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CNN CAPITAL GANG

Iraqi Exiles Meet to Start Forming Government; Is Bush Bringing Democracy to Mideast?; Bush Hits Road to Sell Tax Cuts

Aired April 19, 2003 - 19:00   ET

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

ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG. I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

With the whereabouts of Saddam Hussein unknown, Iraqi exiles and opponents of the old regime met in a tent near the birthplace of Abraham to start forming a postwar government.

Margaret Carlson, is this going to be a real Iraqi government, or is the U.S. Pentagon calling the shots?

MARGARET CARLSON, CAPITAL GANG: Well, we should hope in the short run that the Pentagon admits that it's calling the shots and starts calling them, so that the looting and chaos subside.

In the long run, everybody wants the Iraqis to have a democracy and take over their own government. It's not going to be easy. It took seven years before the United States could leave Japan. Iraq is much more fractured than that. And unfortunately, the Pentagon has a candidate and the State Department has a candidate. The Pentagon wants Ahmed Chalabi to take over, and the State Department does not back this person.

If they -- if there were to be an election, it would be a stalemate, and we'd have to have a recount.

SHIELDS: And we'd bring in the Florida folks...

CARLSON: Yes.

SHIELDS: ... to help us with that part, right?

CARLSON: There'd be chads. There would be hanging chads.

SHIELDS: Bob Novak.

ROBERT NOVAK, CAPITAL GANG: I think it's a little worse than Margaret says, because these people obviously want the United States out of there. There's nobody who wants a long occupation. But are you going to turn Iraq over? Who do you turn them over to? They've been under a grueling dictatorship for all these years. And democracy, they've never really had a functioning democracy. And if they have an election in the near future, it's going to be, I will predict, an Islamic extremist group. The last thing we want is an election. All this talk about democracy in Iraq, so it's not just a matter of we just got to do a good job. I think there are basic, systemic problems involved.

SHIELDS: Kate O'Beirne, that has been expressed, that fear about of a (UNINTELLIGIBLE) -- of a theocracy emerging in Iraq. Is that a real concern? Or are the concerns dominate at this point?

KATE O'BEIRNE, CAPITAL GANG: Look, it's been merely two weeks since they've gotten rid of Saddam Hussein. We're not in any position to predict that that might be the case, although there are probably voices, no doubt voices calling for that in Iraq.

We have a modest example of self-government in northern Iraq. I don't know how optimistic you were about the Kurds ability to come up with a struggling, functioning democracy. But we do have that model. And it's not going to be a State Department or a Pentagon candidate.

If whoever they might want doesn't have the support of the Iraqi people, they're not going to be able to pull off running Iraq in the near term.

SHIELDS: Al, whoever's running it, the contracts are already out, they're...

AL HUNT, CAPITAL GANG: Well, there -- Mark, but look, the problem is that there are two objective from this administration that we read about. One is to create a model of democracy in the region, one that I'm sympathetic. The other is to turn it over to the Iraqis as soon as possible.

They are incompatible. Is it transformational, or is it transitional? And they won't answer that question.

If anybody -- Kate, I think anyone who thinks that we can really help create any kind of democratic institutions in Iraq and it's going to take less than five or 10 years is delusional. It's going to be a long time if success...

NOVAK: Why do you, why do you think it's going to work...

HUNT: ... (UNINTELLIGIBLE). And we can't...

NOVAK: ... in the long term?

HUNT: No, I'm sure it will, Bob. But I know it won't work in the short term. And also, I know it's not like the banana republic as the '50s, we can't pick our candidate. And what bothers me about what the Pentagon is doing, they're including some, and they're excluding others. Can't do that.

NOVAK: And another, and another factor is that they -- the interim military governor is retired lieutenant general Jay Garner, who is very, very tight with the Sharon regime in Israel. Oh, you know, it just -- try, trying to say if you want to have somebody to lead Iraq who is going to be -- have credibility, wouldn't you have somebody who didn't have an Israeli connection? Wouldn't that just be the smart thing to do?

O'BEIRNE: No. He's going to be the administrator, get things up and running again. Look, I think we could do a couple of things, America can, in the short term, and I don't disagree with you, Al, it is a major challenge. We could come home from Saudi Arabia. The strategic reason for being there no longer exists. It would, again, be evidence that we do not plan on staying for any long period of time in Iraq. We only have to stay as long as necessary, so coming home from Saudi Arabia would make a difference.

Wait until the Iraqi people see that they're going to share in the oil profits. We need an emerging middle class in Iraq, and we ought to cancel their debts.

SHIELDS: I just say, I just...

CARLSON: You know, Mark...

SHIELDS: ... say this, that city councils gathered around the table this week until the table was stolen, and we -- in Iraq, in several different cities. And but we did see recently returned after 40 years abroad, the Iraqi National Congress leader, Ahmed Chalabi, who said the following.

(BEGIN VIDEO CLIP)

AHMED CHALABI, IRAQI NATIONAL CONGRESS: The Iraqi people have expressed (UNINTELLIGIBLE) desire for democracy, for freedom, and for the rule of law.

(END VIDEO CLIP)

SHIELDS: Bob, freedom and the rule of law, Mr. Chalabi has it just about right, doesn't he?

NOVAK: (UNINTELLIGIBLE), I mean, the idea of the rule of law, with all these guys looting and trying to get what they want, the idea that's what the Iraqis want, the Iraqis are glad to have a little freedom after being suffocated all those years. But there are hardly candidates for self-government at this point.

CARLSON: And by the way, looting is not another name for freedom. The idea that the administration is pushing, which is, Oh, this is just an expression of freedom, is ludicrous.

And by the way, Kate, Chalabi is the administration's candidate. While others couldn't get visas to go to the meeting at Ur, Mr. Chalabi was flown in by the Pentagon. His own...

