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The Lead with Jake Tapper

Is U.S. Pursuing Correct Strategy in Israel?; What Is the Impact of McCain-Feingold?; Is Social Security an Issue in Upcoming Elections?

Aired March 23, 2002 - 19:00   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG. I'm Mark Shields with Kate O'Beirne, Margaret Carlson, and in Syracuse, New York, Robert D. Novak. Our guest is Congressman Robert Matsui of California, the top Democrat on the House Social Security Subcommittee. It's good to have you back, Bob.

REP. ROBERT MATSUI (D-CA), SOCIAL SECURITY SUBCOMMITTEE: Thank you. Happy to be here.

SHIELDS: Thank you.

On his 10-day, 11-nation trip to the Middle East, Vice President Dick Cheney involved the U.S. deeper in the Israeli-Palestinian conflict. But as he returned home, another suicide bombing killed three civilians and injured more than 80 in Jerusalem.

(BEGIN VIDEO CLIP)

YASSER ARAFAT, PRESIDENT, PALESTINIAN AUTHORITY (through translator): We strongly condemn the operation that happened in West Jerusalem today, especially that which was directed against the innocent Israeli civilians. We will take all immediate necessary measures.

(END VIDEO CLIP)

SHIELDS: Yasser Arafat's reassurances were not enough for Israeli Prime Minister Ariel Sharon, who canceled truce plans.

(BEGIN VIDEO CLIP)

RAANAN GISSIN, SHARON ADVISER: Arafat cannot bask in his neutrality. He cannot bask in the -- and exonerate himself from deeds or misdeeds conducting terrorist activity.

(END VIDEO CLIP)

SHIELDS: Nevertheless, Vice President Cheney has not given up on the Palestinian leader implementing a cease-fire.

(BEGIN VIDEO CLIP) DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: If he's doing that, if he's living up to those requirements and General Zinni signs off on it, then I'm prepared to go back almost immediately for a meeting.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, what does a possible Cheney-Arafat meeting tell us about U.S. policy?

MARGARET CARLSON, "TIME" MAGAZINE: That the United States is intensely involved, that the Bush administration has gone from a policy of benign neglect and criticizing Clinton for his intense involvement in the Middle East at the end of his administration to being involved even when a suicide bomb goes off the very week that Cheney is in the region, and administration still says, We'll go back.

Part of the reason for that is that to not keep up the peace talks is to give the suicide bombers the veto power over the peace talks, because there'll always be another suicide bomber willing to do that devastating deed.

Colin Powell called Arafat and said, Listen, stop it, and find the person. He may not be able -- anyone -- he may not have the power to find the person doing it. It seems to be out of his control. So the United States is going to just have to stick with it. General Zinni's going to have to stay there, and maybe Cheney's going to have to go back.

Of course, 52 senators have said -- written a letter saying, Don't go back. So that's going to have to be negotiated first -- perhaps first.

SHIELDS: Bob Novak in Syracuse, New York, the Bush administration's policy right now does tell us, though, apparently, they've concluded the United States must take the lead role in securing peace between the Israelis and the Palestinians.

ROBERT NOVAK, "CHICAGO SUN-TIMES": Yes, but I've just heard some very dispiriting news this evening. I'm told that the agents of Vice President Cheney who are stationed out in the Middle East to prepare his meeting with Arafat have been told to come home and forget about it, it's all over, there's not going to be a meeting.

And that means, I believe, that the administration has bought into the Israeli position, which is a catch-22. It tells Arafat, Unless you can promise us there'll be no violence, we won't negotiate to the ending of violence. That's the disastrous Sharon policy, and the -- essentially, the failure of the overture by Cheney to meet with Arafat, the administration giving up on it, I think is very bad news.

SHIELDS: Bob Matsui, your own conclusion. Do you think that the prospects for peace have really suffered a fatal body blow this week?

MATSUI: Oh, there's no question about it. Actually it's been suffering a fatal body blow for quite a number of weeks with all the bombings going on there. There's no question that the vice president should meet with Mr. Arafat, but only if he complies with the conditions. That is, rounding up the militants, trying to confiscate the weapons, and those kinds of things.

But no meeting should occur otherwise. Actually, the vice president went to the Middle East not so much for the Middle East peace talks but basically to get the Arab countries to support our efforts against Iraq.

And obviously you have to separate the two, because the Middle East now is ready to explode, and certainly we need to focus on that and not so much on Iraq.

SHIELDS: Kate O'Beirne, it was fascinating to watch the vice president's trip. I mean, what went to enlist support, backing for the United States' efforts to overthrow Saddam Hussein. All of a sudden about midcourse changed into the president -- the vice president becoming a full-fledged activist in the Israeli-Palestinian.

