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CNN LATE EDITION WITH WOLF BLITZER

Hagel, Durbin Discuss Possible War With Iraq; New al Qaeda Videos Found; Dreier, Spratt Debate Measures to Jump-Start U.S. Economy

Aired August 18, 2002 - 12:00   ET

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, 11:00 a.m. in Crawford, Texas, and 8:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks for joining us for LATE EDITION.
We'll talk with two leading United States senators about the implications of a possible U.S. war against Iraq, but first, this news alert.

It's been nearly a year since the September 11 terror attacks, and we've learned much about Osama bin Laden and his al Qaeda terror network. But now, CNN's senior international correspondent Nic Robertson is just back from Afghanistan with a truly remarkable find. Over 60 videotapes, from what he's been told, a never-before-seen al Qaeda library, behind-the-scenes footage of bin Laden and his al Qaeda terror network.

This amazing treasure trove of al Qaeda videos has been meticulously reviewed by Nic and our investigative team. We've had many of the top al Qaeda experts from around the world view the tapes as well.

For more on this incredible find, we're joined now, from the CNN Center in Atlanta, by Nic Robertson, who begins a five-part series, "Terror on Tape," tomorrow here on CNN.

Nic, first of all, good work. Thanks for joining us.

Let's talk about these tapes. How did you first learn about them?

NIC ROBERTSON, CNN CORRESPONDENT: Well, I've been in Kabul, I was in Kabul, I've been there for a number of months. And a contact I'd made a number of months ago came to me in our office there and said, look, I've got all this material, you should really come and see it. Well, I asked him, obviously, to show me something. He showed me one tape, and I could see from that that this was clearly interesting material, we hadn't seen it before. And I said, look, please let me see the rest of it, I'm very, very interested. He said, well, that's somewhere else. We made arrangements, and I went to see it.

BLITZER: And how did you determine, Nic, that these tapes were really authentic, coming from, if you will, perhaps the library of Osama bin Laden, or at least someone very close to him? ROBERTSON: Well, when I first saw the material, I could certainly see that some of it had never been seen before. I realized that it was very, very important, but obviously important, too, to get it back to analysts, international experts, who could really make some very sophisticated evaluations.

What we have heard from over a dozen experts we've talked to is that this is, in their opinion, very important material. Some of it has never, ever been seen before, not even by intelligence agencies.

What one of those experts told us was that this was the memory of al Qaeda. He described it as being -- these tapes, some of the material that we were seeing had been filmed by al Qaeda for al Qaeda, for their own interests. And for him, that really helped conclude that this was, in fact, al Qaeda material, that we had, in fact, discovered a library belonging perhaps to Osama bin Laden, definitely to key members of al Qaeda.

BLITZER: Is there -- was there any concern that you had, perhaps these tapes weren't authentic? How specifically did you go in making sure these tapes were, in fact, the real thing?

ROBERTSON: Well, we've had experts come in from all over the world to look at this material. We have brought in the top minds to bear on this material.

One of the experts has, in fact, in the past, interviewed members of al Qaeda, he has viewed for governments around the world over 200 al Qaeda tapes. He is a leading authority on al Qaeda. He is an author of a book on al Qaeda. For him, the content of the material, its breadth, its depth really helped lead him to the conclusion this was al Qaeda's material.

We, of course, have shown it to a number of other experts in fields -- in the field of explosives, in the field of defense and military training, and in the field of chemical analysis. These experts we have shown this material conclude that it is significant, that it has never been seen before, and that it is, in all probability, material that belonged to al Qaeda.

BLITZER: All right, Nic. Let's go through some of the specifics. What's on these videotapes? Perhaps the most disturbing piece of the videotape shows what?

ROBERTSON: Perhaps the most disturbing piece shows the test of chemical agents on dogs. This has never been seen before. We see experiments involving three different dogs. The dogs die as a result of chemical elements being introduced to the rooms that they are in.

Now, the experts we have shown this to, some believe it's probably a nerve agent. Some believe it may be hydrogen cyanide. Other experts are not sure what it is.

But what they all conclude from this material is that al Qaeda here has demonstrated that they can not only control these chemical agents, that they have formed a way essentially of weaponizing it, putting it in a form that can kill animals, and these experts believe potentially therefore humans. They believe that the al Qaeda can control this material in such a way that they can now use it as a lethal force against the rest of the world.

BLITZER: Why did -- why do you believe that they videotaped these experiments involving supposedly chemical weapons?

ROBERTSON: One of the analysis that experts have given us is that the site that this took place at is a site that Osama bin Laden wouldn't necessarily have wanted to visit. And that these tapes, the particular tape we have, was a selection of recordings from tests, from experiments on these dogs with the chemical agents. That this was edited for him and sent to him to review, so that he could see how the process that these experts believe he'd put in train (ph) because of his control of al Qaeda so that he could review how their work was going.

BLITZER: And the experts who looked at the specific tapes involving the dogs, and we'll be showing these tapes in great detail through the course of this week here in CNN, showed that there was a sophisticated level of a chemical weapons test that underscored great concern, didn't it?

ROBERTSON: There has been concern amongst governments around the world about the level of al Qaeda's knowledge about chemical agents. There have been some indications from interviews with al Qaeda prisoners that perhaps al Qaeda had been testing, or that in fact al Qaeda had been testing with chemicals, with cyanide. In fact, when CNN first visited one al Qaeda camp, Dirota (ph), in the east of Afghanistan earlier this year, they discovered a document there that showed the formula for sarin nerve agent.

Now, the experts we say -- the experts we've talked to believe that when you add all of this material together, it shows just how far al Qaeda had progressed in this direction. What is conclusive, they say, about this videotape that takes them to a level of knowledge beyond what they had before, beyond the interviews with al Qaeda prisoners and testimony from al Qaeda captives, is that this is conclusive evidence on this tape, conclusive proof of a level of knowledge, of a level of training, of a level of sophistication, and a level of development that has not so far been gleamed of fully believed, perhaps, from these al Qaeda operatives.

BLITZER: There is another amazing tape that includes pictures of a meeting that we knew about, but we had never seen these pictures or anything like this before. Talk a little bit about that.

ROBERTSON: Well, this is the meeting in May 1998 where Osama bin Laden arrives amid tight security, many gunmen around him, along with his military chief, Mohamed Atef, and one of his key advisers, Ayman Al-Zawahiri. Now, this is the meeting, essentially, where Osama bin Laden declares his jihad on America, where essentially he declares his war on the United States and the people of America. So this is a very significant piece of material.

It is, essentially some experts describe it as a videotape historic document of al Qaeda, of their essential coming out into the world. And for Osama bin Laden, this would have been a very important piece of material. Very important here that this has never, ever been shown before, that this was a piece of material in this library that we believe was only accessed by top al Qaeda officials.

There were journalists present at that meeting. We had heard about this meeting before. It had been documented. But there had only ever been a few still pictures showing the al Qaeda leadership, just those top three members. And no videotape in any form at all had been released publicly so far.

So a major insight here into what took place in that meeting and to some of the people who were present at that meeting who were off the -- off-camera, if you will, as far as al Qaeda was concerned that should be for public consumption, but on camera in the al Qaeda videotape.

BLITZER: And there is also some other very chilling videotape that we will be seeing throughout the week here on CNN, specifically involving training in explosives and urban attacks. Talk a little bit about that.

ROBERTSON: Again, when we showed this material to experts, it concluded -- it helped decide in their minds a level of sophistication that they hadn't realized al Qaeda had achieved before.

What we see on one tape is the chemical process of manufacturing pure TNT, but it goes beyond that. This is the process not only of making TNT but of making fuses. And very significantly, these experts say, it is making detonators as well. Detonators are very hard components, they say, for terrorists to make in the past.

But what is very, very significant, again beyond this training tape, this is a video training tape, is that there is an associated list of chemicals. The chemicals on this list that al Qaeda has put out to their operatives is a simple shopping list. The chemicals needed to make this pure TNT from this shopping list can be easily obtained in pharmacies and hardware stores. If the chemical product isn't easily available, they show how it can be derived, say, perhaps, from soap or something else available from a hardware store.

So this material, the TNT training tape in itself, allows al Qaeda operatives to travel the world without explosives and then manufacture those explosives, the detonators for them, from easy-to- get items. It makes al Qaeda operatives very difficult to track down.

One other thing we found about this particular tape in amongst the 64 tapes we have is it had been copied, and those copies had been put inside of movies, so these tapes could be taken around the world and at first glance, if somebody found the tape, they might just think it was a movie of some description. You get into the middle of the tape, you find the training material.

The other training material there, experts say, leads them to believe the assassinations we see being rehearsed on the training tapes, the hijackings, these type of things, indicate that al Qaeda is prepared and ready to take their terror tactics into the urban environment, take them to Western Europe, take them to the United States, and play them out in an urban environment.

BLITZER: Nic Robertson, thanks for that update, thanks for that exclusive report. We'll be following your reports, of course, throughout this week.

And this program reminder, a special edition of CNN Sunday Night will air tonight with Aaron Brown, 10:00 p.m. Eastern. Aaron will take an in-depth look at this incredible story, which of course can be seen only here on CNN. That's at 10:00 p.m. Eastern.

And tune in, please, all week for Nic's continuing reports, "Terror on Tape," including on my daily program, Wolf Blitzer Reports, weekdays at 5:00 p.m. Eastern. Please note, these reports contain very disturbing material, and viewer discretion is strongly advised.

In other news, the Bush administration continues to mull over its options regarding Iraq amid lots of conflicting advice the president is receiving from both inside and outside his administration.

Our senior White House correspondent, John King, is at the presidential ranch in Crawford, Texas; joins us now live.

John, the debate is getting pretty public, isn't it?

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: More public and more pointed, Wolf. The president said on Friday it was a healthy debate, and that he was listening. He is out of our public view today, in seclusion at his ranch nearby here in Crawford, Texas. But if the president tuned into any of the Sunday news shows, more conflicting advice, clearly no consensus even within his own Republican Party on what to do when it comes to us. The president has said that his goal, the stated goal of regime change in Iraq.

Richard Perle from the Reagan administration, an adviser now to the Bush administration at Pentagon says the United States made a mistake in not dealing with Osama bin Laden sooner and should not make the same mistake when it comes to Saddam Hussein. Richard Lugar, on the other hand, influential senator, Republican from Indiana, said the president and his national security team have a lot of explaining to do before the United States can go to war. Senator Lugar saying, how many troops, how much will it cost, who will the allies be, and what will the U.S. investment then be in building a new government in Iraq?

The White House views much of this debate as premature. Dan Bartlett, the president's top communications adviser, out on the Sunday shows also today. He says the president will do this in a deliberate and responsible way. Dan Bartlett saying that when the time is right, President Bush will go to the United States' allies and the American people and make his case.

(BEGIN VIDEO CLIP)

DAN BARTLETT, W.H. COMMUNICATIONS DIRECTOR: You'll find, because of the abysmal record of Saddam Hussein and the threat that he causes in the region and to us as well that we will have support. The president hasn't asked for support, because he hasn't made up his mind. But I think you'll find many people rallying to such a noble cause.

(END VIDEO CLIP)

KING: And as the debate continues, the president will get an update on his options in the week ahead. No public events scheduled until Thursday, but National Security Adviser Condoleezza Rice arrives here in Crawford tomorrow. The Defense Secretary Donald Rumsfeld will visit Mr. Bush at the ranch beginning on Wednesday. The ongoing operations in Afghanistan one concern, but also on the table, we are told, a continuing update as the Pentagon makes contingency plans for the possibility -- and the White House says this is still down the road -- but the possibility, strong possibility of a military showdown with Saddam Hussein -- Wolf.

BLITZER: John King at Crawford, Texas, thank you very much.

And just ahead, the Bush administration ratchets up its call for regime change in Iraq. How close is the United States to trying to oust Saddam Hussein? We'll talk about that and more with two leading members of the United States Senate, Democrat Dick Durbin of Illinois and Republican Chuck Hagel of Nebraska.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

This past week, Saddam Hussein made new overtures toward the United Nations on the issue of weapons inspections. But the Bush administration was unmoved, and reiterated its call for regime change in Baghdad.

Joining us now to talk about any impending U.S. action and the war on terror are two key members of the United States Senate. In his home state of Illinois, the Democratic Senator Dick Durbin, he's a member of the Senate Intelligence Committee. Here in Washington, the Republican Senator Chuck Hagel of Nebraska, he serves on the Foreign Relations Committee.

Senators, good to have you back on LATE EDITION, both of you.

Let me begin with you, Senator Hagel. And before we talk about Iraq, the overall war on terror, you just heard my debrief with our Nic Robertson on these videotapes that he came upon in Afghanistan, are the very, very disturbing. You haven't seen them, obviously, all of them. We just saw little snippets here. But what was going through your mind when you heard what he had to say?

SEN. CHUCK HAGEL (R), NEBRASKA: Wolf, this is further, very clear evidence, of the deadly, insidious challenge that the world faces in global terrorism. As we develop more of these kinds of finds and reporting, it will become clearer and clearer what we're up against. And we'll get into some of this when we discuss Iraq.

But I think it, once again, points to the fact that it is critically important, and, if we are to win this war, and we must, this new 21st-century scourge on mankind, it's going to take relationships, enhanced relationships, allies, coalitions of common interest and intelligence, in order to beat this kind of thing that we just saw a few minutes ago, the United States can't do that alone. It's going to take many nations working together.

BLITZER: Senator Durbin, by all accounts, of course, September 11th, the terror attack was very sophisticated. But on these videotapes, we see another level of sophistication, not only involving hijackings and urban warfare but of chemical warfare, if you will, which raises the ante, I would say, significantly.

SEN. RICHARD DURBIN (D), ILLINOIS: I think it will raise it significantly. And your tapes are a grim reminder that we are in the midst of a war against terrorism, a war against al Qaeda that is far from resolved. We estimate that al Qaeda is present in maybe 60 nations around the world even as we speak.

Let's make certain that we resolve this war in the right fashion with the support of the American people, with the support of Congress, with the support of our allies, before we embark on a new invasion of a new territory and a new enemy.

BLITZER: Senator Durbin, you're on the Intelligence Committee, you're privy to most of the top-secret information the United States government has.

I want to read what the foreign minister of Afghanistan said yesterday in an interview with Reuters. Dr. Abdullah said, "What is now certain is they survived the operation of Tora Bora" -- referring to Osama bin Laden and Mullah Mohammed Omar, the leader of the Taliban. "The entire energy of these two guys is now focused on their own survival. They will be found, they cannot go into hiding forever."

