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CNN CAPITAL GANG

President Bush Forces Congress To Make All $87 Billion Grant For Iraq; Number Of Attacks On Americans In Iraq Has Doubled; Who Will Win Governor Election In Kentucky?

Aired November 1, 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 THE CAPITAL GANG. I'm Mark Shields, with the full GANG -- Al Hunt, Robert Novak, Kate O'Beirne and Margaret Carlson.

George W. Bush held the 10th press conference of his presidency.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I would say that the world is more peaceful and more free under my leadership, and America is more secure. And that will be the -- that will be the -- that will be how I will begin describing our foreign policy.

(END VIDEO CLIP)

SHIELDS: In the face of mounting casualties in Iraq, the president was questioned again about his victory statement aboard the USS Abraham Lincoln.

(BEGIN VIDEO CLIP)

BUSH: The "Mission Accomplished" sign of course was put up by the (UNINTELLIGIBLE) of the USS Abraham Lincoln, saying that their mission was accomplished, but my statement was a clear statement, basically recognizing that this phase of the war for Iraq was over, and there was a lot of dangerous work.

(END VIDEO CLIP)

SHIELDS: Congress complied with President Bush's insistence that it remove from the $87 billion emergency appropriation for Iraq a Senate-passed provision requiring partial repayment by the Iraqis.

On the economic front, it was announced that third quarter growth has soared to 7.2 percent, and the Dow Jones Industrial Average for the month of October closed 5.7 percent higher.

Al Hunt, is President Bush now flying high politically?

AL HUNT, CAPITAL GANG: Only when compared to the Democratic candidates, Mark. Look, the third quarter performance and the economy was fueled by tremendous stimulus, the tax cuts and higher defense spending, and the higher stock prices and fatter 401(k)s are undoubtedly good news for President Bush, but during that same period, almost 150,000 jobs were lost, a net loss of jobs. That's more important now. The administration says this is the beginning of the Bush boom. If they're right, and we have 7.2 growth for the next nine months, and if John Snow is right, and we add 200,000 jobs a month as he said, then the economy will be a real plus for George Bush.

I think it's more likely that it will be lucky to get about half of that growth and about half of that job gains, which will be a pretty mediocre performance.

As for the president denying that he was responsible for that banner during his "Top Gun" triumph, which has now soured somewhat, that really was (UNINTELLIGLE). The White House had to backtrack from that, but they said it really was the sailors' idea. Now, imagine, just imagine if Bill Clinton had said it was sailors returning from combat who are really responsible for that, not me.

SHIELDS: Yes, it was some boatman's mates (ph) idea, right, Bob Novak?

ROBERT NOVAK, CAPITAL GANG: Well, you know, the only people who care about that business about mission accomplished are left-wing radio talk show hosts, left-wing columnists, Democratic politicians, because they want to keep that issue up.

And you know, the people don't give a damn about that, Al. What they care about is the economy. And the entire Democratic campaign is based on a bum economy. So when you get good news, and this was good news that tax cuts do work, they give growth, that you get a higher stock market. All the indicators are going up.

It's horrible news for your friends, Al.

MARGARET CARLSON, CAPITAL GANG: Well, I don't think the stock market rallied on this news, but it is, it's great news, and let's hope it continues, and it's not a one-time thing due to the tax cuts and mortgage refinancing. Because if it remains a jobless recovery, consumer spending can't continue without consumer jobs.

The banner is not -- it is a small thing, except that why would the president tell a tiny little white lie about it? It shows...

NOVAK: Margaret, are you calling the president a liar?

CARLSON: No, a little white lie, a fib, how's that? Can I call it a fib?

It just doesn't make sense to do it. You know, he -- the ball was spiked in the end zone when they were on the 10-yard line, or maybe the 20 or the 30, and he doesn't want to own up to it. A football analogy, Bob, how's that?

NOVAK: A football metaphor, yes.

KATE O'BEIRNE, CAPITAL GANG: Look, the economic news was clearly welcome. The unemployment rate is virtually the same as it was in 1994, when nobody thought we were looking at a Hoover-type recession, but maybe people feel more strongly about an unemployment rate of over 6 percent nowadays. I suspect people feel more strongly about their own capital formation in the stock market, but we'll see if that's the case.

I think the $87 billion grant that the president was able to get, the full package is good news. Not because of the difference between loan and grant. I think that's lost on most Americans. I think it's very good news for the president, because it forced Democrats to declare themselves, his Democratic challengers. And aside from Dick Gephardt and Joe Lieberman, every other one running for president has adopted some version of, let's cut and run from Iraq. Now, that provides the public with a very stark choice next November, and I think that's good news for the president.

