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Capital Gang

Giuliani Bows Out of New York Senate Race, and Rep. Rick Lazio Steps In; Bush Unveils Social Security Plan and Challenges Al Gore

Aired May 20, 2000 - 7:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG.

I'm Mark Shields, with Al Hunt, Robert Novak and Kate O'Beirne.

Our guest is former Congressman Vic Fazio, leading prominent Democrat from California.

Great to have you back, Vic.

VIC FAZIO (D), FMR. U.S. REPRESENTATIVE: Thank you. It's nice to be back with you.

SHIELDS: Thank you.

New York City Mayor Rudolph Giuliani ended three turbulent weeks by announcing he will not be the Republican candidate for the U.S. Senate.

(BEGIN VIDEO CLIP)

MYR. RUDY GIULIANI (R), NEW YORK CITY: I don't feel that if I take on the commitment to run that I have the kind of confidence that I should have that I should be the candidate I should be.

(END VIDEO CLIP)

SHIELDS: The New York GOP's leadership quickly settled on a new candidate to oppose Hillary Rodham Clinton.

(BEGIN VIDEO CLIP)

GOV. GEORGE PATAKI (R), NEW YORK: I think clearly the best would be Rick Lazio. He has an outstanding record in Washington, voting for the environment, for stronger families, for lower taxes, and he also is a New Yorker. He's one of us.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. RICK LAZIO (R), NEW YORK: I am one of you. Every possible liberal group from outside our state of New York has lined up for our Democratic opponent. Well I say bring them on.

(APPLAUSE)

(END VIDEO CLIP)

SHIELDS: Congressman Peter King, Republican, quickly bowed out as a candidate.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: We don't have a full democracy in the Republican Party in New York State. The fact is, the governor can anoint the candidate.

(END VIDEO CLIP)

SHIELDS: How does the first lady see Congressman Lazio?

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON (D), NEW YORK SENATE CANDIDATE: This campaign is not about me or about any opponent.

(END VIDEO CLIP)

SHIELDS: Bob, does this guarantee a Senator Hillary Rodham Clinton in Washington?

ROBERT NOVAK, "CHICAGO SUN-TIMES": Mark, the Democratic spin in the last three weeks, as -- Mayor Giuliani was self-emulating, all that only Rudy Giuliani can beat Mrs. Clinton. But in fact the Democrats I talked to in the last 24 hours or are very worried about Rick Lazio. He does a couple things. He brings in the Conservative Party designation. He will get the Conservative Party designation. Giuliani wouldn't. At the same time, he's more moderate in image than Mayor Giuliani. He's going to bring some voters in there, and I know that the polls are going to show him behind coming out over the weekend. But that is Giuliani votes moving to undecided, very few moving to Mrs. Clinton.

I'd say she has a problem, and even a question of whether some of the Democrats are saying, we have bought all of Hillary Rodham Clinton's negatives and we don't have the Giuliani negatives to stack up against him anymore.

SHIELDS: Al Hunt, what about that?

AL HUNT, "WALL STREET JOURNAL": Three or four times a year Bob gets it right, and he's awful close tonight. That's it for you, Bob. I'll tell you, Hillary Clinton has become actually a much-better candidate, but I'll tell you the dilemma that this causes. Rudy was as much of an issue as Hillary -- now she is the issue. And I think what she has to -- what she really has to deal with now is this guy is totally unknown, so she naturally would like to help define him. She'd like to define him as someone who sided with Gingrich, voted against Patients' Bill of Rights, voted for impeachments and the like, but she's got a 45 percent negative to start with, and if she goes negative on him right now, it's likely to drive that up. If she doesn't -- her own negatives. If she doesn't, he gets to define himself as independent-minded moderate, which creates problems for her, make him harder to beat him in the fall.

There is a poll out now, Bob , that shows her ahead 50 to 31 right now. If I were Rick Lazio, I'd be encouraged by that poll.

NOVAK: That was taken before Giuliani...

(CROSSTALK)

HUNT: Yes, I know. I'm saying I'd be encouraged by that poll.

