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CNN CAPITAL GANG

How Should Congress React to the Decreasing Surplus?; Honoring George McGovern; Can Al Sharpton Affect Change in the Democratic Race?

Aired August 25, 2001 - 19:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From Washington: the CAPITAL GANG.

SHIELDS: Welcome to CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak and Kate O'Beirne. Our guest is former White House Chief of Staff John Podesta.

Thanks for coming in, John.

JOHN PODESTA, FORMER WHITE HOUSE CHIEF OF STAFF: Glad to do it.

SHIELDS: Good to have you here.

The federal budget director issued the government's mid-year budget review, showing a 40 percent drop in the previously projected surplus.

(BEGIN VIDEO CLIP)

MITCHELL DANIELS, DMB DIRECTOR: The report we've issued this morning confirms that the nation has entered an era of solid surpluses -- surpluses on the order of $160 billion, despite an economy that has been weak now for over a year, and in decline for that time.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The federal budget will have the second-largest surplus in history in part -- in part because this administration took immediate action to address the downturn. We took exactly the right action at the right time by pushing the largest tax cut in a generation.

(END VIDEO CLIP)

SHIELDS: Democrats in Congress said the reduced surplus requires a remedy.

(BEGIN VIDEO CLIP)

SEN. ROBERT BYRD (D-WV), APPROPRIATIONS COMMITTEE CHAIRMAN: I think that the Congress ought to consider revising that tax cut. The Congress certainly ought to consider the cost of the missile shield. There are areas which we need to take a close look at in the appropriation bills.

(END VIDEO CLIP)

SHIELDS: Kate O'Beirne, what will the administration do about the shrinking surplus?

KATE O'BEIRNE, "NATIONAL REVIEW": Well Mark, the administration's right: We're running a huge surplus. Surplus represents one thing: Taxes are too high. It means the American taxpayer is paying tens of billions of dollars in taxes Washington doesn't immediately need for its needs.

But they inherited, this administration, the sort of crazy surplus politics on Capitol Hill, where both Democrats and Republicans, for no reason, have embraced the fiction that there's a Social Security trust fund nobody can touch. The Republicans because they want to prevent Democrats from spending the surplus; and the Democrats because they wanted to prevent Republicans from cutting taxes with these surplus funds. So that's what they inherited.

They, themselves, endorse the notion of not touching this make believe Social Security trust fund, which they don't this year. They think they're safe; they think the ball is in the Democrats' court. If it's going to be touched this year, it's because the Democrats are spending too much.

But if this economy doesn't get stronger, it is going to be a problem in the short-term, next year, maybe, for the administration. And at least Larry Lindsey is beginning to say some things are more important than the Social Security trust fund, like economic growth; and he's right.

And they're actually willing, I think, to run a small deficit.

SHIELDS: They're even talking about the "R" word, if I'm not mistaken. Recession crept into the Republicans' vocabulary.

John Podesta, should the administration do something about this shrinking surplus, or should the Democrats?

PODESTA: Well, they've already done something about the shrinking surplus in their management of the economy. You know, for eight years the balance sheet of the federal government got better an better and better, and then in eight months it's got worse and worse and worse.

They put through that big tax cut at the beginning of the year. He's proposed a lot of big spending this year that will be put into place. And I think that, you know, I think that -- he's pledged not to go into the Medicare trust fund, that's blown through. And now it looks like they're going to dig deep into the Social Security trust fund.

SHIELDS: Bob, the Republicans are a little hoist on their own petard here. They made such a virtue out of this. You know, Denny Hastert and Dick Armey and Tom DeLay say we're not going to touch Social Security, it's off bounds, it's in a lockbox. And now we've got a $1 billion surplus?

ROBERT NOVAK, "CHICAGO SUN-TIMES": I agree with you, the lockbox thing is silly. We don't have a $1 billion surplus, we have $160 billion surplus. And it doesn't matter what tax the money comes from because it -- Kate said there is no Social Security trust fund.

The fact is, the surplus -- the economy is not in good shape, mainly because Dr. Greenspan screwed up with the Fed. He had too much tightening for a year. And what wee need is a much looser policy at the Federal Reserve and a capital gains cut.

But the idea that the Republicans, John -- that you are playing the role of Herbert Hoover, you don't even look like Herbert Hoover. But you have an economic downturn and you want to increase taxes or cut spending. That's ridiculous.

SHIELDS: I doesn't think John talked about...

(CROSSTALK)

AL HUNT, "THE WALL STREET JOURNAL": This is man that told us in 1993 tax increases would devastate the economy, and we have had the best seven years in Bob Novak's life, Mark, just to get the facts straight.

Look, I agree the short-term debate is phony over the trust fund. These are IOUs, it's not a trust. There's no question of that. But it is illustrative of what will be a substantive debate in three or four years. Three choices: You can either go back to the days of red ink, you'll have real budget deficits like the '70s or '80s; you can pare back that tax cut that's supposed to take effect in later years; or you can abandon notions like beefed-up defense spending or more money for education and health care.

