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Capital Gang

Gary Bauer Discusses the Ashcroft Confirmation, Tax Cuts, Faith-Based Initiatives and the New DNC Head

Aired February 3, 2001 - 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 a one-hour CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak and Margaret Carlson. Our guest is former Republican presidential candidate Gary Bauer. Thank you for coming in, Gary.

GARY BAUER, CHRM. CAMPAIGN FOR WORKING FAMILIES: You're welcome. Good to be here.

SHIELDS: Good to have you. The Senate confirmed John Ashcroft to be attorney general by 58-42, in what was close to a straight party-line vote. All 50 Republican senators voting yes, 42 out of 50 Democrats voting no. After the vote, Democrats claimed victory.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: It was a very powerful message that was sent all across America as well as to the White House and the president.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D), NEW YORK: It's a shot across the bow in terms of the Justice Department and how it conducts itself. It's a shot across the bow in terms of Supreme Court nominations.

(END VIDEO CLIP)

SHIELDS: In the Senate debate, Republicans questioned Democratic tactics and goals.

(BEGIN VIDEO CLIP)

SEN. ORRIN HATCH (R-UT), CHRM., JUDICIARY COMMITTEE: I resent the calumny that they've heaped on John Ashcroft. I resent the unfair tactics. I resent the distortions of his record. And boy, it's been distorted.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. PHIL GRAMM (R), TEXAS: I'm beginning to wonder if this was all just an effort to smear and defeat John Ashcroft or whether this was an effort to cow John Ashcroft, to cow him in office and in the process prevent him from carrying out George Bush's mandate.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, will the close vote intimidate John Ashcroft as Senator Gramm contends and block the mandate of President Bush?

MARGARET CARLSON, "TIME" MAGAZINE: I wonder if the close vote could cow Phil Gramm. I don't think anything could. You know, when it came to answering the questions before the committee, John Ashcroft sounded like a moderate. It could have been Janet Reno answering those questions. You know, it was a complete personality transplant.

BAUER: She's a moderate.

CARLSON: Well, yes. But when it comes to doing things, we just don't know what he'll do. The things on the surface, I think, the things that we can see, he will be, you know, somewhat moderate and enforce laws. But it's the hundreds of things in the background that we won't see that we just don't know about. He'll be wilier about it, but I don't know that -- I don't know who we have. Do we have the man that was nominated or do we have the laundered John Ashcroft?

SHIELDS: Bob Novak, Margaret raises a point. I mean, is there a David Souterization here, sort of a muting down of position that we're left with a sanitized?

ROBERT NOVAK, "THE CHICAGO SUN-TIMES": I think the better analogy would be Walter Hickel, the Hickelization, secretary of the interior in the Nixon administration who really, he was -- he changed his positions because he was intimidated by the confirmation process.

But that is not true of John Ashcroft. They're not going to turn him around. The decision on things like partial-birth abortion, on all the abortion questions will be made at the White House. He will follow them through.

His big duty and the place where he has freedom of action is to try to clean up the mess that Janet Reno left in the Justice Department. He's going to do that. He's going to name as deputy a very good former U.S. attorney from Florida named Larry Thompson and they...

SHIELDS: From Georgia, Bob.

NOVAK: From Georgia, and they are going to clean up that mess there and there's going to be a lot of people, a lot of cases that have been buried that are going to be brought to light. So this -- this vile effort by the Democratic senators to take the confirmation process and make it an intimidation has failed.

SHIELDS: Oh, all right. Gary Bauer, your take?

BAUER: Well, I don't think he's going to be intimidated, although I do think that was one of the purposes of this confirmation hearing. It's worked before. I really don't want to name names, but there have been some very noteworthy examples in the last 15 years of people going up for confirmation and being so beaten up spent that they spent the rest of the time in office trying to prove they weren't who they were when they were nominated.

I believe Senator Ashcroft is an honorable man. I think he'll enforce the law, but I also think that he will at the Justice Department do what he can to move the law so we get to the point where, for example, all of our children are welcomed into the world and protected under the Constitution, which is something I think George Bush wants to do to.

SHIELDS: Al Hunt, your take, and I guess what I'm really fascinated by is whether in fact you think that John Ashcroft was abused and beaten up the way that Bob suggests?

AL HUNT. "THE WALL STREET JOURNAL": No, I don't.

(CROSSTALK)

HUNT: I think Democrats contending that this is going to be a harbinger for other fights, I think, is enormously exaggerated. Nomination struggles are so ingenerous. It depends on the nominee. I don't think it has much effect on that at all.

I also think that NARAL and some of those interest groups that are now going out and attack Russ Feingold and Chris Dodd, that's very counterproductive. They voted the way -- you might agree or disagree with them, but they did it out of conviction as I think most of the 42 who voted against Ashcroft did.

I don't think it's going to affect John Ashcroft's tenure. I think Gary's' absolutely right. I think he's going to pick some very smart, some very right-wing, Federalist Society types to be his assistants and they will pursue a right-wing agenda over there.

