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CNN LATE EDITION WITH WOLF BLITZER

Evans Discusses the Economy; Nickles, Feinstein Debate Tax Cuts; Kissinger, Brzezinski Discuss War Against al Qaeda

Aired January 6, 2002 - 12:00   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.
WOLF BLITZER, HOST: It's noon in Washington; 9:00 a.m. in Los Angeles; 5:00 p.m. in London; and 9:30 p.m. in Kabul, Afghanistan. Wherever you're watching from around the world, thanks for joining us for this three-hour LATE EDITION.

We'll get to our interview on the wartime economy with the U.S. commerce secretary, Don Evans, shortly. But first, here are the latest developments in the war against terrorism.

(NEWSBREAK)

BLITZER: And joining us now to talk about the administration's game plan for reviving the wartime economy is the U.S. Commerce Secretary Don Evans.

Mr. Secretary, welcome to LATE EDITION.

DON EVANS, SECRETARY OF COMMERCE: Thank you, Wolf. Good to be here.

BLITZER: The president made a very sweeping statement over this past weekend. We'll play that soundbite right now.

(BEGIN AUDIO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's going to be people that say we can't have the tax cut go through anymore. That's a tax raise. And I challenge their economics when they say a raise in taxes will help the country recover. Not over my dead body will they raise your taxes.

(APPLAUSE)

(END AUDIO CLIP)

BLITZER: You heard Senator Lieberman say that's not necessarily wise economic policy to eliminate one option if there is a need for some serious economic decisions.

EVANS: Yes, Wolf, I tell you, the president has been a public servant for seven years now. He served the state of Texas as its governor. He served president -- he's served as president of United States for the last year. He has consistently fought for the American taxpayer, the American worker, the American farmer to make sure that they get to keep the money that they earn.

And that's what he is saying. He says that I'm going -- he is saying I'm going to continue to fight for you.

BLITZER: But what if there is some dire economic situation, another terrorist incident, the war escalates, there is a need to raise taxes. What does he do then, having made that kind of bold statement that he made yesterday?

EVANS: He has consistently made the statement where he is on taxes. And he consistently told the American worker that, look, his responsibility as a leader of this country is to create the environment in which this economy can grow. And the way to do that is to decrease taxes, which will increase productivity in this economy.

And so, when he lays out an economic plan to continue to grow this economy, he understands how important it is that the taxes be lower rather than higher.

What he says to the American worker -- or what any economist would say to you is, look, if you are going to tax something, you get less of it. If you reduce the taxes on it, you get more of it.

So what this economy needs right now, is more productivity, more economic growth, more job creation.

BLITZER: You know, a lot of comparisons -- every newspaper in the United States today making the comparison to this statement the president made yesterday and the statement his father made years ago, "Read my lips, no new taxes."

Listen to what the elder, the former President George Bush said in 1988 at the Republican Convention.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Congress will push me to raise taxes and I'll say no. And they'll push and I'll say no. And they'll push again and I'll say to them, "Read my lips, no new taxes."

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Obviously a popular line. But two years later, he did in fact go ahead and raise taxes.

EVANS: That was then and this is now. And the president has said that he is going to continue to fight for the American taxpayer.

BLITZER: So -- but you're saying as the commerce secretary right now, under no circumstances while George W. Bush is president, could you foresee any increase in any tax whatsoever?

EVANS: I'm saying that I think the American -- this American president, President Bush, will continue to fight for the American taxpayer. He will continue to ensure that their taxes are lower rather than higher.

BLITZER: And taxes across the board -- not only income taxes, but energy taxes or gasoline taxes -- any taxes are not going to be increased?

EVANS: Taxes aren't going to increase under this administration.

BLITZER: OK. That's a bold statement that you just made yourself. And we'll see what happens in the next few years, obviously, as this president continues in office.

Senator Daschle, the Senate majority leader, made a very, very tough speech the other day, on Friday, in which he railed against the tax cuts that were pushed through by the president during his first year in office.

I want you to listen to an excerpt of what Senator Daschle had to say.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Not only did the tax cut fail to prevent a recession, as it's supporters said it would, it probably made the recession worse and left us with only two choices, both of them bad. We can shortchange critical needs such as homeland defense or we can raid the Social Security surplus.

(END VIDEO CLIP)

BLITZER: All right. Senator Daschle obviously throwing out a very major challenge to this administration, blaming the administration's tax cut proposals for a big chunk of this recession.

EVANS: Well, that's just -- I don't know anybody that -- any serious economist that believes that the tax cut has caused this recession. To the contrary. If anything, the tax cut has made this recession -- will make this recession shallower rather than deeper and shorter rather than longer.

And so -- I mean, I'm not sure what textbook, you know, he may be reading. But I'm not familiar of any serious economist that would say tax cuts would create a recession.

BLITZER: Well, but he's suggesting -- and we just heard him say it in that little excerpt that we ran from his speech -- is that the tax cuts mean less revenues coming in to the federal government right now, meaning that the options, he says, before you, the Bush administration, either to shortchange, in his words, critical needs such as homeland defense or raid the Social Security surplus, which is the Social Security trust fund. EVANS: Yes. But I mean, I think we need to understand what comes first. Does the surplus come first and then growth? Or does growth come first and then the surplus?

I mean, we would argue -- I would argue that growth comes first and then the surplus. So the idea of...

BLITZER: So dipping into the Social Security surplus right now -- Social Security trust fund is a good idea, an essential idea right now?

EVANS: No, I -- well, what I'm saying is tax cuts were a good idea and are a good idea. And it's tax cuts that will stimulate this economy. It's tax cuts that will get this economy growing again. It's through tax cuts that we'll increase productivity in this economy. And that's the key to surpluses in the out years is economic growth.

BLITZER: Is the Bush administration determined right now to -- because, as you know, Butch Daniels, the budget director, was on this programs a couple of weeks ago. He said there is going to be deficits now throughout the remainder of the four-year Bush administration -- the next three years, no surpluses envisioned.

EVANS: Well, you know, look, I think we need to focus on today and what's happening right now. I know there is Americans hurting across this country. We've had a million people out of work since the president put forth his stimulus package some three months ago now. And, you know, exactly what the budget is going to be over the next three to five years, you know, is pure speculation at this point.

What we need to focus on is get this economy moving again.

BLITZER: Unemployment, as you know, the most recent numbers, 5.8 percent in December, very high relatively speaking obviously. And as the president likes to say, 5.8 percent, but for those who are unemployed, it's 100 percent unemployment right now.

There are other signs, though, suggesting the economy is beginning to make a recovery and that there's some positive trends unfolding right now. There's a cover story to that effect in U.S. News and World Report in the coming issue.

What is your sense right now? Is the economy beginning to turn around?

EVANS: You know, Wolf, I would say this, that this recession began officially, I guess, back in March. And I would say we're closer to the end of the recession than we are the beginning of the recession.

There are signs. Retail sales look pretty good in the fourth quarter. Auto sales look strong. Home sales look strong. And so there are some positive indicators out. Inventories have continued to come down, of course. And so there are the underpinnings there right now for this economy to begin to grow again. And so, look, I'm optimistic that this recovery will begin sooner rather than later, but it's important that we pass a stimulus package or an economic recovery package or an economic security package.

BLITZER: They're all the same basically, but they're different names.

By the way, let me ask you, why is the administration no longer calling it an economic stimulus package as opposed to an economic security package?

EVANS: Well, let me just say that, you know, the president's been talking about economic security of this country for the last three years out on the campaign trail and again as president. I mean, he's -- the economic security package is a broad package. I mean, there's an energy policy, there's trade promotion authority. There is now, of course -- and there's a tax cut in the Spring.

But now we're focused on the hear and now and what are we going to do to get this economy moving again so we put people back to work.

BLITZER: All right. So you -- when the Congress reconvenes in the next few weeks later this month, the administration will once again try to get through an economic stimulus package.

EVANS: Yes, absolutely.

BLITZER: What will be the single most important issues that you want to be included in that plan?

EVANS: Well, tax relief and support and help for those who have been dislocated because of the September 11 attacks and this economic downturn. We must help those people in need right now.

BLITZER: The Congressional Budget Office, nonpartisan Congressional Budget Office released a study showing various elements in the economic stimulus package that may have an impact short term, small impact, a medium impact, a large impact.

When they talk about a large impact -- immediate, large impact in helping the economy recover they point to two issues: an immediate payroll tax holiday or a sales tax holiday. That would have a dramatic, immediate impact, large impact on economic recovery.

Is either of those issues something that the Bush administration would favor?

EVANS: You know, listen, you know, we went through -- the president laid out his plan in the fall, back in October. The House passed it quickly. The Senate debated it and discussed it and talked about different kinds of tax relief, talked about different ways of helping those that are unemployed or have been dislocated. We were very, very close to a decision or to a bill coming out of the Senate. It didn't happen.

And what needs to happen is the Senate needs to come back, they need to sit down and come together on passing a stimulus bill, go into conference in presenting something to the president.

I mean, I'm not going sit here and debate the various aspects of the stimulus package on your show. What I will say, though, what's important for the Senate to do is coming back and sit down and pass a bill.

BLITZER: The -- some of the more controversial aspects were the House legislation which the Bush administration did not necessarily support, the repeal of a corporate minimum tax alternative, alternate minimum tax. That's something the administration's not necessarily demanding right now, right?

EVANS: That's correct.

BLITZER: And as far as faster cuts in individual tax cuts, you do still want to do that, including a high income?

EVANS: Well, that's what came out of the House bill, sure.

BLITZER: And want that, any final bill to include that because, as you know, the Democrats -- most Democrats...

EVANS: Well, the House didn't include the high income.

BLITZER: But you do want that.

EVANS: The -- what the president is saying is the Senate needs to come together, bring a bill to the floor, debate it, vote on it, go to conference and send the bill to him.

BLITZER: Let me switch gears, because we only have a short time left, to talk about this Enron, this energy company that just went belly up, went bankrupt, causing a lot of pain for workers, their investors. They lost a ton of money.

Senator Lieberman was on one of the shows earlier today, and I want you to listen to what he said about an investigation.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: This is an unprecedented event, the largest bankruptcy in American history. And unless we look at it thoroughly and ask all the questions, the danger is it's going to happen again and a lot more average folks are going to lose a lot of hard-earned money.

(END VIDEO CLIP)

BLITZER: Does the administration support a full-scale investigation, what happened at Enron?

EVANS: I'm certainly supportive of what Senator Lieberman is doing and the administration is.

And, look, I think this was a very serious situation. Many, many people lost their life savings. Something went wrong, and we need understand why.

BLITZER: So there should be a full-scale congressional investigation and other federal investigations, too?

EVANS: I think we need to continue to look at it and analyze it. I know that Secretary O'Neill has been looking at it.

BLITZER: OK. Mr. Secretary, thanks for joining us on LATE EDITION.

EVANS: Yes. You bet.

BLITZER: Welcome.

EVANS: Thank you, Wolf.

BLITZER: And when we come back, we'll get the Senate view and we'll talk with two key senators about what's in that Bush economic proposal, as well as the war in Afghanistan. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We're joined now by two key members of the United States Senate. With us here in Washington, the Republican whip, Don Nickles of Oklahoma. And in San Francisco, Democrat Dianne Feinstein of California. She is a member of the Senate Select Intelligence Committee.

Senators, good to have both of you on the program.

Senators, I'm going to get to the war in Afghanistan in a moment, but I want to begin on taxes.

We just heard Secretary Evans, Senator Feinstein, make the case for tax cuts, in contrast to what we heard from the Senate majority leader, your Democratic leader, Senator Daschle, early on Friday.

You were one of those 12 Democrats who voted for those tax cuts last year. Did you make a mistake?

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I don't think we did. Twenty percent of the Democratic Senate caucus voted for the tax cut. Over $1 trillion dollars of that tax cut has yet not gone into effect.

My view is that we ought to stay the course.

The rebate portion of the tax cut, of course, has gone into effect.

I was also one that voted to support a trigger, which would give one the opportunity, should the surplus deteriorate, to be able to slow down the tax cuts.

But the impact of the tax cut has not yet been felt. I think that's a very important point to make. So I don't think it worsens the recession at all.

I think what had a tremendous impact in all of this was 9-11, because it injected an element of fear into those people who might otherwise spend, so that they were kind of turned away from spending and put into a much more conservative mode. They were worried about their job. The economy deteriorated rapidly.

Now that is beginning to reverse itself. And there are many who think it is bottoming out.

So, I'm not sorry. I think it's good policy to let people keep more of their money.

BLITZER: Well, on this issue, Senator Nickles, Senator Feinstein totally disagrees with her leader, the Senate majority leader, Tom Daschle, who made this point in his speech on Friday. Listen to what he said.

(BEGIN VIDEO CLIP)

DASCHLE: September 11 and the war aren't the only reasons the surplus is nearly gone. They are not even the biggest reason. The biggest reason is the tax cut.

(END VIDEO CLIP)

BLITZER: Well, he makes the point that, in terms of the surplus, what it costs that tax cut the first year, or the second year, is the biggest reason why the budget surplus that the Republican administration inherited has disappeared.

NICKLES: Well, I think Senator Daschle is entitled to his own opinion, but he's not entitled to the facts. The facts are that the recession has caused about 68 percent of the reduction of the surplus this year.

The greater, the balance of that, the other 32 percent, most of that has been new spending. We have had spending this year go up about a hundred billion dollars. The tax cut this year was $38 billion.

And so we have had -- you know, when Senator Daschle said we need be fiscally responsible, I'm thinking, well, wait a minute, there is a lot of things he was pushing in the last month that...

BLITZER: But a lot of that expense, extra spending was to pay for the homeland security, the military, the results of September 11.

NICKELS: Some of it was, some of it wasn't. I mean, we just we just passed a bill -- $15 billion for the railroad industry that I thought was very suspect. He was trying to pass $15 billion on homeland security that president was saying, wait a minute, give us another month. Let Tom Ridge, Governor Ridge come up with recommendations.

There is a couple of hundred billion dollars of ideas out there that some people think, instead of just grabbing $15 billion, let's have some input. Let's have some coordination. Let's have a budget. Let's maybe reduce spending in some other areas to offset for some of the money we'll need for homeland security, for national defense. So, let's have a budget.

