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CNN Late Edition with Wolf Blitzer

Ridge Discusses State of Homeland Security; Thompson, Edwards Talk About Trip to Central, South Asia; Kemp, Sperling Debate Economic Policy

Aired January 13, 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; 8:00 p.m. in Mogadishu, Somalia; and 9:30 p.m. in Kabul, Afghanistan. Wherever you're watching from around the world, thanks for joining us for LATE EDITION.

We'll get to our interview, our exclusive interview, in fact, with the U.S. homeland security director, Tom Ridge, in just a few minutes, but first, the hour's latest developments.

(NEWSBREAK)

BLITZER: And while the military campaign has been successful so far, the Bush administration is still crafting a comprehensive plan to protect the United States at home.

Earlier today I spoke with a man leading that effort, the homeland security director, Tom Ridge.

(BEGIN VIDEOTAPE)

BLITZER: Governor, thanks so much for joining us. I haven't spoken to you really since you took over this new assignment. You got your hands full, as we all know.

It's now four months since the September 11 attacks. Are the American people any safer today than they were on September 10?

TOM RIDGE, DIRECTOR OF HOMELAND SECURITY: Wolf, I think every day since the horror and the tragedy of September 11, both individual citizens, all levels of government, companies, everyone has looked for ways to make themselves, their communities more secure.

So, yes, I think every single day since September 11, we have made ourselves safer, stronger and more secure. We still have a lot of work left to do, Wolf, but we are making progress every day.

BLITZER: But there are still credible threats out there. As a result, you want the country to remain on a high state of alert, at least through the Winter Olympics in February. What specific threats though do remain?

RIDGE: Well, Wolf, one of the most challenging characteristics of this job, one of the most challenging things we face every single day is trying to deal with the threat information that the CIA and the FBI and the other agencies gather.

And unfortunately, unlike conventional warfare, terrorist obviously conduct their plans in much more clandestine ways. And therefore, trying to peace together bits of information that suggests that there will be additional terrorist attacks on the United States is a very, very difficult enterprise, a very difficult process.

And we still believe that, obviously, al Qaeda has cells around the world, sympathizers around the world. And until we can deal with Osama bin Laden, until we can dismantle the al Qaeda, we think we need to be on a very high state of alert.

BLITZER: Well, you're suggesting, therefore, that there are still al Qaeda cells out there, so called sleeper cells, in the United States. Is this a serious problem?

RIDGE: Wolf, I can't tell you absolutely, conclusively, without any doubt that there are X number of al Qaeda operatives here.

But what we do know is that we are an open and a welcoming and trusting country. We do know that we let millions and millions of people into this country every single year. The 19 that were involved on September 11 came in lawfully through the immigration and visa process that we have. And I think we should operate under the assumption that there are still some sympathizers or cells in the United States.

I think that the attorney general, the FBI, the president, the secretary of treasury, everybody has done a great deal now to disrupt their activity, freezing their finances. The law enforcement is on a state of alert, higher than ever before. We probably disrupted activity, but we still have to be very, very vigilant.

And I must say that once we deal with bin Laden and once we deal with al Qaeda, given the nature of the 21st century world that we will confront, I think we just have to prepare as if this is a possibility, there is a potential of a terrorist attack at any time, by any organization, not only foreign but potentially domestic, a la Timothy McVeigh.

BLITZER: The Winter Olympics in Salt Lake City, you were just out in Utah, you inspected the situation said that the security unprecedented, but there's no 100 percent guarantee that there could be no terrorist operations during the Winter Olympics.

RIDGE: Wolf, you said it precisely. This is an effort that has been undertaken for five years, preparing for security. It has been designated a national special security event over two and half years ago. The Secret Service, the FBI, the Federal Emergency Management Agency has been working tirelessly for two and half years.

They had expanded well over $200 million before September 11. Once that happened, they reviewed the plan, they enhanced it. It's just -- it's a lot deeper now. You've got the coordination of 60 different federal state and local agencies, so, they've done everything I believe that is humanly and technologically possible, but that still means that it's not fail safe.

I mean, we feel comfortable, we think that we have done everything that can possibly be done. And I would say it's not a static operation out there. Every single day they review, every single day they look for ways to enhance the security for the participants, for the visitors and for the spectators.

BLITZER: Well, with the Taliban destroyed in Afghanistan and the al Qaeda on the run, Osama bin Laden on the run, do you think they still have the capability, al Qaeda specifically, that network, of communicating and getting another terrorist operation off the ground?

RIDGE: I think because of the extraordinary success of the military and the domestic efforts undertaken by all the relevant agencies, I think access to monies becoming more difficult; I think communications has been severely restricted.

But I do believe that this is a -- we know they're an audacious group. But this is a very, very sophisticated operation. And I think as the president has signed the executive order giving me the opportunity to lead the office of Homeland Security, it's the responsibility of our staff to plan and prepare for this being almost a permanent part of our environment in the future.

The 21st-century world, as the intelligence community has indicated, will bring us not only threats from sovereign nations, but terrorist groups around the world regardless of whether we -- and we will get Osama bin Laden and we will dismantle al Qaeda, but I'm afraid that there will be successor organizations, and we have be prepared to deal with them. So they can conduct whatever enterprise they try to deal with to undermine United States security; undermine our way of life -- they have to conduct their work on our rules rather than us on theirs.

BLITZER: So you're basically saying the war against terrorism, we should see it as sort of an equivalent of war against crime or the war against illegal drugs.

RIDGE: I think that's a fair statement. And as you well know and probably have commented upon it since September 11, we've been on a very high state of alert. And the attorney general a couple of times went public reminding America that we must remain vigilant. I stepped forward and did the same thing.

And one of the exciting prospects and, I think, very important aspects of the office of Homeland Security is we're working with local, state and federal law enforcement agencies so that we can really create a different language of alert, a different language of preparedness as we go into the future, so we're just not either high alert or no alert.

And we've had some very, very good meetings, Wolf, and I suspect within the next several weeks we're going to try real hard to see if we can get national consensus so the law enforcement community as well as the citizens can have the threat information that we can share with them in a context, give it some texture.

BLITZER: Because of some of the criticism that was generated earlier about...

RIDGE: Right.

BLITZER: ... the warnings while at the same time no specific threats. Why alarm the American public if there are no specific threats?

RIDGE: Well, and I think it's legit. I mean, and I respect the law enforcement community and understand that they would like these alerts to be framed based on the kind of information, the accuracy of the information, the specificity of the information.

We actually received some very good ideas from the Association of International Chiefs of Police. The governors and the homeland security directors in Indiana and New York and California have some ideas. The FBI's been working with our Homeland Security Office on this. So I think we're trying to work very hard so we can have a national consensus around what we would use in the future.

BLITZER: Governor, let's get to some specific cases, the case specifically of Richard Reid, the suspected shoe bomber. Was he acting alone, or is the best information available to you that he was part of some sort of group?

RIDGE: The information available to date -- and clearly, the military, the CIA and the FBI and everybody's drilling down on this very, very aggressively -- there does appear to be a connection. And I'll let those more involved personally and professionally in that investigation draw the conclusions.

But it certainly does not appear that he was acting alone; he had some support. And time will tell if we can directly link him to a specific organization or not.

BLITZER: Do you have evidence that he was directly linked to Zacarias Moussaoui, who, as you know, has been the only individual formerly indicted, implicated in the September 11 attack?

RIDGE: Wolf, the thorough investigation that's being -- that's an ongoing investigation, I believe they've made some connections. I'm not familiar with the depth of the investigation or the connections that they've made. It's still an ongoing investigation, and once they reach some conclusions, I'm sure they're going to -- you'll be made aware of them.

BLITZER: What about this case the other day, the arrest of an Egyptian who had been at a hotel across the street from the World Trade Center, his name Abdallah Higazy, who did have a so-called aviation radio in his room. Is there a direct link there, as far as you know, between that incident and September 11? RIDGE: Well, I think the FBI is probing in that direction. Here you have an individual with communications equipment, possibly monitoring communications between the airport and air traffic. I think it, again, remains to be seen how conclusive these links are. I know that it has been a high priority within the FBI. It, too, is a subject of an ongoing investigation.

One of the challenges, as you have noted, I'm sure, on many instances, that there's a -- literally, hundreds, if not thousands of FBI agents and state and local police involved in an assortment of investigations around the country, not only dealing with September 11, but obviously one of the rules of the FBI had been, historically, prosecution. But right now, they're in the prevention business, as well. So that brings a whole new dimension to their activities.

So they have literally dozens and dozens of ongoing investigations, not only to deal with September 11, but to disrupt, prevent and deter future activity.

BLITZER: A lot of concern raised over the case of Charles Bishop, the 15-year-old who smashed that small plane into that office building in Tampa, but flew over the MacDill Air Force Base before. That's the headquarters of the Central Command, which is conducting the war in Afghanistan.

At point should that plane have been shot down?

RIDGE: Well, this is conceptually probably one of the most difficult decisions any military commander or anybody involved in the chain of command would have to deal with. I think one of the challenges that we have dealing with potential terrorism is you have to assess your vulnerabilities and the kind of risks and threats that you believe exist.

And I think it was -- it's fair to say that a 15-year-old and a Cessna was not at top of too many people's list as being a high probability of terrorist activity.

So I think what we have in this instance is a very, troubled young man tragically ending his life. I don't think anyone really thinks he had any connection with al Qaeda. Who knows about his sympathies, with regard to Osama bin Laden.

And I know the military commanders on these bases -- and it begins with the president of the United States and the secretary of defense -- they've got ongoing security. They've enhanced their security around this country, and, again, they will remain on a state of alert for the foreseeable future as well.

(END VIDEOTAPE)

BLITZER: We have to take a quick break. More of my exclusive interview with Homeland Security Director Tom Ridge when LATE EDITION returns. I'll ask him why the United States government still posts germ warfare techniques on the Internet.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing now with more of my exclusive interview with the homeland security director, Tom Ridge.

(BEGIN VIDEOTAPE)

BLITZER: Governor, you may have seen the front-page story in today's "New York Times" saying the government, the U.S. government still makes available some very sensitive germ warfare techniques to the American public, indeed to people around the world. Just go on the Internet, and you can buy some of this information.

Are you doing anything to tighten that up?

RIDGE: As you report, and as people read, we are a very open society and we're very much an information society, and there are a lot of us that think that some of the information we share with the public probably should be restricted in some fashion.

Obviously you have to be very, very careful about that, but I think the president's science director, Dr. Marburger, working with the office of homeland security, as well as others, has not only expressed a concern, but looking to see what kind of information should be so easily available in the public domain.

So that's a priority for us, and we're working on it, Wolf.

BLITZER: But no final decision as of this...

RIDGE: No final decision, not as of today. But again, the president's science director, members of Congress have expressed a concern on both sides of the aisle.

You know, as of September 11, we rethink how we conduct business in this country, not just in terms of security, but the openness, and we really don't want to lose those qualities of America.

We are open, we are trusting, but we have to be a little bit more careful and a little bit more vigilant. And we may have to take a look at these kinds of issues from a different perspective because of the tragedy of September 11 and the follow-on incidents that we've had to deal with.

BLITZER: Are you any closer today than you were a few months ago, Governor, to finding out who was responsible for the anthrax attacks here in the United States?

RIDGE: The FBI continues to follow some significant leads, but I can't report to you today anything other than they have made progress. I think they've narrowed the universe down, but it's still a fairly large universe that they're looking at.

And right now it is not a frustration, but I guess to the individual agents who've been out there plowing through records and following up leads and trying to identify the perpetrator or perpetrators, it is something that they hope they can resolve quickly.

But right now I can't tell you that we're close to arrests. But I can tell you we're following some leads very, very aggressively.

And it's been complicated, frankly, by the fact that we've had thousands and thousands of hoaxes that we've had to send agents out to work on as well.

So hopefully those individuals who felt that somehow generating an anthrax hoax was either comical or funny would -- I think that we've seen the numbers substantially reduced -- hopefully we're going to send a couple dozen of those people to jail, to remind them that this is no laughing matter, this is serious business in this environment.

But they're working hard on it, Wolf, but no conclusion yet.

BLITZER: But as far as those deadly letters were concerned, is the evidence pointing more toward domestic American terrorists or foreign terrorists?

RIDGE: I believe the direction of the investigation has gone to -- more toward internal, domestic terrorists than external. I think a lot of us, including myself, felt that it couldn't possibly be a coincidence after September 11.

RIDGE: I think our natural inclination was to look to external terrorists, but the primary direction of the investigation is turned inward.

BLITZER: As far as your office is concerned, there's some controversy that there is a recommendation before you and the president to take over border responsibilities involving the INS, the Immigration and Naturalization Service, the Customs department. Are you seeking to do that?

RIDGE: Well, there is a consensus within the Office of Homeland Security and I would like us to consider looking at the borders in a different way than we have in the past.

I think a consolidated, a border management agency, is an alternative dealing with not only security, but commerce. We should consider it with our Canadian and Mexican friends. There is certainly no consensus within the executive branch around this idea. I have promoted that idea.

It's interesting, one of the charges the president has given me is not only take a look at America through the lens of security, but he's also said if in that process you can figure out ways to make us a better country, do so.

And so we've had several conversations not only with regard to the security of these borders, but how we can facilitate the flow of the goods and people, commerce across those borders. So, one of the alternatives we are looking at is some form of border management agency.

There is no consensus. We are going work with our colleagues in the Cabinet to see if we can come up with some alternatives to see if there is a 21st-century approach that will deal not only with the commercial side and enhancing the financial interaction that we have, but also on the security side.

BLITZER: And these reports of a power struggle, a turf war that may be under way because your Office of Homeland Security is seeking to usurp some of these other powers, what do you say about that?

RIDGE: Well, first of all, our office has absolutely no operational responsibility, nor do we seek any operational responsibility. I think the president wants me to consider changes and anticipation of needs and anticipation of the kind of incident that we had to deal with on September 11.

I would not categorize it as power struggle. I think it is right now there is some disagreement as to whether a need exists. And clearly that is one of the reasons that we decided to look at a variety of alternatives.

And I think this is an issue that has been studied 30 years. There is plenty of literature out there, Wolf. And most of the literature says that we ought to consider a border management agency. What form, what configuration -- maybe we stage it incrementally or maybe don't do anything.

