This is a partial transcript from "Hannity & Colmes", March 18, 2004, that has been edited for clarity.

SEAN HANNITY, CO-HOST: But first the famous scream, well, it may have done him in at the ballot box but Howard Dean still has a lot more to say.

Earlier today, Alan spoke with the former presidential candidate. He was in Seattle today, criticizing the president to announce the creation of his new political organization, Democracy for America.


ALAN COLMES, CO-HOST: You said about Spain, you said the president was the one who dragged our troops into Iraq, which apparently has been a factor in the death of 200 Spaniards over the weekend.

You then made clear that that was what an al Qaeda operative said, and then you were criticized for quoting al Qaeda as if who would believe al Qaeda.

Were you taken out of context there?

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: No, that was just bad journalism, of which we've seen a great deal of that in this campaign.

The White House put out a press release, which deliberately took my remarks out of context. The press presented that to Senator Kerry, and Senator Kerry reacted accordingly.

It's just, you know -- just another example of kind of made up stuff in the newspaper and there's nothing to that.

COLMES: Senator Kerry said, "It's not our position." Is there a difference, then, between you and Senator Kerry on the...

DEAN: That's correct. There is no difference -- no, because it was again, bad journalism.

Senator Kerry was replying, said it's not our position when he was talking about the Bush administration, not about me. The papers made up something differently and put it in the paper, which I thought was pretty bad. And they probably ought to retract it.

COLMES: Given that the Democrats, we couldn't get you as a nominee, is John Kerry second best?

DEAN: John Kerry is first best right now. He's the nominee of the Democratic Party. That's who the Democrats have chosen to represent them. And we need John Kerry in the White House.

John Kerry understands defense. This president does not. John Kerry understands working with other countries. This president does not. John Kerry understands jobs. This president does not.

John Kerry understands you can't run half trillion-dollar deficits. This president does not.

We need a new president, and that president is going to be John Kerry.

COLMES: You know the Republicans like -- they will look at, as Democrats would if the other side were having primaries, at all the divisive things that got said.

And they're going to hit you with how you said that John Kerry was a candidate of special interests, that he would not beat President Bush, that you were the guy to do it.

And how will you then respond to these charges that what you're saying now is different from what you were saying then?

DEAN: I think in primaries we focus on our differences, and there were some differences between myself and Senator Kerry. In general elections, we're going to focus on what we have in common.

John Kerry wants health care for every American. Our plans are very similar. We're the last industrialized country in the world that doesn't have health insurance for every American, because this president believes if you're rich, you deserve it and if you're poor, you deserve of it, too. That's not what I believe.

John Kerry is a true champion of the environmental -- of the environment. The president has done everything he can to wreck the environment. He's the president of the energy companies and the polluters.

John Kerry believes in balanced budgets. So do I. This president has never balanced a budget.

So I think the things that John Kerry and I have in common are much greater than the things that divide us.

COLMES: When did you know it was over for you?

DEAN: Probably -- I think in Wisconsin. You know, when we came in third behind John Edwards in Wisconsin, I realized that there was really no purpose in continuing, other than to be kind of a conscience of the Democratic Party. And I think you can be the conscience of the Democratic Party without spending more of your supporters' money.

You know, I had never intended to run a quixotic campaign, and when I realized that we were not going to not only beat John Kerry, we couldn't beat John Edwards, then I thought it was time to leave the campaign trail and go on to something else.

So we started DemocracyforAmerica.com, and we're now interested in promoting other people's candidacies and getting other people to run for office.

COLMES: You know for so long, all this press and the word "presumptive" before the word "nominee," which I'm sure could drive you crazy, how did you cope with that emotionally when that moment finally came when you realized you were not going to be the nominee?

What's that roller coaster ride like?

DEAN: It's very intense. But the key -- I brought myself back to why I really ran. I ran because I thought the country was being really badly run.

We have a president that can't handle money; he's managed to spend half a trillion of ours every year that he doesn't have. We have a president that has gotten us into an enormous amount of messes in foreign affairs.

We need a stable presidency, and I think John Kerry will provide that and George Bush cannot.

We've got to have jobs back in this country. This is the first president since Herbert Hoover who's managed a net loss of 2.3 million jobs.

So I realized that when I wasn't going to be president, I was going to support whoever was going to be the Democratic nominee. We need fundamental change in Washington.

This is an administration which has not told the truth at home or abroad. This is an administration that's taken taxpayers' money and given it to billionaires in the biggest corporations in the world. This is an administration that doesn't care about ordinary Americans. They've forgotten us.

And a Democrat, I think, has a better chance of not forgetting us. And, of course ... we'll be working hard to make sure the new Democratic president doesn't forget us.

COLMES: When do you plan to formally endorse John Kerry?

DEAN: Soon. Soon. I'm not going to give you an exact date, but it will be soon.

COLMES: What are you waiting for?