What they're of course responding to is the fact that 70 percent of all Dems polls show they want to somehow to pull out of Iraq as soon as possible, before mission's accomplished, and 88 percent of Republicans don't. That's the fight that I think the president wins.

NOVAK: The pullout gang -- people wanted to pull out of Vietnam and did pull out of Vietnam, to the eternal shame of this country, they're the same people, they'll vote Democratic anyway, won't they?

SHIELDS: Let's get a few things straight first of all historically. The people who pulled out of Vietnam were Richard Nixon. Let's be very blunt about that.

NOVAK: I don't want to debate that tonight, but you're wrong.

SHIELDS: That's the reality.

(CROSSTALK)

SHIELDS: That was the Vietnamization...

O'BEIRNE: They were the anti-war party then, they're the anti- war party now.

SHIELDS: The Vietnamization plan, just like the Iraqification plan, is with a Republican president. But you know, I just don't think that the rising stock market or economic growth means anything if jobs aren't created. I mean, the reality is the economy doesn't exist for people -- it exists for people, people don't exist for the economy. It's not some abstract...

HUNT: Mark, Mark, you're absolutely right. Let me give Bob a little lesson. Bob, I'll tell you something, you've been a great political reporter for almost 50 years. You know something? I want you to listen carefully, the party out of power always wants a bum economy. Republicans did four years ago.

NOVAK: That's not true.

HUNT: Bob, Bob, Bob, if you look carefully, that's always the case. Now, I'll tell you something, Kate. You're right, it was 6 percent unemployment in 1994, down 20 percent from the year before, right after the Bill Clinton tax increase.

O'BEIRNE: (UNINTELLIGIBLE) talking about Herbert Hoover.

HUNT: Because Bill Clinton was lowering the deficit. It lowered by $100 million. Inflation was down, the stock market was up. If George Bush can replicate that (UNINTELLIGIBLE) performance in the one year after the tax increase, it will be a great success.

NOVAK: Let me set you correct, Mark, a little bit, because you guys play that class warfare, you're way out of date. Oh, boy, jobs, jobs, jobs, you know, there's a lot of people in this country -- you don't like it -- but the middle class has stocks, they have 401(k)s, and they're very interested in the stock market.

O'BEIRNE: Bob, (UNINTELLIGIBLE) Democrats' remedy. Every single Democrat running for president wants to raise taxes. That is not going to create jobs.

HUNT: It did in 1994.

O'BEIRNE: Every single one of them.

HUNT: It did in '93 and '94.

SHIELDS: I think highly of the American people, obviously, than you do, Bob. I think Americans are concerned when other Americans do not have jobs, and it's no recovery, it's no prosperity if those jobs -- if they're still three millions jobs short next November.

THE GANG of five will be back with bad news from Iraq.

ANNOUNCER: Here is your CAPITAL GANG trivia question of the week. How does President Bush's approval rating compare to those of Ronald Reagan and Bill Clinton at this point in their presidencies? Are they A, lower, B, higher, or C, about the same?

We'll have the answer right after the break.

(COMMERCIAL BREAK)

ANNOUNCER: Before the break, we asked how President Bush's approval rating compares to those of Ronald Reagan and Bill Clinton at this point in their presidencies. The answer is B, higher.

SHIELDS: Welcome back. The Muslim holy month of Ramadan began in Iraq with attacks that killed over 35 persons on Monday, beginning a week of escalating violence. Hostile deaths of U.S. military forces reached 122, for the first time exceeding the 114 killed during combat.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: There aren't short term fixes to these problems. The attacker has the advantage, and that is why the task is to root out terrorists and terrorist organizations where they are, to find them and to capture them or kill them. PAUL BREMER, U.S. CIVILIAN ADMINISTRATOR IN IRAQ: There is no denying that this has been a tough week here in Iraq. They believe that they can drain the coalition of its will by inflicting a steady stream of casualties. They are wrong.

(END VIDEO CLIP)

SHIELDS: Ambassador Paul Bremer announced Iraqi participation in fighting guerrillas and running the government will be accelerated.

Kate O'Beirne, is the U.S. government getting ready to turn this problem over to Iraqis and get out, as it did in Vietnam?

O'BEIRNE: The president said again this week about Iraq, we are not leaving. Seems to me the administration has made clear, they won't stay a week longer than necessary, but this president is determined not to leave Iraq until he leaves a stable democracy.

Polls suggest the American public supports him in that goal, and these Vietnam analogies are just silly. The terrorists and the guerrillas who are on the attack in Iraq are killing Iraqi policemen, Iraqi politicians, U.N. civilians, Red Cross civilians. They are opposed to the liberation of 20 million Iraqis. They are not a popular insurgency. They oppose Iraqi self-rule.