Is that your assessment as well?

DURBIN: Well, I can recall a briefing in Afghanistan in January, when I went on a congressional delegation, and they pointed to a spot on the map no bigger than a half dollar and said, this is where Osama bin Laden is. And I said, you're certain of this? "We're virtually certain of this."

Well, still as we come to this show today, there's no confirmation of his death. I personally believe he's been dead for a while. Otherwise we'd see him on Al-Jazeera on videotape.

But having said that, keep in mind that we still have a war to win in Afghanistan and a war to win against terrorism against al Qaeda before we start talking about other possible theaters of invasion.

BLITZER: We'll get into that in a moment. Senator Hagel, I think you agree with Senator Durbin on that, not necessarily on whether Osama bin Laden is alive or well, but that there still is still a capability out there that represents a serious threat to the United States.

HAGEL: Wolf, I think there will continue to be a very serious capability that will threaten this country, as well as other nations of the world. And that's why, in my opinion, it's important, as we work through these great challenges, that we take into consideration all the peripheral interests that we have here on Iraq.

Iraq is a threat, is a problem, Saddam Hussein. But we also have other interests that are connected to that. Afghanistan, we're a long way from bringing that into a universe of some stability and security. Obviously, the Israeli-Palestinian issue is at a critical point. The India-Pakistan issue. Our overall interest in the world.

DURBIN: We need to keep in mind that these pieces fit together. Not one should capture the essence of our policy on any other part of the world, but they cannot be decoupled. They are all part of the overall effort that challenge our security interests. And terrorism now is that one defined area of challenge.

BLITZER: The former Reagan Pentagon official, Richard Perle, now an adviser, the chairman of the Defense Policy Board over at the Pentagon, to the president and the secretary of defense, informal adviser, suggests that the U.S. made a bad mistake in not preempting, going after Osama bin Laden before 9/11. It would make a similar, perhaps even worse, mistake by not going after Saddam Hussein right now.

HAGEL: I think you can go back and replay every dynamic of decisions in the past. And as always, the case is things look a little better, a little clearer today.

Sure, should we have gone after him if we knew where he was and all the other pieces that were related to that at the time. But the fact is, we are where we are now. And I don't think it helps any of our interests to go back and replay anything or blame anybody.

We have got an incredible challenge to civilization ahead of us, and we can't do it alone. We are going to have to bring all of our interests together in this common coalition.

Weapons of mass destruction, what we saw referred to on your tape, is what we're playing for here, as to get rid of those weapons of mass destruction, make sure they do not end up in the hands of the people who will do great, great harm to our nations, to our people, to the world. And that should be our overall general focus as we work our way along the lines here as to policies regarding Iraq or any other country.

BLITZER: Senator Durbin, in his commencement address at West Point a few months back, the president laid out a strategy of preemptive strikes to deal with issues like Saddam Hussein and weapons of mass destruction. Do you support that strategy of preemptively going against Saddam Hussein?

DURBIN: There is, of course, something that will preempt that policy. It is the Constitution of the United States. Article I, Section 8 makes it clear that only Congress can declare war. The decision was made by the people who wrote the Constitution that governs this country that the American people will make this decision about going to war through their members of Congress.

President Bush's father learned that in the Persian Gulf War. I hope he has learned it as well. If you accept the premise that we can preempt dangerous things around the world with offensive military action, not defending the United States or its people, then frankly, Article I, Section 8 means nothing under the Constitution.

The president said over the last several weeks that he will consult with Congress. That's great. The Constitution requires a lot more. The Constitution requires the Senate to vote.

BLITZER: So you want to -- Senator Durbin, you want a formal up and down vote, as occurred before the Persian Gulf War in January '91. Is that what you're saying?

DURBIN: I certainly do. And as occurred on September 14th, after the attack of September 11th, when Congress -- the Senate unanimously gave the president the authority and the resources to go after those responsible. That's the way it should be done under the Constitution.

BLITZER: Senator Hagel, a Washington Post poll that was out earlier this month asked the American public, "Do you support U.S. military action against Iraq?" Let's put up the numbers. Favor military action, 69 percent; opposed, 22 percent; no opinion, 9 percent.

It looks like, at least according to this poll, the American public has made up its mind.

HAGEL: Well, I think if you ask the next set of questions after that, regarding heavy casualties and going it alone with no allies, then you get some different numbers.

But the bigger point is this, and I think Dick is right, first I can't imagine President Bush would not want to have the Congress on record in support of his effort, if that's where he decides to take America. To commit America to war is a big deal. This isn't like skipping down to Haiti or Grenada and making some analogy like those one of two efforts. This is a huge deal.

If we were to exercise the military action to preempt, inverting our doctrine, by the way, that we've always had in this country -- preemptive strikes are now the new doctrine -- that will of course would set in motion a lot of other possibilities: India hitting Pakistan, maybe Israel striking out. Others could use that excuse to say, well, I'm sorry but I think they are a threat to my nation because the Americans did it. A lot of the uncontrollables and the unintended consequences could well flow from this. But the American people must be behind this. The Congress must be involved. And that, I'm sure, is what the president would intend when he is ready to make that case.

BLITZER: He's clearly not yet ready. And we're going to continue this conversation, but we have to take a short break.

When we come back, much more to discuss with Senators Hagel and Durbin. They'll also be taking your phone calls. Call us now. LATE EDITION will return right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. SECRETARY OF DEFENSE: We intend to live our lives as free people, and to go about our business, and to do everything we can to defend our people, our country, our allies and our deployed forces against terrorist acts.

(END VIDEO CLIP)

BLITZER: Welcome back to LATE EDITION. That was the defense secretary of the United States.

This past week, Saddam Hussein made new overtures toward the United Nations on the issue of U.N. weapons inspections, but the Bush administration was unmoved and reiterated its call for regime change in Baghdad.

Continuing our conversation now, two United States Senators, Democrat Dick Durbin of Illinois, Republican Chuck Hagel of Nebraska.

What about that proposal that the Iraqis made, Senator Durbin, to start the negotiations going once again with the U.N. to let those U.N. weapons inspectors back in? The Bush administration seems to think it's a waste of time, it's only a stalling tactic, the Iraqis wanting to play out the clock. What do you think?

DURBIN: I'm very skeptical. Saddam Hussein is a thug. He's been a threat to his own people, to the region and to the world.

But frankly, if we can get some force within the United Nations to push real, meaningful, verifiable inspection in Iraq, it's in the best interest of everyone. And so we shouldn't give up on it. But I think we ought to come to it with a certain air of skepticism, understanding that it may never happen.

BLITZER: Do you agree with him on that?

HAGEL: I do. Let's not forget here that the resolutions in force against Iraq are not United States resolutions, these are United Nations resolutions. When we went to war in 1991, we had the force of the United Nations with us, the Security Council, almost every nation of the world, almost every Middle East nation. And we should allow the diplomatic high ground to play out, knowing full well that this guy, just as Senator Durbin said, is a liar, he's a butcher, he's a thug. We know that. But that's the way you coalesce the diplomatic strength that you want behind you, so in fact, if you must use the military option, you have the coalition behind you to do it.

BLITZER: But, Senator Hagel, it's been almost four years that there have been no U.N. weapons inspection teams inside Iraq. The president says Saddam Hussein is thumbing his nose at the United States, at the United Nations, at the world. How much longer should the U.S. wait?

HAGEL: Well, I think, again, it shouldn't be just the U.S. here. This should involve the Security Council, should involve our allies, because, in my opinion, we can't do this alone, especially that part of the world. We can't do this alone and not think that this is going to have an effect on all of our other interests, terrorism, all that that represents.

And remember something else here. A military option is not the only way for a regime change. There's no opposition, organized strength of opposition in Iraq. We could be working that. We should have been working that over the years. We can be working with our allies. There are other ways to do that. In the end...

(CROSSTALK)

BLITZER: But some of those Iraqi opposition leaders were in Washington only the other day.

HAGEL: But this is a silk-stocking operation. There is no Northern Alliance like there was in Afghanistan. That needs to be built up.

And the fundamental question is this: Who replaces Saddam? Do you further destabilize the Middle East? What if, for example, he has weapons of mass destruction -- we know biological, chemical weapons, he probably possesses some of that, and the means to deliver them -- what if that gets fragmented, and some of that ends up in other hands, and then it gets scattered around? Those are questions that we need to think through.

BLITZER: So you're saying this situation could spiral out of control.

Senator Durbin, I want to read to you what Dr. Condoleezza Rice, the president's national security advisor, told the BBC in a radio interview earlier in the week. She said this, referring to Saddam Hussein: "This is an evil man who, left to his own devices, will wreak havoc on his own population, his neighbors and, if he gets weapons of mass destruction and the means to deliver them, on all of us. It is a very powerful moral case for a regime change."

Do you disagree with her at all? DURBIN: Not at all. And I think what we're trying to do is to force change in Iraq, as tough as it is. Here we have Saddam Hussein, with almost a half a million men in uniform, with an entrenched defense in his country, and the question is not whether we'll have the strength to prevail against him but the wisdom to do it right.

And I think what Chuck Hagel and I are trying to say today is, take a look a strategy that continues to put pressure for change on Iraq, regime change, number one, but certainly a change to make certain that we contain any violence that he might spread throughout the world.

But before you embark on a military invasion, a land invasion, as has been said over and over by our colleague Dick Lugar and others, you know, let's ask the fundamental questions.

DURBIN: Who will be on our side? Which countries in the region will provide a base of operations? How long will this last? What impact will it have? Remember in Kuwait when Iraq turned the Scud missiles on Israel, what if they turn other weapons of mass destruction on Israel as part of our invasion? And finally, what is the long-term cost of this? What is the investment in the United States to bring ultimate stability and security to Iraq?

Tough, hard questions that have to be asked and answered.

BLITZER: And, Senator Hagel, you served in Vietnam. A lot of those kinds of questions were not necessarily asked before the U.S. committed the troops to Vietnam. Of course, that it did commit -- we are not going to get into that issue right now.

But I do want to read to you from a very controversial article that Brent Scowcroft, the first President Bush's national security advisor, wrote this week in the Wall Street Journal, saying now is not the time to go to war against Iraq. Among other things, he wrote this: "Our preeminent security priority, underscored repeatedly by the president, is the war on terrorism. An attack on Iraq at this time would seriously jeopardize, if not destroy, the global counterterrorist campaign we have undertaken."

But exactly the opposite conclusion is reached by the Richard Perles, other hawks, when it comes to Iraq, saying if you destroy Saddam Hussein's regime now, that will send a clear and powerful signal to the terrorists out there elsewhere that you're dealing with a different United States.

HAGEL: I don't subscribe to the more simplistic view of all of this, that somehow this effort can be cordoned off and decoupled from every other action, reaction, unintended consequence. I don't buy that. This is a different kind of world, Wolf.

In fact, isn't it interesting that what the terrorists did to us on September 11th, they used the great innovations of mankind to further the goodness and benevolence of mankind, through the Internet and through transportation, through all the sophisticated means of communications and travel, they turned that on us. What does that mean? Well, one thing it means is the world is far more complicated today. You don't make these decisions to go to war in vacuums. They have consequences.

And so I am more of the opinion that General Scowcroft, who, by the way, has led men, and a West Point graduate and all the other credentials you say, understands this very well from all the dynamics, has it just about right. We have to ask those questions that he asked.

But in the end, we can never be paralyzed by the uncertainty or the risk of never having all the answers. We never will. War has never been that. But surely, you want a lot more answers and understanding of consequences than what we have now.

BLITZER: We're going to take a quick break. But very briefly, what do you say to your neo-conservative friends in the Republican Party, including over at the Weekly Standard, the magazine here in Washington, that what you are suggesting, what Brent Scowcroft is suggesting is tantamount to appeasement, as occurred before World War II with the Nazis?

HAGEL: Oh, that's goofy. That's completely ridiculous. To talk about Colin Powell being an appeaser, or Brent Scowcroft, or Chuck Hagel, I mean, that's laughable.

No, we're not appeasers. I hope that we are using some of our real-life experience to apply to something very deadly here. That's war, that's life and death. That's big-time stuff here. This isn't an intellectual debate. We could set in motion a destabilization of the Middle East and South Asia that no one could even think through right now.

So I'm glad we have Colin Powell and Brent Scowcroft and others out there asking the tough questions.

BLITZER: All right. We're going to take a quick break. We're going to come back. We have more, including phone calls for Senators Hagel and Durbin. LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing our discussion on a possible U.S. war against Iraq with the Illinois Democratic Senator Dick Durbin and the Nebraska Republican Senator Chuck Hagel.

We have a caller from Texas. Texas, go ahead with your question.

CALLER: Yes, good afternoon. I just had a question on the impact of going after Saddam in Iraq or causing a war. What kind of impact is that going to have on our homeland security and the presence of foreign nationals in our country?

BLITZER: All right, let's ask Senator Durbin. DURBIN: Well, let me tell you, I think one of the more unheralded successes of the war on terrorism has been this emergence of a global intelligence effort by countries that are cooperating with the United States to fight terrorism. This is something that has really helped, and we've seen evidence of it in country after country.

I fear, as Brent Scowcroft wrote in the New York Times, that if we decide to, quote, "go it alone" in Iraq after Saddam Hussein, that it could jeopardize or put a damper on those global intelligence efforts when in comes to counterterrorism.

And that could have dramatic consequences in many different ways: regime instability in some country, possibly less information being transferred to the United States in terms of terrorist suspects. And frankly, I don't know that we want to jeopardize that.

I go back to my original point. We have a war to win, the war against terrorism, before we embark on another war.

BLITZER: Senator Hagel, by all accounts, if there is another war and the Iraqi regime sees itself going down the drain, it could lash out, including against Israel. Thirty-nine Scud attacks in 1991 with conventional warheads. But this time, some of them, assuming they still have some Scuds, might not have conventional warheads. They could have chemical or biological warheads. And there's every reason to believe the Israelis would not show restraint this time, would respond massively.

HAGEL: Well, President Sharon already said that...

BLITZER: Prime Minister Sharon.

HAGEL: Prime Minister Sharon mentioned that they would not hold back this time, and I believe the prime minister.

