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Capital Gang

Will Campaign Finance Reform Get Through Government Successfully?

Aired March 24, 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 Washington: the CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG; I'm Mark Shields with Robert Novak, Kate O'Beirne, and in Fort Lauderdale, Florida, Margaret Carlson. Our guest is Democratic Congressman Marty Meehan of Massachusetts, the real sponsor of the McCain-Feingold bill.

It's great to have you back, Marty.

REP. MARTY MEEHAN (D), MASSACHUSETTS: Great to be back.

SHIELDS: Thank you very much.

The long-awaited debate on the McCain-Feingold campaign finance reform bill began this week in the Senate.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: We're asking incumbents to vote to change a system that keeps incumbent in office, and every special interest in this town that uses money in order to buy access and influence is apoplectic about the prospect of losing that influence.

SEN CHUCK HAGEL (R), NEBRASKA: The first day-and-a-half of campaign finance reform was all about protecting the incumbents. We took a day-and-a-half to make sure that no millionaires could oust any of my colleagues from their seats.

(END VIDEO CLIP)

SHIELDS: Would President Bush sign what Congress eventually passes?

(BEGIN VIDEO CLIP)

MCCAIN: The president has never said that he threatened to veto. And we want to work with the president, and we think we can get a bill he can sign.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I would like a bill to sign, and I want all parties involved in the debate to know that I'm anxious to sign a bill. I look forward to a bill.

(END VIDEO CLIP)

Margaret Carlson in Fort Lauderdale, what will it be from President Bush: a veto or signature?

MARGARET CARLSON, "TIME" MAGAZINE: Mark, Bush only said the half of it. He desperately wants to sign something called campaign finance reform. But just as desperately, he doesn't want to sign McCain- Feingold. There's still a lot of bad blood between McCain and Bush. And while he can't afford not to be seen in favor of some kind of reform -- that train has moved down the track -- he's going to sign something like it which, surprisingly, might be the -- Chuck Hagel, Senator Chuck Hagel's compromise bill, which allows soft money, but which looks like the life raft for George Bush.

The White House is secretly quietly backing that bill, so as not to scare off Democrats. And McCain doesn't like that bill at all. And the surprising thing is that Senator McCain and Senator Hagel are best friends, and that Senator Hagel has chosen, you know, of all the gin joints in all the world, why did he choose McCain's life work to submit the compromise bill for?

But I think that is what George Bush will sign.

SHIELDS: Bob Novak, this week you saw momentum heading toward the McCain-Feingold side in the sense of Don Nickles, arch- conservative -- ardent conservative, foe of McCain-Feingold, saying he could go for banning soft money if it raised the amount of hard money -- that is, that you could give directly to a candidate. Doesn't that show some -- at least a little momentum toward?

ROBERT NOVAK, "CHICAGO-SUN TIMES": Well, if you had been listening the last several months, the conservatives have been saying that for some time, some of them even saying, take the limit off of hard money.

The president -- I don't know what the president is going to do, and he doesn't want the -- he doesn't want to give a clear sign what he's going to do because if he says, gee, I'm going to veto a bad bill, the Democrats, who are scared to death of campaign finance reform, would load it up because it'd be a no-risk proposition, they'd get it vetoed.

I watched a lot of the Senate debate. I thought it was a unedifying debate; I thought it was an incumbent-protection operation. I thought they were putting in -- they were trying to try to get cheap ads on television. They tried to -- they killed any idea of cracking down on labor's power in politics. I thought it was a phony bill, and it's not the kind of campaign reform that I would like to I think most Americans would like.

SHIELDS: Sometimes television can be deceiving, because I was up in the Senate press gallery, and I have to say it was a serious, thoughtful discussion. They were actually talking to each other, back and forth, Marty Meehan...

NOVAK: Could there be a difference of opinion... SHIELDS: I doubt it, Bob, because I know when a great, trained reporter you are -- Marty.

MEEHAN: I think it was an outstanding debate. And, frankly, I think it was a very good week for John McCain and Russ Feingold. They beat back attempts to destroy the bill with paycheck protection.

I disagree with the Hagel -- that the Hagel bill is in any way a compromise. This bill is a compromise, it was more comprehensive before. We've taken the worst things in the system -- soft money and reigning in sham issue ads -- the Hagel bill makes a bad system worse. And as far as the president signing, he hasn't said he would veto the bill. I believe, ultimately, he has to sign the bill. This is the only piece of bipartisan legislation that's come out of the House. If he doesn't want to sign McCain-Feingold, then he can sign Shays- Meehan; maybe he'll feel better about it, calling it by that name. But he has to sign this bill.