SHIELDS: Has his own...

CARLSON: ... his own transport.

SHIELDS: ... he has his own militia now.

CARLSON: Yes, and his own militia.

(CROSSTALK)

HUNT: ... which is reminiscent of Lebanon.

Look, let me tell you another, I think, another big mistake that they are making right now, and that is, the first big -- no big contracts...

SHIELDS: Right.

HUNT: ... go to Bechtel and go to Halliburton. They may be the most qualified. But the way this is done, and I'm afraid to give it to politically connected big contributing company just plays into the hands of those critics who say we went there for ulterior reasons. I think it's just crazy.

O'BEIRNE: Those, those critics have been wrong about everything, about everything...

HUNT: Well, most critics include...

O'BEIRNE: ... about how we'd win...

HUNT: ... a lot of Iraqis.

O'BEIRNE: ... about, about how the progress of the war would go. So why should we worries, overly worried about...

SHIELDS: Kate, (UNINTELLIGIBLE)...

O'BEIRNE: ... what they're saying now with respect to contracts for reconstruction?

SHIELDS: (UNINTELLIGIBLE) this, in the reconstruction of Japan, there wasn't a single contract given to United's and American company. I mean, it wasn't a rush to profit and payday. I mean, and that -- boy, this one really does look different.

O'BEIRNE: Nobody can plausibly argue that we went for any other reasons than the reasons stated.

HUNT: Kate, I don't, I don't argue that...

(CROSSTALK)

CARLSON: I don't argue that either.

HUNT: ... but I'm saying the way we've handled it, we lend credence to those who erroneously argue (UNINTELLIGIBLE).

NOVAK: I, I, I would say the most depressing part of this, after a great military victory was the looting of the museum.

SHIELDS: That's right, yes.

NOVAK: But worse -- not worse than it, but aggravating the looting museum is the whole idea of, Boy, you can't protect everything. You know, you -- we're protecting the oil wells. You can't protect the museums.

O'BEIRNE: Let me totally disagree...

CARLSON: You know, (UNINTELLIGIBLE)...

O'BEIRNE: ... first of all...

(CROSSTALK)

HUNT: We did it during the war, we protected civilians...

O'BEIRNE: Yes, but some of...

HUNT: ... beautifully during the war...

CARLSON: Yes.

O'BEIRNE: Look...

HUNT: ... the military does its job...

(CROSSTALK)

HUNT: ... and then after the war, they didn't, Bob, I agree with you, I agree with you.

O'BEIRNE: Our troops, our troops were still very much at risk, Bob, and I don't think it was worth the life of a single soldier or Marine to protect some of that stuff. Secondly, think of it as a tax on the rich. They were looting Saddam's palaces, which I have no problem with. And the museum looting looks like an inside job. How could America be held responsible for that?

SHIELDS: Kate, Kate...

CARLSON: If we're bringing democracy, you shoot -- Republicans shoot to kill when there's looting in this country. And it is -- even if you say it had to happen...

O'BEIRNE: Shoot, shoot...

CARLSON: ... or there wasn't anything to do...

O'BEIRNE: ... shoot civilians...

CARLSON: ... we had...

O'BEIRNE: ... who are looting palaces?

CARLSON: No, we had Marines there. We could -- when a government is overthrown, you institute a curfew, if not martial law. The Marines stood by and let it happen.

O'BEIRNE: Rather than shoot civilians.

SHIELDS: (UNINTELLIGIBLE) Kate, Kate, I'd just say, Eric Shinseki, general of the Army, said, You're going to need 200,000 troops in there to pacify and occupy. This is his, this is his validation.

It was a small enough force to take over, it wasn't a big enough force to...

O'BEIRNE: Oh...

SHIELDS: ... patrol the country. It isn't...

O'BEIRNE: A little looting of palaces?

SHIELDS: ... big enough for -- A little -- 40 hospitals...

CARLSON: Hospitals!

(CROSSTALK)

SHIELDS: ... 40 hospitals...

(CROSSTALK)

CARLSON: Hospitals!

SHIELDS: ... closed. Forty hospitals closed.

Does Washington have a road map to remake the entire Middle East? The GANG of five will be right back.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

A sharply revamped Middle East was in prospect with the U.S. talking tough to Syria, Palestinians hammering out a new government, and Arabs everywhere apprehensive.

Bob Novak, is President Bush going to bring democracy to the whole Middle East region?

NOVAK: I think that is really biting off too much. I think it is saying we have the strongest military in the world, therefore we can impose our way of life on everybody.

It would be very nice if these people could have a democracy, but who really thinks that if you have a free election in Saudi Arabia, you're not going to end up with something like Iran?

So I -- I'm very concerned with -- all right, next is Syria, what comes after that? The point -- most important thing the president can do, and I think he's sincere about it -- he's got a lot of people in the Pentagon who don't agree with him -- is to start on a Palestinian peace plan. That's the biggest thing he can do to bring peace in the Middle East.

Let's have peace before we have democracy.

SHIELDS: Kate, you agree with Bob.

O'BEIRNE: No, I don't. I don't think the agenda is to impose democracy in the Middle East. I do think it's trying to work with democratic forces in the Middle East on behalf of people, like Iranians, who desperately want to be freer, because they're more stable, and they won't cause the kind of threat to us that so many of those autocratic regimes do that abuse their people.

I think this president, President Bush, has an advantage when he turns his attention to the Middle East, because he doesn't suffer from the illusion that the United States can solve the Middle East conflict. He'll do everything he can to be helpful. But if the cornerstone of his policy remains the same, Arafat from last spring has got to go. Only then can Israel and the Palestinians come up with a road map that would work.

SHIELDS: Margaret Carlson.

