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Capital Gang

Peter King Discusses the End of Bipartisanship, Dick Cheney's Health and the Bush Tax Cut

Aired March 10, 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: From New York, THE CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG. From New York, I'm Mark Shields with Al Hunt, Margaret Carlson, and in Atlanta at CNN's world headquarters, Robert Novak. Our guest is Republican Congressman Peter King of New York, the top vote-getter in all congressional races in Long Island every time he's run. Thanks for coming in, Peter.

REP. PETER KING (R), NEW YORK: It's a pleasure, Mark. Thank you.

SHIELDS: Thank you. Dick Cheney checked himself into the hospital after suffering chest pains. A medical procedure was performed, and the 60-year-old vice president was released and went back to work the following day. Doctors said he had not suffered another heart attack, but questions were raised whether the vice president's duties are adversely affecting his health.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I don't think so. I'm having the time of my life. I've lost a good deal of weight over the last several months and expect to lose more. I'm doing those things a prudent man would. As long as I'm comfortable and the doctors are comfortable having me do it, I'll continue to do it.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, has the vice president's health become a political problem for President Bush?

MARGARET CARLSON, "TIME" MAGAZINE: You know, if this had happened during the campaign, Al Gore would probably be president today. I mean, he would have really won and be president. We didn't get Dick Cheney's medical record during the campaign and no one knew perhaps how serious it was.

But now that he's vice president, I think, you know, he's going to get 280 million "Get Well Soon" cards, including from me, because people want him to be well. The problem for the White House is that Bush looks very nervous when Dick Cheney gets sick and there's Orwellian language coming out of the White House, saying, I think he said -- the White House said it was a non-emergency precautionary procedure.

But the hospital said it was urgent and significant. So, it makes it seem as if the White House, you know, the spin machine is spinning us on something as important as health.

SHIELDS: Bob Novak down in Atlanta, Margaret makes a very good point and I think you have to add to that the fact that this vice president, in just a short time, has become the most important vice president in the nation's history, and that has caused some consternation.

ROBERT NOVAK, "THE CHICAGO SUN-TIMES": Yes, he is a prime minister and that's why there is consternation. But you know, I'm amused that a lot of my colleagues who have trouble understanding politics have suddenly become medical experts and are speculating on his life expectancy, when his next heart attack is going to be.

I think there's a lot of people who don't mean very good -- who have don't have very good intentions towards President Bush, are saying well, he's not really president. Cheney is president. That's nonsense. I think he relies on advice from Cheney, but the decisions are made by President Bush and I think this is being used by a lot of critics to undermine President Bush.

SHIELDS: Peter King, whether it's being used to undermine President Bush or not, there is real concern about Dick Cheney?

KING: I think there is. I think it's important to note, though, that Bill Clinton felt everybody's pain and Dick Cheney doesn't even feel his own. So, there really is a difference as we've gone from administration to the other.

Dick Cheney is an invaluable part of this administration. Obviously, we all hope his health is going to come back, he's going to be strong. But I don't think there's ever been a vice president who plays the role that he does. But in fairness to President Bush, they work well together.

I think President Bush is very comfortable in knowing what he can do, what Dick Cheney can do and I think that as long as his health remains OK and he keeps getting the check ups, things are going to get along. I don't know what else we can do about it at this stage. As Margaret said, this would have been an issue in October or November. Right now, he is the vice president. He's doing his job. We just have to wait and watch.

SHIELDS: Al Hunt, do you think some of the, as Robert Novak charges, some of the press concern, consideration about this or emphasis on Dick Cheney's health is those who don't wish the Bush administration well?

AL HUNT, "THE WALL STREET JOURNAL": Well, I think that's almost irrelevant because I think that the vice president, as Peter said, has taken, Dick Cheney has taken the vice presidency to a new level in only seven weeks. He is a truly indispensable man. I agree with Bob that George Bush is still the president. But let me explain to Bob what the problem is. There is a zone of privacy for a president, for a vice president, but it doesn't extend to their health records. And I think the press, in fact, has abdicated its responsibility here, starting back with the fall.

I think the White House ought to release Dick Cheney's full health records. If they are as encouraging as he says, it will put all of this rest and nobody can take those kind of cheap shots. We don't know how much weight he's lost. We don't know what his LDL cholesterol level is. We don't know what medications he's taking or what side effects they may have and until they put all that out, Mark, I think there will be a suspicion that they're trying to hide something.

NOVAK: Can I respond to that?

SHIELDS: Bob Novak, I want you to respond to that. Al makes a good case, doesn't he?

NOVAK: You know, I have been very critical of all of you for bringing up Republican past misdeeds every time there was a criticism of the Democrats, so I'm going to do the same thing right now and say that Bill Clinton never, ever released all his health records. There was always some implications of mysterious stuff we didn't know about.

