Updated

This is a partial transcript from The Beltway Boys, July 12, 2003, that has been edited for clarity. Click here to order the complete transcript.

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MORT KONDRACKE, CO-HOST: Well, the hot story is that the war goes on. The Bush administration is double on the defensive over Iraq this week. One, because an item of intelligence that was used by President Bush in his State of the Union (search) message about Saddam Hussein's alleged attempts to acquire uranium (search) in Africa turns out to be false.

Now, this could easily have been a mistake, bureaucratic mistake.

FRED BARNES, CO-HOST: Sure.

KONDRACKE: But the Democrats are convinced that it was a big lie. And here's a Democratic National Committee fund raising ad which makes the point. Watch.

(BEGIN VIDEO CLIP, DNC AD)

(BEGIN ONSCREEN)

In his State of the Union address George W. Bush told us of an imminent threat...

(END ONSCREEN)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Saddam Hussein recently sought significant quantities of uranium…from Africa.

(BEGIN ONSCREEN)

America took him at his word.

But now we find out that it wasn't true...

A year earlier, that claim was already proven to be false.

The CIA knew it.

The State Department knew it.

The White House knew it.

But he told us anyway.

(END ONSCREEN)

(END VIDEO CLIP)

KONDRACKE: I don't know if people are going to following all that click-click-click stuff.

KONDRACKE: Any, in any event...

BARNES: ... people don't have typewriters any more, after all.

KONDRACKE: ... the uranium, the uranium thing was a minuscule part of the Bush case for going to Iraq. But this piece fits into the bigger problem that the big reason for going, weapons of mass destruction, have still not been discovered in Iraq. That's a credibility problem for the Bush administration.

Bush, of course, still says, Look, I was right to do this. And here is how he made his case during his trip to Africa. Watch.

(BEGIN VIDEO CLIP)

BUSH: I gave a speech to the nation that was cleared by the intelligence services, and it was a speech that detailed to the American people the dangers posed by the Saddam Hussein regime. And my government took the appropriate response to those dangers, and as a result, the world is going to be more secure and more peaceful.

(END VIDEO CLIP)

KONDRACKE: Now, in addition to and far more important than this credibility flap is what's going on on the ground in Iraq. Our soldiers continue to get shot. The lights still aren't on in Baghdad (search) most of the time. It's very hot there, 120 degrees. And, and the Iraqis, the Iraqis are restive.

I mean, what we've got to do is to get NATO (search) in there to share the responsibility for security, and also flood the zone with, with resources so that the Iraqis feel as though this, this endeavor was worthwhile.

I mean, regardless of how we got in or why we got in to, to Iraq, we are there... and we have got to make a success of this, or else not just Bush is in trouble, but the whole country is in trouble...

BARNES: Yes.

KONDRACKE: ... our foreign policy is in trouble.

BARNES: I agree, we have to make a success of it. I think they're moving in that direction. And…but let's not create a welfare state in Iraq. Let's create a free market economy, which is harder than had been thought originally because of the way the infrastructure had worn down under the command economy that Saddam Hussein had there.

We don't need NATO in. We do need some replacement troops from NATO countries, preferably not France or Germany, but, you know, because they would demand concessions here or there and try to get, you know, commercial advantages and so on. So the heck with them.

Now, I am glad you played down this mountain that has been made out of a molehill about this one piece of intelligence information that was mistakenly and wrongly in the State of the Union address. It is not integral to the case against Iraq.

Democrats, I think, are making a mistake in playing this up. What they do, once again, they can't help themselves, is side with the quibblers and the doubters and the fainthearted and wind up with the antiwar crowd, even some of these people who were actually voted for the resolution in favor of the war.

This is not the way they're going to win the White House. This war was successful. The most horrible dictator in the world was thrown out, and the Democrats are quibbling about it. OK.

The other hot story, the domestic hot story is total recall. You'll get the...

KONDRACKE: Reference to Arnold Schwarzenegger?

BARNES: Arnold Schwarzenegger, yes, but actually, what I'm talking about, and I was out in California to report on the recall campaign against Democratic Governor Gray Davis. It…they already have, the recallers already have enough signatures that they've turned in to get on the ballot, it'll either be on the ballot this fall or in March, depending on whether Gray Davis can hold it up or not.

This is a populist revolution that has really caught on out there, against the ruling class, mainly Democrats and all the figures in the establishment. But Republicans may gain from this. The party now…the California party, has said, We're going to really try to drum up the vote in this thing. And they've already made some gains in registration, anecdotally, in a few counties.

So they stand to gain a lot.

Now, there are two things on this recall ballot. One is, should Gray Davis get the heave-ho? And the second one is, who should replace him? Well, !!!!!!!The L.A. Times has done some polling on this very question, and you'll see that it shows that 51 percent would vote to recall Davis. And that has to be alarming to him.

But what about the replacements? Look at the vote some of those ones got. Dianne, Senator Dianne Feinstein, who everybody agrees, if she got on the ballot she'd be the next governor, Los Angeles mayor, or former mayor, Richard Riordan, who is a Republican and could be a very strong candidate, and of course the Terminator himself, Arnold Schwarzenegger.

Look at Darrell Issa down at the bottom, who's a congressman, and who funded a lot of the recall. I think he's a sleeper there who could do well, as could Richard Riordan now.

The Terminator, you know, he's been grooming himself for years now to run. I think he planned to run for governor at…when there was an open seat in 2006. Whether he'll get into this one or not, I don't know. I expect he will.

KONDRACKE: Well, I don't see in those polls the making of a conservative populist revolt, if that's, if that's what you're expecting.

BARNES: Right.

KONDRACKE: Proposition 13, then Ronald Reagan.

BARNES: Yes.

KONDRACKE: I didn't see a Ronald Reagan there. Dianne Feinstein's not Ronald Reagan...Richard Riordan's not Ronald Reagan. Arnold Schwarzenegger...

BARNES: Yes.

KONDRACKE: ... is not a conservative on a lot of...social issues...

BARNES: No.

KONDRACKE: ... I don't know what he stands for...on...fiscal issues or on, you know, the rest of the agenda.

BARNES: Right.

KONDRACKE: So where is the Ronald Reagan in this picture? You have to get down to Bill Simon and maybe Darrell... Issa, and, you know...

BARNES: ... look, I mean, a conservative populist revolt doesn't necessarily automatically cough up a conservative governor. But it just changes, it upsets the entire political landscape in California. That's what we have now.

KONDRACKE: my hunch, my hunch...here, by the way, on Schwarzenegger is... that he will be making "Terminator 4"...not running for governor.

BARNES: You know, he is a lot less of a factor out there than we think in the East, though.

KONDRACKE: OK.

BARNES: That's for sure.

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