SHIELDS: The ceiling that Mrs. Clinton may very well have.

Kate O'Beirne, you have the disadvantage of being a New Yorker. What's situation?

KATE O'BEIRNE, "NATIONAL REVIEW": We're growing in number, we New Yorkers, as you may have noticed in New York.

SHIELDS: That's right. People are moving from Washington, Arkansas.

O'BEIRNE: Illinois.

SHIELDS: Illinois.

O'BEIRNE: Hillary Clinton has to be favored in this race. Democrats have such an advantage in registration number of voters in New York.

Having said that, I never thought Rudy Giuliani was the best candidate to go against her, for some of the reasons bob mentioned. He was always handicapped. He was always going to have two third- party candidates against him, worth maybe six points. Nobody ever thought, nobody ever convinced me he was going to win by more than that. So she now has a problem, because despite trying to hypnotize New York voters: It's not about me, it's not about me -- of course it is about her. But she lost the advantage of the anti-Rudy forces on the other side. She's running against somebody who's likable, while she has her high negatives.

I think she'll try, as I'll explain, to makes it look like he's too young or unready. That's tough to do, though, given that he, unlike Hillary, has held public office. He has a public record, he is from New York, he has run before -- it's just tougher how to make him look like some amateur, when she has a lot of nerve to be running for the Senate.

SHIELDS: Well, first of all, we've got to get the pronunciation thing -- he's Lazio; you're Fazio.

Now why isn't he "Lazy-o?"

(CROSSTALK)

FAZIO: Well listen, this a nice guy. I think he's liked by his colleagues, but we don't know whether he is really ready to step up to the bigger game that a Senate race is involved with. I think Al is right, Hillary is a much better candidate than she was. Her campaign has been through the rigors of the early months. They're really establishing a base in upstate New York, which they needed to do. I think she has an advantage, not just in name recognition or money, but I think she has a guy who's whose record of support for Newt Gingrich and the Republican Congress is going to be exploited in New York State, which is still a Democratic state. Al Gore is ahead by 16 percentage points there. This is I think Hillary's race to lose at this point.

O'BEIRNE: Vic, they're clearly going to try to do that, you know. Rick Lazio is Newt Gingrich. That's going to be awfully hard to do, though. He supported things like balanced budget, welfare reform. If anything, conservatives are going to be sort of surprised to find out that Rick Lazio has taken so many liberal positions. His positions aren't unlike George Pataki's, who beat Mario Cuomo with the same kind of position on this.

FAZIO: But he has a lot more positions on the record that don't really coincide with what New Yorkers want.

(CROSSTALK)

SHIELDS: My turn, three quick points, Bob. First of all, Hillary Clinton is a unique candidate. This is a woman whose candidacy is predicated upon the bad conduct, publicly exposed of two men, namely her husband, who made her sympathetic national figure, raised her popularity. She gets into the race, she's stumbling, in big trouble, and then Rudy Giuliani self-immolates, and now she's the favorite in this race.

But I think that this is the key point for Rick Lazio the next two weeks. He's introducing himself to the American people. He doesn't have to establish his Republican bona fidees; he has to show that he is a grownup. I think that's the most important thing that he has to show, that I am a grownup and I can win this race. I think that, third, not to be able to -- Bob, get used to saying speaker Gephardt, because the fact is Rick Lazio's seat was carried by Bill Clinton 20 points, and, in 1996, and Mario Cuomo and Pat Moynihan.

NOVAK: That's the big downside on that, is for the Republicans, no question. But Lazio is a classic moderate, he really is. And they say while his Contract with America -- they're going to pin Newt Gingrich on him, and he's Newt Gingrich's lieutenant. That's nonsense. He voted for the Striker Replacement Bill with the liberals, voted for the minimum wage with the liberals, parental leave with liberals, voted for an increase in spending -- in funding of the National Education Endowment, all of that stuff, but the other thing is -- no, I'm not going to endorse anybody, unlike you, but he, he is -- that's right. He is not -- on abortion, for example, he says he's for a woman's right to choose, but he votes for all the conservative restrictions on abortion. He's a classic moderate. He's about 50-50 in all the ratings systems, and that's hard to run against.

