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RUSH: Mr. President.

THE PRESIDENT: Hey, Rush, how are you?

RUSH: Never better. It's a thrill to have you on the program today and many thanks for making time for us.

THE PRESIDENT: Thank you, sir, for giving me a chance to visit with you.

RUSH: How are you doing?

THE PRESIDENT: I'm doing great. I really am. You know, when you've been doing this as long as I have you feed off the crowds and feed off the enthusiasm and you like a contest, and we're in a really important contest, and so I'm doing fine. It's kind of like a reminder of how I got here in the first place, and that is: go campaign hard and tell people what's on your mind. That's what I'm doing.

RUSH: Well, you have maintained optimism throughout. Many people, I guess -- in the opposition press, the opposition party -- are incredulous that you are optimistic about the outcome next Tuesday. Why is that? Why are you optimistic? What do you know that they don't?

THE PRESIDENT: First of all, I fully understand that here in Washington people are trying to proclaim the election over with, but I've had that experience before. That's what happened in 2004, and it's what happened in 2002. So one reason I'm optimistic is I trust the will of the people and not the national punditry. Secondly, I know that we're right on the issues -- and the issues, the two main issues, are low taxes and winning the war on terror and protecting the American people. So I believe if our candidates continue to talk about the strong economy, based upon low taxes, and an administration in a Congress that was willing to give professionals the tools necessary to protect them, we'll win this election.

RUSH: When you go out on the campaign trail or when you're in your private moments, do you think of the consequences of governing with a Democrat majority in either the House or the Senate when it comes to things like tax cuts and the war on terror?

THE PRESIDENT: No, I really don't think about the idea of having a Democrat-led House and Senate because I don't think it's going to happen. I do believe, though, that there's a big difference of opinion between the two parties. Every tax cut we passed, which has helped this economy grow, was opposed by the Democrat leadership. The people that would assume power are the very ones who oppose letting people keep more of their own money, and then when it came time to fighting this war on terror we had votes on whether or not we should be able to listen to al-Qaeda or an al-Qaeda affiliate making a phone call to the United States and the overwhelming majority of House Democrats voted against that bill. Or when it came time to question detainees that we picked up on the battlefield, the overwhelming majority of House and Senate Democrats voted against that bill. So there's just a different mindset, Rush, a different attitude about how to protect the American people. My attitude is to give the professionals the tools, and to stay on the offense and fight the enemy wherever we find them and defeat them overseas so we don't have to face them here......

RUSH: Yeah, but you've got -- as you've just said, you've got -- a sizable majority of people, not majority, but sizable number of Democrats who are trying to stop you from even finding these people. Let me go through a list of things. The New York Times, some other national newspapers, have published classified secrets of the United States during wartime. Everything from blowing up the financial tracking program that you had, to trying to destroy the Patriot Act, to trying to destroy your Foreign Surveillance Act, the leakers haven't been identified or punished. The American people are outraged about this Mr. President, because they consider this... They remember 9/11, and they know that this is not just a mere episodic event in their lives and they want to know when these people, media and leakers, are going to be held accountable for this action that, to them, is an attempt to sabotage and undermine victory over this enemy.

THE PRESIDENT: Well, I share the concerns of the people who wonder why there are leaks, which tells the enemy how we're conducting the war against them. Obviously as Commander-in-Chief, Rush, I'm deeply concerned about our secrets being made known. There's a Justice Department Task Force or Justice Department group that are in the process of gathering the information necessary to find whether or not they can find the leakers. But you talk about the fact that some people don't want to give us the tools necessary to fight the war. All that means is we gotta win on November 7th. Now, I recognize some people don't think we're in a war. I know we're in a war, and I know there's an enemy that still wants to strike us. As a matter of fact, I spend a lot of time thinking about how best to protect the American people -- and the idea that, you know, some in Congress don't agree with me, I accept. But they should not deny the tools necessary to this government to do our most important job, and that's the fundamental issue in this campaign. So when I say that, you asked why I'm optimistic, because when I spell it out to the people I'm in front of, they fully understand. People come up to me all the time and say "Thank you for protecting us." My answer in this campaign is, "I'm going to continue to protect you, but I need a Congress that understands the stakes."