SHIELDS: Margaret Carlson, is Kate actually painting an accurate portrayal and we're just getting this negative picture from the press?

CARLSON: Right. You know, the president says we're having such successes there that they're more desperate than ever, and that's why they're behaving this way, but it looks as if, according to American intelligence, that Iraq is now a magnet, that terrorists are flowing in from other places, listening to the call of Saddam Hussein to return. So rather than be reduced, these numbers of attacks -- and they seem to come at will. They can get police stations and mosques and libraries, they can go anywhere they want. It doesn't seem to be reduced.

And so the sense I have is that where there wasn't a terrorist state, there is now a terrorist state, and where Americans are totally vulnerable. They don't have to come to New York. They can kill Americans at will in Iraq.

SHIELDS: The number of daily attacks on Americans has doubled, Al, in the last month.

HUNT: Well, Kate's right that the Vietnam analogy is -- can be a bit far-fetched. But I'll tell you one element of it that is -- is -- is -- rings troublingly true, and that is to deny the policy is in trouble, and to pretend that every decision is predicated upon the previous decision being correct, is a prescription for a disaster. I'm afraid that's what we're doing. The violence is on the increase. The instability is on the increase.

Joe Galloway of Knight Ridder, who is one of the great, great war correspondents of all time said these acts are not the acts of desperate men, talking about the terrorists, but a sign the enemy is getting stronger. We just have to face up to that. And I'd love to turn -- everybody else would love to turn more of it over to the Iraqis. That's great, but they are not ready for much of this.

Let me give you just one example. Paul Bremer says he wants a constitution. The Shiites, the majority, the people who we think are more friendly to us than the Sunnis say yes, let's have an elected -- let's elect the drafters. Bremer says, can't do that, takes too long, too complicated. In other words, we're going to create a democracy, but we can't let the masses vote. That's a sign we're going to be there for a long time.

SHIELDS: Bob Novak.

NOVAK: When I was critical about this military venture in Iraq, one of the things I said was, this is going to be hell running the place, and I was right.

HUNT: You were.

NOVAK: Now, once we are there, we have no choice. And all this yip-yapping by journalists who don't know a damn thing about Iraq makes me a little bit sick, but not as sick as the Democrats who voted to get in, including presidential candidates, and then they vote against the money and say we have to get out. They are the kings of the hypocrites, they are really horrible, and I think -- I think it's going to -- I give a lot of credit to Dick Gephardt. And Dick Gephardt says he voted for it, he is there for staying. He is critical. That's fine, he's a politician. But he's a consistent, honest man. You can't say that for a lot of the others.

(CROSSTALK)

O'BEIRNE: The only two who won't -- who aren't advocating some version of cutting and running. And Margaret, if terrorists are bent on killing Americans, better they're up against the 4th Infantry Division in Iraq than up against commuters in Boston or Washington. I mean, that's who's being killed in Iraq.

CARLSON: Well, I don't think it's an either/or, but there is a race to get Iraqi security forces in place because we're not going to get the troops from other countries and we're not going to get the money.

SHIELDS: I'll just make one point, and that is that the current terrorists going in Iraq don't need any passports, don't need any airplane training, don't need any visas or anything of the sort. They are just streaming across because Iraq is now the magnet for them.

Next on CAPITAL GANG, Republicans pick up two more governorships.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I know we're Haley's fans, because when I stood in front of the Congress and the country and advocated a pro-growth policy for our economy, he was strong by my side. You better have you a governor who's willing to stand up to the trial attorneys and have medical liability reform, so that people can get good health care in the state of Mississippi.

(END VIDEO CLIP)

SHIELDS: President Bush was in Mississippi and Kentucky today, campaigning for Republican challengers to Democratic-held governorships. In Kentucky, the latest poll shows Republican Congressman Ernie Fletcher 9 percentage points ahead of Democratic State Attorney General Ben Chandler.

Bob Novak, who's the winner in Kentucky?

NOVAK: I think it's going to be Fletcher, and probably by a lot. The poor, poor Mr. Chandler, who is Happy Chandler's grandson, suffers from the sleaze Governor Paul Patton in there. That's why Republicans are going to win the governorship for the first time in about 30 years.

CARLSON: Chandler is actually the reformer, the clean government guy, but the Republicans have spent $1 million in ads tying Chandler to Patton, with whom he has nothing in common. And so I agree with...

SHIELDS: (UNINTELLIGIBLE) same party.

CARLSON: The same party, and Patton had the nursing home scandal, and with the nursing home woman. And so I agree with Bob that Fletcher will win.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Well, Ben Chandler is also in Kentucky has been running against the Bush economy. I'd say that's a case of bad timing. Bush is popular in Kentucky, so even though those voters have had Democratic governors when they support Republicans for other offices, I think that will be different this time. I think Fletcher is a good candidate in his own right. I think he's helped by George Bush, and I think Ernie Fletcher wins.

