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CNN CAPITAL GANG

Bush and Kerry clash over Iraq. Bush and Kerry camps agree on debate schedule. Congress overwhelmingly approves extending some tax cuts.

Aired September 25, 2004 - 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 Al Hunt, Robert Novak and Kate O'Beirne. Our guest is Senate minority whip Harry Reid of Nevada.

It's so good to have you back, Harry.

SEN. HARRY REID (D-NV), MINORITY WHIP: Thank you very much.

SHIELDS: President George W. Bush addressed the United Nations General Assembly this week, but Senator John Kerry beat him to the punch with his own foreign policy speech.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: ... and provide aide...

SEN. JOHN KERRY (D-MA), PRESIDENTIAL NOMINEE: George Bush has not told the truth to the American people about why we went to war and how the war is going.

BUSH: He woke up this morning and now decided, no, we shouldn't have invaded Iraq. He believes our national security would be stronger with Saddam Hussein in power, not in prison.

KERRY: George Bush made Saddam Hussein the priority. I would have made Osama bin Laden the priority.

(END VIDEO CLIP)

SHIELDS: Iraqi prime minister Ayad Allawi addressed a joint session of the U.S. Congress.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: Every day, we strengthen the institutions that will protect our new democracy.

KERRY: I think the prime minister is obviously contradicting his own statement of a few days ago, where he said the terrorists are pouring into the country.

BUSH: My opponent chose to criticize the prime minister of Iraq. This brave man came to our country to talk about how he's risking his life for a free Iraq.

(END VIDEO CLIP)

SHIELDS: Kate O'Beirne, can anybody rationally decide -- deny that this was a good week politically for John Kerry?

KATE O'BEIRNE, CAPITAL GANG: Mark, only anybody who thinks it's a really bad idea for a presidential candidate to appear to be rooting against American successes. There are ways to criticize, very sharply criticize George Bush for mistakes made in Iraq without also undermining the crucial mission we have there. This week, John Kerry said he's not sure whether or not the assault on Iraq was illegal, thereby siding with Kofi Annan. He says that allies, of course, new allies, are crucially important. Why should they join a war that John Kerry calls the wrong war in the wrong time and the wrong place? He, of course, typically undermines our real allies, who are helping us, by calling them the coerced and the bribed.

And this week, he added the insult to our most crucial ally in Iraq, the prime minister. This incredibly brave man, who came here to give a heartfelt thank you to the American public, his senior aide, Kerry's senior aide, Joe Lockhart, called him a "hand puppet," thereby playing into the hands of those savages who've been beheading Americans this week. I think it's been a shameful week for the Kerry campaign.

SHIELDS: Harry Reid, to return to the question -- was it a good week politically for John Kerry?

REID: Of course it was. I think what -- we all know that the president was a cheerleader in college, but we don't need a cheerleader now, we need a leader. And that's what's wrong with what's going on in Iraq. He has to acknowledge what his own party senators have to say. Lindsey Graham, Richard Lugar, Hagel, McCain have said this week the war's not good and something has to happen drastically quickly.

SHIELDS: Bob Novak?

BOB NOVAK, CAPITAL GANG: I think that the -- that Senator Kerry was more focused, is more on message than he has been, which his aides have been trying to do. He also came over as very harsh. He did -- he seemed less of a leader than a -- than somebody who might be on the CAPITAL GANG, being as mean as we are. And that is...

AL HUNT, CAPITAL GANG: No. No.

NOVAK: And that isn't -- that isn't the posture for a president. Also is -- he was inconsistent. You know, he was on with Larry King in 2001. He never mentioned Osama bin Laden. He said, We've got to get Saddam Hussein. That's the problem. He linked in that program the connection between Larry -- Osama -- between Saddam Hussein and -- and the -- and terrorism. I would say right now that the problem that he has, Harry, is that I think he'd like to get us out of there, but he's afraid to come right up to it, as President Bush is afraid to come right up to it, and said, We've got to get out of here next year, after these elections. Neither candidate will say that.

SHIELDS: Al Hunt?

HUNT: Well, I think Bob's right. I think this debate is a little bit surreal, you know, as a matter of fact. I do want to say one thing, Kate, about this so-called brave Iraqi leader. Let's look at the facts. This guy was a Ba'athist henchman who lost a power struggle, went in exile, came back and was appointed by the Americans. He's no Jeffersonian Democrat. All the dispatches from Iraq say he's trying to -- he's trying to manipulate both the election and even the trial of Saddam. This is not Nelson Mandela, so it -- you know, you can't -- you're not disloyal because you think this guy is less than -- less than perfect.