(CROSSTALK)

SHIELDS: I agree. And he beat Tom Downey, a very able...

HUNT: I think Mark has it right. I mean, all those voting -- it is whether people think that he is -- is he dull? I mean, New York like to elect people that they think are pretty classy, particularly for this seat. This is the Pat Moynihan/Robert Kennedy seat.

I will say one nice thing, though. Robert Novak and his friends no longer have to give us these -- I don't know if they're Talmudic or Jesuitical distinctions between infidelity by Republicans and infidelity by Democrats. So there is...

NOVAK: Wait a minute, he you mentioned my name.

Have you ever heard me once, Mr. Hunt, talk about infidelity as a campaign issue?

HUNT: Not as a campaign issue.

NOVAK: All right. Well then, don't put me with those people.

HUNT: I didn't say as a campaign issue. I said as a moral issue.

SHIELDS: Newt Gingrich is grateful.

Vic Fazio and the GANG will be back with the great Social Security debate.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

George W. Bush unveiled his Social Security plan and challenged Al Gore.

(BEGIN VIDEO CLIP)

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: I am here with a message for America, and to put my opponent on notice. The days of spreading fear and panic are over. The days of delaying, dividing and demagogueing are over. When I am elected, this generation and this president will save Social Security.

(END VIDEO CLIP)

SHIELDS: The vice president accepted the challenge all week.

(BEGIN VIDEO CLIP)

AL GORE (D), VICE PRESIDENT OF THE UNITED STATES: Under the Bush privatization plan, even if your own investments do well, it's inevitable that others won't be so lucky. Your friends, your neighbors, your relatives could be left without the retirement income they need.

Under the Bush privatization plan, individuals could lose some or all of the money that they invest.

The Bush privatization plan would take the security out of Social Security.

(END VIDEO CLIP)

SHIELDS: Al Hunt, who is winning the first round of the Social Security debate of 2000?

HUNT: Well, certainly, Bush is winning among the elites, and I think in the press coverage so far. But, Mark, I don't think he can go for five or six months with ducking the details of what this is all about. Bush, on the one hand, says this a bold, courageous proposal, but on the other, he says, but there are no risks, no one is going on lose everything, no one is going to have their taxes increased or their benefits cut.

And look, over the long run there is no question that stocks do better than government bonds. Bush wouldn't be proposing this if there weren't a 17-year bull market. But it's also true that sometimes markets go down. From '66 to '82, the American stock market didn't go up. The Nikkei in Japan was 39,000 11 years ago, it's 19,000 today.

What Bush has to explain is two things. Number one, what happens during those down times to people who count on some kind of guaranteed Social Security benefits? And number two, over the next 10 years, how is going to finance the transition cost and the end big tax, because his numbers don't add up. The problem is, over the long run, not everybody makes it.

SHIELDS: Bob Novak, get your -- one question, and that is, he is taking a political risk here.

NOVAK: Who is "he"?

SHIELDS: George Bush, because voters who are most concerned about Social Security are voters of the age of 55 and over, ones who are looking to get it. People over 65 basically know it's not going to be taken away from them. He is appealing to younger voters, making a pitch that they're going to be responsive to this pitch. Is it worth...

NOVAK: In the first place, he's saying that people who are about go on Social Security are not affected by this.

(CROSSTALK)

NOVAK: But there is not going to be any change, and he's telling them that. The other thing is that all the polls show that there is an overwhelming public support for taking two percentage points out of the tax plan and putting into private investment. Over a thirty-year period -- there's never been a 30-year period in the stock market where you haven't had a rise, and it's not that you're sitting doing day trading; you have a limited amount of options.

But I really do believe -- and some Democrats share my belief -- that going on day after day, pounding on this is a mistake by Al Gore, because it gives the entire attitude that he's a beginner and an oppositionist.

NOVAK: Gore people say this the one issue where there getting traction, though, is on Social Security.