HUNT: Yes, I agree. Fletcher. The Democrats have been in power for too long, and the load of Paul Patton's corruption is too much for Happy Chandler's grandson (UNINTELLIGIBLE).

SHIELDS: Still hoping against hope that Ben Chandler can spring the upset. It's $8 million that Republicans spent for Fletcher, $4.7 million the Democrats have been able to spend for Chandler. But as Chandler himself said, Paul Patton would be a drag on Jesus Christ, and I think that's probably true.

In Mississippi, most polls have given former Republican national chairman Haley Barbour a slight lead over Democratic Governor Ronnie Musgrove. Most recently, a 4-point edge by the Mason-Dixon poll. At the same time, a poll commissioned by TV station WAPT in Jackson gave Governor Musgrove a 1-point lead. Margaret Carlson, your prediction on Mississippi.

CARLSON: It's totally dependent on African-American turnout. Haley Barbour, a nice guy, has run a very nasty campaign that's an insult to African-Americans. And so it all depends on turnout. If they can get out, if that get-out-the-vote effort is successful, Musgrove can win.

SHIELDS: Kate O'Beirne.

O'BEIRNE: The incumbent Democratic governor has joined other statewide Democrats in favor of confirming Judge Pickering to the federal bench, because that's a very unpopular thing to filibuster up here in Washington. He's not really running as a Democrat. He's running as a conservative, running as an independent. Not too many stark differences with Haley Barbour, but I think Haley Barbour, who's run an aggressive but fine campaign, wins.

SHIELDS: Al.

HUNT: My prediction would be Barbour by a hair. It's a very Republican state. But I think there is a 40 percent chance that neither one will get 50 percent, and the legislature will then once again put Musgrove in.

SHIELDS: Ronnie Musgrove will prevail, and I, as somebody who's admired Haley Barbour's rather heroic race, disdaining all racial politics against John Stennis, am just disappointed that he's in bed with the Conservative Citizens Council, a racist group.

NOVAK: That's a canard. He's not in bed with them. Look, please, he's not in bed with them. He's running -- if you were down there, as I was this week, you would find he's running a clean race. It's Musgrove who's been running the nastier race, accusing him of poisoning children.

CARLSON: (UNINTELLIGIBLE).

NOVAK: Al's right. It's a very close -- poisoning kids is the word he used. I'd rather not be interrupted. I know you hate the truth, both of you. And you're exactly right, it's a close race, and I think that the fact that Musgrove won't get more than 20 percent of the white vote means they're going to lose. A close race, though.

CARLSON: Mark, I love the truth, and I think the fact that Haley Barbour let his face stay on the segregationist Web site...

NOVAK: (UNINTELLIGIBLE). That's a tired Democratic canard.

CARLSON: It's the truth, Bob.

NOVAK: I'm embarrassed to even...

(CROSSTALK)

NOVAK: I'm just embarrassed to hear you say that. SHIELDS: Why was it that July 19 fund-raiser, father, when he raised money (UNINTELLIGIBLE).

O'BEIRNE: It should matter that we all know Haley Barbour and we know that not to be the case, and that should matter.

(CROSSTALK)

NOVAK: He says he totally disapproves of -- and we shouldn't even be talking about it, because that's the sleaze that Musgrove has been putting out.

CARLSON: (UNINTELLIGIBLE).

SHIELDS: Is that why we're disappointed in Haley, Margaret?

In Philadelphia, the latest poll gives Democratic Mayor John Street a 13-point lead over Republican challenger Sam Katz, after it was revealed that the FBI had bugged Mayor Street's office. Kate O'Beirne, who wins in the City of Brotherly Love?

O'BEIRNE: Well, it seems that the FBI bugging of his office bugged the voters, and I think that's helped him, and I think all the publicity over the FBI bug has drawn publicity to the race, will probably help boost turnout, and unsurprisingly, reelect a Democratic mayor in Philadelphia.

SHIELDS: Al...

HUNT: John Street wins, Mark, and the loser is the John Ashcroft politically charged Justice Department.

SHIELDS: John Street does win, and wins quite comfortably, in part because the race has been federalized and nationalized.

NOVAK: I think John Street wins. I think this helps him, as stupid as bugging the mayor's office. But the other thing is, in Philadelphia they like what they call a pay for play. If you want to play, you pay, and that's your home town, Al, and that's the kind of place you come from, and that's what they like.

(CROSSTALK)

SHIELDS: Is that another canard, Bob?

CARLSON: You certainly pay to play in the federal government. I mean, if you want to get a contract, you contribute to the Bush campaign. The bug backfired. John Street has done a good job, and he wins.