But I think Bob is right. I think Kerry has been inconsistent on some of these things, but so has Bush. I mean, Bob had a -- Bob on this show last week said that, basically, there are people inside this administration who say in a year, we're going to be getting out of there. And now we have George Bush talking about, We're going to stay the course. This guy's a cut-and-runner. And there are other stories who say that we're going to go into Fallujah after the election. Let's have a real debate about what the policy ought to be. We're not having that now.

O'BEIRNE: In the past 12 months alone, John Kerry has wanted to send more troops, he wants to begin pulling out by the summer. He wants to spend more money, whatever it takes, we're spending too much money. We're better off -- of course, we're better off, he's telling the Democratic field in December, without Saddam Hussein. Who could say we weren't? Now he's saying, you know, the stability of a dictatorship might be better than what...

SHIELDS: He didn't say that.

O'BEIRNE: He's implying that things were more stable, which is certainly true...

NOVAK: (UNINTELLIGIBLE)

O'BEIRNE: Exactly, in Iraq, with Saddam Hussein killing...

HUNT: Look, Kate...

O'BEIRNE: ... tens of thousands of Iraqis.

HUNT: ... everybody agrees Saddam Hussein was a -- he was a junior Hitler, a terrible man. But the fact that he's gone -- the fact that you replace something awful doesn't necessarily mean it's better. Fifteen years ago, we said if we get rid of the communists in Afghanistan, anything will be better. You know what? We found something that was worse. We have a less safe world today, and that has nothing to do with Saddam Hussein. And all apologies to my rector (ph), I wish someone would have pulled a gun to his head.

O'BEIRNE: John Kerry shouldn't have voted and it was a mistake to vote for the war! SHIELDS: Harry Reid, your take right now on the question of Iraq politically in this campaign.

REID: Well, first of all, I think John Kerry had a good week. I repeat that. He gave a very fine speech on foreign policy. He outlined four points that I think are extremely important. He then gave a dissertation, and I thought it was a good one, on terrorism. I think he had a very good week. You know, it seems to me that we have to recognize what is going on in Iraq. The president has to level with the American people. People can accept the fact that the war's gone bad. And I think the situation is simply this. The president's credibility, I think, is on the line. He's not leveling with the American people on this, with Medicare, with Leave No Child Behind. And for us in Nevada, what he's done on nuclear waste is certainly deceptive.

SHIELDS: OK. Let me just make one point. I think that John Kerry, obviously, got under the skin of the Republicans this week and under the White House because in a campaign conspicuous for hit-and- run attacks, we hit a new low in smears, and that is Dick Armitage, the undersecretary of state, Orrin Hatch, the senator from Utah, Denny Hastert, the speaker of the House, all of whom have respected -- considerable careers, hit a new low in suggesting and arguing that the terrorists are supporting a victory of John Kerry in this election. I have never seen that done before. And I -- I just...

NOVAK: Oh! I have seen it done!

SHIELDS: Well, I...

NOVAK: Where were you, asleep during the Vietnam war?

SHIELDS: I have never -- I have never seen -- I have never seen this argument -- and I'd just -- I'd just point out that Teddy Roosevelt said it is a libel on the American people and it is treason not to be able to criticize leaders during wartime.

NOVAK: I'm sorry you're so shocked that -- I know you -- I know you have great sensibility about -- about dirty politics, Mark. But -- but Al, when you say we want a debate -- come on! This is an election year. They're not going to have an honest debate on what's -- what's going on. They want a vote being there -- in their strongest position. And Harry, let me just say, those four points, the weakest part of his speech because they're -- he is -- Bush has done all those four points. It's the hot stuff that he can't respond to.

REID: I wish that were true.

SHIELDS: OK, last word, Harry Reid. And a good one it was.

Harry Reid and THE GANG will be back with the Kerry and Bush campaigns making a deal on debates.

(COMMERCIAL BREAK) SHIELDS: Welcome back. The Bush and Kerry campaigns agreed on three presidential debates, the first this Thursday at Coral Gables, Florida, and one vice presidential debate. Senator Kerry was asked about the rules on "The Late Show With David Letterman."

(BEGIN VIDEO CLIP)

KERRY: We wanted to have John Edwards stand. Dick Cheney wanted to sit through the whole debate.

DAVE LETTERMAN, HOST: Oh, I see.

KERRY: So we compromised, and George Bush is going to sit on Dick Cheney's lap.

LETTERMAN: Well!

(LAUGHTER)

(END VIDEO CLIP)

SHIELDS: In advance of the debates, the two campaigns offered dueling TV ads.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: John Kerry's hobby? Wind-surfing on issues, dude. He claims to be the big kahuna on terror, but votes to cut defense and intelligence. The Patriot Act? Whichever way the wind blows. Kerry rides the wave and Kerry surfs every direction on Iraq.