Some things did happen. I think we learned something about John Ashcroft's political character and his veracity which gives a lot of people not very much confidence that he's going to clean up anything over there. And secondly, as one wise Democrat person said to me the other day, the best benefit for Democrats is the first person who comes in with a Nader 2004 button and says it doesn't makes a dime's worth of difference, the antidote to that is a picture of John Ashcroft.

SHIELDS: That's the last word. Al Hunt, Gary Bauer and the gang will be back with the recession watch.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. In the face of more job layoffs, including 75,000 reported by the widely acclaimed General Electric Corp., the Federal Reserve cut interest rates for the second time in less than a month, a reduction of 0.5%.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: I don't want to use the "r" word, but I think that there's two things we can do. There is fiscal policy, and there is monetary policy. The Fed has done its part lowering interest rates, and I think that's the right thing to do, and the Congress can do its part by lowering taxes.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: Trying to fight it through fiscal policy, either increasing spending or cutting taxes, almost always comes too late. So, really the best way, most economists would say, to fight economic slowdown is through these rate reductions by the Federal Reserve.

(END VIDEO CLIP)

SHIELDS: But President Bush kicked off tax cut week today with his radio address, promising to pay down the national debt, and promising more.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: American families have debts to pay as well. A tax cut now will stimulate our economy and create jobs.

(END VIDEO CLIP)

SHIELDS: Al Hunt, are we now sure to get both interest rate cuts and tax cuts?

HUNT: Well, we got the interest rate cuts and we're going to get probably a bigger tax cut than we ought to get. Even Alan Greenspan doesn't argue that that Bush tax cut would counter any possible recession.

Look, the economy has gone south more quickly than most experts thought it would. But Alan Greenspan, I remind you, has a remarkable record, combining, I think, his unsurpassed knowledge and just terrific instincts. 1994 and 1995, when a lot of the full moon crown was saying the same thing they're saying today, he was right. '96, he was the one who understood that you don't raise rates, even though the unemployment rate was dropping below 5.5 percent because the economy has changed.

I think, in fact, Alan Greenspan in the '93 Budget Deficit Reduction Act, tax increases are primarily responsible for the best economy we've had in our lifetime and I would just say I still think there's a better than even chance or at least an even chance you avoid a recession. The worst thing we could do now is give huge tax cuts to people who least need it. SHIELDS: Bob Novak, I want you to address this, but you've got to explain to me and to the economic uninitiated how these budget surplus projections continue to grow as unemployment continues to grow.

NOVAK: Because there's no connection between a budget deficit and a budget surplus and good and bad times. We've had some of the great economies while we're running big deficits and the idea that a surplus guarantees big times is the old-fashioned Republican and new- fashioned Democratic idea.

Now, let me say this, that Senator Conrad and the present Democrats are absolutely wrong and you know this, Al, when they say it's slower with tax cuts than with monetary policy. Monetary policy it takes about six months get through the tunnel. A tax cut has an immediate effect.

There's going to be a big tax cut. It's needed. And the one unaccountable person in American politics is Alan Greenspan, who the new figures coming out shows he made a huge mistake in November when he didn't cut interest rates and was waiting for the results of the Florida recount.

SHIELDS: But Gary Bauer, then why don't we cut the payroll tax? Instead of cutting the marginal rates on these richest among us, why don't we just cut the payroll tax. That's going to put more money in the economy. That's going to generate the activity Brother Novak alleges he wants.

BAUER: Well, Mark, I'd be in favor of both kinds of tax cuts, the payroll taxes is one of the highest taxes for about three-quarters of the people.

SHIELDS: Three-quarters of the people, that's right.

BAUER: The answer to your first question about why do the projections of the surplus still keep going up, it's because the American people are overtaxed. They're sending too much of their money to Washington. Washington can't spend it as fast as the taxpayers are being forced to send it here.

I think that Alan Greenspan made a terrible mistake when he raised interest rates over and over again, increasing the cost of homes, of automobiles, making it less likely for new businesses to start. Now, he's scrambling to stop a Greenspan recession. And quite frankly, I think there's more interest rate cuts to go. I think we need to take off at least another full point before this year is over.

SHIELDS: Margaret, is it a Greenspan recession, a Clinton recession, a Bush recession or any recession?

NOVAK: Carlson recession.

CARLSON: I'm having my own personal recession.

(LAUGHTER) CARLSON: I'm one of these people left behind by the Greenspan boom. It was a boom.

BAUER: Interest rates are not going to help this one, I'm afraid.

CARLSON: It was a Greenspan boom. Now that Saint Alan has blessed the tax cut, there will be a tax cut. But remember, you know, even Al Gore was proposing some tax cut. Now the tax cut we're talking about, if it's for the recession now, which Bush is pushing, it has to be different than the one that Bush has put out there because when wealthy people get a tax cut, and the huge preponderance of this goes to wealthy people, they put it somewhere, wherever wealthy people put their money.