SHIELDS: Do you promise not to run against him in the New Hampshire primary?

MEEHAN: Maybe; I reserve my right to change my mind on that.

SHIELDS: Kate O'Beirne

KATE O'BEIRNE, "NATIONAL REVIEW": Mark, you know, the media's much-prized cynicism has really failed them on this one. I remember back in 1996 when PACs were the most evil thing in political life in America.

NOVAK: Now they say it's OK.

O'BEIRNE: Exactly. PACs will go to anybody -- anybody who defended PACs was attacking democracy. Know Senator McCain and others are on the floor defending PACs; now soft money has become evil. What's the difference? PACs back incumbents; soft money goes to political parties, and political parties tend to be the only ones willing to back challengers. They have so -- even though there are big differences with respect to who benefits from what in the current system, boy can incumbents get together when they want to protect themselves, like the millionaire challenger insurance. One thousand dollars -- more than a $1,000 would typically corrupt you, but you won't be corrupted by $6,000 contributions if you're up against a millionaire.

MEEHAN: Kate, this is having a corrupting influence over everything we do. Why do you think we don't have a patients' bill of rights?

O'BEIRNE: And this is no different. This debate is no different.

MEEHAN: Because of soft money. Why don't we have Medicare prescription drug coverage? Because the pharmaceuticals gave $15.7 million to both political parties. NOVAK: You know, Mark, I don't know what you were watching up there -- maybe they drugged you in the gallery up there, but I was listening to these guys wringing their hands about, we can't have these millionaires coming in and running against us. Oh, boy! One thing we want to do is we want to make sure that nobody is able to run against us. That's the messages I got from that debate.

SHIELDS: Let me just get one thing straight, just a little factual correction here: There were 394 incumbent House members reelected last year; six lost. That's the old system. Over the decade of the 1990's, 95 percent of House incumbents got reelected. It is a system...

NOVAK: They want to make it 100 percent.

SHIELDS: ... that's why there's -- no -- that's why there's a resistance. This opens it up, it makes it more competitive. Am I right, Marty?

MEEHAN: Absolutely.

(CROSSTALK)

MEEHAN: The fact is, it's supposed to be illegal for corporations to give money to political campaigns, yet they found this loophole, this loophole that has eaten the law. It's a corrupt system, we have to change it, and we are going to change it.

SHIELDS: Anyway, when they put in the provision forcing television stations to mark down their prices...

MEEHAN: It's already the law. It's enforcing the law that's...

(CROSSTALK)

SHIELDS: Bob Novak, the defender of television stations all over the country, and other assorted fat cats get the last work.

Marty Meehan and the GANG will be back with the stock market and the economy in trouble.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. The Federal Reserve cut short-term interest rates by 1/2 percentage point, less than investors wanted. Stock prices plunged sharply, and even after a rally at week's end, the Dow Jones Industrial Average was off 3.2 percent for the week and 10.7 percent for the past two weeks.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, TREASURY SECRETARY: I think the markets go up and the markets go down, and if you've been watching them as long as I have, you know that and you anticipate that. And it's not clear to me that there's some high utility in me noticing everyday what's going on. (END VIDEO CLIP)

SHIELDS: In Congress, bipartisan support grew for an immediate tax cut, and President Bush pressed for passage of his own tax reduction plan.

(BEGIN VIDEO CLIP)

BUSH: Another problem is the slowing economy and we're going to deal with it. When we give people their money back, it should serve as a stimulus to economic growth.

(END VIDEO CLIP)

SHIELDS: Bob Novak, will the economy be revived by the Congress cutting taxes?

NOVAK: Well, the Democrats think the way to cut taxes is to take a lot of money on an airplane and just scatter it all over the country, and somebody will go out and buy a toaster. But as a matter of fact, even the Bush tax plan would have very little short-term effect on this economy. What you need is a liquification, more liquidity...

(CROSSTALK)

NOVAK: ... more money pumped into the system. Inflating the money supply, if you want to talk about it, because it's been much too tight, and I would suggest, with all due deference, to the secretary of the treasury, Mr. O'Neill, that he ought to look at the stock market because it's a good indicator of trouble all along the line in heavy industry, in high-tech, in retail, and when you have $5 trillion lost in investments, that is not chicken salad.

SHIELDS: Margaret Carlson in Fort Lauderdale, outside the Beltway, one analysis has it the economy is in good shape, it's just the shock market that's in trouble.

CARLSON: Oh, Mark, I'm so glad you said that because Treasury Secretary O'Neill is right. The market is not the economy. Other aspects of the economy do not have the signs of recession that the market is leading us to believe because it is the elites like Bob who watch the market and think that that tells us everything.