Tommy Thompson said in the "L.A. Times" interview the other day that it looks like we now won't have money to expand health care insurance for poor children. Those are the choices you're going to face.

O'BEIRNE: mark, there's a fourth choice. Economic growth creates surpluses. Pro-growth tax cuts would increase the surplus, increase revenues, is what we've learned. They ought to cut capital gains taxes, which is self-financing.

SHIELDS: Let me just point out, I think that both parties have lost elections, particularly the Republicans for 40 years talking about cold showers and root canal work on balanced budget and fiscal austerity.

But I will say this: What you have now, I think, for the Democrats is to make the argument, there's a choice. George Bush made his choice. There was a tax cut for all kinds of good folks. They got a big cut out of it. Or that George Bush has said no -- he said no to prescription drugs, he said no to children's health coverage and he said no to all sorts of things, including ballistic missile defense.

NOVAK: The economy -- I mean, that's all a lot of Democratic propaganda. It is, really.

The fact of the matter is the economy is in very bad shape. Nobody believes the administration's prediction of 3.2 percent growth next year. The Ford Motor Company has said it's curtailing production. It's the auto industry that's been carrying this...

(CROSSTALK)

NOVAK: Just a minute. These things are all in bad shape.

Now I want to ask you, John, with all of this going down, would you really pull back on these projected tax cuts? Do you think that's a good economic plan?

PODESTA: I don't think that's in the cards in the short-term. But what is in the cards until...

(CROSSTALK)

PODESTA: What is in the cards in the long term is following a path of fiscal discipline...

NOVAK: What would you do...

PODESTA: ... that will work with Alan Greenspan's...

NOVAK: What would you do right now? Tell me what you'd do right now?

PODESTA: Right now I'd try to keep spending under control, and I'd start looking at those out-year tax cuts.

(CROSSTALK)

HUNT: I'd take away the tax cut that rich people like you are supposed to get in three or four years. There's no question I would do that, because let me tell you: We hear a lot of gnashing of the teeth, crying about a Social Security deficit in the year 2025 a $425 billion. That's about half what the -- about half the revenues the tax cut will lose...

(CROSSTALK)

HUNT: So I would take your tax cut away, Bob, you're right. I wouldn't take it away for working class...

(CROSSTALK)

NOVAK: You used to under a little economics when you covered the Ways and Means Committee. That was many years ago. But Al, I will tell you this: If you take away those tax cuts, the economy is in the can.

(CROSSTALK)

SHIELDS: Let's just get one thing straight: You badgered John Podesta for an answer. John Podesta was co-captain of an administration that brought unprecedented prosperity, and you sit here...

(CROSSTALK)

SHIELDS: ... of Larry Lindsey...

(CROSSTALK)

SHIELDS: ... putting it in the junk yard.

HUNT: He said it would be a disaster, Mark.

SHIELDS: He did. I don't know what I'm going to do with you Novak, except go to the next thing...

PODESTA: The only thing going in the dumpster these days is that Social Security lockbox.

SHIELDS: Yes, or a watch box.

NOVAK: I hope it does.

SHIELDS: John Podesta and the GANG will be back with Jesse Helms bowing out. And later, Gary Condit staying in.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

After nearly 29 years in the Senate, Republican Jesse Helms of North Carolina called it quits.

(BEGIN VIDEO CLIP)

REP. JESSE HELMS (R), NORTH CAROLINA: I would be 88 if I ran again in 2002 and was elected and live to finish a sixth term. And this, my family and I have decided unanimously, that I should not do and, ladies and gentlemen, I shall not.

(END VIDEO CLIP)

SHIELDS: On the day following Senator Helms' announcement, Elizabeth Dole transferred her voting registration from Kansas to North Carolina, fueling speculation that she will try to succeed Helms.

Bob Novak, after five terms does Jesse Helms leave a legacy beyond that of that being Senator No?

NOVAK: Well, I've read editorials and columns that are a lot meaner than that, Mark. They make him out as a mean-spirited old man.

SHIELDS: Anyone in particular?

NOVAK: The one thing he is not is mean-spirited. He is one of the gentlest people I've met in politics, and I've met a lot of them. People in North Carolina who don't agree with him -- who are Democrats -- they love him. He has been an adornment to that state.

But what he has really been is the most influential senator for the last 30 years. He has influenced foreign policy, influenced the United Nations, affected appointments. And he has been a power in the Senate, and the people in North Carolina around Duke University and the North Carolina Chapel Hill -- the Terry Sanford kind of people, they just can't stand the idea of this great conservative from North Carolina, but they should be proud of him.

SHIELDS: Al Hunt?

HUNT: I went to Wake Forest. I didn't go to those schools that...

SHIELDS: Jesse Helms' school.

HUNT: Exactly.