If you want people to buy a Chevy or a refrigerator, you've got to reduce the FICA or tilt that tax cut back towards the middle class.

HUNT: Where does Bob put his money? I've often wondered that.

(CROSSTALK)

HUNT: Let me just say, because I really do think what you said about Alan Greenspan and the Florida recount, which was so silly in the face of it. I gave you a copy of Bob Woodward's book on the Fed a couple of weeks ago, I wish you would read it because then maybe you'd understand how these things work, Bob. It had nothing do with the Florida recount. And I would say his track record on the economy over the last eight years versus Novak's, I'll take his.

NOVAK: Let me explain one thing to you. What's happening, Margaret, in the economy is that there is a tremendous shortage of capital for people for new start-up projects, for small companies. That's why you're having layoffs, mergers. And what you need is more money for people to invest so we have more investment capital and giving a couple of dimes to somebody to buy a extra pair of razors isn't going to do it.

(CROSSTALK)

CARLSON: The working class. The riff-raff should not...

SHIELDS: We're hearing some Tiffany Bob, here. Tiffany Bob.

NOVAK: I tell you the truth. The politicians won't tell you that.

SHIELDS: Quite frankly, let's be absolutely blunt about this, the Democrats have caved totally. During the campaign, at least Al Gore made the case that this was tilted totally to the rich. It was going to line the pockets of the well-off already, and if there were to be a tax cut -- the Democrats dropped that. Now they're simply saying me too, me too, me too and that terrifies me because it looks worse.

(CROSSTALK) HUNT: Another way you can stimulate the economy, by ending the estate tax. If people will die quickly, we'll get a lot of capital.

(CROSSTALK)

NOVAK: I'll tell you what it is. If you end the estate tax, again, you have another infusion of capital. I mean, everybody I talk to that tried to have real estate projects or having start-up companies, there's no money.

BAUER: Look, we shouldn't be sitting in Washington making judgments about how people spend their money, whether it's on razor blades or stocks and bonds. The fact of the matter is the American people are going to spend it better and more efficiently than a bunch of Washington bureaucrats.

(CROSSTALK)

HUNT: Gary your people -- the average working class American has lower taxes today than he or she had 10 or 20 or 30 years ago. They're only on higher on Bob's people.

BAUER: I would lower those taxes on what you call the working class whether it's working class, middle class I would lower them even more because between the payroll and income tax, Americans are still overtaxed.

SHIELDS: Gary Bauer said the key thing: Three out of four Americans, their payroll taxed, the Social Security and Medicare taxes are higher than are their income taxes. I think they're the ones that need relief and not the well-off. Not the well padded and not the affluent.

(CROSSTALK)

SHIELDS: You'll have to save it for us, Bob because next on CAPITAL GANG, a faith-based presidency.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. President Bush unveiled his faith-based initiative, asking Congress to permit religious groups to directly receive federal funds for social services.

(BEGIN VIDEO CLIP)

BUSH: We will encourage community and faith-based programs without changing their missions. We will eliminate barriers to charitable works wherever they exist.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JERROLD NADLER (D), NEW YORK: What makes me uncomfortable is the thought of the federal government invading our churches and synagogues, bringing with it federal regulation, which is inevitable.

(END VIDEO CLIP)

SHIELDS: At the National Prayer breakfast that same day, the president suggested there should be limits to the separation of church and state.

(BEGIN VIDEO CLIP)

BUSH: The days of discriminating against religious institutions simply because they are religious must come to an end.

(END VIDEO CLIP)

SHIELDS: Bob Novak, is President Bush taking a dangerous walk on shaky constitutional grounds?

NOVAK: He may be in the opinion of a lot of federal judges, liberals, the five members of the Supreme Court who think that the Founding Fathers, when they cited there shouldn't be an established religion said that you can't even pray in school or even have a Christmas display in a town square.

But I think what the -- what President Bush doing is a very good idea on the faith-based initiatives and I certainly believe, that I hope, he's going to be very firm in saying that the Constitution does not bar in anyway some of the things that the Supreme Court says it has.

SHIELDS: Al Hunt?

HUNT: Well, I'm not worried so much about the constitutional programs. I don't believe in school prayer. But I think this is an interesting initiative. I think it's got a lot of promise. It's not novel. Bob forgot to mention Catholic Charities, which has been doing some of the most important work in the country for years in this kind of an area.

I also am very encouraged they picked a guy named John DiIulio, a Penn professor, a man of impeccable integrity and, I think, a caring person to head this at the White House. Two cautions, however. One is don't think this can substitute for a public investment. It can't. Texas proves that.

And the second, I think, is a political issue and I wonder what the public and Gary Bauer, for instance, are going to think about public monies for Louis Farrakhan's prison programs or the Scientologist's anti-drug programs in the inner city. I think those are tough political issues.

SHIELDS: Gary.