This is just but one of many of the pieces here that we need to think through, and we, I think, are rather confident that Saddam Hussein in fact would lob some of those Scuds over onto Israel, and he would do it, of course, to try to bait Israel into a response.

And you could then end up with a situation completely out of control, forcing the friendly Arab moderate nations, who are allies to us, further away from us. And if you didn't have some of those Arab nations with us going into Iraq, which, right now, we don't -- as a matter of fact, all of them have said, don't do it, we won't be with you -- then it would be even worse, I think, because their own constituencies, the leaders of those nations like Jordan and Saudi Arabia, Egypt and others, would be then in a very delicate situation where you could actually, in Jordan, for example, see regime change.

What happens if King Abdullah goes down? That is the one buffer nation between the rest of the Arab world, essentially, and Israel. That's not in the interest of Israel, certainly not in the interest of the region or the United States.

BLITZER: Senator Durbin, the Israelis seem to be convinced war with Iraq is inevitable. This past week, the government announcing they're going to start giving smallpox vaccinations, anti-radiation pills out there to the Israeli public, or at least a big segment of the Israeli public.

What is your sense, what is your worst-case fear if there is another war, what would happen with the Israelis?

DURBIN: I think Senator Hagel is right. We just can't predict the instability in the Middle East should we invade Iraq or should a larger war emerge. And some of the fragile regimes, who have been friendly or neutral, may be forced into a different position.

You can certainly understand Israel's precautions. They've been victims of terrorism, and they're certainly anticipating the worst, as they must, to protect their people.

But, you know, we have to step back and look at the larger picture here. We have at least the tacit cooperation of even some of Israel's enemies who have said, well, we're with you in going after al Qaeda. What happens after an invasion of Iraq? Where do we see this headed? I don't think it's for a more stable Middle East. It could be a much more dangerous situation.

BLITZER: Finally, Senator Hagel, I want to play for you an excerpt of an interview I did earlier this week with Jalal Talabani, one of the Kurdish opposition leaders to Saddam Hussein, in which he made it very clear -- although he seemed to backtrack a little bit later -- that he was inviting the United States to establish bases in northern Iraq from which to attack Saddam Hussein. Listen to this excerpt.

(BEGIN VIDEO CLIP)

JALAL TALABANI, KURDISH OPPOSITION LEADER: The American army will be very warmly welcomed in Iraq and Kurdistan, contrary to the rumors.

BLITZER: Just to be precise on this point, the United States, U.S. Military forces, will be welcome to use areas in northern Iraq...

TALABANI: Very much welcome -- will be welcomed. And believe me (ph), the United States is very popular now in Iraq and Kurdistan.

(END VIDEO CLIP)

BLITZER: Is that model that was used in Afghanistan, the Northern Alliance helping the United States overthrow the Taliban regime in Afghanistan, is that applicable in Iraq?

HAGEL: No. Two complications to what we just saw: One, where the Turks would be on this. The Turks have said, "No, we're not part of any of this," and part of the reason they've said that is because they do not want to see an independent Kurdistan, which then goes over the border into Turkey. Second, we're talking about keeping Iraq as it is, the geopolitical boundaries of Iraq. Now, we would most likely be talking about moving toward an independent Kurdistan. Maybe that's the right thing to do, but that's the second complication here.

Turkey is an almost indispensable -- probably is an indispensable ally of us, certainly in the Middle East, certainly of Israel. If you continue to alienate Turkey here, then what effect does that have of an invasion into Iraq by us?

So those are two very important parts that we need to think through.

BLITZER: The discussion is only just beginning. Unfortunately, we are out of time with our two senators.

Senator Hagel, Senator Durbin, thanks to both of you for joining us.

HAGEL: Thank you.

DURBIN: Thank you.

BLITZER: Thank you.

And up next, if war is waged against Saddam Hussein, will the United States be an army of one without the support of its allies? We'll get some special insight from the former supreme allied commander of NATO, General Wesley Clark.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I will use all the latest intelligence to make informed decisions about how best to keep the world at peace, how best to defend freedom for the long run.

(END VIDEO CLIP)

BLITZER: President Bush commenting on the possibility of a U.S. military campaign to oust Saddam Hussein.

Welcome back to LATE EDITION. Joining us now from Little Rock, Arkansas, the former supreme allied commander of NATO, the retired General Wesley Clark. He's also a CNN military analyst.

In the September issue of Washington Monthly magazine, General Clark outlines the challenges of the United States taking military action against Iraq without the support of its major allies.

General Clark, welcome back to LATE EDITION. Thanks for joining us. In your article -- an excellent article, which I read, of course -- among other things, you write this, and I'll put it up on the screen: "We don't necessarily need Europe's full military support for a war against Saddam, but we need its diplomatic support now and its assistance in the aftermath. Without this support, others will have an excuse for not cooperating."

Some of your critics -- some people say, the United States really doesn't need that support, it should go it alone. If it has to bring the Europeans on board, it'll just complicate and slow down the entire operation.

GEN. WESLEY CLARK (RET.), CNN MILITARY ANALYST: Wolf, I think that having the Europeans on board is absolutely essential to the success of this operation in the long term. It's not just about going after Saddam Hussein's regime. We can certainly go in there and, with air power alone, ravage all of the assets of that regime. We'll have to put ground troops in to get the weapons of mass destruction.

But beyond that, it's the aftermath. How are we going to make the Middle East a more peaceful, a more stable area? How are we going to help it democratize and deal with the needs of its citizens? We can't do that alone.

We need to slow down. We need to think about the big issue, that other issue that Senator Durbin and Senator Hagel brought out, that was in the tape at the beginning of your show, is the issue of terrorism. That's, after all, how we got into this dialogue with the American public, starting on 9/11.

We pulled Saddam into that discussion on terrorism, but terrorism is still the major threat. Strategically, we have to go back and ask, how would a unilateral intervention in Iraq affect the war on terror? And I can't imagine that it would be a good effect. I think it will chill relationships, I think it will make it more difficult to go after terrorist cells in Europe, more difficult to get intelligence from the Middle East, more difficult to handle the problems and the aftermath.

BLITZER: Well, the critics, the hawks on this particular issue, say just the opposite, that if the U.S. gets the job done, if it leads, others will follow, and that the best way to deal with terrorism is to send that powerful signal by getting rid of Saddam Hussein, if necessary, alone.

CLARK: I think that the demonstration of American power will always bring Middle Eastern governments around. But the problem is not so much the Middle Eastern governments, it's the Arab street, so to speak, it's what the mass of opinion feels.

The majority opinion in Saudi Arabia right now is against the United States and siding with bin Laden. They believe there's something wrong with the way the United States is behaving in the world, projecting itself, influencing values and opinions around the world. They're concerned. Unilateral action in Iraq, without the support of the government of Saudi Arabia and others in the Middle East, is likely to deepen that problem. And in the long term, that's the source of the terrorism.

BLITZER: Another intriguing excerpt from your article in the Washington Monthly is this. Let me read it: "We've got a problem here. Because the Bush administration has thus far refused to engage our allies through NATO, we are fighting the war on terrorism with one hand tied behind our back."

As far as a war with Iraq is concerned, you want to see NATO actually get involved as an institution, even though it's outside the geographic jurisdiction, if you will, of NATO?

CLARK: Absolutely, Wolf. We had this debate in the United States and NATO during the 1990s. We said NATO either had to be able to go out of area or out of business. We did go out of area in the Balkans in the 1990s.

NATO's perfectly capable of playing a part in any operations inside Iraq, either in time of war or in the aftermath, in terms of a peacekeeping. It doesn't have to be exclusively NATO. We have the full mechanisms in NATO to bring other non-member nations in. Indeed, that's what we did in the Balkans.

But what's important about NATO is not the forces, it's the consensus machinery of NATO. It keeps governments and diplomats operating in step and in accordance with international law. And, ultimately, that's going to be our most powerful weapon in the war on terror.

BLITZER: But, General Clark, if you need the consensus of all the NATO members to make any military move against Iraq, that could be a prescription for paralysis.

CLARK: Well, what we saw in the Kosovo campaign was that, in fact, it wasn't. We saw that the NATO members added their resolve to the resolve of the United States. And that a little bit of investment in planning, talking, really working with allies paid enormous dividends. I think we've got to learn that lesson from the Kosovo campaign and apply it in this new struggle against terrorism.

BLITZER: Richard Perle, one of the hawks when it comes to going to war against Iraq, was on ABC earlier today. I want you to listen precisely to what he had to say.

(BEGIN VIDEO CLIP)

RICHARD PERLE, CHAIRMAN, DEFENSE POLICY BOARD: No one is talking about going in unilaterally. There are Iraqis who are our principal allies on this. In fact, most of the population. Our European allies are just not relevant to this. And the one of some importance, the United Kingdom, is, I believe, going to be with us. The rest of the Europeans prefer to look the other way or cut deals with Saddam or buy him off in various ways. (END VIDEO CLIP)

BLITZER: That's a diametrically different assessment than you have.

CLARK: It is. I have been living and working in the NATO context. I have a lot of respect for the European diplomats and their political leaders. I do believe that if the United States has a strong case to make, it can bring European support, through the consensus engine of NATO. And we'll find ourselves in a much more advantageous position than if we go in only by ourselves with the Iraqi opposition.

BLITZER: And if the U.S. makes the case to the Europeans and fails to win their support, what does that do to the entire U.S. operation?

CLARK: Well, I think it leaves it no worse than where it is today, because what we're trying to do is make the case behind the scenes, quietly, bilaterally.

What we need is a consensus engine like NATO to help pull together all of these countries multilaterally. We've got to share our intelligence with them. We've got to level with what our perspective is. We've got to bring them into the problems of the region in a way that we haven't done before if we're going to really get their support.

BLITZER: General Clark, thanks for joining us. Thanks for a very thoughtful article in the Washington Monthly. Good stuff for this debate, which obviously is just beginning here in the United States. Appreciate it very much.

And ahead in the next hour of LATE EDITION, developments in the anthrax mystery. Are investigators on the right track? We'll talk with the spokesman for a former Army researcher who has been named as a so-called person of interest by the FBI.

Plus, two members of Congress face off on President Bush's efforts to talk up the sagging economy. And we'll get additional perspective on the diplomatic and military obstacles involved in a possible new war against Iraq.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We'll talk about the possibility of a new war with Iraq in just a few moments. But first, here is CNN's Fredricka Whitfield in Atlanta with a news alert.

(NEWSBREAK)

BLITZER: Several lawmakers on Capitol Hill here in Washington are now saying, on the record, that another war between the United States and Iraq should not necessarily be viewed as inevitable. Still, the Bush administration continues to make the case that Saddam Hussein must go, one way or another.

We're joined by two guests with very different points of view.

Here in Washington, both of them: Ken Adelman, he served as the director of the United States Arms Control and Disarmament Agency during the Reagan administration; and Lee Hamilton, he's the former Democratic Congressman, chairman of House International Relations Committee. He's now the president of the Woodrow Wilson Center for International Scholars, also here in Washington.

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

Ken Adelman, you believe the United States must go to war against Iraq right now. Why?

KEN ADELMAN, FORMER DIRECTOR OF U.S. ARMS CONTROL AND DISARMAMENT AGENCY: Well, thank you for having us. And let me just say, I thought it was a fascinating debate that you had a few minutes ago between two senators who both oppose this move.

I think...

BLITZER: We didn't say it was a debate. It was a discussion.

(LAUGHTER)

ADELMAN: OK, a vigorous discussion...

BLITZER: This going to be a debate.

(LAUGHTER)

ADELMAN: OK, but vigorous discussion against two anti's.

Let me just say, I think it is very important, because I think Saddam Hussein represents the biggest threat facing America and facing civilization. And I think that we have a warning now that we didn't have before September 11th, that unless we do something, we will pay a terrible price.

And there was clear pattern before September 11th that Osama bin Laden gave us kind of around the world, but we didn't do anything about it because we thought we were invulnerable. Now we know we are vulnerable, and I think it would be very responsible -- in fact, essential -- for the government to preempt an attack us on by attacking Saddam Hussein and liberating Iraq.

BLITZER: If you suspect, Congressman Hamilton, that someone is about to kill you, don't you have a responsibility to preempt and kill him first?

LEE HAMILTON, PRESIDENT, WOODROW WILSON CENTER FOR INTERNATIONAL SCHOLARS: If the threat is imminent, present, clear, the answer is yes. I don't reject the idea of a preemptive strike. In the world we live in -- put aside Iraq for a moment -- it is quite likely that the United States, at some point, will face just that question.

My view, with regard to Iraq at the moment, is that we ought not to reject the military option; we should prepare for the military option. But I think there are other alternatives that should be pursued at present.

BLITZER: Like what?

HAMILTON: Well, diplomatic, economic and military. You begin the build-up militarily to put pressure on Saddam Hussein. You proceed with the covert actions, which I think are probably under way. You make a very clear statement from the president of the United States that we must have inspectors in Iraq, that they must have complete run of the country, it has to be intrusive. And Saddam Hussein has to fulfill the U.N. resolutions passed a decade ago, and other steps.

That would put enormous pressure on him. And we should always try economic, diplomatic steps prior to the military.

BLITZER: What's wrong with that prudent -- before you put young men and women in harm's way, why not accept that advice?

ADELMAN: Lee Hamilton, a man who I have enormous respect for and testified many times before, I think he makes a very, very wonderful menu of actions.

The only trouble is, we've been there, we've done that for the last 12 years, OK? There is no reason why you keep doing the same thing over and over and over again. We have tried diplomatic isolation of Iraq. We have tried sanctions. In fact, now we're in the process of loosening sanctions. We're not tightening sanctions.

BLITZER: The secretary of state calls them smart sanctions.

ADELMAN: Yes, but they're kind of dumb, if you ask me...

(LAUGHTER)

... because they're loosening the restrictions on what the Europeans, especially, can give to Iraq. But anyway, they are called smart sanctions.

We have tried U.N. speeches. We have tried all kinds of requests for inspectors. We found that when the inspectors were there, Lee, which you know very well, they didn't find anything. Why? It was not what the Iraqis would call an career-enhancing move to show the international inspectors something that was a clear violation of the U.N.

BLITZER: What's the response? Been there, tried that, it hasn't worked. What do you say?

HAMILTON: The first point is that it has worked in part, not totally. We have contained Saddam Hussein. He has not moved across an international boundary. He has not been an aggressor. He has not fired a Scud missile at anybody. But he is still there, and he may be developing weapons of mass destruction.