We're sorry about Bob's portfolio, but it doesn't mean that unemployment is going higher or any of the other indications of a recession. So, here's what's going to happen, though. I mean, Bush has talked us a little bit into this gloom and doom, and so the tax cut, which was never going to be Bush's tax cut, but a tax cut will now come faster and it will be fairer.

There will be -- if there's going to be any effect on the economy at all, the tax cut has to come now, not later. And I think that that's the impetus now. The Republicans are holding the Democrats over a barrel, saying you have to sign on for the whole Bush plan in order to get the stimulus now of a quick tax cut. But I don't think that's going to happen. I think there will be one that will be faster and it will a little bit fairer than the Bush plan.

SHIELDS: Kate O'Beirne, a $60 billion tax cut, which is being talked about very seriously by both sides of the aisle, is 10 times as much that the Bush plan would provide this year. I mean, that would give still stimulus, wouldn't it?

O'BEIRNE: Congress, which is too busy at the moment fooling around with campaign finance reform and not paying enough attention to the economy and tax cuts, should clearly have a much larger tax cut than what the House was able to pass. But a one-time rebate, although people will spend money their money better than the government does, is not going to be the kind of health for the economy that the Bush tax package will because it's cuts in rates, the kind of tax cuts that stimulate the economy and have incentives for growth and savings.

The single most important thing that could help now, immediately, is a cut in capital gains. Experience tells us you get an immediate impact on the stock market. It'll actually increase revenues, as it typically does, but my favorite thing now is the accusation that George Bush, who we've been told is the most inarticulate politician in public life, is silver-tongued enough to be able to talk down a $10 billion economy. I just love that

SHIELDS: But Kate, correct me if I'm wrong, capital gains is at 20 percent, the top rate is at 39. It was always the argument made by conservatives that the capital gains rate had to be as low as the tax rate or slightly lower. It's incredibly low by historical standards.

O'BEIRNE: Should be lower.

NOVAK: Should be zero.

SHIELDS: Marty Meehan.

MEEHAN: First of all, I'm very happy to see that all of this debate, now, has centered on the fact that even Bob Novak admits the Bush tax package is only $5.5 billion. It means nothing in terms of a stimulus to the economy. What a great opportunity for a bipartisan president, if he practices what he preaches, to reach across the aisle and say, we're going to do $60 billion tax cut for working families right away in the first year. That's a greet opportunity. He should take that opportunity.

The second thing that we ought to look at, obviously, with the slowing down of the economy, you'll see more and more estimates that aren't quite as rosy. We aren't going to have 5 percent growth. We're not going to even have 2.7 percent growth. Let's look realistically at what the surplus projections are, go back to the drawing board, and come up with a tax package that is fiscally prudent, that makes sense. The...

(CROSSTALK)

MEEHAN: ... coalition did some great work this week, Bob, that we ought to take a look at.

(CROSSTALK)

NOVAK: God save us from the Concord Coalition, but you see, it's the economy, stupid. I'm not calling you stupid, I'm just -- you know, that's the -- the economy is in terrible shape. People in the heavy industry that I have talked to, this recession in heavy industry started six months ago, eight months ago, long before George Bush was elected, and the idea that any kind of a low income bracket tax cut is going to help is ridiculous.

The only thing that's going it help is to get Alan Greenspan off -- just a minute -- off of his bum and pump up the economy. Even then, it's going to take a long time, but at least it's a start.

MEEHAN: Well, hopefully we'll get another one. But I can't believe -- you don't want tax cuts for working families to go out and buy --

NOVAK: The interest rate cuts, Marty, are not going it help.

(CROSSTALK)

NOVAK: Are you listening to me?

MEEHAN: Yes.

NOVAK: It's not going to help. What you're going to have to do is pump up the money supply.

SHIELDS: Would it be in the interest of you to not talk about Chairman Greenspan's anatomy. Margaret Carlson, right down there, tell us in Fort Lauderdale what the story is?

CARLSON: Well, I was waiting for Bob to bring up Alan Greenspan, you know, his nemesis. Listen, there -- as you're talking to these people in heavy industry, Bob, I don't think there's anybody who says, listen, I didn't build a plant, I didn't hire somebody because the interest rates were so high. They aren't that high.

NOVAK: Money is not available.

CARLSON: And you have everybody down here -- it's very funny to walk around. People complaining, you know, Alan Greenspan should have cut 75 basis points, not 50. As, you know, as I -- when you read the history of the Depression, you say, you know, the bubble burst when people -- when the elevator boy was talking about stock prices.

NOVAK: Oh, boy.

CARLSON: And, you know, it's just time in the market for the bubble to burst, and we'll all be better off and it has nothing to do with Alan Greenspan at the moment, Bob.