BAUER: Look, there are a couple of issues here. First of all, faith-based institutions are doing an incredible job. This past week I was at a dinner for Chuck Colson's Prison Fellowship. You look at the figures of what they've doing with prisoners and the recidivism rate, no government program can touch that kind of success.

But it is a double-edged sword because there are federal judges that have a very expansive definition of what this aid means when you give it to a group and if those federal judges try to use federal grants as an excuse to force religious programs to drop what makes them effective, which is their faith-based components, then this will not have been a good idea. So, we're going to have a big debate over the next couple of years and I think the jury's is going to be out on it.

SHIELDS: Margaret, you're a lawyer and I have question for you, and that is this...

CARLSON: Pop quiz.

SHIELDS: ... the argument was made against -- by the Bush administration, with some logic was that aid to groups like Planned Parenthood and others who do family planning, but also sponsor abortion clinics, money is fungible, that if you give money to one side it can go either way. Isn't there a concern somewhat here if money goes to any one of these faith-based organizations, while it goes to the civic social purpose, it could be used as well for religious purposes.

CARLSON: I mean, it's exactly what happened, we were discussing it last week, when the money for the federal planning clinics overseas was going to go -- it was taken away in that if you free up money, it goes for the thing you don't want it to go for.

So, you're freeing up money for say, Catholic Charities -- by the way, I'm going to a Catholic Charities dinner. And I hope they get tons of money. And I hope they get, say, more than the Methodists or the Presbyterians. We can all go in and fight for those dollars.

But it does free up money and the Founding Fathers might have had a point let us not have government -- let us not have government getting involved because they muck things up which is what, by the way, Gary Bauer, most conservatives think. They think, you know, anything government gets involved in they kind of ruin it.

(CROSSTALK)

BAUER: The founding fathers...

CARLSON: ... but they want it to get involved what seems to be working, which is faith-based things.

BAUER: The founding fathers took tax money and they used it to sent missionaries among the Indian tribes. They did not have this fastidious hostility to religion...

CARLSON: And took their land, as I recall.

BAUER: What we've seen in the last 30 years and Mark, look, Catholic schools, for example, are getting the short end of the stick and federal programs because of the fear that if we help some poor child in a catholic School, he may see a crucifix when he walks down the hallway.

NOVAK: Let me make one small point. Al, in all due respect, what you were saying that, boy, we can't let this substitute for government, this is something I heard a lot this week from a lot of liberals and a lot of Democratic politicians, and what it is is you're very afraid that somehow or another this aggrandizing, expansion of government spending is going to be threatened by the private sector. I certainly hope it is.

HUNT: No, Bob, I'm not -- I like this idea but Gary, I want to come back again. What do you think about public monies for Louis Farrakhan, for the Scientologists? Good idea?

NOVAK: What's wrong with Louis Farrakhan?

HUNT: It's just -- let me ask Gary.

BAUER: I think if a group applies, it's going to have to meet the basic requirements of a program. And I believe that any group that has a question about hatred or bigotry, etc. is going to find it real hard to get a grant.

HUNT: But Farrakhan does every bit as good a work as Colson does in the prison stuff.

(CROSSTALK)

BAUER: Nobody is suggesting that we repeal the rules on fairness and not taking tax money and giving it to groups.

NOVAK: Farrakhan has been defamed by a lot of people. I think you take a look at what he really has said and not what he is reputed to have said.

BAUER: I've actually heard him say those things about Jews, Bob, so I would have some real problems if he got...

BAUER: Therein we see the problem, I think, Gary. I think it's and as I say, I'm very encouraged that John DiIulio is going to head this. But it's not going to be as easy as some people suggest.

CARLSON: But you know, the California public utilities don't need help and health maintenance organizations and prescription drugs, but God needs help? I mean, listen, government does not equal...

(CROSSTALK)

CARLSON: ... religious groups are going to be fighting over this money, people are going to be making judgments. It's going to be a mess.

SHIELDS: Last word, Margaret Carlson. We'll return to look at how THE CAPITAL GANG reacted four years ago this very week to a revelation in the campaign fund-raising scandals then.

(COMMERCIAL BREAK) SHIELDS: Welcome back. Four years ago this week, it was revealed that the comptroller of the currency, the government's top bank regulator, attended a White House campaign coffee for bankers.

President Clinton said, quote, "mistakes were made," end quote, and that the comptroller of the currency should not have been there.

This is how the members of your CAPITAL GANG reacted on February 1, 1997.

(BEGIN VIDEO CLIP)

NOVAK: This is serious stuff. You know, I think the coffee with the comptroller of the currency is one of the most interesting things I've seen in town since the Keating Five, when the senators sat around with Charles Keating's representatives.

KATE O'BEIRNE, "THE NATIONAL REVIEW": I thought the president's performance at his press conference was incredible. He seemed jittery and irritable, but I guess that should attributed to all the coffee he's been drinking with bankers and felons and foreigners.

SHIELDS: It was decaf espresso.