SHIELDS: OK. Anything else you want to add?

(CROSSTALK)

HUNT: My home town has had some rascals, there is no question about it, Bob Novak, but they've had some great people. Eddie Rendell was a terrific mayor. Jay Richardson Dillworth, many years, back in your prime, was a great mayor. So they're not all corrupt.

(CROSSTALK)

NOVAK: Let me just say -- I just want to say one thing, if we can go back to Mississippi for just a moment.

HUNT: Oh, boy.

NOVAK: If I may. That the whole idea that in Mississippi you can't call yourself a Democrat anymore and expect to win I think is hilarious, and Haley Barbour, in every ad and every poster, calls himself a Republican. It is part of the realignment of America, and it has nothing to do with any kind of racial prejudice.

HUNT: It's been true for 25 years, and I must say, Bob, in addition, when Haley Barbour raises the Confederate flag issue down there, that's a code word to blacks.

SHIELDS: Last word, Al Hunt. Coming up in the second half of CAPITAL GANG, I'm on the beat in New Hampshire, covering John Kerry's presidential campaign. "Beyond the Beltway" looks at the California wildfires, with a disaster relief expert Richard Carson. And our "Outrages of the Week," all after the latest news headlines.

(COMMERCIAL BREAK)

(NEWSBREAK)

ANNOUNCER: Live, from Washington, THE CAPITAL GANG.

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

This week, I was on the beat, reporting in New Hampshire. Eighty-eight days before the Granite State's first in the nation presidential primary, Massachusetts senator and Democratic presidential candidate John Kerry needs to find and to win a lot more voters.

(BEGIN VIDEOTAPE)

SHIELDS (voice-over): Many New Hampshire voters are torn between Kerry and former Vermont Governor Howard Dean, the clear frontrunner here. No Massachusetts candidate running for an open White House nomination has ever lost the New Hampshire Democratic primary. Jack Kennedy in 1960, Michael Dukakis in 1988, and the late Paul Tsongas in 1992.

But John Kerry trails Howard Dean in the latest "Boston Globe" poll, 37 percent to 24 percent, with everybody else in single digits. But Dean has strengthened his position here as the Democrat best able to beat George W. Bush. Six weeks ago, Kerry and Dean were essentially tied on the question of electability.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I'm running close in New Hampshire. People have to stop focusing on day-to-day polls and start listening to the differences between us. I want to protect the middle class. Governor Dean wants to raise taxes on the middle class. I want to protect Medicare for seniors. Governor Dean wants to put Medicare on the table and reduce it, to balance the budget in five years.

SHIELDS: The criticism most often heard here is that John Kerry is not connecting, personally and emotionally, with voters, in this retail politics state, where close to half of the electorate can base their decision on personal exposure to a candidate.

Still, New Hampshire voters can be notoriously fickle. Just ask Senator Ted Kennedy, who had a huge lead here in October, before losing to President Jimmy Carter in the 1980 primary.

(END VIDEOTAPE)

SHIELDS: According to Jerry Travinsky (ph), the "Boston Globe" pollster, the one bright spot for John Kerry is that less than one- third of Howard Dean voters now say they will, quote, "definitely support," end quote, the former governor. John Kerry needs to start connecting, now, big time.

Margaret Carlson, do you think that Senator Kerry can start connecting?

CARLSON: Well, he went hunting today, and he put on his Eddie Bauer, and spilled the first blood of the primary, by shooting a pheasant, or a buck, or a deer. Whatever.

NOVAK: (UNINTELLIGIBLE).

CARLSON: He didn't look as bad as Dukakis in a tank, but I don't know that that's a connecting, particularly connecting move.

You know, maybe the romance among New Hampshire voters with Dean, being fickle, as you say, could have peaked and is cooling off. You know, the fact that almost everybody has coffee with the candidates, gives Kerry still time to make that connection is the Dean fervor kind of cools off.

SHIELDS: Still time, Kate?

O'BEIRNE: Well, this isn't the kind of guy you want to have a cup of coffee with, and that could be...

CARLSON: Well, coffee, and then you like him.

O'BEIRNE: ... that could be the problem. I think a couple of things benefit Howard Dean in New Hampshire. He's an outsider. He hasn't been in Washington. I think that has a certain appeal. He's been able to define himself to New Hampshire voters in ways I think they find attractive. He's coming across as this guy who tells it like it is. I'm not so sure that's true, but I think he's effectively defined himself that way. The problem with John Kerry is, voters in New Hampshire know John Kerry. They've been watching John Kerry. He's got to, like, re-sell himself. And I thought your point about the electability question was key. If Dean voters are now talking themselves into the proposition that he's the strongest candidate against Bush, and actually I think that's a weakness of Dean's, that is a major problem for John Kerry.