And I don't think the Congress has been very fiscally responsible when it comes to spending in the last couple of years. And so, I hope Democrats and Republicans all unite and say, let's be fiscally responsible. I think it would be very healthy.

BLITZER: Senator Feinstein, it looks like, and you can correct me if I'm wrong, it looks like the bipartisan approach, the unity that was developed as far as prosecuting the war in Afghanistan, the war against terrorism continues to hold, obviously. But, when it comes to domestic issues, when it comes to the tax cuts, for example, other economic issues, the old-fashioned partisanship is back, especially during this new election year 2002.

FEINSTEIN: Well, I think there's a lot of truth in what you're saying, Wolf. I think it's too bad, frankly, because I think the enemy that we are fighting is much more a threat to our way of life than many people believe.

And I think the unity between the two parties and the unity of this nation, and country rising above party, is really the most important thing we can do right now.

I spent my time really reading everything I get my hands on, in the public domain about al Qaeda, about the history of terrorism, about how these movements are now interrelating, about how they have set up advanced fronts. And I think we are into something that is much deeper and wider than most people think, and are going to go on for much longer period.

So I think, as Democrats and Republicans, the most important thing we can do is come together and stand as one people.

Now, having said that, the economics are worth debating. Whether there is another stimulus or not I think is not necessarily going to retard the recovery, because I think we're -- the recovery is going to happen. I think production is going to go up.

I think, you know, we have spent an additional amount of money -- the bailout of New York, the bailout of airlines, additional military spending, the railroad spending and so on and so forth. And I think some of that we've got to taper down.

BLITZER: Let me bring back Senator Nickles.

Are you at all concerned about that very flat statement that the president made, reiterated by Secretary Evans a few minutes ago, that the president says over his dead body, no new tax increases, there's not going to be any more down the road.

NICKLES: No, I agree with the president wholeheartedly. I'm applauding him. I think the president is showing leadership. He's showing the solution to the recession isn't in a tax increase. And although Tom Daschle didn't call for it, he almost did. I mean, he basically said because of all of our woes, it's not increased spending, it's not Congress, it's basically the president and his tax cut.

The tax cut -- and I compliment Senator Feinstein who supported it -- that helped us get out of this recession. And tax increases in the future aren't going to help us create jobs.

And so we need to work together. And Senator Feinstein is right, we need to -- and we have worked together in fighting the war on terrorism. Senator Feinstein also has the bill dealing with border security that Senator Kyl and Senator Brownback others have done. We need to pass that. We almost got that done. So that's on our list of things we need to take up pretty early next year.

But, you know, to be -- really, Senator Daschle was almost declaring war on the president on the domestic front. Says I'll support you internationally, but on the domestic agenda I'm going to fight you every way I can.

He said he'd support an energy package, but oh well, he's really implying, well, if you have ANWR in it, we're going to filibuster it. He says we want trade promotion authority, but then he says, well, we also have to have new entitlements...

BLITZER: So are you saying that he's back to the old politics as usual?

NICKLES: When it comes to domestic agenda -- I listened to Senator Daschle's speech last night. And when it comes to the domestic agenda, I basically think Senator Daschle was trying to say, I'm the new Democrat leader. He's acting like he has 65 votes in the Senate, like LBJ did. He doesn't have 65 votes; he has 50 votes. And like he is going to be an equal counterpart to the president in trying to thwart his domestic agenda.

He's done it to some extent. He stopped -- Senator Daschle stopped the stimulus package that we could have passed this past year. We should have passed an energy package. We should have passed trade promotion authority. And unfortunately, Senator Daschle was successful in stopping those. Hopefully we'll get those done in the next couple months.

BLITZER: All right, we'll pick this up in a moment. We're going to take a quick break.

Stand by, Senator Feinstein. We're going to get back to you in a minute, as well.

But when we come back, we'll have a lot more to cover for both of our senators, including phone calls. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We're continuing our conversation with the Oklahoma Republican Senator Don Nickles and the California Democratic Senator Dianne Feinstein.

Senator Feinstein, we have a caller from North Carolina. Let's take that question.

Go ahead, please, North Carolina.

CALLER: Hello?

BLITZER: Yes, go ahead.

CALLER: I'm sorry, this question was for the superbly intelligent Senator Nickles, actually.

BLITZER: All right. This must be one of your relatives, Senator Nickles.

(LAUGHTER)

CALLER: Actually, I'm a former employee and one of his biggest fans.

Hi, Senator, it's Laurie Goen (ph).

NICKLES: Hey, Laurie (ph), hi.

CALLER: I was wondering -- I guess my question is, other than how we get you back the majority, is what can Americans do every day to help with the surplus?

NICKLES: Well, I think it's important to get the economy going, and I think that's what Secretary Evans was talking about earlier. The president has taken the initiative. He wants to have the stimulus package -- economic security package, as it's called now -- to really help America get going.

September 11 was a real hit, and he proposed a package on October the 4th. The House has acted on it. I think we've made some changes in the Senate. We were very close to getting it done before we adjourned. Senator Daschle really didn't want to have it before the Senate. Now he's proposing some changes.

But, you know, if we're going to start re-opening it, I'd like to see capital gains tax reduced from 20 percent to 15 percent, effective January 1. I think that would help the economy. The economy is hurting.

But Secretary Evans was right. If we get the economy moving, that will generate the surpluses.

BLITZER: But let me ask you this question, Senator Nickles. Are you at all concerned that this president will have to do what his father did and sort of eat his words, as far as no tax increases? NICKLES: No, I'm not. I don't think he needs to eat his words.

You know, you talk about -- let's look at this in comparison with where we were several years ago. President Daschle was bragging about the tax increases...

BLITZER: Senator.

NICKLES: Senator Daschle -- Oh, he was running for president.

(LAUGHTER)

Senator Daschle was bragging about the tax increases in '93 that President Clinton pushed through. Well, the maximum rate when President Clinton was elected was 31 percent. He took it up to -- personal income tax -- 39.6 percent. President Bush, with his great, big tax cut that Senator Daschle says is weighted toward the wealthy, reduces that eventually to about 35 percent. So still, even higher than it was with President Clinton.

So I think President Bush is very committed to allowing taxpayers to keep more of their own money. And I think if we do that, we'll be helping the economy.

BLITZER: Senator Feinstein, on this whole issue investigation of Enron, this huge energy company that's gone bankrupt now, causing enormous pain to a lot of investors, a lot of workers over there -- we have an e-mail question from Lorena (ph) in Oregon.

She writes this: "Is an investigation of the Enron debacle possible in this present political climate? We've wasted so much money investigating Whitewater and Monica and the damage to many people with so much less that those hurt by Enron."

FEINSTEIN: Oh, I think it's very important that we do this. As has been said, the largest bankruptcy in the history of the nation. And because so many of the transactions were apparently off budget, there was no transparency, I think that takes a real look. And I'm delighted that Senator Lieberman's committee is going to be looking at that.

I'd like to just address something that Senator Nickles just said, though. And this is where I really disagree.

I think it's extraordinarily important that we don't take an absolute position right now. I think the tax cut that was passed in June needs to go into effect. The bulk of it has not.

I think to put an additional tax cut on top of this one would really be a grave mistake in view of the deteriorating surplus. As a matter of fact, I think the chances of getting an additional economic stimulus package through the Senate are slim and none, frankly, because those of us that voted for the first tax cut recognize that the bulk of it hasn't gone into play yet.

And if we were to do anything, it ought to be, right now, to see that that surplus is stabilized and to try to see that the country -- the productivity of the country picks up.

There's much in that first tax cut that's good. For example, additional child care credits for people. That's very helpful, particularly in a state like mine.

The upper-income tax cuts, I frankly think are less related to an economic reversal in the sense of building a new recovery than the remaining parts of it.

So I think we need to see if it gets into play, and then you can look at additional things to do. I think it is important not to take an absolute position.

BLITZER: Senator Nickles, let me get back to this Enron collapse, this bankruptcy of this huge company.

There are some already suggesting, some Democrats I should say, suggesting that this could be for the Bush administration, given the close political collections between Enron executives and the Bush campaign, a lot of Republicans, that there could be, as part of an investigation, it could be the Bush administration's Whitewater, if you will. What the Whitewater investigation was for the Clinton administration this could be for the Bush administration.

You know this energy issue quite well. You're from Oklahoma. What do you say about that?

NICKLES: Well, I think the analogy to Whitewater is absurd, absolutely absurd.

I think we need to investigate what happened. Why was there some discrepancies between what the accounting firm said and what was reported? There is a big story in The Washington Post today talking about Microstrategies, a firm in Virginia who had some accounting changes. And all of a sudden their stock went from 300 to 30, and now it's at four. So there was millions and millions of dollars lost in that as well.

And some of that, again, hey, how much are people taking projected future income, discounting it and counting that as realized in the current year? I think Microstrategies did that. Maybe Enron did that with some of these contracts that weren't directly connected, I don't know.

So we need to find out. We need some accounting standards. And we need to see where...

BLITZER: But you're not worried about the political -- potential political fallout given how the close ties between Enron and a lot of Bush administration officials, a lot of Republican leaders?

NICKLES: No, I'm not. I mean, Enron contributed to Democrats and Republicans. I don't think that has anything to do with it. I think what we need to do is find out what went wrong...

BLITZER: All right. NICKLES: ... and, you know, get the bottom of that and make sure that the accounting standards are such that they are going to be adhered to.

When investors see reports that companies made so much money, they need to know that they made it in that year, not somebody's wish that what they were making in the future.

BLITZER: A little bookkeeping error or...

NICKLES: Funny math.

BLITZER: Fuzzy math, as some used to call it.

Senators, stand by, we're going to take another quick break.

When we come back, we'll shift gears. We'll talk about the war in Afghanistan, the search for Osama bin Laden and Mullah Omar. We'll be back with Senators Nickles and Feinstein right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're talking with two key members of the United States Senate, Republican Don Nickles of Oklahoma and Democrat Dianne Feinstein of California.

Senator Feinstein, you're a member of the Intelligence Committee. Your chairman, Bob Graham, earlier today suggested that perhaps Osama bin Laden has indeed escaped Afghanistan, fled. Senator Edwards, another member of the committee, quoting the Uzbek intelligence chief as saying that he probably did get out of Afghanistan into Pakistan.

Based on what you know, are those senators probably right?

FEINSTEIN: Oh, I think they probably are. I've said this before.

I think we underestimate, first of all, the fanaticism of these people. I think we underestimate what their goal is. I think we underestimate the amount of planning that has gone into this. I think it's remote that a $25 million reward is going to get anyone to turn him in.

I think we have to better understand the goals of this whole movement, which essentially is to strike at all infidels and establish a religious, fanatical Islamist government that would sweep through Southern Asia into the Middle East. And I truly believe that's a goal.

As a member of Intelligence, one of the things I've been most surprised at is how much information is in the public domain. How many books and periodicals really have a depth of background of what's been happening for the last 20 or 25 years.

And I've come to realize that we must really sharpen and improve our intelligence, because it is true, there was an enormous intelligence failure that let this thing happen. And we've got the probability out there now of other major events happening, and maybe we can, maybe we can't stop them.

But I think we have to begin to understand the nature of the enemy. And I think we have tended to underestimate it up to this point, to be frank with you.

BLITZER: Senator Nickles, is that your understanding as well, that Osama bin Laden probably is no longer in Afghanistan?

NICKLES: I don't really know. I don't doubt -- I mean, that's very much a possibility. But I don't think this administration's underestimating Osama bin Laden. And I agree with Dianne that I think in the past this whole country, maybe the whole world has not paid enough attention to terrorism.

But this administration, certainly after September 11, has been energetic. And their coalition they put together, the military effort, the success they've had in Afghanistan has been phenomenal.

It won't be complete until we get bin Laden, until we get Omar as well. So, those efforts need to continue.

But it's phenomenal, the success that they've had militarily, and I think the administration should be complimented for their efforts.

BLITZER: Do you believe, Senator Feinstein...

FEINSTEIN: Don, let me just clear something up. I wasn't saying the administration underestimated them. Not at all. I'm saying, I think everybody has underestimated them as a people.

NICKLES: OK.

FEINSTEIN: I think that the coalition that's put in place is fine, but I think this group wants to displace the Egyptian government, the Saudi government, the Turkish government. I think they could strike anywhere at any time. I think it's a very serious thing.

And I think one of the things that has interested me was how much more information is available in the public domain that most people don't know about.

There's one book for example, Yossef Bodansky's book on Osama bin Laden. This man has studied him for some 25 years and once you read it, I think you realize that what we are up against is something very major, very substantial and something that's unprecedented in American warfare.

BLITZER: Senator Nickles, a lot of people are already looking ahead after Afghanistan. Whether or not the U.S. captures Mullah Omar or Osama bin Laden, they're looking, where else should the U.S. strike against terrorism. There is commotion, there's some agitation that Iraq should be the next target. We asked a poll late last month, a CNN-"TIME" magazine poll asked, do you favor U.S. ground troops in Iraq? Seventy-three percent of the American public said yes; 22 percent opposed U.S. ground troops being used to try to overthrow Saddam Hussein in Iraq.

Are you among those calling for a strike against Iraq as a possible next target?

NICKLES: Well, I think the one of the stupidest things we could do is to be making public calls for where we should go after terrorists. I think we should go after terrorism as President Bush said, where terrorism lies. And when we find terrorist cells, when we find people who are trying to put weapons together to kill innocent people, Americans or allies of ours, I think we need to be aggressive in going after terrorism.

Hopefully, you would see some changes in behavior in Iran, Iraq and Somalia and other places that have harbored terrorists in the past. They realize now we have a president who's very forceful and means exactly what he says, that we're going to go after terrorists. And maybe they will quit harboring terrorists; maybe they'll quite financing terrorists. Maybe the money for terrorists will dry up.

I think Dianne's right, we've got a real problem here. There's a lot of people that want to have an Islamic world or something, that they're going against America. They're going against basically freedom across the world.

We need to be energetic, but I think it would be kind of foolish to say we're going to target somebody or an individual country. We need to find out where those terrorist cells are and go after them.