So, this is not a precedent, and didn't I didn't hear people ringing their hands that Bill Clinton's health records were not out. And I think this is all a lot of nonsense. I think if we're in a midst of an election campaign, maybe there's some validity, but the question is not his health records, but whether he is capable of performing his duty, and hell, he was back on the job the next day.

SHIELDS: Bob, let me just draw attention to your limping analogy there. The questions about Bill Clinton dealt with a, let's be quite frank, gossip about a non life-threatening disease which they thought may be incurable. But it had nothing to do with the fact that his mortality was hanging in the balance, and I think that's the difference with Dick Cheney, you'd have to agree.

NOVAK: No, I wouldn't agree with that at all. I think this is all more politics. I think that there is a different treatment of Cheney and Clinton and I'm disappointed, frankly.

SHIELDS: Well, Bob, we'll have to end on your disappointment.

(CROSSTALK)

HUNT: Let me just say that I'm just disappointed that Bob Novak. as a member of the press, no longer thinks that politicians ought to fully disclose their records. I'm very disappointed in that, Mark.

SHIELDS: Well, that's the last word there and disappointment reigns. Peter King and the gang will be back, however, with the end of bipartisanship. Or is it?

(COMMERCIAL BREAK) SHIELDS: Welcome back. In a surprise move, Senate Republicans killed worker safety regulations put in place by President Clinton during his final hours in office. The ergonomics rules were aimed at fighting repetitive motion injuries.

(BEGIN VIDEO CLIP)

SEN. DON NICKLES (R), OKLAHOMA: Look at how extensive, how expensive it is. I will state that this is probably the most expensive, intrusive regulation ever promulgated.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: They're coming in here with a blunderbuss, and say, we've got the votes, we're playing hardball. Effectively, we are not going to -- we are going to give short shrift to the American workers, primarily women.

(END VIDEO CLIP)

SHIELDS: On the next day, the House finished the scuttling of the regulations. Democratic leaders were bitter.

(BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: I think what we're seeing this week is the end of what we thought was bipartisanship.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It doesn't look like it's dead to me. It looks like it's alive and well here in South Dakota.

(END VIDEO CLIP)

SHIELDS: Bob Novak, is this action in Congress evidence that the Republicans really do not want bipartisanship?

NOVAK: They don't want Dick Gephardt's bipartisanship, which means swallowing all the liberal regulations left over by Bill Clinton, all the liberal proposals on the grounds that George W. Bush not a legitimate president.

What was fascinating to me, Mark, that was we had all 50 Republican senators opposing organized labor in the Senate. Couldn't imagine that in bygone years and all but 14 Republicans in the House opposing them. John Sweeney, the president of the AFL-CIO, has overplayed his hand by antagonizing Republicans and that's the real message of this vote.

SHIELDS: Congressman Pete King, has the AFL-CIO antagonized Republicans by overplaying their hand, as Mr. Novak intends?

KING: Yes, to an extent they did. On the other hand, Republicans played into the hands of the Democrats, I think, and I'm one of those who voted with the Democrats in this because I think we are making a mistake as Republicans.

Nixon made great roads into organized labor. Ronald Reagan made great inroads into organized labor. I think we needlessly antagonized labor by bringing this up right away. I think we can get labor on issues like tax cuts, on social issues; but by driving these wedges between us and the Democrats, we're playing into Gephardt's hands, we're playing into Sweeney's hands. We're undoing the work that Nixon and Reagan did in bringing the Reagan Democrats into the Republican Party.

SHIELDS: Well, you have a disadvantage, of course, you run for office.

But we don't, so Al, what's our reaction?

HUNT: The first thing that John Sweeney ought to do is get a new name. I mean, ergonomics sounds like something we shouldn't be talking about on this program.

But I don't think it's an issue that is going to resonate a lot with voters out there; but I am struck by the hypocrisy of Don Nickles and others, because they said they did this in the name of small business and yet, on a separate measure, bankruptcy measure, Pat Leahy, the senator from Vermont, democratic senator, thought he'd test that. And he said, let's make sure that from bankruptcy that small business creditors get paid first. Now, that meant the big business creditors weren't going to get paid first, and Don Nickles and all the other weeping hearts about small business said oh, no, we can't do that. I think there's a lot of hypocrisy in this vote.

SHIELDS: Margaret, we're talking -- this repetitive motion injury -- we're talking a sizable number: up to 600,000 a year. I mean, this is an issue that's just not going to go away, is it?