SHIELDS: Margaret Carlson, we thank you. Kate, I'll point out one thing: The House passed the tax bill that President Bush submitted. They didn't make it up... O'BEIRNE: We'd be in much better shape if Democrats and Bill Clinton hadn't opposed tax cuts last year. Tax cuts last year would have been a help.

(CROSSTALK)

NOVAK: Just to show you, Mr. Meehan, I was on the record in the campaign as saying that that tax cut by Bush was an inadequate tax cut.

(CROSSTALK)

SHIELDS: I'll just say one other thing that was during the campaign, if you're going to use the economy, stupid, at least give credit to James Carville, who came up with the statement. Next on CAPITAL GANG, dissing the ABA.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. President Bush ended the American Bar Association's 50-year role in the evaluation of possible federal judges. White House counsel Alberto Gonzales wrote the ABA, quote: "Although the president welcomes the ABA's suggestions concerning judicial nominees, the administration will not notify the ABA of the identity of a nominee before the nomination is submitted to the Senate and announced to the public," end quote.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: There are a lot of people who wondered whether putting an organization that took a lot of stands on issues and that had a specific sort of bent toward ideology itself would be an impartial broker of a developing nominee.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MARTHA BARNETT, PRESIDENT, AMERICAN BAR ASSOCIATION: We are concerned about the message that this sends to the public and to the profession about the role of politics in the appointment of federal judges.

(END VIDEO CLIP)

SHIELDS: Kate O'Beirne, why end a procedure that began with President Dwight David Eisenhower?

O'BEIRNE: Because the ABA is not what it was in 1953. The ABA has become a liberal advocacy group. They take hundreds of positions on political issues: anti-welfare reform, anti-capital punishment, pro-abortion. They're a 15 member little committee, many of whom give money to political candidates, pretend they have some sort of objective standard.

They weight the compassion and sensitivity of proposed nominees. They're shown themselves to judge Republican nominees unfairly. Judge Posner, Judge Buckley, Judge Noonan all got less than good ratings from the ABA. They have a system that can be abused. They have abused it, and President Bush's action is about 25 years too late, but welcome.

SHIELDS: Margaret Carlson.

CARLSON: Well, as the other lawyer on the panel, there was a separate committee at the ABA that did the evaluating, the judicial committee, which was separate from any one who did the commenting on the political issues. And all you have to do is look at the Supreme Court which helped George Bush win the election to see that the ABA has approved many judges that are very conservative on the basis of their professional qualifications. I think what Bush did is really grudge holding by Republicans because Judge Robert Bork was given a bad review by the ABA and was subsequently, you know, not approved.

SHIELDS: Marty Meehan, a former crusading district attorney in Massachusetts, a lawyer yourself, didn't the ABA provide some insulation for presidents?

MEEHAN: It sure did. In fact, Bush may be costing himself some embarrassment. They used look at candidates for integrity, look at candidates for professional competence and judicial temperament. That's what they look at, not ideology.

This is a big mistake for Bush. The fact is, they have turned down as not qualified more Democratic nominees than Republican nominees for judgeship. This doesn't make any sense at all. These people that are on this committee don't get involved in politics. People who are part of the ABA don't even know when these names are submitted. He's making a big mistakes. Now, when have incompetent judges, no professional organization will have vetted those people out.

SHIELDS: Bob Novak, how about that?

NOVAK: As the only non-lawyer to speak so far, I'm not surprised that Marty, who's a good, loyal Democrat, is unhappy with because this is bad news for the liberals. It's about 16 years too late. Let me tell you the truth is. Things come back to haunt you and when these arrogant ABA aristocrats decided that Bob Bork was unqualified, they were just waiting for somebody with the guts enough to do this. And I say...

MEEHAN: Is that what this is all about.

NOVAK: Yes, it is.

MEEHAN: It's all about get even, isn't it?

NOVAK: I hope so.

MEEHAN: You say it is what it's all about and Kate says it isn't.

(CROSSTALK)

NOVAK: I think it is. I think George W. Bush should be commended and I'll tell you what else, he gave his health care speech at the College of Cardiologists in Orlando, last week, not at the AMA, because the AMA has moved to the left, too.

O'BEIRNE: It's not clear what they're doing. They approved three judges, the ABA, great ratings, who were later impeached by the Senate. Clinton's own top legal adviser on judges said in eight years they never -- the ABA never told the Clinton White House, the DOJ anything they didn't already know about judges. So, let other groups talk, too. Let's hear from victim's rights groups, DA's groups. Why should the preferential treatment be given the ABA?