BLITZER: Senator Feinstein, an article in today's "New York Times," a writer writes this, saying: If there is a moment to get him, referring to Saddam Hussein, proponents contend, it is now. The war on terrorism has generated a global momentum against purveyors of terror. Further, if Mr. Hussein is not crushed now, he may never be.

Where do you stand on this notion of going after Saddam Hussein?

FEINSTEIN: Well, Saddam Hussein is an evil man, there's no question. And there's no question that he equates success with survival. I agree with that.

Having said that, whether this should be the next step the United States takes or not, I'd certainly leave up to the administration.

There are a number of places that we can go. The Hezbollah network, the Hamas network, what's happening in Somalia, in various other places.

So I happen to agree with Senator Nickles. I think it's a big mistake to announce on television what one thinks in this regard. I think this decision has to be made on a very careful basis and on a basis that we can move rapidly and be successful where we do strike.

BLITZER: OK, Senator Feinstein, Senator Nickles, we have to leave it right there. Thanks to both of you for joining us.

And when we return, Bruce Morton.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: I looked up at one point, and CNN was carrying a trial live. Not a terrorist trial, mind you, but an ordinary manslaughter trial.

(END VIDEO CLIP)

BLITZER: Are the media finally getting back to normal?

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Now Bruce Morton shares some thoughts about what he views as a very welcome development.

(BEGIN VIDEOTAPE)

MORTON (voice-over): The war on terror isn't over or nearly over, of course. But something encouraging happened this past week. We newsies seemed to have rediscovered normality. I looked up at one point and CNN was carrying a trial live.

(BEGIN VIDEO CLIP)

CNN CORRESPONDENT: Judy, four witnesses have testified, today...

(END VIDEO CLIP)

MORTON: Not a terrorist trial, mind you, but an ordinary manslaughter trial about violence at a children's hockey practice. When was last time you saw something like that on all-news TV? Well, maybe not as long ago as O.J., but it has been a while.

And doughtiness is back. Everybody reported that school board in the Eastern York School District in Pennsylvania had voted 7 to 2 to keep using Harry Potter and Sorcerer's Stone to teach 6th-grade kids about fantasy books.

A parent, a preacher and a teacher had complained the book was teaching witchcraft. This, of course, not true. Honestly, the spells don't work. I have tried levitating editors I don't like and flat failed.

Anyway, parents who didn't want their kids to read that book may have poor taste in fiction, but they're safe, too. Their kids will be assigned to a different class.

What else? Everyone carried stories about New York's new mayor and the city's financial problems; terror-related, maybe, but budget stuff at its heart. The city celebrated New Year's, although there was more security than usual.

The president took time out from the war to visit his ranch and inspect his official portrait. Good likeness? What do you think?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And if you look across the street, you can begin to see now the snow is sticking.

(END VIDEO CLIP)

News media found room for other stories it had nothing to do with terror. Snow in the south always fun, those pictures of drivers battling half-inch drifts. Snow in Buffalo, where they really speak snow; and experimenting cloning pigs that may make it easier to transplant organs; football games and how mixed up the Bowl system is.

All sorts of things, in fact. No Johnny-one-note war on terror this week. Stories about terror, of course, the war isn't over. But they had to share time and space with news about all the other things that were happening in the normal, unterrified world.

Tom Daschle did get one more letter, but it was a fake. And the Senate eventually probably will reopen its Hart Office Building. The feds may be the last to rediscover normality, but they will, eventually.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thank you, Bruce.

And up next, the second hour of LATE EDITION. We'll check the top stories. Then we'll talk with the former Secretary of State Henry Kissinger, the former national security adviser Zbigniew Brzezinski on the impact of the war on President Bush's international policy. And three prominent attorneys will join us to debate the U.S. legal system's role in the war on terror.

It's all ahead in the next hour of LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We'll hear from former Secretary of State Henry Kissinger and former national security adviser Zbigniew Brzezinski in just a few minutes. But, first, here's Carol Lin in Atlanta with a quick check of the hour's latest developments.

(NEWSBREAK)

BLITZER: The war against terrorism, meanwhile, has forced some major shifts in the Bush administration's international policy. Joining us now with some perspective, two former presidential advisers. In Kent, Connecticut, the former Nixon secretary of state, Dr. Henry Kissinger. He was also secretary of state under Gerald Ford. And here in Washington, the former Carter national security adviser, Dr. Zbigniew Brzezinski.

Gentlemen, welcome back to LATE EDITION.

And, Dr. Kissinger, let me begin with you, a poll that CNN and "TIME" conducted. Take a look at these numbers. When we asked the American public, what was the main problem facing the country right now, in September, only 8 percent after the September 11 attack said it was the economy recession; 26 percent say now, it's the economy, recession.

Look at terrorism, it's gone from 45 percent as the main problem. Almost half of the American people in September; only 25 percent think it's the main problem facing the country right now.

Does that suggest the perception out there is that the war in Afghanistan, the war against terrorism may be over?

HENRY KISSINGER, FORMER SECRETARY OF STATE: The perception may be that the war in Afghanistan is over, and I think the major part of it is over. But the war against terrorism is not over. And if we were to quit now, we would face the same problem in perhaps an even more acute form in a very measurable time, so...

BLITZER: How does the Bush -- well, let me bring in Dr. Brzezinski and ask him how the Bush administration should deal with this perception that Americans are getting back to normal, that the war against terrorism may be taking a back seat, when, as Dr. Kissinger says, the war is by no means over.

ZBIGNIEW BRZEZINSKI, FORMER NATIONAL SECURITY ADVISER: Well, the president had repeatedly stressed that the war is going to be a long- term affair. And the American people, I think, realize this is, indeed, an enduring challenge.

The reason for the drop in anxiety, I think, is related to the fact that there wasn't the so-called second strike. There was widespread fear after the first strike that there would be follow-on massive attack, and that has waned. If it should reoccur, those percentages are going to zoom up dramatically.

BLITZER: But, as you know, Dr. Kissinger, having studied this issue of terrorism for a long time, the record of al Qaeda and Osama bin Laden's organization is that he usually has at least a year or sometimes even a two-year interval between kinds of strikes.

The question is this: Does he still have the capability, at this point -- he's on the loose, he may have escaped Afghanistan, as we heard earlier today. Does he still have the capability with his sleeper cells out there of launching a major strike against U.S. interests? KISSINGER: Well, to the extent that he's deprived of territorial safe havens like Afghanistan and to the extent that he's on the run, his capability of planning these things, understood (ph), is obviously diminished. So there may be a bigger interval between attacks.

We should also not think of these terrorist attacks as only focused on bin Laden. This is sort of an alliance of various terrorist groups that have been financed by bin Laden. And I believe that they are now reorganizing and that, within a measurable time, they will plan another attack just to show that they are still in business.

BLITZER: Dr. Kissinger, which other groups do you associate with that loose alliance that you're talking about?

KISSINGER: Well, there are a number of countries. The Egyptian Jihad is one of the components of the al Qaeda network, and there are headquarters of various terrorist groups all over the Middle East.

And as we go to phase two of our campaign, we will have to try to eliminate these various groups, hopefully with the cooperation of the local government but, if not, we may have to do it by military action.

BLITZER: Dr. Brzezinski, Hamid Karzai, the leader of Afghanistan, the new interim leader, was on Meet the Press earlier today. And he spoke about the difficulty of finding Osama bin Laden in Afghanistan. Listen to what he had to say.

(BEGIN VIDEO CLIP)

HARMID KARZAI, INTERIM LEADER OF AFGHANISTAN: He's one man, and one man can easily, you know, hide, can easily take a motorbike and go places. I take this example from my own entry into Afghanistan when the Taliban were there in all force, but I managed to move into Afghanistan and they could not find me for months.

(END VIDEO CLIP)

BLITZER: Yet, there are some who are suggesting that perhaps Osama bin Laden, Mullah Omar are making deals with other warlords, bribing their way, getting out, while they have these so-called cease- fires.

What's your sense? Is it back to business as usual in Afghanistan?

BRZEZINSKI: Well, my sense is, first of all, that we are make big mistake in over-personalizing this issue. Even for the last five minutes, we have talked about Osama, Osama, Osama.

The issue is much bigger than he. He, in some way, is a symbol. He may be the catalyst. He, I think, has been pretty much removed from the scene, insofar as Afghanistan is concerned. He's either dead or in hiding. His operation in Afghanistan has been massively disrupted. And yet, the phenomenon of terrorism goes on.

So we shouldn't make the standard of success or failure, whether we get Osama are not.

BLITZER: But having said that, as far as big chunks of the American public out there, that's the way they're going to look at the situation.

BRZEZINSKI: Well, yes. But, you know, to some extent, it's the way the American public is presented with this picture and the emphasis, every single day, is on Osama.

I think the emphasis has to be on the disruption of the terrorist networks, and the really dangerous ones are the ones that operate in Western Europe and in the United States.

Even that horrible attack of September 11 was planned largely in the United States and in West Germany. And the remnants of these cells may still be operating -- that we do not know. And this why so much vigilance and continued effort is needed.

But let's not over-personalize it, because that's a big mistake.

BLITZER: I think on that point Dr. Brzezinski makes, Dr. Kissinger, the Bush administration appears to have shifted from the early days when they made a big publicity campaign, the most-wanted list, international most-wanted list with Osama bin Laden right at top, $25 million bounty, if you will, for Osama bin Laden.

Is Dr. Brzezinski right that there shouldn't be this much emphasis on this one individual?

KISSINGER: Yes, I completely agree with Zbig. This is not an issue of one individual. This is an issue of a series of networks that very subtly are using the legal framework of the countries in which they are host -- which they are guests. And they are using the modern technology, the Internet, very skillfully.

Bin Laden is not in a position now to plan any major operations by himself. He's a fugitive. And our strategy ought to be to get as many of these cells on the run as we can so that they have to spend their energy surviving rather than planning attacks.

But this is not something that can be focused on one man.

BLITZER: All right. We're going to take a quick break.

We have a lot more to talk about, including phone calls for Dr. Henry Kissinger and Dr. Zbigniew Brzezinski. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We are talking about the challenges the United States is facing in the war on terror with the former Nixon and Ford secretary of state, Henry Kissinger, and former Carter national security adviser Dr. Zbigniew Brzezinski.

Let's take a caller from Tennessee. Go ahead with your question, please.

CALLER: Good afternoon, gentlemen. I have a question that has bothered me for I don't know how long.

Why do we continue to give foreign aid when we know that the foreign aid does not go where it should go, that it is used by people that are technically biting our hand? More than anything else I remember the Northern Alliance, we backed them. I think probably we have been responsible for ensconcing a lot of people that are terrorists against us.

That's one question I would like for someone to address. Thank you.

BLITZER: Dr. Kissinger, as you know from your time in government and since, foreign aid is not necessarily a popular concept in the United States, especially during rough economic times.

KISSINGER: Well, it's a good question, because probably the problem arises -- aside from the question whether we should give any foreign aid, the problem arises when we give aid to groups that later on turn against us.

For example, in the case of Afghanistan, we probably helped the Taliban get started. And we were right to do so because our principal objective at that time was to weaken the Soviet hold on Afghanistan and the Soviet position in the world.

But what we do need is to think about the long-term implications and to see, in what way some of these groups might develop.

Theoretically, and in practice usually, I think America has to have some kind of foreign aid program in order to relate itself to other parts of the world that are much less fortunate and that are in process of development.

But there is a obvious limit beyond which development depends on the countries themselves and not on our assistance.

BLITZER: Dr. Brzezinski, the whole issue of Afghanistan is causing a lot of concern out there. Some Americans are concerned the U.S. is getting sucked into a long-term, not only economic commitment to Afghanistan, but a long term military presence in Afghanistan; something the Bush administration earlier on opposed as far as nation- building was concerned.

The president when he spoke on September 25 said this. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: This is an administration, we're not into nation-building. We're focused on justice. And we are going to get justice. It is going to take a while probably, but I'm a patient man. Nothing will diminish my will and my determination, nothing.

(END VIDEO CLIP)

BLITZER: How long do you think the U.S. is going to maintain military forces in Afghanistan?

BRZEZINSKI: Well, first of all, let me just make one preliminary point. The United States did not contribute to the rise of Taliban. The Taliban arose roughly 15 years after the Soviet intervention of Afghanistan and five years after the war ended. The real contributor to the rise of the Taliban was actually the Soviet Union, which, by pulverizing the Afghan society, polarized it and gave rise to extremist groups such as Taliban.

The United States assisted the mujahedeen in resisting the Soviets. And I think that was a good cause and a good decision. We wouldn't be better off in dealing with terrorism today if the Soviet Union was still around.

Insofar as to how long we will stay in Afghanistan, I think the administration has been very wise in using the local forces to do the main comeback, pressing at the same time the Afghans to create some sort of coalition government, and encouraging the international community to come in with peacekeeping forces and economic assistance.

If we maintain this careful balance, which is very difficult, very difficult, indeed, I think we will avoid becoming bogged down the way the Soviets did. And we haven't really been fighting the Afghan people; the Soviets were.

So I think that analogy with the Soviet invasion of Afghanistan fortunately does not hold. I think we are being skillful in avoiding that danger.

BLITZER: Dr. Kissinger, where do you stand in this debate that you read about, you hear about, certainly, I hear about it here in Washington, over those hawks who say go after Saddam Hussein right now while the going is good, if you will, as opposed to those who are saying maybe this is not necessarily the best time to strike against Iraq?

KISSINGER: Well, if there is a time to strike against Iraq, this is as good a time as any because we have our forces deployed.

And the analysis about Iraq have to be on the basis that they are developing large stockpiles of biological weapons and chemical weapons. They have used chemical weapons against their neighbors, they have a nuclear program.

And the question is, if Saddam is still there five years from now, having survived the Gulf War and the anti-terrorist campaign, his capacity for mischief is enormous.

On the other hand, we should undertake such an enterprise only if we have a military plan that brings about a fairly rapid, a very rapid conclusion in a few months. It is not something into which we should launch ourselves on the basis of reliance on local forces alone. So, until one sees what the military possibilities are, it is very hard to answer your question. But there is a good reason to go after Saddam and to try return Iraq to a responsible role in the area which would change the entire climate on a number of these issues.

BLITZER: Let's take a caller from Illinois. Go ahead with your question.