CARLSON: I mean, if the president thinks he can overthrow a regime, certainly he thinks he's capable of bringing at least a start on that road map in -- between Palestine and Israel. And it is the -- it's an essential next step.

The cheerful news this week is that Secretary of State Powell is getting on an airplane and going to Syria, and has announced that Iraq was a unique situation, and that despite all the saber-rattling toward Syria, that he's going to Damascus to talk and to try to get Syria, which I think one thing they've done is to limit visas for Iraqis to get into Syria and hide.

And I think Syria's are more -- Syria is more willing to talk now that they have seen what has happened in Iraq, about weapons and hiding Iraqis that should be in (UNINTELLIGIBLE) -- tried for war crimes.

SHIELDS: Al, (UNINTELLIGIBLE)...

HUNT: I want to say, I think (UNINTELLIGIBLE) that Bob is actually right about the Israeli-Palestinian issue. I think it's a sine qua non to any kind of progress in the entire region, whether it's Iran, whether it's Iraq, whether it's better conditions in Jordan. And the administration's policies for the first 25 months have -- 26 months have been a disaster. Let's hope that they see the light and turn around.

I think one thing that does bother me, Margaret, I hope you're right, there was the -- that was the word last week, that everybody would -- had taken notice from this, and they were going to act differently. And the North Koreans were example number one. Then this week they come out and say that they're already processing... (CROSSTALK)

CARLSON: But that was a translation problem. Right.

HUNT: Well, sure, it's a translation problem...

(CROSSTALK)

HUNT: ... you know.

CARLSON: But at least they said it was, so that they wanted to pull it back.

HUNT: (UNINTELLIGIBLE) say it.

NOVAK: You know, the -- Kate, I'm really, I'm really amazed you say that we can bring all this democracy to people who've never had democracy, but the question of trying to mediate an agreement between the Palestinian and Israelis is too much for it.

O'BEIRNE: You can't...

NOVAK: I think that's inconsistent.

O'BEIRNE: The president's made clear he doesn't intend to and won't mediate between Israel that wants safe and secure borders and Arafat that does not want Israel...

NOVAK: Oh, that isn't the issue...

O'BEIRNE: ... to exist, and...

NOVAK: ... that isn't the issue...

O'BEIRNE: ... and has been a terrorist. It is the issue. That's how he's defined the issue, Bob.

SHIELDS: Al, Al, let me ask...

NOVAK: (UNINTELLIGIBLE) not.

SHIELDS: ... you a question. In -- (UNINTELLIGIBLE) -- Margaret's right, when Colin Powell this week said, Don't worry, all the people are nervous, Arabs and others and Europeans, apprehensive about the United States and Syria and militarily, is that -- is the secretary of state speaking for a regime, unanimous in that position, that the United States should not do anything militarily?

HUNT: Mark, I'm not sure. There's certainly a compelling case to bring a lot of pressure on the Syrians, including real economic pressure. They harbor terrorists, they're -- they've promoted terrorism, they have some of Saddam's bad guys there, their religious leader this week said that Muslims ought to attack American soldiers.

But there is no case for militarily going into Iraq. I think the administration's probably bluffing, and they hope that that'll be enough to scare the Syrians into better behavior.

NOVAK: You know, there was a remarkable quote in an Israeli newspaper, which -- I thought it was remarkable, it didn't get much attention by the Israeli minister of defense, Shaul Mofaz, he said, quote, "We have a long list of issues we are thinking of demanding of the Syrians, and it would be done through the Americans," unquote.

Now, that, that is the kind of statement that really enrages and infuriates the Arabs, that the, that the United States is the, is the, is the muscle for Israeli policy in Syria. What is Israeli policy in Syria? To get them out of Lebanon, to do a lot of things...

O'BEIRNE: If we want to...

NOVAK: ... maybe they're good things...

O'BEIRNE: ... if we want to have a constructive role in the Middle East, Syria, of course, is going to play a major role there, because they're such a key sponsor of the terrorism that goes on in the Middle East.

So they do hold their responsible, in large part...

NOVAK: Are we supposed to be Israel's...

O'BEIRNE: ... and they do hold...

NOVAK: ... (UNINTELLIGIBLE)?

O'BEIRNE: We (UNINTELLIGIBLE) -- Wait. The administration is next supposed to bring peace to the Middle East, but not supposed to pressure Syria, given their role in the terrorism that prevents peace in the Middle East? Bob, you can't have...

HUNT: You don't think there's a case now to take them...

O'BEIRNE: ... it both ways.

HUNT: ... on militarily, though, do you?

O'BEIRNE: You can't have it both ways. The only one I know...

(CROSSTALK)

O'BEIRNE: ... who wants to take on Syria militarily is Democratic Senator Bob Graham, is the only one I know who's ready now to take them on militarily.

SHIELDS: Now, should the United States' position be to bring total tranquility and peace and democracy to the Middle East, to make it a nuclear-free zone? And does that mean that Israel then gives up its nuclear weapons?

O'BEIRNE: There no -- that -- they're not posing the same risk to their neighbors that those who harbor and support terrorism are, Mark. Damascus is the international capital of international terrorism.

NOVAK: Let me just add, let me just add...

O'BEIRNE: It's going to be awfully hard...

NOVAK: ... one...

O'BEIRNE: ... to bring peace, well, as long as that situation prevails.

NOVAK: Let me just add one factoid, that the Joint Chiefs of Staff, two, two weeks ago, asked EUCOM (ph), the European Command, General Jones, in Europe, to prepare a plan of action for Syria. That's a fact. I know that happens to be true. Doesn't mean they're going to use it, but the idea that this is remote, that we could ever go to war against Syria, and you're right that General Colin Powell was the only guy to give that assurance, wasn't given...