DEAN: The fact is, there are some -- there are some of my supporters that are uncomfortable with Senator Kerry.

We had a very wide coalition, including Green Party people, independents and even some moderate Republicans who believe in balanced budgets, as I do.

And -- so some of those folks need some time, and they need -- John Kerry needs to show them that he's going to be the kind of president that they'd like to have and -- but I'm firmly in John Kerry's corner. I'm going to encourage my people to be in John Kerry's corner. And I want to encourage our people to be in John Kerry's corner.

COLMES: Where is the discomfort?

DEAN: Oh, I'm not going to go into that, because it would be an implied criticism of the Democratic nominee, which I'm happy to do again privately but not publicly.

COLMES: Is your political philosophy closer to that of John Kerry or closer to that of Ralph Nader?

DEAN: I actually don't think there's that big a difference between John Kerry and some of Ralph Nader's ideas.

John Kerry is a true believer and supporter of the environment, and so is Ralph Nader.

John Kerry has supported campaign finance reform in the past. We have -- obviously have some differences of opinion on that.

But I think -- I see no reason for anybody to vote for Ralph Nader over John Kerry.

You know, I'm a veteran of third party campaigns when I was running for governor, and I can tell you that George Bush or John Kerry will be the next president of the United States.

And unfortunately Ralph -- a vote for Ralph Nader is the same as a vote for George Bush. I know that's not what people want, but that is in fact the truth.

I believe this is an incremental business. We tried to change dramatically, and the Democratic voters felt more comfortable with someone who might not change quite so dramatically the country.

But the fact is we need incremental change. We need any kind of change. John Kerry can provide that change. Ralph Nader cannot provide that change, because he can't win.

And I would urge people not to vote for third party candidates, because that's only going to have the effect of reelecting George Bush, who's been an economic disaster for this country.

COLMES: You were painted during the campaign as a far left liberal. They keep throwing around the "L" word. Now they're trying to throw that at John Kerry: left wing.

People might presume that you are closer to Ralph Nader, what he has espoused than what John Kerry has espoused. How do you deal with -- and how should Democrats deal with the "L" word as it gets used as pejoratively by those -- derisively -- toward whoever the nominee is?

DEAN: What I used to say, Alan, is that if you want -- if it takes a liberal to balance the budget in Washington, maybe we better have a liberal in the White House.

If it takes a liberal to get jobs back in America, maybe we ought to have a liberal in the White House.

If it takes a liberal to work with other countries when America's interests are threatened abroad, maybe it's time for a liberal in the White House.

So I don't shy away from that language.

Let's look at people's records. George Bush has spent more money than any other liberal ever has. His spending has gone up far higher than Bill Clinton's. He can't balance a budget to save his life, a half a trillion- dollar deficit. He has no idea about how to -- other people's money.

And so I think it's time to have a Democrat in the White House, and if they're a liberal, so what? At least they'll balance the budgets and get jobs back in this country. Who cares what their label is?

COLMES: Looking back on your campaign, would you have done anything differently?

DEAN: That's a hard one to ask because in medicine, we call that the retrospectoscope. You get to look back knowing what you already know.

I'm sure there are some things we would have done differently, but, you know, had we won, of course everything we had done would have been perfect.

I think, you know, the loss of Iowa is what killed us. It wasn't the speech played 693 times, whatever all that stuff was. It was just the fact that we lost Iowa and we knew whoever was going to win Iowa was likely to win the nomination.

And when Gephardt came after us and we went after him in a multi- candidate race, that really is tough, and that's probably the most important mistake that we made. But I don't know what we could have done differently.

COLMES: What do Democrats have to do now to win the White House?

DEAN: We've got to show the American people that we can be better stewards of our national security than George Bush, which shouldn't be too hard, and that we can run the economy better than George Bush, which again shouldn't be too hard.

The other thing we've got to show is we'll tell the truth, because this is an administration that has not been truthful, either about how much money they've been spending, which is our money, or has not been truthful about the war in Iraq.

COLMES: What are you going to do over the next four years?

DEAN: Well, I can tell you what I'm going to do over the next few months and that's to do everything I can to get Democrats elected into office by raising money and helping grassroots organizations.

After that we'll keep our organization going. Democracy for America is something that's going to last a lot longer than this election.

We've got to do our best to keep the Washington folks' feet to the fire in both parties. They really -- Washington is a special place unto itself, which seems to forget that ordinary Americans have to live their lives, make some money, send their kids to college, put food on the table. We'd like Washington to remember ordinary Americans.

If we change fund-raising the way we changed it for our campaign and people become dependent on small donations, that will do a lot to get rid of the special interests. We'd like the special interests to be ordinary Americans first, which is not what goes on in Washington right now.

COLMES: Will you ever run for office again?

DEAN: I have no idea. It's too early to ask.

Copy: Content and Programming Copyright 2004 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2004 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.