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CNN LATE EDITION WITH WOLF BLITZER

Interview With John Edwards; Interview With John Snow

Aired October 10, 2004 - 12:00   ET

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


WOLF BLITZER, HOST: It's noon in Washington, 9 a.m. in Los Angeles, 7 p.m. in Baghdad, 8:30 p.m. in Kabul, Afghanistan. Wherever you're watching from around the world, thanks very much for joining us for "LATE EDITION."
We'll get to my interview with the Democratic vice presidential nominee, John Edwards, in just a few minutes.

First, though, let's go to CNN headquarters in Atlanta for a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: We begin in Afghanistan, where, one day after the first direct election, there are calls to nullify the results even before the votes have actually been counted.

Our chief international correspondent, Christiane Amanpour, is in Kabul. She's joining us now live with the latest.

Christiane?

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Wolf, the stakes are exceptionally high, not just for the Afghan people, but for the United States as well. The U.S. ambassador and others have been in consultations trying to mediate this dispute by the opposition candidates, and it appears by this evening that some of them have modified their positions.

The election board here and the observers, the organizers, have declared that they will not nullify yesterday's vote despite the opposition candidates calling foul over indelible ink that, in fact, in some cases was not indelible, the ink used to mark a person's thumb to avoid fraud. They're saying that they cannot nullify an election based on a few complaints, but those complaints will be investigated.

And, of course, the Afghan people, who were so delighted to have been voting, say that they want this election to stand, and they want whatever the result is to stand, as well, and to be accepted.

President Karzai himself said he hopes that people will vote for him, he hopes that he does become the victor, but he also was very upset about the cries of foul yesterday.

(BEGIN VIDEO CLIP) HAMID KARZAI, INTERIM PRESIDENT OF AFGHANISTAN: While millions of Afghan people were still lining there before the voting stations to vote, the boycott call came. This was very unfortunate, and it hurt me very much, hurt me as an Afghan, hurt my Afghan sentiment, my sentiment as a human being and as a person who had just gotten the right to vote and to confirm and affirm that right.

(END VIDEO CLIP)

AMANPOUR: Now, there were millions of people who turned out yesterday all over the country. In some parts it was snowing, others it was rainy.

Here in Kabul, it was very unseasonably chilly, with dust in the air.

And people are looking forward to the results. These are going to be quite slow in coming. They have only just started collecting the ballot boxes in Kabul from around the country. Voting will be by hand. Initial results perhaps not known for the next several days, and a final result not for the next few weeks.

BLITZER: Christiane Amanpour reporting for us from Kabul. History unfolding in that part of the world.

Thank you very much, Christiane.

Turning now to the U.S. presidential campaign, with just about three weeks to go until Election Day here in the United States, Democratic presidential nominee John Kerry and his running-mate, Senator John Edwards, are hoping to try to capitalize on some of the momentum they've been building from their debate performances.

The third and final presidential debate between the president and Senator Kerry set for Wednesday night in Tempe, Arizona.

Just a short while ago, I spoke with the Democratic vice presidential nominee, John Edwards.

(BEGIN VIDEOTAPE)

BLITZER: Senator Edwards, thanks very much for joining us. Welcome back to "LATE EDITION" from the campaign trail today in Milwaukee.

I want to get right to a key issue, namely Afghanistan. We saw dramatic pictures, hundreds of thousands of people lining up to vote in the elections this weekend. This has been a centerpiece of the Bush administration's policy.

Do they deserve credit for seeing this election get off the ground?

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: Well, of course the election taking place is a good thing, Wolf. The problem is -- it's been, as you know, postponed twice because of security concerns.

The problem is, there are still big chunks of Afghanistan that are not secure, under the control of drug lords and warlords. Afghanistan has gone back to its narcotics business. I mean, they're providing 75 percent of the world's opium now. So there's a very dangerous trend there. Parts of the country not secure; continuing to develop their narcotics business. I think the bottom line is that there's a great deal more to be done in Afghanistan.

And on top of that, one of our concerns, which John and I both talked about in these debates, is the fact that we had Osama bin Laden cornered at Tora Bora, and instead of using the finest military in the world -- we had the 10th Mountain Division just over the line in Uzbekistan -- we turned the job of capturing and killing him over to the Afghan warlords, the very people who had been protecting him a few weeks before, which we think was an enormous mistake.

BLITZER: You know, General Tommy Franks, who was the commander of the Central Command at that time, he denies that they knew for sure that Osama bin Laden was cornered in Tora Bora, because he said around the same time there were reports he was in Waziristan and other areas.

So he's dismissing -- he supports President Bush now, but he says at the time there was no hard evidence that he was there.

EDWARDS: Well, then, why in the world would we give the job of finding out whether he was there, if we thought there was a real chance he was there -- and I think there's a lot of evidence to the contrary -- why in the world would we turn that responsibility over to the very people who had been protecting him a few weeks before? Made no sense whatsoever.

If we thought there was a serious chance that Osama bin Laden was at Tora Bora -- and I think there's a lot of evidence that that's exactly where he was -- we should never have stopped using our own forces, the finest military in the world, to flush him out, kill him or capture him.

BLITZER: Well, on that point, he also says -- and I've interviewed him on this program not that long ago, and I pressed him on that -- he says that they never turned over complete authority to the warlords or the drug lords or anyone else, that the U.S. had extensive military capabilities in that area.

And he says they could do the job in Afghanistan, at the same time as they were preparing for the war in Iraq. But we're not going to get into the whole debate over that issue right now, since we're limited with the amount of time.

Let's move on from the elections in Afghanistan, which have taken place, although there are still serious questions about how free and fair these elections were, to the elections scheduled for the end of January in Iraq.

Do you believe that, if these elections can in fact take place, that will have proven that this war was the right thing to do? EDWARDS: No.

First of all, I think there are really serious issues with these elections taking place. And if you look at what's happening on the ground right now, we have about 30-some odd -- I believe, about 35 is the last number I saw -- U.N. personnel on the ground.

The U.N.'s responsible for conducting this election. You know, the U.N. conducted the election in East Timor, a much smaller country, and had over 200 people on the ground. It's absolutely impossible to conduct this election with that number of people.

And of course, the reason there aren't more there is because it's so dangerous. And, you know, we've lost over a thousand troops, and we've got Americans being kidnapped and, in one case, beheaded, and have these insurgents and terrorists flowing into Iraq from all over the world. Parts of the country under the control of insurgents.

No, I think the reality is that this president -- our military has done everything they've been asked to do, Wolf; they've been extraordinary; our men and women in uniform have been heroic -- but the president had a responsibility to plan for this stage, to provide a plan to win the peace. And it's now absolutely clear he didn't have a plan, and the results are catastrophic.

BLITZER: But let me press you on this point, though. If, in fact, there are free and fair elections in Iraq and democracy takes hold there, why do you say the war would not have been justified? You get rid of Saddam Hussein, and at the same time you create a democracy for the first time in the Arab world. What's wrong with that?

EDWARDS: Well, here's what I'm saying. I'm saying, first of all, that what's happened is Osama bin Laden is still at large, al Qaeda has reconstituted itself. They are now in 60 different countries around the world. They were the people who attacked us on September 11th, first.

Second thing is, if you look at what's happening on the ground in Iraq right now, and I think even the administration people would say there is a serious issue about whether these elections can take place as planned.

Our responsibility, and John Kerry's laid this out very clearly, is we do believe we have to be successful in Iraq. It's important because they've turned Iraq into something it wasn't before the invasion. They've turned it into a haven for terrorists.

And the result of that is, we have a responsibility, along with the rest of the world, to ensure that we don't have an Iraq in the middle of the Middle East which is a haven for terrorists, which means we have to be successful there.

BLITZER: Let me read one excerpt, one quote, from the Charles Duelfer report, nearly a thousand pages on weapons of mass destruction in Iraq or lack thereof. Among other things, he writes this: "By 2000-2001, Saddam had managed to mitigate many of the effects of sanctions and undermined their international support. Iraq was within striking distance of a de facto end to the sanctions regime."

He goes on to say, "Saddam wanted to recreate Iraq's WMD capability which was essentially destroyed in 1991, after sanctions were removed."

In other words, what he is saying is, if the U.S. would have simply allowed the status quo to go forward, the sanctions would have been removed sooner rather than later and then he would have recreated his WMD capability and potentially shared it with terrorists.

EDWARDS: But the point of all this is that Iraq had no weapons of mass destruction. They didn't even have an ongoing system to create weapons of mass destruction.