CARLSON: Colin Powell's in -- yes, Colin Powell's in charge now until he's not.

O'BEIRNE: Colin Powell only said there are no immediate plans, which is certainly the case. We never take it off the table. If we were mad at France, we would barely take it off the table.

SHIELDS: I have no intention to invade Iraq. Fourteen times, I heard that.

And next on CAPITAL GANG, will a triumphant George W. Bush also win the tax war?

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

With President Bush's tax cut reduced by half by Congress as it recessed for its Easter break, Mr. Bush hit the road to sell his plan to the country.

Kate, will the president get what he, get what he wants?

O'BEIRNE: Do you mean, Mark, will the economy get the tax cut it needs? Is that what you meant to say?

SHIELDS: Not at all, Kate. I think we go back and look at the question. Will the president get what wants, or will he hold his breath?

O'BEIRNE: This is so -- the complaint on the part of members of the Senate is so ridiculous. The federal government's going to spend over $20 trillion over the next 10 year. The notion that a tax cut in the modest amount of $500 billion over 10 years is too much is ludicrous.

I think the president will wind up getting closer to 500, the figure he's now asking for, than the 350 the Senate, the Senate voted on about a week ago, which is only the reconciled budget. That's the amount of tax cut that could go through with only a simple majority. If they can figure out ways, I think, getting some of the others.

And there also could be spending offsets. That might get deficit hawks like Senator Voinovich on board, because they ought to be cutting back spending to make room for these tax cuts.

SHIELDS: Margaret, will the president's popularity, I mean, he's come in as the triumphant war commander, translate on Capitol Hill?

CARLSON: Well, you know, once the bombs stop falling on Baghdad, and it's reconstructing Baghdad, people are going to start paying attention to the economy again. And George Bush may well say, Thank you, in '04 to the moderate senators who have held him back from this ill-advised tax cut.

Now, speaking of the war, you have the House of Representatives speech after speech praising the troops, and declaring their undying support, and then voting to cut veterans' benefits so we can have this tax cut that almost nobody except the administration shock and awe economists believe in.

SHIELDS: Al Hunt, you've covered Capitol Hill for a long time. George Bush goes up to...

HUNT: (UNINTELLIGIBLE).

SHIELDS: ... George Bush goes up to Capitol Hill, and in the gallery, joint session speech, he's got Jessica Lynch, the young private from West Virginia, and General Tommy Franks, does that translate into clout politically?

HUNT: Oh, he's got some added clout, and I think that moderate Republicans are always a thin reed. But if the president's looking for another salesman to help him with this tax package, I got a candidate, that old Iraqi information minister. He knows how to sell a fraud.

This is such a fraud. This is not economic stimulus, Mark, this is...

SHIELDS: Bob Novak (UNINTELLIGIBLE).

HUNT: ... a tax -- No, (UNINTELLIGIBLE), he knows it's not. Bob is always been quite honest about that. This is a giveaway to wealthy investors and contributors, and it's going to cost...

NOVAK: Now, listen, I don't want, wait a minute...

HUNT: ... (UNINTELLIGIBLE).

NOVAK: ... I didn't -- I never said that...

HUNT: You said it wasn't...

(CROSSTALK) NOVAK: ... you said Bob said that it was a giveaway...

HUNT: No, no, no, you didn't...

(CROSSTALK)

HUNT: ... you said it wasn't...

(CROSSTALK)

NOVAK: ... was very silly.

HUNT: No, no, no, it was not an economic stimulus.

NOVAK: Well, let me, let me, let me tell you this. First place, I'm very happy to be agreeing with Kate on this. It is just absurd to say that this little tax cut is going to have any impact on this huge economy. It just -- that's mindlessness. The problem is that it may have an effect on how much pork they get to send in their district. That's what it is, it's a spending orgy.

Now, the situation right now is that there was a provision, there was an agreement made by the majority leader, Bill Frist, that they would not have a tax cut in the final bill any bigger than $350 billion.

HUNT: Hundred and fifty.

NOVAK: That was an outrage. And he did not tell the House leadership, he did not tell members of his own leadership, he did not tell the White House about it. And he is, he is traveling around Asia, and he is in big trouble. They got about three or four weeks to fix this. But I a telling you right now, there are senators, Republican senators, who will not vote for a tax bill if it is bound on this silly requirement that Senator Frist agreed to.

HUNT: Good, let's not have any. That's a great idea.

SHIELDS: Let's get one thing straight.

HUNT: So would John McCain on that.

SHIELDS: Let's get one thing straight. Bill Frist didn't have an option. Bill, Bill Frist...

NOVAK: Yes, he did.

SHIELDS: ... Bill Frist did not have an option if he was going to get that (UNINTELLIGIBLE)...

NOVAK: Want me to tell you what the option was?

SHIELDS: What, to pull it down?

NOVAK: Yes, exactly...

(CROSSTALK)

NOVAK: ... and that's what he should have done.

SHIELDS: If he's going to get a budget resolution through in that, in that...

NOVAK: You don't have, you don't...

SHIELDS: ... in that, Republicans had made big hay over the fact that Democrats didn't pass a resolution last year in the Senate...

HUNT: Don Nickles wanted one...

SHIELDS: ... (UNINTELLIGIBLE) and Don Nickles, Don Nickles said...

(CROSSTALK)

NOVAK: ... Don Nickles was wrong...

SHIELDS: ... said we're going to have...

NOVAK: ... so I tell you what the problem was. They were so eager to get out last weekend for their damn junkets and their congressional delegations, including Senator Frist, that they panicked, and they didn't even know what they were voting on when they voted on that, on that budget resolution.

CARLSON: You know, when, when...

SHIELDS: Margaret, would you bring some light to this?