Bob and I fundamentally disagree -- totally disagree on Jesse Helms. But I think if you look ahead, this could be a break for Republicans. I think Helms would have been very beatable in 2002. I think if Elizabeth Dole gets the nomination, I think she's virtually unbeatable.

The carpet-bagger issue, I think, is bogus. She grew up in North Carolina, she went to Duke. She goes down to visit her 100-year-old mother all the time. But I'll tell you what is not bogus is that -- whether she has the stomach for a tough primary. And the Democrats' hope is that Helms protege Lauch Faircloth gets in there. And I'm not sure Elizabeth Dole can win a tough primary. If she can, the Democrats are dead.

O'BEIRNE: Mark, the most competitive Democrats in North Carolina didn't think Jesse Helms was going to be beatable next year, they bowed out of the race, because I think Jesse Helms would have been reelected by people in North Carolina who love Jesse Helms.

NOVAK: Five times.

O'BEIRNE: He has always been one of my heroes. He is so courageous. And the thing that I think drives liberal elites crazy is he never cared what they thought.

And boy oh boy, if more people felt that way, what would happen to the liberal elites in the media? A "New York Times" editorial would condemn Jesse Helms. An old staffer of his told me that the first time it happened when he was on the staff, he went in and said, let's respond; I've drafted this response. And Jesse Helms turned to him and said, I don't care what "The New York Times" says, and the people I care about don't care what "The New York Times" said.

Would that more Republican senators felt that way.

PODESTA: The irony of Jesse Helms is that he was personally gracious, but he built his whole career on hate and division. And after 85 years, even Strom Thurmond learned an important lesson, that he had to reach out to...

O'BEIRNE: He hated communism. That was a big...

PODESTA: So did Harry Truman, but he never campaigned on the basis of hate.

SHIELDS: I think it's fair to say. I think John has touched on something that's real here. And that is Strom Thurmond and George Wallace both made public apologies for their segregationist pasts. Jesse Helms never did.

But I will say this about Jesse Helms: Ronald Reagan never would have been president of the United States but for Jesse Helms in 1976. Reagan had lost every primary he was $2 million in the hole, there were negotiations about his getting out of the race. And if he had gotten out of the race with no victories in 1976, his political career would have been over.

Jesse Helms propped him up, and he won the North Carolina primary and went on to contest the nomination all the way to Kansas City, and that really made Reagan the front-runner for 1980.

And Bob Novak, you've got the final word. Let's hear it.

NOVAK: I would say the Democrats are so afraid of Elizabeth Dole that they are begging Jim Hunt, the former governor who had said he wasn't going to run to come and run. And I understand that the great Democratic National Chairman Terry McAuliffe is doing that.

SHIELDS: I will just trust that the Republicans, who are so harsh on Hillary Clinton for being -- not having lived for 40 years in New York, will be equally...

(CROSSTALK)

SHIELDS: She visited. She didn't use the pretext of her mother, for goodness sake.

(CROSSTALK)

Next on CAPITAL GANG: Gary Condit goes public.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

America listened to Democratic Congressman Gary Condit of California for the first time. In an interview with ABC's Connie Chung, he said he did not know what happened to Chandra Levy. When asked repeatedly whether he had a sexual or romantic relationship with Ms. Levy, he gave the same answer.

(BEGIN VIDEO CLIP, "PRIMETIME," ABC)

REP. GARY CONDIT (D), CALIFORNIA: I've been married 34 years. I have not been a perfect man. I have made mistakes in my life. But out of respect for my family, out of specific request by the Levy family, it's best that I not get into the details of the relationship.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BILLY MARTIN, LEVY FAMILY ATTORNEY: The Levys have no objection to Gary Condit telling the world what he knows about the relationship between Gary Condit and Chandra Levy.

(END VIDEO CLIP)

SHIELDS: In a California interview with KOVR-TV, the congressman talked about the Levys.

(BEGIN VIDEO CLIP)

CONDIT: My heart, you know, goes out to the Levys. I don't think I could describe what they're feeling or what they're going through.

Where it gets a little bit unfair, I think, is when Dr. and Mrs. Levy make allegations that I might have had something to do with the disappearance.

(END VIDEO CLIP)

Al Hunt, has Congressman Condit begun, now, to solve his problems?

HUNT: I want to tell my friend John Podesta that I covered Bill Clinton. I know Bill Clinton, and Gary Condit is no Bill Clinton.

I want to tell you, there may have been -- it may have been possible to have a worse performance, but I can't imagine how.

SHIELDS: Why is that?

HUNT: I think what was needed was confession. He had to say, I had an inappropriate relationship -- wouldn't even say that. Contrition and concern. Instead, what we got was someone who was evasive, someone who was duplicitous and insensitive.

Everybody was lying but Gary -- the police chief. You know, he even picked a fight, I think, with the Levys. It was just extraordinary.