RUSH: You riled the press corps at one of the press conferences at the White House when you intimated that their work in Iraq has sometimes advanced the cause of the enemy, and there's a recent example of this. CNN recently aired video that they got from terrorists. They reached out to these terrorists, and according to accounts, the way they got the tape from the terrorists was to promise the terrorists a "fair shake." This video showed terrorists taking pot shots, assassinating US soldiers in cold blood. What are your thoughts as the Commander-in-Chief when you see this and when you hear about this?

THE PRESIDENT: My thoughts are that we face an enemy that will kill innocent people. They murder to achieve their objectives, and they use propaganda in order to do two things. One: proclaim their might, and secondly to discourage us. Obviously the idea of their propaganda being displayed is something that bothers me in the sense that I don't want the American people to become discouraged. One: I want them to understand the stakes in this war; and, two, that we're going to win this war and not to be discouraged about the violence and the propaganda that they see. Obviously, some of the violence is not propaganda, but these tapes that they put out are all aimed at shaking our confidence.

Osama Bin Laden himself has said that it's just a matter of time before the United States loses its will and retreats. Give me a second here, Rush, because I want to share something with you. I am deeply concerned about a country, the United States, leaving the Middle East. I am worried that rival forms of extremists will battle for power, obviously creating incredible damage if they do so; that they will topple modern governments, that they will be in a position to use oil as a tool to blackmail the West. People say, "What do you mean by that?" I say, "If they control oil resources, then they pull oil off the market in order to run the price up, and they will do so unless we abandon Israel, for example, or unless we abandon allies. You couple that with a country that doesn't like us with a nuclear weapon and people will look back at this moment and say, 'What happened to those people in 2006?' and those are the stakes in this war we face." On the one hand we've got a plan to make sure we protect you from immediate attack, and on the other hand we've got a long-term strategy to deal with these threats, and part of that strategy is to stay on the offense. Part of the strategy is to help young democracies like Lebanon and Iraq be able to survive against the terrorists and the extremists who are trying to crush their hopes, and part of the democracy is for a freedom movement, which will help create the conditions so that the extremists become marginalized and unable to recruit.

RUSH: Well, that is extremely visionary. One of the things, if I may make this personal, one of the many things I've admired about you is that you see down the road 20 or 30 years. You just illustrated that with your comment. What if down the road 20 years we look back to this time and with 20-20 hindsight realize we blew it. You're not, as far as it sounds to me, you're not going to let that happen. You're going to do whatever it takes to secure victory.

THE PRESIDENT: I am and I fully understand the nature of this enemy. One: they're great propagandists, and two: they truly believe they can cause us to retreat by inflicting enough damage, and three: they're lethal. But I also understand they have no vision; they have no ideology. I mean, they have an ideology, they just can't convince people that their ideology makes sense, and I also understand that we're inflicting damage on them. That we're on the hunt, that we're bringing them to justice; that if you're al-Qaeda you know the United States of America is breathing down your neck, and we will continue to do so so long as I'm the president -- and Iraq is a tough fight. The recent debate here on Iraq, some say Iraq is a "distraction" from the war on terror. My answer to them is, listen to Osama Bin Laden who says: "Our objective is to defeat America, which will disgrace America, which embolden the terrorists," which will then enable them, them being al-Qaeda and extremists, to have safe haven just like they had in Afghanistan -- and we're not going to do let them do it. No matter how tough it gets, the United States of America must remain firm and resolved to protect a generation of young Americans, and that's precisely what I'm going to do as your president and that's precisely what I'm telling the people on the campaign trail.

RUSH: Mr. President, we hear a lot of things from troops in Iraq, both troops that are there and troops who have returned. To a man and woman, they are shocked, they say, when they get back here, turn on the news, and look at the reporting of how things are going. They think there are tremendous successes that have taken place in Iraq. Not just governmentally over there, but military successes that aren't being reported, and it frustrates them. I think they're a large voting block, they and their families, and as they come back and watch I think they're going to be active in this election as well.

