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CNN CAPITAL GANG

Israel Launches Attacks in Gaza Strip; Medicare Revision Makes Progress in Congress; Hillary Clinton Hits Talk Show Circuit

Aired June 14, 2003 - 19:00   ET

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

ANNOUNCER: From Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG.

I'm Mark Shields with Al Hunt, Robert Novak, and Margaret Carlson.

Our guest is Senate majority whip Mitch McConnell of Kentucky.

Thank you for coming in, Mitch.

SEN. MITCH MCCONNELL (R-KY), MAJORITY WHIP: Glad to be here.

SHIELDS: Good to have you.

After Palestinian terrorists killed four Israeli soldiers, Israel launched two helicopter attacks in the Gaza Strip, one aimed at a senior Hamas leader.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm concerned that the attacks will make it more difficult for the Palestinian leadership to fight of terrorist attacks.

(END VIDEO CLIP)

SHIELDS: A suicide bombing in Jerusalem by Hamas left 17 Israelis and the attacker dead.

(BEGIN VIDEO CLIPS)

YASSER ABED RABBO, PALESTINIAN MINISTER: They want to drown their old map in a sea of blood.

SILVAN SHALOM, ISRAELI FOREIGN MINISTER: This government will not march or walk in two tracks in the same time in parallel. I mean, terror by day and negotiation by night.

BUSH: It is clear there are people in the Middle East who hate peace.

(END VIDEO CLIPS)

SHIELDS: With Israel retaliating with helicopter attacks, is the road map to peace now dead?

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: The road map remains the way forward to a peace deal between the Palestinians and the Israelis.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, is Secretary Colin Powell right and convincing about the road map?

MARGARET CARLSON, CAPITAL GANG: Well, the road map is what there is, so he has to say that. And there -- he's going to a meeting on June 22 at which they'll do what they can to shore it up.

Problem, President Bush gave a rare rebuke to Ariel Sharon for the latest violence because he must buck up Mahmoud Abbas in his position, which Bush did at the Mideast summit.

Without that, there's just no hope of going forward, because, you know, Arafat is sidelined at the moment. If the Palestinians that he can't control the violence in Palestine by being at least given a chance by Sharon to prove that the Palestinians can be controlled, the road map could be dead.

SHIELDS: Mitch McConnell, the president sort of stopped and started this week. I mean, he first condemned, really chastened, anyway, the Israeli response, and then he backed off and did not do that after the subsequent retaliation.

MCCONNELL: The most intractable dispute in the world. Every president since Harry Truman has used up political capital trying to solve this problem. This president's made a decision to do the same.

This is not easy, and I wouldn't want to handicap the chances of success at some point down the road.

SHIELDS: Bob Novak.

ROBERT NOVAK, CAPITAL GANG: I thought this was a very great step forward by the president...

SHIELDS: You said that on the air, yes.

NOVAK: ... (UNINTELLIGIBLE). But, I mean, since we've been on the air...

SHIELDS: Oh, OK.

NOVAK: ... to come out against the Israelis when they tried to assassinate the Hamas leader, that took a lot of guts, particularly when the Republican Party is so anxious to get the Jewish vote in the next election. He did back a little bit away from it when the Hamas, who wants thing to fail, had this terrible suicide bombing.

But the difference is that Hamas is a renegade group, that they do not run the Palestinian Authority, while it's the Israeli government that all over, all over the next last few days have been having American helicopter gunships killing, burning and children and civilians.

So this is a -- this is really a problem. And the president -- only the -- you're right, Margaret, only the president can do it. But I don't believe that Sharon in the end can defy the president if the president stands firm.

SHIELDS: Al Hunt.

AL HUNT, CAPITAL GANG: Well, this is the Middle East, so nobody should have been surprised by the events of this week, and the vicious cycle of violence. But I think Secretary Powell is right. The road map is the only hope for peace.

There are two imponderables, Mark. First of all, as we -- as has been mentioned, Sharon. Now, Sharon was doing what is absolutely natural. When you get whacked, you ought to whack back. That's what we did after 9/11.

The problem, however, is that as Margaret said, that if Mahmoud Abbas isn't given some space -- how much support he has among the Palestinians is a very dicey question. If he isn't given some space, he's not going to be able to deliver on anything.