CARLSON: Yes, it actually does matter. But, as a way of showing your political muscle, it wasn't a bad one to go after because, as Al says, it's badly named. And it looks like the oh, my aching back set of regulations. And you know, everybody would like a better chair. I mean, you can trivialize the rule and then make it easy to vote against and it's not going to resonate the way something against, you know, coal miners or farm workers or something where it's black lung disease versus carpal tunnel syndrome. Even the syndrome doesn't work. So Republicans had a way of showing, boy, we can stick together, we're strong -- the Bush White House -- we can do what we want on something that's not going to hurt them as much out there with the ordinary folk.

KING: Margaret, we could have done that on taxes, which we did. You know, why needlessly antagonize people when we're trying to line up votes for more important things like taxes, rather than this, which was really just a power play against the AFL-CIO. SHIELDS: Bob Novak?

NOVAK: Let me say, of course, that this isn't just fun and games; this would cost American business hundreds of billions of dollars. Some people think 1 trillion dollars over time. But the political point that I am trying to make is that John Sweeney was trying -- would love to kill every Republican at the polls. If he thought he had a chance even against a friend of labor like Peter King, I think Peter would agree with me, he'd snip his head right off; but he knows he can't.

Now, the interesting thing to me is that when you find in the Senate Ted Stevens, a great friend of organized labor from Alaska; Arlen Specter, a great friend of organized labor from Pennsylvania voting -- voting with the rest of the Republicans on this, you know that Sweeney is in trouble with the Republicans. And I think he has made a tremendous blunder.

SHIELDS: Bob, I'll go back to Peter King and his political decapitation. But before we do that, I want to point out that Ted Stevens from Alaska did, in fact, warn the Republicans at their Senate luncheon that they just couldn't walk away from this issue; that maybe they could...

NOVAK: But he voted yes.

SHIELDS: I understand that, but that -- pretend that there's no federal responsibility for dealing with this problem...

NOVAK: That's not the point.

SHIELDS: He thinks is an abdication of heart -- Peter King.

KING: Well first of all, I hope I don't get decapitated; but I just -- we shouldn't let John Sweeney set our policy. I'm saying we should go on the offensive; and I think we, as Republicans, could make inroads into organized labor if we played our cards a little better and not needlessly antagonize them and not respond to everything John Sweeney does. We should set our own agenda, the way Ronald Reagan did, the way Nixon did.

SHIELDS: Last word, Pete King.

Next on CAPITAL GANG: What's the outlook for tax cuts in the Senate after passing the House?

(COMMERCIAL BREAK)

SHIELDS: Welcome back. The House passed President Bush's tax cut on a largely party-line vote.

(BEGIN VIDEO CLIP)

GEPHARDT: I must say, with all due respect, that this tax cut bill, coming without a budget, is another "my way or the highway" approach to legislating in this Congress. REP. JENNIFER DUNN (R), WASHINGTON: The longer we delay in providing tax relief, the less likely it will materialize because we know that it's a fundamental fact that if that money stays in Washington, D.C., it will be spent.

(END VIDEO CLIP)

SHIELDS: President Bush followed the House action by taking his tax cut campaign into the Dakotas.

(BEGIN VIDEO CLIP)

BUSH: The American people had a victory today. The American family had a victory today. The American entrepreneur had a victory today.

One House down, and now the Senate to go.

(END VIDEO CLIP)

SHIELDS: Al Hunt, how hard will it be for George Bush and the Republicans to sell the Senate on the tax cut?

HUNT: Mark, first of all, the White House made a rare political mistake: they did not tell Tom Daschle before it was public that they were going into his home state to campaign against him on the tax cut. You don't do that with the Senate democratic leader. And that trip to South Dakota actually, I think, backfired.

But look, already in the Senate the talk among Senate Republicans is full of compromise. Specter, and Collins and Hagel are all saying, we're not going to get the House bill, Bush is not going to get his bill, we have to start to modify it. I think by the summer that President Bush will get a tax bill close to the $2 trillion dollar tax cut that he is seeking, but it's not going to have so many ingredients. The top rate will not be cut from 39 to 33. The estate tax will not be abolished. More will be given to working class Americans.

It will be a compromise that I won't be crazy about, Bob Novak won't be crazy about, but I'll bet you Peter King votes for it.

SHIELDS: Bob Novak down there in Atlanta, is Al Hunt's analysis and prediction hold water?

NOVAK: I love Al, because just a couple weeks ago I thought he was saying a little prayer over the unearthed corpse of the tax bill.

What's going to happen is there's going to be an across-the-board tax cut, which the Democrats oppose; it's not going to be a targeted tax cut. It's going to be a very substantial tax cut in the upper bracket, perhaps not as much as the president wants -- it's going to go pretty much what he wants in both the size and direction.