You know, so, the Bush administration's explanation is we invaded a country because at some point in the future they might get weapons of mass destruction?

I mean, Iran and North Korea, the other two parts of what George Bush labeled the "Axis of Evil," they have nuclear capability. Iran has moved forward their nuclear weapons program. North Korea has gone from one to two nuclear weapons to as many as six to eight nuclear weapons.

All that has happened on their watch, and they have done nothing -- they have abdicated responsibility for confronting Iranians to the Europeans. They did the same thing with North Korea, abdicated responsibility to the Chinese. And both those countries have nuclear capability.

I mean, the bottom line is this is a convoluted logic to try to justify in hindsight what we now know wasn't true.

Here's what we believe. We believe that...

BLITZER: Well, let me interrupt, Senator, for one second, because the president repeatedly says that in the post-9/11 world you can't take any chances about that. It is better to err on the side of action as opposed to inaction.

EDWARDS: It is better to have good judgment, Wolf. It's better to make the right judgments that don't cost the American people and doesn't severely damage our credibility around the world.

I mean, we have a couple of examples. Al Qaeda's now in 60 different countries. So, I mean, how many of those countries are we going to invade?

Iran and North Korea clearly have significantly more capability than Iraq had at the time of the invasion. And what are we going to do about Iran and North Korea? I mean, that's great rhetoric, but at the end of the day what you want in a president of the United States is somebody who takes the information and the intelligence available to them and exercises good judgment.

This president has made misjudgment after misjudgment. He made the wrong judgment about capturing or killing Osama bin Laden in Afghanistan. He made the wrong judgment to turn the focus away from the war on terror and the people who attacked us. And he made the wrong judgment in not having a plan to win the peace in Iraq.

(END VIDEOTAPE)

BLITZER: Coming up, more of my interview with Senator John Edwards. I'll ask him why he noted that Vice President Dick Cheney has a gay daughter during their debate.

Then, U.S. intelligence and Iraq: How could the Bush administration have gotten it so wrong? I'll ask the chairman and the vice chairman of the Senate Intelligence Committee.

And later, who will win and who will lose? Bush-Cheney campaign chairman Marc Racicot and New Mexico Democratic Governor Bill Richardson weigh in on the second presidential debate and the home stretch of this campaign.

"LATE EDITION" continues right after this.

(COMMERCIAL BREAK)

BLITZER: "LATE EDITION's" Web question of the week: Which candidate won the presidential debate Friday night? You can vote right now. Go to cnn.com/lateedition. We'll tell you the results later in our program.

Up next, more of my interview with Democratic vice presidential nominee John Edwards. I'll ask him why he didn't correct Dick Cheney when the vice president insisted they had never met before the debate.

You're watching "LATE EDITION," the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: A beautiful day here in Washington, D.C. Welcome back to "LATE EDITION."

We return now to my interview with the Democratic vice presidential nominee, Senator John Edwards.

(BEGIN VIDEOTAPE)

BLITZER: When you debated Vice President Dick Cheney at Case Western Reserve University in Cleveland this past week, he came out swinging. He was very tough in going after you, specifically your record in the United States Senate. Here is an excerpt of what he said: (BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Senator, frankly, you have a record in the Senate that's not very distinguished. You have missed 33 out of 36 meetings in the Judiciary Committee, almost 70 percent of the meetings of the Intelligence Committee. You've missed a lot of key votes on tax policy, on energy, on Medicare reform...

(END VIDEO CLIP)

BLITZER: Was he telling the truth?

EDWARDS: No, no. As usual, it was misleading. He also said, by the way, which you didn't play, that he and I had never met before he walked on that stage last night. That's just black-and-white false.

BLITZER: Why didn't you correct him at the time when he said that? It seemed like a great opportunity for you to score some points.

EDWARDS: Now, wait a minute. You asked me one question, let me answer that one...

BLITZER: All right, go ahead and answer both.

EDWARDS: Let me go back to your first question.

The answer to his criticism is, first of all he is talking about -- when I was -- during the first two years I was in the Senate, I had an almost perfect attendance record.

And I fought for and worked on things that really matter in this country. I helped write the Patient's Bill of Rights. I fought for it, got it passed on the floor of the Senate. I helped write the law after September 11th to keep this country safe, and not only that I worked on and helped lead the fight on things like campaign finance reform, making sure that we do something about drug company ads on television. Every time we would be making progress, Bush and Cheney would block what we were doing.

So I came to the conclusion the only way to really fix this problem was to get Bush out of the White House, get George Bush out of the White House. So I made the decision to run for president.

So that's the period of time that he focused on with those comments. And the thing about coming onto the floor of the Senate to preside and not having spoken to me? You know, the truth is, Dick Cheney would come on to the floor of the Senate on the Republican side, sit at the presiding desk and then leave on the Republican side.

Now, I guess I could have chased him down from behind and shook his hand, but this is all -- as my wife's grandmother loves to say -- you know, the intent to deceive is the same as a lie, and that was a whole series of things that were intended to create an impression that's just not true. BLITZER: Why didn't you correct him when he said he had never met you?

EDWARDS: Yes, I made the decision, wrong or right, in hindsight, I made the decision at the time that it was more important for us to be talking about the vice president's credibility and what's happening in Iraq, where men and women are dying, than to talk about whether Dick Cheney and I had ever met before.

So it was really pretty much that simple. So whether it was the right decision or not, that was the decision I made at the time.

BLITZER: I've got one final question, Senator. A comment that you made during the course of the debate with the vice president on the issue of same-sex marriage. Listen to what you said because it's caused somewhat of a stir. Listen to this.

(BEGIN VIDEO CLIP)

EDWARDS: I think the vice president and his wife love their daughter. I think they love her very much, and you can't have anything but respect for the fact that they're willing to talk about the fact that they have a gay daughter, the fact that they embrace her. It's a wonderful thing.

(END VIDEO CLIP)

BLITZER: Now, he thanked you for that, but he didn't mention the fact himself that his daughter, Mary, is a lesbian. And some people are saying you wanted to sort of embarrass him by pointing that out in the debate and I want you to give us a chance -- to give yourself a chance to respond to that criticism.

EDWARDS: Oh, of course not. That's absurd. The vice president brought it up himself, if I remember correctly, either in his 2000 debate or at other times in his public life. I would never do anything like that.

The point was to recognize that the vice president, like millions of parents in this country, want their children to be happy, and they want them to be treated fairly and not be discriminated against, and that was the whole purpose of saying what I said. It was heartfelt.

BLITZER: And he did bring it up himself about a month before that debate. He publicly mentioned the fact that his daughter is gay.

Senator, we're all out of time. Thanks so much for joining us.

EDWARDS: Thanks, Wolf. Thanks for having me.

(END VIDEOTAPE)

BLITZER: We have to take a quick break.

Up next, we'll get a quick check of what's making news right now, including the latest on the alleged voting irregularities in Afghanistan.

Then, terror at Egypt's Taba resort. Did al Qaeda strike again? We'll talk to the chairman and the vice chairman of the U.S. Senate Intelligence Committee, Republican Pat Roberts and Democrat Jay Rockefeller.

More "LATE EDITION" straight ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our long-term security depends on our deep faith in liberty.

(END VIDEO CLIP)

BLITZER: President Bush, making closing remarks at Friday night's debate in St. Louis. That second face-to-face meeting showcased dramatic differences between the president and Senator Kerry on Iraq, the war on terrorism, national security and other issues, as well.

Joining us now to talk about that, two guests: the chairman of the U.S. Senate Intelligence Committee, Republican Senator Pat Roberts of Kansas, and the committee's vice chairman, Democratic Senator Jay Rockefeller of West Virginia.

Senators, welcome back to "LATE EDITION."

SEN. PAT ROBERTS (R), KANSAS: Thank you, Wolf. It's good to be here.

BLITZER: Let's read a couple of little excerpts from the report, the nearly 1,000-page CIA-sponsored report by Charles Duelfer on WMD, weapons of mass destruction, in Iraq.

ROBERTS: Actually, it's 1,500 pages.

BLITZER: 1,500 pages. I stand corrected. Among other things he writes this: "The ISG, the Iraq Survey Group, which went in to look for WMD, judges that Iraq unilaterally destroyed its undeclared chemical weapons stockpile in 1991."

And then they say this: "Saddam Hussein ended the nuclear program following the Gulf War. The ISG found no evidence to suggest concerted efforts to restart the program."