UNIDENTIFIED MALE: One thousand U.S. casualties, two Americans beheaded just this week. The Pentagon admits terrorists are pouring into Iraq. In the face of the Iraq quagmire, George Bush's answer is to run a juvenile and tasteless attack ad.

KEN MEHLMAN, BUSH CAMPAIGN MANAGER: It was a humorous and a memorable ad, which is always the goal. It's also about a very important issue.

(END VIDEO CLIP)

SHIELDS: Four independent polls of likely voters this week show Bush leads of 4 points, 7 points, 3 points and 6 points.

Bob, what is George W. Bush risking by agreeing to the three debates?

NOVAK: Well, the feeling that they had put -- the Bush people had put out -- maybe it was just a smokescreen -- was that they didn't want the debates to dominate the campaign. They didn't want to have the middle debate in -- in St. Louis, which is a town hall debate. But I don't think they could have insulted Missouri, which is a battleground state, by ending their debate. And maybe they had in mind three all the time. What they -- what they have -- the Bush people claim they're happy about is getting the first debate, which is always the most important debate, on international affairs, where they think the president has an advantage. That -- there's no question, going all the way back to 1960, the people who -- the president -- the candidate that looks good in the first debate usually, not always, has the advantage in the minds of the voters.

SHIELDS: Harry, the debates.

REID: I think one of the things the American people have come to expect is George Bush always is able to lower expectations to how well he's going to do. But the fact of the matter is that he is very good. One of our great debaters, Ann Richards -- he beat her in debates in Texas. Al Gore, who had destroyed Perot -- he beat Al Gore in the debates. At least, that's what many people felt.

I think that this is going to be a debate where Bush will do well again, but we also can't underestimate John Kerry. John Kerry beat William Weld as a result of how well he did in the debate during the Senate race. So I'm looking forward to a debate with two very, very good debaters.

SHIELDS: Are they important politically, Kate?

O'BEIRNE: John Kerry beat William Weld because he was running as a liberal Democrat in Massachusetts, for gosh sakes! I told you two weeks ago don't be surprised if the Bush campaign agrees to three debates on the theory that the more the people see John Kerry, the less they like him. His unfavorable -- his favorability rating of the moment, John Kerry's, is only 32 percent. His unfavorability rating is 12 points higher.

But what does he have to do? Well, as Michael Moore, Democrats, the liberal Democrats in his base, want him attacking George Bush. But the more he attacks George Bush, the higher goes his unfavorability rating. He's already -- the number of people who think he spends more time attacking George Bush than telling us what he'd do as president has been -- has been increasing dramatically this past month. That's going to be a real challenge for him in these debates.

SHIELDS: Al, the debates.

HUNT: Well, I agree with Bob Novak on the way -- way it all developed, and I do think that the Bush people think that having foreign policy first is their chance really to put him away, that if they go and the president really is -- is the clear winner, whatever that is, on Thursday night, that that -- that Kerry will never be able to make that up. And they may be right if that happens. I suspect that won't happen. But I think the other thing you got to keep in mind -- and Kate, I will say our poll doesn't show anywhere near those kind of unfavorables for John Kerry...

O'BEIRNE: This was the CBS poll.

HUNT: Well, that's -- we know about CBS these days.

(LAUGHTER) HUNT: So all I can say is that I think we have a much better -- and actually...

NOVAK: Did Dan Rather do that polling?

HUNT: Actually, they both have about, you know, very close to the same ratings. But you know, my old friend, Hamilton Jordan, said one thing you got to remember about these, they're like Oprah, and so style matters. I think Bush knows that. Let's hope Kerry knows that.

SHIELDS: Let me just say one thing. Debates always help the presidential challenger because it's the only time, A, he stands on the stage with the president, and the president doesn't have any of the trappings of office. There's no White House, there's no Air Force One or seal. Secondly, I would say this about it, that I think the president has been ill served by the campaign tactic of appearing only before pre-approved, friendly audiences. He's gotten a little sloppy in some of his facts, and I just think that could be a problem that he hasn't been in an adversarial setting.

NOVAK: Let me just challenge you. It didn't help Bob Dole one bit. I thought it didn't -- those debates helped Clinton because Dole was an unattractive candidate, and he came over as an unattractive candidate in the debates. All those little rules I take a dim view of. But what I do believe is that that was a very funny, clever ad with the wind-surfing. And this fast response, the James Carville syndrome, you got to go out there and hit them hard -- I think they look ridiculous when they say, This is a serious campaign.

SHIELDS: Harry, is it a serious campaign or just -- just a few laughs?

REID: I think it's a serious campaign. I think the ad that the president ran is below the dignity of the president of the United States.

(LAUGHTER)

REID: I say that seriously.

O'BEIRNE: Lighten up! One problem John Kerry...

REID: I think that...

O'BEIRNE: ... has is he has no sense of humor!