SHIELDS: I'm just glad that George Bush didn't speak to the College of Cardinals. We'll be back with a CAPITAL GANG classic, our first discussion of campaign finance reform a full eight years ago.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. Nearly eight years ago, the Democratic- controlled U.S. Senate passed a bill, backed by first-year president Bill Clinton, which was intended to limit campaign contributions.

Two days later, on June 19, 1993, your CAPITAL GANG discussed campaign finance reform for the first of many times.

(BEGIN VIDEOTAPE)

AL HUNT, "THE WALL STREET JOURNAL": Mark, who does this bill really help, incumbents or challengers?

SHIELDS: This bill, Al, if it were law in 1992, would have helped challengers to this extent: $37 million would have gone out of incumbents' war chests, one-third of their total. It deserves a testimony because it's opening up our faucets and making our politics more fair.

NOVAK: I am sorry to see Mark buy into that ridiculous observation that this is going to help challengers. This is an incumbents' protection bill. It makes it much harder to amass the money to challenge an incumbent. But what it really is, it is the foot in the door by these professional politicians on Capitol Hill to get a taxpayer-financed system of politics, an entitlements for professional politicians.

HUNT: The Democrats in the House, privately, have analyzed the Clinton bill, at least, and they figure they would have lost about 20 House seats in 1992 if that had become a law. What they're baffled by is why, and delighted, by the way, some of them are, as to why conservatives resist the public financing section, which is exactly what would help conservatives right now.

NOVAK: That's the Brer Rabbit sort of thing, don't come into my briar patch. That's nonsense. Nobody believes that, Al. SHIELDS: It eliminates soft money. We're talking about $60 million. We're talking about $60 million of soft money from rich individuals, from corporations and from labor unions.

(CROSSTALK)

NOVAK: Labor unions, come on.

SHIELDS: It's absolutely true.

(END VIDEOTAPE)

SHIELDS: Marty, you heard Bob Novak's Uncle Remus argument about throwing them in the briar patch. Have the arguments changed that much since 1993?

MEEHAN: Well, the evidence is more overwhelming. You said $60 million dollars. You know what it was in the last election? $463 million in corrupt soft money. That's an increase of must be 670 percent. I will say this: The tie -- not the tie, but the suit that I saw Bob had on, it was just as out of style in 1993 as it is today in 2001. In fact, I think it's the same suit

(LAUGHTER)

SHIELDS: But Bob's opinions are never out of style, right, Margaret?

CARLSON: Right, I mean, the arguments haven't changed; Bob's clothing hasn't changed; the percentage of incumbents reelected hasn't changed. The only thing, as Marty points out, that's changed is the amount. They're truly obscene now.

SHIELDS: Obscene, Kate O'Beirne?

O'BEIRNE: Well, one thing has changed. If the Democrats back in '93 didn't just want to be used in the campaign finance issue to bash Republicans, they could have a Democratic Congress pass a reform bill that could have been signed by Bill Clinton as president.

But it seems to me the fact they never did points out they have always preferred having the issue to bash people with and they're always sort of afraid that they might make a change that could disadvantage them, unintended consequent. They know one thing about the status quo, it's a system that got them elected.

NOVAK: I will say that maybe Marty Meehan and John McCain and Russ Feingold are sincere, but most of those people there are trying to protect themselves.

MEEHAN: I think Chris Shays is, too.

SHIELDS: Chris Shays, we'll put him in there, but they're all trying to protect themselves, and what they want is to make very hard for anybody to run against them. And, of course, their little thing at the end is to have a little dribbling amount of money from the public treasury, which would be the worst system of all.

SHIELDS: You know, it absolutely fascinates me. Kate says that the status quo has bee very good.

O'BEIRNE: Well, they think so.

SHIELDS: Novak says the bill is intended to help the status quo and the incumbents. I mean, you can't have it both ways, Bob. But Lord knows you try. Marty Meehan, thank you for being with us.

We'll be back with Senator Russ Feingold as the "News Maker of the Week," California Governor Gray Davis joins us for our look "Beyond the Beltway" at his state's power crisis and our "Outrages of the Week," all after a check of the hour's top news.

(COMMERCIAL BREAK)

ANNOUNCER: From Washington: the CAPITAL GANG.

SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with Robert Novak, Kate O'Beirne and, in Fort Lauderdale, Florida, Margaret Carlson.

Our "Newsmaker of the Week" is Senator Russ Feingold of Wisconsin, the cosponor of the McCain-Feingold campaign finance reform bill. Russell Feingold; residence: Middleton, Wisconsin; age: 48, Democrat, Jewish; Rhodes Scholar, Harvard Law School; elected to the Senate in 1992; reelected 1998.