Senator Roberts, you've looked into this as closely as anyone. How could the U.S. intelligence community, on such a critical issue involving war or peace, be so wrong?

ROBERTS: Well, basically, it's the same thing that Senator Rockefeller and I have been pointing out, after our 17-0 vote on the WMD investigation by the Senate Intelligence Committee, which pretty well is confirmed by the Duelfer report. And we both said that this was a problem of group-think and assumption train, not only by the American intelligence community, but worldwide, every agency including the U.N. assumed that he had from past behavior -- that he had the weapons of WMD.

You mentioned the Duelfer report. It's almost encyclopedic in regard to the history of Iraq, what was going on in Saddam's head. But it also said that Saddam had a fetish about WMD.

The real question is, had he been able to end the sanctions and continue the oil-for-food program, would he have reconstituted that weaponry? I think he probably would.

BLITZER: But that was not the justification for going to war.

ROBERTS: No, not at that time.

BLITZER: The intent was -- the justification was the stockpiles.

ROBERTS: Yes, that's correct, and one of the things about intelligence -- I know we're having a great debate in the Senate now and the House about intelligence reform, and the military always says that they are the principal consumers. That's not right.

The principal consumer is the president of the United States and the Congress and the National Security Council and also the major consumer, which is the military. All of us, Jay and I, made very declarative statements and aggressive statements, as did the president, following that National Intelligence Estimate of 2002. The intelligence was wrong.

That's why it's so important to quit looking in the rearview mirror with 20-20 hindsight and get on with the business of intelligence reform which we're trying to do.

BLITZER: We're going to get into that in a minute, and I want to get on to the whole issue of what happens now.

At stake right now, Senator Rockefeller, as you well know, is U.S. credibility at home and around the world. If the U.S. government were tomorrow to say there's evidence of a nuclear bomb program in Iran, for example, and the U.S. is going to take it out or North Korea or Syria or any other place, wouldn't the United States have a serious problem with the world believing U.S. intelligence, given this record going into the Iraq war?

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: Not necessarily. If it was Iran or if it was North Korea, Syria, perhaps. Look, I mean, Iran is trying to get those weapons, nuclear weapons, North Korea definitely has them. If they use their third-stage missile they can actually put that into the west coast of the United States.

Our intelligence was terrible. And part of the reason was we didn't have anybody on the ground. I think part of the other reason was that -- something I've always believed -- that the Duelfer report, I think, in some ways confirms, that he destroyed, Saddam Hussein destroyed all of this stuff in the early '90s, because I think actually it was intended for Iran, as a defense against Iran. It had really nothing to do with us.

BLITZER: So when Tariq Aziz and other high-ranking Iraqis before the war insisted to the U.N., to the world, they had no weapons of mass destruction, they were telling the truth, weren't they?

ROCKEFELLER: Whether Tariq Aziz knew they had no weapons of mass destruction isn't clear, because Saddam Hussein kept everything from his leaders and generals. But, yes, I mean it's very clear now that it was true.

I mean, David Kay said that Saddam Hussein is delusional, said this last week. And then he said, so he has an intent or a desire, but that has nothing to do with capability. Duelfer makes it so clear, as did David Kay, he had no capability.

BLITZER: Do you regret voting for that resolution?

ROCKEFELLER: Yes.

BLITZER: Authorizing the president to go to war?

ROCKEFELLER: I've said a hundred times, I mean, I think, based on the intelligence at that time, but what, you know, Senator Pat Roberts and I have come to know since then and every other senator, I said it was a wrong vote on my part.

BLITZER: Was it a wrong vote on your part?

ROBERTS: I don't think so. I think if you still had Saddam Hussein there, he'd be paying $25,000 to attack the Israelis. I think if he were still there and efforts were made to lift the sanctions, he would have probably tried to reconstitute that weaponry.

It is interesting to note that on the Armed Services Committee, when we talked to two generals of the Iraqi of the Republican Guard, one general thought the other general had the WMD. I really think that probably Saddam Hussein thought he had WMD.

And in some ways, why, Dr. Kay also indicated -- or David Kay also indicated that the place was absolutely chaotic. It was sort of a grand central station with people who had expertise on WMD. I think that's a very unstable situation.

I think my vote would have been thought out on a little bit different, what, rationale than the immediate national security warning.

But we keep talking about U.S. intelligence. Wolf, this was a global intelligence failure. Even the French, even the Germans, not to mention the British -- everybody said that.

BLITZER: You know what they say, you know what they say. They say they made a major mistake because they were relying on the CIA, too. ROBERTS: Well, that's fine, but it's a two-way street in terms of the cooperation that we have with intelligence with our allies. And sometimes our allies have some very compartmented material that they don't give us. Obviously, there are some times that we don't give them information.

Yes, the CIA is probably the lead well. It is the lead intelligence agency in the world.

BLITZER: I want to play a sound bite from what the president said Friday night on the -- looking back, he doesn't admit he made a mistake. He doesn't acknowledge he made a mistake. And he's very forceful on this point. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: I wasn't happy when we found out there wasn't weapons. And we've got an intelligence group together to figure out why.

But Saddam Hussein was a unique threat, and the world is better off without him in power.

(END VIDEO CLIP)

BLITZER: Is he right?

ROCKEFELLER: No. I think, first of all, he's the president of the United States. And so he is the person who, if something doesn't happen on his watch -- and this would have been on his and part of Clinton's watch -- then the president is wrong.

But I think the more important question on that is that he could not admit even to that person who asked him, name three mistakes. He would not admit one.

And I don't think, Wolf, that in life, until a leader recognizes that they've made a mistake like a little case in my vote, then I correct it. I don't think that you can lead properly unless you admit to a mistake. And for some reason, Dick Cheney and President Bush can never admit anything went wrong.

BLITZER: Ambassador Paul Bremer, the former chief of the U.S. operation in Iraq, says that he made a mistake. And he told a group of insurance executives in West Virginia earlier in the week, caused a big stir, "We paid a big price for not stopping it" -- referring to the looting -- "after the major combat ended because it established an atmosphere of lawlessness. We never had enough troops on the ground."

That's a very, very serious allegation that he makes, even though he supports the war, supports the president. For him to say that the U.S. never had enough troops on the ground and that's the cause of a lot of the problems the Iraqis and the United States and coalition partners are facing today, that's a major statement.

ROBERTS: Well, I don't know if you can have it both ways.

Number one, it isn't so much the number of troops you have on the ground, it's the kind of troops and what they're trained for.

I know there are people who say we need 10,000, 30,000 or 50,000 or whatever it was that General Shinseki said, but you need the troops who are trained to do that, you know, particular kind of job.

Now, we can go back and argue that number and talk to Tommy Franks, or we can talk to Richard Clarke, or we can talk to Wesley Clark, or all 20/20 hindsight in the rearview mirror. What we have to figure out now is how we train more Iraqi police and forces, and we're doing that, so they can take up the job.

It would be nice if we could look forward. We have both candidates saying we have a four-point plan. The only difference that I see in these plans is that somehow John Kerry thinks that in the near future after a summit the French are going to send the French foreign legion down to Iraq. I just don't think that's feasible.

BLITZER: All right. Let me let Senator Rockefeller...

ROBERTS: We ought to be looking forward -- both of us are doing that -- in terms of intelligence reform and train the Iraqis, so that they can defend their own country and their election and their future.

BLITZER: Are you upbeat, looking down the road to the scheduled elections at the end of January in Iraq?

ROCKEFELLER: I want them to work, as an American. I'm worried about them.

I don't think they're going to be ready for it. The military police that are being trained, the president keeps saying that we have 125 and we'll have 175. When Pat Roberts and I were over there on our last visit, they had something like 4,000 trained. And I just don't have confidence that enough are coming forward to protect their own country, so I'm worried about the elections.

BLITZER: The Senate is in session right now, a rare weekend session, in part to try to deal with intelligence reform.

ROCKEFELLER: Yes.

BLITZER: You passed major intelligence reform legislation, 96-2, I believe, 96-2, backing up most of the 9/11 Commission recommendations to restructure the intelligence community.

The House passed legislation as well, but as you know, very, very different pieces of legislation. You're now trying to come up with a compromise. Can you do it?

ROBERTS: I don't know about "very, very." I'll say "very."

What the House has done is that they have more emphasis on border control. They have more emphasis -- I think they do something with the Patriot Act, I may be wrong in that regard. They also give less authority to the national intelligence director. You're looking at two people who, on the Intelligence Committee, believe the national intelligence director should have more power, not less. And so there's going to be some differences.