O'BEIRNE: No, I think it's finally getting to him.

SHIELDS: The last time I heard "mistakes were made" was spoken by Ronald Reagan during Iran-Contra, distancing himself from what had gone on in his administration.

HUNT: Let me tell you something, I can name, and I will in a minute, as sleazy an activities that the Republicans have done as anything Democrats have done. Some guys also want to use this as an opportunity not to do anything on campaign reform.

NOVAK: Aren't you a little appalled by the comptroller of the currency sitting down there?

HUNT: Absolutely. Oh, absolutely.

(CROSSTALK)

HUNT: No question, no question.

SHIELDS: Let me close it with this: Bill Clinton has not been a stand-up guy on this.

HUNT: Right.

SHIELDS: Americans are yearning for their leaders to seek and accept responsibility.

(END VIDEO CLIP)

SHIELDS: Al Hunt, did we exaggerate the importance of the regulator sipping some decaf coffee with contributors? HUNT: Mark, we were talking about his a few moments ago, and none of us except for Margaret Carlson could remember the name of the comptroller of the currency, which suggests it was an exaggerated story. But you know, when you have a system that is so corrupt, appearances matter, and unfortunately, the system today is probably even more corrupt than it was four years ago.

SHIELDS: More corrupt today, Bob?

NOVAK: What has changed is that we know now that the president can get away with anything. People think they can get away with anything. We thought this was a big deal, the regulator sitting down with the bankers. But it had about a two-week lifespan and the president got away with it.

SHIELDS: Do you think is made it possible, Gary, for George W. Bush to raise $110 million and nobody would even bat an eye?

BAUER: I think the rules keep getting dumbed down, watered down. Look, I continue to be a conservative that is in favor of fair campaign finance reform. I think when big corporations and big unions can give million dollar soft money donations to the two parties it is inevitably corrupting and I think we ought to get together on this and stop it if we're going to restore confidence in Washington.

SHIELDS: Great to hear a principled conservative voice.

HUNT: Absolutely.

CARLSON: Yes.

BAUER: Can I take it back? You guys...

(LAUGHTER)

CARLSON: Don't try to run again. You'll get no traction now. You know, I wonder if this was before or after Tom DeLay actually had regulators in to the Capitol to sit down and write legislation. Do you remember?

SHIELDS: That's right.

CARLSON: They may or may not have had coffee. But, you know, Clinton proved that this was just the tip of the iceberg or the tip of the coffee cup in that it just got worse and worse until he exited with silver in his pocket.

SHIELDS: The last word, Margaret Carlson. We will be back with the second half of CAPITAL GANG with George W. Bush's charm offensive; a money man leading the Democratic Party and our own outrages of the week, all after a check of the top news.

(COMMERCIAL BREAK)

(NEWS BREAK)

(COMMERCIAL BREAK)

SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak and Margaret Carlson. Our guest is Gary Bauer, chairman of the Campaign for Working Families. Good to have you here, Gary.

BAUER: Good to be here.

SHIELDS: In his second week at the White House, President Bush stepped up his charm offensive aimed at Democrats. He met for an hour with the Congressional Black Caucus. Later in the week, Senator Edward M. Kennedy and other members of his family were guests for dinner and a viewing of the new movie "Thirteen Days," about the Cuban missile crisis.

He next became the only president to attend policy retreats of the opposition party.

(BEGIN VIDEO CLIP)

BUSH: Senator Daschle invited me over this morning to the Library of Congress, and I was so honored he would, and it gave me a chance to come, and many members of the Senate there had never seen me in person and I'd never had a chance to visit. I'm going to Pennsylvania Saturday -- Sunday afternoon as well, thanks to the kind invitation of Congressman Gephardt.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN BREAUX (D), LOUISIANA: He's trying to do what he said he did in Texas, where Democrats and Republicans were treated as equals in terms of how the administration worked with both sides.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. PAUL WELLSTONE (D), MINNESOTA: Nobody should confuse the president coming by and the call for civility, which I think we need, with agreement on the major policy issues.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, what is the purpose of George W. Bush's charm offensive?

CARLSON: Well, to be charming. You know, he called Paul Wellstone Pablo and part of what he does is, you know, a little bit of this and nicknames. I'm still waiting for my nickname. On the plane...

NOVAK: I know what it is.

SHIELDS: I do too, Margaret. I don't think you want to know. (CROSSTALK)

CARLSON: He wants to be charming. I know what yours might be for me, Bob, but there's still hope. I asked on the campaign plane for my nickname and he said he didn't give them to pundits. So, you know, I'm out in the cold. But, you know, he could pull me over in this spirit of uniting not dividing.

You know, it's a lovely thing to see. You know, honk if you haven't hugged a Democrat, Gary, and you know, and he's going to be feeling someone's pain soon. It's very good and fellowship helps and it's a good way to begin. Pretty soon, he's going to actually have to say things and not just, you know, be friendly. Part of the Ashcroft thing is perhaps, who wants to be the skunk at this garden party, and you want to be affable while the other guy's being affable, and I think it does help. But there's to come a point where you're going to need more than Zell Miller and John Breaux to get something done and we'll see what happens then.