Ken may be right. It may be, at some point, we have to go in. I hope he's not right, and I suspect he hopes that he's not right, in a way, because nobody wants to go to war. But we've had some success, although it's a qualified success, with containment.

The second point would be that, look, when you really get serious here, when you really begin to apply the pressure, we haven't done the things as strongly and effectively as we're able to do them. We've not had a massive build-up since the Gulf War militarily in the region to put pressure on Saddam Hussein. We've had a sanction policy, quite frankly, that hasn't worked very well. That could be greatly enhanced and made much, much tougher.

And we have not been, I think, nearly insistent enough with regard to the inspectors. I really think the inspectors are key to this. And I think the president should just come forward...

BLITZER: But do you believe that if those inspectors are allowed to go back in, they will have the unfettered access that the United States and the United Nations demands to go, for example, to those Saddam Hussein presidential palaces and just walk around and look for whatever they want?

HAMILTON: I can't be sure of that. But we have to have the assurance of intrusive inspections, but more than the insurance. If our inspectors go in, "our" meaning the U.N. inspectors go in, and they're blocked from going to where they want to go, and then they come out and say to the world, "We tried to get into this facility. We were operating on the basis of intelligence. We think that building has important installations. They wouldn't let us in there," and then make that case before the world, I think we're in a much, much more powerful position.

ADELMAN: Then we should be in a super-powerful position now, Lee, because they won't even allow the inspectors in the country. So why isn't there a clamor to accept going to war now, when they say, no you can't go into this one building, they do something much greater, you can't go into our country entirely?

Let me go to the last two points that Lee made.

BLITZER: Before you do that, I was just going to say, it's been almost four years since there have been any U.N. inspections, and who knows what's been going on over those four years?

HAMILTON: Well, we don't know for sure what's been going on. And it's a very worrisome thing, there's no question about it.

But you have to put this also in the context of the threat. What is, today, the clear, present, imminent threat to the American people, to their safety and their security on American soil of Saddam Hussein?

BLITZER: What is that threat?

ADELMAN: Oh, that's quite simple, that he develops the greater arsenals of chemical and biological weapons and soon has nuclear weapons, and passes them off to a terrorist group that would, Lee, be delighted to get their hands on the weapons of -- the most vile, destructive weapons in the world, to use against us. They would be delighted to get that.

And the fact is that, before the next presidential election, before 2002, for sure, Saddam Hussein...

BLITZER: 2004, you mean.

ADELMAN: '04, sorry, for sure, Saddam Hussein will have nuclear weapons. Is that the time you want to build a coalition? Is that the time you want to ask Turkey and Saudi Arabia and Israel to join you? Is that the time, Lee, you want to have a few hundred thousand Americans on their border, when he has the bomb, or is it better to do it now before he has the bomb?

HAMILTON: There -- he has no bomb today. We don't think he has a bomb, we don't think he'll have a bomb for several years.

There are very large assumptions behind Ken's position. If those assumptions are right, he turns out to be right, then we should go to war. But you don't begin a preemptive strike, you don't begin a war on the basis of assumptions and on the basis of predictions.

The United States is a power that historically has been reluctant to use force. We've always insisted, really, on self-defense as a reason for going to war. And to strike out at someone when the threat is not imminent, when it is not one today, on the assumption, on the belief, on the prediction that he's going to do certain things, I think is not prudent at this point.

ADELMAN: Two other points.

BLITZER: Go ahead, make your point.

ADELMAN: And I think Lee is absolutely right in traditional international relations, you are absolutely right.

This is no longer traditional international relations for two reasons, Lee. Number one, the weapons of mass destruction are so destructive now that you cannot wait for an attack by an enemy before you mobilize, as we did in World War I and World War II and other -- number two, deterrence does not work against total madmen who don't care about their country, who don't care about their people at all. And if we know anything about Saddam Hussein, we know that.

So your position is absolutely logical in the traditional foreign affairs. It is not logical when you are looking at weapons of mass destruction that could cause not 3,000 deaths but 3 million deaths tomorrow.

HAMILTON: I think all of that is on a very pessimistic assumption, and I don't think you go to war especially at a time when we are not under an imminent threat.

(CROSSTALK)

ADELMAN: I don't believe that.

HAMILTON: He has no nuclear weapons.

ADELMAN: I don't believe that.

HAMILTON: He has no large chemical capacity that we know of.

ADELMAN: He may have. We know that he has a large chemical capacity...

(CROSSTALK)

HAMILTON: We don't know his biological weapons...

ADELMAN: We know that there's a big program there, that's for sure.

BLITZER: You heard the...

ADELMAN: And we know he knows there's enough going on there that he doesn't want anybody to know what's going on there, Lee.

HAMILTON: There's a big difference in having a capacity, and the ability to deliver it. The big problem on biological weapons, for example, not just for Iraq but for everybody, is, how do you deliver so you don't hurt yourselves?

(CROSSTALK)

ADELMAN: ... interested in not hurting themselves, we see that every day, in the Middle East, when suicide bombers go...

BLITZER: Ken, how do you explain that Lee Hamilton's a Democrat, we heard from Senator Durbin, a Democrat, but Chuck Hagel, who's a Republican -- we heard from Brent Scowcroft on the pages of the Wall Street Journal this week expressing the exact same opinion that Lee Hamilton. A lot of Republicans, Dick Armey now, are coming out and saying publicly, "Hold off, step back, think long and hard before you go to war."

ADELMAN: I think -- I respect all those people. I think there is, as Lee Hamilton says and all those people say, that there is a very big step here, and I do not discount that at all.

I am saying that we should've learned something via September 11th, and we should not be in a situation where we are surprised that we are attacked and we could have done something in the past. Before September 11th -- and we're having hearings now on who was responsible before September 11th -- it was unimaginable what would happen September 11th. After September 11th, it's imaginable they'd have something like that. We know now we should have done something about Osama bin Laden, and the Clinton White House had three opportunities to grab him or to have him arrested or apprehended in some way; didn't do it. I think that's going to be a heavy mark in history. I don't want the United States to do that again.

And let me say secondly, while I like Brent Scowcroft, I worked with him many times in my life, I don't see it's very logical, what he says. He says in his article that, should Saddam Hussein get nuclear weapons, that would be a casus belli to go to war. Is that the time you really do want to go to war?

BLITZER: Let me get Congressman...

ADELMAN: I think it is the most irresponsible thing in the world. And I say that not lightly. I say that very solemnly. I think it's very irresponsible to order a military build-up against Iraq when Iraq has nuclear weapons.

BLITZER: You'll have the last word.

HAMILTON: Well, the last word is that, in addition to what we've already said here, is you don't make a decision to go to war in a vacuum. A war has consequences. It has economic consequences. In this war, it has huge consequences in the Middle East. It has consequences with a doctrine of preemption. It has enormous precedental consequences around the world. All of those things have to be taken into account.

And one very large question, and I suspect Ken may agree with me here, if we do go in and if we throw out Saddam Hussein, then I think we should stay there to try to make Iraq a democratic regime. And that means a long-term commitment. That always raises the question, in my mind, of sustainability. Whether or not the United -- let's put it in these terms, whether or not the United States Congress, five years from now, after we've thrown out Saddam Hussein, would be willing to appropriate $7 billion a year for Iraq?

BLITZER: That's a subject for another occasion.

Congressman Hamilton, Ken Adelman, thanks for joining for this debate.

(LAUGHTER)

ADELMAN: This was a debate.

BLITZER: This was a debate.

Just ahead, the anthrax investigation here in the United States. What does the recent discovery of anthrax on a New Jersey mailbox mean for the case, and the investigation focusing, perhaps unfairly, on one man? We'll talk with his spokesman, Pat Clawson, and Time magazine's Elaine Shannon.

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

(BEGIN VIDEO CLIP)

STEVEN HATFILL, ANTHRAX MAILER SUSPECT: The FBI agents promised me that the search would be quite, private and very low-key. It did not turn out that way.

(END VIDEO CLIP)

BLITZER: Steven Hatfill, the former U.S. Army scientist and one of several people the FBI has dubbed a so-called person of interest in the anthrax investigation. He was speaking publicly for the first time last Sunday at exactly this time.

Welcome back to LATE EDITION.

Joining us now from New York is Pat Clawson. He's a friend and spokesman for Steven Hatfill. And here in Washington, the Time magazine correspondent Elaine Shannon. She's been covering the anthrax investigation for her magazine.

Good to have both of you on LATE EDITION.

And, Pat, let me begin with you in New York. A week ago we heard publicly for the first time from Steven Hatfill. What has happened this past week in terms of the investigation and Steven Hatfill?

PAT CLAWSON, SPOKESMAN FOR STEVEN HATFILL: Well, it's very clear that in the last few days the surveillance on him has stepped up. I understand it's virtually around-the-clock now. And I understand that the agents are not really trying to be surreptitious anymore. They're actually visible, sometimes as close to two to four feet behind the bumper of his car when he's driving around.

Also, it's my understanding that his girlfriend is now under surveillance by the FBI as well. She's being followed by car and by foot. So it's a troublesome development.

In Princeton, New Jersey, this week, the FBI went out and handed out Steve's photograph to people all over the city asking if they'd seen him near a mailbox.

A couple of problems with that. One, the photo spread included only his picture. It was kind of like a one-man lineup. And Justice Department rules require at least five other pictures to be included in that. Second, some enterprising reporters in Princeton have found that the city's fire inspector bears so much of a strong resemblance to Steve Hatfill that the FBI had actually detained him for questioning.

BLITZER: So what's the point of that -- I mean, what's the point you're trying to make?

CLAWSON: The point is that this an investigation that's running amok. It's absolutely a good thing for the FBI to take a look at Steve Hatfill. They should be taking a look, however, at all of the people that have worked in the biological weapons program of this country, not just single him out.

Right now, the FBI and the Justice Department have leaked to the press that there are 30 persons of interest. But Steve is the only one they have publicly named. And they've also told the Associated Press they have no evidence whatsoever tying him to the anthrax attacks.

I mean, it's really beginning to raise a serious question here, Wolf. What's going on at the Justice Department and the FBI?

BLITZER: Well, what is going on at the Justice Department, Elaine, in terms of this investigation? You've been doing some reporting on this story, obviously.

ELAINE SHANNON, "TIME" MAGAZINE: Well, they do talk about looking at a universe of -- well, a large universe, but then there's a smaller universe of people who worked in the weapons program of about 50 people. They think they eliminated about half of that, so that does leave about 20, 25. And it's true also that they've only shown, as far as I know, Dr. Hatfill's picture in Princeton near this hot box.

BLITZER: The mailbox?

SHANNON: Yes. This is a cause of some concern, I think, within the criminal justice system because, like in Oklahoma City, when everybody saw Tim McVeigh and John Doe Number Two everywhere because they'd see him on television, you create a consciousness and a recognition of a person that may just be what they saw on CNN.

BLITZER: Well, why are they so convinced...

CLAWSON: Wolf, if I might...

BLITZER: Go ahead, Pat. I'll let you go ahead.

CLAWSON: What Elaine is alluding to is what is know by psychologists as the framing effect. And they teach FBI agents about this at Quantico, and they train police investigators about this all over the country.

The way in how you frame a question and pose it to people can bring about a certain type of answer. And when you're using only one photo, it's a one-man lineup. It's inherently unfair, and it's completely against current Department of Justice and FBI guidelines.

BLITZER: Is that what you're seeing as well, Elaine, that this is an unfair FBI investigation that Pat Clawson would say has run amok?

SHANNON: Well, I'll tell you what, it bothers me to hear this. I mean, there is fairness, and there's also, are they going to get the truth, or is the atmosphere going to be so polluted that we won't know it if we see it? What they are doing around this mailbox is trying to see who got parking tickets there, who got speeding tickets in the area, look at some motel records, maybe restaurant records, particularly of this group of 20 or 50, however you slice it. They've probably gotten charge records on all those people see if any of them were in the area of this box. They haven't quite finished all the mailboxes, though, so they need to keep going.

BLITZER: You told me earlier -- yes, Pat, I was going to say...

CLAWSON: Wolf, it's important to realize that Steven Hatfill...

BLITZER: You told me earlier in the week that Steve Hatfill never was in Princeton, as far as he knows.

CLAWSON: That's the point I was just trying to make. Steve Hatfill has stated categorically that he's not been in Princeton this year, last year or any year, to the best of his knowledge, that he's never, ever visited Princeton University. I mean, it's just a total nonstarter.

The thing that people have to realize about this fellow is that he's previously been through the security clearance process. The FBI knows about his background in great detail. The fact is, he offered to cooperate with the FBI.

BLITZER: Well, let me stop you, let me stop you, Pat. Let me stop you on that specific point, since you raise it. There are reports, as you know, Pat, that he lost his security clearances not that long ago, and that may have been a motive in his anger against the U.S. government.

CLAWSON: It's my understanding that those reports are not accurate.

BLITZER: Did he lose his security clearance?

CLAWSON: It's my understanding that is there an administrative appeal going through the system right now, detailing with some issues involving some polygraph questions that have been asked, or a polygraph question that led to, basically, a security clearance being placed basically on hold.

But the reports that he's taken all kinds of multitude polygraph examinations, as the New York Times has reported, that he's failed these questions and failed that question, that doesn't appear to hold up.

BLITZER: Nicholas Kristof, the columnist in the New York Times, reporting this week, Elaine, that he did fail some key polygraph examinations, and that perhaps resulted in his losing those security clearances, in effect losing a job that he wanted because he didn't have the clearances.

SHANNON: Well, obviously, there's some issue there, and I don't know exactly how it is. And I'm always a little bit suspicious of polygraphs, because they're an art, not a science. Some really good spies pass polygraphs.

BLITZER: Like Aldrich Ames.

SHANNON: Like Aldrich Ames, and there are people who can game the system. Whoever did this is really smart.

(CROSSTALK)

BLITZER: What's...

SHANNON: Whoever did this is very manipulative.

BLITZER: Go ahead, Pat.

(CROSSTALK)

CLAWSON: ... here on the polygraph business, however. All of this stuff that's appeared as unsourced allegations in the New York Times and Nick Kristof's columns, there is no source behind any of that stuff.

I'd like to know who the source is. I mean, as far as I know, the FBI and the CIA don't usually go out handing out information about polygraph tests. And I don't think Steve Hatfill has talked to anybody about a polygraph test.