But the president said take a look at these things not only from security side, but if you can improve things as well, to facilitate commerce, and that is exactly what I'm going to do. I'm going to look at alternatives and then make a presentation to the president if a good alternative develops and there is a consensus among the agencies to get it done.

BLITZER: Before I let you go, Governor, I want to ask you a quick question about the whole Enron controversy because your name did surface over this weekend in a comment that was attributed to Ken Lay, the chief executive officer, the chairman of Enron, who recalled a conversation he had with the president way back in 1997.

He said this: "I called George W., who was then the governor of Texas, to kind of tell him what was going on. And I said that it would be very helpful to Enron" -- which is obviously a large company in the state of Texas -- "if he could just call the governor" -- meaning you -- "of Pennsylvania and tell him this is a serious company. This is a professional company, a good company."

The then Texas governor did call you and speak highly of Enron. Give us the gist of what happened.

RIDGE: Well, we had, in Pennsylvania, as governor, we had deregulated natural gas as a commodity. We were the first state, we like to think, that did it correctly when it came to deregulating electricity. And as I recall, there is a conversation then with my colleague, then Governor Bush, and we had known about Enron beforehand. We had known that they were interested in expanding their markets in Pennsylvania.

And regardless of the phone call, Mr. Lay would have been welcome at that time. I think we looked at Pennsylvania as a pretty good place to do business because we had deregulated our utility industry. As it turned out, they didn't do much business in Pennsylvania.

BLITZER: So the phone call really didn't make much difference as far as the bottom line as far as Enron was concerned?

RIDGE: I'll just tell you, within the National Governors Association, from time to time there are these kinds of phone calls. We share information. We share best practices. It made absolutely -- it was nice to get the phone call. It meant absolutely nothing, as it turned out.

We had seen several people involved in the utility industry. Whether they was a preceding phone call are not, made absolutely no difference in Pennsylvania. We had a good, deregulated market. Those who chose to come in to compete we welcomed them regardless of whether there was a forwarding phone call or not.

BLITZER: And let me wind up this interview, Governor, by getting back to what I asked you at the beginning. Advice to the American public, bottom-line advice: Go about your work, but be more prudent. It's easier said than done when you've ordered a higher state of alert.

What is your bottom-line advice?

RIDGE: Well, professionally, the responsibility the president's given to me is to make sure that, at the conclusion of every day, as we have monitored what's going on not only in government but around the country, that we have made progress in becoming a more secure and better and stronger country. And I think I can report to you and to America that that happens.

I truly wish that all 285 million Americans could spend a little bit of time at my desk, reviewing the correspondence, listening to the people that I talk to, and seeing the extraordinary effort that is being undertaken, again, not just within government but around this country, to make America safer and more secure.

And we have done a lot since September 11. We have a great deal more to get done. But the fact of the matter remains, it is a high priority, not only for the Office of Homeland Security, and obviously it's one of the highest priorities for the president of United States, but everybody. I mean just so many people in America are engaged in this.

And I'm confident that down the road we will not only be more secure, but we'll be better and stronger because of this tragedy. America always responds to these kinds of things, Wolf, in a very positive way. And we are going to take this tragedy. We will be more secure. We'll be a lot stronger country as a result of it.

BLITZER: OK, Governor Ridge. Thanks so much for joining us on this Sunday.

RIDGE: Wolf, good talking with you. Thank you very much.

BLITZER: Good luck to you.

(END VIDEOTAPE)

BLITZER: And CNN has just obtained pictures of a U.S. Airforce C-17 lifting off from the Kandahar Airport in Afghanistan. You're looking at these pictures right now.

The plane is carrying some 30 heavily guarded al Qaeda and Taliban detainees. They are bound for the U.S. Naval Base at Guantanamo Bay in Cuba. They will join some 20 other Afghan war detainees who arrived there earlier; they arrived Friday afternoon.

And when we return, the Enron investigation. Two key members of the U.S. Senate weigh in on the energy company's collapse. We'll also get a firsthand account of their just completed trip to Afghanistan, and where the war on terrorism stands right now.

The Democratic Senator John Edwards of North Carolina, and the Republican Senator Fred Thompson of Tennessee. They are next on LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

Joining us now are two members of the United States Senate. They are just back from a congressional trip to Central and South Asia, the first since September 11. The Democratic Senator John Edwards of North Carolina, and the Republican Senator Fred Thompson of Tennessee. Both senators members of the Intelligence Committee.

Thanks to both of you for joining us.

And, Senator Edwards, you heard Tom Ridge, the homeland security director, say there are probably still some sleeper cells, al Qaeda, other networks, out there in the United States right now.

How concerned should the American public be, especially as the Winter Olympics approach next month?

SEN. JOHN EDWARDS (D), NORTH CAROLINA: Well, our law enforcement agencies are very focused on this, as you know, Wolf. But I think it'd be a reasonable assumption that there are certainly still terrorist cells here within the United States, al Qaeda and other terrorist cells, and we need to stay focused on that.

But I think everyone needs to do what they've been doing since September 11, which is to stay focused on it and keep a heightened level of alert. BLITZER: Are there any specific and credible threats that you know of?

EDWARDS: Nothing specific. I think what we know is, there have been terrorists within the United States for a long period of time, from all kinds of terrorist organizations, Hamas, Hezbollah, al Qaeda, and that those people mean harm to us, and so we've got to stay focused on it. The law enforcement agencies are intensively investigating and monitoring their activity.

BLITZER: Do you think the American public can do that, Senator Thompson, be on a high state of alert and then simply go about their day-to-day activities, fly and engage in all sorts of activities, without being overly concerned?

SEN. FRED THOMPSON (R), TENNESSEE: It seems a little counterintuitive, I guess, but I think pretty much, yes. I think, if nothing happens for a while, our attention will wander a little bit. But I think it's up to us and people like Governor Ridge to point these things out.

I think John's right. I think we've got to assume that he's right about this. When you look at the presence of a lot of these bad organizations and suspect organizations that we know over the last several years have come in here under our loose immigration policies, it's only logical to assume that some of them are active in this regard and going to remain active.

And I think the FBI now has had its attention really gotten about this. I think they're going to do a much better job in keeping up with it in the future.

BLITZER: You're just back from the region. Do you have a better sense today than you did only days ago where Osama bin Laden might be?

EDWARDS: Well, one of the things that happened, Wolf, is when Senator Thompson and our colleagues flew into Afghanistan to Bagram Air Base, Senator Thompson and I, as members of the Intelligence Committee, had a chance to actually spend some time with our intelligence operation there.

It was a surreal experience. We've talked about it. I mean, we're in this building, which is a cinder-block building out in the dark, middle of the dark, in the freezing cold, but that's where a lot of the work is being done.

And one of the things that we discovered there, I think, is that there is an intense effort going on, first of all, to find bin Laden, to find Omar. It's a high-tech operation. These are highly professional, highly competent people. And I came away with the impression that these folks are clearly going to get bin Laden, it's just a question of when.

BLITZER: Well, do you think he's still in Afghanistan? Or has he fled the country? EDWARDS: Well, I think the reality is, if he's near the border, which at least a lot of folks believe he is, it really doesn't make a great deal of difference.

The border in the area that they're talking about, Wolf, is very porous. The likelihood is, he'd be able to move from Afghanistan to Pakistan and back and forth literally on a daily basis if he chose to do so.

And I don't think it's tremendously important whether he's in Afghanistan or in Pakistan. I think he could be in either one.

BLITZER: Are those the only two options, Senator Thompson, as far as you know? I mean, presumably he could have gotten out a while ago.

THOMPSON: Yes. The Uzbeks think he's in Pakistan; the Pakistanis think he's in Somalia. I mean, it depends on who you talk to.

BLITZER: When you say the Pakistanis think he's in Somalia, you mean the Pakistani government?

THOMPSON: Yes, some there. Or they think he's not in Pakistan, and that's one of the places where they think he might -- could be. But I think it's all speculation. Nobody knows.

All we do know is that the Pakistanis, fortunately, have kept about 60,000 troops that they've had along that border there in place while they've had this problem with India. And it hasn't caused them to move those troops out yet.

So I think we've still got a good chance of catching him. I know they're doing all that they can, and the U.S. forces certainly are. And I think it's just a matter of time.

THOMPSON: Some people think he's inside Afghanistan still, even, and Omar they think pretty definitely is inside the country.

But it's something that people are naturally interested in and we're going to talk a lot about.

But again, I agree with Senator Edwards here, it doesn't really make that much difference exactly where it is. We're going to have to look in all these places, and we're going to have to take some time. And we're going to have to not lose patience, which is something we tend to do sometimes.

BLITZER: Senators, when you say the intelligence officials that you met with in Afghanistan, the U.S. officials working in that complex over there, are -- you came away convince the U.S. is going to find Osama bin Laden and Mullah Mohammed Omar, the former leader of the Taliban.

Why do you say that, given the fact that this has been a successful military operation to date but both of these leaders are still on the run?

EDWARDS: Well, first of all, we knew from the outset that this was going to be a hard, challenging task. Because, first of all, bin Laden has been spent a lot of time in Afghanistan. He knows the terrain. It is very difficult terrain.

Omar is even a more challenging target, because he's from Afghanistan. He has friends there. He has family there. And we know that he's done his best to hide and recede back into the population.

So nobody is surprised that this is taking a long time. All I'm saying is if you met with the people who are responsible, in fact, for finding bin Laden and for finding Omar, that it creates an enormously high confidence level. They know what they're doing. They're highly confident. They're a high-tech operation. I just came away with a very strong opinion that they're going to get him.

BLITZER: And you're confident, Senator Thompson, that the allies, the new interim government in Afghanistan, the Pakistani government, all the so-called warlords who've been working with U.S. troops in that part of the world, they're working cooperatively with the U.S. in searching for these two individuals?

THOMPSON: I think so, to the extent that they can. They're mainly working cooperatively to survive. I mean, they're down to basics there. This is a devastated country in many respects. They're trying to get everybody under the same tent. They're doing a pretty good job of doing that. They've got to have some kind of an army, eventually. They've got to have some kind of police force. We're concerned about the drug traffic, for example, as they are.

But they're not really actively involved that much in a hunt for bin Laden. I mean, that's kind of our job and the Northern Alliance and the other allies there. The new interim government is just really trying to do some very basic things, and I think they're doing a good job of it.

BLITZER: But, Senator Edwards, you've seen the reports that some of these warlords -- maybe this is the way things are done in Afghanistan. They sort of just give a wink and a nod and they take some bribes or let some people slip through their hands in order to just get it over with, and they may deliberately have let Osama bin Laden and Mullah Omar get away.

EDWARDS: Well, I think the reality is we have some intelligence sources we can rely on, some who are reliable some of the time and some who are not reliable. And we have to be able to recognize -- which I think our people do -- who's reliable, who can provide, in fact, real-time intelligence that will allow us to act and act quickly.

And ultimately, our ability to get bin Laden and to get Omar is heavily dependent not just on having information about where they are and where they were four hours ago, but having real and effective, actionable intelligence that we can move on immediately.

BLITZER: OK. Difficult challenge. We're going to continue this conversation, Senators. Stand by. We have to take a quick break.

When we come back, more of our discussion with Senators Edwards and Thompson. They'll also be taking your phone calls. And I'll ask them whether the Enron investigation has the potential to become for President Bush what Whitewater was for President Clinton.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're talking with two key members of the U.S. Senate, both members of the Senate Intelligence Committee: Democrat John Edwards of North Carolina and Republican Fred Thompson of Tennessee.

Senator Thompson, Henry Kissinger wrote an op-ed piece in today's "New York Times" in which, among other things, he says this, looking down the road after Afghanistan: "Were we to flinch, the success in Afghanistan would be interpreted in time as taking on the weakest and most remote of the terrorist centers while we recoiled from unraveling terrorism in countries more central to the problem." Specifically, he's referring to Iraq.

THOMPSON: Yes, I agree with that.

BLITZER: So you think the U.S. should take on Iraq right now?

THOMPSON: No, I didn't say that. I think the timing, when and how is going to have to be something that's given a lot of consideration. I think it's to be done and consult with -- consulting our allies.

I don't think, however, that we can let anyone set our policy for us. I think that we've shown that being too amenable to holding off because of that has caused us to wind up in a more dangerous world.

I don't think it's necessarily that the next thing to do, but I don't think that we can be secure while we still have someone in that kind of role as a head of a country like that, who has shown the proclivity to use weapons of mass destruction even against his own people; who probably is developing the most sophisticated and most lethal of those weapons as we speak; and who refuses to let inspectors in the country, which I don't think would solve the problem even if we had them in there. So I think eventually we're going to have to address it.

BLITZER: All right, let's take a caller. We have caller from New York.

Go ahead with your question please for the senators.

CALLER: OK. Good afternoon, Senators.

In regard to the question of Iraq, Senator Hagel not only addressed that issue yesterday and said very strongly that he felt we should not do any sort of unilateral action against Iraq unless there was some sort of a joint effort with the U.S. and its allies, but he also said that what's happening Iran deserves further examination. You've got a moderate president, Khatami, who's basically set up his half of the government in opposition or in competition with the more religious.

BLITZER: So what's the question, what's the question?

CALLER: The question is, what's your reaction to Senator Hagel's call for greater cooperation and moving toward closer ties with the moderate elements led by Khatami in Iran, as opposed to just listing it as a terrorist state?

EDWARDS: Actually, let me speak to both those issues, if I can.

The first issue you mentioned was Iraq. I actually believe that as long as we have somebody this hostile to the United States in Saddam Hussein, who is in fact developing weapons of mass destruction -- we know he'll use them; he's violated the cease-fire agreement -- the reality is that we can't allow him to continue on the track he is. And I also believe that we can't be secure and the region can't be secure as long as he's still in power. That's number one.

With respect to Iran, we've actually seen some talk from the Iranian leaders, including the moderate leaders, that indicates that they're willing to join us in the fight on terrorism.

The real question is, given their long, protracted history in this area being a huge -- if not the leading, one of the leading sponsors of terrorism in the world, are they actually going to do something about it? And I think that's the test, and I think that's the question we need to be resolving right now.