The other imponderable is, is George Bush really in this for the long run? Is there really a long-run commitment? Is he really going to risk political capital?

I hope that Mitch is right, that he is. He's certainly been good the last couple weeks. But I noticed that one of the guy -- a guy named Clint Lippert (ph), who until March was the head of the Israeli- Palestinian (UNINTELLIGIBLE) for the Bush National Security Council, said this week, "The White House went into this thinking they were serious, but they had no idea what being serious would mean."

They're (UNINTELLIGIBLE).

SHIELDS: Mitch McConnell, your own sense, politically. You're a regularly respected political operative as well as being a United States senator. I mean, what are the political reality here? We're heading into a presidential reelection year. How much, how much capital will the president spend in trying to bring peace to that (UNINTELLIGIBLE)...

MCCONNELL: I think he'll spend a lot of capital on it, and I might surprise you when I say I don't think there's a downside to this. Every president has invested capital, regardless of party, in trying to solve this dispute. If this president is unsuccessful, it won't distinguish him from all the rest of the presidents who tried to solve this dispute and failed, many of whom were reelected.

So I don't think that the president in any way endangers his prospects for reelection by trying to do whatever he can to bring these two sides together. CARLSON: You have to wonder why he neglected it for so long, because Secretary Powell has always wanted high-level involvement in bringing about Middle East...

NOVAK: But he's there now...

CARLSON: ... peace.

NOVAK: ... he's there now. I'd like to disagree with Al on something. Al posits Prime Minister Sharon as saying, Gee, he hit me, I'm going to hit back, and that's natural. Al, I think you know, Prime Minister Sharon does not want a Palestinian state. That's music to his ears when the Hamas is unreasonable. That means he can keep this 100-year war going. He's talked about 100 years' war.

Do you really think he wants a Palestinian state, under any conditions?

HUNT: I'm not a Sharon fan, and I'm -- I have great concerns about this. I know that Arafat and Hamas don't want peace, and I think that every time Sharon hits back, or every time that cycle of violence escalates, it plays right into their hands. And I'm afraid that Sharon sometimes plays too much to his own right wing.

NOVAK: That's -- I (UNINTELLIGIBLE).

CARLSON: Yes. But Sharon doesn't want peace, but only Bush can make him see that it's in his interest.

SHIELDS: We only have a few seconds, but how important was the symbolic dismantling that the -- at the settlement camp, at the Israeli settlement on the West Bank? I mean, was that by -- earlier in the week, by the Sharon, was that, was that a...

NOVAK: Symbolic.

SHIELDS: Just symbolic?

MCCONNELL: Oh, I think it's important. That's one of the conditions that ought to be met along the road map, and the Israelis were indicating they were willing to do it.

Secondly, when the Israelis attack, they're always responding to an attack on them. I don't see the moral equivalency here that Bob apparently (UNINTELLIGIBLE)...

NOVAK: They're killing women and children, though...

CARLSON: Yes. Yes.

NOVAK: ... Mitch.

MCCONNELL: And no Israeli women and children have ever been...

CARLSON: But this dismantling...

MCCONNELL: ... (UNINTELLIGIBLE)...

NOVAK: No question they are. (UNINTELLIGIBLE) on both sides.

MCCONNELL: But I don't think the Israelis target women and children.

CARLSON: This is...

NOVAK: They don't care, they don't care about them being killed, though. I mean, they obviously don't, because they didn't kill.

CARLSON: I -- the dismantling of one, of one settlement is a good symbol, and it is a result of President Bush's personal involvement.

SHIELDS: Last word, Margaret Carlson.

Mitch McConnell and THE GANG will be back with whether the time has finally come for a prescription drug bill under Medicare.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Medicare revision to cover prescription drugs made progress with bipartisan agreement and White House support. A bill to get generic drugs on store shelves won unanimous support from the Senate Health Committee, and this endorsement from Democratic Senator Edward M. Kennedy of Massachusetts.

Quote, "I expect the legislation we passed today to be a key part of those Medicare reforms, bringing down the cost of prescription drugs and stretching Medicare dollars to meet more needs for more seniors," end quote.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think it's an important addition to the resolution of a horrific problem in America today...