KATE O'BEIRNE, "NATIONAL REVIEW": Well, I think a lot of the people he was courting in our plans to eliminate the threats Saddam Hussein poses in Iraq were telling him that peace in the Middle East is a prerequisite for us moving there, which it cannot be. I welcome the news that Bob is sharing with us tonight. I don't see how Dick Cheney could possibly meet with Arafat following the activities of the past week.

The administration was running the risk of looking as though they care more about trying to appease Arab opinion -- and I emphasize trying to -- than having a consistent policy on terrorism. The president has said time and again, those who harbor terrorists will share their fate.

Arafat harbors terrorists. The Thursday suicide bomber this past week is a Palestinian policeman who was in his -- Arafat's custody up until about a week before his attempt.

SHIELDS: Bob Novak, do you agree with Kate that it's good news?

NOVAK: She's giving out the Israeli line, which is that he is behind all these, that the people who are -- who perpetrated these crimes were under his orders. I don't (UNINTELLIGIBLE) that is true. But what this is all a position pushed by the neo-conservatives, by those senators to get the United States out of any kind of (UNINTELLIGIBLE) even-handed position in the Middle East, to, in fact, to say, we are, we are uninterested in any kind of alliance with the Arab world, and we go ahead in Iraq even if we are, even if our allies say that you can't do that while you're favoring the Israelis.

So I think this is very dispiriting news.

CARLSON: There aren't 52 neoconservatives in the Senate signing that letter. The problem is, Arafat may not have control over them, he says he doesn't, and we don't want to believe him...

NOVAK: He doesn't. CARLSON: ... if he did, you know, we could demand that he stop it. But if he doesn't, what are we going to do? Just walk away?

NOVAK: Well, that's a catch-22, Margaret.

O'BEIRNE: Well, if he doesn't, why is he, why is our (UNINTELLIGIBLE) supposedly our partner for peace? Either he can, and he refuses to, or he's incapable of stopping it. Either way, he's not the right person for us to be trying to help broker a peace with.

NOVAK: And so that...

CARLSON: We got nobody else.

NOVAK: So that, so therefore all we have to do is, we sit down with Sharon and say, continue the Apache helicopters, continue the bombings, and what is our position in the whole Arab world and in Islam?

SHIELDS: That's the last word from Bob Novak in Syracuse. But Bob Matsui and THE GANG will be back with campaign finance reform, passed at last.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

After years of struggle, the Senate finally passed the McCain- Feingold campaign finance reform bill.

(BEGIN VIDEO CLIPS)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: ... found impact on each of us for the rest of our time here, and none of us can be absolutely sure what that impact will be. But we know this, the status quo is not acceptable. And today it will end.

SEN. PHIL GRAMM (R), TEXAS: I oppose this bill. This bill is as blatantly unconstitutional as any bill which has ever been written, any bill which has ever been adopted by the Congress of the United States.

(END VIDEO CLIPS)

SHIELDS: Although most Republicans in Congress still oppose the bill, President Bush issued this statement, quote, "The reforms passed today, while flawed in some areas, still improve the current system overall, and I will sign them into law," end quote.

Kate O'Beirne, will this change American politics as much as Senator Daschle suggests? And why is President Bush signing this bill, a bill that he -- proposals he called "unilateral disarmament for Republicans" during the 2000 campaign against John McCain?

O'BEIRNE: Mark, I was just reminded about how much we're going to miss Phil Gramm. SHIELDS: Really?

O'BEIRNE: This bill, this bill, of course does violate most of George Bush's principles of reform, but he's going to sign it for a number of different reasons. Enron helped it across the finish line. The White House would just as soon avoid another round of beholden-to- big business stories. They want the issue and John McCain to go away, in a perfect world.

And he figures, as do many other people who voted for this bill, that the Supreme Court will strike down some of its more obnoxious, unconstitutional provisions, and so those things combine to a Bush surrender on the issue of campaign finance.

(CROSSTALK)

O'BEIRNE: Well, how he's going to sign it is now the question. (UNINTELLIGIBLE) Republicans are hoping he does not add insult to injury by having a ceremony signing it. They want it signed in a closet with the lights out.

SHIELDS: Bob Novak...

CARLSON: At midnight.

SHIELDS: ... Bob Novak, I never promised you a rose garden, is that what George Bush is going to say?

NOVAK: That's right. You know, this bill is very damaging to the two political parties. They're on their -- at death's door anyway, and they're further weakened. But I've been talking to a lot of people on both sides, liberals, conservatives, Republicans, Democrats, who know what they're talking about, and they don't believe it's going to cut down on money whatsoever. The money's just going to go instead of through the parties, the soft money will go through these big organizations, including the AFC -- AFL-CIO.

I could have predicted, I had been predicting, in fact, that whatever was passed by this -- by the Congress would not really hurt the AFL-CIO, and this one hasn't. What it has, what it has done, however, I believe, is make life more easier for politicians like my friend Bob Matsui, who know won't have to worry about independent people using their First Amendment rights to criticize his campaign in the last days of a campaign.