BLITZER: I want to switch gears...

THOMPSON: Let me just comment. Our future in Iran is with the Iranian people, not that leadership. Because the moderate leadership there doesn't run the country. And now we're seeing they're pouring over into Afghanistan and trying to do mischief over there. We need to hold back from this kind of engagement until the people there have a chance to change things.

BLITZER: Let me switch gears and talk about the Enron controversy, which seems to be growing at least here in Washington. Henry Waxman, the Democratic congressman from California, wrote a letter to Dick Cheney, the vice president.

Among other things, he said this: "It is now clear the White House had knowledge that Enron was likely to collapse but did nothing to try to protect innocent employees and shareholders, who ultimately lost their life savings."

You've been around Washington for a long time. You were one of the investigators, one of the counsels going back to Watergate. Is this a huge potential scandal for the Bush administration?

THOMPSON: It's a huge financial scandal right now. I don't think it's going to be a political scandal at all.

Most all of the key people in the administration have come forth and set forth what happened in their contacts and so forth. And it looks like the system worked. I mean, they received some calls apparently. I'm not sure whether what we were asked to do is improper. I mean, everybody from Ken Lay to Mr. Rubin asked them to do things. I don't whether improper or not, we'll find that out. We should investigate that for sure.

But evidently no action was taken, and no intervention was made on their behalf. So if that plays out to be true -- needs to be looked into -- then I don't think there's going to be a political scandal.

But on the other side, there are an awful lot of questions with regard to the Enron situation in terms of their corporate management, in terms of their disclosure. I mean, how you can set up these limited companies and do what they did and the self dealings that apparently were there and get and get by with that has got to be explained to me.

BLITZER: Documents shredded, documents missing.

Do you believe that the Justice Department, the Bush Justice Department, can effectively investigate this issue, given the close ties that did exist between Enron and top people in the Bush administration?

EDWARDS: What I believe, Wolf, is we will get to the bottom of this. There are congressional investigations going on. The Justice Department is investigating. Attorney General Ashcroft has recused himself from the investigation, as everyone knows. We'll find out what happened.

But this is really not a complicated story based on what we know right now. Regular people have lost out, and the people, the wealthy people at the top of the company took out around a billion dollars during a time the company was collapsing. All the employees had their money tied up in the 401(k), required to own Enron stock, and could do absolutely nothing about it.

EDWARDS: And that's ignoring the shareholders and the people who did business, the creditors of the company. The American people have seen this sort of story before.

But our question is, for example, myself on the Labor Committee, I want to know how can we be in a situation where people who put their life savings, their futures, in the hands of their -- in the 401(k), they have no control over the stock that's purchased. They're required to maintain Enron stock when the financial condition of the company is plummeting and, in fact, when management's not telling the truth about what's going on. This can't be the case. We have to do something about it.

BLITZER: OK. Senator Edwards, Senator Thompson, neither one of whom ever received any contributions from Enron. You're probably happy about that.

THOMPSON: Better to be lucky than good sometimes.

BLITZER: Thanks so much to both of you for joining us.

THOMPSON: Appreciate it.

BLITZER: We have to take another quick break. There's much more ahead on LATE EDITION, including a closer look the U.S. economy with two distinguished guests. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: There's much more ahead on LATE EDITION. We'll check the hour's latest developments. Then we'll get some insight into the wartime economy from the former Republican vice presidential nominee, Jack Kemp, and former Clinton economic adviser Gene Sperling.

We'll also ask them about the growing Enron controversy, the collapse of the seventh-largest company in the United States. Is Congress considering limits on how much retirement-fund money employees can invest in their own company stock? Many Enron employees lost their life savings.

CNN's Brooks Jackson explains what happened to Enron's retirement money is not as simple as it seems.

(NEWSBREAK)

BLITZER: And when we come back, we'll ask Jack Kemp and Gene Sperling about the issues raised in Brooks' report. Plus, we'll have the Democratic and Republican perspective on the return of partisan politics to Washington, including, later in the next hour, James Carville.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. Coming up this hour, a conversation about jump-starting the U.S. economy, plus James Carville, Paul Begala, Bob Bittman and Peter King on the political and legal fallout of the Enron collapse.

First, here's Carol Lin in Atlanta with a quick check of this hour's latest developments.

(NEWSBREAK)

BLITZER: President Bush and congressional Democrats are still far apart on the best way to revive the U.S. wartime economy.

Joining us now to talk about that, the former Republican vice presidential nominee and housing secretary Jack Kemp, and the former Clinton White House economic adviser Gene Sperling. They're both here in Washington. Gentlemen, welcome back to LATE EDITION.

JACK KEMP, CO-DIRECTOR, EMPOWER AMERICA: Thank you, Wolf.

BLITZER: And, Secretary Kemp, let's begin with you. And before we get to the economy, this whole Enron collapse, you've been around Washington for a long time. You were in Congress, the executive branch.

KEMP: Right.

BLITZER: You see how these stories develop. Does this have the feel for you of a huge political scandal in the works?

KEMP: No. It could be, but no. It doesn't look like any of the Bush administration did anything to influence credit ratings or -- the tragedy is for Andersen consulting.

BLITZER: Arthur Andersen.

KEMP: The scandal, Arthur Andersen, and for the Enron executives who were selling while telling their employees to hold on to their stock. That to me is scandalous. Whether or not it's a political scandal will have to remain -- we have to wait for the Justice Department investigation, the congressional investigation, of course, the press that'll be on top of this for the next two months.

BLITZER: Only two months, you think?

KEMP: Well, I mean, easily the next two months, maybe longer.

BLITZER: Many months, probably.

KEMP: It's a tragedy.

BLITZER: Well, you've been around, Gene Sperling, you lived through eight years of the Clinton White House.

GENE SPERLING, FORMER CLINTON ECONOMIC ADVISER: Yes.

BLITZER: You know how these stories develop. Does this have the feel for you, that this story, as we say in the news business, has legs?

SPERLING: Too early to tell.

You know, as being part of the Clinton administration, obviously I think we were often victimized, I think, by innuendo and kind of assumptions of guilt before innocence, and I'm not going to do that to the Bush team.

I think this is worth being investigated, but I think that there's no reason to be assuming anything. I think we can have time to wait for the facts. We don't need to mar people's careers or reputations based on reputation. I do agree, at a private-sector level, though, it has serious implications. I mean, three things that are just a core of our capitalist system is, one, that average people can save in a diversified way. Two, that the little guy feels that, when he invests in the market, that it's not rigged against him.

SPERLING: And three, that the information that comes out, even to the sophisticated investor, comes out without biased or conflict of interest.

And I all three of those pillars have been, in some way, abused here. And I think the test for Congress is to fix them and make them better, not to rush in, as can happen at times, and do something that will be harmful.

I think, clearly, there needs to be some form of limits in the amount of concentration of a single company stock in 401(k).

BLITZER: Let me ask you one specific development, as we reported in the past few days. Bob Rubin, the former Clinton treasury secretary, now obviously, the private sector, made a phone call to his department -- the Treasury Department -- to a high-ranking Bush administration Treasury official, asking should there be any assistance give to Enron, as it looked like it was going down. Was that an appropriate phone call to make?

SPERLING: Well, Wolf, a few points. One, Bob Rubin has been a pillar of integrity, and I think that's how he's regarded across Washington and New York.

Number two, Secretary Rubin called him and said to him, I'm not sure if this is a good idea, probably isn't, but I wanted to hear your views. That conversation ended with both him and the Undersecretary Green, it was not a good idea.

Third point is Secretary Rubin was not calling an administration that he had worked for to try to use undue influence. He was calling administration of a different party. And this is not somebody who's trading on his influence. He was CEO of Goldman Sachs before he was in this job. He's gone back to another high-profile job. People in that level of high-profile Wall Street jobs are going to have contacts with the government, if they're going to do their jobs well.

And I don't think there is any implication at all or any suggestion by anybody that Secretary Rubin did anything inappropriate.

BLITZER: Do you believe that there has to be a restructuring, some rethinking about all of these employees who lost their 401(k)s, their pension plans, many of them their life savings, at a time when the top executives of Enron walked away with tens of millions, some hundreds of millions dollars?

KEMP: There were over 300 stock trades by one employer, a high official at Enron.

So, look, as Gene pointed out, investigation has to go forward. We've got to look at the concentration of 401(k) in one stock. We've all been told, you want to diversify and not put all our eggs in one basket.

But clearly, telling your employees not to sell, when you are selling over 300 stock trades, that, to me, is scandalous.

BLITZER: OK. Let's move on and talk about tax cuts.

SPERLING: I just had one point. The reason why this concentration is so harmful is that it's also where your job is. So you are double-burned. When the company goes down, the person both loses their job and they lose the majority of their savings. That's what's particularly harmful about this type of situation.

BLITZER: Tax cuts, economic stimulus packages -- big to-do. At the end of the last -- before Congress went into the recess to Congress' coming back, President Bush wants economic stimulus package passed.

In our latest Gallup poll, the public was asked, should Congress postpone or repeal tax cuts? Yes, 28 percent; no, 67 percent.

The American public don't want the Democrats to succeed, or at least those Democrats like Ted Kennedy who want to postpone or repeal those taxes, they don't want that to go forward.

SPERLING: Well, I think you have to separate short term and long term here, Wolf, and I think even the way that question was presented probably does confuse the public.

First question: Should there be tax cuts in the short term over the next year or so designed to stimulate our economy and get us out of recession? The answer to that is yes.

And Senator Daschle, as well as people like myself, believe that there should be significant tax cuts. Senator Daschle's called for 40 percent depreciation bonus over the next six months, but they want those limited to help jump-start the economy now.

The second...

BLITZER: Senator Kennedy, when he introduced his measure this coming week, he's going to make a speech saying repeal or slow down...

SPERLING: But, Wolf, really, we're confusing two things. There's short-term stimulus that's limited toward the following year. That we should do. I agree with President Bush, we still need insurance policy against recession.

Second question is, for the vast majority of Americans who are supposed to get their tax cut, should their tax cut go forward -- not be raised -- go forward all the way? Everybody agrees, yes.

The only question that's been on the table is in 2004 and 2006, should people at the very top have their tax cut delayed or postponed until we know that we can balance the budget and save enough for Social Security? Ninety-eight percent of Americans would get their full tax cut.

Whether or not that is a good or a bad thing -- which we can disagree on, and we will -- people shouldn't call that a tax increase. That's about postponing tax cuts that haven't happened. A millionaire will still get $12,000 a year. They'll do a lot better than the average American.

KEMP: Gene knows better than that. I mean, you know that the rates were raised to 39.6 percent. That is too high in an economy...

BLITZER: That was the first year of the Clinton...

KEMP: ... to get the type of investment.

I want to make a case, that why have depreciation schedules advanced and accelerated and then take it off a year later? That is so bizarre.

SPERLING: People don't make long-term investments, as you would know, Gene, for a year of tax cut. It is ridiculous.

BLITZER: Mr. Secretary, let me just get back to the specific point that Gene is saying. The top, the wealthiest Americans, should they be willing to delay receiving those tax cuts that passed Congress...

KEMP: No, they shouldn't because the tax is too high on both capital and labor. And if we fail to lower the rates, we're not going to get the type of economic growth that ultimately will give us the strong economy that we want with long-term investment decisions, in jobs, machinery, equipment and particularly technology which is really suffered in the last two years.

BLITZER: All right, we're just getting started. We're going to take a quick break.

KEMP: OK.

BLITZER: We've got a lot more to talk about -- the economy, tax cuts and more -- when we come back.

In addition to all of that, your phone calls for Jack Kemp and Gene Sperling. LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Not over my dead body will they raise your taxes.

(END VIDEO CLIP)

BLITZER: The president only a week ago, making it clear he's not going allow any increases in taxes.

Welcome back to LATE EDITION.

We're talking about the wartime economy with the former Republican vice presidential nominee Jack Kemp and the former Clinton White House economic adviser Gene Sperling.

That's a pledge that may or may not be hard for the president to keep, but he's certainly on record now saying no tax increases.

SPERLING: Well, I think that what's unfortunate about what President Bush said is that he's not owning up to any responsibility for the long-term deterioration of the surplus.

Now, I'm going to be very straight here. The deficits that you're seeing this year are due mostly to recession and terrorism. I'm not saying the president's responsible for that. But the numbers also show that over 10 years, the fact that we've gone from a $5.6 trillion surplus to probably under $2 trillion surplus, a dramatic fall, and actually deficits probably going into Social Security surplus for seven, eight years is due primarily to the tax cut.

And what Jack does not mention to you is that he makes it seem like the world ended in '93 when Bill Clinton came in.

KEMP: No, I didn't.

SPERLING: But the fact is that what happened is, nobody ever wants to delay a tax cut. Nobody ever wants to have to raise taxes even on the top 2 percent like we did. But fiscal disciple, turning our fiscal situation around and having long-term fiscal discipline had put us in a better situation with Social Security...

BLITZER: All right. Let's let Jack Kemp...

SPERLING: ... and keep interest rates low for the investment boom that we had in the '90s.

KEMP: Look, I didn't mention '93 at all, but I'm glad to say that long-term interest rates were lower in '92 and '93 than they were when we went into a deficit.

You've had high deficits with low interest rates and low deficits with high interest rates. There's no correlation, empirical...

SPERLING: That's just not true.

KEMP: Well, that's my view, and I think there's empirical evidence to back it up.

Here's the point I want to make, though. Larry Kudlow (ph) and Steve Moore (ph) pointed out the other day in the Wall Street Journal that the revenues growth in the economy was 7 to 8 percent from '83 to almost 2001. Revenues grew 7 to 8 percent every year, other than taking out for the recession of '90 to '91.

Revenues, we lost revenue, 1 percent of revenue last year because of the recession. Grow the economy, get the economy bigger, make unemployment go down, you get more revenue.

So our goal should be economic growth in the short term, but also the long term.

SPERLING: The funny thing is...

BLITZER: Won't that be more revenue for the Treasury Department because...

KEMP: Absolutely.

BLITZER: ... taxes would go up.