O'BEIRNE: I'm not at all sure that's going to be the case, Mark. I agree with Al. It is bold and courageous, and you're right, it's a gamble, but he deserves enormous credit for doing this. And I think it plays to -- Gore's opposition plays to one every his real weaknesses. He comes across as arrogant. It's one of the reasons I think the public I don't think has warmed to him over seven years. And what he is saying is I don't trust you to have enough brains to manage some small portion of your retirement. George Bush is saying I think people are smart enough to make these decisions. Because Al Gore did back the proposition that Social Security monies could be invested in the market, but the government was going to have to decide, because we 're all too stupid.

And secondly, I think Bush looks like a leader. He's ahead on the polls on leadership quality, and he has a bold proposal. He's willing to defend, make a real change, step up and fix a program that's in fiscal crisis, and Al Gore just saying no, no, no, and attacking, I think weakens the leadership for Gore.

SHIELDS: Vic Fazio, just one point, and that is Larry Lindsey, who is George Bush's principal economic adviser, took all of his stock money out two years ago when his it was 8,500, saying it was overvalued. Doesn't that raise Al's point that maybe we are overvalued in the market right now?

FAZIO: I think so. First of all, this is really directed at the younger voter who has never experienced a downtown in the market, and I'm sure for some, this is a very popular concept. They analogize it to their 401(k) or their stock options.

But you know, if you are going to protect the existing, or soon to be, Social Security beneficiaries, you've got to trillion-dollar transition cost over 10 years. That conflicts directly with the $1.3 trillion tax cut.

NOVAK: When is the last time...

FAZIO: That means we have a serious credibility question here, Bob, because while we give Bush credit for opening this issue up, he has provided none of the details. And whether this is workable or not, I think is as much an issue as whether you think it's comporting with social insurance.

NOVAK: There's no 30-year period where the stock market has gone down, none.

FAZIO: What about who retires and when? I mean, it could be down when you' re retiring. That's the issue.

SHIELDS: Last Word, Vic Fazio.

Next on CAPITAL GANG: Bush and Clinton together on Kosovo.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

The Senate's senior Democrat proposed a deadline on U.S. troops in Kosovo.

(BEGIN VIDEO CLIP)

SEN. ROBERT BYRD (D-WV), ARMED SERVICES COMMITTEE: This matter is about power. It is about the arrogance of power in a White House that insists on putting our men and women in harm's way, and spending their tax dollars without the consent of their elected representatives.

(END VIDEO CLIP)

SHIELDS: But a prominent Republican gave President Clinton help.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), ARMED SERVICES COMMITTEE: It would set a dangerous precedent that would give future Congresses the green light to manage the conduct of American security policy.

(END VIDEO CLIP)

SHIELDS: Next, the GOP presidential candidate intervened -- quote -- "Governor Bush views it as a legislative overreach on the powers of the presidency" -- unquote. Fifteen Republicans senators followed Bush, defeating the limitation 53 to 47.

Kate O'Beirne, is Governor W. Bush out of touch with his party on this issue?

O'BEIRNE: It is not surprising that a man who would be commander in chief objects to Congress doing things like this to tie the president's hands. But people in the Senate were most not happy that George Bush decided to speak out on it. Congressional Republicans themselves, though, spent 12 years during the '80s arguing that Congress ought to give the president broad prerogatives. However, they are so frustrated at what McCain calls the "feckless photo-op foreign policy" of the Clintons that they're driven to do this sort of thing, which John McCain himself, his own amendment on October '93 cut off funds to Somalia, much of it is owing to the frustrations of Bill Clinton.

SHIELDS: Is that is what it is, Al?

HUNT: Well, it's some of that, and I think this administration certainly has not done a very good job of really, consulting with Congress and talking to them, and I think that's part. But I think it's mainly politics. American men and women aren't dying in Kosovo right now. I think it's not a perfect solution by any means, but it's a lot better than it would have been if we hadn't gone there, and I think that to arbitrarily set a cutoff date would be injurious to the effort over there. And I think we're sort of really playing politics, and I give George Bush and John McCain tremendous credit on this issue.