SHIELDS: Now, now, Novak's (UNINTELLIGIBLE) something up in that Syracuse here, but I just had to get -- I -- just a week ago, Denny Hastert, the speaker of the House, said, This is the end of it, the Republicans are going to lose the house. Now it's not going to matter. Now, what's the story here? Is this a significant piece of legislation?

MATSUI: There's no question it's a significant piece of legislation. Secondly, the U.S. Supreme Court could uphold the ban on soft money as well. Six of the justices could actually overturn Buckley versus DeLeo (ph). So I am not pessimistic about this. Secondly, there's no question at the last minute what happens is that many major companies, many major independent finishers (ph) come in, and they just buy all the TV time they can do it, and they really distort the election process. And I think this will go a long way...

SHIELDS: The 60-A (ph) prohibition (UNINTELLIGIBLE).

MATSUI: The 60-A prohibition in general elections will go a long ways, I believe, in making sure that at least the electorate is aware of the honest opinions of both sides, both Democrat and Republican candidates.

So it's -- this is a major reform, this is a major issue that I think was needed in the American politics.

SHIELDS: Margaret Carlson, if this were an incumbent protection act, I don't think so many incumbents would have fought so long and so hard against it.

CARLSON: Right. Mitch McConnell got red in the face repeatedly fighting against this bill. Of course it will make a difference, and it would -- it has a bad side effect, which is that the $2,000 contributor is now going to be king, because that -- the limits were raised, so anybody who can afford that, which is in general going to be the fat cats still, are going to have a disproportionate influence on politicians.

When it gets to the Supreme Court, we're going to see, you know, the, the, the legal teams lined up on both sides. It's quite amazing. Just a long list, Floyd Abrams, Larry Tribe.

But most of it will be upheld, and that's why they were fighting so hard. They didn't want it to get there.

SHIELDS: I have to say, I don't think the $2,000 contributor will be king. I mean, the king is when you'll get somebody who's giving six figures to your campaign, or that you've asked for, you answer his or her phone calls. You probably do his laundry, you clean up his garage, whatever else.

I do want to pick up on one thing Kate did -- said, and I think she's absolutely right. I think one of the reasons the president's singing it is, Linda Duvall (ph), a respected Republican pollster, came out with a poll this week, showed the president 80 percent approval, but it showed the Republican Party 50 percent to 19 between the two parties, Republicans versus Democrats, as which party's controlled by special interests.

And I think this is one way that the president sees that it's a way that he's got to inoculate his own party against that charge.

CARLSON: He should hope John McCain comes to the Rose Garden and stands beside him.

O'BEIRNE: Oh, please. Please.

MATSUI: Yes, he ought to take credit for it.

SHIELDS: That's right, he would take credit for it.

And next on CAPITAL GANG, Social Security wars resume.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

As the House prepared to pass a Republican budget on a party line vote, Democrats accused Republicans of raiding the Social Security fund and threatening the future of senior citizens.

(BEGIN VIDEO CLIPS)

REP. MICHAEL CAPUANO (D), MASSACHUSETTS: I like to make things simple for myself and for my constituents at home. They think they're paying taxes for Social Security. It doesn't go there. They'll get an IOU put in...

REP. CLAY SHAW (R), FLORIDA: To listen to the argument that anyone tries to use as a scare tactic, I think, is below the dignity of this House of Representatives. And I think that this scare tactic is absolutely the low point that I've ever seen in this House of Representatives.

(END VIDEO CLIP)

SHIELDS: Bob Novak, will the safety and security of Social Security a major -- be a major issue in this year's congressional campaign?

NOVAK: Well, that's what Tom Davis, the Republican campaign chairman for the House, is terrified of, and I think most of his colleagues are. And that's what the Democrats are hoping, that's why they had this orchestrated effort on the floor of the House Wednesday to scare the country about Social Security. Had Mr. Capuano just saying that it's going to be terrible, the whole -- people won't get their Social Security checks.

Everybody knows that those checks are going to go through. What neither side will admit is that in the year 2016 there's not going to be enough money for this Ponzi scheme, it's going to finally run out, and there's going to have to either be putting it on a need basis, as Senator John Breaux said on this program is going to have to be done, or a reduction in benefits, some kind of restraint. And that's what the politicians won't come down to, and instead the Republicans will run and tear and the Democrats will demagogue.

SHIELDS: Bob Matsui, Dick Armey was on "NOVAK, HUNT AND SHIELDS" today, he's been a leader of privatization, admitted that the Republicans are running away, scurrying away from the privatization as an issue in the 2002 campaign. Is this one where the Democrats think that they're on the offensive?