SPERLING: Jack and I don't really disagree on the fact that you need a growth agenda. I think where our difference is, is he thinks that if you're just cutting taxes particularly for the well off that's always going to -- I don't mean that just because of well off, but for people he feels are the most productive -- that's going to drive things.

KEMP: No, I think everybody's productive. Don't put words in my mouth.

SPERLING: OK, I won't put words in your mouth.

KEMP: Labor and capital are overtaxed.

SPERLING: But the growth agenda that we saw in the 1990s was triggered a lot by the fact that because we turned our fiscal situation around and we're paying down the debt, long-term interest rates were much lower than they would have been.

Just Friday, Chairman Greenspan said that long-term interest rates had not come down as much partly because of the deterioration of our fiscal surplus.

KEMP: Gene...

SPERLING: Just last week Abby Joseph Cohen from Goldman Sachs said the same thing. In fact Goldman Sachs estimated...

BLITZER: (OFF-MIKE)

KEMP: The deficit this year is less than one-half of 1 percent of GDP, less than one-half of 1 percent. This deficit is almost meaningless in a $10 trillion economy.

Interest rates depend upon monetary policy, and monetary policy in our view has been very tight. Wholesale prices down, producer prices down, consumer prices down. It's causing all companies and nations who have dollar-dominated debt to pay back their debt with your dollars. That is what's hurting everybody from Global Crossing to Enron to Argentina.

SPERLING: It's affected by monetary policy. Why haven't long- term interest rates fallen? They haven't fallen because people have seen the deterioration of the fiscal surplus.

And, Wolf, $4 trillion does matter. When $4 trillion disappears that you're expecting for debt reduction, that does have an affect on our savings rate and interest rates.

BLITZER: Jack Kemp, let me -- you're just back from Israel. You were there when the Israelis intercepted that ship carrying arms that they say were destined for the Palestinian Authority. Yasser Arafat has arrested some individuals now in connection with that.

Is that going to be good enough to get the peace process going?

KEMP: Well, one would hope so, but, I think, you know, being in Israel for the foundation for the defense of democracy with Senator Lautenberg, it's clear to me, Wolf, that Iran and the Bekaa Valley, with the support of Syria, are arming the Palestinian Authority, unfortunately with U.S. tax dollars...

BLITZER: How are they doing it with U.S. tax dollars?

KEMP: We give them aid. We give the Palestinian Authority aid. It should be shut off.

BLITZER: (OFF-MIKE)

KEMP: The purchase of 50 tons of Iranian assault weapons was made with European and U.S. aid, and it should be shut off immediately.

And I think one has to question -- in fact, more than a question, whether or not Yasser Arafat actually will ever be an advocate for peace. He has shown no intention. The people he's arrested have been let out the backdoor. This is a very serious situation. I think the United States has to cut off aid to the PA, the Palestinian Authority, and I think we ought to urge our European allies to cut it off and force Arafat to get serious about making peace with Israel.

BLITZER: Jack Kemp, speaking his mind as he always does, never too shy. Thanks for joining us.

KEMP: Thank you, Wolf.

BLITZER: Gene Sperling as well. Thank you very much.

SPERLING: Thank you, Wolf, Jack.

BLITZER: I know Jack Kemp, I know what you're going to be doing this afternoon, but...

KEMP: Watching football. It's a holy day in the Kemp family.

(LAUGHTER)

BLITZER: Up next, partisan politics returns to Washington big time. And investigations and scandals hounded, of course, the Clinton Administration, but are there similar troubles ahead for President Bush?

We'll ask former Clinton advisers James Carville and Paul Begala and find out what political advice they offer in their new book.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

This, of course, is an election year in the United States, the control of both houses of Congress very much at stake. And that means partisan politics back in Washington, despite unity over the war against terrorism.

Joining us now to talk about that are two former advisers to the former president Bill Clinton, James Carville and Paul Begala. They're also here because they're the authors of a new book entitled, get this, "Buck Up, Suck Up, and Come Back When You Foul Up: How to Fight and Win in Business, in Politics and in Life."

(LAUGHTER)

I guess that's a pretty interesting title, James Carville.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Yes.

BLITZER: What's the point of this book?

CARVILLE: Well, the point of the book is things we've learned through campaigns and things we've seen and how they apply to everyday life to people. And we talk about how to frame the debate, how to come back when you make an error, how to get ahead.

And it's been a heck of a lot of fun, and we've just had a marvelous time with it. We got unbelievable reviews. Tom Peters, the management guru, said it was just like one of the best of these self- help books he's ever seen.

And it was just an enormously fun project. It's not a partisan book. It's a book about how everybody can get ahead.

So it was good to do it, and we had a lot of fun doing it, and I really enjoyed working with Paul.

BLITZER: Well, we've got some, put up on screen, some of the winning tips, what you call the "winning tips," some of the advice you have from your experience in political campaigns dealing with everyday life.

For example, don't quit, don't ever quit. What does that mean? I mean, that seems like almost common sense, right?

(LAUGHTER)

PAUL BEGALA, DEMOCRATIC STRATEGIST: It is, but you'd be surprised. Most people who fail wind up failing just because they just run out of gas. And the successful politicians certainly that we have worked for, Bill Clinton first among them but not alone -- we've worked for Bob Casey, who was the governor of Pennsylvania, had lost so many times, before he finally got elected governor they called him the three-time loss from Holy Cross.

And our poster child for don't quit is Abraham Lincoln. You know, I mean, every schoolchild learns the great, heroic accomplishments of Lincoln, but I think they ought to also learn the many, many failures. Abraham Lincoln was the biggest loser of his era, and yet, simply because of determination, resilience and perseverance, he became the greatest president in history.

BLITZER: James Carville, as you well know, there was a song once called "You Got to Know When to Hold Them and When to Fold Them." Doesn't that mean you should quit at some point, when it's over?

CARVILLE: No, we actually praise Jack Welch, the GE chairman, who -- his last thing was, he went down on the Honeywell deal, but I have much more respect for him because he stood there and kept swinging.

And, you know, show me a winner, and I'll show you a guy that's lost a lot. And if you're not willing to lose, you're never going to be a winner, is message of the book.

And Lincoln was probably the biggest loser of his era, arguably the biggest loser in American politics, but he was also the most famous and greatest president we had in the eyes of many historians, probably the greatest American.

And the point is not -- if you stay at -- Ted Williams failed, you know, how many -- he batted, what, .343 lifetime. So you can imagine how many times that he struck out or he didn't get a hit.

So the point of the book is, if you want to win, be willing to lose.

BLITZER: All right. Now, one of the winning tips that you suggest, Paul, number 4: Frame the debate.

BEGALA: Yes.

BLITZER: And indeed, when you frame the debate, you say the best example of this framing the debate was what Ronald Reagan said in 1980. Listen to what he said.

(BEGIN VIDEO CLIP)

RONALD REAGAN, FORMER PRESIDENT: Are you better off than you were four years ago?

(END VIDEO CLIP)

BLITZER: That's the single best piece of advice you have, how to frame the debate. BEGALA: President -- Governor Reagan then, right? He was running against President Carter, the incumbent. He could have talked about anything and everything under the sun. Instead, he took the entire election -- that clip was, I believe, the night before the election -- and he took -- or the last debate before the election -- he took it right down to that question.

He said, cast everything else aside. President Carter wanted to talk whether Reagan was a warmonger or so forth. He framed the debate. That was the only question he wanted people to ask. Not who had more experience in Washington, or not who had a higher IQ or a degree in nuclear engineering from Annapolis like Jimmy Carter did. But just, are you better off than you were four years ago?

And Ronald Reagan -- that's why we said, it's not a partisan book -- Ronald Reagan was one of the great leaders of our time, and Democrats have to acknowledge that and learn it from it. And that's one of the things we drew from in the book.

BLITZER: It was the last debate, it was October 29, 1980, only a few days before the election. He framed that election, pretty...

CARVILLE: And the point is, if you're going in to ask for a promotion or a raise, or you're trying to close a deal or something like that -- and we use the example of our mother, who sold encyclopedias -- you want to put it in context. I mean, you have to frame the choice that your boss is going to have to make if he's going to give you a promotion or a raise. You have to frame the choice that your customer's going to make if they're going to decide to buy your product.

And we think it's -- what Reagan did there is very applicable to people in everyday life who want to try great ahead.

BLITZER: One of the other suggestions, your winning tips, number 5, you say, understand the difference between strategy and tactics.

There's one of your 12 winning points, as you say.

You say one of the, I guess, the worst examples of this was Al Gore, in 19 -- actually, one of the best examples was Al Gore in 1998, in the Rose Garden.

Let's -- excuse me for a second. Al Gore had the best and the worst of this.

CARVILLE: Right.

(LAUGHTER)

BLITZER: But the worst was when he said one thing on December 19, 1998, in the Rose Garden, the day that Bill Clinton was impeached. Listen to this.

(BEGIN VIDEO CLIP)

AL GORE, FORMER VICE PRESIDENT: The man, I believe, will be regarded in the history books as one of our greatest presidents.

(END VIDEO CLIP)

BLITZER: And then he said only a few months later, "I think what he did was inexcusable. If you've ever had a friend who disappointed you, and you worked with that person, and you rebuilt the relationship, and moved forward from the disappointment, that's exactly what that was like for me."

James Carville?

CARVILLE: Well, I like the vice president, former vice president, Al Gore, a lot. I wish we had written our book before his campaign, because I think it would have been of enormous help.

(LAUGHTER)

And what people think they look for in strategy and tactics -- there's an excellent example in there about former House Speaker Newt Gingrich that we cite with approval, where he talks about the -- there's a lion, and the lion can eat all of the...

BEGALA: Field mice.

CARVILLE: All the field mice that it wants to, inexhaustible field mice. But the problem is, the amount of energy it expends on field mice doesn't give it sufficient calories, so therefore it has to hunt larger game that's it's going to get fewer of.

And the point here that Gingrich is making, that we make in the book is -- and Gingrich is right about this -- you want to expend your energy and your time on strategy, you want to be after antelope and not field mice. The antelope may be harder to get, but that's what's going to sustain you. The field mice is a tactic, the antelope is a strategy.

And I think what happened with the vice president's campaign is, they had a lot of different tactics that never fit into an overall strategy.

BLITZER: And they were only supposedly trying to recreate Al Gore.

BEGALA: Right. It certainly looked that way.

I mean, I had the pleasure, James did too, of working closely with this guy for nine or 10 years, and he's a terrific guy. And it was really a shame to watch that campaign unfold, where they seemed to be positioning him as a different man every other day, whereas the governor of Texas, now our president, he had one clear message through the whole campaign.

And, again, Democrats have to learn from our mistakes. We've got to be willing to learn from the successes of Republicans. And we've tried to be as honest and objective as we could be. We're still who we are. But we learned a lot from the success of George W. Bush. We also had to look at the things that Gore's campaign did wrong.

BLITZER: You know, one of the -- you take a look at the other six winning tips that you had, one of them, it says, "Turn weakness into strength." Now, that is something that people always try to do, but how do you do it?

CARVILLE: Well, I mean, let's take -- we can talk about myself. I am learning-disabled. It took me eight years to get out of undergraduate school. I talk about that.

And I think what's happened, because I had a hard time of attention-deficit syndrome, what has happened is, it gave me a great strength. I can think in soundbites. I can sort of come up with clever things and memorable things to say from time to time.

And so what you want to do is, you don't have to accept somebody else's definition of you. I'm bald-headed. OK? Most people, when I'm on TV, people remember me. It's actually a strength, because I'm sort of a memorable-looking fellow. So I'm not going to go out and grow some kind of stupid hair and try to grow hair. That's just the way God made me. God made me that I couldn't do very well on these standardized tests. I'm not going to try to go out and try to pretend that I went to Harvard or anything like that.

What I'm saying is to people, you have a strength, you have a God-given gift. It may not be the gift that exposes itself on the SAT tests it might not be that kind of gift, but somewhere in you you have a real talent. Play to that talent, and use that talent.

BLITZER: And you also have in that book what you call a hall of fame of best soundbites ever.

(LAUGHTER)

And I want to play for our viewers. We had them recorded, some of the best soundbites.

CARVILLE: Oh great.

BLITZER: Listen to this.

(BEGIN AUDIO CLIPS)

PATRICK HENRY, IMPERSONATED: Give me liberty, or give me death.

FRANKLIN DELANO ROOSEVELT: The only thing we have to fear is fear itself.

WILLIAM J. CLINTON: I feel your pain.

UNIDENTIFIED MALE: Leave the gun. Take the canoli.

(END AUDIO CLIPS)

(LAUGHTER)

BEGALA: That one might be the best.

BLITZER: Patrick Henry, I can assure you, was an actor playing Patrick.

BEGALA: CNN was there. You were right there in the House of Burgesses when that speech was made.

BLITZER: These are great soundbites. What makes these so memorable?

BEGALA: Well, you watch them, they frame the debate right. "We don't have nothing to fear but fear itself." They are memorable. They are punchy.

But also, they say something of real substance. A lot of politicians and a lot of sales people think that if you say something in a brief amount of time, it can't be very deep, it can't be very meaningful. And that is just wrong.

And one of the things we learned from watching everybody from Bill Clinton all the way back to Patrick Henry, is you can say whole lot in just a little bit of time. I mean, there was Abraham Lincoln who said, "As I would not be a slave nor would I be a slave owner." That is a powerful truth. He says it in about three seconds.

BLITZER: Did you come up with the phrase, "It's the economy, stupid?"

CARVILLE: Yes. The one of the last things I actually did myself, that I got credit for.

BLITZER: In the '92 campaign. That's because you think in soundbites.

CARVILLE: But it was like, don't think you're so smart. You know, "It's the economy, stupid" was a message to us. Don't try to out-clever yourself here. You know, we're about some very basic things. "The economy, stupid," was not so much a message to America as it was an internal message to the campaign.

I think the greatest soundbite ever is, "Do unto others as you would have them do to you." I mean, you could lead your whole life on that. I mean, it's just -- there's nothing -- there's just so much wisdom in that one thing.

And Paul is right, there is a sort of thing in Washington, a policy that something has to be complicated and difficult for it to be any good. And that's just not true. You know, it really isn't.

BLITZER: Advice. We need advice. Wisdom from James Carville, Paul Begala.

