This is a partial transcript from "The O'Reilly Factor," October 28, 2005, that has been edited for clarity.
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BILL O'REILLY, HOST: In the "Unresolved Problems" segment tonight, obviously, having the vice president's chief of staff resign in the face of five felonies not good for the Bush administration. However, this is not a popular story, as I said. Most people don't even know who Lewis "Scooter" Libby is, so how important is it?
Joining us now from Washington, Senator Lindsey Graham, a Republican from South Carolina. Here in the studio, New York Senator Charles Schumer, a Democrat.
Senator Schumer, we begin with you. It goes to Bush's ability to govern, does it not?
SEN. CHARLES SCHUMER (D), NEW YORK: Much more than anybody else.
O'REILLY: Yes, that's right.
SCHUMER: That's why if Karl Rove had been indicted, it would have been a real...
O'REILLY: A disaster.
SCHUMER: He runs the show. But Libby is a very important figure in the White House, and I don't know who's going to replace him. I think they named somebody already.
But it's disruptive, and the fact that the — when you saw Fitzgerald today he seemed to say it's pretty close to wrap up. And I have a lot of faith in Fitzgerald. He is a no-nonsense, nonpolitical prosecutor. He's not going to drag this out just to drag it out.
O'REILLY: But he is going to continue with the new grand jury.
SCHUMER: And it's still hanging over their head.
SCHUMER: And I think that matters.
O'REILLY: OK. Now, in the chambers of the Senate, you've Katrina, you've got high oil prices which you are looking into.
SCHUMER: Right. Yes.
O'REILLY: You've got Miers going down.
O'REILLY: And you've got Libby getting indicted.
O'REILLY: That's a lot of hits for a president to take in a short period of time. And that's in less than two months.
SCHUMER: Yes. He's had the roughest week and the roughest month he's had.
To me the interesting thing, Bill, is that Katrina sort of, if you will, it was sort of like "The Wizard of Oz," pulled back the screen. I think one of the places the Bush people lack is running the government. If you ask me what was most missing in the White House over the last years it's a COO, chief operating officer.
O'REILLY: Well, that's supposed to be Rove.
SCHUMER: No, Rove is a great — he combines the press, the politics and the sort of strategy of even a policy. But he doesn't make things run. They've never had anybody.
O'REILLY: You know what I think?
SCHUMER: And it caught up with them.
O'REILLY: And I want Senator Graham's opinion on this. I think they're all exhausted.
SCHUMER: Could be.
O'REILLY: I think they're exhausted. You know, fighting a war on terror, 9/11, Al Qaeda, Iraq, on and on and on. And we're in the fifth year of the Bush presidency. I think they're exhausted. And when you're exhausted, you make mistakes, Senator, don't you?
SCHUMER: That's you, Lindsey.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Oh, OK. I don't know how — I don't know how to disagree with you. I know it's my job to come on here and kind of liven things up, but it's a pretty good statement of where we're at. I mean, people do get tired. Second terms are sometimes a result of people being kind of worn out.
It's not a good week. How can you say it is a good week?
But I think when you look at this case, what didn't happen was as important as what did. It wasn't Karl Rove. It wasn't about an intentional effort to release a CIA operative's name. That is not what happened. It was about something serious, along the journey of explaining yourself of a crime that never...
O'REILLY: Well, it's the same thing, as we said, when you were on impeachment committee, so you know this, when you were a congressman.
O'REILLY: Same thing Clinton did.
O'REILLY: And you can't have public — you can't have powerful guys like you guys lying to grand juries.
O'REILLY: Now look, you're in the Republican Party. Republicans got a big important election a year from now.
GRAHAM: All right.
O'REILLY: OK? And right now...
O'REILLY: ... the country is turning against the GOP.
O'REILLY: So, how are you guys going to deal with that?
GRAHAM: Well, Chuck, you cannot listen to this part. I think our problem, Bill, is that gas prices have a lot to do with the polling data right now.
O'REILLY: You bet. You bet.