MATSUI: Well, let me say this. This isn't really about being on the offensive, this is really about policy. Americans that are senior citizens today are -- have very high standard of livings, and the reason for it because of Social Security and Medicare. And we want to make sure they have a defined benefit program.

I think it's very critical, and for Republicans to say this is scare tactics or we're just using this, that's not right. The purpose of elections is to talk and debate about issues that you're going to be actually putting into law the next year. And Social Security's a big issue.

The Republicans and their budget have, in the next five years, tapped into, raided, the Social Security trust fund by $850 billion, and that means we're going to weaken the Social Security system as a result of that, mainly because of that tax cut that they passed. And secondly, there's no question, the president wants to privatize Social Security. He says that he's going to privatize Social Security.

And if you do that, because Social Security's a pay-as-you-go system, you're going to put the American public in a position where you're going to have to cut benefits even further than what Bob Novak says. And that's why this is such a critical issue.

SHIELDS: Kate, a critical issue.

O'BEIRNE: You know, the phon -- possibly the phoniest issue in Washington is the Social Security trust fund issue, and it is stiff competition for phony issues. Even good, decent Bob Matsui dipped into the Social Security trust fund for years, since he showed up in Washington, until the Republicans took over the House.

Happily, the public has shown itself immune to these kinds of attacks. Even with the bear stock market and Enron and a recession, Gallup poll in late February showed the president's on the right side of this issue, 63 percent of the public wants the freedom, it's up -- it'll be their choice, to take a small portion of their Social Security taxes and invest it in the stock market.

The alternative to save Social Security is either to raise taxes or cut benefits if you're not going to let the stock market do some of the heavy lifting.

SHIELDS: But if that's the case, Margaret, why won't the Republicans debate it, if it's a -- better than two to one, in the campaign of 2002? Tom Davis, Republican House campaign committee chair, just says, Not on your life. I'm not going near that third rail.

CARLSON: Well, it may not be a third rail any more, but -- because Bush did bring it up during the campaign. But that poll you cited in the last segment, the 50 to 19 Republicans are the side of the big guys and not the little guys, is the reason that they don't want to bring it up, because they don't win in a discussion of it.

It might be phony to you, Kate, but it's not phony to most people who see Democrats wanting to protect it, put it in the lockbox. And if the Democrats could ever make the argument that part of what's going on here is the tax cut, and not be put off by the phony argument that by postponing the tax cut they're raising taxes, then, you know, you guys would be winning this -- the budget battle.

MATSUI: And, you know, also I would say this. The president has a plan now. He has three options that his commission came up with. Why not bring those to the floor of the House so we can vote on those, debate them and vote on them, because the American public...

SHIELDS: You proposed that this week.

MATSUI: We proposed that this week. The American public is entitled to know where people stand on the issue of privatization, and also the raid on the trust fund.

(CROSSTALK)

SHIELDS: ... doesn't that sound like a good idea, to get a vote and a debate in the House?

NOVAK: Oh, that's all politics. I'm a great admirer of Bob and a friend of Bob Matsui, but I'm so disappointed in him, because people like him, I would like -- wish he would stand with John Breaux and get away from this politicking over Social Security. This is a monster that is going -- eating up the entire tax revenue of the United States, the entire government of the United States.

Something has to be done. There's just too -- with all these old people out there, something has to be done to protect the rest of the country from this voracious system. And, and, and, and...

SHIELDS: Well, Bobby...

NOVAK: ... and, and, and, and it's going to take courage and responsibility by both parties, and neither party is showing it.

MATSUI: Bob, you, you, you, you don't need Social Security. We understand that. But a lot of people do in America. That's why we have...

NOVAK: Well, why should I...

MATSUI: ... to keep it as a defined benefit program...

NOVAK: ... if I (UNINTELLIGIBLE)...

MATSUI: ... in America today.

CARLSON: And, and...

NOVAK: If I don't need it, Bob, why, why am I getting it?

MATSUI: Well, why don't you just give it back? That's what you should do.

NOVAK: (UNINTELLIGIBLE), are you kidding?

MATSUI: But we want to make it available to all...

NOVAK: A check from the government, I'm going to give back?

MATSUI: ... Americans. We do want to make it available to all Americans. But you can give it back.

CARLSON: We do want to means-test it. Now, Bob, if Social Security had been privatized and people would put their money into Enron stock, where would they be? Where would their Social Security be?

NOVAK: That's so silly, you wouldn't invest it in Enron stock, and you know that, Margaret.

I want to ask Bob, you're saying I should give it back. Are you now (UNINTELLIGIBLE)...

MATSUI: No, no, I said, if you want...

NOVAK: Just a minute.

MATSUI: ... to give it back, Bob, you can give it back.

NOVAK: But I...

MATSUI: But you should be entitled to it.