BLITZER: But, Pat, we're going take a break, but you know as well as I do, you used to be a reporter here in Washington, covered a lot of these kinds of agencies...

CLAWSON: You bet.

BLITZER: ... that there are sources out there who are willing to share information on all sorts of subjects they're not supposed to share information on.

We're going to continue this conversation, we're going to continue our discussion with Elaine Shannon and Pat Clawson. They'll also be taking your phone calls. More on the anthrax investigation, when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking about the anthrax investigation here in the United States with Pat Clawson, he's the spokesman friend of Steven Hatfill, and Elaine Shannon of Time magazine.

Pat, is your friend Steven Hatfill still fully cooperating with the FBI?

CLAWSON: Well, right now his lawyers have told him to shut up and not cooperate with anybody until they can figure out what's going on.

Up until the time of the criminal search warrant being served on his home, he had been cooperating voluntarily with the FBI from the word go. He never had any problem with cooperating voluntarily with the FBI. He'd given everything they'd asked for.

BLITZER: Elaine, I want to put up on the screen the actual letter that was sent to Senator Daschle, Senator Leahy. I want to analyze some quirky things about it.

If you take a look at the letter, look at the date first of all, 09-11-01. Some forensic experts have said, by putting 09 there, it looks like it comes from a scientist, because that's sort of a scientific way of writing, whereas, if it would have been coming from a foreign source, the month would have been second, the date would have been first, it would have been 11-9-01.

What have you heard about the analysis of the letter?

SHANNON: Well, you know, there's what, 36, 38 words on this. So, you know, on the Hatfill side, there's the -- it says Greendale School, and there's a region in the former Rhodesia, where he went to school, that's called Greendale, and some people have made much of that.

On the other hand, the profilers say, well, this whole -- these letters could have been dumbed down. One of them says, take penicillin, and it's misspelled. Now, A, it's misspelled, and B, we don't use penicillin in this country very much, which suggests a foreign country that still uses it. But is that, you know, disinformation?

BLITZER: And, Pat, I want you to take a look at the letter too. I'm going to put it back up on the screen, and let's read precisely the words that are in that letter: "You cannot stop us. We have this anthrax. You die now. Are you afraid? Death to America, death to Israel. Allah is great."

Now, as you know, some law enforcement sources saying it's all a cover, it's really a domestic terrorist who wrote this to get the U.S. on a different track in terms of the investigation.

CLAWSON: Well, Wolf, two things. One, I write dates with a 09 or a 08 or a 07, does that make me the anthrax terrorist? I mean, a lot of people write dates that way, so I don't think that means anything.

Second, just this morning, here in New York, I was reading a British news magazine on the intelligence community, "I Spy," it's a credible magazine, it's read widely in the intelligence community. They cite the case of another doctor, who apparently committed suicide last November, near Memphis, Tennessee, and that magazine raises all kinds of questions as to whether or not he was the anthrax killer.

I don't think anybody knows who the anthrax killer is, at this point in time.

BLITZER: I think that case in Memphis has never been resolved, as far as I know. It was a scientist. You know something about that case, Elaine, but he was a Harvard professor who was on a bridge, and he disappeared, and they found his body a few hundred miles down the river, at some point.

Let me go into this other aspect of this investigation, because it's been a source of some interest to me and, I'm sure, to a lot of our viewers out there.

Why is the FBI apparently so convinced it's a domestic, American terrorist who mailed these anthrax letters, as opposed to foreign terrorists?

SHANNON: Well, it's the Ames strain of anthrax, they know this from the DNA testing. And that's what was used in Fort Detrick. Because labs that had this didn't keep great records in the past, you can't get it down to this block of time.

BLITZER: But didn't that Ames strain, didn't foreigners have access to that as well?

SHANNON: There may have been, you know, that's -- some abroad -- I mean, they're not positive of anything. And they're still working the foreign connection very actively. They don't think it's the strain that Iraq, for instance, makes.

Secondly, it's extraordinarily fine and fluffy, and so they think that that tells you that somebody with a really good scientific background, really good equipment and a containment box made it. It's like -- they describe it as like cigarette smoke. So, how do you get it into this country without releasing it and contaminating everything around and killing some people?

BLITZER: Pat Clawson, your friend Steven Hatfill is supposed to have a job at Louisiana State University, is apparently on paid leave right now. Tell us what's going on, as far as the future for Steven Hatfill is concerned.

CLAWSON: Well, I think it's a good question. I mean, quite frankly, Steve's reputation has been completely trashed in the media and it's been trashed by the government. I personally think that he's been the victim of a character assassination.

I mean, the FBI should investigate him. I mean, there is no question about that. But if you don't have any evidence on anybody and if the man has no criminal record and if the Justice Department tells the press we don't have anything on him, why do they keep telling the press that he's a person of interest? I mean, that just casts a tremendous cloud of suspicion over someone.

I mean, Wolf, the guy might look a little fishy to you. He might look a little fishy to some reporter or to an FBI agent. Go ahead and investigate that. But if you have no evidence tying to him a crime, why do you keep pointing the finger at this guy? It's just un- American.

And I've got to ask you, I'm really beginning to question where the sense of morality is at the Justice Department and the FBI to persecute someone on the basis of no evidence.

BLITZER: Well, on the basis of his flat denial last Sunday at this time, Pat, the FBI still continuing to focus a lot of attention, very public attention, on Steven Hatfill. Clearly this story, this investigation is not going away.

Elaine Shannon, Pat Clawson, thanks for joining us today.

Up next, upbeat talk from President Bush about the U.S. economy. But are Wall Street and consumers buying his message? We'll get two very different views from Republican Congressman David Dreier and Democratic Congressman John Spratt.

LATE EDITION will be right back.

(BEGIN VIDEO CLIP)

BUSH: We may have hit a bump in the road. That road is going to smooth out, and people going to find the economic security they want here in America.

(END VIDEO CLIP)

BLITZER: President Bush talking up the lackluster United States economy. Welcome back to LATE EDITION.

There were mixed reviews on the president's economic summit this past week in Texas. Let's get two views from two key members of the United States Congress: In Los Angeles, the California Republican David Dreier, he chairs the powerful House Rules Committee; and in Charlotte, North Carolina, Democratic Congressman John Spratt of South Carolina, he's the ranking member on the House Budget Committee.

Congressman, welcome to LATE EDITION.

REP. DAVID DREIER (R), CALIFORNIA: Great to be with you, Wolf.

BLITZER: Thank you very much.

Let me begin with you, Congressman Spratt, what was wrong with the president inviting a lot of experts to come to Waco, Texas, to get their views on what should be done to deal with this ailing U.S. economy?

REP. JOHN SPRATT (D), SOUTH CAROLINA: Well, first of all, I think the president is right to use a bully pulpit to keep up spirits in country, but he invited mostly like-minded people. There was an assortment of people with a different point of view, but for the most part, this was like-minded people sharing views with each other. There was not a real diversity of opinions, and there was a notable lack of Democrats.

We've been calling on the president to have a summit on the budget and the economy since the first of this year. That's really kind of summit he needs to convene. The one in Waco was OK, but we really need one in earnest where we sit down with budget and acknowledge that it's based on premises about the economy that no longer are paying (ph).

BLITZER: Congressman Dreier, do you want to respond to that?

DREIER: Well, I will say that, if you look at that meeting, it consisted of a wide range of views. Some of the names that come to mind of people who participated in Waco are Jerry Yang, who is a big Democratic supporter, Richard Grasso, who has been a contributor to Democrats for a long period of time -- lots of people who have supported Democrats.

It's true that we didn't have Democratic members of the United States Congress there. But the fact of the matter is, as President Bush pointed out correctly, 11 months a year, he meets with Democrats and Republicans in the Congress, and we have been talking about these issues.

It is fascinating, when we saw that meeting take place, John's leader, Dick Gephardt from Missouri, made it very clear that he didn't want to say what he believed should have been done. When proposals were out there to repeal the tax cut which Tom Daschle advocated a while back, Dick Gephardt refused to say that he supported that.

All that they can propose, Wolf, is that we have another meeting, another summit. When, in fact, I believe that President Bush and the United States Congress have put into place policies which will go a long way toward ensuring that we can get the economy moving.

And I think also, Wolf, it is important to note that while we do have a number of negative signs -- I acknowledge that, and there is real uncertainty out there -- inflation is low, wages are up. We do have some positive indicators in the economy today that can't be ignored.

BLITZER: Some positive indicators, but, Congressman Spratt, there are a lot of people ailing out there, a lot of 401(k) retirement plans that are in deep trouble, and a lot of Americans searching, desperately wanting leadership, not only from the president, but from Congress.

Let's put up on the screen, Congressman Spratt, what the president's -- at least key parts of his economic agenda include right now: fiscal responsibility; a crackdown on corporate corruption; implementing terrorism insurance; permanent tax cuts; and a more independent U.S. energy policy.

Do you have any problems with any of that?

SPRATT: No, but I think it begins with the budget. That's the -- we are condemning American corporations because of the way their books look. Our books don't look so good either.

We started out, just 18 months ago, with the assumption, OMB's projection that we had a surplus of $5.6 trillion. OMB admitted in mid July that they missed that call, that estimation or calculation by at least 30 percent. We've got, now, a surplus that is barely mentionable, $200 billion or $300 billion, according to their estimation of it.

That is a drastic change, and we need to have a meeting in earnest. There are meetings between the leadership in the House and the president every week, but there's nothing like the budget summit that his father convened in 1990 which led to the first budget agreement in the 1990s that laid the basis for balancing the budget

DREIER: And a massive tax increase, John.

I will tell you that there are a number of policies that have been put into place that I think will go a long way toward dealing with this, but the president said, when he was a candidate, that the three criteria set forth for going into deficit -- war; you know, economic recession; and obviously, a national emergency -- we face all of them.

We are rapidly approaching the anniversary of September 11th, and we cannot in any way ignore the tremendous cost that that's had on our economy.

The real reason that we have seen this is a combination of the slow economic growth, which we all know and you'll acknowledge began at the end of the Clinton presidency. And while I know there are many people who criticized George Bush -- they said he was talking down the economy -- he was actually facing the reality when he became president that the economy was slowing down.

And we have, I believe, with things like trade promotion authority and the tax cut package that we have put into place, laid the groundwork for economic growth. And unfortunately, Democrats like John didn't support those kinds of very positive policies.

BLITZER: Let me let Congressman Spratt respond. Go ahead, Congressman.

SPRATT: Well, I've supported, first of all, a stimulus bill that would give the economy some impetus right now. I voted for the bill that we finally agreed upon, originated the idea of having one, was all for the $60-billion rebate to put money in consumers' hands that they would spend and give this economy some get-up-and-go. So it's not true I didn't support all of them.

The one I didn't support was the substantial tax increase, based upon a surplus estimate that I thought was inflated at the time, and history has proved me correct. The administration ignored the storm clouds that were gathering over our economy and cheerily predicted that we'd have a surplus of $5.6 trillion over the next 10 years. It hasn't happened, David.

BLITZER: All right.

(CROSSTALK)

DREIER: This was all before September 11th, and we...

SPRATT: No, it is not either. The last... DREIER: Yes, but we've had to look at the aftermath of September 11th, and we know that that has created a tremendous cost. We're also focused on the prospect of maybe a war with Iraq. We've got a lot of uncertainty out there. We acknowledge that, this administration acknowledges that.

SPRATT: A surplus estimate, their surplus estimate...

(CROSSTALK)

SPRATT: ... this time last August was $575 billion, down from $3 trillion excluding Social Security in April.

DREIER: Well, this time last August was before September 11th.

SPRATT: That was right, going into September the 11th, we'd gone from a $3 trillion surplus to a $575 billion surplus, excluding Social Security. So on the eve of 9/11, most of the surplus had disappeared, vanished.

BLITZER: All right, gentlemen, we have to take a quick break, unfortunately. We have a lot more to talk about.

Our conversation with Congressmen Dreier and Spratt will continue right after this. They'll also, by the way, be taking your phone calls, so call us now.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking about the struggling United States economy and the new corporate crackdown here in the United States with the California Republican Congressman David Dreier and the South Carolina Democratic Congressman John Spratt.

Congressman Dreier, earlier on this show, we heard from Republican Senator Chuck Hagel. But he was interviewed in the New York Times last Monday, and I want to put up on the screen precisely what he said. Referring to Bush and the economy, he said, "People knew when they listened to Clinton that there was something behind him. There was Bob Rubin, there was an economic team. I don't think the markets see anything behind the president's words."

Those are pretty strong words, almost a condemnation of the Bush economic team, coming from a fellow Republican.

DREIER: You know, I'll tell you, Wolf, I believe that the policies are the things that we really need to focus on. And there is a level of confidence in these policies.

I mentioned just before we went to the break, one of the most important things that we struggled to give President Clinton that we've finally been able to give President Bush, over the protest of people like John Spratt, and that is recognition that 90 percent of the world's consumers are outside of U.S. borders. And we now have in place trade promotion authority, which means that we will be able to expand opportunities throughout this hemisphere. There are 14 million computers south of our border, Wolf, but 500 million people. In Russia, there are 7 million Internet users and 146 million people.

It seems to me that we need to realize that if we're going to get this economy growing, we've now put into place, we've laid the groundwork to do just that. The slowdown began before George Bush became president. That's the why the numbers didn't look as good a year ago.

BLITZER: Let me ask you...

DREIER: So there is a level of confidence, I believe, in these policies.

BLITZER: Congressman Dreier, do you have confidence in Paul O'Neill, the secretary of the treasury?

DREIER: Absolutely. I think Paul O'Neill is doing a superb job. I have the highest regard for him. He's one of the most intelligent people I've ever known. And I believe that he is pursuing the absolute right policy to get this economy growing. And I think that he enjoys the confidence of the president, which is even more important than mine.

BLITZER: Congressman Spratt, at that economic forum in Waco, Texas, President Bush made clear he wasn't going to spend that $5 billion emergency supplemental bill that was sent to his desk because of some extraneous money in there for purposes he says don't really serve the taxpayers of the United States. Listen to what he said.

(BEGIN VIDEO CLIP)

BUSH: I have to spend all five of the extra billion dollars or spend none of it. That's how they wrote the supplemental. Those are the rules they placed upon my administration. I understand their position, and today they're going to learn mine. We'll spend none of it.

(END VIDEO CLIP)

BLITZER: What's wrong with the president's policy, as far as not wasting taxpayer money?