REID: And I think the...

HUNT: George Bush does?

O'BEIRNE: Lighten up!

REID: ... follow-up that came from Carville...

O'BEIRNE: He's much more likable than...

(CROSSTALK)

HUNT: Depends on where you're coming from.

SHIELDS: OK, last word, Harry Reid. Coming up on THE CAPITAL GANG, George W. Bush gets his fourth tax cut from Congress. And stay tuned for a live update on Hurricane Jeanne at the bottom of the hour.

(COMMERCIAL BREAK)

SHIELDS: Welcome back. Congress gave final approval to a bill extending President Bush's tax cuts, scheduled to expire at the end of the year. The House passed the bill 339 to 65 after a senior Republican issued a warning.

(BEGIN VIDEO CLIP)

REP. JIM MCCRERY (R), WAYS & MEANS COMMITTEE: Let us be clear. If you vote for this bill, you're voting to allow taxes on the middle class to remain low. If you vote against this bill, you're voting to increase taxes on the middle class in this country. That's it. Plain as day.

(END VIDEO CLIP)

SHIELDS: The House Democratic leadership opposed the bill but did not impose party discipline.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: My advice to my colleagues is when they're dealing politically on the floor, you deal with it any way you need to deal with it.

(END VIDEO CLIP)

SHIELDS: The Senate passed the bill 92 to 3. Senator John McCain of Arizona, the Republican dissenter, voted for the bill with these misgivings.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I cannot cast this vote without also expressing my grave concerns over the very serious financial situation facing our country.

(END VIDEO CLIP)

SHIELDS: Al Hunt, does this lopsided victory mean Republicans now have won the political debate over taxes?

HUNT: No, not really, Mark. But this is a cleverly packaged scam. This is as much of a middle class tax cut as Madonna is a family values entertainer. I'll tell you what this is. You know what this is, Mark? And this is shocking. I hope I'm -- this is class warfare. This is income redistribution. This is reverse robbing the -- this is taking from the middle class and poor and giving to the rich. You know, this is actually a tax increase bill. There are working poor people who will face a tax increase because of this bill. So I would hope Bob would come out against a tax increase because I know he cares about poor people.

SHIELDS: Bob, I know you do, and one of the more interesting provisions that was struck from the bill was the Earned Income Tax Credit for our combat men and women in Iraq. That was -- they would not extend that, but they extended, obviously, the tax cuts that Al's talking about.

NOVAK: Yes, I want talk about -- about politics here because that's what this is about. And Al carries the red flag because he doesn't have to run for anything. He's got a big, expensive executive's job with "The Wall Street Journal," so he can carry the red flag. He took off the hammer and sickle, but it's still a red flag. And the other hand, people like Harry Reid, they have to -- they have to be elected. So they're not going to vote for -- for tax increases. Democrats are not that smart, but they're not stupid.

And two funny things is -- is Nancy Pelosi saying, I'm voting against it, but I give you a pass if you want to save yourself. And John McCain, who somehow has got this bill mixed up with the financial situation in the country, saying, I'm voting for it, but I got misgivings. That's Mr. Integrity.

SHIELDS: Kate O'Beirne, the Federal Reserve has raised interest rates three times. They don't think there's any need for a stimulus. Where's the stimulus argument for this bill?

O'BEIRNE: This would have been -- this is -- this is a direct help to families with children. It keeps the child tax credit that everybody with children in America practically gets, at $1,000 rather than $700. Politicians sure don't want to be lowering that. And it extends the elimination of the marriage penalty and the 10 percent tax bracket. So it was squarely centered on a population that politicians want to stay on the right side of. Because it was so popular, I think there may have been an opportunity to offset some of it, although the tax cuts alone are important enough, with some spending cuts. But that's not what anybody in Congress is interested in doing.

SHIELDS: No spending cuts, Harry. The deficit grows.

REID: This tax cut should have happened a long time ago. There was never any question that we would help the middle class. The question was whether we would extend it and help some of the people you've talked about. Blanche Lincoln and others, Max Baucus, worked very hard in conference to get that done. It didn't happen. But this could have happened six months ago, eight months ago. We -- these are no new tax cuts. These are extensions of tax cuts that are already in effect.

An of course, it would be good if we could offset this, and the only place to go is what's happening around the world. And of course, as we know, last year, we approved $87 billion and then $69 billion -- I'm sorry, $87 billion, $69 billion-plus just in supplementals for Iraq. So there's a lot of money out there, and I don't think we should discount what John McCain said. I think there's some spending going on there that the Republicans are only concerned about when it seems not to have a direct bearing on their tax policy.

O'BEIRNE: There's plenty of domestic spending that could be cut!