Mark, he not only didn't help himself, I think he put the final nails in his coffin. And you are going to see more and more Democrats, including some publicly say Gary, it's time to quit. SHIELDS: I'm not sure where Al Hunt stands on this.

(LAUGHTER)

SHIELDS: Do you agree?

NOVAK: I agree 100 percent, and so does Dick Gephardt, apparently, because the House Democratic leader was on "Meet the Press" last Sunday and I was just stunned he gave a blanket endorsement of Gary. I don't think that played too well, because he came out in St. Louis on Friday just attacking Condit and saying he might have to withdraw support for him.

That is the trouble when you get a very harp Washington lawyer to represent you. And they'll tell you how to stay in jail, but they won't tell you how to...

SHIELDS: Stay out of jail.

NOVAK: To stay out of jail, but they won't say how to make any friends. I thought it was a disastrous performance.

I thought the most bizarre thing was when he said that this airline stewardess was lying about the relationship. Nobody believes Mr. Condit on that one.

SHIELDS: John, what about Gary Condit? Would you bet on his future prospects?

PODESTA: Well, you know, I wouldn't have bet on Connie Chung's future prospects after Tonya Harding. But, you know, she did a pretty good job, I thought, with the interview last night.

And so you never can tell, but I wouldn't buy futures in Condit country, I'll tell you that.

SHIELDS: I will say this, in a strange way Connie Chung was a tough interrogator in the sense that he had obviously gone to cast himself -- Condit did -- as the victim. As the victim of this media. And now if it had been somebody like Novak going after him, badgering him like he just did in an earlier segment here, you know, there might have been some sympathy for him.

But there was absolutely no -- there was no sympathy. I thought he brimmed with self pity. It was unhelpful. I don't know where, in an way, he helped himself.

O'BEIRNE: He solved one mystery. A lot of us have been wondering for weeks: Why is he maintaining this silence? Why doesn't he come forward? Well now we know. Surprise, surprise, he's a dishonest, dishonorable man, and that was on full display this week.

So I think he was smart not to have come forward before now. Virtually no Democrats criticized him at all until this week. I think they were waiting to see whether or not he had the Clinton touch -- could he at least fake some contrition, fake some empathy? It's clear he can't. So I agree with Al; I think they're going to be abandoning Gary Condit.

SHIELDS: Now, the future right now, I mean, has to be getting him out of the race for the Democrats, would you agree?

NOVAK: I don't think it really makes that much difference because that district is a conservative district. It was won comfortably by George W. Bush in a state where he lost badly to Al Gore.

So the talk before was that -- before all this happened, the only guy that could carry this district was Condit. Then there was talk about changing the district to make it more Democratic. If you look at your geographical-political map of California, you can't do it.

(CROSSTALK)

HUNT: They can do a little bit of stuff...

(CROSSTALK)

NOVAK: You'd weaken the adjoining districts.

HUNT: But there is a Republican district that you could give even more Republicans to, and you could make it a better Democratic district. I agree; that district -- unless you do something like that, that's going Republican.

SHIELDS: I will say one thing in defense of his Washington lawyer. I was told...

NOVAK: Abbe Lowell.

SHIELDS: Abbe Lowell. I was told on my own reporting on Friday from Democrats on the Hill that this was not Abbe Lowell's advice, that this was political advice for his consultants looking solely toward that...

(CROSSTALK)

SHIELDS: ... looking totally toward that district. Maybe it will work in the district, Bob. I don't know...

(CROSSTALK)

O'BEIRNE: ... nobody is taking responsibility for that.

SHIELDS: I think you've...

NOVAK: You know, jut one last thing, I love the use of the word "conservative" because anything bad is...

SHIELDS: He's a conservative Democrat?

NOVAK: He suddenly become...

(CROSSTALK) NOVAK: He certainly wasn't mine.

He suddenly has become a conservative Democrat. I looked at his voting record. You know what he is? He's a guy that goes right down the middle of the road, 50-50. That's not a conservative. He votes about like Chris Shays votes. That's not a conservative, is it?

SHIELDS: The only time you go 50-50 down the middle of the road is in your Corvette -- and that's the last word.

We'll be back with a "CAPITAL GANG Classic": the collapse of the Soviet Union and the Soviet Communist Party.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Ten years ago this week in Moscow, Boris Yeltsin banned all communist activities in the Russian Republic, Mikhail Gorbachev resigned as secretary general of the Communist Party and the Communist Central Committee of the Soviet Union dissolved itself.

Here is what your CAPITAL GANG had to say on August 24, 1991. Our guest was former Secretary of State Alexander "I'm in Charge" Haig.

(BEGIN VIDEOTAPE, AUGUST 24, 1991)

SHIELDS: Does this mean that both the Communist Party and Mikhail Gorbachev are finished, Robert Novak?

NOVAK: This is a great night for lovers of freedom, which I hope there are some besides me on this panel, because the Communist Party is dead; it is gone. The greatest anti-human force that has been known in the world is finished. It's also a bad night, however, for the lovers of Gorbachev.