SPRATT: I have no problem with his -- the appropriators said to the president here's a list of things we need to do that mainly affect homeland security -- the FBI, the National Security Agency. We'll give you this additional money if you'll declare an emergency and say it's available and can be spent within the next 30 days. But you've got to take it all or none. And he's decided not to take it all. He'll come back, he said, and ask for a billion and a bit more.

I think that this will be over once we get back to Washington because we have 13 appropriation bills to finish before we can close out this fiscal year. And that'll eclipse the whole issue of the $5 billion out of a $2.1 trillion budget. It's a minor tempest in a teapot.

DREIER: I agree that I think what the president...

BLITZER: Congressman Dreier, I was going to say a lot of fire fighters and others out there are raising their arms and they're pretty mad at the president right now for not giving them their pay raises.

DREIER: Well, the fact of the matter is, the president is going to expend what can be. But as he said, he can't expend that full $5 billion.

And the president really should not, in fact, be held accountable on this. And the reason is that he was given, as John correctly said, this all-or-nothing view, which primarily came from Democrats of the United States Senate who were pursuing that goal. And so that is what has created this pain here.

But we've got to complete our work on the appropriations process. We're going to be doing that in the weeks that will follow Labor Day when we get going. And I agree.

But I think the president is demonstrating his priority of fiscal responsibility. I think he's doing the right thing here. But we're going to make sure that we have the resources for those firefighters and others who need them.

BLITZER: Congressman Spratt, a final political question for you. How's all this economic morass, if you will, going to affect the November elections in the House of Representatives, including in South Carolina?

SPRATT: Well, it will definitely have an impact, because people vote their pocketbooks. When they're doing well, they tend to vote for those in power. When they're not, they look around for somebody else who can help them out.

BLITZER: What about that, David Dreier?

DREIER: Well, I'm convinced that we are laying the groundwork to see the policies that the American people are supportive of continued. And the only way we can do that is to keep a Republican United States House of Representatives, and I hope win back the Senate.

It's going to be close. I will acknowledge that, but I think we're on track towards breaking what has been the tradition of seeing the party in the White House lose seats in the off-year election. I think we've got some positive indicators out there. But it's going to be close, I'll acknowledge that.

BLITZER: All right. We're going to leave it right there. We'll of course be watching the elections and all the build-up to the elections in November here on CNN.

DREIER: Have a nice August, John and Wolf. Great to be with you all. BLITZER: Thank you very much, Congressman Dreier.

Congressman Spratt, thanks to you as well.

SPRATT: Thank you, Wolf.

BLITZER: And just ahead, Bruce Morton's essay.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: A strike deadline is not a strike, but if the players do walk out again, it would be the ninth work stoppage in the last 30 years.

(END VIDEO CLIP)

BLITZER: Is Major League Baseball in the United States inflicting itself with a fatal wound?

(COMMERCIAL BREAK)

BLITZER: And now here's Bruce Morton's essay on these dark days of baseball.

(BEGIN VIDEOTAPE)

MORTON (voice-over): You remember the movie "Field of Dreams," if you build it they will come. And they build a ballpark in a cornfield, and the old legends do come and play. I have always been a little like that as a fan. If there is a ballgame, I'll probably watch. But that may change.

A strike deadline is not a strike. But if the players do walk out again, it will be the ninth work stoppage in the last 30 years. I don't think I'll come back.

Baseball used to be the national pastime, and it had some qualities other sports lack. The clock will never beat you. If the score is tied, you play on until somebody wins. Plus, it happens in some very pretty places: Wrigley Field in Chicago, Fenway in Boston. It's had great players: Ruth, Williams, Dimaggio. It has great players: Bonds, Johnson, Sosa. But if it all comes down to money, who cares?

It's already not the national pastime. Football replaced it. And now stock car racing may have replaced football. And baseball is way down the list. A new outburst of greed won't make the game smell any sweeter.

It is, in fact, mutual arrogance on a grand scale. The owners, at the one owners meeting I went to, were way more arrogant than presidents of the United States. Of course, they're richer, which may explain it. And the players, one of the issues that apparently did get settled was the minimum wage they'd accept, $300,000 a year. That's a starting salary, a beginner's, what you get the first day you show up in the park asking where your locker is. Starting lawyers don't make anywhere near that much, or starting doctors, nor even starting plumbers. Congressman don't. In a just world, $300K might be a fair salary for a third-grade teacher with a record of success. It would certainly be more valuable to society than a shortstop who can turn the double play.

All sports are businesses, of course. Baseball is simply better than the others at displaying greed, cheapness of spirit. So go ahead and strike, guys, and don't hurry back. I'll be walking the beach or watching hoops or reading a book.

You'll get no joy from this ex-fan. Mighty baseball has struck out.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thank you very much, Bruce.

It's time to say goodbye now to our international viewers. Thanks very much for watching.

Coming up for our North American audience, the next hour of LATE EDITION. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We'll explore a new lawsuit filed by families of the 9/11 attack victims, and the fate of enemy combatants here in the United States in just a moment, but first, here is CNN's Fredricka Whitfield in Atlanta with a news alert.

(NEWSBREAK)

BLITZER: Relatives of some of the 3,000 people killed in the 9/11 attacks have filed a trillion-dollar lawsuit against those they accuse of funding terrorism. Three Saudi princes are among the defendants named in the suit.

Joining us now to assess the effectiveness of this tactic in the war on terror are two guests: Here in Washington, George Terwilliger, he served as the deputy U.S. attorney general during the administration of the first President Bush; and in Providence, Rhode Island, the criminal defense attorney Roy Black.

Gentlemen, welcome back to LATE EDITION.

And I want to play -- begin this discussion by hearing from one of the relatives of the victims of 9/11 explain why this lawsuit going against Saudis, Sudanese, others, banks around the world, is justified. Listen to this.

(BEGIN VIDEO CLIP)

THOMAS BURNETT, FATHER OF 9-11 VICTIM: It isn't about money at all. It's about catching those people, routing them out, choking them off, bankrupting them. That's what we hope to do. And we're confident that the team we've joined is going to be able to do that.

(END VIDEO CLIP)

BLITZER: George Terwilliger, is this a frivolous lawsuit, or does this lawsuit really have potential? Does it have merit?

GEORGE TERWILLIGER, FORMER DEPUTY ATTORNEY GENERAL: Well, I think time will tell whether or not there are facts to support the allegations that have been made. Congress has provided a mechanism for these kinds of suits to be brought.

I'm not intimately familiar with the ins and outs of the case at this point, Wolf, but it does seem like it paints with a pretty broad brush, at least in terms of the initial allegations. We'll have to see if the evidence is there later to support specific allegations against specific defendants.

BLITZER: Roy Black, based on what you've seen from this lawsuit, what's your take?

ROY BLACK, CRIMINAL DEFENSE ATTORNEY: Well, you know, Wolf, when I first looked at it, I was somewhat skeptical and feel somewhat as George does to see where it plays out, but the more I think about it, the more interesting it becomes. Because now we have independent plaintiffs suing to do something which the government probably would not, because the State Department does not want us in any way to interfere with Saudi Arabia and our relationships, but these plaintiffs are willing to go a lot further.

And what I think is real interesting, and what the gentleman mentioned, is that, get into the discovery process, to find out what kind of funding was given to al Qaeda and al Qaeda-type groups by these various institutions. And if in fact, in the civil discovery, that is disclosed, then I think then you're going to some real retribution.

BLITZER: George Terwilliger, as you know, the Patriot Act, which was approved, signed into law after 9/11, did hold out specific opportunities for victims of terror to go ahead and sue terrorists or those who sponsor terrorism. So there is a mechanism, there is a law that apparently is the basis for this kind of lawsuit.

TERWILLIGER: Right. And I think everyone would agree that, as a fundamental matter, that's a good idea and could contribute in an important way to the overall effort against terrorism.

But we have to make sure of two things: One, that only those people who are truly responsible on the other side are held, as opposed to simply perhaps those with deep pockets. And two, more importantly, that it doesn't interfere with the government's effort to win this war on terrorism as it proceeds.

Congress didn't provide any mechanism to delay that kind of lawsuit. I'm not sure anybody really thought about it. BLITZER: So what you're suggesting, if I hear you right, is that for diplomatic or political reasons, reasons of national interest, the Bush administration might be able to step in and stop this lawsuit from moving forward.

TERWILLIGER: Well, I don't know about stopping it, per se. But there may come a time when -- and I'm just speculating -- they may ask to slow it down or to defer some of the procedures until later.

BLITZER: It would be a huge -- it would make a huge difference, Roy Black, if the Justice Department, if the Bush administration endorsed this lawsuit, as opposed to opposed it -- actively opposed it or simply took a neutral position and stood on the sidelines, wouldn't it?

BLACK: Oh, it certainly would. But I can't imagine that the Bush administration is going to step into the middle of this morass. I don't see how it could help them in any way. And they, of course, want to keep good relations with Saudi Arabia for any kind of ideas they have on attacking Iraq or any other kind of terrorist-related matters out there. So I can't imagine the administration wants to get into this.

But there are some very aggressive trial lawyers involved in this case. I mean, Ronald Motley (ph), for example, started with asbestos, then after the tobacco companies, and now after these people. And these are serious lawyers. So I imagine there is going to be some really interesting discovery.

BLITZER: He speaks about Ron Motley (ph), who is a well-known U.S. attorney, George Terwilliger, who did win the tobacco lawsuits on behalf of the states of the United States. What was it, about -- a settlement with the tobacco industry of about $300 billion, of which his law firm took a significant chunk of that money. So there is a track record that these lawyers have.

TERWILLIGER: Well, they have a track record. I think there is probably a legitimate public debate about how much of a public service that lawsuit was and perhaps others. But that's a debate on another day for another topic.

I do have some concern, though, Wolf, with having the private civil litigation sort of mucking around in the middle of a war, if you will, because that's what we're in. And we'll just have to see what happens.

BLITZER: Do you -- the other example -- let me bring Roy Black in. One of the other prominent attorneys involved in this civil lawsuit is Allen Gerson (ph). He's been representing families, the victims of Pan Am 103, the Lockerbee bombing, going against Libya for all these years. So he knows something about suing foreign countries, if you will. In this particular case so far, the Libyans have suggested they might be willing to settle, but there has been no settlement yet.

Do you sense, Roy Black, that in this Saudi -- predominantly Saudi case, there is an opportunity for some out-of-court settlement?

BLACK: Well, you know, Wolf, that's a very difficult question to answer, and there has been some discussion about that. As I understand, some of the plaintiffs are unhappy that there have been some discussions about settlement. Because what I really think the plaintiffs want, you know, the individual plaintiffs want to find out the information. They want to expose what has been going on.

You know, we see tidbits of this in the news over the last several months. And then we had -- we saw that RAND Corporation analyst claim that there is all kinds of connections in Saudi Arabia with al Qaeda. So I mean, people want to know the details. They just don't want to see a cash settlement here. They'd much rather get the information and hold people responsible for what they've done.

TERWILLIGER: It's naive though, Wolf, to assume that terrorists are going to sort of go along and play the civil discovery game the way a corporation or a tobacco company would.

BLITZER: Yes, terrorists, but what about, like, Saudi princes or Saudi banks or so-called charities that are being sued as well?

TERWILLIGER: Well, we'll have to see whether or not they are really involved or not. I mean, one of the things that we've seen in this case so far is that many institutions, including American aviation flight schools, have unwittingly been used and had their facilities used by these people for nefarious purposes. So it's not just enough that they were involved. There is going to have to be some level of showing that they were intentionally involved and meant to assist terrorists.

BLITZER: Do you see a significant difference, George Terwilliger, between this kind of lawsuit as opposed to the lawsuits from the Pan Am 103 Lockerbee victims?

TERWILLIGER: Yes, I think so. And there are differences, such as those we just talked about.

But there are also some similarities, and one of those similarities makes these suits difficult for plaintiffs. And that is that we're dealing with a very shadowy, murky world where little is seldom clear.

I was at the Justice Department when Pan Am 103 was indicted, and there was a great deal of controversy about who or what government might have ultimately been responsible or involved. And I saw the intelligence, raw and personal.

And there are still difficult conclusions that have to be drawn from that that require analysis. I'm not sure the civil justice system is necessarily set up to draw those conclusions.

BLITZER: All right. Let's take a caller. Go ahead, caller. Ask your question.

Caller? OK, we don't have a caller. Let me bring back Roy Black and talk about the overall thrust of this kind of suit.

When the individuals say it's not about money but it's about justice, normally, a lot of people react, well, it is about money. What is this lawsuit, as far as you can tell, really about?

BLACK: Well, Wolf, as I said, I think it's more interesting getting the information than rather getting a settlement. Obviously, people would like to be paid for the damages they suffered. But I think they want to establish whether there is a connection between either the Saudi government, or high officials, or corporations, banks, with this terror network by funding and laundering money to them.

You know, George is right, this is more difficult than Pan Am 103, because there, allegedly, the people who set up the bombing were employees of the Libyan government. Here, you're going to have to show that not only was there knowledge that al Qaeda, what its aims were, but there was a specific intent to help them in that.

And remember, also, that bin Laden was thrown out of Saudi Arabia, you know, 10 years ago. So it's not easy to make a connection between al Qaeda and the Saudi government.

BLITZER: All right, we have a caller from Arizona. Go ahead, Arizona. Arizona?

We don't have that Arizona call. We're going to take a break. We have a lot more to talk about.

When we come back, we'll continue our conversation with George Terwilliger and Roy Black. U.S. citizens being held as enemy combatants: What rights, if any, do they have? We'll talk about that, plus phone calls, we hope, when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking about the week's major legal developments with the former United States deputy attorney general, George Terwilliger, and the criminal defense attorney Roy Black.

George Terwilliger, you know, there are U.S. citizens, two U.S. citizens, Jose Padilla -- we could put up a picture of Jose Padilla -- and Yasser Hamdi, who was born in Louisiana, even though his parents are Saudi, they moved back to Saudi when he was a little child -- who are being held as enemy combatants in the United States. No charges have been leveled against them. They have no right to even speak to attorneys.

This has resulted in the American Bar Association issuing a statement on August 10th, and I want you to hear what the president of the ABA says about this situation.

(BEGIN VIDEO CLIP) ROBERT HIRSHON, PRESIDENT, AMERICAN BAR ASSOCIATION: U.S. citizens detained on U.S. soil should be given the guarantees that they have under the Constitution for access to counsel and access to the courts.