Now, in the old days when Al used to be one of the great reporters covering the Ways and Means Committee, he'd call that a Republican victory.

SHIELDS: Margaret Carlson.

CARLSON: Bob, all of us on this panel said there would be a tax cut; I don't think anybody said there wouldn't be a tax cut. We said it wouldn't be the tax cut that Bush is proposing, it would be modified.

HUNT: Thank you, Margaret.

CARLSON: You're welcome, Al.

And you know, Bush is showing, as he did in the ergonomics, that bipartisanship is just something he kind of goes out and talks about but isn't really practicing. He really wants to go it alone, as he did on ergonomics, and he wants to do it on the tax cut. But he alienated conservative -- the blue dog Democrats in the House and doesn't have somebody like Senator John Breaux in the Senate whom he needs who could bring along people. He's got Zell Miller who announced in January and who can bring along -- who has brought along no one and probably isn't going to bring along anybody. And it's 50- 50 over there, so I think he's going to have a hard time.

SHIELDS: Pete King, you've looked at the United States Senate for a long time. Tell us your assessment of what's going on over there.

KING: First of all, let me set the record clear. Bob Novak and I agree 100 percent, and I'm not going to sit here and let you people malign this good man...

(LAUGHTER)

KING: And we agree on this issue.

SHIELDS: The Capulets and the Montagues are making up here!

KING: No, actually, I strongly support the president's tax cut. It worked under Reagan, it worked under Kennedy, it'll work again. The reality is, it is going to get bogged down somewhat in the Senate; that's why it was important for us to get it out of the House, get it over there, and now the process begins. If we had fooled around for this for the next six weeks or eight weeks in the House, it would have just, you know, delayed the whole process.

Right now it's in the Senate; sure, some of the moderate Republicans are going to back away, and a few Democrats, maybe, will come on board and it will be probably better than what Al wants, not as god as what Bob Novak and I want; but I think you will see a tax cut late this summer.

SHIELDS: Let me ask this great political question, and that is -- and I'll start with you, Mr. Novak -- and that is, this tax bill that passed the House this past week will not be taken up in the Senate until after the budget, which is -- the first chance they'll have in early April, until a mark-up in the Senate Finance Committee, which Republican Chairman Chuck Grassley says will be at least the middle of May.

I mean, don't they run the risk of some of the air going out of that balloon -- the momentum?

NOVAK: Oh, that's lot of bologna, I mean...

SHIELDS: Well, thank you, Bob.

NOVAK: I mean, it really is ridiculous.

People want a tax cut; Republicans took a poll in South Dakota and they had -- they said the Daschle tax cut or the Bush tax cut. The Bush tax cut won two-to-one in the poll in South Dakota. And I'd love for Al Hunt to explain to me how the president going to South Dakota backfired on him, because that -- my fragile mind cannot conceive of how...

HUNT: Well, Bob, I'm glad you asked that question because I now will explain it to you: because Tom Daschle actually is more popular than George Bush in South Dakota. He's taking out television ads for 10 days, pointing out the details of the Bush tax plan; and I assure you if the reason to go out there was to get Tim Johnson, the other senator, it's not going to happen.

Finally, Bob, I will tell you that we did a poll this week with a competing television outlet, NBC, and we asked the question -- we had a Republican, Democratic pollster -- we framed the question as it should be framed, and the result was quite different, Bob. So it depends on whether you have a good poll or the kind of tilted poll that you were taking about.

NOVAK: I think you used the right word, Al, when you used the word "frame," because a lot of those polls are framed.

SHIELDS: Margaret?

CARLSON: I think there's -- you know, Bush may be overreaching a bit. He even taped his radio address on Wednesday crowing about the House -- the tax cut...

SHIELDS: The one that played on Saturday.

KING: Margaret, that showed he had vision.

(LAUGHTER)

CARLSON: He also has hubris.

SHIELDS: The hubris and vision, are they mutually exclusive? That's the question; we'll be back with a CAPITAL GANG classic speculating whether Hillary Rodham Clinton really would run for the U.S. Senate.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. Two years ago this week, we were in New York talking about whether Hillary Clinton would run, or really should run, for the U.S. Senate. Here is what your CAPITAL GANG had to say on March 6, 1999.

(BEGIN VIDEO CLIP, CAPITAL GANG, MARCH 6, 1999)

SHIELDS: Is it possible for Mrs. Clinton to still say no after all this buildup?

CARLSON: Of course she can say no. But if she's going to say no, she has to say no sooner rather than later. I mean, no one has benefited more from not dispensing -- from sexual favors not dispensed by herself than Mrs. Clinton. And so this Sally Field moment -- they like me, they finally like me -- has to be taken advantage of quickly.