THE PRESIDENT: Let me say something about our troops, Rush. I am... I guess "amazed" is the proper word at how courageous our troops are, and I am amazed at the fact that they are so capable, and that they volunteer in the midst of this war to defend us, and these troops deserve all the support of the United States of America, and they understand as well as anybody that we are making progress in Iraq, and they know when their comrades are out there fighting that they're bringing enemies to justice. They see that firsthand. The enemy has got an advantage in that by killing innocent people it looks like they're winning, because it gets on our TV screens. We have taken a measured approach to talking about casualties, but I can assure your listeners: our troops are on the offense, and they're after an enemy. When they find the enemy and the enemy confronts, we win.

They can't beat us on the battlefield. The only way we can lose this is if we leave, and our troops are -- the other thing people say, "Well, you know, it's a long slug and therefore it's going to be hard to maintain morale in the military." One: it is going to be a tough fight, but I will tell you something. The morale in our military is high because these young men and women understand the stakes. Reenlistment rates are very high and recruitment rates are strong, which all says to me we've got an amazing country when we've got people who put on the uniform say, "Put me in. I want to go fight for this country."

RUSH: Yeah, and then they turn around and get insulted routinely. John Kerry is not the first. He's just the latest, Mr. President. We don't really have to focus on him. You've spoken about Senator Kerry. He's now trying to laugh this off by saying he was talking about you, but clearly he has a Vietnam era mind-set, back when we had a draft, that if you didn't have a college deferment you got drafted -- and that's his thinking on who comprises military members, that they're basically uneducated boobs, but it's not just Senator Kerry. We've got Senator Durbin who has impugned interrogators at Guantanamo Bay. Throughout this war effort some Democrats have done their best to impugn the people who are volunteering, offering their lives in sacrifice to defend this country. They have questioned their motives. They've questioned their backgrounds and so forth -- and frankly, Mr. President, the American people are outraged by this because John Kerry is just the latest. This is not the first.

THE PRESIDENT: Anybody who is in a position to serve this country ought to understand the consequences of words, and our troops deserve the full support of people in government. People here may not agree with my decision. I understand that. But what I don't understand is any diminution of their sacrifice. We've got incredible people in our military, and they deserve full praise and full support of this government. Secondly, what they deserve is a plan for victory, and we have a plan for victory. Our victory, as you know, is really to help the Iraqis win, to help the 12 million people, to help Iraq realize the dreams of 12 million people who voted. To help the political process and help the security process and help the economic process and we're doing just that. It's not easy work, because there's an enemy that still tries to derail the process. They're trying to foment sectarian violence, and on the other hand it's necessary work. My problem with many of the Democrat voices in Washington is they have no plan for victory.

This is an essential part of the war on terror, and I believe responsible leaders must come up with a plan for victory in order to achieve peace, and yet the only plan I hear is, one: let's get out of Iraq before the job is done -- which would be a disaster for a future generation of Americans. Getting out of Iraq, Rush, all that would do is embolden an enemy and dash the hopes of millions who count on the United States to help them secure freedom, and getting out of Iraq would make the country less secure. One of the interesting things about this war that is different from previous wars, is in previous wars you could leave the battlefield and the enemy would stay close to the battlefield. In this war, if you leave the battle, the enemy follows us home to America -- and that's one of the lessons of September the 11th, and that's one of the reasons why we will win in Iraq. I repeat: the only reason we could lose in Iraq is if we leave, and, therefore, we've got kids sacrificing in Iraq, and when they hear politicians say, "Get out before the job is done," that's discouraging to them, and it's discouraging to the Iraqis, and it's encouraging to the enemy. That's why my voice is so loud in saying to our troops: "What you're doing is noble and important and you're going to win and history will look back and thank you for your sacrifices."

RUSH: Before we go -- I know time is dwindling -- I must ask you about North Korea, because I find this fascinating.

THE PRESIDENT: Sure.