Jay is on that conference committee. I think we're going to have to iron them out. Delay is the worst enemy of reform. We've tried...

BLITZER: Is that Tom DeLay you're talking about?

(LAUGHTER)

ROBERTS: OK, you got me. Well, maybe.

(LAUGHTER)

But at any rate -- now you've completely ruined my train of thought.

(LAUGHTER)

OK, what we're going to try to do is get this done before the election.

And if the conferees can meet, and if the conferees can understand that we should be doing this before the election and not really pay that much attention to the people who say rush to judgment -- now, both Jay and I say we got to get it right.

I'm not particularly happy with the bill that was passed in the Senate. It's not the best possible bill, but it's the best bill possible.

BLITZER: We're out of time, but I want Senator Rockefeller -- you're on the conference. Can you work it out so that there will be a good bill that will emerge? Are you optimistic before the end of this session?

ROCKEFELLER: I'm not optimistic if they hold on to their current position that the national intelligence director can only recommend a budget and tasking and all the other authorities. We say that the national intelligence director does it.

BLITZER: All right. We'll leave it there, and we'll see you what you can do. In the past, there have been differences that have been resolved on these kinds of matters.

Senator Rockefeller, Senator Roberts, thanks very much to both of you.

ROBERTS: Wolf, thank you very much.

BLITZER: Good luck in this work.

Up next, behind the scenes of a political family. I'll speak with the Vice President Dick Cheney's daughter Liz about her father, life on the campaign trail and much more. And don't forget our Web question of the week: Who won the presidential debate Friday night? You can vote right now. Go to cnn.com/lateedition.

And "LATE EDITION" will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

To some, Vice President Dick Cheney is a key weapon in the Bush campaign arsenal. Others, however, consider him a liability. Everyone, however, agrees he wields a vast amount of power and influence in the Bush administration.

Joining us now, the vice president's daughter, Liz Cheney. Earlier in this administration, she served as deputy assistant secretary of state for Near Eastern affairs.

Liz Cheney, thanks very much for joining us.

ELIZABETH CHENEY, VICE PRESIDENT RICHARD CHENEY'S DAUGHTER: Great to be here, Wolf. Thank you.

BLITZER: I'm going to read to you what your dad said after the first Gulf War -- I covered that war -- when he was secretary of defense. He said this on August 14, 1992. He said, "I would guess if we had gone in there" -- referring to Baghdad -- "I would still have forces in Baghdad. Today, we'd be running the country. We would not have been able to get everybody out and bring everybody home. And the question in my mind is, how many additional American casualties is Saddam Hussein worth? And the answer is, not very damned many."

Those were strong words by the then-defense secretary, your dad, after the first Gulf War that seemed to be pretty prophetic.

E. CHENEY: Well, I think, clearly, you've got a situation where we had 12 years of resolutions that Saddam Hussein flaunted. You also had 9/11.

And after 9/11, the president judged, and was absolutely right in judging, that Saddam Hussein's Iraq was the nexus, where those who want to kill Americans could get access to either the weapons or the capability to build those weapons.

And there was simply no other choice. If your objective is to do everything possible to keep America safe, then going in and taking down Saddam Hussein and liberating Iraq as we also did with taking down the Taliban and liberating Afghanistan was critically important.

BLITZER: How does the vice president feel about virtually all the intelligence he was given by the CIA and everyone else about WMD in Iraq turned out to be so wrong?

E. CHENEY: Well, the president and my dad have both said that we need to have an investigation to look at why the intelligence was not as accurate as it should have been, but it doesn't change the fact that going into Iraq, removing Saddam Hussein was absolutely critical to keeping America safe.

If you look at the Duelfer report, you see that. You see that Saddam Hussein was actively thwarting the sanctions. Saddam Hussein was working very hard to bribe key members of the Security Council and other governments to help him get around the sanctions, that he was still in touch with scientists who knew how to make these weapons.

And if you were charged with keeping this country safe, you have got to make sure that that technology and that know-how doesn't get into the hands of the terrorists, so that's what we've done.

BLITZER: During the debate in Cleveland at Case Western Reserve University...

E. CHENEY: A great debate, by the way.

BLITZER: It was a very strong debate. Both Edwards and Cheney were both very, very good. The whole issue of Halliburton, the company your dad used to run from '95 to 2000 came up. Edwards made a point of that.

The New Yorker magazine writes this: "Cheney earned $44 million during his tenure at Halliburton. Although he has said he severed all ties with the company, he continues to collect deferred compensation worth approximately $150,000 a year and he retains stock options worth more than $18 million. He has announced that he will donate proceeds from the stock options to charity."

When all the controversy over Halliburton comes up, does your dad understand why there are some who think he may be doing something wrong now?

E. CHENEY: He understands that the Democrats are using this as a political tool. And I would direct people to factcheck.org. It's become a famous Web site now.

BLITZER: That would be dot-org, not dot-com.

E. CHENEY: Dot-org.

But your characterization is not accurate, actually, Wolf. Before he became vice president, he donated all of those options to charity and he bought an insurance policy to ensure that he has absolutely no conflict of interest with respect to Halliburton.

It's an issue the Democrats bring up, as The Washington Post has pointed out, when they don't want to talk about health care, they don't want to talk about Iraq, they don't want to talk about education. It's become a smoke screen, and I think the American voters see through that.

BLITZER: Listen to what John Edwards said at the debate. Listen to this.

(BEGIN VIDEO CLIP)

EDWARDS: While he was CEO of Halliburton, they paid millions of dollars in fines for providing false information on their company, just like Enron and Ken Lay. They did business with Libya and Iran, two sworn enemies of the United States. They're now under investigation for having bribed foreign officials during that period of time.

(END VIDEO CLIP)

BLITZER: Is that true?

E. CHENEY: Well, I would just point to what I said before. This is an issue that the Democrats continue to raise. Go to factcheck.org. Look at The Washington Post piece on this. There is nothing here. There's no charge here. And I think people will see through it. And you have to sort of wonder why the Democrats raise it.

You know, if you look at the polls, the only people who care about this issue tend to be the base. They tend to be sort of the extreme left of the Democratic party. And if the Democrats are, in fact, spending so much talking about this, I think you've got to wonder about whether or not they're really trying to shore up their base. And what does that say for a party in October of an election year?

BLITZER: On the issue of same-sex marriage, your dad said this at the debate Tuesday night. Listen to what he said.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I said then and believe today that freedom does mean freedom for everybody. People ought to be free to choose any arrangement they want. That's really no one else's business.

(END VIDEO CLIP)

BLITZER: This must be a very difficult issue for your family to talk about. Is it?

E. CHENEY: No, I think this is an issue my dad's been very clear about. And, frankly, it's an issue that not a lot of Americans are spending a lot of time being focused on this election cycle. My family is out working very hard.

You know, I'm a security mom. I've got four little kids. And what I care about in this election cycle is electing a guy who is going to be a commander in chief, who will do whatever it takes to keep those kids safe.

So I spent a lot more time, frankly, talking to people and worried about Senator Kerry's record for the last 20 years being on the wrong side of every national security issue facing this nation. His record the last couple of years in this election campaign: not being able to stick to any one position on Iraq.

And, frankly, this new issue that came up in the debate a couple days ago about a global test and saying that somehow making sure that our president is popular in the halls of government in Paris, you know, is as important as keeping us safe. Those are the issues that America cares about.

BLITZER: He wanted to make that global test, he says, in order to get international support for U.S. troops.

E. CHENEY: But he said, Wolf, though, a global test before you use preemption. And that is a critical point that people may pay attention to.

BLITZER: Do you accept what John Edwards said on this program earlier today, that he wasn't trying to embarrass your dad or your family by bringing up the issue in the debate, that your sister Mary is gay.

E. CHENEY: Well, you know, at the time when he brought it up, it was not appropriate. And, you know, again I sort of can just think that...

BLITZER: Why wasn't it appropriate?

E. CHENEY: ... he didn't have a lot of substance to talk about on this issue. And so it seemed that, you know, he could eat up some of his time by, you know, raising my sister and talking about her rather than talking about the substance of the question he had been asked.

So I don't question his motives, but I do point out that on a number of questions in the debate, the senator seemed not to be as well-informed as people, you know, ought to expect their vice presidential candidates to be.

BLITZER: How is your dad feeling?