NOVAK: I think the New York Democrats are in a terrible box; at least the ones I talk to say so, because those who a few months ago thought -- didn't take it seriously, now feel she must run or they're going to lose that Senate seat because it's really too late.

HUNT: If I were a friend of hers, I would advise her not to run; and I think she still may come to that decision. All I said was, as of today, I think she's planning to run.

SHIELDS: I have one thing to say, and that is that Chuck Schumer said this week -- the senator from -- who was elected last November, beat Al D'Amato -- said, I haven't felt this much electricity and excitement in one room in a long time.

(END VIDEO CLIP)

SHIELDS: Bob Novak, were all the members of the GANG a little too negative about Senator Clinton's prospects?

NOVAK: Absolutely. All guilty, especially me. I think we overestimated the sensitivity and intelligence of the voters of New York -- that they would accept this kind of a candidate. And another thing we overestimated was the aggressiveness of the New York press corps. They let her off easy in the campaign; never laid a glove on her.

SHIELDS: Pete King, is that a fair assessment, that the New York press took a dive on Hillary Clinton?

KING: I don't think so. Actually, they went after her quite a bit. The fact is that she ran a decent campaign; she ran a steady campaign. She was able to zero in, she blocked out all distractions and she showed that type of compartmentalization that has made the Clintons as successful as they are.

Also, Giuliani had to drop out of the race; Rick Lazio had a hard time getting his campaign started. And now she's in the Senate and she's laughing at all of you.

SHIELDS: Margaret Carlson, you made the comment then that she was the beneficiary of not having dispensed sexual favors -- a victim on that count. Tell us your own assessment. CARLSON: Well, she took advantage of that victim moment and decided to run. And, as Pete says, she ran the most disciplined campaign. You know, she practically lived in upstate New York. I thought she was going to start milking cows she was up there so much. So, you know, of course she won. And she's still showing that discipline in the face of the pardons; when she gave that press conference, she said exactly the same words like 40 different times.

SHIELDS: Al Hunt?

HUNT: I like it better, Margaret, when you talk about sex. You looked awful young, gosh, I tell you.

CARLSON: I've got to get that facelift.

HUNT: You know, Mark, obviously we were wrong, Bob Novak's absolutely right; but, you know, I'm still...

SHIELDS: Bob Novak was more wrong than anyone.

HUNT: Of course he was -- but that's not news; that's not a headline.

CARLSON: It was agonizing not telling him.

HUNT: But I'm wondering, you know, if it's still not true that if you were a good friend you'd tell her not run. I mean, she's not a very happy woman these days.

SHIELDS: Well, you're absolutely right.

Pete King, thank you for being with us.

KING: Thank you.

SHIELDS: We'll be back for the second half of the CAPITAL GANG with newsmaker of the week, likely candidate for mayor of New York, Mike Bloomberg; our "Beyond the Beltway" feature looking at the dangers of lost wealth in the stock market; and our "Outrages of the Week" all after a check of the hour's top news.

(COMMERCIAL BREAK)

SHIELDS: Welcome back to the second half of CAPITAL GANG from New York City. I'm Mark Shields with Al Hunt, Margaret Carlson and in Atlanta, Robert Novak.

Our "Newsmaker of the Week" is billionaire communications mogul Michael Bloomberg. The 59-year-old founder of the Bloomberg News Service probably will run for mayor of New York City this year as a Republican.

Al Hunt interviewed him in New York this week.

(BEGIN VIDEOTAPE) HUNT: Michael Bloomberg, why would a successful and influential business leader even consider running for an aggravated, aggravating job like mayor of New York City?

MICHAEL BLOOMBERG, CEO AND FOUNDER, BLOOMBERG L.P.: Well, I love the city. I live here. My kids live here, and I think the city needs the four things that I think I could bring to it. It needs somebody that can listen to people. It needs somebody that can attract and explain what we're trying to do. It needs good management, and it needs somebody that knows how to be accountable

HUNT: Rudy Giuliani is considered by most observers to have been a pretty successful mayor.

BLOOMBERG: Yes.

HUNT: What would you do differently?

BLOOMBERG: Well, keep in mind, Al, that every mayor governs during a different period when they have different resources and different problems. What I am going to do is try to focus on, if I run for mayor, and if I win, to include as many people as possible. I think that's one of the problems. There's a big section of the city who Rudy really probably did a lot for, but they don't feel that they were part of the solution.

HUNT: African-Americans, primarily?

BLOOMBERG: African-Americans and Latinos, in particular.

HUNT: In that context, this is a city of interest groups, a city of ethnic enclaves, how can you do that and also not practice the politics of pandering?