(END VIDEO CLIP)

SHIELDS: But not everybody was happy, as the Senate Finance Committee approved its Medicare bill.

(BEGIN VIDEO CLIP)

SEN. DON NICKLES (R), BUDGET CHAIRMAN: We have a $13.3 trillion unfunded liability on Medicare today. This bill's going to make it a lot worse.

(END VIDEO CLIP)

SHIELDS: Al Hunt, after so many years, does it look like prescription coverage drugs is in final sight? HUNT: It is, Mark, and it's a good time for seniors. This isn't everything that people like Ted Kennedy wanted, but it's a very important first step.

And it does not dismantle Medicare, as some people would like. I think George Bush will get political credit for this when he signs it, but I also think that the idea that that then takes this issue off the table is wrong, because there's lots of things we can build on this, as they say, as where -- when you go.

This bill has a great start, but there's some gaps. For instance, it pays about half the first $4,500, then for $3,000, if someone's really sick, they got to pay all the drugs themselves. There ought to be motions to try to rectify that.

For instance, it freezes wheelchair and oxygen expenses. There's no reason that should happen. And Mark, it takes effect in 2006. Well, the argument we just heard on the tax cut was, why take effect later if you take effect now? Let's have it take effect now.

And finally, I would suggest, if cost is a problem, let's sunset it after about eight years, and then we can spend more and then see if it works or not.

SHIELDS: Boy, I'll tell you, Bob, Al makes a hell of a case, doesn't he?

NOVAK: Be of good cheer, Al, this is, this is a big, long step towards socialized medicine. Number one, it's a new, a new entitlement.

HUNT: It is.

NOVAK: A big new entitlement. The thing that I just discovered this week is this thing coming out of the Finance Committee has immediate price controls at 85 percent of the market price. It's (UNINTELLIGIBLE) -- it's -- they're having price controls. It's going to reduce the amount of research by the pharmaceutical companies, and it's going to mean a much poorer health -- quality of health care down the line.

And I guarantee you that, Mitch, this is just the beginning. Teddy Kennedy, when he's smiling, you should be crying, because he's got a bigger agenda ahead.

SHIELDS: Now, Mitch, Mitch...

CARLSON: Are you crying?

SHIELDS: ... I have to say, Democrats I've talked to would not say for attribution, but they were grumbling, because when Senator Kennedy endorsed it, it basically gave, and the president's support, gave it a momentum that made it difficult for Democrats to oppose.

MCCONNELL: Here's the politics of this. If you watch the Democratic candidates for president, you'll notice that this year, they've all been talking about the problems of the uninsured. Why? Because they believe that the prescription drug issue is coming out of the issue box and into the accomplishment box.

You can sort of overdose on what the details are of the Finance Committee proposal, but the point is this. This is a work in progress. It's going to happen. It's going to happen on a bipartisan basis. Kennedy realized that, and he didn't want to be completely out of it by opposing it.

There were enough Democrats who were going to support a proposal this year to make it a reality. And so I think Ted thought the best way to have some impact on the final product was to embrace it, at least to some extent.

SHIELDS: Now, Margaret, Bob Novak does make a good point, though. Ten years ago, when this was included in the Clinton plan, my goodness gracious, it was considered to be socialized medicine, an absolutely encroachment upon a great American industry, the pharmaceuticals.

Now the pharmaceuticals are...

CARLSON: They're...

SHIELDS: ... (UNINTELLIGIBLE)...

CARLSON: ... (UNINTELLIGIBLE), yes, yes.

SHIELDS: They're (UNINTELLIGIBLE).

CARLSON: Yes, they're in there, asking for it. I mean, the -- everybody's declaring victory here, Ted Kennedy, Bush. I don't see you crying. Medicare is not going to wither on the vine, which Republicans wanted a few years back.

It's not tilting at the moment towards private plans, which Republicans would like, getting people out of Medicare and into profit-making plans. And it's not a perfect bill.

But when, you know, for instance, it's going to -- the Mayo Clinic and other clinics are no longer going to take nonsurgical cancer payment -- patients because the payments for the chemotherapy are too low in these, in these tradeoffs. And maybe it'll be fixed, and maybe it won't.

NOVAK: You know, what...

CARLSON: But, you know, Ted Kennedy and George Bush did this once before. I'm sorry, I don't mean to...