E. CHENEY: He feels great. He's working very hard. And we feel really good heading into the last weeks of this election.

BLITZER: How good exactly do you feel? You must be pretty nervous, given the tightness of the race.

E. CHENEY: Well, it's a tight race. We've known it was going to be tight all along. But I just, you know, I feel very good about this commander in chief, about my dad, about the direction the country is going in.

And, you know, getting out of Washington and talking to people all around this great nation who tell us they're praying for us, who tell us how important it is for us to support our troops, having the chance to meet many of those troops, it's really an honor and a privilege to be involved in this.

BLITZER: Elizabeth Cheney, although everybody calls you Liz, thanks very much for joining us.

E. CHENEY: Thanks, Wolf. Great to be here.

BLITZER: Say hello to your parents.

E. CHENEY: I will. Thank you.

BLITZER: Still ahead, is the U.S. economy poised to create more jobs? And what about the record high price of oil? I'll speak money matters with the treasury secretary, John Snow. He'll join me.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION." We'll talk with the U.S. treasury secretary, John Snow, about jobs, tax cuts, the price of oil and much more in just a few minutes.

First though, let's go to CNN headquarters in Atlanta for a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: Let's get back to Iraq now, where there is no let up in the terror attacks. A pair of suicide bombings today killed more than a dozen people. The violence came amid a surprise visit to Iraq by the U.S. defense secretary, Donald Rumsfeld.

CNN's Brent Sadler is in Baghdad. He's following all of these developments. Brent is joining us now live.

Brent?

BRENT SADLER, CNN CORRESPONDENT: Thanks, Wolf.

Yesterday, two more deadly car bombs, suicide car bombs in the center of the Iraqi capital. In one of those explosions, a U.S. soldier from Task Force Baghdad died from injuries suffered in one of those suicide car bomb blasts.

In a second explosion close to a police academy, at least six Iraqis were killed in that blast, some of them police recruits. This, a familiar theme in insurgent attacks, trying to undermine the morale and recruiting levels among Iraqi security forces, not least the police.

Now, these attacks came on a day that U.S. Defense Secretary Donald Rumsfeld was in Iraq. His first visit here since the hand over of power to Iraqi interim government authorities three months ago. Mr. Rumsfeld visited U.S. Marines, about 1,500 of them, at an aircraft hangar in the western desert of Iraq.

He told them that attacks, terror attacks, were likely to escalate before planned elections at the end of January in Iraq. He also said that U.S. forces and Iraqi forces were not engaged in a conventional battle here.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. SECRETARY OF DEFENSE: The innocent people that are being killed, Iraqi people, are not incidental or accidental casualties. In many instances, they are the targets, because this is not a battle against large armies and navies and air forces, this is a test of wills that we're engaged in.

(END VIDEO CLIP)

SADLER: Well, one of those test of wills may come to an end pretty soon with news from Iraq that the bloody battles that have been going on for the past several weeks in Sadr City on the outskirts of the capital may come to an end through peaceful means.

Militants loyal to Muqtada al-Sadr, the radical Shia Muslim cleric, say they'll start handing over heavy and medium weapons Monday during a five-day grace period.

Some of their loyalists were seen dismantling heavy machine gun Sunday, ahead of that five-day handover period. If this goes ahead smoothly, the surrender of weapons, and regaining of control of Sadr City by central government forces, then this, say Iraqi officials, will indeed be a breakthrough.

Wolf?

BLITZER: Brent Sadler in Baghdad.

Thanks very much, Brent, for that report.

Over the last week here in the United States, we saw a sputtering stock market, record-high oil prices, and a lackluster jobs report, the last one we'll get before Election Day.

The man overseeing Bush administration economic policy, the treasury secretary, John Snow, joined me here earlier today. He was in Richmond, Virginia.

(BEGIN VIDEOTAPE)

BLITZER: Secretary Snow, thanks very much for joining us. Welcome back to "LATE EDITION".

JOHN SNOW, SECRETARY OF THE TREASURY: Hey, thank you, Wolf. Good to be on with you again.

BLITZER: We have a lot to go over. Let's begin with jobs right now, a key issue in this presidential campaign, certainly high interest to Americans out there.

Only 96,000 created last month, less than expected by Wall Street analysts, and certainly not enough to give this administration a net plus in jobs creation over the past four years. Why the anemic jobs recovery? SNOW: Well, Wolf, let me say, on last Friday's numbers, first of all, they're estimates. And most of those estimates get revised upwards.

Secondly, the estimates occurred at a time that covered a period when we had those hurricanes in the Southeast. That clearly had a negative effect on the jobs. When Floyd hit in '99, which was a smaller hurricane, it knocked out about 57,000 jobs.

So if you add the jobs that would have been there into the number we got, I'm confident we had a much better number.

BLITZER: But you know that there are some economists who say that hurricane and disaster relief actually creates jobs, because it gives opportunities to hire people to go in and rebuild.

SNOW: Well, Wolf, that's right, but that's in the next estimation period. I think we'll see October numbers much stronger, as the rebuilding occurs. But the first month, when they hit, is always negative, as the Floyd experience indicates.

BLITZER: Why is it that -- and the Kerry people keep pointing this out -- this is the first administration in 72 years, since the administration of Herbert Hoover, that's had a net loss, about 800,000 jobs, over the past four years?

SNOW: Well, if you use the so-called establishment survey, the number is about 580,000.

But remember, this economy has been through the most serious set of negative body blows any economy has faced in a four- year period, going back to the meltdown of the equity markets, the bursting of the bubble, the recession that the president inherited, 9/11, the corporate scandals and so on.

But even, Wolf...

BLITZER: Well, let me interrupt for a second. Franklin Roosevelt had to deal with a depression, a world war. Those were pretty serious economic dislocations as well.

SNOW: Well, they were, and he had a long time to deal with them, as you know.

If you look at, Wolf, and this is important to make -- a point to make. If you look at the broader survey of work, the most inclusive survey of jobs in America, the household survey, we've picked up 3.2 million jobs since the president took office.

Now, that's the survey that's used to put -- to make the estimate on unemployment. It's the survey that includes all jobs. It's the survey that is more reliable in dealing with new businesses being established and with the self-employed.

So, you know, when people say you've lost jobs, they're not looking at the whole job picture. They're looking at this narrower survey that deals with establishments and firms that have been around for a while.

BLITZER: What people are also looking at, though, is the quality of jobs and the pay that people are getting for the jobs.

There is an interesting article in today's Los Angeles Times that compared the minimum wage of today, what is it, $5.15, in 2003 dollars. In 1978, that minimum wage would have been the equivalent, they say of, of $7.48, meaning people are working harder, making less today for equal kind of jobs.

Do you accept that notion?

SNOW: No, Wolf, I reject it out of hand. American standard of living is higher today than it's ever been. More Americans own their own homes than ever before. Real disposable income is the highest in the history of the country. Looking at the household survey, more Americans are working than ever before.

And I'll go back to the fundamental fact that real disposable income, what people have in their pockets after they leave work every two weeks or month, is the highest in the history of the country. It's risen about 10 percent since the president took office.

So, no, I reject out of hand this suggestion that the jobs that are being created are these so-called hamburger-flipper jobs. The fact -- there is no evidence to support that. In fact, the evidence points quite the other way.

BLITZER: All right. Listen to John Kerry in the debate the other night with the president, hammering away on another key issue, namely turning this economy around from budget surpluses to budget deficits. Listen to this.

(BEGIN VIDEO CLIP)

KERRY: With respect to the deficits, the president was handed a $5.6 trillion surplus, ladies and gentlemen. That's where he was when he came into office. We now have a $2.6 trillion deficit. This is the biggest turnaround in the history of the country.

(END VIDEO CLIP)

BLITZER: What he was referring to there was the surplus in 2001 of, what, $127 billion; this year there will be a $422 billion deficit. This is a serious issue that results in American taxpayers paying, what, about $1 billion a day in interest to just deal with the debt?

SNOW: Well, Wolf, let me say on that, first of all, the president wasn't handed a huge surplus. That surplus was an estimate that was wildly erroneous. It was an estimate handed to the president, as the senator said, before we knew that we were going into a deep recession, before we knew that the stock market was going to take $7 trillion out of the wealth of America. It was an estimate made before 9/11 and the corporate scandals. The reason we went into a deficit is clear: the economy. The loss of the equity markets, capital gains, revenues went down markedly. That accounts for most of the reason.