NOVAK: ... (UNINTELLIGIBLE) -- I want to ask you, are you ask -- are you coming out for a means test now?

MATSUI: No, no, no. I said if you want to give it back...

(CROSSTALK)

MATSUI: ... if you want to give it back.

SHIELDS: All right. That's the next time.

O'BEIRNE: It should be taxed, however.

SHIELDS: We'll be back with a CAPITAL GANG classic debating campaign finance reform nearly five years ago.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

In the summer of 1997, Republican Senator Fred Thompson of Tennessee began hearings on abuses in the 1996 election campaign. On July 8 (sic), 1997, we discussed campaign finance reform with Republican Senator Thad Cochran of Mississippi, who then opposed the McCain-Feingold bill but later became an important co-sponsor.

(BEGIN VIDEO CLIP, July 12, 1997)

Bob Novak, are these hearings going to produce much-needed campaign finance reform?

NOVAK: Certainly not. I don't think it has any connection with campaign reform. I'm for campaign reform, if it's real campaign reform, and not something that leaves the unions off the hook.

CARLSON: It's never going to end until there's some kind of reform. And just because what Clinton did is -- may be illegal doesn't mean that the whole system doesn't have to be looked at, because what's legal is corrupt as well.

SEN. THAD COCHRAN (R), MISSISSIPPI: The most corrupt thing that we've found is breaking the laws that we have. And there are rules about disclosing where the money comes from, prohibiting foreign sources from contributing. And all of those rules were broken by the Democrats.

AL HUNT, "WALL STREET JOURNAL": This hearing's supposed to look into unethical activities as well as illegal activities, just as the Watergate committee did 24 years ago.

NOVAK: There is a tac -- a Democratic tactic that any time this comes up, it's like a button. What we have to do is have campaign reform.

HUNT: I agree with you if you will agree there's a Republican tactic which says is, the whole thing is about illegalities. It's not about a rotten system.

NOVAK: Well, it is about illegalities.

(CROSSTALK)

HUNT: It is not, it's about a rotten system.

SHIELDS: A rotten system, it's about a terribly rotten system, and I had the chance this week to spend time with two Republicans who understand it and who have the guts to risk the scorn and the wrath and the outrage of their own leadership, Newt Gingrich and Trent Lott, namely, John McCain of Arizona and Chris Shays of Connecticut. And if there were more courageous people like them in the Congress...

CARLSON: And, and (UNINTELLIGIBLE) -- and...

SHIELDS: ... we would change.

(END VIDEO CLIP)

Bob Novak, those 1997 hearings did contribute to the eventual passage of campaign finance reform, didn't they?

NOVAK: Not a lick, not an inch, and you know it, Mark. There was a lot of other things that contributed to it. But the main thing that contributed to it and pushed it over the top, and I think we'll all agree, was Enron. But those hearings on Bill Clinton's bad behavior didn't produce campaign reform.

SHIELDS: Bob Matsui, Marc Rich's pardon helped push campaign finance reform through.

MATSUI: No, I think it was really Enron. I think Enron was really the principal reason why we all voted for it at the end.

CARLSON: No, there was a cumulative effect over a long period, and I think Senator Thompson's hearings, where it -- showed how hard it is to make the actual link between money given and an act performed.

Nonetheless, it was all very disturbing at that time, and so here we are today with this now big snowball of corruption.

SHIELDS: Kate O'Beirne, who...

O'BEIRNE: I wish I had been there to point out to you that courting the wrath and outrage of Newt Gingrich and Trent Lott is nothing compared to courting the outrage of "The New York Times" and "The Washington Post." Real courage is not embracing elite media opinion. The real courage has been Mitch McConnell, who's willing to buck elite media opinion.

SHIELDS: Bob Novak, is the real profile in courage Mitch McConnell?

NOVAK: I think he showed a lot of courage. He's often wrong, but never cowardly.

SHIELDS: It's a hell of a profile too.

Thanks for being with us, Bob Matsui. We'll be right back in the second half of THE CAPITAL GANG, our "Newsmaker," "TIME" magazine film critic Richard Schickel previews the Oscars, "Beyond the Beltway" looks at a startling change in the race for governor of Massachusetts with veteran political writer David Nyhan, and our "Outrage of the Week." That's all after the latest news following these important messages.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

In the second half of CAPITAL GANG, I'm Mark Shields, with Margaret Carlson, Kate O'Beirne, and in Syracuse, New York, Onandaga County, Robert D. Novak.

Tomorrow night, Hollywood will host the 74th Academy Awards. For an Oscar preview, our "Newsmaker of the Week" is Richard Schickel, film critic for the magazine "Time."