(CROSSTALK)

CARLSON: You know, they...

HUNT: (UNINTELLIGIBLE) resource. CARLSON: You know, Ted Kennedy puts his arm around George Bush, and they claim they've got an education bill. They put their arms around each other, they've got a...

NOVAK: Well, they did, (UNINTELLIGIBLE)...

CARLSON: ... prescription drug bill.

NOVAK: ... they -- and then, you know...

CARLSON: Yes.

NOVAK: ... and they -- and, you know, the question I had, Mitch, is, what good is this Republican Senate? They coupled to Blanche Lincoln on giving tax cuts to people who don't pay taxes. They can't confirm judges. What good is having a Republican control?

CARLSON: What good are you, Mitch? Yes.

SHIELDS: Yes, Mitch?

CARLSON: Yes.

MCCONNELL: I'm not sure I have time to answer.

SHIELDS: No, absolutely.

MCCONNELL: Yes. But politically, we fought this issue to a standstill in the last two elections. The Democrats realized there was no way they were going to beat us on it. And so they rolled over, and we're going to have a bipartisan accomplishment.

Bob, I don't think it's going to be as bad a proposal as you do. It is going to introduce managed care into Medicare. And I think in a way in which it will -- a number of participants will be (UNINTELLIGIBLE) -- be encouraged...

NOVAK: Through price controls, right?

MCCONNELL: ... to join the PPO. That remains to be seen.

CARLSON: (UNINTELLIGIBLE), well...

HUNT: Can I just say, this is a Ted Kennedy bill. He didn't reluctantly accept this. This is what he's been fighting for for 10 or 12 years. Bob Novak is absolutely right...

NOVAK: Price controls.

HUNT: ... on that score. It is a great bill. And I want to say this too, 40 years ago, when we first enacted Medicare, the Bob Novaks of the world said, It's socialized medicine, it will destroy in the -- American medicine and health care today, it will remain the leader in the world. And I'm sorry, Bob, you were wrong then, and you're wrong today.

(CROSSTALK)

NOVAK: Somebody going to, is somebody going...

CARLSON: Right. (UNINTELLIGIBLE)...

NOVAK: ... to tell me that this is not a price control bill?

CARLSON: No.

HUNT: Certainly, I hope Medicare does bring (UNINTELLIGIBLE).

NOVAK: You like price controls.

HUNT: I -- no, I like...

SHIELDS: Price stability (UNINTELLIGIBLE)...

HUNT: ... I like...

SHIELDS: ... problem.

CARLSON: Mark, Secretary...

NOVAK: No, I'm talking about price controls.

CARLSON: Mark, Secretary Donna Shalala used to say she'd go around the country and seniors would say, Republican seniors, Keep government out of my Medicare.

SHIELDS: Yes.

CARLSON: It was such a good program, they didn't think government was in it. It's a great program, it works, it should not wither on the vine.

HUNT: And I want Bob Novak to get some benefits too.

SHIELDS: Last word, Al Hunt, kind, compassionate Al Hunt.

Next on CAPITAL GANG, what is Hillary doing on the talk show circuit?

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

As readers rushed to buy her memoir, Senator Hillary Clinton went on the TV talk circuit, saying how she had reacted to her husband's infidelity.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), AUTHOR, "LIVING HISTORY": I was, as I say in the book, ready to wring his neck. I was so upset and angry with him, very disappointed. And yet at the same time, he was my president. (END VIDEO CLIP)

SHIELDS: But the former first lady did not tell everything.

(BEGIN VIDEO CLIP)

CLINTON: I have talked a lot in this book about how I feel, but I also believe in the continuing right of every person to have a zone of privacy.

(END VIDEO CLIP)

SHIELDS: And what about that vast right-wing conspiracy theory?

(BEGIN VIDEO CLIP, ABC)

CLINTON: I would say that there is a very well-financed right- wing network of people -- it's not really a conspiracy, because it's pretty much out in the light of day -- that was after his presidency from the very beginning...

(END VIDEO CLIP)

SHIELDS: Bob Novak, you're a great devotee of the free market. Is this just about selling books?