BLOOMBERG: Well, you have to have some principles and you have to stand up, and you can't give all things to all people, but if you tell them why it isn't their turn, I think they'll go along with it. And if they won't go along with it, then there's nothing I can do about it. Somebody has to stand up and stop the partisan arguing, the special interest groups, and just say this is what's in the common good. I've listened to everybody, and you've elected me, and here's where we're going to go. Let's get going and stop it.

HUNT: There are other wealthy men who have run...

BLOOMBERG: Sure.

HUNT: ... for political office. "The New York Times" editorial page says it would be an outrage, however, if you were to brush aside New York City's public financing system and use your own wealth.

BLOOMBERG: I have absolutely no intention of brushing aside the city's campaign finance reforms. It -- those reforms allow two things. You can either take city money and agree to a cap or you can spend your own and not agree to a cap. For me, somebody that's as lucky as I've been, to take city money that could go for police and fire and education and health and to spend it on trying to get a better job would just be obscene. The public will find out, based on the money I spend to get the message out, what I believe, and then they'll know that that's what I'm going to do if elected.

HUNT: Final question, while we have you here, Michael Bloomberg, a) are we headed into a recession, and b) should the Senate follow the House and pass George Bush's tax cut?

BLOOMBERG: Well, number one, the economy is clearly slowing down. I don't think there's any question about that. Recession is more a definitional thing.

And in terms of the tax cut, I think they will come to some compromise. The politics of giving people something for nothing and passing some kind of a tax cut are so compelling that both sides of the aisle will find some ways to go back to the voters and say we reduced the tax burden. Now, it may very well be that the surplus that they're trying to give back to the taxpayer never exists and we'll have some big problems down the road.

(END VIDEOTAPE)

SHIELDS: Al Hunt, will political rookie Mike Bloomberg have a chance against an experienced Democratic opponent in this overwhelmingly Democratic New York City?

HUNT: Mark, it's uphill. New York City politics is a mine field, and the experience of wealthy men running for political office in recent years has not been very encouraging. But if anybody can overcome it, it's Michael Bloomberg.

He created -- he just brilliantly created a remarkably successful empire. We at Dow Jones appreciate it because, frankly, he clobbered us, and unlike most people who get in the news business later in life, he has injected great values and total integrity in Bloomberg News. I think that's very impressive.

He's also chairman of the board at Johns Hopkins. He's brought not just great generosity, but quite thoughtful and quite caring. So, I'm not sure if he can make it, but it'll be an more interesting race with Michael Bloomberg in it.

SHIELDS: Bob Novak, what's you sense. I mean, here's a rookie candidate with deep pockets. But, boy we saw that in a California governor race in California with Al Checci of Northwest Airlines who ran into a buzz saw in Gray Davis.

NOVAK: Well, I think Bloomberg is impressive, and I would think that my old friend and former colleague on "CROSSFIRE," Mark Green, the public advocate who is the leading Democratic candidate for mayor, is really not a household word in New York. He's not a major figure. I think he ought to be scared to death of Bloomberg. The thing that fascinates me about this interview, Al, is that he is saying is that, gee, Rudy Giuliani was a good mayor, but he just wasn't nice enough to African-Americans and Latinos. I'll tell you something right now, if Giuliani could run for a third term, he'd win very easily and I'm not quite sure that pandering is going to be as successful in New York as it used to be.

SHIELDS: Margaret.

CARLSON: Bob, what happens, I think, with Bloomberg is you get Giuliani's management, bringing the city back to financial viability and getting rid of the squeegee man and doing things that improve the quality of life, but you won't have the Diallo, the police shootings that then Giuliani would defend, you know, mindlessly, and alienating a huge segment of society, which hurt Giuliani and might have hurt him if he had actually run for the Senate.

You know, Al brings up this one point, Bloomberg -- the only drawback to Bloomberg running for mayor is that the city lose a great philanthropist in that he's actually done -- he's one of the more generous billionaires in American society.

SHIELDS: Bob Novak, on that question, though, how do you run -- I mean, do you run for continuity as the Republican candidate for mayor of New York City? I mean, to succeed a two-term Republican, I mean, how do you make your self different if you're Michael Bloomberg?

NOVAK: That's a problem. I think it has to be a personality problem. I think putting himself up against Mark Green, you know, he's not going up against Ronald Reagan. I think that's possibly to do that.

The interesting thing to me, Mark, was when I learned that Mike Bloomberg was going to run as a Republican. I always thought he was a liberal Democrat, and I think he thinks like a liberal Democrat. For example, when he says that a tax cut is giving the people something for nothing, I almost fell off my chair because of course it isn't, it's giving their own money back and I don't think he understands that.

Now Rudy Giuliani isn't much of a conventional Republican, but I do think he understands that tax cuts are not an hand out, but a simple justice to people who carry the economy and pay the taxes.