HUNT: For these years Bob has been predicting his overthrow, and finally, Bob, you waited long enough and you're right. This is an incredibly exciting week. Communist is dead, and the times have clearly passed Mikhail Gorbachev by.

Let me say one thing about Gorbachev, however: I do think that he will go down as a truly historic figure. Communist was doomed. It was a dreadful system; but the fact that the dissolution happened so quickly and so relatively painlessly, in large part is due to Mikhail Gorbachev.

SHIELDS: Al Haig, what about Boris Yeltsin? I mean, at this point he's such a celebrated figure he seems to be a human figure without warts, without mortal defects. Can this -- is he too good to be true?

ALEXANDER HAIG, FORMER U.S. SECRETARY OF STATE: Well, we'll see the warts in the weeks and months ahead. But he's a leader, and a man of great courage. He proved it this week. HUNT: The economy is going to slide this year; 50 to 100 percent inflation. They still have an enormous problem. This is a fantastic week week. It will be a lot better a country in two or three years.

SHIELDS: Does he have any plan for the hungry or the homeless and the jobless?

(CROSSTALK)

NOVAK: I want to tell you something: This may not mean much to you and Al, but there was a great moment for me this week -- this is one of the happiest weeks of my life.

(END VIDEOTAPE)

SHIELDS: Bob Novak, was your exuberance -- was it just a little bit overdone?

NOVAK: No it wasn't. I still feel tingly.

You know, as I watch that, and I read the whole transcript, I felt that this was the greatest thing that ever happened to me in my life. It still is. That was the most evil force on the globe -- against God, against man, against civilization. And you guys were worried about the inflation rate and the unemployment rate and whether Yeltsin was going to be able it put in a New Deal in Russia.

SHIELDS: Al?

HUNT: I think Bob really misses those days. We doesn't have any villains any more.

But of course it was a great day. But Russia -- I just got back from a couple days in Russia. Problems are terrible. Thank God Communism's dead, but Russia is still in dreadful shape. And Mikhail Gorbachev really was a semi-heroic figure.

O'BEIRNE: Bob, this fellow lover of freedom wished I could have been with you during the happiest week of your life. I would have kept you company on that panel.

And, may I point out, that Jesse Helms' legacy includes the fall of the Soviet Union, given what a dedicated anti-Communist he was during...

NOVAK: Absolutely.

SHIELDS: And the death squads in El Salvador.

Go ahead, John Podesta.

PODESTA: I finally found something to agree with Bob Novak on. But I think the tragedy really is that Boris Yeltsin proved to be more of a Patrick Henry than a James Madison or Thomas Jefferson -- that he couldn't really...

(CROSSTALK)

PODESTA: ... country. He was good on the ramparts, but then...

NOVAK: He was still a hero though, wasn't he, John?

PODESTA: Right, he was a hero.

SHIELDS: That's it.

John Podesta, thank you for being with us. The GANG will be back with the second half of the CAPITAL GANG. The "Newsmaker of the Week," former Senator George McGovern; "Beyond the Beltway" looks at the Reverend Al Sharpton's presidential ambitions with Harvard law Professor Christopher Edley; and our "Outrages of the Week." That's 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 the CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak and Kate O'Beirne.

Our "Newsmaker of the Week" is former Senator George McGovern. George S. McGovern: age, 79; residence, Stevensville, Montana; religion, Methodist. B-24 bomber pilot, United States Army Air Force, 35 bombing mission in World War II, awarder the distinguished flying cross. PhD in history from Northwestern University; 18 years as a United States senator from South Dakota; Democratic presidential nominee in 1972. Currently U.S. director of U.N. food agencies in Rome.

Earlier this week Al Hunt interviewed Senator George McGovern.

(BEGIN VIDEOTAPE)

HUNT: Your heroics as a World War II young bomber pilot are at the center of Stephen Ambrose's terrific new book "Wild Blue" about the boys that flew the B-24s over Germany.

How has this book, revisiting those extraordinary times and your extraordinary feats affected you?

GEORGE MCGOVERN, 1972 DEMOCRATIC PRESIDENTIAL CANDIDATE: Well, for the first time since World War II somebody has forced me to just methodically and intensely review everything that happened more than 50 years ago. The book has given me a new appreciation of what we did in that war, and air power did make a difference in the outcome of that war.

HUNT: Well I was going to say, this is one of the first full- blown treatments of bomber pilots, and Stephen Ambrose says it's hard to imagine winning World War II without the 15th Air Force. Was it to you at the time the critical role you were playing?

MCGOVERN: Yes it was, because I saw the photographs after every mission we flew. We didn't always hit the target right on the nose, but we came close enough so that we virtually closed down the oil refineries in Eastern Europe and Germany. And that had the effect of putting the German Air Force on the ground.