SHIELDS: Al Hunt.

HUNT: I think John Kerry has literally weeks to turn this campaign around, two or three, and if he doesn't, he's dead. First, the staff infighting is just debilitating to his campaign. He's got to end that. He's got to put one person in charge, ought to be someone like John Sasso (UNINTELLIGIBLE), if you don't like it, get out. Two, he's got to quit traumatizing over this Iraqi war vote and focus on big, big, big issue.

He was in Iowa when he was hunting, Margaret, and he spent the whole time lambasting Howard Dean on gun control. Now, I happen to think we need more gun control in this country, but it's not going to be the determinative vote. He ought to focus on the big issues and get away from that stuff.

NOVAK: You know, I don't agree with either you or Mark or Kate on this electability issue. I've never felt the voters vote on electability. What they do vote on is likeability.

O'BEIRNE: A guy they like.

NOVAK: Like. And John Kerry is not a "like" person. Now, Howard Dean is kind of odd, but he's kind of likable.

(CROSSTALK)

NOVAK: The thing I really love, it's very, very funny, is that John Kerry -- I'm sorry -- yes, is that John Kerry is running on the Bush tax cut. He says, this guy is against the Bush tax cut. Isn't that terrible? And part of the Bush tax cut, Mark, and isn't that funny that this is supposed to be the great anti-Bush candidate campaign, and John Kerry says, gee, don't vote for Dean, he'll take away the Bush tax cut.

HUNT: Bob, quick question, if likeability matters, how did Richard Nixon get (UNINTELLIGIBLE).

(CROSSTALK)

SHIELDS: And let me just clarify one thing, John Kerry makes a major point of saying he wants to repeal all the tax cuts for the top 1 percent, top 2 percent.

(CROSSTALK)

SHIELDS: Not the Democratic part, which is the child tax credit and...

(CROSSTALK)

NOVAK: It's more than the child tax credit...

O'BEIRNE: Kerry's right, Dean wants to raise taxes on the middle class. Kerry is right about that.

SHIELDS: The key is, Bob, if likeability is a determining factor, Kate's point is that if his electability was seen as a big liability, then Kerry could have hit him over the head with it. Now he's seen as the most electable, then it neutralizes it, and thank goodness for you, likeability isn't the key.

Coming up on CAPITAL GANG Classic, Haley Barbour elected to the Republican national chairmanship, that is, 10 years ago.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. Haley Barbour, running for governor of Mississippi on Tuesday 10 years ago was elected chairman of the Republican National Committee on the third ballot.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think the biggest problem we had in 1992 was that the White House imposed, just stuffed down a position on abortion -- it was an absolutist position -- on the convention.

(END VIDEO CLIP)

SHIELDS: CAPITAL GANG discussed this development on January 30 of 1993. Our guest was the late Republican Senator John Chafee of Rhode Island.

(BEGIN VIDEOTAPE)

HUNT: Bob, does Haley Barbour's election signify a move by the Republicans to the center?

NOVAK: What it signifies is a lot of fear by the politicians who have gone to the Republican National Committee about being tarred as the extremist party.

Haley Barbour, saying this was stuffed down their throats at Houston, I didn't hear him yelling about it then.

SEN. JOHN CHAFEE (R), RHODE ISLAND: All five of the candidates were opposed to a strict pro -- or anti-abortion platform, that all of them felt we've got to move back to the center of the road. To mix a metaphor, we've got to have a bigger tent.

UNIDENTIFIED FEMALE: I think Barbour's position is to try to heal this rift. I am not saying it can't be done, but I do think, unlike someone identified with either extreme, Barbour could do for the Republicans what Brown (ph) did for Democrats.

SHIELDS: Barbour is an able fellow. NOVAK: He is able.

SHIELDS: Cares about politics. He's good at it. I think you're right, and I think he was a good choice for the Republicans.

(END VIDEOTAPE)

SHIELDS: Bob, were we all mistaken in thinking that Haley Barbour would take the Republican Party to the middle?

NOVAK: Absolutely. You were particularly, and I was particularly. As a matter of fact, he brought the Republican Party into a position, a very unified position on abortion, by using the -- he coined the "late term abortion" and "partial birth abortion," and I would say that most Republicans would tell you that that was the outstanding Republican national chairman of their lifetime.

SHIELDS: Kate.

O'BEIRNE: Had I been there, I would have told you Haley Barbour is a conservative, he's not going to be moving the Republican Party in any direction. He himself is pro-life. He deserves enormous credit for the GOP takeover of the House in 1994, along with Newt Gingrich, so he was an awfully successful RNC chair.