SHIELDS: Bob, George Bush this week bipartisanship was the dream. I mean, China, he joins Bill Clinton, Kosovo, he bails Bill Clinton out and brings his own party and saves the president from an embarrassing defeat.

NOVAK: You can't accuse him of being hand to hand with the Republican leadership in Congress, because he went the other way.

I'm a little embarrassed, because I supported the presidential prerogatives, and the Contras in Nicaragua, and the Cold War and the Vietnam War, but I would have voted for this.

SHIELDS: You would have?

NOVAK: I certainly would have, because the president, in the point where he without regard to the voters, without regard to the Congress, he's putting troops in a Haiti, Somalia, Montenegro, Kosovo, Bosnia, Kosovo and Bosnia. They'll never get out, and that isn't the way this government should be run, and I don't know what else you do about it.

SHIELDS: Vic Fazio, there's two Republicans Parties I see. One is isolationist when it comes to any intervention anywhere. The other is totally engagement when there's a commercial interest. They love China. Boy, oh boy, there's a market there, let me in.

FAZIO: When a business community tries to organize the party, they get organized, as they are in PNTR. The rest of the name the time, this is a party that seems to wants to shrink from its international responsibilities. The same people who are asking to spend more money on defense -- and I can understand that -- are for some reason unwilling to commit American troops, and I do think it's largely an animus toward Bill Clinton that has brought them to this point, voting against their own principles. Thank God McCain and Bush at least made them face that.

SHIELDS: Now if you'll explain to me how the Democrats, who want troops to go everywhere, want to cut defense budget?

FAZIO: I would admit there's a little bit of hypocrisy on both sides on this. Part of this debate is about the fact that the War Powers Act is in shambles, and there's nobody who is really been able to come up with a method to involve the Congress in our foreign policy.

SHIELDS: Vic Fazio, thanks very much for being with us. The gang will be back with the "Outrage of the Week."

ANNOUNCER: Our "Viewer Outrage of the Week" is from Dennis Smith of Raleigh, North Carolina. He writes, "It is an outrage that our national drug program is not a primary issue this election year. Everyone is aware that our drug program is our national disaster. We hear stories that the drug pushers are so thick that even elementary students have to be escorted to school. It is an issue that no one wants to touch. This is an outrage.

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week."

Filipino strongman Ferdinand Marcos once bragged after a stolen election -- quote -- "My opponent may have won the vote, but I won the count" -- end quote. Republican Party bosses in the Bush presidential campaign have bought the politics of Marcos to Michigan and Vermont. Senator John McCain won 58 Michigan delegates, but Bush backer John Engler's loyalists gave Bush 46 delegates instead of the six the Texan deserved. Party bosses in Vermont today did the same thing, overturning McCain's primary victory there. Is this the way a reformer with results plays fair and square.

Bob Novak.

NOVAK: Now I know, as a Baltimore orioles fan who personally pays for season tickets, why my team did not try to sign El Duque and other great Cuban players. A spokesman for owner Peter Angelos said the Orioles alone, among all Major League teams, actively discourage what he contemptuously calls Cuban defectors. Signing them, it was announced, would be disrespectful to Cuban dictator Fidel Castro, who runs his country like a prison. No wonder Cuban-American Rafael Palmeiro left the Orioles for less money.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Photos of Elian Gonzalez in his young pioneer uniform learning to be a good revolutionary, like Che, have been taken right here in the U.S. of A. Meanwhile, Janet Reno has received a surprising reward. The woman responsible for returning Elian to Castro recently accepted the Ellis Island Medal of Honor, no doubt honoring her for all her efforts on behalf of those yearning to breath free.

SHIELDS: Al Hunt

HUNT: Mark, pro basketball player Latrell Sprewell was suspended for a whole season, as he should have been, when he tried to choke his coach. By contrast, Indiana University this week took no real action against basketball coach Bobby Knight, who has chocked, punched and verbally assaulted players, colleagues and even an aging secretary. Mr. Knight has his attributes, but he is temperamentally suited to lead young men anymore, and the university was too cowardly to acknowledge it.

SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG.

Next on CNN, "SPORTS TONIGHT" reports on how Pegasus did in the Preakness.

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