SHIELDS: Well, let me just say that, you know, Republicans, Democrats talk about their concern about children and posterity and the future, and what they basically decided was the future was November 2. And if that -- if that debt is passed on to the next generation, hey, what the hell. As Ronald Reagan said...

(CROSSTALK)

SHIELDS: Ronald Reagan said, What did posterity ever do for me?

(CROSSTALK)

HUNT: We're in a war against terrorism, and now we are asking people to make sacrifice and take a tax cut.

(CROSSTALK)

HUNT: Boy, I'll tell you!

NOVAK: ... and saying, I'm against it, but if you want to vote for it, go ahead and vote for it.

SHIELDS: She said publicly, Bob, what people say privately, and maybe...

(CROSSTALK)

HUNT: ... same thing Republicans said on the Medicare drug bill, Bob.

(CROSSTALK)

SHIELDS: Harry Reid -- Harry Reid, I'm sorry you're here in the middle of this squabbling and to see Bob's true colors come out, but we thank you very much for joining with us.

REID: My pleasure.

SHIELDS: Coming up in the second half of THE CAPITAL GANG, our "Newsmaker of the Week" is Pulitzer Prize-winning journalist David Halberstam on the parallels between Vietnam and Iraq. We'll go "Beyond the Beltway" to South Dakota, where the Senate Democratic leader is fighting for his political life. That and our "Outrages of the Week" all after a live update on Hurricane Jeanne, how hitting Florida's Atlantic coast.

(COMMERCIAL BREAK)

LIN: Good evening. I'm Carol Lin at the CNN Center in Atlanta. And here's what's happening right now. Jeanne just keeps getting bigger and stronger and faster as it prepares to hit the United States and make landfall. CNN meteorologist Jacqui Jeras tracking the Category 3 hurricane for us -- Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Carol, about 90 miles away from Vero Beach at this hour, still winds at 115 miles per hour, but getting higher gusts. We just got a report out of Vero Beach with a wind gust at 52 miles per hour. So those hurricane-force winds are getting closer now. It's moving westerly at 14 miles per hour.

I want to show you the radar picture because some of these outer bands are beginning to move in here. And right within the area that it's expected to make landfall, there you can see that big, bad eye. It's about 30 to 40 miles wide at this time, and these outer bands are going to be having some wind gusts, 40 to 60 miles per hour.

We'll watch those move out tomorrow. Sixty, 70, maybe 80 miles per hour in the next hour and a half. Also, be aware, within this area we may see some isolated tornadoes. And there's a tornado watch in effect until midnight for tonight.

Forecast track has it making landfall some time around the midnight hour, give or take an hour or so, and then curving on up to the north, then making its way back to the north and to the east. It will weaken pretty rapidly as it does so, or it's going to have some big threat, along with the heavy rain and damaging wind, storm surge about four to eight feet -- Carol.

LIN: All right. Pretty impressive. Thanks, Jacqui.

Floridians are obviously becoming experts at preparing for hurricanes. Four so far in the past six weeks. Craig Fugate is in Tallahassee. He's with the Florida Emergency Management -- or operations center there.

Craig, what are you doing to prepare for Hurricane Jeanne?

CRAIG FUGATE, FLORIDA EMERGENCY OPS CENTER: Well, right now there's very little we can do to change the outcome of the storm. It's going to make landfall. But what we've done with our state teams and our federal partners is make sure that we have the resources and people to go in immediately after the storm makes landfall. And as conditions permit, begin search and rescue and immediate needs.

But for many Floridians it's going to be a long night. And for us here as well. It's kind of frustrating watching this storm come ashore and know that there's nothing we can do until it gets out of the way.

LIN: Yes. And kind of frustrating. Kind of frustrating for you to hear that people -- a lot of people just blew off the warnings and said, "Look, we survived Charley, we survived Frances, we survived Ivan. We're just going to stay in our home because we're sick of leaving." Chances are there could be a much higher death toll from Jeanne as a result. What can you tell those people who are sitting in their houses and have regrets right now?

FUGATE: Well, there's not much I can tell them other than that help will be on the way. But it won't be coming tonight.

Conditions are rapidly deteriorating. Rescue crews (UNINTELLIGIBLE) support local governments. But if you're still on that path and you still have an opportunity, you need to go now. And if you're not in the evacuation zones, you need to get inside and stay inside as the storm comes through.

Again, a very dangerous, hopefully not deadly. But our history tells us it could be a very long night for a lot of Floridians.

LIN: And you consider all the debris from the last hurricanes. Frankly, a lot of that debris could become flying missiles in Hurricane Jeanne, raising the death toll, raising the number of injuries.

FUGATE: Well, exactly. And that's why the safest place for many residents are going to be inside of an -- of a building, and get inside and stay inside there in a storm. Two storms have already hit these areas. This will be the third storm. Again, you don't want to be out and about as this storm moves through the area.