Now, let me be clear. Deficits matter. Current deficits are too large. The president is committed to bringing the deficit down, and we will. We will bring it down to a level that's only half of what it was when the president made the commitment here a year ago. And we will bring it down to...

BLITZER: I was going to say...

SNOW: We will bring it down to a level that...

BLITZER: It's going to be hard to bring that deficit down when the president keeps allowing the federal government to expand. As was pointed out at the debate the other night, he hasn't vetoed one spending bill over the nearly four years he's been in office. It keeps going up and up and up, and tax cuts keep being implemented, and as a result the revenue is not there.

SNOW: Let me take a minute on that, Wolf.

The deficit now is lower by about $100 billion than it was estimated to be a year ago. That's because, with the tax cuts, the economy is growing and expanding at a much faster rate. Nearly 2 million people are working and paying taxes.

The way you get the deficit down is to have a strong, expanding economy, people paying taxes, companies paying taxes, government receipts rising. And government receipts are rising markedly.

The second thing you have to do, of course, as you suggest, is control spending. The president knows that. That's why the president sent to the Congress this year the tightest budget in history, I think, in terms of growth in nondiscretionary spending and discretionary spending outside of homeland security and defense. Now, those are priorities.

But if we stay on this path of holding discretionary spending down -- I think it was less than one-half of 1 percent, we'll get there. And I'm confident we'll get there and see this deficit fall to a level that's low by historical standards.

BLITZER: I only have time for one final question, Mr. Secretary.

$53 a barrel for oil right now. It's double in recent months, as you well know. And this is causing an enormous drag on the U.S. economy.

What, if anything, are you going to do about that?

SNOW: Well, it is a drag. It's creating headwinds for the otherwise very strong economy. And it acts like a tax, taking disposable income away from people. But the answer there is clear. The president sent to the Congress three years ago legislation to make us less dependent on these uncertain foreign supplies. It's passed the House twice. It's time for the Senate to act.

BLITZER: But if the Senate is -- clearly, the Senate's not going to act any time soon on any of this. Is there any immediate step you can take, the bully pulpit, for example, dealing with OPEC, Saudi Arabia?

That's what the president said he would do in the campaign in 2000. It's not happening, at least not now.

SNOW: Well, Wolf, I just left a series of meetings with Middle Eastern finance ministers, where we put on the table the need for expansion of output in quotas. And I must say that we got a very good response on that. And they've indicated that they are committed to bringing the price of oil down.

BLITZER: So do you think the price will go down any time soon?

SNOW: Well, I think the price is above what's justified by the fundamentals of the marketplace. It's out of line with the fundamentals, and there will be a movement back toward the fundamentals, which means a lower price, yes.

BLITZER: All right. We'll see if that happens. Secretary, thanks very much for joining us.

SNOW: Hey, Wolf, good to be with you, as always. Thanks.

BLITZER: Thank you.

(END VIDEOTAPE)

BLITZER: And straight ahead, tackling the economic issues on the other side of the presidential campaign. I'll speak live with Kerry campaign adviser Gene Sperling. He's standing by.

Then, dissecting round two of the presidential debates with Bush- Cheney campaign chairman Marc Racicot and New Mexico Governor Bill Richardson.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Right into the camera, yes. I am not going to raise taxes. I have a tax cut.

(END VIDEO CLIP)

BLITZER: John Kerry in Friday night's debate, doing something politicians sometimes regret doing later on, namely, making a tax pledge.

Welcome back to "LATE EDITION."

Joining us now from Los Angeles is a man who knows his way around taxes and Washington, a key adviser to the Kerry campaign, the former Clinton White House economic adviser, Gene Sperling.

Gene, thanks very much for joining us.

GENE SPERLING, FORMER CLINTON WHITE HOUSE ECONOMIC ADVISER: Thanks, Wolf.

BLITZER: Were you cringing -- and I know you're a straight- talker -- were you cringing a little bit when John Kerry looked into the camera and said, "No new taxes, read my lips." He didn't exactly say it like that, but that was the implication.

SPERLING: Not at all. Because I know that this senator is willing to make tough choices.

He's been willing to say on the deficit, Wolf, that he would restore the rules of pay-as-you-go. If you have a new initiative, you have to pay for it. That's something both Newt Gingrich and Bill Clinton actually agreed on.

He wants to restore the spending caps. That means we can't have growth outside of homeland security and education above inflation, and he's been willing to say he's going to roll back the tax cuts for those who make over $200,000 and take on the corporate subsidies that him and John McCain have tried to take on.

We're confident that if we take these tough choices, we will be able to give tax relief to the middle class, as Senator Kerry has promised.

And, Wolf, I've got to respond to one thing Secretary Snow said, because sometimes there's something that's just wrong. He said we didn't know about -- we didn't inherit a $6.5 trillion surplus. I encourage viewers to go check this.

In February of 2001, the Bush administration put out their numbers when they were in charge. And you know what they said the surplus was going to be over next 10 years? $5.6 trillion. So he's wrong about that. That was their projection.

And now we've had almost a $10 trillion deterioration, the worse deterioration in history, under President Bush's watch.

BLITZER: But there has been a steady increase, albeit not as robust as everyone would like, of jobs over the past 13, 14 months; inflation still very, very low; unemployment, what, 5.4 percent.

Listen to this new ad that the Bush-Cheney campaign is running.

(BEGIN VIDEO CLIP) ANNOUNCER: There are many reasons to be hopeful about America's future: Nearly 2 million new jobs in just over a year. Nearly 2 million more people back working. Nearly 2 million more people with wages. Nearly 2 million more people with more security.

(END VIDEO CLIP)

BLITZER: Aren't the trends right now, as the Republicans are insisting, positive?

SPERLING: Wolf, not for working families, not for middle-class families. As you said, the verdict is in that this president will be the first president to face the electorate with lost jobs, 1.6 million lost sector jobs, 2.7 million lost manufacturing jobs.

But let's take on their claim, their big brag. Their big brag is, over the last 12 months, they've created 1.7 million jobs or the economy has. So let's take that on.

That would be, Wolf, the worst year of job growth under Bill Clinton. All eight years of Bill Clinton's job growth were better than that. More importantly, it's not even enough job growth to cover the new workers coming into the workforce. For this part of the recovery, it's the worst in 50 years.

So, here they are. Their number-one campaign brag is, we have one year where we have job growth that is worse than the worst year under Bill Clinton, and not enough to even start finding new work for the 8 million that are unemployed, the 2.5 million that have dropped out of the labor force and the millions more that are working part- time and want to find a permanent, full-time job.

BLITZER: But the administration was successful in coming out of a recession relatively quickly. Listen to what The Wall Street Journal wrote in an editorial on September 1st.

"Mr. Bush has had to steer through some very large hazards that could have produced a much deeper, even a Hoover-like slump. The tech bubble that began to burst in Spring 2000, the 9/11 attacks and the corporate scandals all sapped the confidence of business. It's scary to think what the economy would look like now without the tax cut."

Is The Wall Street Journal right?

SPERLING: No, they're not. And let me give a few responses.

First of all, let me say, I don't blame everything bad that's happened in this economy on George Bush. There were some hard hits, certainly 9/11. But, you know, Chairman Greenspan said we came out of 9/11 quite quickly.

And here's what is most important. Economy.com and others said that the tax cuts in 2001 had virtually no effect on us actually coming out of the recession. In February of 2002, five months after 9/11, the administration said, "Pass our tax cuts and we would be 7 million jobs ahead of where we are right now." Wolf, those kinds of excuses, that kind of blame, that kind of not taking responsibility may have been credible in November or December of 2001. It is October 2004. He's been president for 44 months. He's had an all-Republican Congress. You can't run for reelection on the "dog ate my homework" president. The buck is supposed to stop with the president.

And it's not just bad luck. It is bad choices on never doing anything about health-care costs, bad choices on never passing an energy bill, and bad choices about during the economic slowdown doing tax cuts that had very little effect on jump starting job growth, went mostly to the well-off, and have just exploded our deficit without getting our economy going.

BLITZER: There's a lot of allegations now being hurled against Senator Kerry for flip-flopping on the issue of outsourcing, on free trade.

He's always been a free-trader, but more recently, as you know, now he's been siding with Senator Edwards in opposing these kinds of free-trade bills and in complaining about jobs being supposedly exported.

As someone who supported NAFTA and worked very closely with President Clinton on all of these issues, how uncomfortable are you now by the rhetoric of Kerry and Edwards?