SHIELDS: Al Hunt, I have to ask you, do you think Michael Bloomberg understands taxes?

HUNT: Well, I just think it's so nice that Bob Novak can explain entrepeneurialism success to Michael Bloomberg. I supposed, perhaps, Bob is worth more than Michael Bloomberg. Maybe he'll tell us later on in the show, Mark.

I think one of the big issues that's going to confront Michael Bloomberg is that part of his appeal is he's a very candid man. He's very blunt. He says what he thinks. I think that's very hard to do in New York City politics. I think it is a city of ethnic enclaves and I think that candor is going to have to be tempered and can he be himself and also temper the candor. That's a delicate balancing act. That'll be tough

SHIELDS: Margaret, you think he can?

CARLSON: He'll learn. he might get burned once by being an excess of candor and then will back off, and in New York, wealth may not be as big a problem. Next door in New Jersey, remember, Jon Corzine, the former chairman of Goldman Sachs, just won.

SHIELDS: I'll you this, New Jersey looks like Sunnybrook Farms politics compared to New York City, though. I mean, you wish him all the luck in the world, but welcome the NFL, Mr. Bloomberg. Next on CAPITAL GANG, "Beyond the Beltway" looks at America's investors loss of wealth. We'll be joined by financier Roger Altman.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. "Beyond the Beltway" looks at the impact of the stock market decline. Both leading market indicators fell yesterday. Joining us now in New York is investment banker and former U.S. deputy secretary of the treasury, Roger Altman. Thank you for coming in, Roger.

ROGER ALTMAN, CHAIRMAN, EVERCORE PARTNERS, INC.: It's a pleasure, Mark.

SHIELDS: Roger, what does the market news and the drop and the loss of paper wealth mean for America?

ALTMAN: Well, first of all, it's a gigantic amount of wealth that's been lost. Three trillion dollars has been lost on the Nasdaq over the past year. Now, you have to put that a little bit into context because the Nasdaq soared like a skyrocket, excuse me, very quickly to get to that level of 5100 a year ago and now, of course, has fallen to 2100. But three trillion in value has been lost.

I think the main impact is on consumer confidence. I think one of the big reasons consumer confidence levels have fallen to five- and six-year lows is the daily onslaught of news about the falling Nasdaq and particularly, the falling stock market in general.

SHIELDS: But Bob Novak, your own take down there, what do you think it has had? What impact?

NOVAK: Well, I think it's had a very serious impact. I think it's had a serious impact on the broader economy. I think the economy is in much worse shape than the politicians admit. Poor President Bush tells a little truth and he's accused of talking down the economy.

But anecdotally, the people I talk to are very concerned. I think that Alan Greenspan is having the worst time of his entire life. I think he is looking at the numbers on his green screen instead of realizing we have to liquefy the economy, and I think when you have the kind of loss of wealth that Roger talks about, that is a very serious business in America, and it doesn't just affect the millionaires and the billionaires.

SHIELDS: Roger, just to come back to you for a second, do you agree with Bob Novak about Alan Greenspan's plight right now?

ALTMAN: Well, I agree with Bob in the following sense: The global environment as a whole is kind of scary and a little worse, I think, then is being generally recognized. The three strongest economies in the world, U.S., Japan and Germany, the U.S. is stalled, zero growth, probably that way at least through the first half. Japan is weakening again. It's stock market is at a 15-year low. Germany is seeing negligible growth.

We're seeing, you know, recurring national financial crises erupting like volcanoes, most recently, Turkey, but Argentina and so on. We're seeing vastly higher energy prices, and I think that combination makes the global environment shaky and I thinks that the outlook, specifically for the U.S., but more broadly, is very weakish and that I agree with Bob. I don't think President Bush and his colleagues are talking down the economy. I think it's actually at a delicate moment.

SHIELDS: OK, Margaret Carlson, let's just take that and the political implications for it. The privatization of Social Security, which involves investing in the stock market, that politically and psychologically becomes a harder sell when you've got a market, if not in free fall, at least in decline.

CARLSON: It sounded like this no-lose proposition last year when it was talked about in the campaign, because as Roger said, it was still skyrocketing, the Nasdaq, and you saw these incredible dot-com millionaires, you thought you could get in without risk. Now, I think that's a much harder sell because imagine if you were retiring today and you'd had part of your Social Security privatized. You know, it's not just the wealth effect, it's not a paper loss, it's a real loss.

SHIELDS: Al Hunt.

HUNT: Roger, it still seems to me the fundamentally sound companies and fundamentally sound investments are doing fine. I mean, the Dow Jones average has stalled a little bit, but it's still three times what it was when you so wisely engineered back in 1993 that budget compromise and tax increase. We thank you as American citizens...

