Matt Lauer — was also about rap because John McCain went on in fact to say, as he has many times before, that we've been in South Korea, we've been in Japan. No troops are getting killed. Nobody cares as a result of it. If we were there in Iraq on the same basis, no one would care about that either.

What I think John McCain should be doing, especially on the Iraq issue, saying, look, we had a choice a year ago whether we had a surge or not. Barack Obama was against that surge. If we followed his strategy, we would have lost in Iraq.

But instead McCain's response is pretty lame. Watch.

(BEGIN VIDEO CLIP)

MCCAIN: Obviously disappointed in a comment like that. My position, the war in Iraq has been very, very clear. Very clear. I opposed the failed strategy that was failing. I argued for the strategy that's succeeding. and it's winning.

(END VIDEO CLIP)

BARNES: There's a reason of course why we have McCain down rather than up. And that is, in politics, if you're not on offense, you're on defense. and he's clearly on defense, answering every trivial and nitpicking charge about Iraq the Democrats come up with, when he needs to go on offense by doing exactly what you're talking about, giving speeches and talking about the bigger picture in Iraq where Obama's completely wrong. Obama pretends like there's been really nothing changed in Iraq the last year. But Al-Qaeda's been destroyed, so have the Shia militias. We've seen violence way down. We've seen American troop casualties way down. I could go — Prime Minister Maliki, for one. that was finally established as a national rather than a sectarian leader. Quite astonishing.

KONDRACKE: Up, Barack Obama. His campaign moved quickly to deal with the bad P.R. for the candidate, first, by jettisoning a Washington insider Jim Johnson when questions arose about Johnson's finances. And by launching a web site to combat Internet rumors about Obama and his wife.

BARNES: Dealing swiftly with a problem, when a politician does that, it can be pretty impressive rather than letting things drag out as they often do.

My question is, Jim Johnson was eager to stop being the poster boy for Obama's hypocrisy. And certainly, Obama didn't seem to do anything to ask him to stay as the head of him the vice presidential search committee. And the flap died right away, I have to say. It was well done by the Obama people. This web site, you know, about Michele Obama. And they'll declare every criticism a smear no matter what. Or at least she was quoted out of context.

KONDRACKE: Well, it is a smear that she once went to the Trinity United Church of Christ and used the word "whitey." That's been around the Internet. It's OK to stop on that.

But the problem is I think the Obama campaign will declare everything a smear that's a legitimate criticism of Obama like, for example, that he has a weak foreign policy, because he does.

BARNES: Coming up, the senate grinds to a halt over judicial nominees. And the Supreme Court rules in favor of Gitmo detainees. We'll have all the fallout next.

(COMMERCIAL BREAK)

BARNES: Welcome back to "The Beltway Boys." We're continuing with our "Ups and Downs."

Down, the Supreme Court. It's getting big time flack for its ruling this week giving the world's most dangerous terrorist, including the mastermind of the 9/11 attacks, the right to challenge their detentions in the U.S. courts.

I was surprised by this decision. I think it's wrong for a couple reasons. One, the justices and majority had to overturn a long-standing Supreme Court precedent and, in doing so, gave unlawful combatants, if you want to call them that, or terrorists, a right that most countries don't give them. And it's one for instance, Mort, that is not given to illegal immigrants who cross the border and come here peacefully don't have or overstay their visas or something like that.

And, secondly, it's really classic judicial overreach, activism, usurpation, imperialism. All these things apply in this because it takes from Congress and the presidency the right to decide how the military handles things, particularly how it handles prisoners.

KONDRACKE: The problem here is you've got 270 detainees in Guantanamo who have never been charged with anything. They've been there, some of them, for six and a half years. This is going to be a long war. What do we do with them? You can't leave them in this legal limbo never having had a full court hearing as to whether they're legally being held. So the Supreme Court is trying to answer that.

How this is going to be carried out is the big question. Now it's up to a district court in D.C. to decide what the rules of evidence are. And hopefully they will figure out some way so that these guys, some of whom are highly dangerous terrorists, don't get released back into the world. It's a big problem.

BARNES: I want to add one more thing. I think you can leave them in legal limbo. I think that's probably the best thing. You can't — as long as the war goes on.

KONDRACKE: For years? For the rest of their lives?

BARNES: You can't return them to countries that are just going to release them. Mort, 30 of those who are there, terrorists, who been decided they were unlawful combatants, turned out to be, if they were not that, have gone back and killed Americans and Iraqis and Afghans and all kinds of people. It's too dangerous to let them out.

KONDRACKE: You're saying who is somebody innocent should be held for the rest of their life without a hearing.

Down, the Senate Majority Leader Harry Reid. He's fallen way short on his pledge to confirm President Bush's judicial nominee and senate Republicans are doing everything to close senate business down in protest. Just this week Reid promised to move the process along. In an unusual letter to the editor of the "Wall Street Journal," Reid wrote, quote, "I expect the senate to consider two nominees this month consistent with our efforts to treat Bushes judicial nominees with more respect than Clinton's received from the Republican senate." That is just flat false. As Mitch McConnell, the Republican leader said, "15 judges were confirmed during the last two years of Bill Clinton's administration. Eight during the last two years of Bush's administration thus far, with two more expected this week." So that a total of ten. Are they going to get to 15? No way. The Democrats are not going to approve anymore Bush nominees because they want those vacancies to hold over into the President Obama administration.

BARNES: This, Mort, is a perfect issue for John McCain to jump on for a couple reasons. One is, of course, conservatives are just sort of falling in line behind him. You talked to them. They're pretty mellow about it. They're really indifferent to it. They'll vote for him.

This is an issue you can excite his base by attacking Reid, by talking again about the kind of justices that he would put on the court, John Roberts and Scalia and the ones he has endorsed and try to prove to all these conservatives that he's not quite the same John McCain who joined, what, the gang of 14 that actually did get some conservatives through but stopped senate Republicans from borrowing filibusters in the case of judicial nominees. It's just the perfect thing for him to seize. Now, I don't think he's going to do it. But the point here is, is he going into the election against a very popular candidate like Obama with a base that's boring but not really excited or one that is excited and really is a stirred and turning out especially large numbers? He needs that.

KONDRACKE: What I think is interesting is what is John McCain going to do about the Guantanamo decision? Here's another case where he could make the case for his Republican audience that this is a case that judicial usurpation overreaching and make the case he would appoint people like Alito and Roberts to the court, who would not do such things. Whether that's a good idea or bad idea I don't know but...

BARNES: It's a good idea.

KONDRACKE: Politically it's a good idea. Don't move a muscle. "The Buzz" is coming up next.

(COMMERCIAL BREAK)

KONDRACKE: What's "The Buzz," Fred?

BARNES: Tim Russert. I was saddened so much, as we said before, by his death. You know, he did amazing things as a commanding figure in television news. But he also was a great figure in politics before hand. He could handle the press in ways that I never could see anybody do so effectively. I columnist who knew him well once told me, every time he'd go see Russert every week or so — he said every time he saw Russert, he'd get a column out of it. Russert knew more than anybody else. He knew how to talk to reporters. It served him well when he moved into television journalism.

KONDRACKE: Yes, he was a great racum turum (ph). Everybody in town knew him and loved him.

What he did with "Meet the Press" was to pioneer the technique of extensive research into videotape, for example. And he would confront his guest with things that they said before and said, how do you square this? Quite embarrassing, quite effective.

That's all for "The Beltway Boys" for 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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