Richard Schickel, age 65, residence, Los Angeles, California, educated at the University of Wisconsin, film critic for "Life" magazine 165 to 1972, and for "Time" magazine from 1972 to the present. Producer, writer, director of television documentaries, most recently on the making of Clint Eastwood's "Unforgiven," and a history of movie-making. Author of books on Douglas Fairbanks, Sr., and Marlon Brando, he's currently writing a biography on Clint Eastwood. Earlier this week, our own Al Hunt interviewed Richard Schickel from Los Angeles.

(BEGIN VIDEOTAPE)

HUNT: Richard, Hollywood's biggest night tomorrow, the Academy Awards. It comes as a shock to us in Washington, but the Oscars are steeped in politics this year. Is that a new phenomenon?

RICHARD SCHICKEL, FILM CRITIC, "TIME" MAGAZINE: No, I think perhaps, though, this year the politics are a little nastier and more intense. But of course it's a political thing, and it has been -- I think it has been as long as the age of television has been on.

HUNT: Let's talk specifics. There are reports of what one critic calls "a down and dirty campaign" against the movie "A Beautiful Mind," about Nobel Prize-winning economist John Nash and his schizophrenia. The charges are the movie ignored Nash's homosexual experiments and anti-Semitism.

SCHICKEL: There's apparently been some whispering. I don't think that it is an organized campaign stemming from the top of competing studios. I think it's possible that overzealous underlings have done some whispering to people like Matt Drudge. I think it's a kind of a ludicrous business. It would be impossible to name a biopic that was -- which was historically accurate.

In the case of John Nash, the anti-Semitic ravings and so forth were a product of the fact that he was profoundly schizophrenic and mentally damaged.

HUNT: This also affects what many see as a two-man contest for best actor between Russell Crowe in "A Beautiful Mind" and Denzel Washington in "Training Day." It's noted an African-American hasn't won best actor since Sidney Poitier 38 years ago. Is race a factor in that outcome?

SCHICKEL: Well, I think it has been a factor in the past. I think black performers, people of color in general, have been invisible men and women of the Oscar. There has been a reluctance to give the big prize. That's really a bad thing.

I think Denzel Washington has a tough time this year. I think that's an excellent performance, but I think it's not a movie that Academy members are going to particularly cotton to, whereas "A Beautiful Mind" has a couple of things Oscar voters like.

First of all, it is a triumph of the human spirit. He does come back to sanity. And second of all, it has a lovely love story of a faithful wife standing by her man. Good as Denzel Washington is, and he's been good in a lot of movies, I think he's just riding the wrong horse this year.

HUNT: Paul Newman is my favorite actor, won an Oscar for "The Color of Money" after the Academy stiffed him for his roles in "Hud" and "The Verdict," arguably even more impressive performances. Like basketball, in the Oscars, are there makeup calls?

SCHICKEL: Oh, almost annually. I think it's almost a tradition that wonderful actors don't necessarily win for their best performance. What they win for is a sort of a life achievement award. Paul Newman was superb in "The Verdict" and was passed over, and then he wins for "Color of Money," which I don't think is a major Paul Newman performance.

HUNT: Obviously it's important to a studio to win, to the box office, to little independent films. But does it really matter to an artist? There had been a number besides Mr. Grant, Alfred Hitchcock, Judy Garland, Lauren Bacall, legends who haven't won. Does it really matter to an actor or actress?

SCHICKEL: I think it matters eventually. I mean, I think you can accept a loss or two, but at some point, when you've been, you know, someone of the stature of, say, Cary Grant, to never have won, it's got to rankle.

HUNT: It's crunch time. I hope your record is better than mine in politics. Which movie is going to win the Oscar Sunday night?

SCHICKEL: I still think "A Beautiful Mind" will win. I think Ron Howard is a shoo-in as best director.

(END VIDEOTAPE)

SHIELDS: Margaret Carlson, why should anyone outside of Hollywood care about who wins the Oscars?

CARLSON: Well, like the Super Bowl and that silly basketball tournament Bob's at that -- where the final four end up on TV, it's one of the few things we still all kind of do at once and talk about at the same time, and it's a touchstone for us to have discussions about a lot of things, like the fact that there are three blacks up for Academy Awards this year, it's quite amazing.

"TIME" is so lucky to have Richard Schickel as a critic, and I agree with him, I'm rooting for "A Beautiful Mind." I like a simple story.

SHIELDS: Bob Novak, you've got a beautiful mind, but I think you agree with me that Paul Newman is the outstanding actor of our generation, but he deserved it for both "The Color of Money" and "The Verdict," don't you agree?

NOVAK: Well, I prefer Orson Welles. But as a matter of fact, I haven't watched an Oscar in 40 years, and I don't know any men that do watch it. I think it's a girls' thing, essentially. But gender attitudes aside, it's one of the silliest things I know of. There's no standards, there's no objectivity. The -- I don't know what the -- I don't know what basis they pick these things are -- on.

And I'll tell you, like most sensitive people, I'll be watching the NCAA basketball tomorrow night instead of the Oscars.