(END VIDEO CLIP)

BLITZER: Right now those two U.S. citizens don't have that access.

TERWILLIGER: Right. Well, they do have access to the courts, under the writ of habeas corpus, which is how Mr. Hamdi got his case before the judge down in Norfolk. What jurisdiction that court has is another matter, as the ABA president knows well.

They don't have any constitutional right to counsel, though. The right to counsel attaches in connection with criminal proceedings. There are no criminal proceedings against either one of them at this point. So the Sixth Amendment right to counsel does not apply.

But more importantly, I think what we have to understand here are two things. One, what we typically as Americans understand to be the constitutional rights of an American arise in a variety of procedural circumstances in court.

The circumstances we're dealing with here are entirely new and entirely unique, at least to our post-World War II experience, and I think it's critically important for people to understand this, Wolf. What we're talking about is the prosecution of a war. Judges and lawyers don't control the prosecution of a war. That is a job for the president and for Congress, under the Constitution.

So, what we have here is a situation where what we normally think of as legal procedures simply are inapplicable. At the same time, because this is a new paradigm of warfare, the procedures that should be used and that the president and military ought to use, I think, are I evolving ones.

BLITZER: All right. Well, how evolving, as far as you're concerned, Roy Black, are these new principles?

BLACK: A short history lesson, Wolf. In the Declaration of Independence, one of the wrongs we asserted that King George committed was that he took the military out of civilian control. We, in the Constitution, created Article I, Section 8, which gave Congress the right to define the laws, to regulate the military and to handle court proceedings and set up court proceedings.

And then in Marbury v. Madison, which every law student reads in their first semester in law school, it says that, unless the courts have the power to review legislative and executive decisions, there is no rule of law in the United States.

BLACK: What the Bush administration is doing is absurd. And what George just said, where we could put somebody in jail indefinitely, but since we don't charge him with a crime, you have no rights. Can you imagine? That's exactly why we have a Constitution. That's what they used to do in France and England.

TERWILLIGER: Roy, what you're saying is absolutely irresponsible. The fact of the matter is, no one is suggesting that people can be put in jail indefinitely without due process attaching...

BLACK: For how long, George? How long?

TERWILLIGER: Excuse me. Excuse me. You had your chance to talk. Your allusions to Marbury v. Madison and to the Declaration of Independence are simply erroneous declarations of constitutional law.

The courts have limited jurisdiction. Judges, whether you and your colleagues in the ABA like it or not, like everybody else, has to follow the law. Courts do not have the power to tell the president how to prosecute a war.

Now, I am as uncomfortable as you are if the idea was that American citizens can be locked up indefinitely with no process at all. But that's not what we're talking about here.

The case that is currently before this judge in Norfolk is about a very limited proposition. And rather than just test the legality of Mr. Hamdi's detention, this judge immediately jumped in to dictating the conditions under which he had been held, which are outside of his jurisdiction and none of his business.

BLITZER: What about that, Roy?

BLACK: No, no, George, what the judge asked the government is, who decides who is an unlawful combatant? What are the rules for making that decision? Where in the history of the United States have you ever been able to hold an American citizen incommunicado, indefinitely, without access to a lawyer and without access to the courts? That's what the judge asked, and the government has yet to ever answer those questions.

TERWILLIGER: No, no, what the judge did, Roy, was order that Mr. Hamdi have the right to have counsel present without anyone from the military being involved and other aspects of his condition. He is quite correct to ask the question as to who decides and on what basis. And at some point, I assume, if he gets his procedures correct, that question will be answered. But his role in that is extremely limited, as you know.

BLITZER: Roy Black, I want you to listen, because it's right on the matter that we're discussing right now, what Michael Chertoff, the assistant attorney general, said this past week about this whole notion of the United States, in the middle of a war, trying to deal with some of these legal issues that you're concerned about. Listen to what Chertoff said.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, ASSISTANT ATTORNEY GENERAL: We can't really envision, you know, Patton racing through Europe with a number of judges sitting along with him making adjudications about who he can shoot and who he can capture.

(END VIDEO CLIP)

BLITZER: His point is the United States is in the middle of the war, so you have to throw all these niceties about legalities basically out the window.

BLACK: Yes, I know. They want to throw the Constitution out and make this a Constitution-free zone. We don't have a situation with Patton roaring through Europe. We don't -- we're not fighting a nation-state. We don't have battles like that. What we're doing is going after people who have basically committed crimes.

Now, what's the difference between Hamdi and Lindh? Lindh is captured on the battlefield with a rifle in Afghanistan, is brought back here and has a trial. Hamdi is the same exact circumstances, but he's being held incommunicado. They're not even consistent with the rules.

BLITZER: And that's a good point. But you could even go further, George Terwilliger. Moussaoui, who is a French national, he has got all the rights in the world to a lawyer, a big trial coming up in the Northern District of Virginia. There does seem to be some pretty serious inconsistencies.

TERWILLIGER: Well, in my personal judgment, putting Moussaoui on trial in a civilian court was a huge mistake. But nobody asked me, and it wasn't my decision.

The fact of the matter is that Roy is right to recognize that this is a different paradigm, a different kind of warfare than World War II. But Mr. Chertoff's comment about the analogy between the two situations is a very good one. If tomorrow, Wolf, the Taliban were to somehow land at Newark Airport in New Jersey and form up into a unit of irregulars and start hot-footing it over toward New York, we wouldn't call lawyers and judges to deal with that. We would deal -- the Army would deal with it. And the fact of the matter is that what we have to recognize here is that the kind of warfare we're facing is where infiltrators, perhaps people like Mr. Padilla, come in in disguise, in our midst and lie in wait, waiting to kill us.

BLITZER: All right. Roy Black, you'll have the last word.

BLACK: Yes, well, certainly we can fight people on the battlefield and we can kill them on the battlefield because then they are combatants and they are legitimate targets.

Once we have somebody in custody, once we have them in a federal jail, like Mr. Hamdi, you can't treat them like we're shooting somebody on a battlefield. You have to give them judges and a trial. And then you punish them and put them in jail or execute them.

But my God, if we don't follow our own rules, our own Constitution, then what are we fighting for?

BLITZER: On that note, we're going to leave it. Roy Black, George Terwilliger, thanks to both of you for joining us. We'll have you back.

BLACK: Thank you, Wolf.

TERWILLIGER: Thank you.

BLITZER: Thank you.

And coming up next, our Final Round. Our panel debates the big stories of the day. Our Final Round, right after a news alert.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now for our Final Round.

Joining me, Donna Brazile, the Democratic political strategist, Michelle Cottle of the "New Republic," Rich Lowry of the "National Review," and Robert George of the New York Post.

Lurking beneath the debate over what the United States should do about Saddam Hussein are questions about the president's motives. Some critics have suggested he's largely being driven by the need to finish the job started by his father. But earlier today, the man who led the Gulf War, the retired General Norman Schwarzkopf, insisted the elder Bush has not been pressuring the president.

(BEGIN VIDEO CLIP)

GEN. NORMAN SCHWARZKOPF: He's always been very statesmanlike about it and very clear as to why he made the decisions he did, along with, oh, by the way, the leadership of the entire coalition. And I'm talking about all of our allies were involved and literally agreed with that decision when it was made. So I don't believe that there's any acrimony there that he is passing on to his son.

(END VIDEO CLIP)

BLITZER: All right, Rich, is there any personal issue involved here between father and son?

RICH LOWRY, NATIONAL REVIEW: No, I don't think so, and the irony here is that there are indications that Bush's -- W's dad may actually oppose this. Certainly all his former top aides, like Brent Scowcroft and Colin Powell oppose it. Scowcroft and Powell, of course, saved Saddam the last time, and they're trying to save him once again.

So there's nothing personal here unless W has some weird Oedipal thing where he wants to stick a finger in his dad's eye.

(LAUGHTER)

BLITZER: Why do you think that some of these advisers to the first President Bush are now being so cautious in terms of wanting to go after Saddam right now?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, first of all, I do think at times the president sounds like it is personal by just saying that he's an evil man. Well, Ray Charles can see through that and know that he's an evil man.

I think some of the previous advisers are really concerned about the situation in the Middle East, how this can explode into perhaps further problems, whether or not we have the right option on the table, the Gulf War model, the Afghan model.

I think they're concerned about the dialogue that's taking place, and the fact that we need to have more discussion on it.

BLITZER: Robert, are you surprised that a lot of Republicans, conservative Republicans, not only like Brent Scowcroft, but like Senator Hagel, who was on this program earlier, are speaking out, urging caution, saying...

ROBERT GEORGE, NEW YORK POST: Dick Armey did the same thing.

BLITZER: Dick Armey is not exactly a liberal either.

GEORGE: Exactly.

I think it is actually interesting that the big debate on the signature of foreign policy right now is going on between Republicans, whereas, you know, liberals have sort of like kind of backed away from it.

But I think one of the concerns that some of these conservatives are pointing out is that what you have -- I mean, no one would disagree that Saddam is an evil man. But he also happens to be a non- ideological dictator, whereas the biggest threat in the Middle East right now is ideological, fundamentalist Islam. And I think there's a concern that, if you just take Saddam off the table, that terrorism, that fundamental Islam is still going to be there and is still a major threat to the United States.

BLITZER: It's not even a political issue, it's sort of spanning the parties, going across party, Democrats and Republicans, this whole debate right now.

MICHELLE COTTLE, NEW REPUBLIC: Yes. It's not anything really partisan. He's just not making his case. The president is not getting out there and making a case for why he would need to go into Iraq. The fact that this guy's a bad man is not going to do it for the American public. I mean, polls show that they support the war unless you start talking about maybe suffering some casualties. And so, if the president's going to want to get support for this from his own people, he's going to need to do a better job.

BLITZER: Rich, is he going to start doing that job, or is he just waiting until the time is right?

LOWRY: Well, part of the problem appears to be, he hasn't really decided himself exactly how do it, so it's hard to go out with a full- throated case until you've made that decision, and he hasn't yet imposed order in his own government. You have the State Department and Colin Powell openly advocating a certain position within the administration which seems to oppose the direction that the president's going. So that's a chaotic situation.

Now, I don't put much credence, though, in some of these arguments that have been advanced by Brent Scowcroft. You know, Scowcroft is a fan, fundamentally, of the global status quo. He opposed toppling Saddam the first time because it would have been too destabilizing. He opposed supporting Yeltsin when the Soviet Union was falling apart. Too destabilizing. He opposed toppling the Taliban last year. Too destabilizing. And of course he opposes toppling Saddam now, because of course it will be too destabilizing.

(CROSSTALK)

BRAZILE: Rich, we can't do it by ourselves, and that's the problem this administration is having. They keep talking about all these various options, we keep getting leaks, but we cannot find one ally right now in Europe that's staying with us.

LOWRY: That's not true: Britain, Italy, Spain and Portugal. Four right there. And Germany...

(CROSSTALK)

LOWRY: And Russia.

GEORGE: Blair doesn't even have his own Labour Party behind him...

COTTLE: Yes, to say Britain is behind us, you're going basically on Tony Blair.

BLITZER: Let's move on, because we've got a limited amount of time.

(LAUGHTER)

I'd like to move the talk from war to the economy. During the week, the president hosted an economic forum, as we all know, in Waco, Texas. Democrats dismissed it as nothing more than a photo opportunity. But today the White House communications director, Dan Bartlett, said the summit was indeed substantive and successful.

(BEGIN VIDEO CLIP)

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: What we found during these sessions was the fact that the American people are pretty positive and optimistic about the future of our economy. There are concerns, concerns about corporate governance, concerns about making sure that we take actions in Washington that'll help create jobs.

So the president was very pleased with the output.

(END VIDEO CLIP)

BLITZER: And, Donna, the president now suggesting, hinting broadly that, based on what he heard at this forum, he's now going to come out with some new economic initiatives. BRAZILE: Well, all 15 minutes of what he heard while he sat through those boring sessions, I'm sure.

(LAUGHTER)

Look, it was an echo chamber, amen corner. That was the -- what we called the Bush wing of the Republican Party coming down for a made-for-TV show. The administration still lacks a credible spokesperson on the economy. They have no game plan on how to get America moving again and get America back to work. So all they could do is produce a nice photo-op.

BLITZER: Was that all it was?

GEORGE: Pretty much, frankly.

I mean, it was nice to hear the president say that he's going to take it to Congress on spending, and he pointed out this $5.1 billion that he's going to block. Unfortunately, that was kind of undercut by him signing the $170 billion farm bill earlier this year. So, I mean, I think there has to be some consistency.

And I think that we all agree that there is no real credible voice in this administration on the economy right now.

BLITZER: Do you agree on that?

COTTLE: Absolutely. I mean, Bartlett's been out in the Texas sun too long if he thinks anybody believed this was substantive. It was a photo-op, and their mistake was in pitching it as something big and meaningful. If they had just let it ride out, it's August, you know, the press would have shown up and done their thing. That would have been fine. But please.

BLITZER: But what's wrong with having a bully pulpit, using that kind of forum as a bully pulpit to talk about these economic issues?

LOWRY: Well, I mean, there's nothing really wrong with it. I mean, all administrations do this sort of PR exercise. But it was just a PR exercise, and it wasn't even really good theater, because, as Donna points out, Bush doesn't have a great appetite for sitting for hours listening to this kind of thing.

(CROSSTALK)

LOWRY: But let me say, the news Friday that the president is considering pro-investor measures is a very good one, because it'll allow him to go on the offensive. And I'd love to hear Democrats now, after months of complaining about investors losing so much money, explaining why they're going to oppose the president's initiative to increase the deduction for capital losses and other pro-investor initiatives.

(CROSSTALK)

BLITZER: You don't remember when, during the transition in December of '92, after Clinton was elected, he had an economic forum of his own, in Little Rock. Here is the question. How many days -- days -- did that go on?

(LAUGHTER)

BRAZILE: About 72 hours. It's still going on, in fact, if you ask me.

(LAUGHTER)

Well, first of all, I think, if the Republicans are willing to put that irresponsible tax cut back on the table, perhaps we can talk about some of these other options in the context of a long-term economic strategy.

LOWRY: Do you think it's irresponsible for people to be able to write off their capital losses?

BRAZILE: When 2 percent of the American people are going to get the bulk of the tax cut, it's going to cost us $4 trillion to pay for it over the next decade, when millions of people are about to retire...