CARLSON: ... when, when Senator Frist took over from Senator Lott, he immediately started, you know, mouthing all these things about how it's not moral to tax dividends twice, and we have to have this tax cut, and deficits don't matter, I think he really believed it. And I think he...

NOVAK: Ohh!

CARLSON: ... I think he understands that the president needs to be saved from himself by Senators Grassley and Voinovich and Snowe and the other moderates who have stood up and said, It's not going to be more than $350 billion.

NOVAK: Do you, do you, do you know that...

CARLSON: And McCain.

NOVAK: ... do you know that Senator Frist has apologized for this outrage? He is a rookie legislative leader. He's never done this before...

(CROSSTALK)

NOVAK: ... you know he apologized forward? SHIELDS: Who gave him his job?

CARLSON: Who'd he apologize to?

SHIELDS: Karl Rove gave him his job.

NOVAK: Ohh, stop it!

SHIELDS: Remember, remember Strom Thurmond's birthday party when Trent Lott became an embarrassment, and Karl Rove said, We got a great guy to take his place, Bill Frist? Isn't that right...

(CROSSTALK)

NOVAK: Did you know he apologized?

CARLSON: No, I didn't...

(CROSSTALK)

CARLSON: ... did he apologize to you, Bob?

HUNT: Can I just...

(CROSSTALK)

NOVAK: ... he apologized to the, to the, to the people for not telling the speaker of the House and for -- he had told the speaker of the House that he was going to work for a $500 billion...

(CROSSTALK)

CARLSON: Well, did he apologize for doing it?

HUNT: ... let me just get away...

CARLSON: Or not telling?

HUNT: ... can I get away from this inside baseball and just talk about the substance of this miserable tax cut?

SHIELDS: Go ahead.

HUNT: I mean, basically, Bob, you're usually accusing me of class warfare here. Bob, I just want to go through what a couple people said. There were over, over, over 400 economists, over 10 Nobel Prize winners...

NOVAK: Oh, don't give me that...

(CROSSTALK)

HUNT: ... wait just a second -- they said it would add to chronic deficits and reduce the capacity to fund Social Security. Committee for Economic Development, CEOs and educators, said that we can't afford it. And a bunch of former, of former cabinet members... NOVAK: Oh, let...

HUNT: ... and senators like Bob Kerry and Sam Nunn and Paul Volcker said it's fiscally...

NOVAK: Well, wait a minute...

HUNT: ... irresponsible. They're not...

NOVAK: ... (UNINTELLIGIBLE), the fact that...

HUNT: ... class warfare.

NOVAK: ... it interrupted a tirade...

HUNT: (UNINTELLIGIBLE). No, that's just (UNINTELLIGIBLE) reporting.

NOVAK: ... if that's the kind, if that's the kind of crap that's been put out by those kind of people for years, we wouldn't have had the Reagan tax cut, we wouldn't have had the Kennedy tax cut, if it, if it, if it was -- if he listened to those kind of people.

HUNT: How about the (UNINTELLIGIBLE)?

NOVAK: And let me tell you this. This is a necessary...

O'BEIRNE: There is...

NOVAK: ... piece of tax legislation. And I hope it's just the start of more and more tax cuts.

(CROSSTALK)

HUNT: ... Bob.

O'BEIRNE: ... there is a huge a coalition of businesses, Al, who are lobbying for this tax cut, disagreeing with those liberal economists you're talking about.

HUNT: (UNINTELLIGIBLE) liberal economists, Paul Volcker?

SHIELDS: I just say, (UNINTELLIGIBLE) closing thought, you've got to control yourself, because people get an idea that you really care about this drek. They really would...

(CROSSTALK)

SHIELDS: ... oh, boy, I guess, (UNINTELLIGIBLE) you'd almost think it was personal.

THE GANG of five will be back with a CAPITAL Classic. What did we say after the last war with Iraq 12 years ago?

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

A little more than 12 years ago, the first Gulf War ended with Saddam Hussein defeated but still in power. Your CAPITAL GANG discussed the situation on March 16, 1991. Our guest was Republican Congressman Henry Hyde of Illinois.

(BEGIN VIDEO CLIP, March 16, 1991)

PAT BUCHANAN, CAPITAL GANG: Is the Middle East as far away as ever from the stability that was one goal of Mr. Bush's war policy, Mark Shields?

SHIELDS: Yes, it is, Pat. What we don't want in Iraq is obvious. We don't want a pro-Shi'ite, a Shi'ite pro-Iranian government, we don't want Saddam Hussein. We seem to want a more manageable military dictatorship, and I don't even know if that is achievable.

REP. HENRY HYDE (R), ILLINOIS: You have a terrible neighborhood with Iran and Syria being the stable countries, and Iraq falling apart. The Kurds, the Shi'as, mischief all over the place.

HUNT: We're telling these people to rise up and throw out Saddam, and they do it, and they get gassed and bombed, and, you know, we're not going to come to their aid. So it bothers me.

NOVAK: The Israelis must really get heartworm seeing President Bush -- I'm sorry, Secretary of State Baker, sitting there with Hafez al-Assad, because the one thing they didn't want to have this war end with suddenly the Americans and the Syrians buddy-buddy, because I think the (UNINTELLIGIBLE), the Israelis want to make Syria as much of a demon, and make Assad as much of a demon as they made Saddam.

(END VIDEO CLIP)

SHIELDS: Al Hunt, will history be kinder to President George W. Bush than to his father for having gone all the way to Baghdad in 2003?

HUNT: Well, Mark, let's not forget, that's not what the alliance bought into back in 1991, go to Baghdad. In hindsight, clearly we would...

SHIELDS: Drive him out of Kuwait.

HUNT: ... clearly we would have been better off if we had.

But I do think that the one thing that was indefensible that that first administration, first Bush administration did was when they encouraged the Kurds and the Shi'ites to rise up, and then when they did, then abandoned them. We're still paying a price for that.