HUNT: Many in the 15th were never even in a plane before World War II. You were frighteningly young -- early 20s or late teens -- but as the French diplomat Clemenceau wrote, "you were kittens in play, but tigers in battle." Was there something uniquely American to this performance?

MCGOVERN: Well, I think what was unique about it is that that war, including the air war, was fought was with people who, during the previous 10 years, had battled against the worst Depression in American history. They knew something about hardship and about making everything they did count. Beyond that, that was a war where everyone that I knew believed in what we were doing.

HUNT: You flew 25,000 feet above the ground for eight, 10 hours at 40 degrees below zero temperatures; your oxygen masks froze to your faces; there were no windshield wipers, so you had to stick your head out of the window if it was cloudy, and on most missions you took lots of flak from the Germans.

MCGOVERN: Well, it was a terrifying experience; but I kept my focus always on the fact that 10 people's lives were in my hands. I had the wheel of that airplane in one hand and four throttles in the other, and we would fly, as you said, for eight to 10 hours in tight formation. We couldn't have done that had it not been for the superb training we got from the Air Force before they sent us into combat.

HUNT: You received the distinguished flying cross.

MCGOVERN: That's where we had three engines either knocked out or blown out one way or the other and were losing altitude until we saw that little 2,200-foot runway. I knew that wasn't long enough to land a B-24 bomber, but it was all we had. Fortunately I hit the very end of the runway, and we got that plane stopped about 10 feet short of the end of the runway.

HUNT: Senator, many Americans remember you as the anti-war presidential candidate in 1972. And you, who consistently risked your life bombing the Germans, was striking. yet your opponents painted you as the naive softy, some even impugning your patriotism. You've said recently it was a mistake not to have talked more about your war record in that campaign. Why didn't you?

MCGOVERN: Well, I think it's difficult in a political campaign to talk about your own war record. It almost sounds like a bowse. So I think it's better to have Steve Ambrose tell the country about my war record than it is for me too talk about it at great length. He's the premiere historian of World War II, so I'll put my case in the hands of the historians rather than talking about it too much myself.

(END VIDEOTAPE)

SHIELDS: Al Hunt, isn't this a George McGovern that nobody saw some 29 years ago whether he ran for president?

HUNT: Well Mark, I disagree with George McGovern, I think he should have emphasized it more in 1972. But of course, the way to do it would have been a video biography with your acceptance speech. Unfortunately, that was at 2:00 a.m. in the morning for the Democrats. So I think given the debacle of Eagleton and the convention, it probably would not have made much difference.

Let me make one other point: Newt Gingrich sometimes derides McGovern Democrats as being antithetical to American values. This is a man who has served with great distinction and integrity for 40 years. Here's someone who's been married to the same woman for more than 57 years. And he's a genuine combat hero. That is American values.

SHIELDS: That's -- it's a very good point. And I just think it can't be driven home enough what he did -- the B-24 was a lumbering truck of a plane. It was subject to fighter plane attacks, to anti- aircraft. I mean, and to have three engines knocked out, Bob, that's an act of such courage and heroism.

NOVAK: This is a great book. I couldn't put it down, and...

SHIELDS: What about McGovern?

NOVAK: It is one story after another involving him.

I can never think of George McGovern the same way. Of course he was a genuine hero. He was a great leader. The navigator, who was an older man -- navigator/bombardier later said he was the best pilot in the Air Force. And he -- you know, it's just a wonderful story.

And I'll tell you one thing, why this wasn't a part of his campaign. I was talking to one of his young aides, and they said, you've got to tell this story. And the people around him said no, we're the peace candidate. He was bombing innocent people. This would go against -- he'd kill off our own supporters. He had a lot of bad people associated with that campaign, and that was -- it wasn't they didn't think of it. They rejected that option.

O'BEIRNE: I think it's such a shame that this courageous, selfless hero became the candidate of the 1960's self-indulgent, left- wing baby boomers. I agree with Bob; I think the Democratic Party in the late '60s, early '70s was in such an anti-war frenzy they didn't want to hear about the kind of characteristics and qualities that George McGovern had displayed during World War II.

SHIELDS: OK, I will say this, though: To have him disparaged by people who completely avoided and evaded the chance to serve their country is nothing but an indefensible outrage.

HUNT: Mark, he's writing a book now on the '72 campaign which, I think, will be interesting.

SHIELDS: Good. I look forward to it.

Next on CAPITAL GANG: "Beyond the Beltway" looks at Al Sharpton for president.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

"Beyond the Beltway": The Reverend Al Sharpton finished serving his jail term after his Vieques protests and announced the formation of an exploratory committee to study a possible campaign to be president of the United States.

(BEGIN VIDEO CLIP)

REV. AL SHARPTON, PRESIDENT, NATIONAL ACTION NETWORK: It is like when we were forced in the African-American community to be maids, to cook the meal for everyone else to enjoy while we hide in the kitchen while they eat what we prepared. That type of politic cannot go forward in 2004.