LIN: All right. Thanks, Craig Fugate. It's hard to imagine you actually have to tell people that, but our correspondents have seen people out there on the roads even as we speak.

Thank you.

Stay tuned to CNN for the very latest on Hurricane Jeanne. And I'm going to have continuous coverage starting at 8:00 p.m. Eastern and throughout the night.

That's what's happening right "Now in the News." I'm Carol Lin. Now back to THE CAPITAL GANG.

SHIELDS: Welcome back to the second half of THE CAPITAL GANG.

David Halberstam is a 70-year-old reporter for "The New York Times," won the 1964 Pulitzer Prize for his coverage of the Vietnam War. The first of his 16 books, "The Making of a Quagmire" in 1965, was also about Vietnam.

Earlier this week, Al Hunt interviewed David Halberstam from New York.

(BEGIN VIDEOTAPE)

HUNT: Doesn't it amaze you that the Vietnam War, almost 30 years removed, is still an issue in an American presidential election today?

DAVID HALBERSTAM, JOURNALIST: It's absolutely staggering. It's really -- I wrote about it earlier in "Vanity Fair," and I said that it was like 1952, when Dwight Eisenhower and Adlai Stevenson were running against each other and they started attacking each other over what they had done in World War I. Not World War II, in World War I.

I mean, it doesn't go away. It's the -- it's the sort of unfinished meal at the table. It's the second American Civil War.

HUNT: What's your take on the criticism of John Kerry's service in Vietnam and his criticism of the war afterwards?

HALBERSTAM: The criticism of him and these ads are really outside normal political decency. I think he went, he served bravely, he did well, he won very difficult medals to get, the Silver Star, the Bronze Star, the Purple Heart. Swift boat duty was exceptionally dangerous going in those mangrove swamps perfect for ambushes.

And he was rather unusual for his class, upper middle class, St. Paul's School, Yale. To have gone, most of the people who had the ability in those days to avoid going -- and I thought, by the way, that what his testimony for a young man, when he come back, the Vietnam veterans against the war, was really very eloquent, that praise, "Who will ask the last man to die for a mistake?" The people who should have been testifying instead of this young man who had served were people like Secretary McNamara.

HUNT: Does it matter for a policymaker today, fashioning policy on issues like Iraq, whether they served in Vietnam or not?

HALBERSTAM: It shouldn't at all. But they should know -- there should be an elemental level of curiosity. And I think that's what's bothersome about the administration, that they sort of -- they sort of give it the back of their hand.

I thought Vietnam was a critical part of my own education. I mean, learning the limits of American power because of the colonial undertow. And I really wish that some of the people in the -- in the administration, whether it's the president, the vice president, the secretary of defense, had had their enthusiasm for the power of American arms tempered by that war.

John Kerry's not braver than George Bush. And he's not more courageous. And he's not more patriotic. But because of Vietnam, he's been more tempered by the reality of the real world.

HUNT: The Dan Rather "60 Minutes" mistake, what's your take on it?

HALBERSTAM: I think it's a big predatory corporation that doesn't care about the news. They've taken one of the great news organizations and made it a pathetic little thing.

I was very unhappy with the comparable story they did a couple of years ago about Bob Kerrey, when they reinvestigated his medal of honor. I just -- where Rather was very aggressive, almost prosecutorial in his assault and he hadn't even gone to -- go to Vietnam to check it out. And that's true across the board, by the way, in all of our business.

There's been, because of the Internet and CNN and whatever, there's a race to get something on and get it first. And there's been a diminution of the verification process.

HUNT: When you were "The New York Times" Vietnam correspondent, the White House, then in Democratic hands, viciously attacked you.

HALBERSTAM: Yes.

HUNT: It turns out, of course, you were writing the truth and they were lying.

HALBERSTAM: Yes.

HUNT: Do you think our government today on the Iraq war is lying to us?

HALBERSTAM: I think it is exaggerating our successes and underestimating the undertow of the resistance that we're in. I think we punched our hand into the largest hornets' nest in the world. I think this is going to be -- end up being more costly, more difficult, and harder to resolve than Vietnam.

(END VIDEOTAPE)

SHIELDS: Al Hunt, at this stage, is it reasonable for the wonderfully candid David Halberstam to call Iraq harder to resolve than Vietnam?

HUNT: Yes, Mark. You know, the fears back then of the domino theory and the communists taking over southeast Asia, Vietnam, never materialized. I think of Iraq, and (UNINTELLIGIBLE) there are going to be far graver consequences.

SHIELDS: Bob Novak.