We have a lot more to talk about when we come back. We'll also ask James Carville and Paul Begala about, get this, the Enron controversy. Will it be election-year issue? We'll also be taking your phone calls. Get ready. LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're are continuing our discussion with the two Democratic political strategists and former Clinton advisers, James Carville and Paul Begala.

We have a caller from Wisconsin. Go ahead, please, with your question.

CALLER: Mr. Carville, Mr. Begala, it's always good hearing your points of view on politics. Who do you see as the front-runner for the 2004 Democratic Party, and is there anyone out there that can beat George Bush?

CARVILLE: Well, look, sometimes a little diplomacy is in order here. I got a lot of -- there's a lot of people that are being talked about, running for president.

I think we've got a whole bunch of gifted people. One of them was just on here -- Senator Edwards from North Carolina. I don't want to go through the whole list: Senator Kerry, Senator Daschle. All these people being talked about, and all them are outstanding people.

Sure, I think that a lot of people are going to be able to beat George W. Bush by 2004. But, you know, right now, I think the party's focus has got to be more on 2002, and then we'll see what happens.

But we have a wealth of Senator Lieberman. He's got this Enron thing that -- and I'm sure that he will -- if he does great job on this, that gives -- is going to help his candidacy a lot, if he decides to run. Vice President Gore is talking about running. So we've got a lot of folks...

BLITZER: You think Gephardt may run?

CARVILLE: Gephardt? Yes. I don't want to -- it's a problem. You start saying names...

BLITZER: Yes, you leave somebody out.

CARVILLE: ... you leave somebody out.

BLITZER: But do you think Al Gore seriously can make a comeback?

CARVILLE: I think -- and I've I have said before -- is he has to acknowledge that he learned from 2000. And I think if he does that, I think he's got a -- he's well thought of and a distinguished public servant. I don't know. But he'll think about it. And if he does, I think if people -- if he acknowledges that he could have done better job as a candidate in 2000, I think people give him a...

BLITZER: I interviewed Mark Penn, the Democratic pollster, on Thursday. I asked him if Enron was another Whitewater, and he said it was worse. CARVILLE: Oh, it's not even close.

BEGALA: It's much worse. The only people that lost money in Whitewater were the Clintons.

(LAUGHTER)

OK, we have 21,000 people, presumably, lost their jobs, lost their life savings, lost their investments.

And another way it should be different from Whitewater is that Democrats ought not go -- and they haven't yet -- gone into the politics of personal destructions. They shouldn't begin with conclusions. I have been very proud. I saw the way both Senator Edwards earlier today and Senator Thompson from the Republican Party, were talking about it.

I think Washington is taking this one seriously, because it's not some personal peccadillo that they're seizing on to get somebody they don't like, which is all that all that Clinton stuff was. This is real. This is tens of thousands of people who have been wiped out and maybe millions of people who have been ripped off. And I think the Congress and the Justice Department and maybe an independent investigator needs get to the bottom.

CARVILLE: Yes. And Whitewater is creation of the press. This is stupid. I mean, they all know now that that was the stupidest thing that they every did.

That 22,000 real people -- we don't know how many creditors they had. We don't know how many investors there are. And we don't know, we're just -- we don't know what's going to happen to these accounting firms.

And Paul's exactly right. Democrats, we don't need to go out and, you know, we have to look into the circumstances of how much influence Kenneth Lay had on the appointment of people on these regulatory agencies. We certainly have to go back and look and see in Texas what this was.

But we can't draw conclusions yet. We have to get facts, and we have to have an investigation, both on the Hill and in the Justice Department, that has a lot integrity and a lot of confidence of the American people.

I was talking to Secretary Kemp before this. Our system depends on people having faith in our markets, and this is going to shake that faith. And people will have to be assured that this is going to be conducted, that the truth is going to be found and people are going to be brought to justice if they did something wrong.

But we're not going to go out as in Whitewater and a goofy Whitewater panel, a hearing they had, did, and try to leak things and ruin people's lives. The most partisan hacked operation I ever seen.

BLITZER: All right. Lanny Davis, who was the president's special counsel at the White House, wrote this in the "Washington Post": "I don't think there's any shred of evidence that the White House has any connection to what went wrong with Enron. Democrats should not go down the road of focusing on innuendo."

BEGALA: There's not any evidence yet. I mean, there's not any evidence of anything because the investigation hasn't begun.

But there are questions, and these are the questions. We know that CEO of Enron, according to the "New York Times"...

BLITZER: Ken Lay.

BEGALA: ... Ken Lay, called and tried to bully the head of the energy regulatory body, the governmental body that regulated his company. We know that that guy did not go along with what Ken Lay wanted. We know he got fired and replaced with someone...

BLITZER: But that doesn't mean President Bush or any of his advisers did anything wrong.

BEGALA: But somebody fired the guy. I mean, Ken Lay can't fire him. We got -- the "New York Times" reported that Ken Lay called a named Curtis Herbert, the chairman of the Federal Energy Regulatory Commission. And according to the "New York Times," said to him, "If you adopt an Enron-friendly regulatory policy, I'll ask my friend Bush to keep you on."

Reportedly Mr. Herbert said that was not acceptable. Mr. Herbert lost his job and was replaced with Pat Wood, a man from Austin, Texas, who had given Enron very favorable treatment in Texas in the Public Utility Commission, was brought up here to regulate...

(CROSSTALK)

BLITZER: All right, so what's the point? So what's the point?

CARVILLE: I like Lanny Davis, but Lanny Davis is crazy if he don't think that they need to look into the relationship between Ken Lay and the federal regulators; if they don't need to look into regulations that were in Texas that were favorable to Enron.

I mean, all of this has got -- I'm not saying anybody did anything criminal. But I'm saying, if you're going to have confidence in our system, in our market system, in our legal system, all this stuff has to be looked into.

CARVILLE: It has to answered, and I'm sure that it will.

BEGALA: He's a busy man. Maybe we ought to send the president the book, because one of the things he has done wrong already -- and I don't think it's going to have lasting damage -- but you can't start off saying things that aren't true. You got to get the facts right.

The president went out on Friday and said, oh, Ken Lay supported my opponent when I ran for governor. Now the Dallas Morning News reports that that's false. He said I didn't get to know Lay until 1995. The papers in Texas which covered him for years all say that that's false as well.

So you can't start off saying things that are not factually true. You have got to be very careful in this environment to get your facts right. And I don't think any of this is crippling long term, but...

BLITZER: So he may not have learned the lessons of Bill Clinton's mistakes.

BEGALA: You can't you can't sit in the Oval Office and say I did not have financial relations with that corporation, Enron...

(LAUGHTER)

... OK, because he did. So, he ought to fess up, be open, put it all out there and we'll get the honest truth out.

BLITZER: Maybe you should send him a copy of your book.

CARVILLE: It's in the mail, Mr. President.

BEGALA: I gave one to the vice president, so maybe he can send it up.

CARVILLE: He hasn't said anything wrong, yet. If the president would have read our book, he would have never said that.

BLITZER: I want your response to this fund-raising letter that some conservatives are sending out, linking September 11 to the Bill Clinton administration. Listen, to among other things, what they write in this letter.

"Who is to blame for the intelligence failure that allowed Islamic terrorists into the United States to murder almost 4,000 innocent Americans? Bill Clinton and the liberals in Congress. They made deadly deals with our enemies. The tragic consequences of the deaths of almost 4,000 innocent Americans, the loss of more than 1 million jobs and a war that may last for years."

CARVILLE: These people are crazy. I'll go back to what Brent Scowcroft said. He said the thing about the Bush administration policy before September 11 is exactly the same as the Clinton administration policy.

But you got a group of people out there, and I think what it is, I think they're just hateful people, that sort of conjure up anything they can. I don't pay any attention to these people. We beat them like a drum during the impeachment thing. We slapped them back like the little annoying gnats that they are.

BLITZER: The president was impeached.

BEGALA: Wrongfully, and he was acquitted by a Republican Senate.

CARVILLE: Acquitted by a Republican senator, acquitted by the American people -- two-thirds rated him the highest-rated president since they started polling. But the point is, I don't want to go back and refight an old battle and this kind of stuff is -- well, now they're going to say he did this. No, he didn't have anything to do with the recovery, now he has something to do with recession. All these people, they are just there raising money.

BEGALA: Let me just put one fact out there that I'm sure they didn't have time to put in their letter. In the whole of the federal government, President Bush only asked two high-ranking Clinton appointees to stay on -- not his economic team, unfortunately, but his counter-terrorism team. His head of counter-terrorism at the national security council, Dick Clark, and his head of the CIA, George Tenet. That's the highest praise you can give the Clinton counter- terrorism team is that President Bush asked them to stay on.

CARVILLE: By the way, the Clinton military not doing too bad a job over there.

(LAUGHTER)

BLITZER: James Carville always loyal to President Clinton, Paul Begala as well. Thanks to both of you for joining us.

Just to repeat the name of the new book, "Buck Up, Suck Up" -- it's hard to say all of this -- "And Come Back When You Foul Up: How to Fight and Win in Business, in Politics and in Life."

Thanks for joining us.

BEGALA: Thank you.

CARVILLE: Good to be back.

BLITZER: And just ahead on LATE EDITION, a very different perspective. Is President Bush handling the Enron controversy the right way? We'll talk with the former deputy Whitewater independent counsel, Robert Whitman, and Republican Congressman Peter King about Enron and more.

And the new movie, "Black Hawk Down" depicts the story of the 1993 U.S. mission to Somalia that went awry. We'll talk with the film's producer and a soldier who was there.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED ENRON INVESTOR: I do feel real bitter over what I've lost.

(END VIDEO CLIP)

BLITZER: An Enron investor testifying in a congressional committee hearing last month. Welcome back to LATE EDITION.

Joining us now from New York, the Republican Congressman Peter King, and here in Washington, the former Whitewater independent deputy independent counsel Robert Bittman.

Gentlemen, welcome back to LATE EDITION.

Congressman, let me begin with you. You heard the case that Paul Begala and James Carville just made, saying there's got to be a thorough investigation into what happened, including the ties between top Bush administration officials and Enron.

Can the Bush administration, though, the Bush Justice Department successfully investigate these ties given the close relationships that have existed?

KING: Yes, surely you can. I mean, I was one of those people who was actually opposed to an independent counsel law, so I think that a special counsel should only be brought in as an absolutely last resort.

But, you know, I think the president has handled this just right up to now, there's been absolutely not even a hint of any wrong doing. In fact that they've done everything the right.

And yes, some of the stuff that Paul Begala and James Carville were trying to bring up, I mean, to me make absolutely no sense. I mean, if anything, you know, the Clinton administration had also very close ties with Enron, as they should have. It was one of the major employers in the country. I mean Ken Lay played golf with President Clinton, the Clinton administration certainly helped them promote their energy plan in India.

And by the way, I think a Republican administration would have done the same thing. This is a major player, whether it's the head of Enron or the head of the AFL-CIO calling Cabinet officials, they should talk to them so long as on legitimate business interests, and that's what this was about.

BLITZER: Bob, is this a case, though, where there should be an independent outside investigation, or can it be done within the framework of the Justice Department?

BITTMAN: Well, right now, Wolf, there's no allegation whatsoever that any government official committed any criminal wrongdoing at all. In fact, some of the congressmen are complaining that maybe they should have done something, but it doesn't seem that way.

But quite contrary to Whitewater where there was a specific allegation that the president of the United States committed criminal wrongdoing, here you just don't have that.

There's no independent counsel statute anymore. The attorney general does have the power to appoint a regulatory special counsel, but I think we're really far from that right now. BLITZER: What about the example that Paul Begala and James Carville cited, that the commissioner of the Federal Energy Commission was warned, if you don't play ball, we're going to rid of you, and then they eventually the Bush administration got rid of them.

BITTMAN: Well, that's interesting because the then-head of the Federal Energy Regulatory Commission, Curt Hebert, was quite deferential to Enron, had been. He was well-known on the record as being quite deferential to free, open energy markets. And the new head of FERC, Mr. Wood, is not nearly as so to the energy markets.

And of course Mr. Hebert resigned -- and he wasn't fired, he resigned, and then Mr. Wood came in. So there's just no merit to that whatsoever.

BLITZER: Peter King, here's a statistic -- I want to put it up on the screen -- showing the kind of contributions that Enron delivered, made to Republicans and Democrats alike. And you're absolutely right, they did make contributions of both.

But if you look at this, Enron and its executives and their political action committee gave a total of nearly $6 million, but 73 percent of that went to Republicans. What does that say to you?

KING: It means that Enron thought that Republican free-market politics were closer to theirs, just like organized labor will give more to the Democratic Party.

But so what? The fact is, this proved the system did work. There's not even a hint that anyone who received any contributions did anything at all untoward to help Enron.

And, you know, the fact is that Tom Daschle, Harry Reid, the two Democratic leaders in the Senate, Martin Frost was one of the Democratic leaders in the House, they all received contributions from Enron, and there's nothing wrong with that.

I mean, Enron until several months ago was looked upon as one of the most respected and prosperous companies in the country and the world. So, you know, now we're somehow applying some ex post facto morality here. But the reality is, there was absolutely nothing wrong in accepting a legitimate contribution from Enron.

And as far as I'm concerned, this whole process is showing the system does work. I mean, they called Secretary O'Neill, nothing was done. They called Secretary Evans, nothing was done. If anyone who has reached out from the past, it was Secretary Rubin who called into the Treasury Department, who was trying to get the Treasury Department, I guess, to talk to Moody's or Standard & Poor's.

But the reality is, the Bush administration has a 100 percent clean record on this. They should be proud of what they've done, and I think the American people are going to realize that.

If the Democrats try to make partisan issue out of this -- I hope they do actually. Well, actually I shouldn't say that. I hope they do for my own partisan reasons, because it will backfire on them.

But during the course of a war, you know, we all take free shots in politics. You shouldn't take a free shot at the commander in chief when there's a war going on unless you have something to base it on.

BLITZER: If this were a different -- if you were still a federal prosecutor, as you were deputy independent counsel, and Arthur Andersen, in the midst of this investigation, says, you know what, significant numbers of documents have been shredded or missing, no longer are out there, doesn't that -- wouldn't that raise an enormous alarm bell in your mind?