GRAHAM: That we're — we're defined by the war, my friend. The war is ours. We own it. If it gets better, if the political successes in Iraq begin to translate to success at home, we'll be in better shape.
And our base is not going to be excited by a Supreme Court nominee nearly as much as they would be if we control spending.
So how do we get back into the game? Control spending, make adjustments to the war, govern the best you can. This event with Scooter Libby does not cast a long shadow over our party's future in the long run.
O'REILLY: All right.
Now, Senator Schumer, the worst mistake that you — and I don't think you'll do that — or any Democrat could make would be to gloat over Libby. Isn't that correct?
O'REILLY: All right.
SCHUMER: It's a sad thing. A sad thing.
O'REILLY: The nutty left-wing Web sites, you know, if Howard Dean gets out there and starts yucking it up at Libby's expense, you guys are going to — you see, you can't capitalize on the weaknesses...
SCHUMER: You know — you bet.
O'REILLY: ... of the GOP, because people think you're mean S.O.B.'s.
SCHUMER: When we say not enough is being done about the oil companies, people are with us. When any Democrat gloats that things are going badly for America, we lose.
O'REILLY: That's right.
SCHUMER: And that's true of the Republicans, too. And Democrats make that mistake.
O'REILLY: And also with this guy Libby, even though people don't know him and he may be guilty and he certainly has to answer for it if he is, nobody wants to see a man — nobody of good will...
O'REILLY: ... of good will, wants to see a man destroyed the way this man has been destroyed. Because you know, just to defend himself, wipes his whole financial portfolio off the earth. You can imagine what his family is going through.
SCHUMER: It's a nightmare.
SCHUMER: A total nightmare.
O'REILLY: And this is a guy who's in public service, tying to do the best he can, you figure, right?
SCHUMER: It's true. Except, you know, Fitzgerald, again, I'll go back to him. I have a lot of faith in him. And when you listen to what he said today, it was clear this was not just one mistake.
And it was clear that Fitzgerald, he only indicted one person, so he was not out to turn over every stone and find indictments. And he did — it seems almost as if, when you listen to Fitzgerald, he gave him every chance and he just kept lying, lying, lying.
O'REILLY: Well, but we don't know. All right. Now last question for both of you, and I'll start with you, Senator Graham. Do you have any idea why Libby would do this? This is the big missing puzzle, the big piece of this puzzle is why?
Why not just go in and say, "Look, I learned about Plame from this person. I have security clearance. I have a right to do it. In a discussion I said this. I didn't know it was — whatever it was. Can you think of any reason why the guy would mislead the FBI and a grand jury?
GRAHAM: Not really. I don't know why Bill Clinton did what he did.
O'REILLY: Well, I know why, because he was embarrassed. He didn't want — he didn't want to admit any of that. It was a personal thing, and he didn't want Hillary to find out. But here, this is...
GRAHAM: But — well, but here — I voted against Article 2. If you blindside me with my human failings, I'll probably lie. But why did Bill Clinton lie nine months later? I thought he lied nine months later. That's what got me.
O'REILLY: There you go.
GRAHAM: About Scooter Libby, maybe, maybe to protect the vice president in some weird kind of way. I don't know.
SCHUMER: It's not a weird kind of way if — and this is pure hypothetical, but if — if there were a talk with the vice president, whomever had else and said, "Hey, let's get this guy. We now that she's an agent. You go leak it." He goes and says that, he's implicating higher- ups, not even in perjury but in actual crime. Now, if that happened, I have no knowledge.
GRAHAM: But he wasn't charged for that.
SCHUMER: But it's a plausible explanation.
GRAHAM: No, it's not.
O'REILLY: We want to — we want to put the big speculation blanket over that. We don't have any evidence of that.
GRAHAM: He's not charged with that.
SCHUMER: But that's the only plausible explanation.
GRAHAM: No, there might be another one.
SCHUMER: Otherwise, why would he do it?
O'REILLY: There might be another one and we'll wait and see.
Senators, thank you very much, both of you.
SCHUMER: Thanks, Bill.
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