SHIELDS: Joining us now is Professor Christopher Edley of Harvard Law School, the founding co-director of the Civil Rights Project at Harvard and a member of the United States Civil Rights Commission.

Thanks for coming in, Chris.

PROF. CHRISTOPHER EDLEY, HARVARD LAW SCHOOL: Glad to be here, Mark.

SHIELDS: Al Sharpton -- should we take this, Chris, seriously, this Al Sharpton for president?

EDLEY: Well, not seriously to win a nomination or get elected, quite obviously. But I think he has it within his reach to have an impact on the content of a campaign. If he can raise a modest amount of money and stay visible, I think it's doable that he'll have an impact.

SHIELDS: And an impact in what sense? I mean, among African- American voters or larger...

EDLEY: Well, let's be clear: If he has an impact among African- American voters, and really is able to rally a substantial amount of interest and support from that community, then he'll have an impact on the Democratic race.

And I mean, if he can have the discipline to pick out a couple issues like education, like criminal justice, perhaps some foreign policy issues and stay focused on those, I think other candidates are going to have to respond to what he has to say if it's thoughtful and if he has some message discipline.

SHIELDS: Does he have a potential to be a Jesse Jackson?

(CROSSTALK)

EDLEY: Well, the cliche, of course, is that he's undergone a lot of growth over the last 15 years. But he has quite a bit more growth to do, I think, before he's really in Jesse's league.

Jesse has a policy breath as well as, I think, some stylistic skills that Sharpton doesn't quite have yet.

NOVAK: Chris, I assume if he's going to have an impact, it's going to be pushing the party to the left. Is that what the Democratic Party wants -- it has been...

EDLEY: Which Democratic Party?

NOVAK: Well, the one that elects presidents.

Since John F. Kennedy, the only Democrats elected have been from the old Confederacy. All the talk is that you've got to be in the center, you can't have extreme positions -- certainly not extreme positions on the left. If the idea is winning presidential elections, and he does have an influence on how people campaign for the Democratic nomination, he's bad news, isn't he?

EDLEY: Look, well let me make two points. No. 1 is I think that the diagnosis of the party drifting too far to the right and becoming an imitation of the Republican Party is one, frankly, that I agree with a lot. And there are a lot of folks within the Democratic Party who are afraid that the DLC's effort to really take over the party is actually bad news for the future of the republic, if not only the party.

But secondly, I think that if he picks out a few issues -- take education, for example. There's a way to talk about education and making sure that every kid has a world-class education that shouldn't be left-right. And if he can drive that home, it has the potential to mobilize quite a broad base including, I think, pushing the Democratic Party to talk more creatively about a range of issues -- education among them, criminal justice reform among them -- that I think could reach a lot of moderates.

O'BEIRNE: But Al Sharpton, who's been a New York phenomenon so far, has a history -- has an MO in New York. If he were to talk about the education issue...

EDLEY: I agree.

O'BEIRNE: ... he would somehow make it a plot by the white man -- poor education in minority schools to keep -- to oppress black people. I mean, that's his MO. He is a big fraud. She's as big a fraud as (UNINTELLIGIBLE) that he never...

(CROSSTALK)

EDLEY: I think that's rather extreme.

(CROSSTALK)

O'BEIRNE: He exploits racial division and he exploits racial suspicions. That's his MO, and that has got to be a poisonous thing for a larger black community to embrace. EDLEY: Look I think, first of all, that is the old Al Sharpton and the newer Al Sharpton is not as divisive and does try to do quite a bit of bridge-building. I think that people who are involved in or closely follow New York City politics recognize that. That's why you see a lot of mainstream politicians of every racial group courting his support and trying to talk to his supporters.

The question is: Does he have the message discipline to play in big-league politics? And I think that's a very tough question. If he stumbles in answers to questions, if he doesn't have an effective way about dealing with his baggage of the past, then he's never going to be able to get on-message and influence a debate in that way.

HUNT: I think everybody, anybody has the right to run. Steve Forbes ran, so anybody can run.

And I actually am closer to your point of view on Sharpton, probably, that Kate's. I mean, he's a very shrewd guy. But I also think he's a hustler. I think he's a political hustler. And I think even a lot of Democrats who do go see him think that.

And my question to you is: Do you think in the African-American community he's -- it's going to be seen more as a hustle, or will there be this sense of racial pride that will say, you know, we can send a message with.

EDLEY: Look, we're not monolithic. There will be a combination of reactions, obviously. And I think -- let me just say I don't quite know what you mean by hustler. If you mean, is he a self-promoter, then which politician or which cable television pundit is not a self- promoter?

(LAUGHTER)

SHIELDS: Certainly nobody on this program.

O'BEIRNE: Well, we're not very good at it, let's put it that way.

EDLEY: If you mean, does he have the substantive depth and reach to respond sensibly and thoughtfully on a wide range of domestic and international and economic issues, the answer is not yet, and he's got a long way to go. he has historically had a rather narrow agenda. The test for him now is can he broaden it out in a careful, thoughtful, disciplined way.