NOVAK: I'm sorry that my old friend Dave Halberstam has bought into the Democratic propaganda on this. It sounded like a little bit out of the Kerry campaign, and particularly his saying that John -- John Kerry -- well, buying whole John Kerry's patriotism, when his fellow officers in Vietnam said he gained the material to ensure a political career for himself.

SHIELDS: Kate, Dick Cheney was not...

(CROSSTALK)

O'BEIRNE: Who is this journalist to be telling 2.7 million Vietnam vets how they should feel about John Kerry's testimony? And the 256 swift boat veterans who faced the exact same dangers three times longer than John Kerry did have every right to feel that they were slandered by him in '71. However eloquently it was done, it was a slander.

SHIELDS: Al? HUNT: He won his medals. He was a hero. And this is all about politics, the other...

SHIELDS: Last word Al Hunt.

Next "Capital Gang Classic": George W. Bush's first appeal to the United Nations for help on Iraq.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Two years ago, President George W. Bush went before the United Nations to make his case against Saddam Hussein. CAPITAL GANG on September 14, 2002 discussed his first appeal for international support.

(BEGIN VIDEO CLIP)

NOVAK: I think he gave a message to the world that he wasn't a lone cowboy just having the United States unilaterally acting. He opened the way.

If Saddam Hussein wants to be sensible, then he can avoid this war by coming around. I think there's a lot of people depending on it, saying, "Let's get rid of him. We don't want him to agree."

O'BEIRNE: He guaranteed that we're not going to go alone because the rest of the world responds to that kind of resolve and leadership on our part. He made a great gift to the United Nations by helping to save them from irrelevancy.

CARLSON: The most important thing he can do is to -- is to get -- if we must go there, get the country and our allies to the place where we have to go into Iraq. Not because President Bush wants to, but because we must.

SHIELDS: It was essentially presenting the case against Saddam Hussein and his violation of U.N. resolutions rather than advocating an invasion, an occupation and a dismantling of the Iraqi government.

(END VIDEO CLIP)

SHIELDS: Bob Novak, did President Bush in 2002 ever really want to avoid a military confrontation with Iraq?

NOVAK: As I said, the Pentagon wanted the military confrontation. And I think now that the president was with the Pentagon on that.

SHIELDS: Would the Pentagon?

O'BEIRNE: The president gave the U.N. a chance to be relevant. They chose irrelevancy. And now they're doing the same with Sudan.

SHIELDS: Al? HUNT: Mark, you all look as good today as you did back then.

SHIELDS: Thanks a million, Al Hunt.

We'll be right back after a short break.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

In South Dakota, Senate Democratic leader Tom Daschle faces a serious challenge from former Republican Congressman John Thune.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: Tonight, the president has called us again to greatness. And tonight, we answer that call.

ANNOUNCER: Senator Daschle helped forge a consensus to rebuild our military.

JOHN THUNE (R), SOUTH DAKOTA SENATORIAL CANDIDATE: For years, Tom Daschle has been telling us one thing here in South Dakota and then doing the opposite in Washington. He says he's fought for lower energy prices, but he hasn't.

(END VIDEO CLIP)

SHIELDS: The candidates met in debate for the first time on NBC's "Meet the Press" this last Sunday. And the Republican attacked the Democratic leader's criticism of the Iraq war.

(BEGIN VIDEO CLIP)

THUNE: What it does is emboldens our enemies and undermines the morale of our troops.

DASCHLE: I take this personally. It's not only an attack on me, it's an attack on where I'm from.

(END VIDEO CLIP)

SHIELDS: A new poll by the "Argus Leader" and KELO TV shows a five-point Daschle lead, compared with a two-point lead in May. Joining us from Chicago is David Kranz, political columnist of the Sioux Falls "Argus Leader."

David, how do you explain this apparent improvement in Senator Daschle's poll numbers?

DAVID KRANZ, SIOUX FALLS "ARGUS LEADER": Well, there's a couple of things you can look at. Really, the race is really starting to intensify in the middle of August, and one of the things that happened was a more aggressive, more pointed campaign by former Congressman Thune. And one of the things I can tell you about our poll that showed up -- I'm not at the liberty of telling you the exact numbers, but Mr. Thune's negatives went up quite substantially compared to last time. And so it may be somewhat of a backlash in that particular situation. You also had the "Meet the Press" debate that may or may not moved some of the numbers some.

SHIELDS: Bob Novak.

NOVAK: Tell us about that, David. Do you think that the position taken by -- by Mr. Thune on the "Meet the Press" debate hurt him? A lot of people thought that the -- the weepy performance by Senator Daschle was a little ridiculous, but do you think it went over in South Dakota?

KRANZ: You know, the reaction to that was kind of like we are in the country today, or in the Senate, when you vote in South Dakota. It was kind of a 50-50 response.

You heard a lot of people saying that that was over the top as far as Mr. Thune was concerned. And other people said, well, Daschle needs to be accountable.