BITTMAN: As they say, federal prosecutors say, that could be a clue. Absolutely, something is very, very wrong when that many documents are destroyed after Arthur Andersen knew they had to correct some of the opinions that they gave and some of the statements that they gave out about Enron's financial condition. That's very, very troubling, and federal prosecutors will think of that as well.

BLITZER: I want you to listen, Congressman, to what Ari Fleischer, the White House press secretary, said earlier this week when he was asked about the administration's ties with Enron and what was going on. Listen to this.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: It's appropriate to take a look into what led to the bankruptcy of Enron and whether or not anything was done wrong in the process of Enron going bankrupt.

But if that's a political charged or politically motivate effort than I think the American people are going to want to say that this is just another fishing expedition, another endless investigation, the type that they soured on over the last many years.

(END VIDEO CLIP)

BLITZER: So I guess it was a mistake, is that what you're saying, for all those Republicans to be pushing Whitewater in recent years?

KING: Actually, I was not one who did overly push Whitewater.

But, listen, I agree with what Ari Fleischer said, as far as this investigation. I mean, there are thousands of innocent people have lost their life savings.

Certainly, as Bob Bittman said, there's very strong evidence that something went wrong here when Arthur Andersen is destroying records, when you have the insiders at Enron selling their stock and making hundreds of millions of dollars.

So, something very definitely went wrong here, and it looks like very likely something criminal happened here. And that requires a full investigation. And also, if we have to set in procedures, as far as giving more power to the SEC or the CFDC or any of them, then we have to do that.

But to go off on a political witch hunt, to me, makes no sense. And if the Democrats feel it was wrong when it happened to Bill Clinton, it's just as wrong if it happens under President Bush, even more so here because it's not even a scintilla of evidence or any allegation whatsoever even in Paul Begala's mind or James Carville that the president could possibly be involved in this or anyone in his administration.

BLITZER: Bob Bittman, as someone who has been a federal prosecutor -- now you're in private practice -- you see the way the administration, there could be a fire storm that develops. The media has got a hold of it. There's a lot of excitement, a lot of interest in this story.

What should the president and his top advisers be doing right now in terms of cooperating with the various investigations the Congress is going to have, the House and the Senate, as well as with the news media?

BITTMAN: Well, obviously, they do want to cooperate, they want to put all the information out there. They don't want something to come back and bite them in rear end later that turns out not to be true.

These investigations are proper. Something went very, very wrong with Enron, and a lot of people were damaged. That doesn't necessarily -- that makes it a scandal, a business scandal, not necessarily a political governmental scandal.

BLITZER: Because a lot of times, as you well know, in the history of these other scandals, the cover-up turns out to be -- the effort to cover something up turns outs to be a lot worse than the original sin that may or may not have been committed.

BITTMAN: The White House and the rest of the executive agencies should find out what happened, put it out there. And that should be end of it, as long as they didn't do anything wrong. If they did something wrong, they should own up to it.

BLITZER: OK, Bob Bittman, Congressman Peter King, thanks to both of you for joining us. Always appreciate you having -- appreciate having you on the program.

And coming up next in the next hour of LATE EDITION, we'll talk with two United States senators about the effectiveness of new aviation security measures.

Then we'll talk to the producer of the new movie, "Black Hawk Down," which tells the story of the U.S. mission in Somalia in 1993. We'll also talk to a soldier who was there.

And our very opinionated panel will weigh in on the big issues of the week in the "Final Round."

LATE EDITION will continue right after this. (COMMERCIAL BREAK)

BLITZER: Welcome back. This hour we'll take a close look at aviation security. How safe are the skies? We'll also have the real story behind the new motion picture, "Black Hawk Down." And our new "Final Round." You've got questions, our panel has answers.

But first, aviation security. Joining us now are two United States senators who spent a great deal of time on this issue, especially since the September 11 attacks: In New York, the Democratic Senator Charles Schumer, and in Dallas, the Republican Senator Kay Bailey Hutchison.

Senators, welcome to LATE EDITION.

Senator Schumer, let me begin with you. This whole issue of whether the screeners at U.S. airports -- nearly 30,000 of them -- should be at least required to have a high school diploma. There's a sense now that the new restructuring is, that may not be necessary. Do you believe that's a huge mistake?

SEN. CHUCK SCHUMER (D), NEW YORK: I do think it's a mistake.

And I'm worried for two reasons. First, because I think the high school diploma is important. We intended, when we upgraded these positions, which are now paid a little bit above minimum wage, but under the law that we passed will be paid an average of $32,000 to $35,000 a year, that these positions become much more like law enforcement positions rather than just a technical position where you sort of look at a screen and try to identify something. There was supposed to be a big upgrade.

Well, if you talked to law enforcement officials, a high school diploma is required actually to be an FBI agent -- a college degree is required. You know, more than high school is required for Customs and border guards. But any police department that I checked with in New York state, large ones like New York City but smaller ones require a high school diploma.

Can you say that probably a few screeners could do the job without a high school diploma? Sure. But if you want to upgrade the position, pay more and make it like a law enforcement position, do what law enforcement does and at least require a high school diploma. The job requires skills of assessing people, talking to people, judging about people, that you think someone could get through high school if they're qualified.

BLITZER: Senator Hutchison, why is the Bush administration backing away from that?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Well, I hope they are not backing away from it. I talked to officials at the Department of Transportation when I heard these reports, and I said I'm very concerned because we wrote the law for a high school diploma. We did allow some leeway, some flexibility, if experience overrode not having a high school diploma. So that would be the exception, not the rule. And the Department of Transportation official told me that that was absolutely the case, that it would be the exception, not the rule. It would be people who have work experience that have shown an initiative and an ability to meet all the other qualifications which include testing for proficiency, vision acuity, hearing acuity, knowing the rules, being trained, and then being able to pass the test, that they could do the job.

BLITZER: Go ahead, Senator Schumer.

SCHUMER: Well, the thing that bothered me, Kay is on the money as to what we had intended. What bothered me as much as dropping the high school diploma requirement when they said that they would, is they said, well, we have 7,000 describers of the 28,000 who know exists who don't have high school diplomas.

The whole point was that we should upgrade who these people are. And the idea of instead of upgrading the standard and seeing if the people met it, rather lower the standard to the existing people, well, you have a couple of problems there. One is we're paying more, why aren't we getting better quality? The second is that if you ask any person who travels when they go through the airports, do the screeners, the vast majority of them give you a great deal of confidence that things are being screened well and properly, I think they would say no.

So, if the FAA doesn't really back off this, if the Department of Transportation doesn't back off, then I will be introducing legislation to require the high school diploma. Because right now it seems they are not just making a once-in-a-blue-moon exception for somebody's who really qualified, but much rather doing it en masse for everybody because there are so many now don't meet the requirement.

BLITZER: Senator Hutchison, go ahead.

HUTCHISON: Well, if I could, I just want to say that no one wants to hear the words we are trying to keep the people who are in place now. That was the exact opposite of what we were trying to do in the legislation. We are trying to upgrade. We are trying to assure that qualifications are met.

And I think as we transition into this law enforcement agency, we are going to see the standards increase. And we are going to see the quality, the training and the testing increase as well.

BLITZER: Senator Schumer, another point of the new law was to get people to match their baggage, their checked baggage, with the people that actually go on the planes. But now it looks like the U.S. doesn't have the equipment, the X-ray machines, to go through that and get that done on time. Is there anything that can be done about that?

SCHUMER: Well, you know, the deadline that was set January 18, is probably not going to be met. But I think that deadline indicates to the Department of Transportation that Congress wanted this done really quickly, that the public wants it done really quickly. And when the secretary of transportation, who's just a fine guy -- I knew him when we served in Congress together, but when he said it would take until 2009 to get these machines all in place, well, that sent a shiver down my spine and, my guess, the whole air transportation industry's spine, because people want security in their travel, and that's the only thing that would bring travel up again.

So I hope that, first, the Department of Transportation does everything it can to get more of these machines on line more quickly, that they put together a system that the biggest and most-traveled airports get the machines first, and, finally, come up with an alternative method of screening the baggage soon, if we can't get too many of the machines on line quickly.

BLITZER: Senator Hutchison, was it a mistake to put that January 18 deadline in there, given the technology, given the fact that Secretary Norm Mineta says, simply can't do it any time even close to January 18?

HUTCHISON: It was not a mistake at all, because in the legislation we provided for alternatives to this screening being done by machines. We knew the machines were not available. We did give a deadline of the end of 2003 for the machines to be on line, and I think they will be able to meet that deadline. But we have other alternatives, and I think that we are going to hear next Friday that they will meet the deadline and that there will a baggage-match as a major component of this.

Now, I am going issue the warning right now, that this is going to cause a backup in many airports. It's going to cause inconveniences as we work through this process. Because baggage match and the manual testing, the manual going through bags, if the baggage match is not done, there will be more dogs. But all of this is going to be time-consuming, and there will a time period in which people are going to have even longer waits than we are used to now. But I hope people will be patient and understand that we are trying to screen in some way every bag that goes on an airplane.

The major vulnerability we have in aviation security today is checked baggage, and we are trying to address that. Next Friday is going to be a significant deadline. It is going to be one that will cause some delays, but it is nevertheless necessary, as we transition into the very best security system of any aviation system in the world. It's going to take a while to get there, and it's going to take some inconvenience before we perfect it.

BLITZER: Switching gears, Senator Schumer, on this whole Enron controversy that's up there now, you took in, according to the Center for Responsive Politics, nearly $22,000 in contributions from Enron, more than any other Democrat in the Senate. Senator Kay Bailey Hutchison took in almost $100,000 in contributions.

Looking back on those contributions, Senator Schumer -- and I want to give Senator Hutchison a chance to respond too -- was it a mistake to take that money from Enron? SCHUMER: Well, you know, let me tell you what happened, Wolf. When I campaigned for the Senate in '96, '97 and '98, one of key issues I had was electricity deregulation, let the consumer not be stuck with a monopoly. We have the highest electricity rates in the country in New York State. And I believed in power deregulation. I didn't even know who Enron was. Worked hard on putting together a deregulation bill.

And to this day, I support deregulation, because the high electricity rates chase businesses out of New York.

So it's no different than my being pro-choice and some pro-choice groups supporting me. Enron has never asked me to do anything, and I have not done anything for them.

In addition, on their major bill in the year 2000, their only really major legislative initiative since I've been in the Senate, which was to allow the markets, the commodities markets, particularly electricity, not to have government regulation, I led the charge against them.

So, I think there's proof positive that, you know, when they're wrong, I'm going to oppose them rather dramatically. I was the leader in the Senate on that issue.

BLITZER: And, Senator Hutchison, you took $100,000 from Enron. Looking back, do you have some mixed feelings about that?

HUTCHISON: Not at all. As a matter of fact, one reason I'm number one is because I had more elections during that cycle than any other senator. I had won a special and then turn around and run again. So I've had six elections in that time period, whereas most senators have had two or four.

So, I think, certainly, you would expect employees and people in a major company in my state to be politically active, and they have been. And they've supported Republicans and Democrats, and I'm very proud to have the people who have done so much for our state supporting me.

Now, obviously, there are some people who have done some very bad things in Enron. For instance, our teacher retirement system and our state employee retirement system are down in the hundreds of millions. And that is a great concern to me, because of those losses.

And I think what we've got to do now, is make sure that every investigation is done, both for the past actions, if they were wrong and criminal, but also going forward, and making sure that employees and pension funds are protected with the knowledge they should have about any public corporation.

BLITZER: OK. Senator Hutchison, we have to leave it right there. Senator Schumer, kind of both of you to join us today on LATE EDITION.

HUTCHISON: Thank you. BLITZER: Thank you very much.

And when we return, the story behind the movie "Black Hawk Down." We'll talk with the film's producer Jerry Bruckheimer and the former Army Ranger Mike Goodale, who served in the 1993 U.S. mission to Somalia.

But first, Bruce Morton's weekly essay on an essence of democracy, agreeing to disagree.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT: Oh dear, the pundits proclaim, partisan wrangling has broken out in Washington. Well, why ever not?

Republicans and Democrats alike support the presidents on the war, but they are arguing about other things. If they were just doing it to score partisan, petty party points off one another, that would be too bad. But some issues are worth arguing about because they affect the way we live.

One example, the "Washington Post" reported this past week that the administration is thinking about resuming nuclear testing at some point. Well, that's worth some argument. Even underground does let some radiation escape. How expensive is it? How many other countries will criticize the U.S. if it tests? And so on. A big issue.

Another story says the Bush administration wants to relax clean- air standards so that older coal-fired power plants can expand without having to install expensive new pollution controls. That's worth an argument. Cheaper power versus dirtier air. Where do you stand? And isn't that something the Congress and, come to think of it, the country ought to debate?

The administration favors offshore oil drilling. Critics say no, that'll just dirty the ocean when there's a spill.

The administration wants to drill in Alaskan wilderness areas. Another good thing to argue about. The hell with the caribou, we need the oil. Or keep the caribou and turn the furnace down a little. Or is there some way to keep the caribou happy and get the oil too?

Tax relief: Should an anti-recession package give money to industries, hoping they'll invest and create new jobs, or give money to people who've been laid off whose unemployment benefits are ending, and hope they'll spend and create new jobs?

Most of these debates won't be strictly along party lines. The situation in your state or your congressional district gets factored in too.

If it were all just party nastiness, sure, the voters would have a right to be angry, but these are all issues on which people really do disagree, really do have different views of what's good for the country. Congresses ought to argue about things like that, and it wouldn't hurt the voters to chip in with their opinions too. You could call it democracy.

I'm Bruce Morton.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED ACTOR: We got a Black Hawk down. We got a Black Hawk down.

(END MOVIE CLIP)

BLITZER: A dramatic clip from the new movie, "Black Hawk Down." It's based on the book by journalist Mark Bowden, and it tells the story of the controversial 1993 U.S. military mission in Somalia. Many American soldiers were killed, including three whose bodies were dragged through the streets of Somalia's capital, Mogadishu.

Joining us now to talk about the movie and that mission is the producer of "Black Hawk Down," Jerry Bruckheimer. He joins us from New York. And in Chicago, the former Army ranger Mike Goodale. He served in the Somalia mission.