SHIELDS: Kate O'Beirne?

O'BEIRNE: I think, I think we saw that, Al, when the first place to welcome American troops was in Baghdad who had not risen up and been brutally, brutally crushed by Saddam last time around.

Last time, in '91, the international community had a veto on the use of American military power. This President Bush has made it clear the international community will not have any such veto, when it's in our own national security interests.

SHIELDS: Bob Novak.

NOVAK: Well, I really believe that what I said before, about the Israelis not wanting to have the Syrian government and the United States too close. That's the next step, isn't it, isn't it, Kate? That's the next target.

O'BEIRNE: Well, I think Syria, I think Syria's done a good job of making itself a demon by being the international capital for international terrorism. They don't need help from any -- the Israelis or anybody else, Bob.

SHIELDS: Margaret, 12 years ago, the show wasn't graced with your presence. Your reaction to...

CARLSON: History will be kind to this current commander in chief if he brings better peace to Afghanistan than there is there now. The brother of Hamid Karzai warned that Afghanistan is falling back into the hands of warlords because it's benign neglect at best going on in Afghanistan.

And if...

NOVAK: Is it just a little problem in running the whole world? Is that a problem?

CARLSON: Well, you can't go...

NOVAK: Maybe, maybe?

CARLSON: ... and topple a regime and not put something in its place.

SHIELDS: To support Margaret Carlson, "The Weekly Standard" this week told its readers that this president's place in history will be determined in large part by whether, in fact, a viable, strong democracy emerges in Iraq. So that's -- it's big time, big casino.

Coming up in the second half of CAPITAL GANG, our "Newsmaker of the Week" is Clinton national security adviser Samuel Berger, talking about Iran. Beyond the Beltway looks at Syria with CNN's Sheila MacVicar, directing direct -- reporting directly from Damascus. And our Outrage of the Week. That's all after these urgent messages.

(COMMERCIAL BREAK)

(NEWSBREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG. SHIELDS: Welcome back to the second half of CAPITAL GANG. I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Our "Newsmaker of the Week" is international affairs expert Samuel Berger.

Samuel Berger, age 57, residence Washington, D.C., religion Jewish. Graduate Cornell University, Harvard Law School.

Deputy director of State Department policy planning in the Carter administration, deputy national security adviser and later national security adviser in the Clinton administration. Currently chairman of Stonebridge International Global Strategic Advisers.

Earlier this week, Al Hunt sat down with Samuel Berger.

(BEGIN VIDEOTAPE)

HUNT: The underlying rationale for Iraq was that we didn't want a dangerous hegemonic power threatening the region. Saddam is gone. But could Iran, also in George Bush's axis of evil, potentially pose such a threat now?

SAMUEL BERGER, FORMER NATIONAL SECURITY ADVISER: Well, there's certainly aspects of what Iran is engaged in that are dangerous. The hard-line clerics that control that government are supporting terrorist groups, Hamas, Hezbollah, Islamic Jihad, pursuing a nuclear weapons program, probably more advanced than we thought.

The success in Iraq, Al, has created both great opportunities and great risks for us in the region. And Iran's a very good example. On the one hand, you have power still in the hands of these hard-line clerics. On the other hand, you have the vast majority of the Iranian people, who have clearly demonstrated the desire for change, for a better life, for better relations with the United States.

And the challenge here, it seems to me, is to see whether we can align ourselves with the internal physics of change in Iran without being in their face and creating a backlash.

HUNT: Iranian experts tell me that when they go there, they hear even from non-radicals, America supported the still-despised shah, America supported Saddam in the Iran-Iraq war, America shot down an Iranian airplane, and America supports a trade embargo that hurts us.

Could we or should we do anything to make amends for those policies?

BERGER: I think the most important thing we could do is to offer a dialogue in which everything is on the table, including all those issues. It's very interesting that former president Rafsanjani, who has managed to kind of go between these two camps, said this week two things, I think, of interest. Number one, he raised the -- entertained the possibility of relationship with the United States, something that never before said by figures such as him, and said perhaps we lost up, but we missed opportunities in the past, I think, referring to various initiatives undertaken during the Clinton administration to try to open up a dialogue. So...

HUNT: Do you think it's beyond the pale, then, that if Iraq does not cooperate on their development of nuclear weapons, that the Israelis would -- will conclude, as they did 20 years ago in Baghdad, that we have to take out that facility?

BERGER: You mean the Iranian. I suppose that every possibility has got to be entertained, and that is, it seems to me -- Again, let's remember what's happened in the last three weeks. An earthquake took place in this region with the overthrow or the fall of Saddam Hussein. That's going to change the internal dynamic of every one of these countries.

Let's take advantage of that. Let's not be overreaching, as some have suggested...

HUNT: Well, if the reformers, which you alluded to earlier, and probably the vast majority of the people were to obtain more power in Iran, the forces behind the popularly elected President Khatami over the extremist religious leader, Khameini, would the result, do you think, be a pro-Western Iran and an Iran, at least, more friendly to Israel?

BERGER: Well, there's a thing now in Iran, is that while the government is rabidly anti-American, the people are quite pro- American, so the reverse of Saudi Arabia, where the government is pro- American and the people are anti-American.

HUNT: Right. What's the biggest mistake we could make, as far as dealing with Iran in the next year or so?

BERGER: We would make a mistake that if we were overtly threatening to Iran, and seemed to be aggressively seeking regime change. So I think we have to be careful that while we seek to align ourselves with the forces of change and with the internal dynamic, that we be not so heavy-handed that we create a backlash and drive Iran to take a position in Iraq that would be -- make it very difficult for us to succeed in Iraq.