SHIELDS: Well, the old curmudgeon up at Syracuse. Kate O'Beirne.

O'BEIRNE: You know what, though, Mark? I think he's onto something. I agree with Margaret, it's a popular event, although fewer people even -- every year seem to be watching it. I don't think people much care who wins outside of Hollywood, outside those investors. I think they're celebrity-watching. They tune in because they're intrigued by celebrities. Bob's probably right, mostly women.

But I don't think the merits of the movies is what gets people there.

SHIELDS: At the risk of incurring Bob Novak's wrath for not meeting the gender standard, I will be watching. I do enjoy it. I like to watch it because by the time you get to cinematography, that's the first time you see the rented tuxes.

Next on CAPITAL GANG...

CARLSON: (UNINTELLIGIBLE) woman.

SHIELDS: ... "Beyond the Beltway" looks at a new GOP lineup for the Massachusetts governor's race with political writer David Nyhan.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Beyond the Beltway looks at what happened this week in the race for governor of Massachusetts. Mitt Romney, fresh from rescuing the scandal-tainted Salt Lake City Olympics, was about to announce his candidacy, with polls giving him a huge lead in the Republican primary over Acting Governor Jane Swift. Then she made a surprise announcement.

(BEGIN VIDEO CLIPS)

JANE SWIFT (R), ACTING GOVERNOR, MASSACHUSETTS: I am announcing this afternoon my decision to end my campaign for governor. I believe that this is in the best interests of our state, as it will allow the Republican Party's best chances of holding the governor's office in November.

MITT ROMNEY (R), MASSACHUSETTS GUBERNATORIAL CANDIDATE: I want to indicate that out of respect for her and for her decision today, that I'm not going to make a formal announcement. Instead, I want this to be Governor Swift's day.

I want to note, however, that lest there be any doubt, I'm in.

(END VIDEO CLIPS)

SHIELDS: Joining us now is veteran political reporter David Nyhan, former "Boston Globe" columnist and associate editor. It's good to have you back, David.

DAVID NYHAN, POLITICAL REPORTER: Hi. SHIELDS: David Nyhan, is this a master coup, that you keep the governorship Republican in a state where the Democrats have not won a governor's election since 1986?

NYHAN: Well, Romney is a fellow with astonishing popularity after his star turn in Utah with the Olympics. And despite the gentlemanly clip which you just showed about out of respect to Governor Swift, I don't want to spoil her day, he sort of flattened her with his presence. She was -- in the "Boston Herald" poll, she was the favorite of only 12 percent of the Republicans polled.

She was a poor candidate. She was overmatched from the day she stepped up from being lieutenant governor to acting governor. And Romney's arrival has discombobulated the five Democrats in the field. They don't know what to do now.

They're desperately ransacking Romney's record as a corporate investor, a venture capitalist, to see if they can come up with something as damaging to him as the little item that Ted Kennedy discovered eight years ago when they found some workers in the Midwest who'd been chucked out of their jobs by a Romney financing venture.

But right now, you'd have to say, Mark, that in your own old state, could be 16 straight years of Republican rule.

SHIELDS: Bob Novak?

NOVAK: David, the last time you were on, you kind of dismissed the chances of the former secretary of labor, a non-politician, Robert Reich, getting the Democratic nomination. But now that Mitt Romney has appeared on the scene, is there a prospect that the Democrats in the sense of self-preservation will turn to little Reich as an outsider and -- rather than nominate one of the statehouse hacks?

CARLSON: Yes, there's -- Reich is -- now stands a good chance, a much better chance of being on the ballot. I think he will make the ballot, which requires 15 percent of the delegates at the state convention June 1. And to Reich backers, they think he has arrived on the scene possibly in keeping with Al Hunt's movie theme here, folks, like "E.T." Reich comes in as "E.T."

But the favorite in the Democratic side is still probably Shannon O'Brien, the state treasurer. She has a running mate who's loaded, Chris Gabrieli. Senate president Tom Birmingham will also certainly be on the ballot. It could be a three-way, four-way, or five-way primary, we're not sure yet.

SHIELDS: OK. Margaret Carlson.

CARLSON: David, Reich has the name ID, more or less, but he -- you know, he still hasn't quite lived down that book he wrote, in which he looked really good and everyone around him looked really bad, and the stories turned out not to be quite true.

And then didn't he say that Clinton had encouraged him to get into the race, and then had to kind of mumble, Well, what I meant to say was, he didn't discourage me from getting into the race, after Clinton came and campaigned for Steve Grossman?

CARLSON: Yes, former president Clinton was up last week and was distinctly cool in his remarks about his old pal and Oxford buddy, Bob Reich. There's no love lost between the two of them. But Clinton, being a better Democrat than Reich, did cough up that, yes, if in fact Reich is the nominee, he will campaign for him.