CALLER: Hi, with all of the brilliance of the panel that you have right there, couldn't they provide a theoretical proposal of how we could work with Saddam Hussein and provide a diplomatic solution where he can win and we can win without a war?

BLITZER: What about that, Dr. Brzezinski?

BRZEZINSKI: Well, that's an interesting and challenging question. Of course, if we could prevail on Saddam and his regime to accept really binding, intrusive inspections, I think we may be somewhat less concerned about the immediate problem that he may be posing.

BLITZER: Would that be realistic, though?

BRZEZINKSI: But I think it's unlikely he will do it.

I would add to the military condition that Henry specified, also, a political precondition. I think if we want to be effective in struggling against terrorism, we have to pull the entire international community in behind us.

And therefore, if we are going to do anything about Saddam Hussein and Iraq, we not only need to have a military plan, a military capability, which can be effective, we also have to create the political conditions in the region so that there is not an inflamed, excited atmosphere which is destabilizing.

BRZEZINSKI: And I have in mind particularly the Israeli- Palestinian conflict.

And we have to consult very closely with our principal allies, the Europeans, so that we do not end up being isolated internationally and perhaps with a regional explosion in our hands.

If we can avoid these two circumstances, then the setting may be right for doing something about Iraq.

BLITZER: All right. We're going to pick up that point on the Israeli-Palestinian situation, talk a little bit about Iran, where Iran stands in all of this. When we come back, more of our conversation with Henry Kissinger and Zbigniew Brzezinski. LATE EDITION will continue.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our conversation with former Secretary of State Henry Kissinger, former national security adviser Zbigniew Brzezinski.

Dr. Kissinger, on this latest incident, the Israelis stopped a ship going through the Red Sea carrying supposedly some 50 tons of military equipment the Iranians were providing, the Israelis claim, to the Palestinian Authority. It looks like that could cause some further serious problems in General Zinni's effort to try to achieve a cease-fire between Ariel Sharon and Yasser Arafat.

KISSINGER: Well, for the cease-fire to be between the Israelis and the Palestinians, not between two personalities.

I think this is -- I don't think this should be a decisive element in deciding whether there should be a cease-fire. I look at that as one of the incidents that's almost inevitable.

What would make me unhappy is if the Iranians are stoking the fires of civil war and conflict in Palestine in a moment when we are trying to improve our relations with them. I look at it mostly from that point of view.

BLITZER: Let me bring Dr. Brzezinski in and speak about Iran for a second. It's a fascinating situation unfolding inside Iran right now. The leadership, conservative Islamic leadership, but there seems to be some serious pockets of dissent unfolding at the same time.

You have a history. You went through 444 days when you were President Carter's national security adviser during the hostage crisis with Iran.

What do you see happening in Iran right now? And do you agree with Dr. Kissinger that if Iran is behind this weapons shipment, if in fact it was an Iranian weapon shipment, that could cause some serious problems?

BRZEZINSKI: Well, there are internal contradictions in Iran and there are external contradictions. For one thing, we know that the Iranian government, which is very theological and very fundamentalist, is also quite divided. And there is within it a moderate wing that seems to have a great deal of popular support. I think it's in our interest that in the long run they somehow prevail. But it's a long- term process and will not happen soon.

Secondly, and very importantly, Iran is hostile to Iraq. Now, it's clearly in our interest to have a better relationship with one of those two, thereby isolating the more dangerous one. Instead, right now we are pursuing a policy which is called dual containment, or dual isolation, which is designed to isolate both Iran and Iraq with the effect that we are not able to exploit the differences between them.

So this is part of this enormously complex Middle Eastern setting which cries for a more affirmative, more strategic American foreign policy because it is now the most dangerous region in the world. That, plus the India-Pakistan issues, are the most dangerous zones insofar as global peace is concerned.

BLITZER: Now, Dr. Kissinger, when President Bush spoke before the U.N. General Assembly in November, he uttered some words that were somewhat controversial. I want you to listen to what he said on this Israeli-Palestinian issue.

(BEGIN VIDEO CLIP)

BUSH: We are working toward a day when two states, Israel and Palestine, live peacefully together within secure and recognized borders.

(END VIDEO CLIP)

BLITZER: Was he premature in uttering that support for the creation of an independent Palestinian state?

KISSINGER: No, I think the emergence of an independent Palestinian state has been implicit in the negotiations that have been going on for years.

The real issue is not whether there should be an independent Palestinian state, because almost all the nations in the world treat Arafat as if he were the head of a state.

KISSINGER: The issue is how you define secure and recognized borders. And that is the issue on which the cease-fire determination and settlement determination will depend.

BLITZER: You were one of President Carter's principal advisers when he brought together Anwar Sadat, Menachem Begin, the former leaders of Egypt and Israel.

But you write in an article in The Washington Post that I read on December 24, an op-ed piece, you write this, and I want you to clarify what you meant. You say: "The United States, by pleading for peace while avoiding its more precise definition, is unintentionally perpetuating the conflict."

BRZEZINSKI: Well, clearly, I want to emphasize the word "unintentionally." We're not intentionally prolonging the conflict.

But by being unwilling to spell out what a solution, eventual accommodation might really involve in some detail, we are perpetuating a situation in which the extremists on both sides can calculate that they can obtain their desired extremist outcome.

That means, in terms of the Israelis, the conservative extremist Israelis, essentially a Palestinian state would be a fiction, it's a satellite, it's a vassal, it's a truncated West Bank, smaller than even the existing West Bank.

And for the Palestinians, it means an Israel which is swamped with returning Palestinian refugees and eventually undermined from within.

As long as there isn't some notion of what a fair peace entails, the worst elements on both sides can compete. BLITZER: But let me bring in Dr. Kissinger, because you have enormous experience in dealing with the Israelis and the Arabs as well. You coined the entire realm of shuttle diplomacy right after the 1973 war.

What Dr. Brzezinski is saying by suggesting that laying out a U.S. plan, if you will, a precise notion of what a settlement should include, doesn't that get sort of close to what the U.S. has said over the years it shouldn't do, Republican and Democratic administrations alike: impose a settlement on the parties?

KISSINGER: I think in the present climate it's not possible to move toward an overall settlement. And I think, in fact, contrary to Zbig, that the attempt to move toward a overall settlement which will involve such issues as refugees and only places, it's going to give rise to more radicalism, as it did in the last year of the Clinton administration.

I think what should be done now is some agreement of coexistence that creates the Palestinian state, creates some dividing line between the Palestinian state and Israel, and leave such issues as refugees, holy places, to a later negotiation further down the road, so that the two people can get used to living with each other in a somewhat peaceful environment.

I think an attempt by the United States to spell out the ultimate settlement is more likely to produce an explosion.

BLITZER: Let me just let Dr. Brzezinski get the last word because we're almost all out of time.

Dr. Kissinger coined step-by-step diplomacy in the early '70s. He's still supporting step-by-step diplomacy. You want you to go for the full...

BRZEZINSKI: No. No, no, I don't expect a peace to be implemented immediately, and I favor some progressive movement towards it. But I think having a peace on the table, a concept, specific concept of what peace would entail, would create conditions in which peace would begin to impose itself even on the political consciousness of the protagonists.

Right now, each side ultimately is pursuing its most ambitious objectives, and these are basically, fundamentally, enduringly incompatible.

BLITZER: OK. Two of the best minds on U.S. foreign policy out there right now, Dr. Brzezinski and Dr. Kissinger. Thanks for spending some time on LATE EDITION on this subject.

KISSINGER: Thank you.

BLITZER: Thank you very much, and have a happy new year to both of you as well.

And when we return, can accused terrorists get a fair trial in the U.S. justice system? We'll wade through that issue with three prominent attornies. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Zacarias Moussaoui, the only person currently facing U.S. criminal charges in connection with the September 11 attacks, wants to have his trial televised worldwide. It's just one of several controversial issues expected to crop up as the United States goes after those accused of involving -- involved in the terror attacks.

With us to help sort out all the legal challenges facing the United States are three attorneys. Joining us from Miami, the famed criminal defense attorney Roy Black. And here in Washington, the former federal prosecutor Beth Wilkinson. She prosecuted the case against the Oklahoma City bomber Timothy McVeigh. And defense attorney Charles Gittens. He's a specialist in military matters.

Good to have all of you with us.

And let me begin with Beth on this whole issue of televising the trial. Is that going anywhere, the trial of Zacarias Moussaoui?

BETH WILKINSON, FORMER FEDERAL PROSECUTOR: No, it's going nowhere. It prohibited by federal law. It's has been upheld as a constitutional prohibition, keeping cameras out of the courtroom. And the specific motion that Mr. Moussaoui's counsel filed, I think, is very unpersuasive.

BLITZER: And as you know, Roy Black, it's -- Court TV really wants to be able to televise this trial. But the attorneys representing Zacarias Moussaoui supported -- one of the attorneys, Edward McMahon, Jr., said this: "Televising will ensure that the entire world is able to watch the proceedings and will add an additional layer of protection to see that these proceedings are fairly conducted.

Is there any way around what Beth says, that the federal government could relent and allow this trial to be televised?

ROY BLACK, CRIMINAL DEFENSE ATTORNEY: Well, the federal government, the Supreme Court, federal judges, are very much against televising trials. They've been fighting it for many years. The chances of changing their minds are extremely small, if not zero.

However, I think that they make a very good point, though, that it would ensure that justice would be done and that people in the world would see that justice will be done if they televise a trial. Remember, they're trying to hold this trial five miles from the Pentagon. There's going to be a lot of doubt about the fairness of that trial. And I would think televising it and letting everybody see all the evidence is one way of ensuring the integrity of the process.

BLITZER: And as you know, Charles Gitten, the federal prosecutors, they want to start this trial shortly after the September 11 anniversary, the first year after September 11. And the defense attorneys are already screaming that that's an outrage.

GITTEN: Well, I think, trial schedules are largely determined on discovery and how compliance with discovery goes. I'm not sure that October 11 is the date that the trial will actually be tried. But, that would be a concern, if I were trying the case, whether or not you could get a fair jury, after -- a month after the one-year anniversary.

BLITZER: As you know, you've prosecuted Timothy McVeigh. There was closed-circuit television for the families, the relatives of the victims in the Oklahoma City bombing.

Would it be appropriate in this particular case, if there's not going to be widespread open television coverage of the Moussaoui trial to at least allow the families, the victims of what happened at the World Trade Center, the Pentagon, the crash in Pennsylvania, to allow them to watch this trial?

WILKINSON: It would it be great idea, because of the number of victims and, really, the different places where all victims live, because of the planes that were involved and the amount of people involved at the Pentagon and the World Trade Center. And it would it be very easy for the court to order closed-circuit TV without compromising the fairness of the trial.

BLITZER: But how do you do that? They have relatives all over the country, indeed all over the world, if you don't have an open, televised trial that allows everybody who sees themselves as victim, as a relative or loved one of someone who was killed on September 11 to just see it?

WILKINSON: Well, Judge Matsch set up some procedures that I think Judge Brinkman (ph) could be copy, by and large.

There is a federal statute on victims, and he set up criteria for how you would qualify to be a victim. And then you set up several places that really mirror the courtroom. You come in, you have to show your identification as a victim. And then you sit in the courtroom. There is usually a magistrate or someone like that who the proceedings as if these victims who are watching the trial are there live in the courtroom.

And so, it's a dignified proceeding that allows the victims to watch what's going on but not have any interference by anyone else.

BLITZER: Roy Black, as you know, the whole world will be watching the Zacarias Moussaoui trial. If you were representing him, do you think it's possible he will get a fair trial, given all the publicity, all the emotions that are out there right now?

BLACK: Well, I think he could get a fair trial in the United States, but I don't think he can get it in the eastern district of Virginia. I mean, the United States government brought the indictment there, just knowing that it's right next to the Pentagon, and it's going to make it extremely difficult to select an impartial jury. But if you would move the trial somewhere else -- and, remember, in the McVeigh case, it was a change of venue from Oklahoma City down to Denver. I think you need to have a change of venue, in this case. If not, I don't think anyone is going look at this as a particularly fair proceeding.

And also, putting on this thing about the televising, if we televise it for 10,000 or 20,000 family members, of all those who were killed, what's the difference between that and televising it for everybody else? I don't see any kind of an intellectual difference between them.

BLITZER: And there could be a lot more than 10,000 or 20,000. There could be 100,000 people who would want to watch -- children, parents, loved ones. And technically, that could be a nightmare, if you try to set up these closed-circuit procedures, Beth, all over the country.

WILKINSON: Well, it's really not. I mean, there's going to be places where there's a majority of the victims and survivors and family members, and that's going to be New York and Washington and a few other areas.

But I don't agree with Roy that it's equal to televising them. Closed-circuit is the live transmission of the signal. A single camera that looks at the witness stand as if you are sitting in the jury -- I mean, if you're sitting in the row of the courtroom. And if you had it televised, you could repeat it during a show like yours or other news programs. So it's quite different to have that closed- circuit TV for the victims versus televising the proceeding.

BLITZER: Is there any possibility, Charles, that they might move the venue, the location of this proceeding from Northern Virginia, right outside of Washington?

CHARLES GITTENS, DEFENSE LAWYER: I would expect that the defense lawyers would seek to do that. That would be a standard motion in a case like this, particularly with the very high emotions in this area involved in the loss of life at the Pentagon.

BLITZER: Roy Black, this proceeding against Zacarias Moussaoui could go on, not for months, but could go on for years. You're very familiar with the criminal defense -- the criminal justice system in the United States.

That's one of the reasons why Senator Lieberman, suggested that maybe this Zacarias Moussaoui, the alleged 20th hijacker, that this should have been a case that the president should have authorized for a military tribunal, which would have been much more expeditious, done in secret, if they wanted, not release information, not cause the kind of spectacle that could be caused right now.

BLACK: Well, first of all, I don't think there is going to be any spectacle. I think that when you read the indictment, it's a very detailed indictment. It's going to be a circumstantial case. The reason it will take a long time is the government is going to want to establish thousands of little facts that are going to add up to an extremely strong case against him, and that's why the length of time is going to be there.

