HOST: ...til the midterm elections in November, a season of discontent for voters? Democrats hope so. They're trying to capitalize on public dissatisfaction with the war in Iraq, and the way President Bush is handling it. Howard Dean built on those themes in his 2004 presidential bid, and now, as Chairman of the Democratic National Committee, he joins us from Burlington, Vermont. Doctor Dean, good to see you.

DEAN: Thanks for having me on.

HOST: Hey, let me just sort of get your thinking, so close, just two months before the midterms. Are Democrats going to win the House?

DEAN: Well, we certainly have a good shot at winning the House, and we have a decent shot at winning the Senate. I think people really want a new direction in this country. I think they're tired of the misleading things that the President said, and they're tired of the war in Iraq, which is essentially a civil war at this point. And I honestly think that all this emphasis on the defense is going to help us, 'cause I think that people finally realize that the President has not made America safer, and what they want is a group of people who are gonna be tough and smart, not just talk tough at election time.

HOST: Okay, let's take you at your word, your belief that you-- the Democrats will win the House, get the 15 seats-- hold onto what you have, and get the additional seats needed. What is going to be the difference next year?

DEAN: Well, I think there's gonna be a huge difference. First of all, we'll put a check on the President's crazy economic policies, where we've expanded the deficits enormously. One of the idears [which] has been put forward, which I strongly recommend, is the idear of going back to what Bill Clinton used in order to balance the budget, which is a 'pay as you go'. You can't spend more money on programs or tax programs for the oil companies and so forth, unless you say where you're gonna get the money.

Secondly, we're gonna raise the minimum wage without giving some big chunks of money away to the Republican donors and so forth as the President tried to do. We're just gonna-- and the next thing we're gonna do, is have ethics reform in Congress. We've promised that. We want to ban jet plane rides and free meals and all these free junkets that the Republicans have taken. We want honesty and openness back in our government. Those are the first three things, I think.

HOST: Where do you have common ground, on any of those issues, with the President right now? Because at some point you have to work with the president.

DEAN: There's not a lot of common ground with the President. This is the most far-right President we've seen, certainly in my lifetime. Frankly, the Republicans are out of the mainstream in terms of what they're doing to the country. Most people don't agree with the direction they're leading us in. They want a different direction.

So, we would encourage the President to work with us to help make it easier instead of harder for middle-class people to go to college, make it easier to get health insurance, not harder--

HOST: -- OK, so--

DEAN: -- and let's come up with a real solution that works to fight the war on terror, and not keep us bogged down in a civil war in Iraq.

HOST: Gotcha. So if there is, as you described it, no real common ground that you can see right now, boy! How do you move forward? How does the next Congress do anything more than the current Congress, and aren't we talking about gridlock and [?]

DEAN: It's our hope that after this election, that the President will begin to move back towards the moderation that we need in this country, the thoughtful middle. Where we can be tough and smart in the war on terror, not just tough. Where we don't give huge no-bid contracts to people who were formerly associated with members of the administration. Where we don't give huge tax breaks away to oil companies and insurance companies. Surely, those things are gonna be helpful for America, and we're hoping that the Republicans, should they end up in the minority, will at least agree with some of those.

HOST: Got a couple of other points I want to get to. Unemployment at 4.7%, the President says the tax cuts are responsible and should be made permanent. Labor Secretary Chao says this about the incomes of Americans-- take a listen to this, and then I've got a question for you.

[VIDEO CLIP]

... after-tax basis, personal income has actually risen. And it's very important to know that. Because of the President's tax cuts, the after-tax disposable income increased 9.2% since 2001.

[END VIDEO CLIP]

HOST: What do you make of that? Is...

DEAN: -- I think that's true. It increased dramatically for people like me and Bill Clinton, and it went down for 80% of Americans. 80% of-- the reason the President's so frustrated, because the economic numbers are good, is because the voters know they're not good for them. 80% of Americans have seen a substantial decrease in their income every year since George Bush has been President. A million of them have lost their health insurance every year since George Bush has been President. The Republicans just cut Pell grants and raised interest rates on college loans. It is harder and harder to hang on to being a middle-class person in this country.

And so, they can make the numbers say whatever they want, and I'm-- personally, I benefited from the President's tax cuts. But they're bad for America, because they've hurt middle-class people. It's more expensive to stay in the middle class today than it was, even though it's easier for people like me.

HOST: Okay, lemme just switch before I run out of time with you. I want to talk about Iraq, just a couple of thoughts. Is it time, in your estimation, for this country to bring the men and women home, in a phased-out way?

DEAN: Yeah, in a phased-out way, it certainly is. And what we-- we're not gonna bring them all home, we can't do that. We do have a serious war on terror to fight. But the war of Iraq was a war of the President's choosing. Saddam Hussein was not a threat to America, as dreadful a human being as he was. We've essentially met our objective over there. We got rid of Saddam Hussein. Now we're in the middle of a civil war where we have no business. So-- and we do need more folks in Afghanistan. We have a redeployment plan that some of us have agreed with, which calls for maintaining a force in the Middle East so that we can deal with terrorist threats. But the Guard and Reserve don't belong in Iraq and they ought to be home.

HOST: And one final question. The President is gonna talk about Guantanamo Bay, what they do with detainees. What's your thought on that?

DEAN: I think there's the middle road, I think as Senator Lindsey Graham, a Republican from South Carolina, a lawyer in the JAG*, understands this issue, while you can't-- you gotta obey the law, that's the problem with the President. Look, all of us wanna be tough on terrorists, but you gotta obey the law, and that's where the President fell down.

So there is a middle task, and we're-- a middle way where we can get the information that we need, where we can imprison terrorists, but where we don't remove the liberties and freedoms of Americans while we do that. And that's what we seek, and I think Senator Graham-- (smiles) hard for me to say nice things about a Republican, as the Democratic Chair, but you know, I think when you have a good idear, we oughtta support that one too, and Senator Graham and others are gonna come out with a decent idear.

HOST: You did fine, you did just fine with that.

DEAN: Thank you.

HOST: The chairman of the Democratic National Committee, Howard Dean. Howard, thank you.

Transcribed from the video on YouTube provided by DemocraticVideo.