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This is a partial transcript from The Beltway Boys, August 9, 2003, that has been edited for clarity. Click here to order the complete transcript.

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ARNOLD SCHWARZENEGGER CALIFORNIA REPUBLICAN GUBERNATORIAL CANDIDATE: The man that is failing the people, more than anyone, is Gray Davis (search). He's failing them terribly. And this is why he needs to be recalled.

And this is why I'm going to run for governor of the state of California.


FRED BARNES, CO-HOST: Did you notice that thunderous applause? Arnold Schwarzenegger (search) stirs it, excitement. And I think probably at the moment he's the front-runner to replace Gray Davis (search) as governor of California in that recall election on October 7.

Listen to this from Arnold Schwarzenegger now.


SCHWARZENEGGER: I will never have to sit down in Sacramento to make a deal with anybody, because special interests cannot buy me. I have enough money. What we have to concentrate on is leadership. In everything I ever did, I showed great leadership.

And you know what happened? I became the highest-paid entertainer in the world.


BARNES: Well, he has some strengths. Modesty isn't one of them. But he's got charisma, he's got crossover appeal, he's got a populist message. He's got a great personal story.

I think he needs only one more thing, and that is Republican voters. You know, he's very liberal on social issues, but if he could just Republican voters, I think the threat for him is not Bill Simon, who ran a terrible race for governor last fall, but Tom McClintock (search), the state senator, well known to Republicans in California, grand…almost was elected state controller last year.

The way to do this is for Arnold Schwarzenegger to say, No new taxes, period. It…and I think that'll work.

As for Gray Davis, Mort, he had the worst 24 hours of any politician I've, I've ever seen. First Arnold gets in, then two Democrats get in. Then the Democrats who are saying nice things about Gray Davis, like Dianne Feinstein, stopped saying those things.

Then he loses two court cases, all in 24 hours. My friend H.D. Palmer, who works for the Republicans in Sacramento, said, 4 words apply to Gray Davis…in lieu of flowers.

MORT KONDRACKE, CO-HOST: Right. I mean, Gray Davis does look like a corpse.

The, the one thing, other thing that what Arnold Schwarzenegger needs is a plan, is, is substance. I mean, he's going to be questioned about, OK, how are you going to get the state there? He is, you know, and Davis's argument is going to be, the Democrats' argument is that this is, would be on-the-job training for Schwarzenegger. And he comes in as an outsider, that's an advantage. But he's got to have some substance to him.

Now, I think will…you know, reporting will develop, whether this is true or not. But, but he may have pulled a very shrewd maneuver by surprising everybody and faking Dianne Feinstein out of, of running. If Dianne Feinstein had run, she would be the front-runner. She would have cleared the Democratic field, and she would be, you know, a formidable opponent.

But, you know, he fooled her into thinking that he wasn't going to run. Then she said that she was out...


KONDRACKE: ... then he jumped in. Might have been very shrewd...

BARNES: Yes, well, I think you're onto something...

KONDRACKE: ... we'll see.

BARNES: ... there.

KONDRACKE: Right, yes.


KONDRACKE: Now, the, the other Democrats in the field, it looks as though the Democrats are going to align behind Cruz Bustamante, the lieutenant governor, who has Indian casino money, lots of it...

BARNES: Right, yes.

KONDRACKE: ... and also is Hispanic and presumably can get a Hispanic big, a Hispanic turnout and presumably is the front-runner, although there are other Democratic candidates in the field.

BARNES: You mean, the front-runner among Democrats.

KONDRACKE: That's…well, the front-runner among Democrats…

BARNES: Right.

KONDRACKE: ... yes, exactly.

Now, the other hot story of the week is the…another Democratic derby, demolition derby, and that is the national one for the, the presidential nomination. These Democrats have gotten themselves committed to one special interest cattle show after another, and every time they go there, they pander to the audience. And the last one was in Chicago this, this week at the AFL-CIO (search) convention, where they were all pandering over, you know, who was against free trade the most.

And you had John Kerry and John Edwards and Howard Dean, who are all previously free traders, suddenly are going back on their position.

Watch what happened when one Democrat, Joe Lieberman, courageously decided to buck the party line. Watch.


SEN. JOSEPH LIEBERMAN, D-Conn., PRESIDENTIAL CANDIDATE: Let's even try the so-called voucher program on an experimental basis, just to see if we learn anything from it. You ask… I'm going to speak the truth. I'm going to say what I think is best for America regardless.


KONDRACKE: And, incidentally, Lieberman...


KONDRACKE: ... also said that he's still a free trader, and so, so did Bob Graham, against the party line. But everybody else was following…competing with Dick Gephardt.

Now, in the next week, the Democrats have five more of these, of these cattle shows...

BARNES: Right.

KONDRACKE: ... and all you can expect from that is a panderpalooza.

BARNES: Yes, yes. Say that again?

KONDRACKE: Panderpalooza.

BARNES: OK, I like that, panderpalooza.

Look, remember back in…you're old enough to remember, to remember back in 1980 when John Anderson was running for the Republican presidential nomination in New Hampshire before a gun group, he came out for gun control and he was booed. The result, the press treated him as a hero. He got enormously favorable press.

John…now, the…2003 and Senator Lieberman, courageously, as you said, comes out against something that the Democratic hard core doesn't like, he's booed. Does the press play him that way? Not at all…this is liberal bias. You move to the left, they cheer you. You move, you move to the right, they don't.

Another case of liberal bias. I mean, would you say otherwise?

KONDRACKE: Why am I not surprised?

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