CNN Anchor Judy Woodruff: Well, Democratic Howard Dean is moving beyond the '04 election in a different way. After weeks of testing the waters, Dean formally announced his bid to be the new Democratic Party Chairman yesterday.

The former Vermont governor and 2004 presidential candidate joins us now on Inside Politics. Welcome Governor. Good to see you again.

Governor Howard Dean: Thanks. Good to be back on.

Woodruff: Not to put too fine a point on it, but if the Democrats didn't want you to be their nominee, why should they want you to be their party chair?

Dean: Well, we brought enormous energy to the Democratic Party and enormous numbers of new people and an enormous numbers-- enormous amounts of money. Those are all things that are very important for the Democratic National Committee.

Look, we're in the best shape we've ever been in. Terry McAuliffe has left us with the first surplus I've ever seen after a Democratic presidential campaign. But there are things we haven't done because we haven't had the money. And those include supporting state parties so we can have grassroots four-year campaigns instead of seven month campaigns. And those include targeting lower offices like Secretary of State.

I've been appalled by conduct of some -- although the Washington Secretary of State is a great exception to this -- but I've been appalled by the conduct of Republican secretaries of state, particularly in Florida and Ohio in the last couple of election cycles, where they actually participated in suppressing voter turnout and making sure, for example, that there are three voing machines in a precinct that is heavily Democratic and ten voting machines in one that's Republican.

We need to pay attention to county clerks, secretaries of state, state legislators who re-apportion -- and we're not paying attention to that now because we haven't had the grassroots four-year cycle and money to do that, but we will.

Woodruff: So you want to have a local focus.

You know the rap on Howard Dean is that at a time when the Party should be centrist, if anything, at a time when the Party has been walloped by Republicans two times in a row, the last thing it needs is a visible liberal like Howard Dean to be its Chair.

Dean: Well, first of all, I don't think there's anything the matter with the word 'liberal'. So we oughtta get that straight right away. Having said that, I am a centrist. I am in the center of where most of America is. I balanced budgets. We haven't seen a balanced budget, particularly from this Administration, for a long time.

I speak my mind and that is what I think Democrats need to do to win. I don't think Democrats need to jump around the political spectrum to win. What we have to have is a clear message that stands for our values. Our values are more in tune with the values of the American people in general than the Republican values are. They focus on things like gay rights and abortion. We need to focus on things that most Americans care about -- helping the least among us, strengthening education, health insurance, which is an enormous problem for most middle-class Americans. That's how you win elections.

Woodruff: At the same time, Governor, what's to stop the Republicans, if you're elected Party chair, from pointing at you and saying, 'here's somebody out of the mainstream, unrepresentative of what the great middle of this country wants?' I mean, there were reports during the campaign that they were salivating at the idea of you being the nominee of the Party. Why wouldn't they salivate at the idea of you being the head of the Party?

Dean: Well when they publicly salivate, you always wonder what they think privately. The truth is that the only way to take on the Republicans is straight ahead and fight them and not become Republicans. If we become-- Ted Kennedy said this today in one of the great speeches I think we've had for a long time. It is not the way to beat the Republican Party by becoming Republican. Harry Truman said that if you run a Republican against a Democrat who acts like a Republican, then the real Republican wins every time.

And, let's look at Newt Gingrich for a model. How did he get rid of us? He stood up and made a distinct difference between the Republican Party and the Democratic Party, after years of Republicans trying to pretend like they were Democrats. It doesn't work to mimic the other party.

It doesn't work to mimic the other party. Our values are the American people's values and we need to be proud of our values.

Woodruff: It's been reported that some conservative Democrats have let it be known that they're ready to leave the Party if you're elected Chair. Have you heard this?

Dean: Well, I haven't-- no, I haven't heard that. That sounds like Washington gossip to me. But I'd be happy to take a look at those reports if you'd let me see them.

Woodruff: Well let me-- let me quote somebody you do know well and that is your former campaign manager Joe Trippi. As I'm sure you know, he's weighed in for someone else, Simon Rosenberg of the New Democratic Network.

But Joe Trippi says of you, Howard Dean, he says: "We are muting one of the most progressive voices in the party, when (what) we ought to be doing is taking somebody who knows how to make the apparatus work, which Howard was not really that interested in."

Dean: Well, you know, I'm not going to go after Joe Trippi. I've been very good about that. Our campaign didn't work. There were plenty of reasons why it didn't work, and to get into all that stuff doesn't make any sense.

This is not about Joe Trippi. The election is about the future of Democrats and the future of democracy. I know how to make grassroots work. I've brought hundreds of thousands of people into this party, many of whom were not Democrats. We need those people in order to win.

We also need to concentrate on our base. Frankly, I don't think we can go to the African American community and say, 'Gee, we have three weeks to go, can you please get your vote out?' We need to honor our base: labor, women, Latinos, African Americans, people of color, and particularly we need to increase our turnout with white working men. We can do that. The labor unions are the key to that. We just have to honor our base and our beliefs.

Woodruff: Two very quick things. Bill Clinton has been reported out trying to recruit Wesley Clark to run for party chair. Do you have an endorsement, either from Bill Clinton or John Kerry? Where does that stand?

Dean: I would be ill-served if I tried to respond to every Washington rumor that there was, and I'm not going to respond to that one. I have spoken to the President about this. I have spoken to Senator Clinton about this on numbers of occasions. I've spoken to John Kerry about this. You know, I believe I'm on pretty good terms with all the potential candidates for '08, which I am not if I end up in this job. But it's my job not to try to align myself with any particular candidate. It's my job to try to make sure that the Party wins, whoever the nominee is. And we need to take back this party back from the borrow-and-spend philosophy of George W. Bush.

Woodruff: Finally, hard for you to give up your dream of being President, which you said you'll give up?

Dean: Look, I want-- more important than my being President is bringing this country back into the mainstream course which set us in such good stead for so many years.

We've lost our respect abroad. The President, as you talked earlier, misled us by guiding us into Iraq, and now more than 1300 brave Americans are dead. We are running up the largest deficit in the history of the country, and now he wants to borrow another 2 trillion dollars so we can take away benefits from social security for old people.

This is not a country that is in good hands and we need to put it in good hands. So it's not so important for me to be the next President. It's important for somebody who has compassion for ordinary people -- and that's a Democrat -- to be the next President of the United States.

Woodruff: Governor Howard Dean, we'll be watching your candidacy, this one's for party chair. Good to see you. Thanks for being here.

Dean: Thanks, Judy. Thanks very much.

See BlogForAmerica for a copy of the transcript (it originates from CNN).