Personally, if you send this to a military tribunal or -- which is an administrative proceeding, it's not a trial -- I believe that's unconstitutional under Article I, Section 8 of the United States Constitution. You would you have a tremendous constitutional challenge to doing that, and I think they want to void that at this stage.

BLITZER: Is that is your reading of it, why they didn't do a military tribunal?

WILKINSON: Well, I think they did it for several reasons. One is, we want to maintain the integrity of a criminal justice system and show that we can handle these type of trials.

And I believe that the president established military tribunals is really for a very limited category of individuals. I'm not sure that's how they started out when they announced it. But it really should be for people caught overseas, like an Osama bin Laden or Omar, who would be really quite dangerous to bring back to the United States.

But otherwise, we should have these trials in a public courtroom, in the American criminal justice system, that can handle them.

BLITZER: Well, let me ask Roy Black, would you support a military tribunal if the U.S. captured alive Osama bin Laden?

BLACK: Well, I think it's unconstitutional. Article I, Section 8 says only Congress has the power to create inferior tribunals to the United States Supreme Court, and only Congress can decide what the laws are, the felonies and the laws against piracy and what have you. The president of the United States does not have the power to do this.

BLITZER: But there have been military ...

BLACK: And if he does...

BLITZER: ... there have been military tribunals, Roy, in the past that the Supreme Court has said were justified.

BLACK: Well, you have to remember what happened. In (UNINTELLIGIBLE) the opinion was released by the Supreme Court after they had already executed the saboteurs. So it was a little bit embarrassing for the court at that time to say you couldn't get away with it.

But the court was extremely narrow in allowing what happened there in a very unusual situation. I don't necessarily think it'll happen again.

BLITZER: He's referring to some Nazis who were captured during World War II, tried before a military tribunal in the United States and executed. The Supreme Court said, no problem.

GITTENS: Right, and I don't think there is.

BLITZER: It's an honor to bring Charles Gittens in.

GITTENS: I don't think there is a problem with holding a war tribunal in the event you have somebody like Osama bin Laden who is captured overseas and who fits the definition of people who have been tried in such circumstances before, actors in wartime scenarios.

But Congress has provided for military tribunals. That's found in the Uniform Code of Military Justice. They are specifically referenced, although there is no specific rules about them.

But in hearings as long ago as 1916, Congress indicated that the rules for military tribunals should track very closely, in fact be identical to, those procedures that are found in courts martial.

BLITZER: Did you want to ask a question?

BLACK: Let me ask you this question.

BLITZER: Go ahead, Roy.

BLACK: The president's order, however, does not follow the Uniform Code of Military Justice. I would agree with you, if the president of the United States said we're going to try prisoners of war pursuant to the Uniform Code of Military Justice, I believe that would be constitutional. And that would fit in with the scheme that Congress thought about at the same time.

However, the president's order is entirely different than that code. How do you explain the fact that there is a huge difference between the two? And how could that be constitutional?

GITTENS: Roy, I agree with you. I was extremely troubled by the executive order myself.

However, I think this is a great opportunity for the secretary of defense to impose rules like the rules for court martial, provide for military judges to preside over the proceedings. The rules are left to the secretary of defense.

And I think the indications coming out of the office of the secretary of defense are that those rules will closely track court martial proceedings.

BLITZER: All right, stand by. We're going to take a quick break.

When we return, our panel of lawyers will be taking your phone calls. We'll talk about the American Taliban fighter, John Walker. What should the U.S. legal system do about him?

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're talking about the challenges of putting terrorist suspects on trial here in the United States with criminal defense attorney Roy Black, former federal prosecutor Beth Wilkinson, and defense attorney Charles Gittens.

Let's take a caller from Mississippi. Go ahead with your question, please.

CALLER: I would like to hear the lawyers explain to me what would be a fair trail for bin Laden or these other guys that caused these plane crashes and did what they did in New York?

BLITZER: All right, let's ask Beth.

WILKINSON: Well, I think we have the procedures in place for a fair trial right now for Mr. Moussaoui, who is the one that's in custody currently. He is going to have access to all the prosecutions' material, to any Brady material that will be used against him. He has three very fine lawyers representing him. They will file a motion, as Charles suggested, to change venue and to get a fair procedures in place.

And then he'll have a trial where they have a very laborious process for picking a jury, especially if the government asks for the death penalty. The jurors have to be death qualified in any federal jurisdictions. That means individual voir dire, questions by each lawyer of each individual juror to see whether they can be fair.

BLITZER: Since he was in, Roy Black, since Moussaoui was in jail, being held on September 11, he was picked up in August, and as result obviously had nothing immediately to do with September 11 attacks. He was being held by U.S. authorities at the time.

Would the death penalty in this particular case be appropriate?

BLACK: Oh, I think he is charged with four offenses that could result in the death penalty.

But when you read the indictment against Moussaoui, you can see what a detailed case the government has against him. When he was arrested, he had radios on him, knives, he had computer disks, he had training manuals for the planes, he had disks showing so he could practice flying planes. He went to all these flying schools. He got money wired to him from overseas from al Qaeda people. There is extremely detailed evidence against him.

I think the government has a very strong case and certainly to show his involvement with the people who finally committed the crime. The fact that he wasn't available on date of the crime I don't think is a great defense for him.

BLITZER: All right, Charles Gittens, let's talk about John Walker, the American Taliban fighter, the 20-year-old Californian now being held by U.S. authorities.

If you were representing this American citizen, how would you defend, represent him?

GITTENS: Well, I don't know all the facts. Certainly you'd have to do some investigation to find out what his specific involvement is.

I think in his favor, the fact that he went to Afghanistan, joined the Taliban, before the U.S. was involved in the hostilities would be a matter that would be extenuating or mitigating. It might also provide a defense, to the extent that he may not have known that Americans were involved or just did not participate in any actions against Americans.

So it would be very difficult, but I think you have to do a very thorough investigation to find out.

BLITZER: Obviously, if he's going to face any charges, he is going to require good legal counsel. But if you were prosecutor in this case, would this seem to be an open-and-shut case as far as treason is concerned?

WILKINSON: Well, I'm not sure that I would charge treason because of the constitutional requirements that are quite unusual in this crime, where you have to have two eyewitnesses to the same overt act of treason. And that is why government prosecutors rarely invoke treason.

BLITZER: Excuse me, but would it really be difficult to find two eyewitnesses, other captured Taliban fighters or al Qaeda fighters who said yes, we trained together with this guy?

WILKINSON: I don't know if it would be difficult, but because of the nature of the crime that they are charging him with and his particular conduct, I think it just doesn't feel like this may be the exact right case for treason. Obviously, the government is debating that because they haven't made an announcement.

But I think providing material support to terrorists seems to capture the conduct we know of thus far. It's a statute that provides a 15-year penalty, which is serious but not life or death in prison.

BLITZER: Roy Black, as you know, the Constitution spells out what treason is. Is this potentially a case of treason?

BLACK: I don't think so. I think the Department of Justice reserves treason only for really high, outrageous kind of cases -- only people who are high government officials, somebody who really does something really outrageous. The Ezra Pounds, the Tokyo Roses, I mean, during World War II people who tortured American service men things like that. John Walker is a flea compared to what they usually charge.

So, as matter of policy, I don't think the Department of Justice is going to use treason to prosecute him. BLITZER: And there is also, Charles, an element, his parents insisting the kid was brainwashed, disillusioned, got himself involved in something that he should have never gotten involved with. He had some serious problems. There could be some issues right there that could come to his benefit.

GITTENS: Well, of course. And his youthfulness, a 20-year-old, doesn't have, probably, the good sense to stay out of a situation like that. He probably was a true believer in Islam, and I think what we are going to find out that he was true believer who got involved in a civil war, was not a person who intended to wage war against his own country.

BLITZER: You're shaking your head.

WILKINSON: I don't think any of those lines of defense will be successful. I mean, he is a 20-year-old adult who went and joined the Taliban and has now spoken that he supported the events of September 11. He took up arms against the United States and against intermediaries for the United States, the Northern Alliance.

And I don't think the idea that he was brainwashed or a true believer is really going to help him. If he's a true believer, that is probably going to hurt him just like Mr. Moussaoui, who the other day when he was brought into court, failed to stand up when the judge entered the room. If he starts to do things like that that shows his true beliefs, I think that will only harm his case.

BLITZER: All right, stand by. We're going to take another break. And we have a lot more to talk about when we come back.

We'll continue our discussion with the attorneys Roy Black, Beth Wilkinson and Charles Gittens. We'll be taking more of your phone calls.

We'll also talk about case of American Airlines versus a U.S. Secret Service agent. What happened? Who's right? Who's wrong? Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Roy Black, you're familiar with this case of American Airlines denying permission to a U.S. Secret Service agent, someone detailed to protect President Bush, denying permission for him to board a flight from Baltimore to Texas last month.

His defense attorney was very, very outspoken in saying that this was a case of racial profiling because this Secret Service agent happens to be American of Arab ancestry. American Airlines denies that, but listen to this exchange.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The question is, if there is no legitimate security risk being posed, does a pilot of an American Airline, any American airline, have the right to keep someone off a plane just because he doesn't like the way they look?

(END VIDEO CLIP)

BLITZER: To which American Airlines responded with this statement: "In this time of tightened security, we feel that absolutely nobody is above approved security procedures."

Roy Black, this agent wanted to board that flight with a weapon, with an armed -- with a weapon with ammunition, and the pilot said it looked suspicious. Was he -- perhaps he was overly cautious, but he said it's better not to let this agent get on the flight.

BLACK: Well, Wolf, we know that using race alone would be improper, but this case is more than that. That was only one factor. You have the race, plus the gun, plus his paperwork had serious inconsistencies in it, where they crossed out things, wrote other things into it, or it couldn't be read.

Now, taking those three things into consideration, I think the pilot justifiably was concerned, particularly because the man wanted to board the plane with a weapon. This is not a case where they excluded somebody solely on account of their race, and I think that makes a significant difference.

BLITZER: President Bush, when he was asked about this case, knowing the particular agent involved, said this. Listen to what he said.

(BEGIN VIDEO CLIP)

BUSH: If he was treated that way because of his ethnicity, that's -- maybe -- that will make me madder than heck.

(END VIDEO CLIP)

WILKINSON: I think we all agree with that, but Roy's made the point, it wasn't just based on his ethnicity, it was based on a firearm with ammunition. There are procedures for law enforcement to carry weapons onboard the airplane.

But ultimately, no matter who it is, if a law enforcement agent is getting aboard a plane, the pilot does have the ultimate authority to decide whether he's allowed on the plane or not, so...

BLITZER: But as you know Charles Gittens that when they looked through his handbag they saw a book about Arab history, his name was of Arabic ancestry. He looked like he was an Arab even though he had the proper credentials that had been reaffirmed for the pilot. Did the pilot then go too far in this particular case?

GITTENS: I don't think he did. I think the problem was -- you've got to put yourself in the pilot's situation. The bad paperwork. There's a problem with Arab terrorists right now. We're concerned about Arab terrorists, the individual had an Arab name. He had a weapon. And overriding, I think, you have the case of Mr. Reid who had been arrested based in part, on -- or at least detained at the airport by the French based on what they believed to be a false passport.

And so, you have a pilot who's placed in a position of if he can't confirm, then he has to act in this -- with the safety of his passengers in mind.

And I think they need to put a procedure in place that would allow a pilot to very quickly ascertain and confirm beyond a shadow of a doubt the qualifications of the individual.

BLITZER: All right, let's take a caller from Alabama. Go ahead, Alabama.

CALLER: Hi, Wolf. This is Mike McLinney (ph) calling from Alabama. I'm an airline pilot flying a 747. Well, I'm just curious if the airline pilots are not going to be the final line of defense, what does our panel recommend out there as far as security concerns?

BLITZER: Roy Black, should the pilot be the final line of defense in saying who gets on board that plane and who doesn't?

BLACK: I think the pilot has the responsibility of the safety of the people on the plane and the safety of the plane itself, and I think that the pilot should have the ultimate decision. I mean, there's going to be complaints afterwards but, you know, it's better to fight this out in court afterwards than to have a disaster.

So I think that the pilot who has the responsibility should have that decision-making opportunity.

BLITZER: Does this Secret Service agent, Beth, have a case that he can make against American Airlines, a lawsuit that -- or the federal government, should the federal government come in and step in and say that, yes, there was discrimination based on his ethnic background?

WILKINSON: Well, he can always try to make a case. I think it's unfortunate that there's been a threat of a lawsuit. I think that Roy is right, that during these times, especially, it's something maybe we want to debate after the fact. But it really is really something where we want pilots erring on the side of caution.

We got so close with Mr. Reid. That could have been another major disaster that stopped people from flying in and around the United States.

So I don't think this should be something that subject to a lawsuit, but unfortunately I think it's something that the Secret Service agent can make and do a lawsuit if he chooses.

BLITZER: It's obviously caused a lot of passions on both sides, but at the whole issue of profiling of passengers based on their ethnic, their racial backgrounds, is that something that these airlines should justifiably do given the current environment out there?

GITTENS: Well, the first point is, the pilot's always responsible. The federal aviation regulations say that. But secondly, red flags like a person of Arab descent who's traveling on a one-way ticket purchased with cash with no luggage. Those kind of things are red flags. It's like fireworks going up. If that's called profiling, that's good profiling and it needs to be followed up.

BLITZER: OK. Charles Gittens, Beth Wilkinson, Roy Black, always a pleasure to have all of you on your program. Thanks so much for joining us. And, belatedly, Happy New Year to all three of you as well.

And coming up next, the third hour of LATE EDITION. We'll check the top stories, then our military analysts will answer your questions about the military campaign in Afghanistan.

Plus, LATE EDITION's "Final Round." You've got questions, our panel's got some answers.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

For some insight now into the latest developments in the war in Afghanistan, as well as the search for Osama bin Laden and Mullah Mohammed Omar, we turn to our guests. Joining us from Madison, Wisconsin, CNN military analyst, retired Brigadier General David Grange. Here in Washington, CNN military analyst, retired Major General Donald Shepperd. And Michael Vickers, he's a former special forces and CIA operations officer.

Gentlemen, welcome to LATE EDITION.