NOVAK: Well, it's a lot selling books. Hillary has never been averse to making money any way she can. But beyond that, people around her tell me that this is a matter of trying to inoculate herself on questions that she's going to be asked if she ever runs for president, or when she runs for president, say, in 2008...

(INTERRUPTED FOR CNN COVERAGE OF LIVE EVENT)

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Nine years ago this week, ex-football star O.J. Simpson was arrested and charged for the murder of his former wife and her friend after a long, low-speed police chase.

On June 18, 1994, THE CAPITAL GANG discussed the arrest and the public reaction to it. Our guest was former secretary of education William Bennett.

(BEGIN VIDEO CLIP, June 18, 1994)

SHIELDS: Al Hunt, why, when a man is charged with a murder of the mother of his children and another human being, did huge crowds in southern California gather and cheer, "Go, O.J."?

HUNT: Mark, it made me sick, frankly. I suppose the explanation is that we have almost a romantic reverence for heroes...

WILLIAM BENNETT, EMPOWER AMERICA: But he's not a hero. He's a celebrity. He was a football star. And sometimes we confuse, as I think was going on here, celebrity with significance, with meaning.

NOVAK: And if you listen to the talk shows and the show -- the calls coming in on the radio, on TV, on poor O.J., and I believe poor O.J., and let's have a fair trial, the attitude we're showing here is not reflected in an awful lot of people, and that worries me.

(CROSSTALK)

HUNT: I think Bill's right, it's only going to get worse.

CARLSON: You know, before it is over, he will be a victim. He will be made into a victim by the media the way Eric and Lyle Menendez and anyone who commits a crime has 100 excuses, which appeal to this mentality.

(END VIDEO CLIP)

SHIELDS: Al Hunt, did our own Margaret Carlson uncannily foresee the acquittal of O.J. Simpson?

HUNT: Well, of course she was right, Mark. But when you have Margaret's record of prescience, I'm not sure I'd use the word uncanny. I've just been -- while Bob was engrossed in Hillary's book, I've been once again going through my second reading of the Margaret Carlson book. A remarkable record.

SHIELDS: Remarkable record.

Bob?

NOVAK: You know, when we were sitting here nine years ago, we were talking about how terrible it was these people who are sympathetic to him. I don't really think even Margaret thought there was going to be an acquittal. I mean, it would have looked like such an open-and-shut case. People were unhappy about it. It was still one of the most amazing trials of the century.

SHIELDS: Can you be humble, Margaret, and...

CARLSON: Oh, Bob, why do you have to rain on my parade?

NOVAK: Because that's my job.

CARLSON: I see -- yes, rain is his job, storm.

SHIELDS: (UNINTELLIGIBLE).

CARLSON: You know, the good thing here is that O.J. Simpson has faded from sight. He's still looking for the real killers, but out of range. He has -- his celebrity has dropped down to nil.

SHIELDS: Of course, O.J. Simpson was acquitted in the criminal case, but then he was convicted of -- in a civil case, which proves in Los Angeles County, if you murder your wife, you can pay a very heavy fine.

HUNT: His acquittal also was helped by very inept prosecution.

SHIELDS: Yes, OK, thank you Attorney Hunt.

CARLSON: And (UNINTELLIGIBLE)...

SHIELDS: Next on CAPITAL GANG, "Beyond the Beltway," is the postwar in Iraq out of control? CNN correspondent Ben Wedeman joins us from Baghdad.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

President Bush on May 1 announced the end of major combat in Iraq. More than 30 U.S. troops have been killed by enemy action since that date.

(BEGIN VIDEO CLIPS)

PAUL BREMER, CHIEF CIVILIAN ADMINISTRATOR: We are certainly seeing some organized resistance. We do not see signs of central command and control direction in that resistance. These are groups that are organized, but they're small.

AHMED CHALABI, IRAQI NATIONAL CONGRESS: Saddam, I believe, is still alive, and he is still inside Iraq working.

There was a major military action today, and I believe that a U.S. Apache helicopter was shot down by forces who are working under Saddam's control.

(END VIDEO CLIP)

SHIELDS: We expected to be joined from Baghdad by CNN's Ben Wedeman, but he is not available, sadly, at this moment. So we're going to ask, I'm going to ask Bob Novak, is there any evidence, Bob, to back up Ahmed Chalabi's claim that there's a coordinated military operation now being run by Saddam Hussein?