Gentlemen, welcome to LATE EDITION. Thanks for joining us.

And, Jerry, let me begin with you. Why did you make this movie?

JERRY BRUCKHEIMER, PRODUCER, "BLACK HAWK DOWN": Well, the only thing I knew about Somalia was what I saw on CNN, where I saw one of our young soldiers being dragged through the streets, until I read Mark Bowden's book, which was back in '97, when it was in galleys before it was published.

And I felt that, you know, we got it all wrong, meaning the media and the American people, the way it was portrayed. These men were heroic. They were brave and they were courageous. It was considered a debacle by the press, so I wanted to set the record straight.

BLITZER: Well, let me bring in Mike.

You were you actually there, and you know the way it was interpreted, that this was a huge failure, this entire mission, given the scenes that we saw of those U.S. soldiers being dragged through the streets of Mogadishu and the fact that only a few weeks later, the U.S. simply pulled out. Almost in disgust, the American public was repulsed by what happened.

MIKE GOODALE, FORMER ARMY RANGER: Yes. It was considered, by most of the public, a failure in the mission. But in actuality, we captured every one of the people we were looking for on that particular day. BLITZER: But you say that it was success. The individuals that you captured, weren't they handed -- returned to Somalia only two or three months later?

GOODALE: Yes, they were, and that was the administration's decision. The military had no choice in the matter.

BLITZER: When you looked at this book, Jerry -- and you obviously were well into this movie long before September 11 -- did you make any significant changes as a result of what happened on September 11?

BRUCKHEIMER: We did initially. We had two cards at the end of the movie that referred to it. But we felt, after we talked to a bunch of people that were screening the movie, that we felt we didn't need it. We felt that the movie stood on its own and people can make their own assumptions, tied to September 11 or not.

BLITZER: But the lessons that were learned, as far as what happened in Somalia, you know -- Mike, I want to bring you back in -- the U.S. may be going back into Somalia, at some point in the not-too- distant future. Is that a good idea?

GOODALE: If it's the mission of our particular forces to go back to Somalia, that's what they'll do. They won't have any problem with it, and they'll complete whatever mission is given to them.

BLITZER: But when you look at all the planning, all the reports that are out there now -- in fact, U.S. troops may already -- at least some special operations forces may be on the ground in Somalia doing some preparatory work for an effort to look for terrorists members of the al Qaeda network in Somalia.

What advice do you have to the top political leadership of the country to do before they send back those special operations forces, let's say, into Mogadishu?

GOODALE: Well, I'm not a high-ranking adviser to the president, but I would say that he needs to make sure the units that go in have all of the assets they need to complete their mission and to makes sure that the American public is completely behind their mission.

BLITZER: Have you seen the movie, "Black Hawk Down" yet, Mike?

GOODALE: Yes. I did go to a screening down in Columbus.

BLITZER: How authentic, how accurate do you think it is?

GOODALE: I thought the depictions of the brutality of war was fabulous. Mr. Bruckheimer, absolutely phenomenal. Some of the intricate accuracies of soldiering and the rangers and the way they interact was a little bit off, but that's to be expected. You couldn't portray that many people and all of the heroics that went on to a T. It would just be impossible in a two-plus-hour movie.

BLITZER: Jerry Bruckheimer, you probably the saw the editorial in the "New York Times" on Wednesday when it said this, referring to U.S. military involvement in Somalia: "Washington's last involvement there a decade ago rapidly turned into a military and political disaster. If military action in Somalia is justified, past mistakes must not be repeated."

What was the major mistakes, based on your research, based on putting this movie together, that happened a decade ago?

BRUCKHEIMER: Well, you know, we bridged two administrations. You have to understand that the Bush administration put 20,000 Marines into Somalia to basically distribute food and stop the warlords from fighting.

This all started with a "TIME" or a "Newsweek" cover of Audrey Hepburn sitting there with a starving child. Don't forget, 300,000 people died there of starvation. So we went in there for purely humanitarian reasons.

And it worked. We distributed the food. The warlords created a truce. And we sent in the U.N. peacekeeping force. But one of the warlords, indeed, after we left, decided that he wanted to take the lion's share of Somalia and started stealing the food and killed 24 Pakistani soldiers.

And we said that's bad behavior, and we went in there with our special forces to remove him. Now, that's what we did. We accomplished what we were supposed to do.

They went out and caught two of these advisers to this warlord, but when some of our young soldiers were killed, the current administration, which was Clinton, decided to pull our guys out and let the warlords go because they thought what were you there for, because we had no interest whatsoever other than the humanitarian interests to be there. Since September 11, it's entirely different.

BLITZER: Mike, did you have sense, looking back on the 1993 mission in Mogadishu, looking back with hindsight of course, that it was a poorly planned mission?

GOODALE: I don't think it was poorly planned, and it certainly wasn't poorly executed.

But in referencing Mr. Bruckheimer's talk about how the administration pulled soldiers out very quickly after some of them were killed, that was the mistake that was made. The soldiers that were there were not allowed to complete the mission the way they wanted to.

BLITZER: And who do you blame for that?

GOODALE: I don't know if there is any blame for it at all. Somewhere in the administration the choice was made to pull the soldiers out, and that's all that can really be said.

BLITZER: Go ahead, Jerry.

BRUCKHEIMER: If you want to use our military, you have to give them the assets that they need.

And you know, Garrison, who was the head of the operation asked the Defense Department for tanks and these C-130 gun ships, and they were denied because the administration was afraid that this would turn into another Vietnam.

So, you have these young soldiers going in there, what they thought was a 30-minute mission, that turned into 18 hours. They didn't have the proper assets. A lot of lives would have been saved had they had those assets by the young ranger in Delta we talked to in our screenings.

We just came back from screenings at Fort Bragg, Campbell and Benning and the soldiers loved it. Some of the men that were there, some of the family members. We met the wives of some the men who died and their kids. And, you know, they hugged me and said thank you for setting the record straight and thank you for portraying our husbands and loved ones so heroically.

BLITZER: OK, Jerry Bruckheimer and Mike Goodale, to both of you, thanks for joining us on LATE EDITION. We'll be watching the film as well. I haven't seen it yet, but I'm looking forward to seeing it.

And this reminder, coming up right after LATE EDITION, it's Business Unusual and a report on the French auto maker Peugeot and the man in that company's driver seat. That's Business Unusual, today at 3:00 p.m. Eastern at the top of the hour, noon Pacific.

But up next, the "Final Round." Your questions, our panel's answers. Your phone calls and e-mails next on LATE EDITION's "Final Round."

(COMMERCIAL BREAK)

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION's "Final Round." Joining me, Donna Brazile, the former manager of the Al Gore presidential campaign; Peter Beinart, the editor of the "New Republic"; Jonah Goldberg of the National Review Online; and Robert George, columnist for the "New York Post."

And we begin with the looming Enron investigation. With at least four congressional hearings already planned, the Treasury Secretary Paul O'Neill today defended his decision not to inform the president about his conversations with the chairman of the failing company.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, TREASURY SECRETARY: The president's prosecuting the war against the terrorists. I didn't think this was worthy of me running across the street and telling the president. I don't go across the street and tell the president every time somebody calls me.

(END VIDEO CLIP)

BLITZER: Peter, should the treasury secretary run across the street and tell the president what was going on?

PETER BEINART, "THE NEW REPUBLIC": No. You know, some cynics might say that the treasury secretary doesn't know where the president's office is, actually, given how far out of the loop he is.

(LAUGHTER)

But no, the Bush administration should not have intervened. They were absolutely right this fall not to intervene. The scandal was what happened over the past 10 years, when they did intervene, the Republicans, to quash lots of regulations that could have prevented this from happening.

BLITZER: What about that, Jonah?

JONAH GOLDBERG, "NATIONAL REVIEW": Well, we can argue about deregulating in energy markets some other time. I think the Democrats are essentially using this, quote, unquote, "scandal" like Felix the Cat's magic bag. They're pulling out every possible argument conceivable, and almost none of them make any sense.

They're saying that O'Neill should have run across the street to sort of save the stock price of Enron during a terrorist war, but they're also saying that Enron -- that they were wrong for not -- that they were bought and paid for by Enron's influence. They can't it have both ways. They can't be at the disposal of Enron and, at the same time, have ignored Enron.

DONNA BRAZILE, FORMER GORE CAMPAIGN MANAGER: But what Democrats are saying is that the big guys got out early. They knew what was going on. They knew that the books were being cooked. They cashed out, and they became wealthy men and women.

On the other hand, the little people, many of whom voted for George Bush as governor, should have -- someone should have told the president that many of his former constituents were in trouble. Twenty-one-thousand people lost jobs, shareholders lost their assets. And someone should have told him because, you know, right around Christmas time, people were receiving pink slips.

ROBERT GEORGE, "NEW YORK POST": Yes. But, Donna, it's a damned- if-you do, damned-if-you-don't situation. If O'Neill had run across the street to go talk to Bush, Democrats would have been turning around and saying, oh, see, you know, the treasurer is trying to give the president a heads-up to cover him politically.

So, I mean, I think O'Neill -- I'm surprised I'm saying this -- but, for once, O'Neill actually did the right thing.

BEINART: That's right. And the Democrats have to be careful, I think. There's a history of overreaching in these kind of scandals, of looking for smoking guns, when smoking guns are very hard to find, particularly given that the center of this scandal is not in the Bush administration. It's in the private sector. It's in Texas.

Democrats would be much better off focusing on, I think, policy -- the policy where the Bush administration is very vulnerable, both on the accounting side of it and on the energy deregulation side.

BLITZER: All right, let's move on. Enron was also a major player on Capitol Hill, contributing, as we all by now know, campaign money to both Republicans and Democrats.

Earlier today, the Michigan Senator Carl Levin said Enron is why it's time for campaign finance reform to get off the ground.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), MICHIGAN: I have no doubt that they had greater access not just to the administration, but to members of Congress, because of huge campaign contributions, and that's what we've got to end. But it's the actions of Enron, the improprieties, the false statements. They were selling glass as real diamonds, and that is false. We've got to put an end to it.

(END VIDEO CLIP)

BLITZER: Robert, with almost everyone in Washington apparently having received some money from Enron, is it possible to have a fair investigation right now?

GEORGE: I'm almost tempted to think that the fact that everybody is tainted by this, may actually cause some Democrats to be a little bit more hesitant than just going for the throat, as many of them would want to.

Obviously, a few of them are saying another Whitewater and so forth. But just because -- I mean, the fact is almost everybody in the Texas delegation, which is split almost evenly between Democrats and Republicans, got money from Enron. Charles Schumer from New York State was the largest out-of-state recipient. So everybody is tainted.

BLITZER: But 75 did go to Republicans.

GEORGE: Yes, but still, but in the context of Congress looking who's into this, no one's a virgin in this. And so, I think many of them are going to be a little bit more hesitant to actually point completely to Republicans.

BLITZER: Donna, you know, there's a lot of people out there, especially Republicans, that are saying the Democrats are simply engaged in the politics of payback right now, given the...

BRAZILE: No, no.

BLITZER: ... scandals, the investigations...

BRAZILE: Absolutely not.

GOLDBERG: Shocked, shocked.

(LAUGHTER)

BRAZILE: I mean, Joe Lieberman is a centrist. He works with -- in a bipartisan fashion. I think this is the time to call for real campaign finance reform.

First of all, the Democrats are not going to conduct a witch hunt. The Waxman letter was right on the point in asking for documents that should be released. Cheney should come clean with the task force, the names of the people he met with, including some of the officials from Enron.

But going back to campaign finance reform, we're three votes short in the House of Representatives. Dick Gephardt could use a call from President Bush. I'm sure he has a list of Republicans who would love to come on board the bill now, discharge it, and vote on it as soon as possible.

BLITZER: Jonah, is this going to make a difference in the whole battle for campaign finance reform? In other words, will John McCain and his passion for campaign finance reform benefit as a result of the Enron investigation?

GOLDBERG: Sadly, yes. You know, I'm of the position that campaign finance reform is one of the most bogus issues imaginable. It's more bogus than a Hong Kong knock-off of the "Harry Potter" DVD.

(LAUGHTER)

And the idea that, somehow -- this again is a damned-if-you-do, damned-if-you-don't situation. You've got a situation where you have all these congressmen who are swearing that the money they got from Enron will not bias them in this, and the reality is that these guys are going come down far harder.

The original question was, can Enron get a fair trial? They're going to get a much harder time because everyone's got to prove that they weren't bought and paid for.

And, you know, it's astounding to me that -- you know, in social science, they have a rule that if a theory can prove X and not X, that means it's too broad. Campaign finance reform people are saying that, because Enron was allowed to fail despite giving all of this money, that there somehow is something wrong with the campaign finance system.

(CROSSTALK)

GOLDBERG: This underscores how the campaign finance argument doesn't make any sense.

BEINART: No, no, that's not the campaign finance argument. The campaign finance argument is that Enron was allowed to play all the dirty tricks that they played over the years and inflate their stock illegally, because powerful corporations like Enron and Arthur Andersen eviscerated regulations that were meant to stop precisely this. And that's a very good argument.

GOLDBERG: Where's the evidence of that?

BLITZER: Stand by, stand by, stand by. Let's continue the Enron investigation and our quote of the week.

On Friday, the vice presidential adviser Mary Matalin dismissed the idea that the White House had any inappropriate contact with the Enron company, saying this, quote: "They act like there's some billing record or some cattle scam or some fired travel aides or some blue dress."

Donna, will the politics of this investigation spell trouble for the Bush White House?

BRAZILE: Well, first of all, Mary's right, there's no devil in a blue dress on this one here, because many of those charges that were brought up against Bill Clinton were trivial, and they were trumped-up charges.

(LAUGHTER)

BRAZILE: And they were partisan, politics of personal destruction. So she was right, I have to give her credit for that.

On the other hand, I do believe that it's -- this administration promised to change the tone in Washington, D.C. And all of a sudden they've changed their tune on campaign finance reform, they've changed their tune on working in a bipartisan fashion.

So I think, yes, this will matter in 2002. As you know, I'm counting the days, 297 days. This will matter.

BLITZER: 297 days.

Do you think it's going to matter in 2002, the mid-term election?