SHIELDS: Let me ask you: Did you ever notice -- listen to brother Novak's question first -- that conservatives condemn and deplore moderates and middle-of-the-roaders on their own side, but just admire them and cherish them in the other party. It's an intriguing development, you know. Anybody on their own side who's a moderate -- Lincoln Chafee is a traitor or whatever but, oh, I love those moderates and the middle-of-the-roaders on the other side.

O'BEIRNE: Al Sharpton's problem is not that he's liberal. SHIELDS: No but I just seriously want to ask you: Is there a likelihood that Al Sharpton's candidacy, or prospective candidacy, would generate other candidacies from elected officeholders? I mean, we've seen an explosion, literally, of African-American officeholders in the United States.

EDLEY: Look, part of the problem here is, I think, some people are saying -- have been saying this week that we ought to have somebody in the mix; too bad we don't seem to have a better vehicle than Al Sharpton, a better message-bearer than Al Sharpton.

Jesse Jackson, whom I admire a great deal, I think has evolved tremendously since when I -- when he was in the '88 campaign, when you and I first met, when I was Mike Dukakis' issues director working against, if you will, the Jackson campaign. Boy has he changed since then.

It's amazing how many...

SHIELDS: Changed in what sense?

EDLEY: He is -- I think he is, that the ratio of wheat to chaff, if you will, has really improved. His ideas, substantively, on what do in the economy and foreign policy and so forth, just light years beyond where he was in 1988.

So I think that we do need somebody to contest for the soul of the party, for the heart of the party. We can't just cede it to the DLC, especially if the key to the next election and elections to come is going to be who mobilizing the base, the black, the brown base.

NOVAK: Let me just talk about race for a minute, and that is that I think someday there's going to be an African-American president of the United States. I'm sure there is. And -- but he isn't going to look like Al Sharpton. He isn't going to be whining about cooking food and being maids and not being at the table and woe is me. He's going to be sound more like Colin Powell, without any apologies or any whining.

Isn't that the next -- isn't Colin Powell the next -- the model for an African-American president, not Al Sharpton?

EDLEY: In the fullness of time, you're absolutely right. But the immediate problem that the Democratic Party has is that when the doors are closed and a small group of people are sitting around the conference table on a campaign or in the White House, is that group inclusive? Does it reflect the full breadth of the party and, indeed, the country?

And all too often, the answer is no. All too often the answer is no, and Sharpton wants to speak to those excluded voices.

SHIELDS: OK Christopher Edley, thank you for being with us.

We'll be back with the "Outrage of the Week."

(COMMERCIAL BREAK)

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

Is there a double standard among my conservative brothers in the press? Consider this: On the July 28 CAPITAL GANG when former Congressman Pete Peterson, an authentic American hero of the Vietnam war and former congressman misstated a single syllable, good old Bob Novak called him a little, quote, "unsteady," unquote. That's OK, but what about the total conservative lockjaw when "USA Today"'s Judy Keen quoted the leader of the free world as saying this: "An expert in Texas trees described by Bush as an `arbolist' -- look up the word, he said -- "I don't know, maybe I made it up. Anyway, it's an arbo-tree- ist, somebody who knows about trees," ending quote.

Tell us, Bob Novak, would you say that President Bush was just a little unsteady?

Robert Novak.

NOVAK: Never.

In Sacramento, California a 27-year-old man murdered six members of his own family, including his pregnant wife and 3-year-old son, and yet the liberal establishment did not seem interested. Senator Chuck Schumer did not make a speech advocating gun control. That's because Nikolay Soltys did not use a gun. He used an ax on his killing spree. But nobody is advocating ax control. The problem is serial killers, not weapons. The real agenda of the liberals is to curtail gun ownership, and they demonstrated that this week.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Excellent point, Bob.

Republicans say they are determined to win over Hispanic voters, even at the expense of Navy training on Vieques and immigrants who obey our laws. But in the new York GOP primary for mayor, the party has lined up against well-qualified Herman Badillo, who switched to the GOP over issues several years ago. Rather than the veteran Puerto Rican politician, the GOP favors the wealthy Michael Bloomberg, a liberal Democrat until just months ago. Why should Hispanic voters give the GOP a chance when the party denies Herman Badillo his?

SHIELDS: Al Hunt.

HUNT: I want Bob to share his gun collection with us, Mark.

Just released FBI files show that long-time director J. Edgar Hoover for years waged a vendetta against the late Senator Al Gore Sr. Gore's offense? He had the temerity to once criticize the FBI. This is only the latest reminder of what a disgrace this Calvin Coolidge- appointed FBI director was. We ought to take Hoover's name off the FBI building, and while we're at it, throw away the high-heel pumps he loved to secretly wear.

SHIELDS: This is Mark Shields saying good night for the CAPITAL GANG. A special one hour edition of "TAKE FIVE" is 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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