Earlier this week Russ Feingold was interviewed in his Senate office by our own Al Hunt.

(BEGIN VIDEOTAPE)

AL HUNT, CO-HOST, "EVENS, NOVAK, HUNT & SHIELDS": Senator, a Wisconsin newspaper last week said that you are a political maverick in the Senate in the tradition of Bill Proxmire. Do you agree?

SEN. RUSSELL FEINGOLD (D), WISCONSIN Not really; I like to think that Wisconsin asks you to be independent. They don't want you to go out there and have a political party hand you a card and say, you're going to do this and you're going to do that. I'm a Democrat and I'm proud to be a Democrat; but you know, when there's something that comes up that I'm uncomfortable with that involves big money in politics or following through on a procedure that I think is important for the integrity of the Senate, sometimes I have to break party lines. So I don't accept that characterization, but it's not the worst I've ever been called. Bill Proxmire was the most popular politician in Wisconsin.

HUNT: You were very independent in that you were one of the very few Senate Democrats to vote for John Ashcroft for attorney general. In retrospect, do you have any regrets about that?

FEINGOLD: Well, I think I did the right thing. This country has never used an approach in the Senate of disqualifying people for a Cabinet if its the president's selection unless somebody has an ethical problem or isn't qualified. I thought Ashcroft met those tests. And even though he wouldn't have been my pick, the Democrats, under Clinton, got the people that Clinton wanted, and I thinks the same thing goes for -- in this case -- for the Republicans.

HUNT: McCain-Feingold it's called, but you are the junior partner, right?

FEINGOLD: I am junior to Senator McCain.

HUNT: Do you feel junior when you're out there with all the attention that John McCain gets?

FEINGOLD: You bet I do, and think I should. He's a war hero, he's one of the great Americans of our time, I am lucky to be working with him. But when we're negotiating, when we're talking about the issue we're equal colleagues. That's how he treats me and that's how I treat him.

But let's face it, when you get out there with the crowds, he's the franchise and he's the reason that we're really able to have a public understanding of this, is that John McCain is somebody who broke the mold by fighting big money even when his party was in control.

HUNT: Some senators say that he is very difficult to deal with, he is volatile, he's not very collegial. Has that been your experience?

FEINGOLD: Well, I get along with him. You know, John's a fast- paced guy, so am I. Occasionally the words get a little fast, maybe a little heated, but it doesn't last. And if you listen to him and he listens to me we work it out. So we've had a good experience and I've enjoyed it.

HUNT: Do you consider the Senate a corrupt institution because of the campaign financing system?

FEINGOLD: I considered the campaign financing system corrupt in that it is having a corrupting influence on the Senate. When members of the Senate are calling up people asking for them for $100,000, $500,00, $1 million, it has to ultimately have some corrupting influence. And I'd like to stop this before it goes too far. This is something that might be called legalized corruption, but when a senator comes up to me, as has happened to me, and said, I just asked somebody for $250 thousand, I feel like I need to take a shower. That, to me, is getting pretty close to the kind of corruption, or at least discomfort that most people in public life should want to avoid.

HUNT: Final question, Senator Feingold: Who do you consider the leader of the Democratic Party today -- Bill Clinton, Al Gore or someone else?

FEINGOLD: I like them all -- put Joe Lieberman in there; we...

HUNT: There is no titular leader of the party? FEINGOLD: I don't know that that's important. We've got a group of very solid people; the people in the Congress, people outside the Congress who are going to form -- the group of people that are going to take us into the future. But the important thing now is not who's the leader, but how we work together.

(END VIDEOTAPE)

SHIELDS: Bob Novak, you've covered Bill Proxmire, elected in 1957, one of the authentic mavericks and -- who was invincible. I mean, he spent $150 on his last campaign and carried every county in the state. Is Russ Feingold the Bill Proxmire tradition?

NOVAK: Definitely. And I don't know why he is so nervous about not being it -- he says, "I'm a Democrat" -- well I guarantee you, Bill Proxmire, whatever he was, was always a Democrat, but he was a maverick. He talked for himself. Wisconsin sends mavericks: fighting Bob LaFollette, young Bob LaFollette, Joe McCarthy -- all of different shades.

And Feingold is a maverick. He was the one person in the impeachment fight who didn't go down the straight line on every single vote with Bill Clinton, and Clinton was infuriated. So I'm disappointed in Senator Feingold, though; he should have said, yeas, I'm a Proxmire man, and if you don't like it, that's tough.

SHIELDS: Margaret Carlson, you own sense, if you listen to Russ Feingold -- I recall at the Democratic Convention last summer in Los Angeles awash in corporate and labor union money, soft money everywhere, he was the only elected Democrat who publicly criticized and condemned what was going on, the circus out there.