I do know some people who are not in the Thune campaign who wished he wouldn't have said it, though, because it's something for them to deal with that they weren't anticipating.

SHIELDS: Kate O'Beirne.

O'BEIRNE: David, in 1998, Tom Daschle won reelection with 62 percent of the vote. I was intrigued that during that "Meet the Press" appearance, the clip we showed, he seems to think it's necessary to make any criticism of him look like a criticism of South Dakota. Is he so unsure of his own popularity six years after that big win that it's now an attack on South Dakota if you're opposed to Tom Daschle.

KRANZ: That does seem to be one of his messages. And, of course, Mr. Thune is using sort of as a theme that he's a leader and Senator Daschle portrays himself as a victim.

So that's going to be part of that campaign as it intensifies when we're near the finish line. But I think Daschle knows he's in the race of his life right here now. And right now I think when he speaks out he tries to protect South Dakota a lot. And I think that's what he really is intending to do by that approach.

SHIELDS: Al Hunt.

HUNT: David, John Thune a couple of weeks ago, gay marriage was going to be his big issues. And then he turned to terrorism. And now it's the question of Daschle emboldening our enemies.

Is he just desperately searching around for something? Because right now, with -- with, what, only five weeks to go, most people seem to have made up their minds. KRANZ: I think that's true. You really see a lot of rock-solid support on both sides. There's not a lot of undecideds left in this race.

And Mr. Thune's approach, I think he's more taking a nationalized approach to his campaign, discussing national issues that he thinks will resonate with South Dakota voters, while Senator Daschle is localizing his campaign, talking more about "what I did for you," you know, in Brule County, or "what I did for you" elsewhere in Sioux Falls. And he's trying to keep it local, saying this is where I've exercised by clout.

SHIELDS: David, looking at the race, the last time Tom Daschle ran in the presidential cycle it was 1992. And I'm trying to figure out who are the Bush-Daschle voters? Have you figured that out in this campaign?

KRANZ: The Bush-Daschle voters are people who basically look at the big picture nationally, because we generally always vote for the Republican for president. Like three times in our history we voted for a Democrat. But the bottom line is they like, you know, the conservative leadership of the president. But the people who look at Daschle say, "Gee whiz, you know, he can get things done for us. He can deliver for us."

And I think that's a big issue right now that gives him an advantage. And it's surprising with almost 20 percent of the Republican voters consistently are supporting Daschle.

SHIELDS: OK. Hey, David Kranz, thank you so much for being with us.

We'll be back with the "Outrageous" in just a minute.

(COMMERCIAL BREAK)

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

Only very rarely do big-time American politicians reveal the utter contempt they privately feel towards what they like to call publicly people of faith. But that's exactly what President Bush and Karl Rove do in a mailing from the Republican Party to church-going voters in West Virginia and Arkansas, warning that if they do not vote Republican, that when liberals get elected the holy bible will be banned.

Tell me, just how bigoted and ignorant does George Bush think Arkansas and West Virginia voters are -- Bob Novak.

NOVAK: A grand jury in Austin, Texas, has indicted three Republican political operatives for alleged illegal political contributions as part of the state's overdue congressional redistricting. The Democratic district attorney, Ronnie Earle, would indict a ham sandwich if he thought it was Republican.

In an investigation that began two years ago, the indictments finally were returned just 40 days before the election. The real target is the mastermind of the redistricting plan, House Majority Leader Tom DeLay, but not even Ronnie Earle could stretch the criminal -- the criminalization of politics that far.

SHIELDS: Al Hunt.

HUNT: Mark, it's the politics of criminalization. That Texas grand jury that indicted those three top associates, the past GOP whip, Tom DeLay, because Tom DeLay controlled a political committee that secretly funneled corporate contributions to Texas state legislative races. A violation of the law. But the spineless House Ethics Committee won't even launch an investigation.

How about getting Richard Falen (ph), the Chicago lawyer who Republicans lavishly praised for his investigation into Jim Wright (ph) in the '80s, to independently review the evidence and report back to the House in a month whether there was a case against DeLay? Don't hold your breath.

SHIELDS: Kate O'Beirne.

O'BEIRNE: John Kerry is well known for his imaginary foreign friends, who he believes will leap at the chance to come to our aid once he's in the White House. Now he's darkly warning about the possibility of reinstating the draft, a favorite urban myth of liberal Democrats who, in fact, are the only ones backing the bill to do just that. If John Kerry doesn't stop playing pretend, he'll look as phony as his phony friends and his phony fears.

SHIELDS: This is Mark Shields saying goodnight for THE CAPITAL GANG. Stay tuned to CNN for around-the-clock coverage of Hurricane Jeanne battering the Florida coast.

Thank you for joining us.

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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