SPERLING: Wolf, Senator Kerry has been completely consistent on trade. This has always been his philosophy. He is for open markets, he is for United States engaging in the global economy, but he believes that, when we have trade agreements, we ought to enforce them, and we ought to make sure that we have labor and environmental standards.

And on outsourcing, what Senator Kerry has said is that you can't stop all outsourcing. What he has fought so hard on is to say, you can stop the incentives to outsource jobs.

Senator Kerry is saying, how can it be that, when we have two companies in the United States, that we give one company -- and they're thinking about expanding jobs -- that we tell the company that wants to go to Malaysia or the Cayman Islands, "We'll give you a tax break," but the one who wants to create jobs in Columbus, Ohio, or Michigan, is going to actually pay higher taxes?

He wants to end the tax incentives for moving jobs overseas, and take that money so that we can lower taxes 5 percent across the board.

It is Senator Kerry who is running with lower business taxes, have a new jobs tax credit, give tax cuts to small businesses for new jobs, and help -- Senator Kerry has been consistent.

You're right. He has always supported open markets. This year, he has also supported extending the Africa free trade agreement, but he does want them to be enforced with high labor and environmental standards. That has always been his position. BLITZER: Gene Sperling, we'll leave it right there. Thanks very much for joining us.

SPERLING: Thank you.

BLITZER: Coming up, we'll get a quick check of what's making news right now, including word that's just in about a group of Turkish hostages in Iraq.

And down the home stretch, we'll ask two political veterans, Marc Racicot and Bill Richardson, to look down at the campaign trail and to look ahead to the finish line.

Stay with "LATE EDITION."

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

Two down in presidential debates, one to go next Wednesday night. Both candidates crisscrossing the country right now. As many as 15 states, maybe even more, up for grabs.

To help us sort out the state of political play here in the United States, two political pros: from Albuquerque, New Mexico, that state's governor, Bill Richardson. Here in Washington, Marc Racicot. He's the chairman of the Bush-Cheney campaign. He's the former governor of Montana.

Gentlemen, thanks very much for joining us.

And, Governor Racicot, I'll begin with you. Three weeks to go and counting, an incumbent president at a time of war basically fighting for his political life right now. Why is it so close?

MARC RACICOT, CHAIRMAN, BUSH-CHENEY CAMPAIGN: Well, there are all kinds of theories that people have. Of course, we believed from the beginning -- you and I have talked about it a number of times -- that this was going to be a very close election.

The issues are very difficult, the world is challenging and, certainly, there's many challenges that all of us confront here in this country. And the fact is, we have been politically divided, I think, for some period of time, very closely, I think, subscribing to one philosophy or another.

So it's just a very challenging time. The democracy is healthy and vibrant, however, and enduring and very, very prosperous.

BLITZER: A lot of people, Governor Richardson, have questions, serious questions, about the incumbent president of the United States, but they're not yet convinced that John Kerry is the best person to replace him. Why has he had such a hard time closing this deal?

GOV. BILL RICHARDSON (D), NEW MEXICO: The two debates that have taken place have shown to a lot of voters in America, especially undecided voters, that Senator Kerry has the strength, the character, the background to be president. He's fit to be commander in chief.

And I believe that these debates that are basically unscripted, where the American people see the two candidates without their advisers, without their TV commercials, and they take a measure of the individuals.

And I think what you're going to see, Wolf, after this third debate in Tempe, Arizona, is clearly that Senator Kerry is not just fit to be commander in chief, but he is somebody with a plan to get us out of Iraq in a sensible way, a domestic plan that deals with health, jobs and the economy.

But I think most importantly, a man of substance and experience and integrity, good humor, that is measured by the American people as ready to take over. I think that's the most important result of these debates.

And then after the debates, it's all going to be turnout, turning out your base and turning out your voters, mobilizing, and that's where the electioneering starts.

BLITZER: You don't disagree with that, do you, Governor Racicot?

RACICOT: Most strenuously, in terms of whether or not Senator Kerry has the background and the back bone to be president of the United States of America.

I think I agree on the tactics. We're going to have to all work very, very hard to make sure we get our voters to the polls and we appeal to new voters to get into the process and become a part of our effort.

BLITZER: What's your biggest problem, though, with Senator Kerry? Why doesn't he necessarily have the backbone to be president of the United States?

RACICOT: Well, I think he's completely impotent to articulate a clear position on Iraq. I mean, if you were to say to him -- if somebody was to say to you, "I agree with Senator Kerry's position on the war on terror," what would you discern that to be? Does it mean you are for the intervention, as you voted for, to go into Iraq? Does it mean you're the anti-war candidate? Does it mean it's the wrong war at the wrong time at the wrong place?

This morning, Wolf -- let me add, this morning, a new approach to this in the Sunday New York Times magazine, where Senator Kerry said that the war on terrorism is like a nuisance. He equated it to prostitution and gambling, a nuisance activity.

You know, quite frankly, I just don't think he has the right view of the world. It's a pre-9/11 view of the world.

BLITZER: What about that, Governor Richardson?

RICHARDSON: Well, I think Senator Kerry has said that the number-one threat to America is international terrorism, al Qaeda. And just today, we had these elections in Afghanistan. Had we put more resources to bring more stability there -- I was there in Afghanistan in 1998. Instead of focusing so intently with $400 billion and our manpower in Iraq, we would have more stable situations, not just in the Persian Gulf. We'd have strong alliances with NATO. We'd have more stability in Afghanistan.

And what you're seeing is a president in the debates with no plan. He's justifying why he intervened in Iraq, but no exit plan, no reconstruction plan, no vision of America and the world. I think that was very evident in the debates.

BLITZER: What are you talking about $400 billion? What's that?

RICHARDSON: Well, $200 billion that we have spent in Iraq and untold projection of $400 billion just if we stay within the next two to three years. So, that's what I'm talking about.

BLITZER: All right.

RICHARDSON: A huge expenditure. America 90 percent of the costs, 90 percent of the troops.

And elsewhere in the world, what is our vision? What is our foreign policy? We are so stuck on Iraq that we failed to see the parameters of a global world that is challenging us, in North Korea and Iran, the failure of our strength and our alliances. That was articulated very clearly in the debates.

BLITZER: Let's Governor Racicot respond to that.

Go ahead.

RACICOT: Well, Governor Richardson, with all due respect -- he is a friend -- he's wrong. He's just as wrong as Senator Kerry was.

BLITZER: What's he wrong on?

RACICOT: He's wrong on $200 billion being spent in Iraq. He's wrong on the amount of...

(CROSSTALK)

BLITZER: ... $120 billion. But he's looking down the road the next few years. It's presumably going to be...

RACICOT: That's programmed through September of 2005.

But in addition to that, Wolf, let's take a look at the mistakes that these people make. And I believe they're purposeful.

They allege expenditures that are way higher than what they are.

They allege, of course, that you shouldn't include the Iraqis, who are fighting for their freedom, when you've put together the amount of injury and damage and death that has occurred as a result. And that when you do that, of course, we sustain a grievous burden. But it's about half of the burden.

In addition to that, they go on with other allegations of error, that the resources in Afghanistan were less because we went into Iraq.

BLITZER: But, Governor Racicot...

RACICOT: The fact of the matter is, they're larger in Afghanistan.

BLITZER: ... if the U.S. does spend the next two, four, six years in Iraq, it's going to be in the $400 billion category.

RACICOT: But, Wolf, the arguments they make are wrong on the facts. If their facts are wrong, their positions are wrong and waffling. And they just simply change from day to day.

BLITZER: I want to let Governor Richardson respond to that.

But I also want you to respond to what the president said at the debate Friday night in St. Louis, Governor Richardson, because it comes to the core of the attack of John Kerry, namely that he's wishy- washy. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: For a while, he was a strong supporter of getting rid of Saddam Hussein. He saw the wisdom until the Democratic primary came along and Howard Dean, the anti-war candidate, began to gain on him. And he changed positions.

I don't see how you can lead this country in a time of war, in a time of uncertainty, if you change your mind because of politics.

(END VIDEO CLIP)

BLITZER: Governor Richardson, go ahead.

RICHARDSON: Well, I think the president is wrong. He just makes these simple statements that have no basis in fact and attempt to divide the country.

What Senator Kerry has said is he voted to give the president authority, authority to take military action. When the president took that authority, he failed to bring the allies together, he failed to have an exit plan, a reconstruction plan. The implications of putting so much financial and troop support into Iraq, at the expense of North Korea, Iran, other parts of the world, became so evident.