(END VIDEOTAPE)

SHIELDS: Al Hunt, did you get the impression that Sandy Berger really thinks now is the urgent time for the United States to deal with Iran?

HUNT: Well, he certainly thinks we ought to make overtures. There are, I think, really progressive forces in Iran. Unfortunately, their religious extremists still control too much. But Mark, this is the most in country in the region. It's the most in -- it's the biggest country there, far more important than Syria. Over the long run, what happens in the region will depend a lot on our relations with Iran.

SHIELDS: Margaret? CARLSON: I don't mean to be telling Secretary of State Colin Powell just to stay in an airplane, but I think a little shuttle diplomacy would be good with Iran. I mean, he's busy in Syria, and North Korea, I mean, these dialogues have to get started and keep going.

SHIELDS: Bob Novak.

NOVAK: I think it's interesting that Iran is more violently anti-Israeli than Syria is, and that we're very bellicose against Syria, and not so bellicose against Iran, because Iran is stronger.

Of course Sandy Berger is right, we should negotiate with them. But he says the Iranians are pro-American. I think they will be unless we start bombing them and threaten to the bomb them. So I agree with Mr. Berger on that.

SHIELDS: Kate, (UNINTELLIGIBLE) go ahead.

O'BEIRNE: Of course we should align ourselves with the pro- democracy forces in Iran. And regime change is exactly what the Iranians want, and it's no coincidence that when we're opposed to these repressive regimes, as we are to Iran's, the people are with us, and when we buck up their repressive regimes, like in Saudi Arabia, the people hate Americans.

SHIELDS: Now, what does that mean about China, Kate?

O'BEIRNE: We're not bucking up China's regime like we are Saudi Arabia's and Egypt's and these other repressive regimes in the area...

SHIELDS: (UNINTELLIGIBLE)...

O'BEIRNE: ... where the people, of course, are anti-American, as opposed to in Iran, where they see us as on their side, the Iranian people.

NOVAK: I'm absolutely baffled where you and your friends at the Pentagon are going. Do you want to have an Iranian-type regime in -- by elected, election, in Egypt and Saudi Arabia?

O'BEIRNE: I -- an Iranian-type regime like -- as currently, like the Iranian people no longer want? The example -- Iraq could be example in the future. The example we already have in Iran is, they've been living under these kind of repressive regimes for over 20 years, and the people have had it.

SHIELDS: Last word, Kate O'Beirne. Next on CAPITAL GANG, Beyond the Beltway looks at the rising tension between the U.S. and Syria with CNN's Sheila MacVicar, live from Damascus.

(COMMERCIAL BREAK)

SHIELDS: Already you can see the crowds assembling at Fort Bliss, Texas, there in western Texas, a great military installation of more than 1.1 million acres. And they are gathered for one purpose, the seven POWs who are flying on their way back right now to Fort Bliss from Germany where they were hospitalized, and they are going to get a heroes' welcome in west Texas later tonight. CNN will bring it to you live.

Welcome back.

Joining us now from Damascus is CNN senior international correspondent Sheila MacVicar.

Sheila, in Damascus this weekend, we know that Secretary of State Colin Powell is on his way there. He surprised even his associates by making that trip. What do the Syrians expect from this visit?

SHEILA MACVICAR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Listen, you could have heard the sigh of relief all over town when the secretary of state announced that he was coming here. The question is when. We hear it's not going to be this week but perhaps two weeks, perhaps more, depending upon what the Palestinians do with their cabinet.

And that means, how is the U.S. administration going to keep the pressure on this place? And that's what's concerning certainly the government here now.

SHIELDS: Bob Novak.

NOVAK: Sheila, was there apprehension in Damascus after all this tough talk from Washington that actually there might be a -- that Syria might be next as a military target of the coalition?

MACVICAR: Well, it seemed fairly clear to everybody that Syria was next in some way. The question of military target, not military target. They were getting hit on a daily basis, sometimes, you know, last Sunday they had the triple whammy from the administration. They had the president, the secretary of state, the secretary of defense, all of them coming out and beating up on the Syrians.

You can imagine the Syrians. They're sitting there going, Whoa, what's this about?

So there's a lot of confusion, a tremendous amount of frustration, and a real desire to resume some kind of diplomatic dialogue and not megaphone politics.

SHIELDS: Margaret Carlson.

CARLSON: Sheila, do you know how many of the deck of cards got into Syria and are being harbored there? And whether the difficulty now in getting visas, I understand that Syria's not going to give out visas any longer, is that going to work to keep the Iraqi leadership from escaping?

MACVICAR: Well, first off, the Syrians have sealed their border, and they seem to have done that pretty effectively. You know, Abu Abbas, Watban al-Barzani, Saddam's half-brother, they were all caught on the Iraqi side of the border, as a Syrian official pointed out to me.

The question of how many on the deck of cards are in Syria, the answer is, maybe one. There is one name the U.S. administration has come up with. There is someone else who is most likely here or was most likely here, that's Farouk Hijazi, Iraq's former ambassador to Tunisia.

And the reason why the U.S. thinks that he was here is because they asked the Tunisians, their very close ally, for Mr. Hijazi. He is wanted by the U.S. in association with his believed role in the attempted plot to kill the former president Bush in 1993. And the Tunisians said no. The U.S. knows that he got in a plane, that they believe he came to Damascus.

And whether he was let in, whether he's still here, whether he's gone somewhere else, that's another question.

But I think that that's an example of how the administration has very successfully turned the tables on the Syrians. It's not really about who might be here, but it's really about who might be thinking about coming here. It's really a warning to the Syrians, and a warning delivered repeatedly that in many ways confused them.