SHIELDS: I was at the first Republican National Committee meeting, as he was chairman, in St. Louis, and that was where they had the big fight about the litmus test. You had to be pro-life. And he fought -- he got Henry Aid (ph) to fight his side, you could be pro- choice and be a good Republican.

O'BEIRNE: He recognizes Republicans...

(CROSSTALK)

O'BEIRNE: Haley knows the Republicans are a right to life party.

CARLSON: He made the tent a little bigger for that moment. I see that you've changed a little bit over the years about Haley.

Hey, it's a good career move to lose RNC chair, because Spencer Abraham and John Ashcroft were both beaten by Haley Barbour that year, and they have gone on to greater things.

HUNT: Well, first, in the public record, I think Bill Brock was clearly the best Republican chairman in modern times, but I think what Haley did was bring the Republican Party more in league with the K Street lobbyists and big money, tobacco, drugs and the like. He did that very effectively.

NOVAK: That's very nasty.

HUNT: No, it's the truth. It's not nasty, Bob. Since when are you against big money? I've never heard that before.

NOVAK: If you want -- if you want to -- if you want to talk to the grassroots Republicans, if you would deign to do that, you'll find that they really thought he was a terrific chairman.

HUNT: I didn't say he was or he wasn't.

SHIELDS: Next on CAPITAL GANG, "Beyond the Beltway" looks at the California fires, with professor Richard Carson, an authority on disaster relief.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. The wildfires in Southern California are now described as 45 percent contained, but not before they had taken 20 lives, destroyed more than 2,800 homes and burned three-quarters of a million acres.

(BEGIN VIDEO CLIP)

GOV-ELECT ARNOLD SCHWARZENEGGER, CALIFORNIA: I asked Senator Kennedy again for advice how to get more federal funding for those things.

(END VIDEO CLIP)

SHIELDS: The Senate passed a long-dormant proposal by President Bush to commit to clearing away of small timber undergrowth.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I believe we must take steps now to reduce the harm of forest fire. These conditions are all familiar to us -- drought, densely packed forests, unhealthily crowded with little trees. For decades, we have put out the ground fires that would otherwise clear out the brush.

(END VIDEO CLIP)

SHIELDS: Joining us now from San Diego, California is Richard Carson, chairman of the Economics Department of the University of California San Diego. Thanks for coming in, Richard.

RICHARD CARSON, UNIVERSITY OF CALIFORNIA SAN DIEGO: Glad to be here.

SHIELDS: Richard, how would you assess the way that state and local governments have responded to this most recent California disaster?

CARSON: The local effort to fight the fire starting about a half an hour before the fire hit San Diego was truly remarkable. Without that effort, we would have had heavy loss of life, and one of the worst urban disasters of modern times.

Now, how a fire went 20 miles across open brush in high winds and hit a densely populated urban area clearly represents a failure of the firefighting system early on.

SHIELDS: OK. Bob Novak. NOVAK: Richard is this a force of nature in Southern California, the climate and the situation? It's just going to happen there, as it isn't going to happen to this degree in the Pacific Northwest or in New England?

CARSON: Well, that's clearly the case. This was indeed an accident, a disaster waiting to happen, but a highly predictable one, and it's simply the matter that there's so much brush out there, and in lots of areas there are open paths so that if you get a fire started in high winds and high temperature and low humidity, and get the wind moving toward a city, it's simply going to move. So it shouldn't have come as a surprise to anyone.

CARLSON: Richard, it may be Mother Nature, but the government, in particularly the federal government, there are things that it can do to help, and they did not do it. One was to provide the $430 million that was requested to get rid of the dead trees and the small brush, and apparently the Forest Service would not permit airborne fire operations to take place at night. They lost all that time. How does the federal government come out of this?

CARSON: The federal government comes out of this in some sense very badly, and the reason is that the state, in a coordinated move, had moved equipment to San Diego, north to San Bernadino, and the feds should have back-stopped the state, and in particular the feds should have put all its available tanker resources in the air from outside of California, and attack the fire at first light. And that clearly didn't happen.

And part of the reason for that is that the feds have been going over budget in its firefighting effort, and a lot of this going over budget has to do with sending up planes, which are the most expensive things to do.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Richard, last year, Democrats in the Senate threatened to filibuster a bill that would have permitted the thinning of forests in the hopes of preventing forest fires. Now, given what's going on in California, as you can imagine, that bill is less controversial now and it has in fact passed the Senate. Will that bill permitting that kind of forest thinning help?

CARSON: It will -- at some level, this notion of thinning the forest has always been a red herring with respect to protecting cities in Southern California, and that's because there is no money in clearing the brush. So the timber companies want to clear the fallen trees where the timber is valuable. Unfortunately, the government is going to have to put its own money to either do control burns or clear out the brush in mechanized ways.