NOVAK: Well, Jerry Bremer around the country said just the opposite, that it was not a -- there's no command and control, these are small groups. That would seem to be it. The idea of Saddam Hussein operating from some underground bunker and pushing buttons seems unlikely.

It really is not, to me, very surprising that in a country filled with all kinds of arms, filled with fedayeen black-clad fighters, filled with people who are resolute supporters of Saddam, that you're having small groups attacking the American troops.

But so I'm -- but I'm very skeptical about Chalabi's statement, and certainly it's not been confirmed by anybody in the U.S. establishment.

SHIELDS: Al Hunt, giving the devil his due, you've been a consistent critic of the failure to plan for the postwar period and the lack of execution since then. I mean, is this as serious as you reported?

HUNT: No, I think it is, and I think Bob is right, it's not surprising. The only thing that's surprising is, is how ill prepared we have been for this.

I think we have been as poorly prepared for the aftermath as we were magnificently prepared for the war. And I just think the great -- you know, we have this huge dilemma now. Do we send more forces in and make it more secure? At which point there clearly will be even more American casualties in the short term. Or do we start withdrawing forces and make it less secure and more chaos?

SHIELDS: And Margaret Carlson, if General Eric Shinseki, the man who actually had predicted the problems that we're now encountering...

NOVAK: Chief of staff of the Army.

SHIELDS: ... the chief of staff of the United States Army, retired this week, and...

CARLSON: With no fanfare.

SHIELDS: ... with no fanfare...

CARLSON: No gold watch.

SHIELDS: ... no gold watch, and no leading Defense Department civilian officials in attendance, and talked about arrogance as a major affliction of the United States leadership at this point.

CARLSON: Right. He was right. It -- a couple hundred thousand troops, maybe even more, to win the peace in Iraq.

You know, the fact that there was this looting, and Secretary Rumsfeld called it "untidiness" and what you expect when freedom strikes, at the time when soldiers are standing by as the lawlessness is going on, you say, Well, wait a minute, what were we expecting? It made no sense.

And you had to take out Garner and put in Jerry Bremer to bring at least an administration to bear.

Ahmed Chalabi is the least trustworthy person to speak on the subject of Saddam Hussein, it seems to me, because he wanted to get -- he was promised or it was hinted at that he would have power in postwar Iraq, by people within the Defense Department, which has not come to pass, because there are such objections to it.

And so he's not reliable on the subject of whether Hussein is calling any shorts (UNINTELLIGIBLE).

NOVAK: (UNINTELLIGIBLE) the whole situation with the Army and Secretary Rumsfeld goes along far beyond that, Iraq. It's a question of reform and (UNINTELLIGIBLE) artillery and a lot of things we're not going to discuss.

But Shinseki was made a lame duck for the last year that he was in there, and he was hit down the minute he said 200,000 troops.

But the problem that Al talks about, the little dilemma you have there, I'm not sure that putting in more and more troops is going to be, is going to be very helpful against the kind of opposition they're coming up against. Jerry Bremer says five- and six-man groups. We can put in a million troops and it isn't going to be...

CARLSON: Well, you need...

NOVAK: ... affect that.

SHIELDS: But while acknowledging that, you know, the political dilemma and the human crisis here, how much of a political problem it appears to be in Great Britain, will it be in the United States? This whole question of weapons of mass destruction, and the failure to come up with them now...

HUNT: Mark...

SHIELDS: ... eight weeks after the war.

HUNT: ... if it goes well, if it turns around, I think it is going to be a very small problem, no problem at all, perhaps, domestically. If it goes poorly over there, if we start losing...

SHIELDS: (UNINTELLIGIBLE) not find them?

HUNT: ... if we start losing, you know, four or five soldiers a week, then I think all sorts of things will start...

(CROSSTALK)

NOVAK: (UNINTELLIGIBLE), but that's...

CARLSON: So far, the general public does not seem to be worried about finding the weapons of mass destruction. But Al's right...

NOVAK: You know...

CARLSON: ... it's a calibrated situation.

NOVAK: ... I don't think that's a domestic political issue...

SHIELDS: You don't.