SHIELDS: Gary.

BAUER: Well, Mark, I would just say I certainly don't begrudge the president watching a movie with Ted Kennedy, and I think everybody is in favor of civility. The thing I found more troubling in the charm offensive is the secretary of education and a couple of White House aides spending several hours with Ted Kennedy trying to satisfy had him on education policy.

Now, if Ted Kennedy is satisfied with the president's bill on education, I'll guarantee you I and other conservatives will not be satisfied. People have tried to charm Ted Kennedy for a whole lot of years. The man is a passionate liberal. My hat goes off to him, but he's not going to be charmed out of his liberalism and I think the White House makes a mistake if they think they can do that.

SHIELDS: Bob Novak, your take on this. I mean, you are, of course, the principal Middle Atlantic states distributor of charm. But George W. Bush, is it good? Is it helpful?

NOVAK: I don't think there's anything wrong with being charming. Ronald Reagan was charming with Tip O'Neill but he's cleaned his clock in the House of Representatives in 1981 in two big bills.

The question is whether George W. Bush will about follow Ronald Reagan or his father. His father wasn't all that charge, but he capitulated to the Democrats over and over again on taxes, on affirmative action, on spending, on clean air, on all kinds of things. So the question is, this is nice to get the dialogue.

But the dialogue has been miserable for the last six years, and I commend him for trying to change the tone. But Paul Wellstone is exactly correct. Civility is fine but there are big differences, and it remains to be seen, I hope and I trust that President Bush won't capitulate and won't retreat on these things, but this about has nothing do with being charming.

SHIELDS: Al Hunt.

HUNT: Boy, I feel good. I thought Bob was going to come out for charm and civility for a while there. So, I do feel reassured. Look, I think George W. Bush has had a great two weeks. He has been helped undoubtedly both by the unseemly Clinton departure and also by some rather sycophonic press coverage. Not in "Time" magazine...

CARLSON: Thank you, Al.

HUNT: ... but some other places that talked about names like Ronde Jorge for George Miller, which is really kind of silly stuff.

I also think it's going to get a little bit tougher in the next couple weeks. I mean, you know, Gary, he may please you if he goes a certain on education, but he's not going to get a bill through. He needs Ted Kennedy to get education and health care bills through the Senate. But it's going to get tougher in the next couple of weeks.

He's going to have a tax cut that's going to favor Bob's friends and now the working families that Gary is for. He may Ariel Sharon as the prime minister of Israel, the oil industry ties -- that stuff is going to be a lot tougher. But you cannot have a more auspicious first two weeks than he's had and he deserves credit for it.

SHIELDS: Let me just ask, this little report from CNN on the Republican conference where reporters were barred and escorted away by police, but on Saturday night, Tom DeLay gave the keynote if speech, the subject was bipartisanship. Whatever Tom DeLay has a reputation as a fierce, no-holds-barred partisan. I mean, is this sort of contagious...

(CROSSTALK)

NOVAK: Can I explain it to you?

SHIELDS: Sure, go ahead.

NOVAK: I think Tom DeLay has a really good working concept of bipartisanship, and bipartisanship is Zell Miller and John Breaux and maybe Ben Nelson of Nebraska, one of your favorites and one of my favorites, coming over to vote. You see, it is 50/50, and particularly on the tax bill, where you don't have to break a filibuster, you only need a few more votes.

So, that's bipartisanship. That was the kind of Reagan bipartisanship where you got the old redneck caucus to come over. So that's what you need. You don't have to have -- you don't to have to capitulate to Ted Kennedy and I hope he won't.

BAUER: May I second that? I mean, Al, in all due respect if President Bush thinks that he's got to have Ted Kennedy to get his legislative agenda through he will be a one-term president because he will alienate his own base. It would be a disaster. It would be a tragedy. There are senators out there who are very close to the Republican Party on a lot of issues. George Bush can get them and he get them without giving up... HUNT: If he follow's Jesse Helms' and Tom DeLay's agenda, I guarantee he will be a one-term president because let me tell you something, Ronald Reagan carried, what was it, 43, 44 states in 1980. That was a huge, huge mandate of which this man does not have right now.

SHIELDS: Let me just say, I thought the most charming moment of the whole week was one that was intended for public consumption. That was when he was overheard talking to Catholic leaders and said in a spirit of candor, let's be very blunt about school vouchers, folks. It isn't just Democrats opposed. Republicans from wealthy suburban districts who are affluent are against them as well, and that's my -- I thought a), it showed a candor that was refreshing and hasn't been seen in his other public appearances and an insight.

NOVAK: If I can offer one other thing...

SHIELDS: Would you, Bob?