CARLSON: You know, he lived it out as well. Remember, he didn't take money from the party or the senatorial campaign during his campaign. And when it accidentally got sent there he felt terrible and sent it back. You know, that takes a certain kind of courage to do, and that's very Proxmire-like.

And he's actually linked up with our current Bill Proxmire, which is John McCain. I was running around with him two weeks ago, and he had his annual press conference with the pig named Rudy in which he hands out the awards for the most pork. And Proxmire had -- did that with his golden fleece awards. But Feingold is not a member of the club, and you need people like that in the Senate who are willing to go their own way.

SHIELDS: I should, in the spirit of full disclosure, reveal that from 1965 to 1968 I worked for Senator Proxmire, who remains a friend to this moment. So any comparison of Russ Feingold to him I consider a high compliment to Feingold.

But let me just ask you, he seemed almost deferential, Kate, when Al Hunt asked him about John McCain. I mean, "John McCain is the franchise," he's an American war hero, he's an authentic American leader. Is he really the junior partner, in your judgment. O'BEIRNE: Well, yes, I think he is -- maybe not behind closed doors. He might well, frankly, understand all the ramifications of the bill and the details of it better than John McCain does, but I think he recognizes what is certainly the case, that Senator John McCain put McCain-Feingold front and center on Washington's agenda, in no small part owing to his crusade last year. So it's just a recognition of that.

And he seems to be a very well-intention member, and he has been admirably independent on a number of issues. But he now finds himself caught up, even though he turned down soft money in his own campaign for reelection -- just this week he and John McCain are accepting the benefit of hundreds of thousands of dollars in soft money from a common cause affiliate to promote McCain-Feingold legislation. Now, if soft money is so evil, why are they taking -- or how can they justify taking $200 thousand?

He's caught up in the basic contradictions of McCain-Feingold; how they just can't get their rhetoric to match their actions, frankly.

NOVAK: Let me say another word about Russ Feingold: I will disagree with 95 percent of the votes that Russ Feingold takes because he's a liberal Democrat. But let me tell you something: When I covered the Senate years ago when Lyndon Johnson was majority leader, he was the kind of senator LBJ hated because he's not controllable. And that's why I admire Russ Feingold, you never know exactly what he's going to do, as on the Ashcroft vote. And the leaders hate a guy like that, and I just wish there were more senators like that. I wish there were more senators on -- maybe on the conservative side, as well.

SHIELDS: I was going to say, that's one of the reasons you must admire John McCain, too?

NOVAK: I've always been an admirer of John McCain.

SHIELDS: Thank you very much.

Next on CAPITAL GANG: "Beyond the Beltway" looks at the power crisis in California with that Golden State's governor, Gray Davis.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. California Governor Gray Davis joins us now from Los Angeles.

Thanks for being with us, Gray.

GOV. GRAY DAVIS (D), CALIFORNIA: Thank you Mark.

SHIELDS: Electricity blackouts swept through the nation's most populous state again. Governor Davis plans for the state to buy transmission lines. But in Washington, the Republican secretary of energy disagreed with the California governor.

(BEGIN VIDEO CLIP)

SPENCER ABRAHAM, ENERGY SECRETARY: We have responded to every request made by Governor Davis. The only issue in which we have some disagreement is the impact of price controls, which we think will actually make the problem worse and make the blackouts more significant in dimension as well as more frequent.

(END VIDEO CLIP)

SHIELDS: Gray Davis -- Governor Davis, as Secretary Abraham warns, won't controls on the price of power reduce its supply?

DAVIS: Well, we believe -- those of us in the West would like some breathing space and to moderate wholesale prices for a brief period of time, six to nine months, in the entire West, I think, would be helpful. I mean, the generators are charging us 800 or 900 times more for the same electricity than we brought a year ago. They haven't improved the product, they haven't improved the service; they've not added on iota to the technological productivity of America. They just have what we need, and they're demanding very high prices for it.

That has driven our utilities to the edge of bankruptcy and complicated our problem. The big problem, Mark, is that no plant was built in this state for the 12 years before I was governor. I've approved 13; six are under construction, three will be on-line this summer, two next summer. But it's very hard to make up for 12 years of inaction with just two years of action.

SHIELDS: Governor Davis, when will there be in place a comprehensive plan to remedy the crisis and the shortage California that California has confronted.

DAVIS: Well, as I said, we've moved aggressively on generation, approving 13 plants, three will be up this summer. We have $1 billion conservation program because this summer will be a challenge to get through. And so we'll reduce someone's bill 20 percent -- give them a 20 percent rebate if they reduce their electricity 20 percent; that's on-line. And then the final piece is to get the utilities back in the utility business; they're on the verge of bankruptcy because of the high prices from the generators.