RUSH: Your critics have been demanding bilateral talks, just the United States and North Koreans. You've been telling them we did that and it didn't work, and you've been insisting that we have six party or multi-lateral talks to deal with the North Korean nuclear problem. North Korea sets off their so-called nuclear test and now, all of a sudden, after you maintaining the six party talks as being key to solving the issue, it's North Korea who appears to have blinked and you have been proven correct in your assessment of how to play this thing. It's a stunning development that has been greeted with silence, Mr. President. It really has. You stared them down. The United States did. Let me not make this personal. The United States stared them down. You stuck to your guns, as you do on everything, and the way you think is best to be handled is going to happen.

THE PRESIDENT: I think that, yes, the news that North Korea wanted to come back to the six party talks is very positive. I want your listeners to understand this, that I made the calculation having watched what happened during the last attempt to have bilateral relations with North Korea, that if it didn't work then, it's not going to work now. The second part of my calculation was: It's better to have more than one voice saying to the North Koreans, "There's a better way forward than you attempting to have a nuclear weapon," and some of those voices are the voices of the Chinese, for example, or the Japanese and the South Koreans and Russians, obviously, and it's that combination of voice saying loud and clear to Kim Jong Il that there's a better way. It will make it more likely we can solve this issue peacefully and diplomatically and now the task is, when the North Koreans come back to the table, is to make it clear that our intention is to help them move forward so long as they give up their weapons in a verifiable way. Our objective is to rid the Korean Peninsula of any nuclear weapons threat. It was good news. The announcement of Monday was good news and we will pursue the opportunities ahead of us. But the key is to make sure that the North Koreans, when they sit at the table, look around and see more than just the United States. That they see other parties who can either help them succeed or cause them to become isolated.

RUSH: Does this mark any kind of a shift, dramatic or otherwise, in our relationship with China?

THE PRESIDENT: Our relationship with China is a very complex relationship, and it's an important relationship. Obviously we have an economic relationship, and we're trying to put that relationship in a position where our Americans can realize that trade is not only free but it's fair. One great opportunity for China, Rush, is to encourage China to develop a society in which there are savers. In other words, a society in which there's a pension plan. Let me rephrase that: a society in which there's consumer because now there's a society of too many savers. The reason they're saving so much money is because there's not a pension plan or a legitimate healthcare system. The people horde the money they have in anticipating there's going to be a bad day. If we can encourage China to be a country of consumers, you can imagine what it would mean for US producers and manufacturers to have access to that market.

An interesting statistic is India, for example, has 350 million people in their middle class. That is a significant opportunity for US firms to sell into those markets, which means better US jobs. So one, there's an economic relationship. Secondly, there's the security relationship. How do we work together to make sure the Far East is secure and peaceful? And obviously the issue we're now dealing with is North Korea, and it's in both our interests that the Korean Peninsula be nuclear weapons-free, and the Chinese understand it's in their interest. So we found common interest here to be able to work together, and the more we're able to work together, the more likely it is that a future president will be able to maintain the peace. One really important issue in the Far East is -- for your listeners to understand -- how important it is for there to be a United States presence in the Far East. We serve as a way to make sure that there's stability, and stability in the Far East obviously is essential for the United States in the long-term, and therefore that's why we'll have a presence there and should have a presence there for the long-term.

RUSH: Mr. President, we have to let you go, but before I do so I have to share something with you. When I announced yesterday when the schedule was firmed up that I'd be talking to you today, I got tremendous -- I would say inundated -- with e-mails from people asking me to tell you that they're praying for you.

THE PRESIDENT: Yes.

RUSH: So I wanted to pass that on.

THE PRESIDENT: My answer to those who say they're praying for me is, one: thank you; two: I'm grateful, and three: It matters a lot, and it's a remarkable country where people from all walks of life and all faiths pray for me and Laura and has made a significant difference in my life and I'm grateful.

RUSH: Mr. President, thank you for your time, and all the best. I look forward to the next time we speak.

THE PRESIDENT: Yes, sir. Thank you.

RUSH: President George W. Bush. We'll be back in just a moment.

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