NOVAK: ... at all, weapons of mass destruction. What is a (UNINTELLIGIBLE) domestic political issue is, if you continue to have this -- a little guerrilla war going on, and it may be (UNINTELLIGIBLE) you get more and more losses. I don't -- I'm not saying that's going to happen.

But I think the political danger is more from the occupation than from the...

HUNT: No, I...

NOVAK: ... (UNINTELLIGIBLE)...

CARLSON: And, and...

HUNT: ... you're absolutely right, I agree with you totally in that. I -- the few high administration officials that I've talked to really, when you ask them, where is Saddam Hussein? Is he alive or dead? when they really honestly say, We don't know. That's really remarkable.

SHIELDS: Margaret.

CARLSON: Some of these troops, but what's needed partly is a military police to bring law and order to Baghdad and the other cities, not just to fight the guerrilla actions by remnants of Saddam Hussein's regime.

SHIELDS: I would just say this, though, on the weapons of mass destruction, without arguing with you. I think if there's any indication or any evidence to suggest that this was just trumped up and blown up to win popular support, because that was the convincing argument that was made on the part of the administration.

(CROSSTALK)

NOVAK: ... it wasn't, it wasn't...

CARLSON: Imminent...

NOVAK: ... no, no, no, no, no...

CARLSON: ... imminent threat, imminent threat.

SHIELDS: Imminent, imminent threat to the United States.

NOVAK: ... (UNINTELLIGIBLE) this is, this is not what we're talking about, but the weapons of mass destruction was to sell the U.N., not the American public. You didn't have to sell -- use weapons of mass destruction to sell the American public on this.

SHIELDS: I disagree. American public opinion was pretty divided...

NOVAK: (UNINTELLIGIBLE)...

SHIELDS: ... until Colin Powell, as Al pointed out...

CARLSON: Right, right.

SHIELDS: ... at the time, made that case.

CARLSON: The testimony, his testimony turned public opinion.

SHIELDS: Last word, Margaret Carlson.

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

(COMMERCIAL BREAK)

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

With Republican total political control in Washington, here is an example of your tax dollars at work.

The Web page of the Internal Revenue Service features this happy baby, up to his elbows in dollar bills, all because of the latest Bush tax cuts.

What the IRS Web site fails to mention is that because of the last three tax cuts by Mr. Bush, increased spending, and runaway federal debt, that unlucky little baby will now owe $22,347.07 as his own share of the increased public debt.

Bob Novak.

NOVAK: Cuban communist dictator Fidel Castro has responded to European criticism of his brutal treatment of political dissenters. The 76-year-old tyrant was present this week when thousands of Cubans ordered by the regime demonstrated outside the Spanish embassy in Havana, chanting, "Down with fascism!"

At the same time, his brother and designated successor, Raul Castro, led demonstrators outside the Italian embassy.

Maybe the Europeans are beginning to understand that Castro has no intention of ever permitting democracy or market reforms.

I wonder whether American liberals will ever learn.

SHIELDS: Margaret Carlson.

CARLSON: Mark, the head of Freddie Mac, David Glenn, his institution is now under federal investigation, was fired by his board for altering notebooks and evidence. Glenn's a big shot in Washington, donating large sums of government-subsidized funds to the Kennedy Center and other cultural institutions.

Despite the investigation, he and chairman Leland Brendsel stand to collect $30 million in severance pay.

Regulators, unite! Treasury Secretary John Snow, why aren't you outraged by this outrage?

SHIELDS: Al Hunt.

HUNT: Margaret's right.

House majority whip Roy Blunt tried to sneak a provision into last year's homeland security bill to benefit Philip Morris. This was done surreptitiously, for a nefarious special interest that gave over $100,000 in campaign contributions to Blunt.

Further, Blunt's son is a Philip Morris lobbyist, and the recently separated congressman has a personal relationship with a company lobbyist.

Most remarkable, however, is Mr. Blunt's explanation for this unsuccessful but shameful effort. It was part of the battle against terrorism.

Sure.

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

Coming up next, "CNN PRESENTS: Summer of Fire."

At 9:00 p.m., "LARRY KING WEEKEND" with Bill Clinton.

And at 10:00., the latest news on CNN.

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



Makes Progress in Congress; Hillary Clinton Hits Talk Show Circuit>


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