LOWRY: I thought Democrats were complaining about investors getting soaked.

BLITZER: We're going to leave it there. We're going to take a quick break, soaked or nonsoaked. We have much more coming up, including a student requirement involving Islam. It's sparking controversy at the University of North Carolina.

Our Final Round will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our LATE EDITION Final Round.

The University of North Carolina is requiring its freshman class to read this book -- we'll put it up here -- a book about the Koran and Islam. But the school is being sued by a group claiming that a publicly funded university cannot promote a specific religion.

Michelle, why shouldn't students at the University of North Carolina, or students everywhere, know more about Islam and the Koran?

COTTLE: They absolutely should. Look, this is not a missionary pamphlet which is aiming to convert people. It's an educational issue. And I think, especially with all that we have been hearing about in the last several months about Islam, people need to know what's going on and what's driving a lot of this issue.

BLITZER: Rich, I mean, after 9/11 especially, don't you think that young people should know more about Islam and the Koran?

LOWRY: Of course they should. And this conservative group suing, I mean, this is the worst sort of conservative yahooism. But I'd make two points about this. One, as a beginner, it's not the best way to learn about a great religion, you know, jumping into its primary text, which is usually very obscure and hard to understand.

Two, I'm sure this is going to be basically a whitewash for Islam. I'm in favor of people learning about Islamic civilization, all things, including the good and the bad and the ugly. And no university is going to do that because that would require some honesty and some willingness to confront PC pieties. And you don't see that on campuses.

BLITZER: The suggestion is this particular text is almost like a whitewash. It only puts the positive, very uplifting parts of Islam out there.

BRAZILE: Well, I think that's perhaps the best way to try to gain a better understanding of this religion that is practiced by 1.2 billion people. Whatever happened to academic freedom and the right to have students and others engage in just a dialog and conversation about different religions?

Look, I studied Islam in college. I didn't -- it didn't convert me. I'm still Catholic. And the only thing I can remember, you know, from 20 years of studying is Assalam-Alaikum, which is, you know, greetings and peace. That's all I remember.

(LAUGHTER)

BLITZER: That's not much, Donna. Obviously, they didn't do a very good job teaching you.

LOWRY: I think you need to brush up again.

BRAZILE: I need to brush up.

GEORGE: I think I learned that in the autobiography of Malcolm X, actually, as well.

(LAUGHTER)

But yes, I mean, it is -- it would be as -- it was as ridiculous if somebody wanted to have a course about Christianity and some -- a radical feminist group or something like that protested it as well. There's nothing wrong with learning about this. It would be nicer if there was a better and more nuanced view on it. But, you know, let the students learn and go on with this.

BLITZER: Yes, right there at the University of North Carolina.

Let's move on. Who gets to spend the night at the White House? A list shows about 160 guests have slept there since President Bush took office, including at least six of his biggest campaign donors.

Donna, this president doesn't look like he's going to get in trouble for what President Clinton did with all those sleepovers in the Lincoln Bedroom.

BRAZILE: Well, first of all, the White House has not identified the bedroom yet. We're still guessing.

But, you know, the Republican motto is "Do as we say, not as we do." So I think this is all ado about nothing. It was all ado about nothing with Bill Clinton. It's all ado -- I mean, if he wants to invite somebody, let him invite them.

BLITZER: What's wrong with having some friends spend the night at the White House?

LOWRY: Well, I think the Bush White House should put a little sign outside the Lincoln Bedroom saying, "You can go in, you can sit on the bed, you can fluff the pillows, but do not, whatever you do, don't sleep here," because it is going to be an embarrassment.

But I do think there is a difference. I mean, the Clinton team did have a very sophisticated and well-structured plan, or scheme, as Al Gore would say, to raise money, including by selling off nights in the Lincoln Bedroom.

BLITZER: Was that a scheme? I'd like to give you a chance to respond.

BRAZILE: First of all, it was not a scheme. That's part of the hypocrisy that's out here.

GEORGE: (OFF-MIKE) risky business.

(LAUGHTER)

BRAZILE: Risky business. These are pioneers who've raised hundreds of millions of dollars for George Bush campaign. And now he's allowing a couple of them, you know, to come by and have a sleepover.

BLITZER: Do you have a problem with any of this?

GEORGE: The White House isn't for sale. Maybe for rent, but not for sale.

No, I mean, the fact is, a lot of these people actually really are old friends of the president.

BLITZER: Most of them are.

GEORGE: In fact, one of them, Roland Betts is actually a Democrat, even though he did contribute to Bush's campaign.

And as Rich said, this is not like the Clinton White House where you had, on top of the sleepovers, you also had all the White House coffees and so forth where they had, you know, one way -- any way they could find to sell access to the White House. It's a little bit different.

BLITZER: Story or non-story?

COTTLE: This is just silly. To try to make distinctions between big Democratic donors sleeping in the bedroom and big Republican donors sleeping in the bedroom is pathetic.

And the fact is, it doesn't matter in any case. For my money, I'd rather get them to sleep in the Lincoln Bedroom than influence policy for all the money they've given him. So you know, just drop it on all cases.

BLITZER: All right. Let's move along to another story. One group that will no doubt be able to ride out our rocky economy is Major League Baseball players. Still, they are threatening to go on strike, perhaps at the end of this month.

Today the Baseball Hall-of-Famer Ozzie Smith acknowledged that, despite the money involved, the dispute is about serious labor issues.

(BEGIN VIDEO CLIP)

OZZIE SMITH, BASEBALL HALL OF FAMER: Everything is relative. I think it's always been very hard for fans to understand why and how guys that are making millions and millions of dollars can talk about strikes. But you know, I think players in many ways, because it's such a big business now have learned that, you know, that's going to happen.

(END VIDEO CLIP)

BLITZER: You know, Robert, a lot of people don't understand if an average salary for a Major League Baseball player is, what, about $2 million-plus, what are they complaining about?

GEORGE: And the minimum wage, I think, is supposed to go up to $300,000.

I mean, there is a big battle over a lot of these arcane things such as luxury tax and things like that. And the average, right, the average person who is going to see a baseball game doesn't understand that.

However, I think if they do go on strike, I think it's going to really -- it will be catastrophic for the sport. And I mean, I think the baseball players, who actually in the past I've tended to support on some of these things, I think, you know, I think they are really going to be shooting themselves in the foot this time.

BLITZER: Michelle, you care about this at all?

COTTLE: I hope they do shoot themselves in the foot, and maybe we can go back and talk about some issues like why they got out of those anti-trust laws for so long and why the commissioner of baseball is allowed to own teams. I want people getting in there and mucking around with this business. So I hope they do tick people off.

BLITZER: Well, what's wrong -- let me ask Rich, what's wrong with baseball players wanting more money, because that money, if it doesn't go to them is going to go to the owners, right?

LOWRY: It's the American way, right. More money. This is my kind of union. A bunch of rich guys who oppose a tax increase.

But look, the union has conceded on the basic principle of a luxury tax. Now it's just a question of what the rate will be. It seems like a difference that just should be split and they should keep playing. Because as Robert points out, it'll be a huge black eye for the game.

(CROSSTALK)

BLITZER: It's going to be disaster for both the players and the owners if there is a strike.

BRAZILE: Absolutely. Look, they're already in the dugout with attendance, in some cases, $50, $75 dollars. It's passing as an American pastime. I don't feel their pain at all.

BLITZER: You don't feel their pain at all?

(LAUGHTER)

BRAZILE: Absolutely not.

GEORGE: Rich and I feel it's important for the Yankees to restore themselves to dominance in baseball, so we don't want them to go on strike.

BLITZER: You want Bill Clinton to come in and work this problem out?

BRAZILE: I think Bill Clinton would know what to do. And I also think George Bush, on this one here, knows what to do as well.

GEORGE: He didn't know what to do in 1994, when they had the biggest strike in the history of the game.

BLITZER: You hear that? He remembers.

BRAZILE: Well, I'm in the dugout on that one.

(LAUGHTER)

BLITZER: We have to take another quick break. But coming up, a retiring senator could have, get this, a new role on a primetime TV program. That and much more in our lightening round. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Time now for our lightning round.

Martha Stewart has until Tuesday to turn over documents about her $200,000-plus sale of ImClone stock to the House Energy and Commerce Committee, which is investigating insider-trading allegations involving the company. Is Martha just an easy target for the committee, Michelle?

COTTLE: Well, sure, but that doesn't mean that it's a bad thing.

(LAUGHTER)

I mean, she's been misbehaving all along here. Whatever kind of original shenanigans went on, she's been foot-dragging and changing her story about what she did. She's been unwilling to be, you know, forthcoming in these hearings. And I think she's doing exactly what people get really ticked off about, which is behaving as though she's above it all.

BLITZER: You know, Robert, the usual sense is that the cover-up is almost always worse than the crime.

GEORGE: Wolf, you literally took the words right out of my mouth, because that's exactly what I was going to say. Yes, this is the case. I mean, there are some people who want to defend Martha, even some conservatives have come up and said, "Well, she's an entrepreneur," and so forth. But, I mean, it's very clear actually that, you know, she's been not forthcoming, she's been very misleading in talking to congressional investigators. And I think she's in some serious trouble.

BRAZILE: Look, I think Martha should just go up there with her needle and thread and try to stitch her way out of this...

(LAUGHTER)

... and get over it.

BLITZER: Can she do it, though?

BRAZILE: Oh, absolutely. Any woman who can cook that well can do anything.

(LAUGHTER)

BLITZER: What about that?

LOWRY: Well, she may be guilty, but it's definitely true, a lot of people really, really want her to be guilty because she would be caught in this terrible faux pas on insider trading.

(LAUGHTER)

BLITZER: Next item in our lightning round, the New York Times today announced it will begin including gay and lesbian wedding announcements in its Sunday Style section. Is this move overdue or just political correctness?

GEORGE: It's a case of political correctness that's overdue for the New York Times. I mean, I don't think -- I mean, it's not surprising that the Times would do this. The only thing that was surprising is that it's taken them this long. BLITZER: Is the New York Post going to do that too?

(LAUGHTER)

GEORGE: We don't have wedding announcements.

BLITZER: OK.

(LAUGHTER)

BRAZILE: You just have horoscopes gossip columns.

(LAUGHTER)

(CROSSTALK)

BRAZILE: I think it's long overdue because states and cities have recognized domestic partners, corporations are recognizing domestic partners And why not let same-sex couples recognize their relationships and their friendships in the newspapers?

LOWRY: Well, Robert's right. It's long overdue for the New York Times. And I wouldn't have been surprised if Hal Raines (ph) announced today that the editors of the New York Times were going to perform these ceremonies.

(LAUGHTER)

GEORGE: Well, they've already recognized them.

(LAUGHTER)

BLITZER: Michelle, is this going to cause a huge uproar among the religious conservatives, what the New York Times is doing now?

COTTLE: This will just convince religious conservatives what they've always thought, which is that the New York Time is a liberal, elitist paper.

But they're being very careful about this. They're changing it to weddings and celebrations, so that they're not, you know, calling these things weddings specifically.

It's fine. For their readership, it absolutely was time.

BLITZER: All right, let's move on. Retiring Republican Senator Fred Thompson of Tennessee is apparently in negotiations to join the cast of the popular TV series Law and Order.

Is Fred Thompson going to be a big star, Rich, on television?

LOWRY: Oh, he's a total natural. I mean, he's great at this sort of thing, and I look forward to the episode where he actually wins a battle with a corrupt White House since, in real life, it turned out exactly the opposite...

(LAUGHTER)

... to my great chagrin.

BRAZILE: I must admit, it's a better day job for him and any other member of Congress to go out there and do some honest work.

(LAUGHTER)

BLITZER: Honest work. You don't think being a senator is honest work?

BRAZILE: Oh, no, sir.

BLITZER: Not Tom Daschle? He's not an honest...

BRAZILE: Well, he's an honest man, but I don't think it's honest work.

(LAUGHTER)

BLITZER: Really? All right.

What do you think about Fred Thompson on the little screen?

GEORGE: I was actually hoping that he would run against Martin Sheen and become president on the West Wing.

(LAUGHTER)

But since that's not going to happen, I think it's a good idea. You know, he's got great experience from In the Line of Fire and No Way Out and so forth. And I think he'll do great on TV.

BLITZER: He was a powerful presence on the big screen.

COTTLE: I'm thrilled about this. This is great. I love the show, I watch it. And I loved him in movies. He's a natural. I'm going to be there every night with him.

BLITZER: Fred Thompson, TV star. Good luck to you, Senator.

GEORGE: He just got married too.

BRAZILE: Yes.

BLITZER: Well, congratulations to Fred Thompson, as well.

Singer Barbra Streisand is coming out of retirement next month. The House minority leader, Dick Gephardt, coaxed her into headlining a fundraiser concert for the Democrats.

Can Barbra sing the Democrats back to control in the House of Representatives?

BRAZILE: Well, to paraphrase one of her songs, Democrats need people. (LAUGHTER)

We need all the people for the next 79 days. And I'm very happy that she's agreed to do this.

BLITZER: Is this going to make a difference, Barbra Streisand raising money for Democrats?

LOWRY: It'll be a little additional money. Barbra Streisand herself won't make a big difference.

I mean, Democrats have a pretty good chance to take back the House, but it's not going to be on the basis of her voice.

BLITZER: What about that?

COTTLE: You know, I'd like the Democrats to get in there and fight, but not at the expense of having to listen to Barbra Streisand mouth off about politics.

(LAUGHTER)

BLITZER: What do you mean?

COTTLE: Oh my God, the woman just needs to keep the mouth shut.

(LAUGHTER)

GEORGE: If she does get in and fight, it will of course be the main event. I have no more tears, though Democrats who need fundraising people are some of the most nauseating people that I know.

(LAUGHTER)

COTTLE: Stop it.

(LAUGHTER)

BLITZER: We have to leave it right there. When we're done with this program, off camera we'll all sing together, "People who need people are the luckiest people in the world."

(CROSSTALK)

GEORGE: ... star is born.

(LAUGHTER)

BLITZER: That's all the time we have today. Thank you very much. That's your LATE EDITION for Sunday, August 18. Please be sure to join us next Sunday and every Sunday at noon Eastern for the last work in Sunday talk.

Join me Monday through Friday, 5:00 p.m. Eastern, for "WOLF BLITZER REPORTS."

Until then, thanks very much for watching. Enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

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



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