Clinton is extraordinarily popular in Massachusetts still, probably the state in which he enjoys the highest esteem. But I don't know if that will translate to Grossman, who is laboring and is in danger of not getting the 15 percent of delegates he needs to get on the ballot.

I should point out, and Shields knows this as a Massachusetts veteran, that Massachusetts is a state with very weak party structure, and it was Jack Kennedy's old political secretary, Billy Sutton, who said, "There's three parties here, Democrats, Republicans, and Kennedys."

And I gave a talk at Harvard last week, Mark, where I said that to understand Massachusetts politics, you have to go for the Afghanistan model, which is no strong central authority, every office holder is his own or her own warlord with their own ammo, and you have to think of Boston as Kabul, Cambridge as Kandahar, and Harvard as Tora Bora.

And I think White is -- or Reich is going to have to move out from Tora Bora if he's to win this primary.

SHIELDS: Kate O'Beirne.

O'BEIRNE: David, back to Jane Swift for a moment. A chorus of women opinion writers raced to her defense, blaming the old boys' network for her decision not to run. Now, this working mother thinks her decision to commute 300 miles to work with three babies at home is insane. Was she a victim of the gender wars? Or is she responsible for her own bum decisions? And did they do her in?

CARLSON: Kate, I'm with you on this one, maybe one of the few I'm with you on. She herself said, and I think accurately, that it was Romney's money that she feared more than anything else. And her problem -- she didn't say this, but I'll tell you this -- her problem was not gender but competence.

She was the least-competent governor we've had here in over 20 years, and she married a very conservative economic philosophy of tax cuts that is going to shred the state's safety net. And she had tried to package some very inconsistent political goals in legislation and programs, and it just didn't work.

Finally, she lost the confidence of the business community when she denounced them for saying, If you don't slow down on your tax cutting, lady, this thing is going to be a debacle.

And there's a great sigh of relief that she's left, because she was not up for the job. SHIELDS: David Nyhan, thank you so much for being with us.

THE GANG will be back with the Outrage of the Week.

(COMMERCIAL BREAK)

SHIELDS: And now for the "Outrage of the Week."

There are two iron rules of Washington scandals. Rule number one, it is never the act itself that gets a politician in trouble, it is always the cover-up of that act. Rule number two, everyone forgets rule number one.

This week, after spending seven years and $70 million of our money, the Whitewater investigation of the Clintons turned up no criminal case against either of them. As David Kendall, the former president's lawyer, put it so well, "This was the most expensive exoneration in judicial history."

Bob Novak.

NOVAK: Fresh from lynching federal judge Charles Pickering of Mississippi, Senate Democrats have targeted a new victim, Texas Supreme Court Justice Priscilla Owen, who, like Pickering, was named to the Fifth Circuit Court of Appeals by President Bush, appointment made about a year ago.

The complaint against Justice Owen is that she received an $80,000 contribution from Enron many years ago, and then voted in favor of the company in a routine tax case. That's a lot of baloney. The reason she's in trouble is the same as the reason Pickering was removed. She fails the feminist test on abortion, and that's the new Senate standard for confirming federal appellate judges.

SHIELDS: Thanks for that brief outrage, Bob.

Margaret Carlson.

CARLSON: No less than three minutes.

Blacks staying at an Adam's Mark hotel were made to wear neon orange ID wristbands and charged the highest prices. Clinton's Justice Department issued an order against the hotel, which the Bush administration is about to lift. Why? Fred Cummer (ph), the hotel's owner, is good friends with Attorney General John Ashcroft. An Ashcroft spokesperson said, the attorney general played no part. But Cummer, who raised $25,000 for Ashcroft, bragged to an attorney that, quote, "his guy won the election, and it would help him get out of the decree."

He wasn't just whistling Dixie.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Fourteen girls died and 50 others were injured when a fire broke out at a girls' middle school in Mecca. Accidents happen, but this death toll could only have happened in Saudi Arabia, where the country's religious police blocked rescue attempts because some of these young girls weren't properly covered with robes and head scarves.

Fanatics who would rather see students die than glimpse a head of hair are an outrage that the U.S. ought to prohibit Saudi Arabia from exporting around the world, including to the U.S.

SHIELDS: Bob Novak, we have a prediction tomorrow night on the Maryland game, Maryland-Connecticut?

NOVAK: I think it's going to be a terrific game, but my analysis indicates a small, tight victory for Maryland.

SHIELDS: You're a class act in consistent objectivity, Bob, I've come to expect it.

This is Mark Shields saying good night for THE CAPITAL GANG. If you missed any part of this program, shame on you. You can catch the replay at 11:00 p.m. Eastern and again at 4:00 a.m. Eastern.

Coming up next, "CNN PRESENTS: Carrier at War."

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