And, General Grange, let me begin with you on where this war stands right now from the military perspective on the ground in Afghanistan.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, we have the advantage. We have the initiative and we're on the offensive. And so right now, we're the hunter. And right now, any al Qaeda and Taliban that are left on the ground -- and there are some left, as you know -- are the prey.

And as we continue to move around and continue the operations until we reach the objective of the United States of America, this will go on for some time.

BLITZER: General Shepperd, what should we be looking for as far as the military developments unfold in the next few days and weeks?

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: Well, obviously, we're still looking for Omar and bin Laden. Those are the two big prizes we're after. We're also looking after cleaning up the al Qaeda cells that have escaped and the Taliban that have retreated into other areas.

We're also going to bringing in the 101st to expand the footprint of military forces available to the CINC to do the things he will have to do around the country to support the security forces around there and to set up the conditions for humanitarian aid.

BLITZER: When you say the 101st, you're referring to the 101st Airborne Division soldiers who are going in to replace the Marines in the Kandahar area.

SHEPPERD: Absolutely.

BLITZER: And tell our viewers why they're coming in. Why can't the Marines who are already there just do the job?

SHEPPERD: Yes, standard joint military doctrine. The Marine MEUs -- the Marine Expeditionary Units are sized and equipped and armed to go in for a short period of time, a 30-day period, to seize an objective. And then they normally turn it over to heavier forces.

So this is the way the military operates. We're bringing in more people with more fire power, and they've got a lot of helicopters.

BLITZER: And, Michael, this frees up those Marines who are in Kandahar, the southern part of Afghanistan, to do something else. What do you think they're going to do?

MICHAEL VICKERS, FORMER SPECIAL FORCES OFFICER: Well, they've already done some hunter-killer operations and gone looking for documents and other things, including maybe some search for Omar. So it does free them up for that kind of work, although they could be redeployed elsewhere too, other areas in the CENTCOM region.

BLITZER: General Grange, the fact that the U.S military now suffered its first combat death over the past few days, does that signal to you that there is a new stage in this current war?

GRANGE: No, it does not. I'm quite surprised we haven't had more casualties in combat action besides the one special forces sergeant that regrettably we have lost. I think it'll continue to be the same type of threat, the danger.

If anything, the determination of these soldiers to accomplish the objectives of the United States of America will be increased because of this incident. And I don't -- but nothing else will change. We'll drive on until we accomplish these objectives for the government.

BLITZER: Let's take a caller from Georgia. Go ahead, please.

CALLER: Yes, General Shepperd, I'd like to ask you how long will it be necessary to have troops stationed in Afghanistan, in your opinion?

And Wolf, CNN is doing a great job of covering the war.

BLITZER: Thank you very much.

SHEPPERD: Well, I think that the troops are going to be required there for some period of time. It's not just the Kandahar area, which is our only base right now, but the international security assistance force that's coming in there to establish law and order, first in Kabul and then other cities across the country, is going to require help.

And so I think we're going to be there for a considerable period of time, a good period of time during this two years of the interim government, perhaps longer if we're invited.

BLITZER: As you know, Michael, the first U.S. combat casualty in Afghanistan was not a military -- member of the U.S. military, was a member of the Central Intelligence Agency. There are still a lot of CIA guys running around Afghanistan. Tell our viewers what they are doing out there.

VICKERS: Well, in fact, a CIA officer was wounded in this recent incident in which the special forces soldier lost his life.

But a variety of tasks, can't say too much about it. But in some cases, interrogation of prisoners; in other cases, liaison with private groups. Work very closely with special forces and often some of the same personnel that come from very similar backgrounds.

BLITZER: What about that, General Grange? You're familiar with special operations. You're a former Green Beret, a member of the Delta Force. How is the relationship between the CIA, non-military personnel, with the special operations forces?

GRANGE: Special operating forces throughout the world, not only in Afghanistan but in other theaters of operation, must operate in coordination, synchronization with these other non-governmental organizations or governmental organizations to accomplish their mission. It takes pieces of all of these different assets afforded by the United States to accomplish what we go out to do.

BLITZER: But, General Shepperd, is there a rivalry or a collegiality? Is there cooperation? Or is there some distrust between the CIA and the military?

GRANGE: I don't think there is an distrust at all. As General Grange has just said, it's absolutely essential that they work together. These people are unseen in many countries around the world, as we speak, doing really dangerous things.

As a matter of fact, some of our State Department people are out there, unseen and unheralded. We never think about them. And their cooperation is absolutely essential to get that initial intelligence before you ever go in and insert forces for military action.

BLITZER: I would -- we have an e-mail from Melvin (ph) -- e- mailed us this question from Kentucky: I would like to know if the U.S. would be better off to offer Mullah Omar, the late Taliban leader, former Taliban leader, I think Melvin suggests, amnesty in return for intelligence that would lead to the capture of Osama bin Laden?

Michael, what do you think about that?

VICKERS: I don't think we'll need to do that. I think we'll either catch him dead or alive. And we'll collect a lot of information from other al Qaeda and Taliban leaders.

And it's very important that the head of the government that sanctioned this state-sponsored terrorism be brought to justice.

BLITZER: Is -- you agree with that, General Grange? That the U.S. shouldn't try to make a deal with Mullah Omar to get the bigger fish in this particular war, namely Osama bin Laden?

GRANGE: No deals. They're going to be brought down, it's just a matter of time. No negotiations with terrorists or supporters of terrorists. And now that the 101st Airborne Division personnel that are there, you have a strike force that can move around anywhere in Afghanistan very rapidly with some very terrific helicopters and troopers that do that.

BLITZER: You know, General Shepperd, the U.S. special forces, they put out this leaflet that they are sending out. They doctored this picture of Osama bin Laden. Let's put it up on our screen.

You see in the first shot, they see dead al Qaeda fighters, Taliban fighters. But then, look at this. Here he is. He looks like -- that's Osama bin Laden shaven, got a little mustache, business suit. And they say, "Osama bin Laden, the murder and coward has abandoned al Qaeda. He has abandoned you and run away. Give yourself up." And goes on to say that it doesn't make any sense for you to stay there.

Is this kind of psychological warfare effective in this kind of a situation?

SHEPPERD: Well, I think the psychological warfare experts really had a big debate before they decided to do that. And I think they asked a lot of Afghanistan people what would be effective, and I guess that's the conclusion they came to.

Pretty effective, as far as I'm concerned. He has abandoned these soldiers on the field. He has fled. A lot of them are dead, just like the (UNINTELLIGIBLE). But whether or not that will really do anything or not -- we're dropping leaflets everywhere, telling the people, if you associate with these people, if you house them or if you have anything to do with them, you are also becoming a target. So I think it's an effective message.

BLITZER: I was down -- when I was a Pentagon correspondent, General Grange, years ago at Fort Bragg, where they -- at least they used to have -- I assume they still do - have the psychological warfare center and they've got these leaflets and broadcasting.

Does it really every do much good, these kinds of operations? GRANGE: They are tremendous. And the information operations added to other power, other combat power, is gives you the advantages over the enemy. We have to do it.

Fort Bragg has an active psychological warfare unit, but actually most of the psychological warfare units com out of the Army's reserve forces throughout the United States and they're all trained to partake in different theaters of operation to do just this, to use it as a weapon to help sway the battle.

BLITZER: What about this argument, Michael, that you doctor a picture like this -- and this is the U.S. government doctoring a picture, a phony picture, of Osama bin Laden, that they're dropping these leaflets all around Afghanistan, and -- does it raise potential problems of U.S. credibility, if the people over there say, well, this is just a fake picture? Everybody knows it's a fake picture. The United States is lying on everything else, as well?

VICKERS: Well, there's some reports that he may actually have done this. But there is risk in this element. But this psy-op up strategy is actually based truth, which most successful psy-op is.

One of the captured documents recently found by U.S. forces by -- written, supposedly, by Ayman al-Zawahiri, encouraged exactly this kind of behavior -- said that it's a duty of front-line troops to die so that the leadership can get away and carry on the movement. And so, it has a certain base-level credibility.

BLITZER: Psy-ops being psychological operations.

VICKERS: Yes.

BLITZER: All right. Let's take another caller. From California, go ahead, please.

CALLER: Hi. Would nuclear weapons be justified in certain instances in this war?

BLITZER: All right. Let's ask General Grange, is there any conceivable use of nuclear weapons? I assume that the caller is referring to smaller tactical nuclear weapons that might, presumably, be justified under some circumstance?

GRANGE: I don't believe so. Unless we're under really extreme distress, I don't see the United States of America doing that. I think our effort is in counter-proliferation of nuclear devices around the world right now. That's where our focus is.

BLITZER: As you know, General Shepperd, during the Gulf War, the then-Bush administration, the first Bush administration, refused to rule out the use of nuclear weapons against Saddam Hussein, arguing that if there was a chemical or biological attack troops against U.S. troops, all options would be are open.

SHEPPERD: Yes. We never take our nuclear weapons off the table. We have not ruled off first use is my understanding across the board there. So people should always wonder what we're going to do, if they do something horrific to this nation. But in the case of Afghanistan, I can't see any scenario where any part of that makes any sense at all.

BLITZER: Would a tactical small nuclear bomb be -- how much more powerful than these 15,000-pound daisy cutters that the U.S. has been dropping on these caves in Tora Bora, elsewhere, in Afghanistan?

SHEPPERD: Well, we've had great success with conventional munitions against a lot of these caves. So through penetrating weapons, as well as the big daisy cutter -- 15,000-pound bombs in areas. And now some experimental air explosive munitions. So there really is no need against these kinds of targets for that weapon.

BLITZER: OK. We're going to take a quick break.

We have more coming up. Our military analysts are standing by. They're waiting for your questions. Phone lines are open. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEN. TOMMY FRANKS, U.S. CENTRAL COMMAND: We don't know where bin Laden is. I mean, we have been pretty honest about that. We have also said that he is either dead or alive, and he can be either inside Afghanistan or he isn't.

(END VIDEO CLIP)

BLITZER: The head of U.S. Central Command General Tommy Franks commenting on the illusive Osama bin Laden.

We are continuing our conversation, taking your phone calls and questions for our CNN military analysts: Retired Brigadier General David Grange, Retired Navy General Don Shepperd, and Michael Victors, a former special forces and CIA operations officer.

We have a caller from Washington state. Go ahead, please.

CALLER: Yes, I'd just like to comment that I'm very proud of the way we are reacting to the situation.

The next question would be, and I know this has been a question in the past, what is next? I mean, I know that Afghanistan is very important. But what is next? What are we going to go for? Any idea? I'd really, really like to know.

BLITZER: That's a good question, and I will ask General Grange to answer it.

GRANGE: You know, I don't think you will see on the next step one particular operation like in a country like Afghanistan. I think you will see a series of things, and some are probably ongoing right now, with the first phase, which is the reconnaissance and intelligence gathering phase in places like the Philippines, maybe parts of Somalia and elsewhere. I'm not sure will you see a large campaign in a particular country. I may be wrong, but that's just my feel.

BLITZER: What about that, General Shepperd?

SHEPPERD: I agree with that. We are doing lots of things worldwide and a lot of it is law enforcement. You are hearing reports of people being arrested in Germany, in France, in the Philippines and other nations. And I think gathering the intelligence, getting the pictures, intercepting communications is what we're about right now before we start tossing military force around. I would be surprised to see a major military move next.

BLITZER: What about you, Michael?

VICKERS: Yes, I think that rather than sequential operations, these are really more simultaneous. There's lot going on outside Afghanistan and that will continue. And, of course, there is important next steps in Afghanistan. We're there for quite a while as well.

BLITZER: So, General Grange, you are not amongst those itching to get into a battle with Saddam Hussein right now?

GRANGE: I am not itching, but I do feel that it's going to happen, and I support that 100 percent.

BLITZER: When do you think it will happen?

GRANGE: Well, when the time is right for us. Remember, you want to have your forces with the right mix of forces at the right place at the right time for any combat operation. We will do it when it's advantageous to us to do it.

BLITZER: Let's take a caller from Pennsylvania. Go ahead, please.

CALLER: Yes, good day. Considering that bin Laden and Omar watch CNN, I'm sure they do, do broadcasting military strategies in terms of where these guy are located and how to apprehend these individual, does that jeopardize military strategy and allow them to slip away in every instance?

BLITZER: All right. That's an excellent question. We get tons of e-mail asking that precise question.

General Shepperd, what's the answer?

SHEPPERD: You always have to balance information for the general public with what they need to support the war. But the American public deserves and needs to know what is going on with their sons and daughters that are being committed to military operations.

On the other hand, we are not giving anything out in the way of specific operational information that is of any use to these people. And I have trouble believing they're having a good reception on CNN right now on the run.

BLITZER: What about that, Michael, because a lot of our viewers keep asking me, why do you have to talk about all this kind of sensitive military stuff, when the so-called enemy is watching?

VICKERS: Well, I agree with General Shepperd. I think most of things that we discuss are really of a general nature and information that would not help them at all. So, if we had specific information -- where they were, we wouldn't discuss that, but that's usually not the case. It's general strategy and not of much use.

BLITZER: General Grange, we have e-mail question from Bill in Charleston, South Carolina, sends us this question: Could you ask your panelists if the chances of chem-bio warfare and/or chem-bio terrorism against U.S. allied forces is more likely now that there have been significant successes against the Taliban and al Qaeda?

General Grange?

GRANGE: I think it's a bigger chance for chem-biological, radiological attack on the United States or one of our facilities overseas are or our people. Not so much because of Afghanistan, just because of the proliferation of these devices, and being able to get materials to do it.

And it's sort of like modus operandi now in these terrorist units. They like to change from hijacking to car bombs, to different means. And I just think it's now out there on the table, a good chance of it being used.

BLITZER: How dangerous, General Shepperd, is this to move a lot of these detainees, perhaps hundreds detainees, prisoners, arrested, taken into custody by U.S. troops in Afghanistan, moving them to the U.S. naval base at Guantanamo Bay, in effect penned up together. Isn't there a potential problem there?

SHEPPERD: No. It's a great place for them as a matter of fact. Taking them a U.S. ships and transporting them to Guantanamo Bay. We have had great experience there before -- large numbers of 14,000, 16,000 in the case of the Mariel boatlift, people in Cuba.