But we're making good progress on that as well. So I hope, within 30 days, to have all the legislative fixes in place.

SHIELDS: Bob Novak.

NOVAK: The fact that there was not any power plant built in the dozen years before Governor Davis came in was not an act of God, it was not a natural calamity, it was the environmentalist lobby, which is very powerful in the state. It's the -- I wrote a piece -- Rowland Evans and I wrote a piece for the "Reader's Digest" about the failing of California, and that was one of the things we wrote about: that the environmentalists had us in sway. And governor, it has to be the case that the people on the left who thought there was something evil in electric power, nuclear power -- things to prevent this kind of a calamity, that they have to take a lot of the blame for this.

DAVIS: Well, I'm not into blaming people, Bob. I just think -- I tell people, look, I inherited a great economy, I didn't deserve that. I inherited this electricity mess, I didn't deserve that; my job is to manage our way through it. I think everyone realizes now we need much more generation and we need more conservation. So, however we got into this mess, our job is to get us out of it.

SHIELDS: And governor, just on that question, I mean, will the energy the state will need the summer, when there'll be a far greater crunch, will it be available 30 days from now or 45 days from now?

DAVIS: Well, I believe we can get through, Mark, but it will not be easy. We need a little luck. We can't have the worst summer in a hundred years. If we have an average summer and we continue to get more megawatts online through use of my emergency powers where we've reduced the permit process to 21 days for additional generation and what we call co-generation and if we get good conservation response from the public, we'll get through the summer.

But everyone has to do their part. Cities can't be turning down plants and people have to do their part. At a minimum, they have to reduce electricity conservation by 10 percent over what they consumed last year.

SHIELDS: Another 10 percent -- Kate O'Beirne.

O'BEIRNE: Mark, Governor Davis, of course, is exactly correct. It's a problem he inherited. There have been a couple Republican governors, although this environmental lock on politicians of both parties in California probably began under Jerry Brown.

So, some of this is legacy, but they really have intimidated both parties and I think it's going to in the long run, be a wake up call for a broad audience that might be helpful to the Bush administration. Now, they're being very careful not to -- to help in every way they can without accepting too much responsibility for what's happening in California, but it's a reminder of what happens, what can happen beyond California if the left-wing environmentalists hold too much sway over an issue policy.

SHIELDS: California Governor Gray Davis, thank you for being us. The Gang will be back with the "Outrage of the Week."

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week." George W. Bush, who ran and won the White House as a compassionate conservative, repeatedly stated his pledge to leave no child behind. But the proposed Bush budget will now cut the program aimed at preventing child abuse and will further cut the U.S. program to train doctors at children's hospitals.

I guess kids just can't come up with the kind of big soft money contributions that the deep-pocket beneficiaries of the Bush tax cut provide -- Kate O'Beirne. O'BEIRNE: Following outrage from the Army Ranger community, and congressional and White House concern, the Army chief of staff announced a compromise in the black beret controversy he created. His edict to put the entire Army in black berets stands because the Army has spent $30 million for five million of them.

He will allow the Rangers to wear tan to distinguish themselves. The change was intended to improve morale. It has done the opposite. General Shinseki's refusal to admit a mistake threatens a greater effect on Army morale than any change in uniform policy.

SHIELDS: Margaret Carlson.

CARLSON: Mark, Ronald Reagan's name is already all over National Airport, but that's not enough for Congressman Bob Barr. He's might ticked off that the Gipper's name isn't called out by the conductor when the subway stops there and wants to change the stop's name.

Never mind that the subway is not under congressional jurisdiction and that it would cost $400,000 to change the name on all the maps that -- in the system. Bob Barr is willing to hold up multimillion dollar transportation projects at Dulles Airport to get his way and have that named changed. Do Bob Barr's constituents know how he's spending his time?

SHIELDS: Yesterday, death claimed Rowland Evans, a devoted, relentless, invaluable political reporter, and the partner in the longest joint byline column in American journalistic history with Robert Novak.

Bob Novak has a word.

NOVAK: Permit me to say a final word about my long-time partner. He was often outraged by today's politicians and politics. That was in the tradition of the Alsop brothers. In that tradition, he mixed dogged reporting with strong opinions.

He loved his wife Catherine of 51 years, loved the Marine Corp, and loved his country. But he really preferred the country of a generation ago to today's and he might have been right. Rest in peace, Rowlie.

SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG. Tune in tonight at 8:30 Eastern for "TAKE 5." "CNN TONIGHT" is up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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