ALTMAN: Thank you, Albert.

HUNT: ... for that, Roger, but there was a story in "The Wall Street Journal" this week, which I thought was a metaphor for a lot of this, about this hot new issue, Loudcloud, I think it was called. A lot of prominent bankers, or backers, rather, and we quoted a top money manager in saying that the only problem, the real problem is I don't really understand what the company does.

And it seems to me that that really said a lot about what was going on and the drop from 5100 to 2100 was a burst of the speculative bubble, and a lot of it was blue smoke and mirrors, wasn't it? ALTMAN: Well, you make a good point in a number of ways. First, we do have two markets today, essentially. There's the industrial world, both big companies and small industrial companies represented by the S&P 500 and the Dow Jones Index and that market has declined moderately, as you say. It's down 16 percent year-over-year.

Not small, but not severe, and that decline is primarily in response to the falling corporate earnings we've seen, and corporate earnings have been steadily falling. Five percent this first quarter is the estimate and probably 5 percent a quarter for the rest of the year. So, it's a natural response and, I think, essentially in line with what you would expect historically to see in light of such falling corporate results.

And then you have the technology world, as you're saying, represented by the Nasdaq which has absolutely crashed, and the dot- com world, the Internet world has imploded and the California gold rush mentality which we saw in the late '90s, which was really quite an amazing moment in history, really; and I think will be the object of many, many, many books has completely evaporated.

And that's -- you're right -- that's the sector, which is not the whole country, and is certainly not all of American industry, which has imploded; and the rest of our economy, which is most of it, has not.

SHIELDS: Bob Novak, go ahead, in Atlanta.

NOVAK: Roger, I think you would agree that we're not just talking about the dot-coms here, we're talking about substantial companies like Oracle and Intel and -- who are really as important in today's economy as General Motors and U.S. Steel. And I think it's something to worry about.

And just anecdotally, outside the Beltway, outside New York, I talk to developers -- they can't find customers, but they can't find financing. And I respect your judgment, as you know, Roger, and I was surprised that you did not immediately rise to defense of Alan Greenspan for his performance during this crisis, and I -- maybe you will now -- but I think it's an indefensible performance by Alan Greenspan.

ALTMAN: Well, I actually think Greenspan has managed monetary policy pretty well, Bob. You can argue that he's taken a little too long to ease and allowed conditions to get somewhat shaky and been a little slow on the trigger. But I think the Greenspan record in general, and I think you agree with that, Bob, has been awfully good. And I find it difficult to criticize Greenspan, whom I think in general gets an "A" over the entire period of his tenure.

SHIELDS: An "A" from Roger Altman.

Roger Altman, thank you for being with us.

The GANG will be back with the "Outrage of the Week."

(COMMERCIAL BREAK)

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

Art Buchwald wrote that you never see a politician on TV campaigning in the company of rich people. That's true -- with cops, nurses, yes; but no spots with investment bankers. Thursday House Republicans, striving to project worker support for the Bush tax plan, got high-paid business lobbyists to remove their Gucci loafers -- to take off their $900 suits and to pose as blue-collar workers for a Capitol Hill rally. It's OK if you're not a real worker, you can still play one on TV for Republicans.

Bob Novak in Atlanta.

NOVAK: Bill Clinton keeps confirming himself as the sleaziest of ex-presidents. A group of lawyers that includes Clinton brother-in- law Hugh Rodham last week made its arguments for a $3.4 billion fee request in tobacco lawsuits. Its videotaped presentation included the former president praising the lawyers for forcing what he calls "big tobacco" to negotiate. Now we know why Hugh Rodham was brought into the case despite absolutely no experience in tobacco litigation.

SHIELDS: Margaret Carlson.

CARLSON: Mark, last fall a tape of a Bush practice debate arrived on Gore supporter Tom Downey's desk. This only hurt Gore because Downey immediately had to drop out of debate prep. But the Bush campaign blamed Gore anyway. Bush spokesman Ari Fleischer said, quote, "the more the FBI inquires, the more nervous they're getting in Nashville." Dick Cheney said, quote, "there seems to be a little bit of smoke there." Last week a Bush aide was indicted for the crime. Ari, want to call those folks from Nashville and apologize?

SHIELDS: Al Hunt.

HUNT: Mark, there were more tragic school shootings this week, with two kids killed in a suburban high school in Santee, California, while a young girl shot a classmate in a parochial school cafeteria in Williamsport, Pennsylvania. Inevitably this produces the stale old debate: is the cause too many guns or debased culture? The answer is both, and until we address the problems of far too many and far too easily attained guns and our cultural ills, there sadly will be lots more of these shootings.

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

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