BLITZER: Yes, but they weren't prisoners, they were Haitian refugees, if you will. Haitian refugees that posed no physical threat to anyone because they didn't come with a grievance against the United States.

SHEPPERD: Indeed, don't mistake them, these prisoners themselves are very dangerous people, but you've got the actual facilities there to put people in jail in cells and separate them. You've got feeding facilities, all the facilities you need for a real good prison and it's isolated -- where it's a long swim for anybody that want to break them out or a long swim if they have to escape. So, it's a good place for them. I think it's a good decision.

BLITZER: But some have worried, Michael, by another Mazar-i- Sharif kind of situation, a situation whereby, prisoners would revolt and there would be danger to U.S. troops trying to hold these guys in custody.

VICKERS: Well, I hope once burned, twice shy, in a sense. We will have lot more control in Guantanamo Bay than we did in the early stages of the takeover of Mazar-i-Sharif.

But one always has to treat prisoners with caution. We've had a number of these incidents in Afghanistan, mostly small-scale, where prisoners have revolted or tried to escape afterwards.

BLITZER: Do you think that this is a good idea too, General Grange, to move these prisoners to Guantanamo?.

GRANGE: I think it's great place. I know you've been there. I have been there myself. Several operations, preparing for operations, good location. And I think that the word is out by chain of command about appropriate security for the hard-liners that we are talking about.

BLITZER: We have an e-mail, Michael, from Roseanne in New York City. She e-mails us this excellent question: One of the short versions of U.S. post-World War II foreign policy is that our enemies became our friends; that is, Germany, Japan, now Russia, Afghanistan, which is good. But then our friends became our enemies to wit, the Taliban. What countries or groups is the United States making nice with today that will come to ruin the future? Pakistan comes to mind, as do some of the autocratic, unpredictable Central Asian republics.

VICKERS: Well, I think actually the reverse may be true. This victory in Afghanistan may actually give us a tremendous opportunity to reshape politics in Central Asia and the Middle East more broadly.

You see a number of reactions in a number of these countries now questioning bin Laden and looking more at the American model. King Abdullah of Jordan has made very positive statements in that direction recently. A lot of pro-American sentiment in Iran. And so I think certain things are really moving in our direction.

BLITZER: General Shepperd, they say nothing succeeds like success. So, if the U.S. continues to succeed, presumably, other nations will get the message.

SHEPPERD: Yes, I think a lot of these al Qaeda that are escaping are probably going to go back home and saying to their fellows out there, this was really not a good idea. You can't imagine the awesome power when we were attacked.

But I absolutely agree with Michael. I can see a sweeping movement towards freedom and democracy if we do this right from Afghanistan, Iran, Iraq, all of that belt across there that's been fundamental, Islamic and very revolutionary, perhaps moving in the other direction if this is done right.

BLITZER: General Grange, as you remember, the airstrikes began October 7, almost exactly three months ago. There's a new government in Afghanistan, al Qaeda's on the run in Afghanistan, Taliban has been overthrown. It seems to have gone rather well rather quickly. Are you surprised?

GRANGE: I'm not surprised. I always felt that this would be a successful operation. It didn't quite turn out exactly the way I thought it would. Certain things happened a little quicker than I thought.

But what's key on this is that a great combination of ground and air power both conventional, unconventional and indigenous. For instance, the Northern Alliance forces mixed together to accomplish this mission. I think the key now is, do not get involved and appear to be involved in Afghanistan politics and their government as we accomplish our final objectives there with our ground forces.

BLITZER: Because Afghanistan, Michael, is still a mess as far as warlords out there, criminals, bandits running around, the dangers facing the U.S. troops who are still on the ground, including the CIA operatives who are still there, are significant.

VICKERS: Oh, they are, because these forces are now destroyed as effective military units on a large scale, but on a smaller scale they're harder to find and they're not in these more mixed concentrations where we can really attack them. So they get the first shot sometimes.

BLITZER: General Shepperd, what are going to be looking for in the next few days, the next few weeks as this military war against terrorism continues?

SHEPPERD: Well, first of all, within Afghanistan you're focusing your censors and you're listening for groups of people getting back together and listening for the obvious, bin Laden, Omar and wherever else they might have gone. And then you're working with these nations, the other nations, one's we've talked about. You're working with Yemen, you're working in Somalia, not with government necessarily, but with the groups there. You're working with other nations around the world to try to help them and go after finances as well as prepare for any type of military action.

So it's really an intelligence gathering thing right now after we're through with Afghanistan.

BLITZER: General Grange, one technical question, and then I'll wrap it up. General Tommy Franks is the head of the Central Command. His region is in Afghanistan, that entire part of the world the Middle East, South Asia.

If there are other military actions that are outside of his region, let's say the Philippines or Africa, North Africa, other places, who's in charge of that operation?

GRANGE: Depends on that theater and that commander in chief.

You know, the world is divided up by different commanders in chief that have different theaters of operations. Right now most of them are supporting, for instance the Pacific commander, the Europe commander, supporting General Franks with Central Command in this part of the world. If the attacked ship, let's say to the Philippines, the Pacific commander would be the support commander. Other CINCs would support him.

BLITZER: All right, so we'll be watching all those other CINCs, commanders in chief, around the world to see what they're going to be up to.

General Grange, always great to have you on. Michael Vickers, General Shepperd, we'll do this again. Thank you very much.

And this reminder, coming up right after LATE EDITION at the top of the hour on Business Unusual, a look at how a slump in Hong Kong's tourism has devastated the age-old snake industry. You'll want to watch this. That and much more on Business Unusual, 3:00 p.m. Eastern, noon Pacific, just ahead.

Our "Final Round," your questions, our panel answers. Also, your phone calls and e-mails, next on LATE EDITION's "Final Round."

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION's "Final Round." Joining me, Donna Brazile, the former manager of the Al Gore presidential campaign; Julian Epstein, the former Democratic counsel for the House Judiciary Committee; Jonah Goldberg of the "National Review"; and Robert George, the columnist for the "New York Post."

The Bush administration says it needs money from Social Security to help win the -- finance the war on -- against terrorism. Republican Senator John McCain warned of big problems for the government program.

(BEGIN VIDEO CLIP)

EVANS: President Bush will continue to fight for the American taxpayer. He will continue to ensure that their taxes are lower rather than higher. Taxes aren't going to increase under this administration.

(END VIDEO CLIP)

BLITZER: That was clearly not John McCain. That was Don Evans, our commerce secretary, saying that the president is standing firm, no tax increases.

Robert, what do you say about that?

ROBERT GEORGE, "NEW YORK POST": Well, I think the president was pretty clear. I think he said over his -- actually said not over his dead body, but he meant over his dead body there is not going to be any -- there's not going to be a tax increase.

And what this is really a -- the switch, the political switch went off on New Year's Day, and right now the two parties are positioning themselves for what is going to be the debate over the next 11 months. BLITZER: Is the president going to live to regret that very firm statement he made?

JULIAN EPSTEIN, FORMER DEMOCRATIC COUNSEL: Well, we'll see. As Senator Feinstein said on your program today, a trillion dollars of the tax cut still hasn't gone into effect. And the Republicans in Congress said that even the $.3 trillion that has gone in effect would have a stimulating effect. It hasn't done it, largely because rich people are spending as much money as they are going to spend and there is an excess of inventory amongst businesses.

So simply giving these two groups the money -- disproportionate amounts of the tax break, as John McCain has complained about, doesn't seem to have much stimulating effect.

BLITZER: Jonah, a lot of comparisons being made, obviously, between what the president said and what his father said, "Read my lips, no new taxes."

JONAH GOLDBERG, "NATIONAL REVIEW": There's a big difference, though, in that these tax cuts have already been passed, they're law. And it would take a lot more than anything Tom Daschle can do, even though he's not even calling for repeal of these tax cuts, to get Bush to break the promise he made yesterday. It's not a "no new taxes" pledge, it's a I'm not going to rescind the taxes that have already passed both Houses of Congress and I've signed into law.

And the cuts are there. They're going to stay. And I don't see how Bush have to worry about having to break that promise.

BLITZER: What do you say?

DONNA BRAZILE, FORMER GORE CAMPAIGN MANAGER: Many of these cuts will not take effect for years to come. Over 60 percent will not take effect for a couple of years. So I think we should put everything on the table.

If the president clearly wished to change the tone of Washington, D.C., he needs to begin talking to Senator Daschle and come up with a real plan that will stimulate the economy in the short term.

GEORGE: From a political standpoint, though, Daschle is in an awkward position. Because if that tax cut had passed by just like one vote or something, Daschle might have a place to stand.

But the fact is, you know, he lost a quarter of his own Democratic caucus in that. You had Dianne Feinstein on. And she is supportive of the tax cuts, so Daschle can't really blame it all on the Republicans.

EPSTEIN: If Evans is correct and in fact nothing is on the table in terms of going and taking a second look at this tax plan, then I think -- and this is a lot of old wine in a new bottle. This same type of economic philosophy gave us structural deficits in the 1980s. Then in fact, if we don't get out of this recession, this will become the Bush recession. BLITZER: All right. Let's get back...

(LAUGHTER)

We got that John McCain soundbite on Social Security. We need to deal with that issue as well. Let's listen to Senator McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Right now, I do not see the funds available to save Social Security and Medicare, and we have to address that. And we have to speak plainly to the American people that both of those systems are in serious trouble.

(END VIDEO CLIP)

BLITZER: Which one is in more trouble, Jonah?

GOLDBERG: Well, you know, John McCain voted against the tax cuts. And so when he says these things, he's a little -- sort of disingenuous there when he says that we don't have the money to save Social Security and Medicare, as if both of these things are on respirators, and if we don't take back those tax cuts, one is going to die, and millions of people aren't going to have Social Security, which is a pretty dishonest way of making this argument.

Neither one is going to die. I think that, you know, the whole proposition that it saves Social Security is a bit of rhetoric left over from the Clinton administration.

And, you know, what's going to happen is they're going to have to negotiate on where the money's going to go. But the real reason, much like the structural deficits that Julian referred to from the 1980s, that the real reason we don't have money for these things is because -- led by Tom Daschle, but also some Republicans, both houses of Congress have been spending money like a pimp on Saturday night.

(LAUGHTER)

And it's been going on for several years. And the rate of growth of government has been outrageous on both sides, and that's where the money went. The money didn't -- we didn't lose money because of the tax cuts, we lost money because of outrageous spending.

BLITZER: And in the first year of the tax cuts, only some $30 billion spent this past year.

BRAZILE: Absolutely.

But let's go back to Social Security. Look, 76 million Americans, baby boomers, are on their way to retire in the next couple of years. Both parties got to get real serious about retirement security in this country. And we've got to find ways to make the system more solvent and not continue to dip our little hands and take what we need in order to pay for these expensive tax cuts. GEORGE: But the really big problem -- the really big problem you have is whenever Republicans step forward and say we need to reform Social Security, we need to reform Medicare, Democrats demagogue it.

You know, back in the last administration, you had John Breaux who helped craft a really good, responsible Medicare reform. And when -- and Gore and Clinton just scrapped it because they wanted to run on the wanted to run on the program.

EPSTEIN: Well, these spending excesses that Jonah speaks about, it's curious. I would remind you, Jonah, that for the better part of the last eight years, save maybe six months, it's been Republicans who have been calling the shots in Congress.

GOLDBERG: I put some of the blame on Republicans.

EPSTEIN: But look -- but look, under this administration's economic plan, their fiscal plan, we've gone from surpluses as far as the eye could see to deficits as far as the eye can see.

And the cynic in me tells me that perhaps that's just the way the Republicans want it because that then gives the Bush administration an excuse for not fulfilling its promise on prescription drugs, for HMO reform and for not touching Social Security. Now it has its out, its excuse for going back on those campaign promises.

(CROSSTALK)

GOLDBERG: ... eyes can't see very far either way. And there are a lot of people saying there were surpluses for as far as the eye can see.

The reality was that all these prognostications about the future and about how the economy works are really silly. These arguments about the stimulus package are ridiculous from both sides.

The reality is that the economy's getting better. We don't really need a stimulus package. We operate on the business cycle in this country.

EPSTEIN: But, Jonah, with due respect, nobody disagrees with the fact that the Bush tax plan has taken away all of the surplus as far as we could see it. And to the extent that it existed...

(CROSSTALK)

EPSTEIN: They would argue about the 10-year projections, but the surplus to the extent that it existed as far as the eye could see is gone because of that. And now the Republican Party...

GEORGE: Returned to the rightful owners.

EPSTEIN: ... will have to explain whether or not that policy is going to work.

GOLDBERG: $38 billion, Julian, $38 billion of that went because of the tax rebates that Democrats insisted upon.

EPSTEIN: Some of it Democrats wanted, not...

(CROSSTALK)

BLITZER: Wait a second. Let's talk about the war in Afghanistan, the war against terror, the search for Osama bin Laden and Mullah Mohammed Omar.

Today, Afghanistan's interim leader promised to stay on the Taliban spiritual leader's trail.

(BEGIN VIDEO CLIP)

KARZAI: If we find him, we will arrest him, today, tomorrow, whenever. We will keep looking for him.

(END VIDEO CLIP)

BLITZER: Donna, is it that important to find Mullah Mohammed Omar?

BRAZILE: Absolutely, absolutely. Mullah Omar, all of his, you know, top lieutenants, as well as Osama bin Laden.

Look, every week we hear these reports that we're hot on his trail, we've surrounded him, we're going in and then some side deal is cut. We need to have a focused program that focus on capturing him whether he's on motorbike, horseback or on scooters.

BLITZER: Jonah?

GOLDBERG: It's important to capture him because we said we were going to, and therefore our credibility's on the line.

But I think there's some problem with Mullah Omar, and the first part is that, first of all, there are a lot of reports that he's daffier than Rain Man and it could be kind of embarrassing when we catch him when we listen to him talk.

(LAUGHTER)

GOLDBERG: And also, the real thing is that Osama bin Laden's the real target because he is the leader of this international movement.

BLITZER: Very quickly.

GEORGE: No, I agree exactly with what Jonah said. I think Omar is -- I mean, it's not that important really if we get him or not.

EPSTEIN: It's very important, he is iconic as the way Osama bin Laden is. Very important for symbolic reasons.