And so Senator Kerry then questions the conduct of the war in Iraq, questions the exit plan, and the president makes those assertions.

I think what Senator Kerry is clearly stating is that Iraq is a mess and he wants to clean it up.

And my good friend Governor Racicot keeps saying, "Well, you're talking about amounts and facts. It's not $200 billion. It's $120 billion." It's still a mistake.

We should be spending that money, whether it's $200 billion, $120 billion or $400 billion in schools in New Mexico and roads in the West, where Governor Racicot is from, and the needs for homeland security: first responders, cops, firefighters to protect the homeland.

But now, here we are in this mess in Iraq that is continuing, that has no end in site, and there is no strategy in site. Look what Ambassador Bremer said: We needed more troops. My God, I mean, there's just no policy.

BLITZER: I'm going to let Governor Racicot respond, and then we'll take a quick break.

But do it briefly.

RACICOT: Well, it's difficult to do it briefly. My God, he has so many different positions, it's hard to articulate in a short period of time.

I mean, just take a look at the debate the other night. He said, "I've always believed that Saddam Hussein was a threat." In the campaign, he said, "Any person who doesn't see Saddam Hussein as a threat doesn't have the credibility or the judgment to be president."

Then two lines down in the transcript or a few pages forward in the transcript, he says, "The president has been preoccupied with Iraq, and there's no threat there."

Well, where is it that this murderous dictator, Saddam Hussein, lived and operated but in Iraq? I mean, he cannot -- he is impotent to articulate a clear vision about the war on terror.

BLITZER: But aren't you embarrassed that the whole rationale, at least most of the rationale for the war -- the weapons of mass destruction, the stockpiles, the chemical weapons, the biological weapons, the nuclear capabilities potentially -- all of that simply has not proven to be true?

RACICOT: You mean the very things that both Senator Kerry and the president of the United States believe that...

BLITZER: But this is the Bush administration that's responsible for the intelligence community, not the Congress.

RACICOT: The whole universe believed that, Wolf.

BLITZER: Based on what the Bush administration...

RACICOT: The British didn't base their judgment on that.

BLITZER: They say they did.

RACICOT: The French didn't.

BLITZER: They say they got their information from the CIA.

RACICOT: Every intelligence agency on the planet had the same conclusion. So did Senator Kerry.

BLITZER: But that was largely based on what the CIA was telling everyone.

RACICOT: That was never the only basis for...

BLITZER: Never the only, but largely.

RACICOT: Who says it was largely?

BLITZER: That's what they all say.

RACICOT: No, you had a murderous dictator who had committed atrocious crimes against humanity, murdering thousands and thousands of his own people, shooting at our airplanes, preparing for another war, a strategic retreat from putting together weapons of mass destruction, retaining the capability to do so.

After 9/11, how could anyone draw any other conclusion other than Senator Kerry?

BLITZER: Now, there were other people that drew other conclusions. But we'll pick up that thought. So stand by, Governor Racicot.

Stand by, Governor Richardson.

We have a lot more talk about. We'll pick up this conversation with both governors. And they'll also be taking your phone calls when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: He talks about Medicare. You've been in the United States Senate 20 years. Show me one accomplishment toward Medicare that he accomplished.

I've been in Washington, D.C., three and a half years and led the Congress to reform Medicare, so our seniors have got a better, modern health-care system.

That's what leadership is all about.

(END VIDEO CLIP)

BLITZER: The president at the debate in St. Louis Friday night.

Welcome back to "LATE EDITION." We're continuing our conversation with Bush-Cheney campaign chairman Marc Racicot and New Mexico Governor Bill Richardson, a strong supporter of Senator Kerry. What about that issue that Senator Kerry really has no accomplishments during 20 years in the Senate that he could be proud of and, as a result, he's not fit to be president?

RICHARDSON: Well, I think that's false.

In the foreign affairs area, it was Senator Kerry that led the effort on the POW/MIAs, normalization of relations with Vietnam, on international environmental issues, on the cops on the street, the 100,000 cops on the street, on welfare reform.

He has broad accomplishments. And I think for the president to say -- there is a difference between a president and a senator from the minority party in the Senate, who has done more on Medicare.

The problem is that on Medicare what the president has now given us is a Medicare plan that is unaffordable, that now costs -- the premiums now cost 17 percent more than when the bill was passed.

And I don't know if those were false statistics, but what we have here is a huge expenditure in a health-care program that is not bringing more coverage to the American people, lower prescription drugs.

And the good thing about the debate in Arizona is it's going to be strictly on domestic issues -- health care, education, the economy -- where we believe Senator Kerry has a plan, has an articulated vision, and President Bush is rather weak in those areas.

BLITZER: There is much greater expenditures now, greater cost to Medicare recipients than in the past.

RACICOT: Unquestionably. The United States of America, the Congress and the president have made a decision, a policy decision to invest, to help our seniors make certain that they receive appropriate medical care.

But, you know, Governor Richardson indicated just a moment ago that the increase in premiums is somehow the cause of action here that results with this administration.

Senator Kerry and his compatriots voted for that back in 1998 or '97. It was automatic. There's virtually nothing that could have been done about it by the president of the United States.

What he said...

BLITZER: But what the president could have done then -- this was a question raised during the debate in St. Louis Friday night. The president could have taken steps over the past four years to allow American seniors and others to purchase cheaper drugs from Canada, safe, secure, but that has not happened.

RACICOT: Well, safe, secure is the key.

BLITZER: But he has had four years to work out that arrangement. RACICOT: Safe and secure.

This president is the only one in the last 40 years, Republican or Democrat, who had the courage and the capacity to work in a bipartisan way to reshape the Medicare system. For the first time ever, a prescription drug benefit plan.

You know, this is, for states like mine and Governor Richardson's, all kinds of efforts to bring rural health care to our seniors that were never there before, it was a wonderful bipartisan accomplishment.

And for people to suggest that somehow the president is responsible for this Medicare increase that Senator Kerry voted for and all of his compatriots, it's just wrong.

BLITZER: What about that, Governor Richardson?

RICHARDSON: Well, Marc needs to spend more time out west in Montana. He's listening too much to what's happening in Washington.

The reality is that the Medicare initiative of the president's, which was exactly one year ago, first of all, is costing the taxpayer 33 percent more in billions of dollars that, when the bill was passed, wasn't out there, the premiums.

Now, Marc, you know, this is from a result of this last Medicare initiative of the president. It's costing seniors 17 percent more. You can't blame that on the '98 or '97 vote. You can't do that. These are the facts.

The president is unwilling to let Canada have -- here's Canada. It's an industrialized nation, our sister nation. Are we saying that in Canada the prescription drugs are not safe and secure? Come on. It's the drug company saying, "Don't do this because it hurts our profits."

It's the drug companies and the president saying, "We don't want to negotiate with HMOs for lower prices." This is respecting and responding to their constituency. That's all it is.

RACICOT: Governor, that is patent nonsense. The fact of the matter is, the central part of this inquiry has to do with safety, the safety of the consumers of this country.

The president indicated the other night during the debate, if we can't put in place a system that ensures safety for all of those who consume, then we can move in that direction. If we can't, then we can't move in that direction. It's just that simple.

These increases in Medicare were scheduled, Bill. They were scheduled by the United States Congress during the Clinton administration.

BLITZER: Unfortunately, gentlemen, we're going to have to leave it right there. We'll continue, though, this discussion down the road, I promise both of you.

Marc Racicot, thanks very much.

Bill Richardson, thanks to you, as well. See you out west. We're all heading towards Arizona. I don't know if you're going to be there, but it's not far from New Mexico.

Appreciate it very much.

We'll take a quick break. More "LATE EDITION" when we come back.

(COMMERCIAL BREAK)

BLITZER: Let's take a look and see what's on the cover of this week's major news magazines here in the United States.

Time magazine features Bush, Kerry and the battle for every last vote.

Newsweek asks, "Will your vote be counted?"

And U.S. News and World Report looks at the warrior elite inside the special forces.

And that's your "LATE EDITION" for Sunday, October 10th.

Please be sure to join me next Sunday and every Sunday at noon eastern for the last word in Sunday talk.

I'm here Monday through Friday, twice a day, at noon and 5 p.m. eastern.

Don't forget to tune into CNN's complete coverage of the third and final presidential debate Wednesday night. I'll be reporting from there, the campus of Arizona State University.

Until then, thanks for joining us. I'm Wolf Blitzer in Washington.

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