It didn't really give them a chance to respond in any kind of private way, to think about what to do next. And this is a regime that needs time.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Well, the -- this administration also reacted to some actions that Syria took. Unlike other Arab countries, Syria actively backed Saddam, and the Defense Department, of course, called them on shipping military supplies to Saddam and on providing safe passage and incurring -- encouraging jihadists who wanted to join the fight against American troops into Iraq.

What was President Assad thinking by so provoking the United States?

MACVICAR: Well, I think that that's a really -- an inside-the- Beltway view of what went on here. Listen, this cross-border military traffic has been going on for at least two years. The U.S. has been raising it quietly with the Syrians for more than a year. It's not government to government, it's private companies who are engaging in kind of, if you will, Mafioso business. It's not pleasant, it's not nice, but that was what was going on.

There's no suggestion that the regime here supported the regime of Saddam Hussein. These are people who had their relations in the deep freeze for 20 years. And the Syrians will give you chapter and verse on why exactly they hated Saddam Hussein and hated his regime.

It's only in the last two years that that relationship has in any way begun to thaw out.

As for the people who are described as jihadists... O'BEIRNE: But the (UNINTELLIGIBLE)...

MACVICAR: ... some of them clearly were. But there's also a different perspective, and that the war in Iraq, from the perspective of some Arabs, was a wrong war, was an unjust war. And people were going to fight not for Saddam Hussein, but in defense of another Arab homeland.

And that's a big difference.

SHIELDS: Al Hunt.

HUNT: Sheila, President Assad's father, the long-time ruler, was considered one of the canniest of world leaders. Lot of people didn't think he was a very good guy, but he was incredibly shrewd. How does the son stack up with the -- as opposed to the father, and would the father be handling this any differently?

MACVICAR: You know, things are very difficult. I think we all understand that the central issue in the Middle East, notwithstanding Iraq, is the larger question of peace between Israel and all of its Arab neighbors.

In large measure, when Bashar al-Assad became president, there was reason to believe that that was attainable and that that was very close. We've seen what happened since the year 2000 when the new intifada began between Palestinians and Israelis. Things have become much more difficult.

Is this president as experienced as his father was after years of running this place at a very difficult time? The answer is no. But you have to remember, Hafez al-Assad made some dramatic mistakes in his early years. This president is moving more cautiously. He has still many of the advisers of his father around him. In many ways, some people complain that that's one of the problems here between the new guard, the old guard, the reformists, the liberators, the liberationists, all of those things combining together.

Is this president treading a difficult course? Yes, it is difficult. Does he face very difficult questions? We all know that he faces very difficult questions, and that those questions are going to have to be answered very soon.

SHIELDS: Sheila MacVicar, thank you so much for being with us and for answering our questions.

THE GANG will be back with the "Outrages of the Week."

(COMMERCIAL BREAK)

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

After American Airlines' top management demanded concessions from workers to keep their jobs and to prevent the airline from going bankrupt, unions representing the pilots, the flight attendants, and the transport workers proved their loyalty to American by voting to accept wage cuts totaling $1.6 billion.

Then word leaked out that 45 American top executives had millions guaranteed in bonuses and retirement even if the airline went out of business, leaving pilots and flight attendants and the other workers out in the cold.

Loyalty is a two-way street, American.

Bob Novak.

NOVAK: Remember Miguel Estrada? He's the brilliant young Washington lawyer nominated for the D.C. Court of Appeals. Remember Priscilla Owen? She's the distinguished Texas Supreme Court justice nominated for the Ninth Circuit. They would both be confirmed if Democrats would let them come to a vote in the Senate. But they won't let them come to a vote.

The outrage is that many Republican senators are giving up. In the weekly GOP members, old bulls say, Let's stop wasting our time on this. It does distract them from a major senatorial goal of pork barrel spending.

SHIELDS: Margaret Carlson.

CARLSON: Mark, amid the scandals tainting D.C. Mayor Anthony Williams comes former Mayor Sharon Pratt, to whom he's just given $236,000 out of the city's scarce terrorism funds to do -- well, not very much. Pratt just has to talk to people about how to get more terrorism funds for the city.

If unsuccessful in doing that, she can talk another six months and collect another quarter million dollars.

You'd think Williams was the mayor of a safe city with all the firefighters and police we need, the way he's throwing money to a crony.

SHIELDS: Kate O'Beirne.

O'BEIRNE: The latest handiwork of the U.N., the outfit that claims it can give moral legitimacy to reconstruction in Iraq, is the morally bankrupt decisions of its Human Rights Commission, now chaired by Libya. The commission refused to monitor abuses in Zimbabwe, ignored the recent brutal crackdown on dissidents in Cuba, and ended the monitoring of Sudan, where starvation and slavery remain government policy.

As long as the worst abusers of human rights manipulate the yearly charade in Geneva, the U.S. should refuse to play along.

SHIELDS: Al Hunt.

HUNT: Mark, the United States Naval Academy, West Point, and the Air Force Academy are far better academic institutions than they were 30 years ago, are producing better officers, and have 10 times higher percentage of Hispanics and African-Americans due to an aggressive affirmative action program.

This, as Solicitor General Ted Olsen was forced to admit to the Supreme Court, might be in danger if the Bush administration's politically driven effort to abolish affirmative action succeeds. To have fewer lawyers, doctors, and military officers is to turn the clock back to the not-so-good old days.

SHIELDS: This is Mark Shields saying goodbye for THE CAPITAL GANG.

Coming up at 8:00 p.m., "SATURDAY EVENING" with Anderson Cooper takes a look at the Laci Peterson mystery. At 9:00, "LARRY KING WEEKEND." Larry and his guests talk about the return of the POWs. And at 10:00 p.m., CNN "SATURDAY EVENING."

And if you missed any part of THE CAPITAL GANG, do not despair. Tune in tonight at 1:00 a.m. and see all that you missed.

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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