NOVAK: I am not going stay up all night weeping if we don't get more federal interference in education, if it all crumbles, but I would say that the tax cut is central to this president's success and Al, I know you're not going believe this, but he's going get a tax cut. Believe it.

HUNT: Bob, I know there's going to be a tax cut, I just hope most of it doesn't go to you. I hope it goes Gary's constituents, working families.

NOVAK: Well, I'm one of Gary's constituents.

(CROSSTALK)

CARLSON: For Bush's political success, he should hope he gets a tax one but not one that sends most of it to the wealthy.

NOVAK: People who invest and provide jobs for your people.

CARLSON: My riff-raff.

BAUER: The president may not get vouchers. There's a lot of problems, obviously, but since we just talked about taxes, in his proposal there is a $5,000 educational savings account for each child that can be spent at any school. And so if we fail on the voucher issue, I'm convinced this administration still has a real chance to advance the cause education of choice.

HUNT: Well, there's also a write-off for charitable contributions which will be far more than offset by ending the estate and it'll kill -- which will really hurt charities far more than that helpful.

NOVAK: That's very interesting. You think people give to charities for tax deductions. I think they give out of their heart because I do it.

CARLSON: What heart?

(CROSSTALK)

SHIELDS: Next on CAPITAL GANG. a new leader for the Democratic Party.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. Financier and political fund-raiser Terry McAuliffe was elected chairman of the Democratic National Committee after his only challenger, former Atlanta Mayor Maynard Jackson, dropped out.

(BEGIN VIDEO CLIP)

TERRY MCAULIFFE, DNC CHAIRMAN: I have worked for this party and spent time raising money. But for the next four years, this party chairman is going to raise hope, raise expectations, raise issues and raise hell about what George Bush and the Republicans are doing.

(END VIDEO CLIP)

SHIELDS: Bob Novak, why did the Democrats pick Terry McAuliffe without any opposition?

NOVAK: Yes, why would they name a guy whose only qualification is raising money, a Washington fixer who is being under investigation in two departments? Why would they raise a guy who has never held any kind of a public office? Why would they do that?

Because the Clintons, with an s., Senator Hillary and former President Bill told them to. He is their fixer. He is their benefactor. He was the guy who contributed the backing for their first house in New York, and that's a decline of the Democratic Party that at least the Republican Party, when they're out of power, they have a big fight for national chairman. Democrats used to when they named Bob Strauss, but now they supinely say, if you say so, Clintons, we'll do whatever you want to say.

SHIELDS: Let me just say one thing, Gary, and it comes back to Bob's -- we listen to his scream and his diatribe and all of rest of it. What happened with Terry McAuliffe was symptomatic of American politics right now. When someone wanted to run for office in the past the question was what are your qualifications? What have you done? Who's going to support you? How are you going to win?

Now it is do you have a million bucks? Do you have two million bucks? Do you have 10 million bucks? Jim Nicholson, God bless his soul, what a wonderful guy, but he was a fund-raiser basically and essentially. That's what's happened. We don't have Larry O'Brien. We don't have Paul Kirk. We don't have Bob Dole or Ray Bliss anymore. We have fund-raisers in our politics.

BAUER: Well, this guy's got, what, the one-day record, $26 million in one night with a series of dinners. That's a record that I suspect will go on for a while. SHIELDS: George W. Bush's record is bigger.

BAUER: Look, I think there's another story here sort of beneath the headlines, and that is that the Clintons and, Bob, you're absolutely right, the Clintons are planning on reopening the war room. They're putting a government in waiting at the DNC. That's why they've hand-picked the head of the DNC you're going to see in a few months regular press releases, regular statements, et cetera, perhaps even in Bill Clinton's voice. We're never, I'm afraid, Bob, going to be free of these folks and they're going to be a government in waiting for the next four years.

SHIELDS: Spoken as a real Republican. You only hope so. OK, Margaret.

CARLSON: Gary and Bob are right. They should rename the Democratic National Committee the Clinton National Committee. It will be for the Clintons and primarily for, you know, Hillary will be first among unequals.

He's a good friend of Dick Gephardt's and I saw the hug, but I had think, you know, first in his heart is the people he gave the mortgage to, the famous mortgage which he took back. What's sad to see is Terry McAuliffe saying he's going to be a policy guy in that little speech, raising hopes and expectations, when the only thing he's going to do is raise money because as you say, Mark, the job is devolved to that being the only qualification for it, and I hope campaign finance reform kicks in and I hope Terry gets to do policies. But for the meantime, he's only raising money.

SHIELDS: Al Hunt.

HUNT: You know, I agree with that except for Bob's, you know, ridiculous contrast between the Democrats and the Republicans. The Republicans picked Haley Barbour, who was nothing but a fixer, who then was under criminal investigation for his activities while he was a fund-raiser as RNC chairman.

So, it's the system. The system is terrible. There is an answer, McCain-Feingold. It's not perfect, but it will make it a little better and I think you put your finger on it. We turn to people because that is now, Jesse Unruh said 30 years ago, it's the mother's milk of politics. It's far more than that now.