So the timber bill has been fought for years over harvesting the timber where the timber is valuable. So Dianne Feinstein deserves some real credit for pushing forward being able to thin out and getting the money allocated toward protecting the cities, which is where this effort needs to go. SHIELDS: Al Hunt.

HUNT: Richard, let me go back to Margaret's question. As she notes, the Federal Emergency Management Agency sat for six months on that request from Governor Davis and their bipartisan group, Republican and Democratic members of Congress, for $430 million to clear dead trees and fire (UNINTELLIGIBLE) Southern California. If that had been approved and the money sent out there, would it have made any difference?

CARSON: I don't think it would have made a difference for this fire, because if the money had been approved it would take a while for the government to spend the money. Clearly, it might make a difference for the next fire, and there will indeed be another fire.

SHIELDS: Richard, almost a social question, a political question, in the sense that after World War II, the great American hero was G.I. Joe, Rosie the Riveter during the war. Have we seen since September 11 in 2001 and now again in California the firefighter emerging as the icon of American heroism and bravery?

CARSON: I think so. And I live in Scribbs Ranch (ph), one of the areas that was the heaviest hit, and I know these firefighters saved my house. And from looking at lots of other disasters, I am aware that they saved the city of San Diego. We had a fire that almost, if the winds had come up the next day like they were the previous day, the day the fire hit, San Diego would be in rubble.

SHIELDS: Richard Carson, thank you so very much for being with us. THE GANG will be back with the "Outrages of the Week."

CARSON: Glad to be here. Thanks.

(COMMERCIAL BREAK)

SHIELDS: And now for "The Outrages of the Week."

Remember Dennis Kozlowski, the ex-CEO of Tyco Corporation, who spent $6,000 of company money on a shower curtain for himself? He is now on trial, charged along with another associate, of looting, make that stealing, $600 million from Tyco. Between 1988 and 2001, Tyco paid Kozlowski nearly $300 million. But for his trophy wife's weeklong birthday party on a Mediterranean island in 2001, featuring hired models to look like the Victoria's Secret catalogue, and male strippers from Chippendale's, Kozlowski essentially asked his employees and stockholders to pay $1 million. Greed is most definitely not good.

Bob Novak.

NOVAK: Mikhail Khodorovsky is Russia's richest oil tycoon. He has built Yukos, a transparent, world-class corporation, with large philanthropic activities. Yet he has been thrown into prison by Russian President Vladimir Putin, who has seized 44 percent of Yukos shares, owned by foreign holding companies. Why? Jealousy of a man worth $8 billion. Also, Khodorovsky has been financing political opponents of Putin, and that is obnoxious to the former KGB bureaucrat. I wonder whether some capitalist-bashing American politicians would commit the same outrage if they could.

SHIELDS: Margaret.

CARLSON: Mark, Iraq is costing Americans a fortune, but it's making one for pals of and contributors to President Bush, according to the Center for Public Integrity study. That means Halliburton is number one, and George Schulz's Bechtel is number two in the windfall parade.

The Pentagon says that all is done on merit. Oh, really? Take the contract to Sullivan Have (ph) Associates, where the Sullivan of Sullivan Have (ph) is married to the Have (ph) of Sullivan Have (ph), who just happens to be the deputy assistant secretary of defense.

For cronies and contributors, the cash register in Iraq is open.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Lieutenant Colonel Allen West's 4th Infantry Division faces daily attacks in Iraq. When he figured a suspect in custody knew of terrorist plans, he scared the guy into talking by firing his gun. The attack was prevented. He reported on himself, and was relieved of his command. After 19 years of honorable service, he faces losing his pension or a court-martial. Saving his soldiers shouldn't cost Colonel West his career. Reprimand him if his superiors must, but get him back to work where his soldiers no doubt are grateful to have him.

SHIELDS: Al Hunt.

HUNT: Mark, 21 mentally retarded workers do a great job at Bethesda Naval Medical Center. They are praised by top officials for their dedication and ability. But their employment was threatened because of a new government initiative, competitive outsourcing, to get more private contractors to do government work. It was only for the efforts of Congressman Chris Van Hollen and a story in "The Washington Post" that saved their jobs, at least temporarily. Is replacing mentally retarded workers in the name of some supposed efficiency games mean by compassionate conservatism?

SHIELDS: This is Mark Shields, saying good night for THE CAPITAL GANG. Coming up next, "CNN PRESENTS," "Fit to Kill," the personal stories of soldiers from World War II to Iraq. At 9:00 p.m., "LARRY KING LIVE," convicted murderer Jeffrey MacDonald. And at 10:00 p.m., a CNN special report, "California Firestorm." Thank you for joining us.

END

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