GEORGE: I see old habits die hard for Donna.

Look, I think this is going to be a continuing nuisance for the rest of the year. I actually agree with what Donna said earlier on. I think, for example, I think Cheney would have been a lot better off had he released the names of the energy task force, because now, in the context of Enron, it's going to have greater legs than it otherwise would have.

So it will be something of a nuisance, but I don't think it's going to be an in-depth scandal like Whitewater.

BLITZER: All right.

(CROSSTALK)

BEINART: It hurts them for three reasons, I think.

BLITZER: Go ahead. BEINART: First, it takes attention off the war, which is why their popularity is so high. Second, it focuses on secrecy, which is one of their vulnerabilities already. Third, it increases anti- corporate resentment. They are the most corporate White House in history.

BLITZER: Do you agree with that, Jonah?

GOLDBERG: I think the only way it could hurt them is if they look like they're covering up something, and so far they've done everything right. Everyone who should recuse themselves from this has recused themselves from this without outcries about Ashcroft having taken money. They've done everything right.

So, as long as they don't generate any smoke, since there's no fire, I don't think it's going to be a big deal.

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

We have a lot more to talk about when we come back, including your phone calls for our panel. LATE EDITION's "Final Round" will return.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION's "Final Round."

We have an e-mail question that just came in. Maybe one of us has an answer.

What happened to the request from the GAO, the General Accounting Office, to the administration, Bush administration, for material on the Cheney energy policy?

You know what happened to that request?

GEORGE: Yes, as a matter of fact, the head of the GAO announced just earlier this week that he would be deciding within a month whether he's going to sue the White House for that information.

As I said before, I think Cheney would have been a lot better off just getting this out because, as our paper editorialized at the time, the secrecy of the energy task force was a little bit too similar to Hillary's health care task force. And that's something that this White House doesn't want to go anywhere near.

BLITZER: OK. We're going to stand by. We're going to switch gears and we're going to talk about the war in Afghanistan.

Four months after the terrorist attacks, how much safer are we here in the United States? The Homeland Security Director Tom Ridge told me earlier today we are not in the clear yet.

(BEGIN VIDEO CLIP) RIDGE: We still believe that, obviously, al Qaeda has cells around the world and sympathizers around the world. And until we can deal with Osama bin Laden and until we can dismantle the al Qaeda, we think we need to be on a very high state of alert.

(END VIDEO CLIP)

BLITZER: Jonah, Tom Ridge, how much has he accomplished so far?

GOLDBERG: Well, I think I can state declaratively that we've had no dinosaur attacks since he took office.

(LAUGHTER)

Other than that, it's a lot grayer.

It's a terrible job that he has. It's a thankless job. The only way he'll ever make it into the news is when a terrorist attack actually happens. And so, by definition, he only gets the limelight when he fails.

And so maybe he's done a whole bunch of the stuff, but the nature of the job is such that it's designed for failure, and I feel sorry for the man.

BRAZILE: Well, I know last month Gray Davis was in town...

BLITZER: Governor of California.

BRAZILE: Governor of California. And he met with Mr. Ridge, and I understand that mayors across the country are coming in next week to meet with him as well. So perhaps he's done a better job of communicating with state and local governors and mayors and so forth. And he's talking to people across the country. So, I think he is on the money, and hopefully he can help us out a lot more.

BEINART: A political problem I think, in most Americans' mind, the real director of homeland security is John Ashcroft. He's the person that is out front and center. He's a much less politically attractive person to have out there. I think it's a problem for the Bush administration.

GEORGE: Yes, and the Bush administration set him up in an awkward way.

BLITZER: Who, Tom Ridge?

GEORGE: Set Tom Ridge up in an awkward way. He doesn't really have a unique, dedicated budget. He's not an official member of the Bush Cabinet. And as Peter said, Ashcroft is actually the one who's been seen as doing something in terms of security.

BLITZER: But he is a member of the Cabinet, right? Why do you say he is not an official member of the Cabinet?

GEORGE: Well, he is not a Senate-approved member of the Cabinet in that sense. I mean, he's not -- he doesn't have a -- he is not the head of the Judiciary Department.

GOLDBERG: There's also the problem that when he got appointed the country was in a frenzy about anthrax. And now it looks like anthrax has gone away as an issue, which makes the position seem more like a glorified directorship of FEMA.

GEORGE: And we still don't know who sent out the anthrax as well. So, which again is showing there's failure there.

BLITZER: But he did say in this program earlier, the focus is now increasingly on a domestic terrorist as opposed to international.

The hunt, meanwhile, for Osama bin Laden continues, as does the hunt for the Taliban leader, Mohammad Omar.

Today, Senator Joe Lieberman stressed the importance of finding both of them.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: This is not going be over until we capture or kill Osama bin Laden and Mohammed Omar, the leader of the Taliban, because they are the ones that oversaw the conspiracy that killed more than 3,000 of our fellow Americans.

(END VIDEO CLIP)

BLITZER: So, Peter, is this just the beginning as opposed to the end of the war in Afghanistan?

BEINART: I think so. I think it's becoming increasingly clear that security outside of the cities in Afghanistan is terrible and that there's actually a lot more people who are still quasi-Taliban around there.

And what's fascinating to me is that the Bush administration keeps on saying, no, no, we don't want to be part of the peacekeeping force because we don't want to violate the sovereignty of the Afghan people. The Afghan government is begging over and over and over again for us to make this a strong, robust peacekeeping force that can keep security in the rural areas. America's got to, I think, enter it.

BLITZER: So was the U.S., or at least some pundits, too premature in declaring victory in Afghanistan?

GOLDBERG: Well, I think military victory, for all intents and purposes, is there. Whether there is political or strategic victory in the sense of making Afghanistan the kind of place that we can brag for having liberated, we're not there yet and we won't be for a very long time. And it's in our interest to make Afghanistan less of a hellhole than it is.

BRAZILE: This interim government needs money, and perhaps we can free up some of the assets that we have frozen from the Taliban, and give them some money to hire policemen, to pay some of the interim staff and government so that they can begin to really rebuild that country.

GEORGE: There has to be more engagement there on multiple levels. We learned earlier this week that the government has actually been releasing some of the Taliban leaders when we'd asked them to hand them over to us. So, I think we have to be more fully engaged there.

And to the extent that we can create a pro-Western government there, I think it's going to be better for our long-term interest, especially in terms of keeping an eye on what's going on between Pakistan and India.

GOLDBERG: And also, not to be cruel to the Afghans, whether or not the Afghans, as a moral issue, we owe something to the Afghans.

But as a matter of strategic policy, we have to tell the rest of world that if you are on our side we bring you hope, and if you against us we bring you pain. And we're supposed to be bringing the Afghans hope because it sends a signal to Iraq and Iran and all these other countries where we may have to go in, and we want the people on our side.

BLITZER: All right. In the midst of all of this, the president has installed two of his more controversial nominees. The Assistant Secretary of State Otto Reich and the Labor Department solicitor, Eugene Scalia, even though the Senate did not vote for their confirmation.

Senator Joe Biden says the recess appointments, as they are called, were wrong.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D), DELEWARE: I think it was a very bad political move on the president's part, and I really regretted having happened. We are going to have to now manage the fallout from this, and this was a not, respectfully speaking, a smart thing to do in my view.

(END VIDEO CLIP)

BLITZER: And maybe not a smart thing, but didn't President Clinton do exactly the same thing when he had a controversial nominee?

BRAZILE: He did it one time.

And let me just tell you, Senator Daschle said this morning said it is was regrettable, and it is regrettable, because promised to bring these two guys up for a vote. Now they are lame ducks, and it's regrettable.

But I believe as Democrats we should pick and choose our battle. And right now we should keep our focus on the economy.

GEORGE: First of all, you had the Democrats who refused to even allow a hearing for Scalia or Reich. BRAZILE: They got hearings.

GEORGE: In the case of Reich, you've got South America falling apart at a number of levels, and you need somebody with his insight down there.

I think basically a president should be allowed to have the people that he wants in there. Republicans in the Clinton era were probably bad in trying to keep Bill Lan Lee out, and I think Bush did what he had to do.

BLITZER: Payback for Bill Lan Lee, who was the assistant attorney general for Civil Rights?

BEINART: Yes. And I think the Democrats are making the same mistake the Republicans made now. I mean, the constitutional, courageous thing to do, if you don't like these guys -- and these are weak, weak nominees -- bring them to the floor and beat them. That's what the Democrats should have done. Now I think they're paying the price because they didn't.

GOLDBERG: I think there's hypocrisy -- I mean, it's house of mirrors of hypocrisy on both sides. Republicans and conservatives lambasted mind-term appointments and now we are supposed to in favor of them. The Democrats have reverse arguments before.

I think presidents should have the people they deserve.

I do think one of the things that's underreported in all of this is that basically, at least in the case of Otto Reich, and Scalia too, is that there is a left-wing staff vendetta against these two guys in the Senate and they don't like...

BRAZILE: Well, how do you explain Senator Enzi of Wyoming, who opposed Mr. Reich?

BEINART: A lot of people are very concerned about what Otto Reich was doing during the contra period, not just left-wing Democrats.

GOLDBERG: I understand. But there were a lot of Republicans that were wrong about what we were doing about what the contras, and I don't -- you know, so the fact that there are some who don't like Otto Reich in my own party just shows that my party is diverse.

(LAUGHTER)

BRAZILE: Oh, finally.

(LAUGHTER)

BLITZER: Stand by. We're going to take another quick break. Our lightning round is coming up next. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Time now for our lightning round where we look ahead at the week's coming events.

To decrease delays and long lines in airports, some airlines are proposing what in effect would be national traveler ID cards with personal information including, get this, credit ratings and voter registration. Will they take us one step closer to Big Brother?

Peter?

BEINART: I don't think it's actually such a bad idea. I mean, the truth is we in effect already have a national ID card, it's called a driver's license, and yet it's connected to driving which has nothing to do with terrorism. I think this could be a good idea.

BLITZER: Makes me sort of uncomfortable. Does it make you uncomfortable?

GOLDBERG: Yes, it's hard to pass the gut test. It's one of these things that ideologically sounds a lot worse than the actual policies associated with it.

Social Security cards were promised -- Social Security numbers were promised not to be ID cards and they ended up being so. Maybe we need a real ID card rather than a faux one.

BLITZER: You want people at airports knowing all this kind of personal information about you?

GEORGE: Well, I think for the private sector, for the airlines to do something like this is not necessarily a bad thing. If you or somebody who flies regularly in a sense giving away a little bit of your privacy to facilitate going through while putting, in a sense, higher hurdles for other people in the name of security, it's not necessarily a bad thing.

BRAZILE: I'm concerned with the abuse of this type of information being placed on a national ID card. I think Congress should look into it and hold more hearings before we issue something like that.

BLITZER: All right. Next subject, several members of the former President Clinton's administration now say they will run for public office. Most recently the former energy secretary and U.N. ambassador, Bill Richardson, who's in the race for governor of New Mexico.

Will Clinton's coattails help or hurt them, Robert?

GEORGE: It's going vary in a number of areas. I think Janet Reno's coattails in Florida, for example, will hurt, especially going up against Jeb Bush.

In Massachusetts where Bob Reich is running, it may actually help. It's -- it's basically it's going to be local and state issues that will determine in these things.

BRAZILE: I think in primaries it will help them because Clinton is enormously popular among the base communities, but in a general election one has to be careful.

GOLDBERG: I think Donna's got it right, certainly about the primaries.

And, you know, look, the Clinton administration brought in a bunch of very ambitious political lawyers and politicians that looked like America and thought like the Harvard Law School faculty, so it's hardly surprising that these guys would go out and seek to further their careers.

The question is whether or not they'll run on Clinton's record or away from it in their various races, and that remains to be seen.

BEINART: I think the Richardson race is the interesting one, because the Democrats badly need national Hispanic spokesmen. The Bush administration's made a lot of ground on that. The Democrats now have opportunities in Texas and in New Mexico. They need people who could potentially be on a national ticket; Richardson fits the bill.

BLITZER: All right, next subject. The emotional picture of three firefighters raising a flag at ground zero will soon become a memorial in New York. But the statue will include one white, one black and one Hispanic firefighter. Is this plan too politically correct?

BRAZILE: It should be -- symbolically, it should represent all Americans and it shouldn't represent individual people but it should represent the spirit of America that took place on September 11. We all came together, black, white, brown, et cetera, and that's what this picture should represent.

BLITZER: Even though it's distorting the original picture?

GOLDBERG: Yes, I mean look, why not get a Muslim, a woman and 17 midgets? I mean, the question is, why use this picture if this picture actually represents something in reality. If you want to have an inclusive sculpture, that's fine, but don't make it also something that people think is a lie. Make it something that is more -- less of a rip off of the actual picture.

BEINART: The really interesting thing here is that the firefighters in New York really are very segregated. It's a very much a working-class, white, outer-borough phenomenon. And what's interesting is that there was a lot of controversy about that until September 11. Now, no one will criticize that institution at all. But the truth is, the statute aside, there is a real question about diversity in these government jobs.

GEORGE: Well, in that case, you should address it in the context specifically of the job. If this picture is specifically of three white guys, and you're going to make that the basis of the sculpture, you know, why change it. BLITZER: But you're not concerned at all about the sort of the political correct issue of all of this?

GEORGE: Well, I mean I think it's embarrassingly politically correct, and I think it's actually a throw back to the pre-9-11 days where we were, like, obsessed with these identity, identity symbolism. And I think it's kind of an appropriate.

And of course the lawyer of the firefighters who are in the original picture have now sent a cease and desist order and...

BLITZER: We knew the lawyers would get involved in this.

(LAUGHTER)

BRAZILE: (OFF-MIKE)

BLITZER: That's all the time we have. We've got to leave it right there, Donna.

(LAUGHTER)

Thanks to our "Final Round."

And that is your LATE EDITION for Sunday, January 13. Please join us again next Sunday and every Sunday at noon Eastern. And during the week I'll see you, of course, twice a day, 5:00 and 7:00 p.m. Eastern, two editions of "WOLF BLITZER REPORTS."

Until then, thanks very much for watching. I'm Wolf Blitzer in Washington.

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