NOVAK: Can I -- just to correct you, I know you like to be accurate. He was the -- the charges that came against him were after he was elected national chairman not before.

HUNT: I said his stewardship as chairman. That's what I said.

NOVAK: But you said he was...

HUNT: I said he was under investigation for his performance...

NOVAK: But that was after be was elected.

HUNT: Right, while he was there he was a fixer, but he never held office before. He never held office.

NOVAK: When he was elected, he had run for the U.S. Senate. He had been a White House political aide. He was very deep in policy. Yes, he had been a political aide.

HUNT: Policy?

NOVAK: Yes, he did and he also worked in the Mississippi Republican Party for many years. But let me just say one other thing about Mr. McAuliffe. If all the things you said were true, if he were just a fund-raiser, you'd say, well, that's a strange thing to do. If he was just a Clinton person, you'd say, well, that's kind of strange, too.

But the reason the Democrats is engaging in the act of living dangerously is that there are pending cases in both the Labor Department and the Justice Department that could come up and bite him. It's a very dangerous thing, and some people say that by making him national chairman, they say surely George Bush in a cleaner, gentler, kinder, charming president won't go after the chairman of the opposite party and that one of the things that have buried deeply in the Clinton administration about McAuliffe for all those are going to be reopened in the Bush administration.

CARLSON: Let me just clear up one thing, saying that Terry McAuliffe is a money man, Terry McAuliffe is an honest man. He's not going to get him. He shouldn't go after him.

NOVAK: The question is in the indictment of William Hamilton...

CARLSON: Ron Kerry...

NOVAK: Can I speak? In the indictment of William Hamilton, the teamsters' political director, it says that McAuliffe was a party to the conversations in this conspiracy. In other words, that he was part of the conspiracy. He was also named as a defendant in a civil suit at the Labor Defendant in the fleecing of a union fund. These cases are pending.

(CROSSTALK)

CARLSON: He's not a target. I call him a witness.

HUNT: Career Justice Department officials recommended that Haley Barbour be indicted and other people there say...

(CROSSTALK)

HUNT: All I'm saying, Bob, is don't create this huge distinction between the two parties. That's the problem I have.

NOVAK: I'll tell you what gets me a little aggravated, because I very seldom get aggravated. I'm a very happy person. But every time when we mention some abuse by the Democrats, you guys always bring up a Republican.

HUNT: Because you said the Democrats are different.

SHIELDS: What we said Bob, I said at the outset, anyway, and I'll close with it, and that is that our politics is money-obsessed. It is money funded. You want to say Republicans, these big millionaires, just write out their checks because they believe in good government and low taxes and you are wrong, Bob. And I'm sorry, and I you hope you keep your equinimity.

Gary Bauer, thanks for being with us.

BAUER: You're welcome.

SHIELDS: The gang will be back with the "Outrage of the Week."

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week." How about around a round of loud applause for Georgia's Democratic Governor Roy Barnes and his Democratic predecessor Zell Miller for their courage and their leadership in persuading the Georgia Legislature to ships Georgia's Confederate flag, adopted in 1956 as an anti-civil rights statement, to the attic. And cheers, too, to Republican Jack Kemp who lobbied for the new flag. The outrage, the head of Georgia's Sons of Confederate Veterans, who vowed revenge on those who dared to vote for the new flag -- Bob Novak.

NOVAK: I long have admired Israel's Ehud Barak, a brilliant general and courageous crusader for peace. His impending election defeat Tuesday undermines Mid-East peace prospects. But I was startled and saddened to learn that General Barak wrote a letter to President Clinton urging the pardon of fugitive tax-dodger Marc Rich, who became an Israeli citizen when he tried to give up his U.S. citizenship. It seems the Clinton infection crosses international boundaries.

SHIELDS: Margaret Carlson.

CARLSON: Now, Mark, Clinton is paying for a swanky $700,000 office in Manhattan, more than four ex-presidents combined. He just looked, according to "The Wall Street Journal," at a possible $15 million bachelor pad vacated by new Senator Jon Corzine. Yesterday, the Clintons agreed to pick up part of the office tab from taxpayers and pay for some of the gifts. But that can't erase their post- presidential image which less Jimmy Carter than Imelda Marcos. What erase it is hearings by Congressman Dan Burton, of "Who murdered Vince Foster" fame. As always, Clinton was blessed with good enemies.

SHIELDS: Al Hunt.

HUNT: Mark, building on my friend Robert Novak's outrage, Clinton apologists, lead by the former president, now claim that the pardon of fugitive billion Marc Rich was justified because the '83 Rich indictment was flawed. If so, Marc Rich, with all his resources, easily could have come back home and beaten it. Instead, this is a man who fled justice, renounced his country and informed sources tell me, continues to engage in sleazy practices while trying to buy respectability and influence. This was a bad move done to help a bad man.

SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG. "CNN TONIGHT" is coming up next.

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