Also, it underscores to me this new government in Afghanistan can't -- is really, talk about ground zero, is at ground zero. We can't expect too much too soon. It underscores the need to redirect, reverse the atrophied intelligence system that we've seen in the last 20 years.

BLITZER: All right. We're going to take a quick break. When we come back, we'll have some of your calls, your e-mails for our panel.

LATE EDITION's "Final Round" will return. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION, where we're continuing our "Final Round" and taking your questions by phone or e-mail.

In fact, we have a question. Julian, what do you think about this?

Morton (ph) e-mails us this question: Does the panel believe that Senator Daschle will run for president in 2004?

EPSTEIN: I don't know if I believe he will. I hope that he will. I think he is singularly the most effective party spokesman out there today.

BLITZER: You think he's running already?

GEORGE: Oh, he's already running.

BRAZILE: I'm not sure. This guy has not indicated one way or another if he'll run.

GOLDBERG: I think he's very effective as a senator, but he has a problem with being duller than the Waltons at the sound off, and I'm not sure he'd make a very good presidential candidate.

BLITZER: All right. You've got to tell us how you really feel, Jonah.

(LAUGHTER)

BLITZER: Congressional support is growing for the war against terrorism to expand to other countries. The Senate Intelligence Committee chairman endorses that action.

(BEGIN VIDEO CLIP)

SEN. BOB GRAHAM (D), FLORIDA: In my judgment, the next phase of that mission should be other al Qaeda cells outside of Afghanistan. And there, no doubt, are those cells in Somalia, as well as maybe as many as 20 to 40 other countries around the world.

COKIE ROBERTS, HOST, ABC'S THIS WEEK: Including Iraq?

GRAHAM: Including Iraq.

(END VIDEO CLIP)

BLITZER: Julian, where do you think? Where should the next mission be? EPSTEIN: Senator Nickles was right on your program when he said, you don't come on television and announce where you're going to strike next.

I think that, clearly, the United States has the biggest hammer in the world. It doesn't mean the rest of the world has to necessarily to become the nail.

I think that it depends where the evidence takes us. If there's evidence that there's real al Qaeda training camps in Somalia, and I don't think that's been shown yet, then there's a case to go out there.

I think, however, there's a much stronger case to do something in the case of Iraq.

BLITZER: What about that, Jonah?

GOLDBERG: I think that's basically right. I mean, we've declared war on al Qaeda and, one, al Qaeda isn't over yet. In the meantime, there's every reason to believe the administration is trying to figure out what to do about Iraq, and that may take some time.

GEORGE: And the war is actually on terrorism in general. And so, it could be Somalia, it could be Sudan where al Qaeda also operated, so go where the evidence leads.

BRAZILE: Perhaps it should be Canada and Western Europe, where there's sleeper cells and they are closer to our border or have access to our country, and we should go there, as well.

GOLDBERG: I always wanted bomb France, so...

(LAUGHTER)

BRAZILE: ... finding the evidence and go where the evidence leads.

EPSTEIN: Just keep in mind the words of Secretary Rumsfeld, and I think these were very prescient on his part. Much of this war we will never see, and there's been hundreds of arrests that have occurred now in other countries and this is continuing to occur.

I think this is precisely what'll happen in places like Somalia. You won't see the grand fanfare of these bombing raids, but I think you will you see a lot of activity going on beneath the radar screens.

BLITZER: All right. Having said all of that, the chorus for Saddam Hussein to be removed from power is apparently growing much louder. Today the Democratic senator and likely presidential hopeful, John Edwards, weighed in on the issue while visiting Uzbekistan.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D), NORTH CAROLINA: He's ignored the terms of the cease-fire agreement, won't allow the weapon inspectors -- our weapons inspectors into the country. It's very difficult to imagine a situation where the world is secure, the United States is secure, while Saddam Hussein is still in power.

(END VIDEO CLIP)

BLITZER: Jonah, some observers out there are already suggesting that Senator Edwards is polishing his resume, his international resume, for an apparent run for the presidency.

GOLDBERG: I'm shocked, shocked by even the suggestion of such a thing.

(LAUGHTER)

GOLDBERG: Actually, that entire junket of all these senators from Uzbekistan or Tashkent this morning, it seemed like the wannabe- presidents of 2004, 2008 and 2012 club. I mean, it was...

BLITZER: It was McCain...

GOLDBERG: McCain, Lieberman, Hagel, all these guys. Of course, Edwards is. He's what, he's a one-term trial lawyer right now. He needs to sort of boost his resume, and that's what he doing.

BLITZER: But he is a pretty impressive guy, you have to admit.

BRAZILE: Well, he's a very impressive guy. But unlike certain governors who don't know the name of world leaders, certain senators must have a greater understanding of world that they live in.

And I think he's doing the right thing by traveling and joining the congressional...

BLITZER: Were you referring to a former sitting governor?

BRAZILE: Well, you know.

(LAUGHTER)

GOLDBERG: Whatever slight chance John Edwards had of winning the nomination, went -- completely went out the window on September 11. I think, come 2004, regardless of whether they re-elect George Bush or they go with a Democrat, they're going to want somebody who's had years of experience. And I think a one-term thing, a one-term senator from North Carolina isn't going to do it.

GEORGE: He may be -- it might make him good vice presidential material.

EPSTEIN: Well, I just got finished saying I hope Senator Daschle is running.

(LAUGHTER)

EPSTEIN: But I think that the good news for the Democrats is that there is an embarrassment of riches. And Senator Edwards is Bill Clinton, I think, without the baggage. He's centrist, he's articulate, he's very intelligent. I think he'd be a formidable candidate, if he decides to get in. I hope he gets it.

GEORGE: There are lots of embarrassments in the Democratic Party, I agree with Julian.

GOLDBERG: Of course Bill Clinton without the baggage makes someone very, very light.

(LAUGHTER)

BLITZER: Let's continue speaking about 2003.

EPSTEIN: Do I get a word back on that?

(LAUGHTER)

BLITZER: You do after the program.

The Democrats meet later this month to finalize plans that would move their 2004 presidential primaries to very early in the year. But the "New York Times" disagrees, writing this: "The nation is moving toward the worst possible scenario, one big diffused presidential primary held in the dead of winter, where only the candidates with large amounts of ready cash need apply."

Donna, you're on the Rules Committee. What are you Democrats thinking about this?

BRAZILE: Well, clearly, the Republicans decided to change their rules and to start earlier in February. We want it to be consistent this time with the Republicans. Last time, the Democrats held our two contests out in New Hampshire, outside the window and then we had a five-week lull in the competition.

So this time, we're consistent with the Republicans, and hopefully, this will spur a lot of debate in many other states.

Now, let me just say that I understand, this is a tough process. That means the calendar is up candidates will be out there early on next year, and you will you find a lot of candidates running earlier this year.

BLITZER: They're running already. The Democrats want to end, basically, the whole process by, when, February, March?

BRAZILE: March.

GOLDBERG: What's actually interesting here is, really, is that both parties are sort of going to a back-to-the-future way of selecting their candidates. I mean, before the big primary process started in the '60s and the '70s, had you the democratic leaders -- the little "d" democratic leaders -- in the back room selecting who the candidate is. And by pushing everything up early, I think they feel that they're going to get the strongest candidate possible, basically the same way the Republicans did with getting Bush out there.

EPSTEIN: Jumping from the frying pan into the fryer, the old system was distorted in terms of giving early states that had early primaries the advantage, disproportionate influence. This new system, this kind of super-primary on February 3, I think is also distortive and would give disproportionate amount of power to those with a lot of money to the party chieftains.

I think that the Democrats are following the Republicans here. They're doing so wrongly. And I think the secretaries of state have put forward a much more intelligent proposal, which is to have five primaries.

BLITZER: Well, the last time around, there was a primary, a Democratic primary in May or June. You know, it was way too late for anybody to even care.

GEORGE: Yes, I think that's right. And I may spontaneously combust for agreeing both Donna and the "New York Times." But I think this sort of process, this race to the bottom between the two parties in moving it further and further up, only feeds the likelihood of more sort of faux populists, like from the right and from the left. (UNINTELLIGIBLE) system locks out real debate and real democracy and all that kind of thing.

And so, I mean, I think it's a bad process, and it's going to hit rock bottom, and then they'll have to fix it again.

BLITZER: A bad process about to get worse?

GEORGE: Yes.

BLITZER: Stand by. We have another "Final Round." Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to the "Final Round."

This week a federal judge will decide if cameras will be allowed to cover the trial of terrorism suspect Zacarias Moussaoui. Should the courtroom be open?

EPSTEIN: A federal judge won't decide if he doesn't have authority. The Congress or the judicial circuit has the authority to decide it. Normally, it's a good idea. In this case I think it's a bad idea, because I think you have witness that could have real security issues.

GEORGE: Yes, that's exactly right. I think you don't want to give this terrorist, in a sense, a window to spout his bizarre views. Obviously, he's going to get a fair trial and there will be enough print reporters to ensure that, but it doesn't have be televised.

BRAZILE: Political circus. I say keep it off TV.

BLITZER: Keep it off TV.

BRAZILE: Keep it off TV.

GOLDBERG: This guy was clearly willing, in my mind, to sacrifice his own life for his cause. I think he's certainly willing to make a circus out of our judicial system.

BLITZER: President Bush, meanwhile, is working hard to revive the economy, and avoid the plunge in popularity that plagued his father after the Gulf War. Will he succeed? Jonah?

GOLDBERG: I really think that in this sense that these are not analogous situations. I think Bush had a much bigger, much different problem with the economy. He has a much different personality. He has a much different relationship with the Republican Party. And I just don't see it. History's not going to repeat itself on this one.

BRAZILE: It's a different war, and I think that while the president is wildly popular now, I don't think it will matter 303 days from now when voters go to the polls and decide which direction they want to take this country. And the Democrats will have a greater chance of proving to them that we care about kitchen-table issues.

BLITZER: 303 days. Are you counting those days? Listen to that.

BRAZILE: Absolutely.

GEORGE: Yes, exactly so. First of all, this war is not over. It's still continuing, whereas the Gulf War was finished by the time the politics actually began.

And second of all, as Jonah said, George W. Bush has a very strong, strong relationship with the base of the Republican Party, with the conservatives, and so, there is not going to be any kind of split.

EPSTEIN: Both parties almost unanimously support the war aboard. So, I think it will cancel itself out in the political issue in 2002.

The key thing to remember is that President Bush had no coattails in 2000, he had no coattails in 2001 during the war effort.

And I think that the key number to remember is, pre-September 11, the polls all showed that only one in four Americans believed that President Bush understood their problems. And I think that will begin to elevate itself now as a determinative factor in the elections.

BLITZER: All right. Amid all of this, Senator Joe Lieberman has announced that he'll begin investigations into Enron's collapse. Some are already saying this scandal could be George W. Bush's Whitewater. Is it?

BRAZILE: Well, you know, I think the American people are interested in this. 60 percent of the American people own stock and clearly they are concerned about what happened to this major Fortune 500 company, the seventh largest company in the country, to just go belly up.

And look, the fat cats, you know, cashed out and all the stockholders were left with nothing but paper, and they've lost a lot of their savings.

GOLDBERG: I think the Whitewater linkage is sort of bizarre to me, and I haven't seen it yet. This guy was friends with Bush and therefore, what? There's no second shoe to drop from that.

But I do think the Enron story is huge and it deserves to be covered, and I think some of these guys might end up going to jail and they screwed up.

EPSTEIN: The Republicans were wrong on Whitewater. They carried on a fishing expedition for seven years. Democrats should not try to do that.

However, one should remember that Enron was essentially Bush's dance partner at the inaugural ball. And when they were cooking the books, federal regulators, it appears, were going to sleep.

And there are a lot of questions that need to get answered so this type of thing doesn't happen again.

GEORGE: Yeah, the Whitewater comparison is absolutely absurd. It's not as if George Bush was Ken Lay's (ph) partner, which is what was going on with Whitewater.

Obviously, it's appropriate to have an investigation and, you know, see where it leads. But it's not going to be the type of all- encompassing scandal that Whitewater was.

BLITZER: This note, too. The "Hustler" magazine publisher, Larry Flynt, wants the Pentagon to change their guidelines and allow him to send correspondents to Afghanistan. Should the Defense Department change their rules?

GEORGE: Of course not. This is absolutely bizarre. I mean, what's next? You know, beneath the Burqa? I don't think so.

BLITZER: The girls of Afghanistan, he wants to do a piece on the girls of Afghanistan.

EPSTEIN: I find it a little bit obnoxious, but the First Amendment attorney in me makes we think they ought to allow him to do it. But especially, just simply to rub Osama bin Laden's nose in it.

GOLDBERG: I think it's an awful idea. I also think that Larry Flynt is an awful human being. So, I think it's perfectly consistent that he would have an awful idea.

Look, one of the reasons why we set off so many bad attitudes in the Middle East and all these places is because of our use of pornography and all these sorts of things. Why we would want to send this guy out there to run mocking, silly covers and all that kind of stuff, and beneath the Burqa thing. I just think it's a terrible idea.

BRAZILE: The last thing the Afghanistan women or any women across world need is some cover story that comes from "Hustler" magazine. I'm a big defender of the First Amendment. But, I think on this one, I would pass and not give "Hustler" magazine what he wants.

BLITZER: No credentials for "Hustler"?

BRAZILE: No, no.

BLITZER: Finally, President Clinton, the former president of the United States, has lost his best friend. Any final memories? Buddy the dog, I remember when the president named Buddy that day. I broke that story, you know, that he picked the name Buddy.

(LAUGHTER)

GOLDBERG: It wasn't Luke, if I remember correctly. You know, it's a shame, but I think Buddy would want us all just to move on.

BLITZER: Yes, he was a lovely dog.

EPSTEIN: Bill Clinton said he'd be with us in New Hampshire until the last dog dies. The last dog hasn't died, but his most loyal and best dog has, and it's a real shame.

BLITZER: We're going to leave it right there.

(LAUGHTER)

Thanks to our "Final Round" on LATE EDITION.

And that is your LATE EDITION for this first Sunday of 2002. Please join us again next Sunday and every Sunday at noon Eastern for the last word on Sunday talk.

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